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What is the Role of Logistics and Freight Forwarding Services?

Role of Logistics and Freight Forwarding Services?

Logistics scene across the globe is quite competitive with MNCs making up for the larger part of the services. However, companies other than these have been providing effective service in the logistic scenario. 

Business practices have been changing for a long time now. Companies providing SCM have seen immense improvement in terms of business. To begin understanding this in detail, let’s have an understanding of what is the role of logistics and freight forwarding services? Or questions like what is the difference between logistics and freight forwarding service?

We’ll start with explaining the role of Logistics and freight forwarding services – 

The topic at hand can be best understood with the help of an example. Say you have a furniture business wherein you got your headquarters or manufacturing unit at Pico Riveria and you want to deliver the finished goods to other parts of the world, how would you achieve that? 

This is where the logistics and freight forwarding services come up. Your furniture ain’t going to move for itself. You need a labour force and machines to do it for your business. 

Any company wanting to cater their goods to different cities makes use of logistics and freight forwarding service. Companies’ logistics department handles the various aspects of the whole process, such as:

  • distributing to different vendors
  • storing the goods
  • Eventually, transportation of the manufactured goods to the designated locations.

Now that we know about the roles of logistics and freight forwarding service, let’s dive into the difference between the two – 

Logistics department is in-house. A company mostly has it on the book and they are managed in the company. In contrast to this, freight forwarding service is a third-party service. For transportation of goods, freight forwarding services might charge carriage charges. Companies have tie-ups for freight forwarding services in order to move goods to places. 

What are the types of Logistics?

Managing logistics is a combination of several different activities. These can be classified as:

  • Management of Supplies
  • Transportation management
  • Production Management
  • Reverse Logistics

Explanation for each of these tasks is as follows: 

  • Management of Supplies: 

Management of supplies involves gathering of market data and quantities to be supplied at a place. A lot of number crunching can also be seen as the part of this task. 

  • Transportation Management:

This includes the task of making transportation available for carrying goods to its destined location. The transportation medium differs according to the goods being moved. Liquid quantities are moved with the help of pipelines. In case of goods being moved at a domestic location, trucks can be used and for overseas supply, ships are used. 

  • Production Management:

Converting raw materials to finished products and making sure the assembly of different parts into one. This is the part only when the company does have an in-house assembly line.

  • Reverse Logistics:

Reverse Logistics is the step of management wherein when excess quantities are delivered, it is upto this department to bring those extra quantities back. Process of reclamation is the responsibility of the reverse logistics.

What are the types of Freight Forwarding Services?

Like we mentioned earlier, logistics management is an in-house department whereas freight forwarding are the third party services. There can be different types of freight forwarding companies like rail freight, sea freight, road freight, and airfreight services. 

Railway freight forwarding service ensures transportation of goods for larger distances. Sea freight forwarding service mostly transports goods in cargo ships set in sea vessels that are quite big. 

The road freight service is the common one among the mentioned ways of freight services. Vehicles such as trucks and cars are used for transportation of goods. Air freight forwarding service, as the reader, can guess is the fastest mode of transporting goods to designated locations. The only drawback is that it can be costly. Freight forwarding services are an important part for any operations team as it plays an important role in the logistics. 

Why do we need the Logistics and Freight Forwarding Services?

Any business needs a proper logistics unit to make profit. A strong logistics team is what builds the foundation of a successful business. Providing goods at the right time and place, and in immaculate quality is what counts. This exactly is the duty of the logistics department. 

Goods that can’t stay stored in the warehouse for long are also dealt by the logistics department. They take demand and value into account and such products are dispatched regularly. The logistics department also helps improve efficiency since the other units can then make a clear plan of what production to make and how to drive sales.

Thanks to logistics and freight forwarding services, there are no location barriers. Any good can be provided at any place, given proper time and route. Thus, we need logistics and freight forwarding services for better business and good reach into the markets. 

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