The logistics service industry is defined simply as the acquiring, producing, and delivering of goods and materials to the intended end users or point of distribution. It includes all the science of planning, deploying, and then managing efficient processes for the best and most economical storage and shipping of goods as possible. This industry is a global one, catering to companies in all sizes because of the wide range of goods that need to be stored or delivered.
Transportation refers to the movement of resources from one location to another. This transport can take place by road, rail, water, air, or even natural means such as geothermal energy. Freight transportation is the major mode of transportation, accounting for over 60 percent of total logistics revenue. Rail, trucking, and maritime transportation are other types of transportation used in the supply chain. When oil, gas, or other sources of energy become scarce, transport is often made by pipeline and railroads.
One major component of the supply chain is the transportation of raw materials to the production site. Most companies utilize freight transportation because it is the fastest and most economical method of transporting goods. The transportation cost of most manufactured goods is between five and ten dollars per unit. However, when the price of the product increases to ten dollars per unit, the actual cost of transportation reduces due to the economies of scale created by the large number of suppliers that provide the goods to the production site. In most cases, transportation costs will remain consistent, no matter what the product cost per unit.
Supply chain management refers to the whole process of coordinating, timing, and providing for products or services to the end users in a timely manner while keeping the overall cost down. All the processes should be integrated if the logistics services are to have a significant impact on overall business profits. A logistics manager is responsible for keeping all the processes of the supply chain operational in order to provide quality services. This includes coordinating the flow of raw materials, transportation, gathering of resources, processing, packaging, and delivering the goods or services to their final destination in a timely manner. Discover more facts about freights at https://en.wikipedia.org/wiki/Containerization
Distribution - Logistics management is required to provide logistics company services as well. Shipping services are critical to most companies that require regular delivery of finished goods to their customers. In addition, logistics services include inland and offshore distribution. Logistics providers arrange for shipping services as well as storage of finished goods during transit to their destination.
In some cases, transportation only occurs between two locations while in other cases, shipping services may extend throughout the supply chain. These trucking company services are often provided by freight brokers.
Intermodal distribution - Some logistics service providers are intermodal, meaning they act as a link between shippers and delivery locations. Other logistics providers are direct, meaning that they arrange for transportation between suppliers and shippers with the use of transport vehicles. Direct logistics providers have an advantage over intermodal providers when it comes to fast movement of items, but they are not able to offer the same level of security or protection that shippers may find necessary.
