Along with sales and marketing and leisure and tourism, shipping and logistics are two industries that are inextricably linked.
However, when taking into account we are talking about an industry estimated to reach a value of over 12 billion dollars by 2027, we’re sure you would agree the small details should be understood clearly.
So what exactly is the difference between the two? Let’s take a deeper look.
What Is Shipping?
It’s understandable why there is some confusion when referring to shipping. When you buy something on the internet, you see the term when discussing delivery charges. We also use it when referring to several ships collectively. But the sense used within the shipping and logistics industry is when talking about the process of getting goods from one place to another.
The term shipping has become more and more significant given our increasing reliance on home deliveries. Companies like Amazon are just one small aspect of modern shipping. Along with most people’s favorite, next-day delivery, shipping also includes specified materials that are hazardous if not transported correctly, known as hazmat shipping.
The process for arranging everything needed for goods to get from A to B is known as shipping management. So what needs to be done once the order comes through? First, documents need to be completed relating to insurance, policies, labels, and much more. Next, the way to transport the goods must be decided. Shipping can be done via roads, rail, air, or by sea.
Last on the list is making sure all invoicing is processed correctly to avoid any misunderstanding before the goods make their way. As you can imagine this is important, as often there may be additional charges for expediting a shipment, and sometimes complete payment is only assured once the goods reach their destination.
All in all, shipping is perhaps the most important link in the global supply chain.
What Are Logistics?
Logistics involves shipping and can also involve where to store goods before and after they reach their destination. It can include handling as well as packing. With this in mind, the scope and scale of logistics are huge.
It is also administered and needed in more industries than just standard goods deliveries. Pharmaceutical, agricultural, manufacturing companies, and even hospitals all need to have a clear strategy in place to manage the many branches of their scope of work.
A hospital for example has countless deliveries of medication on a daily basis. They need a plan to handle and store this medication, particularly hazardous materials. On top of that, they need to have measures in place to manage the large number of people that keep the building operating such as cleaning crews and even catering. The management of this can all be counted as logistics.
Due to the many moving pieces within logistics, it’s easy to see why this is one of the most important aspects of any business. Understanding the logistics process will help ensure profitability and keep waste to a minimum. Get it wrong with an inefficient, slow, and disjointed strategy, and your company could find itself hemorrhaging money without clearly seeing the source of your losses.
The Differences Between Shipping and Logistics
While working together, there are some clear elements to remember that identify shipping and logistics respectively.
While shipping is a vital aspect of getting things moved from one place to another, it is a piece in a far larger puzzle. The puzzle as a whole is what we refer to as logistics.
We could use the example of a holiday you have planned. The shipping aspect of the holiday is everything related to our journey. Your plane tickets, carrying your passport and boarding pass, as well as making sure your luggage meets all the requirements to travel, all important aspects of your time away. Yet, everything else, from booking your hotel, having an itinerary, and where you decide to eat is included in the logistics of the trip.
Logistics Tips That Will Help Your Company Thrive
Given the importance of logistics to the health of your company, you want to get it right; so, we have put together some fail-safe tips to help ensure success.
Have a Backup Plan
The saying “the best-laid plans of mice and men often go awry” is certainly true. The problem is when you are managing what can be up to millions of dollars in goods, you can’t afford to have hiccups.
This means following up on each stage of the process, expecting the worst to happen, and knowing what to do if it does.
Get Automated Where Possible
A multitude of different software platforms can do wonders for streamlining your business. The advantages of making use of them are countless, such as the ability to keep on top of inventory numbers and monitor delivery times.
If you haven’t done so already, review your setup to see if automation could make your logistics processes more efficient.
Communication is Key
Whether it is in-house or with your customers, the key to smooth operations is good communication.
Employees on the ground are the first to see potential issues so maintaining a good chain of communication from the bottom to the top will help stop a small fire from turning into a larger one. On the other hand, keeping customers in the loop will help manage their expectations.
Making Logistics Work for You
We hope our breakdown of the differences between shipping and logistics has been helpful.
We at Kopf Logistics Group pride ourselves on providing simple solutions to complex problems. We also provide opportunities for those who have the communication and problem-solving skills needed to excel in the shipping and logistics industry. Follow this link to find out what it takes to become an Independent Freight Agent.