This post was last updated on October 2nd, 2023
Shipping and logistics are two terms that you will hear a lot when it comes to shipping goods. But what is the difference between shipping and logistics? And which one should you be looking at for your business?
The answer isn’t as simple, but there are some key differences that can make shipping easier or harder depending on how you choose to go about it.
Understanding the Differences Between Shipping and Logistics
There are two words that get thrown around a lot when it comes to shipments. And they are shipping and logistics. So what is the difference? And which one should you be looking at for your business?
What is the difference between shipping and logistics?
The answer is shipping refers to the process of delivering goods from one location to another, while logistics services are a lot more complex with multiple moving pieces.
It’s important for business owners who ship products often or work with third-party logistics companies to understand this distinction so they can find ways to save money on shipping costs, which in turn will help their bottom line!
Shipping Logistics: Definitions + Tips for Optimization
What is shipping logistics?
Shipment means the product you want to ship and logistics means the process of shipping or moving your shipment from the point of origin to the final destination.
Shipping logistics is the art of moving goods, products, and raw materials across vast miles with accuracy. While shipping and logistics are two interrelated terms; the difference is that shipping involves only the transportation of products.
Logistics is a part of the supply chain which includes activities such as ordering, purchasing, forwarding, and warehousing.
While the transportation of any product is important, there are other factors that businesses need to consider in order for everything to run smoothly. Procurement, storage, and freight forwarding are also necessary parts of shipping logistics!
Logistics management is the process of planning, implementing, and controlling the efficient flow of goods while simultaneously ensuring that customer needs are met.
It’s a critical element of any shipping process. It takes into account the time and cost associated with delivering products and affects many parts of our lives beyond the shipping we’re all familiar with.
So, in short: shipping refers to the freight transportation of goods. And logistics is the broader term that encompasses the entire process of shipping services.
Logistics vs. Supply Chain Management
Without sounding too repetitive, logistics services are the integration and maintenance (storage system) of goods in an organization. Supply chain is the coordination and management (flow and movement) of a complete supply chain operation.
Why is Logistics Important?
Logistics are important to businesses both large and small because shipping and shipping expenses can make up a significant percentage of their bottom line.
An effective and streamlined logistic management system can also increase sales and profits by improving distribution efficiency, delivery accuracy, and customer support.
For businesses that have an eCommerce site, shipping efficiency also means less time waiting on customers’ orders before they are shipped out and greater responsiveness when customer service issues arise.
For larger international companies with locations all over the world, more efficient shipping translates into savings in fuel and cargo costs as well as reductions in damage rates if there were no logistical management plan.
The right shipping management solution will also help improve inventory control by enabling better forecasting of demand so that shipping resources can be allocated to meet the needs of customers with less need for carrying excess inventory.
Logistics also help reduce waste and ensure compliance with government regulations, making it easier for companies to deliver goods in a timely manner while staying within budget.
With the right plan in place, logistics management is much more efficient at providing visibility into all aspects of warehousing and shipping operations. Managers can have control over operational costs like product distribution mapping, real-time routing data, and tracking, order fulfillment rates, or supply chain metrics related to sustainability and automation.
What are the four types of logistics?
There are four types of transportation in logistics that companies can use to ship goods. These are ship, truck, train, and plane — also referred to as maritime, road, rail, and air shipments.
Sea and Ocean shipping
Ocean shipping is one of the most popular ways of freight transportation because it is one of the cheapest and fastest in the long term! Ships carry containers filled with everything from food, clothes, cars, and even furniture across oceans.
Trucking and ground transportation
Trucking is often referred to as “ground shipping” because it’s about shipping goods by road and highway systems.
Even though trucks have higher fuel costs than planes and other modes of transportation, trucking remains a popular choice when it comes to shipping logistics.
Air transport service, also known as air freight, is when shipments are transported by planes through various airports all over the world. This shipping type can take anywhere from one week to three days depending on the distance of a shipment.
Tips for optimizing shipping logistics
What are the logistics costs?
Logistics costs are all of the expenses incurred from moving products. Sourcing raw materials to fuel, warehousing, delivering customer orders, and every other step in between the shipping process.
How to reduce shipping logistics costs
- Review your shipping carrier options. Having the best shipping rates will ensure that shipping logistics costs are optimized. Also be sure to review shipping carrier options for shipping times, so that you can get the best possible delivery time without sacrificing shipping rates or shipping methods.
Tip: Contact your courier company’s customer service department to ask about further discounts. Or read our blog post about 10 Secrets to Saving Big on Courier Shipping
- Buy the right packaging for your products and buy in bulk! Buying shipping supplies in bulk saves money over time because you’ll need to pay a one-time fee upfront for all of the shipping materials. Find out which size packaging is best suited for your products and buy accordingly.
Tip: Print shipping labels at home or at the office.
- Get organized. Where are you currently storing your products? Does the layout make sense? Or do you have multiple parts and pieces in different locations? How much time are you losing collecting everything? An organized space is a shipping logistics cost-saving space.
Tip: Conduct a product inventory to find out what you have and determine if it’s worth storing in the future, or whether there is room for more storage. This will help reduce shipping costs over time because you won’t be ordering as much from your supplier.
Shipping and shipping logistics are a big deal for both large and small businesses. It can be difficult to optimize shipping costs, but with these tips, you should start seeing savings.
If there’s one thing every business owner knows all too well, it’s the fact that hidden logistics expenses can really eat away at any profit margin leaving owners to dip even further into margins and savings just to stay competitive!
Luckily ShipSimple has some of the lowest and most competitive shipping rates and logistics solutions for companies looking to get their hands a little less dirty while still saving money by outsourcing these crucial logistical functions to a brand and company they trust.
Get started with ShipSimple today. Your bottom line will thank you for it!