What is Freight Logistics?
Freight logistics focuses on the planning, executing and management of freight by a company that specializes in moving commodities or goods through various means of transport.
A freight company is basically a logistic company that has a detailed framework designed to help its shipping or forwarding of cargo or goods. Freight logistics works as a component of logistics that is fundamental in the field of Supply Chain Management (SCM).
To understand freight logistics, you’d first need to understand the difference between what freight is and what logistics means.
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What is Freight and Logistics?
In international or global trade, freight generally refers to the cargo that a company transports from point A to point B intending to get commercial returns.
Logistics is a process, often in place long before anything moves. To simplify it, the planning and execution of how to move the cargo to meet demands in security, safety and time are what logistics is all about. It is central to business and that includes freight companies.
The scope of services provided by a freight company can include any number of services that range from freight forwarding, customs clearance, warehousing, and a whole host of cargo logistics among others.
While freight companies generally ship commodities, cargo or goods via sea, land, rail or air, most often these sections make up what we call sea freight, land/ground freight, and air freight.
- Sea freight- a company uses a ship to transport goods in sea containers from one seaport to another.
- Land freight- it involves moving goods via road or rail
- Air freight- companies may own or contract air carriers to transport shipments from one point of origin to another.
In later paragraphs in this article, we compare road freight logistics vs. sea freight logistics.
In its evolution, it has birthed two vital categories of companies within the freight business: freight brokers and freight forwarders. Is there a difference between freight brokers and freight forwarders?
Yes, there is. Let us look at that by explaining what freight forwarding is.
What is Freight Forwarding in Logistics?
Freight forwarding is a service that involves the planning and efficient, cost-effective coordination of shipping of goods via any of the various freight modes of air, sea, rail or road.
The service assists companies seeking to import or export goods, be it international or national.
Although a freight forwarder may not move any of the freight, its role comes in acting as a key intermediary. Such a company provides services to an exporting or importing client by linking them to a transportation provider.
How Different is a Freight Forwarder from a Freight Broker?
Basically, a freight forwarding company will do more than connecting a client to a logistics provider- which is what a broker does. A freight broker mainly earns from connecting customers who want shipping services and logistics companies.
On the other hand:
- A freight forwarder takes charge of all the logistics involved in the transporting of the goods and thus relieving the client of that burden, which in most cases can be quite a challenge.
- In logistics, freight forwarding providers will negotiate the best prices for the shipments and use their expertise to choose shipping routes that guarantee timely delivery of goods to an endpoint.
- Other than taking the responsibility of transport logistics for the client, a freight forwarding service will go further, providing access to key ancillary services like insurance, customs documentation, warehousing, and bills of lading.
A company with no internal expertise on the international shipping and transportation landscape will find the services of a freight forwarder very important.
A freight forwarding provider has to put all the logistics in place. Once this is the case, the company can proceed to schedule shipping, secure necessary documentation, manage personnel and track and monitor transportation among other key freight logistics aspects.
A company’s logistics will be handled by a logistics manager.
What Does a Logistics Manager Do?
An overall job description for a logistics manager is that they are supervisors who oversee day-to-day logistical operations of a company. In most cases, it involves implementing plans geared towards seamless business operations, especially when it comes to storage and moving of goods or cargo.
Companies and major global businesses are either providers of logistics services or have departments like that employ logistics managers. These companies are increasingly reliant on proper management, emphasizing this position as one that oversees the smooth flow of operations.
Logistics managers have the responsibility of overseeing a company’s overall transportation, warehousing (or storage), inventory, and distribution of inbound or outbound goods.
If a company, for instance, deals with freight forwarding, a logistics manager could be in charge of negotiating and scheduling shipping, as well as the staying in touch with all that happens around the transportation of the cargo involved.
As a manager, such a post may _in some companies_, allow you to identify, recruit and train junior employees in the department.
In this job, success is premised upon the ability to ensure two principles work out: timeliness and cost-effectiveness. Simply, a logistics manager is central to a business’ overall efficiency.
What do you need to be a logistics manager? Apply for such a post if you have at least a bachelor’s degree in logistics, SCM or business.
The Role of Freight Logistics in Product Transportation
Freight services provide for the transportation of an astounding volume of cargo and other goods annually, with the market worth trillions of dollars.
Growth and improvements in freight logistics have meant that the current volume of goods transported around the world has skyrocketed over the past decade. While most of the freight is still in the form of bulk goods, like ores and coal, technological and software advancements are making it pretty simple to use freight services for valuable products like computers.
Advancement in freight logistics and the overall growth in global trade also mean that unlike a few years back, much more is being transported now than it was the case then.
Freight forwarding has also impacted product transportation in a way that exporters and importers alike can move goods over long distances and to far more locations, all with reduced risks.
How Else Does Freight Logistics Affect Product Distribution?
- Businesses are benefiting from ancillary services like product insurance and warehousing, which means that freight logistics is making cargo shipment a lot easier. It is especially true for companies that would otherwise be bogged down by the numerous challenges in the market.
- Companies are also able to move commodities and other cargo via complex transport networks, with current modes using any of air, sea and land mechanisms.
- The availability of major third-party freight service providers has also played a role in infrastructural advancements. These improvements are driving economic development and consumer satisfaction, the latter mainly due to reliable product transportation.
The Latest in Freight Logistics Technology and Software
Chances are that if you work in the logistics department of your company, that same position will likely be completely changed within the next few years. Here is why that could be the case.
Global trade, much like the rest of the world, keeps changing as information systems and software becomes more sophisticated and the world embraces new technology.
Freight logistics is adapting to this information revolution, with more emphasis on digital technology that enhances customer satisfaction and business growth. As such, companies are going big on software systems and tech trends in cloud computing, artificial intelligence (AI) and Internet of Things (IoT).
Developments in the Internet of Things (IoT) might still be in infancy, but the technology behind it is quickly changing the freight industry. Among the latest is the use of radio frequency identification (RFID) to track cargo from the point of origin to the specified destination.
• This technology is now capable of detecting any counterfeiting that is so often done when goods are in transit.
You no longer need to go through the tedious confirmation of receipts or scan bar codes to authenticate shipments. All the information is relayed in real-time, saving time and money.
Another technological advancement is the use of machine learning. Now freight companies can use sophisticated algorithms to calculate and analyze shipment routes, choose ports or determine when to transport certain cargo.
Emergence of mobile apps and advancements in cloud computing is also a plus to the industry. These apps combine with cloud-based systems to allow companies to improve their logistics, all without the need to rely on overly expensive investments in infrastructure.
What Are the Top Freight Logistics Companies?
Are you looking for a freight logistics job? You might be glad to note that there are various openings you can explore.
The first port of call, of course, is taking a relevant degree course. With that checked, one can always seek out ads by top freight logistics companies at sites like Indeed.com. Go ahead and submit your resume.
Growth and competition in the freight industry have meant that there are numerous top class freight logistics companies doing business across the globe.
Opportunities in this industry can arise from anywhere, be it a small freight company that specializes in road freight or a highly reputable multinational like Switzerland-based Kuehne+ Nigel Inc. In the U.S, top brands include UPS Supply Chain Solutions and C.H Robinson Worldwide.
One of the biggest freight logistics companies in the world is China’s Sinotrans Ltd, while U.S.-based FedEx Logistics and DHL rank among the top 10 around the world. Other companies in the industry to rank higher in freight logistics are DB Schenker USA, Nippon Express and DSV Air & Sea Logistics.
You may already know of DHL, a top logistics brand that provides both air freight and ocean freight services. FedEx Logistics is yet another highly recognizable provider based in the U.S. that is providing a whole suite of services from courier to international shipping and package tracking.
Here are the top 5 logistics companies in 2019 (by revenue).
Smaller Companies May Better Suite Your Needs
While the larger companies may drive the market, smaller companies like B&B Logistics may suite your needs better; especially if you are looking for customer service, reliability, and efficiency. B&B Logistics commands a fleet of over 2000, but still retains all the concepts on which their business was built:
- Customer service
If you have need of a logistics company you can trust, call B&B Logistics today at 1-877-512-0692.
Road Freight Logistics VS Sea Freight Logistics
Road freight logistics involves the use of land-based transport systems, networks, and technology to move commodities and goods. Sea freight logistics, on the other hand, focus on the processes of handling, warehousing, and shipping of goods via ships.
In road freight transport, companies rely on trucks to move goods from one point to another, be it at a port, warehousing unit or consumption point.
Why would one consider road freight? Typically, it works in smaller quantities and thus is generally flexible, more cost-effective and easy to work around compared to sea or ocean freight. In the ocean or sea freight logistics, forwarders usually handle the details of the shipment, mostly in bulk containers.
Road freight is also considerably faster than the ocean freight. The one setback is a lack of better road infrastructure, especially in developing countries, which might add to the cost of freight delivery.
Logistics is fundamental to product transport, and that is so regardless of whether you are looking at road freight, sea freight, or air freight.