eCommerce has grown at a dizzying pace over the last 5 years, and the dependence on 3PLs has grown with it. Businesses know firsthand the importance of working with a shipping company that supports them and delivers a positive experience for their customers. But if you’re new to eCommerce, you’re probably just starting to realize that there’s more than one type of shipping company, the two most common categories being logistics management and freight management.
If you want to improve the efficiency of your supply chain, freight management and logistics management are critical. And while the terms logistics and freight are synonymous with the transportation and movement of commercial goods by ocean, air, rail, and truck, these terms are not interchangeable.
Before we explore the differences between freight and logistics management, we need to first identify their roles and processes.
Freight management refers to the process of controlling freight movement. It’s the intricate process of planning, managing, and executing a cost-effective procedure for the delivery of products. While this appears to be a straightforward task, there’s more to freight management than meets the eye. For instance, freight management combines human resources, logistical knowledge, and data to ensure that the shipping company and carriers are in sync.
A company must execute the following actions, among others, for successful freight management:
Selecting a suitable transportation firm, initiating contact, and engaging specific carriers and transportation
Agreeing on rates, expectations, and terms
Creating and completing thorough paperwork that is required during the freight shipping process
Shipping and coordinating precise transporters to collect and deliver freight at certain times
Choosing a mode, then routing trucks or trailers with load balancing
Following the cargo's progress across the supply chain
Choosing, engaging, and working with customs brokers to ensure customs compliance
Providing an effective insurance plan for the carried cargo while also overseeing freight claims
Supervising and processing payments, receipts, and invoices related to freight transportation
Improving transportation performance, reducing travel time, lowering expenses, and managing environmental factors to ensure that the transportation process runs smoothly
In addition to these activities, freight management staff may also handle additional tasks depending on the specific requirements of each cargo load. Without efficient freight management, essential organizational operations can suffer and ultimately fail.
Logistics management is the process of coordinating the acquisition, storage, and transportation of resources to their final destination. Logistics management, in particular, is a component of supply chain management. It involves controlling the planning and implementation of effective cargo forwarding and storage, as well as conveying relevant information between the point of origin and the point of use to suit client expectations.
The functions of logistics management include inbound and outbound transportation management, fleet management, warehouse management, materials handling, order fulfillment, logistics network design, inventory control, supply/demand planning, and 3PL management.
Logistics management includes, but is not limited to:
Managing orders from suppliers to customers at all stages of the process
Logistics planning and management for warehouses and distribution facilities
Managing materials handling, packaging, and final transportation of goods
Inbound and outbound logistics management
Managing all parts of the supply chain's strategic and tactical planning
Designing and optimizing the flow of the supply chain network
Managing and establishing supplier connections
Managing the flow of materials, analytics and optimization
Ensuring end-to-end supply chain visibility
Asset management, including inventories and infrastructure
There certainly are several major differences between freight management and logistics management, but there are also some striking parallels. It helps to think of logistics management as a broad term that encompasses a variety of procedures, including freight management.
While freight management may be classified as part of logistics management, it’s no less significant. Overlooking this essential component results in far reaching consequences that negatively impact the entire field of logistics management.
As a business owner, it’s imperative that you take measures to enhance your own logistics management, and the first step is to find the right shipping company and tools to help you achieve your goals.
There are multiple benefits to working with a shipping company, including access to:
An extensive network of carriers
Innovative shipping solutions