The blog below will cover 6 types of logistics services that are frequently used on the market.
The word “logistics” is derived from the French word ‘logistique’ referring to the coordination and facilitation of the movement of both cargo and people. Today logistics play an integral role in almost every sector.
For example, in the business sector, logistics services are seen as the lifeblood of the supply chain. It is because they facilitate the movement of cargo from one destination to another, and from manufacturers to consumers.
Below are six types of logistics you should know.
1. Warehouse Services
Before having your cargo shipped from one point to another, it will be probably stored in one or many warehouses. You can select an in-house warehouse (the ones that are run the company itself), or use the services provided by third-party logistics providers. In most cases, the latter option is more preferred as it helps handle and transport cargo more efficiently and at a fraction of the cost on behalf of the client.
When selecting a warehouse to keep your cargo, estimate how much space it will take, how long you keep it there, accessibility, and security.
2. Third-Party Logistics Services (3PL)
3PL services bridge the gap between manufacturers and consumers. 3PL companies do not manufacture products, but they ensure the products remain the same in terms of quality when arriving at consumers’ locations. Logistics providers will make sure that all parties that involve in the process meet their obligation; from the moment cargo leaves a certain point until it arrives at the designated location.
They could be involved in other areas such as customs relations, storage, terminal operation, supply chain management, etc. The edge of 3PL over other services is that all shipping and transporting processes are under control of the logistics service provider.
3. Freight Shipping
These types of logistics services are the shipping process of cargo using different types of vehicles such as trains, ships, and trucks. Mostly, it is used for cargo shipment with high volumes. Use full truckloads (FTLs) for large loads as it can ship anywhere from 2 dozen to 26 pallets. FTLs can also be used for oversize loads. For small loads (somewhere in between a parcel and a truckload), consider using less than truckloads (LTLs) which allows you to share the cost with other companies.
In some cases, you may have to use drayage services which helps you move cargo from ports to warehouses for storage.
As shipping trends vary from now and then, the freight shipping is very complicated. Therefore, it is highly recommended to keep yourself updated with the latest trends in the sector to get the most cost-effective shipping method.
4. Courier Shipping
When the term “shipping companies” is mentioned, this is what comes to mind. These types of logistics services perfectly meet the needs of small orders shipment, especially when it comes to shipping fragile cargo which requires a lot of care.
The edge of courier shipping over freight shipping is timesaving. Also, it is more efficient to move cargo directly from warehouses to consumers using courier shipping. However, the cost can be higher sometimes.
5. In-house Logistics Services
In-house logistics may involve creating a department within the organization whose sole purpose is to deal with matters logistics. The advantages of in-house logistics include having more control of products’ movement and, in some cases, it is highly cost-effective.
If a company wants to manage an in-house warehouse itself, it may have to own a department which sole purpose is to handle logistics matters. In most cases, in-house logistics mean more control of products’ movement and more cost-effective.
However, it can be more effective if you have a budget for hiring services of third-party companies. It is because at the same time you do not have to deal with other matters such as product manufacture. On the other hand, third party companies can handle the shipping better as they specialize in logistics services only. 6.
6. TMS Logistics Software
Transportation is critical when it comes to supply chain. And there is an absolute need for functional systems through which work is made easier. Standing for transportation management system, TMS is one among them. With this platform, users can plan, execute and optimize the activities involved in cargo transportation.
The operation of this platform is based on the coordination of all the data points in the transportation network. Vital information, such as rates and route options, are gathered together, and then presented in a simple, easy-to understand format.
Currently, this system is preferred by many companies (35%). The shipping process has been streamlined and become more efficient thanks to it. Users can stay updated with key performance indicators, and thus monitor their shipments at every stage of the supply chain process.
Logistics involve many activities, namely information flow and integration, material processing, product manufacture, goods packaging, warehousing, transportation, and security, etc. When your business grows, make sure your logistics services grow, too.