There are a lot of terms and jargon used in business that appears to be the same things. Within the world of product manufacturing and distribution, there are two terms that, particularly by the uninitiated and business newbies, are used interchangeably.
The two terms in question are logistics and shipping. Many people just consider these terms to be referring to the same thing. Are they really just different words used for the same thing? The short answer is no. To help you understand why, we are going to look at the two terms separately, discussing what each means, what they cover in a supply chain and what makes them different from one another.
First, let’s discuss shipping.
What Does Shipping Mean?
Shipping in business is the movement or transportation of products, goods and materials from one location to another. There are various kinds of shipping that are required for the movement of different types of goods or to meet the different demands and requirements of a company’s customers. Although they involve different transportation types, arrival times, handling and documentation, they are essentially the same thing – taking something from one place to another.
What, Then, is Logistics?
This is where a lot of people have difficulty separating logistics and shipping from one another. Logistics is, in the most basic definition, the comprehensive organization and implementation of complicated operations. Take a business that manufacturers products (it doesn’t matter what the products are and what industry the company is operating in), the logistics side of things is crucial for managing the flow of those products. That is, through the different departments or parts of the business, from their point of origin or creation through to their point of consumption, when they reach the end-user or customer.
Therefore, rather than just involving the transportation of the goods, it also involves processes like the packaging, warehousing and handling as well as many other aspects too numerous to mention.
So, What Are the Differences Between Logistics and Shipping?
As you can undoubtedly see from our brief overview of both areas of business, the main difference is the scale and scope. Logistics covers more than the shipping. It is a hugely important component of successful supply chain management, which is vital for any business strategy.
Logistics offers additional benefits and functionality from simply having a shipping service. Managers of logistics teams need to be able to make the best decisions about all kinds of aspects of the process of getting the items from the point of production to the end-user. This includes importing, exporting, insurance and containerization in addition to what has already been mentioned.
The crucial thing companies need to realize and appreciate is that, despite the many differences between these two terms and aspects of business, they both have a part to play.
Even being part of the overall logistic services offered by a company, the shipping side of things need to be handled in harmony with everything else.
Be Careful When Choosing a Company
So, now you know. The easiest way to break it all down would be that logistics covers everything from getting a product or materials from its starting point or production point to the end-user, which includes shipping.
Although these do normally go hand in hand with one another, some businesses simply deal with shipping. A company that just offers to ship may not offer any other help or services related to logistics. When choosing, you need to be sure you are getting the right kind of service to meet your needs.