If you’re a business owner in Singapore, logistics and transportation are critical processes in your operations. In every business, there are goods coming in and going out as raw materials or finished products.
To describe the processes involved, many business owners use transportation and logistics interchangeably. However, these two processes are different, with logistics being broader than transportation.
If you need logistics solutions for your company, read on to learn the difference between transportation and logistics.
What is Logistics?
Logistics is a subset of supply chain management and refers to the management of the flow and the storage and handling of materials, parts, and goods.
The supply chain is an essential part of any business and without proper management, operations would be disrupted. Through logistics, raw materials flow smoothly from suppliers to factories. The finished products then flow seamlessly to retailers and finally to the consumers.
For the process to continue smoothly, logistics management is key. Logistics involves overlooking every stage of the flow of materials across the supply chain.
It extends further to the paperwork, legal compliance, standards, reporting, and information flow. The process covers inbound logistics, which deals with the flow of raw materials from suppliers, and outbound logistics as companies distribute completed products to consumers.
Within the companies, there’s the aspect of internal logistics in which your company manages the flow of materials, parts, and other essentials to allow smooth production. The entire logistics process comprises supply, distribution, production, and reverse logistics.
For everything to run efficiently, logistics requires planning, inventory control, packaging and handling, and information processing.
Logistics management deals with the management of the processes that ensure efficient transportation and storage of materials. Without an efficient logistics strategy, businesses would struggle with productivity. While delivery of goods might happen, the lack of oversight through a unified system would lead to inevitable hurdles.
The biggest freight companies offer comprehensive logistics solutions such as transportation, custom solutions, warehousing and logistics which concentrates on the movement of goods through air, land, or sea.
Related Resource: How To Raise Funding For Your Business In Dubai?
What is Transportation?
Transportation is a subset of logistics and an important component of supply chain logistics, transportation in supply chain management only deals with the movement of these items from one location to another. This is the most visible aspect of the logistics process. Some modes of transportation include:
- Air: By plane, drone
- Land: By rail, road, pipeline
- Water: By river, lake, and ocean
For transportation to work seamlessly, businesses need more control, which makes logistics crucial. A transportation company can’t handle the entire transfer of goods without external input. Without transportation, it would be impossible for trade to happen. Transportation creates a seamless link between suppliers and end-users.
Whether you want materials moved across countries or over oceans, a transportation company can do this. In most cases, companies that offer transportation work under a bigger logistics operator. If the transportation system fails, the entire supply chain collapses.
Whenever there’s a disruption in air, water, or land transport services, businesses in Singapore suffer massive losses. Any hitches in transportation services affect the entire supply chain management.
Related Resource: How To Take Your Business Global: Top 5 Tips To Set Up Internationally
What is the difference between Logistics and Transportation?
If you’re a business owner, you’ll come across the terms logistics and transportation used interchangeably. When looking for these services, the confusing use of the terms confuses you and you might end up choosing the wrong solutions for your company.
While logistics covers a broad range of solutions in the supply chain system, transportation only refers to the movement of goods/materials from one place to another. Transportation service for instance won’t help your business with custom issues or efficient cargo handling.
Your logistics partner covers the broader task of management of goods and materials flow. Logistics covers transportation, storage, warehousing, cargo handling, inventory, and information and control. If you have goods in transit, the logistics company helps you track and report on the process. The company also oversees the safety of your cargo and manages the entire process.
Other important aspects of logistics include:
- Cargo insurance
- Compliance with importing and exporting rules
- Settling claims in case of freight issues
- Management of cargo handling systems
- Risk mitigation
A transportation company, on the other hand, only focuses on delivery of goods or materials safely and fast. The company has a fleet of vehicles to achieve this and hires the right personnel for the job. Your logistics partner will most likely offer transportation solutions or lease a transporter for the job.
Logistics falls under the broader supply chain system, while transportation works under logistics. Without efficient logistics solutions, the entire supply chain, including transportation, suffers.
Looking for logistics solutions? Maybe you want a reliable transportation service to handle the transfer of your goods? Whatever your needs, do your research to differentiate between logistics and transportation. While transportation only deals with the transfer of materials, logistics is much broader and handles everything else that’s involved in the supply chain system.