What’s the difference between Freight and Logistics?
We are all living in a world of complex jargon and terms. It is often challenging to choose the right due to these jargons. As a result, in various instances customers end up paying for services they never intended. This problem is even more pronounced in the supply chain and transportation industry. So, let’s start from the basics – what’s the difference between Freight and Logistics? Both the terms freight and logistics bring to mind imagery of bulky goods being transported from one place to the other via truck, car, rail, ocean liner, or any form of transportation. At the outset, freight and logistics are considered incredibly similar. However, they are quite different as you dig deep with your understanding.
What is Freight?
The term ‘freight’ is used to refer to goods that are transported in large quantities where the mode of transportation could be via roadways, railways, waterways, or airways. Freight transport refers to the physical process of transporting commodities, merchandise goods and cargo.
In most countries, any shipment larger than 30x30x30 inches, or weighing over 150 pounds is considered freight. Typically, it is more cost-effective to ship shipments of such dimensions via parcel. Shipping freight is a hassle-free method of transporting goods in bulk and is considered a cost-effective, safe, and secure shipping option.
Freight Management:
Freight management refers to the supervision of the transportation of freight. Freight management combines the essential requirements to complete excellent transportation. Namely, human resources, logistics experience, and information guarantee smooth sync between the shippers and carriers.
Freight management usually involves the following activities –
- Choosing a trustworthy freight & shipping transport company and developing a line of communication with their carriers and personnel.
- Discussing and arriving at a consensus on the prices, expectations, service level agreements, and other conditions.
- Completing the requisite paperwork for the cargo transportation activity. This is especially important in the case of international transportation. Moreover, international transportation also involves working on customs agreements.
- Managing the transporters to gather and distribute the cargo at scheduled times.
- Ensuring that an optimal insurance plan is in place.
- Managing payments, receipts, and invoices.
What is Logistics?
Logistics is an important part of supply chain management. It involves the planning, execution, and controlling the efficient flow and storage of goods and services. Logistics also involves the overall communication and information exchange between the point of origin and consumption. In addition, logistics based projects understand the customer’s transportation needs and ensure that the end-to-end process is dealt with utmost efficiency and zero physical damage.
Logistics Management:
Logistics management usually involves the following activities –
- Managing the storage, administration, and schedules.
- End to end vendor and customer order management
- Ensuring adequate end-to-end packaging, handling, and transport management.
- End-to-end logistics related to Import and export activities.
- Coordination of the supply chain and optimization of connections.
- Keeping track of precise goods and management across the overall supply chain.
- Optimization and analysis of cargo flow from one point to the other.
- Asset management with visibility into the supply chain.
So what’s the difference?
Logistics refers to the overall process of managing how resources and goods are acquired, stored, and transported to their final destination. It is a big picture view centered around processes and planning. Therefore, logistics is an all-inclusive term with end-to-end responsibility.
On the other hand, freight and associated management can be considered a sub-division of logistics management. This is because logistics involves more stakeholders and even more activities than freight services.
Freight Forwarders have ready partnerships with multiple logistics companies. However, a freight forwarder does not own assets directly. A logistics company owns most ships, trucks, or planes.
While logistics is a broader term, freight and logistics management are similar in the value chain. The success of logistics depends on the effective management of freight. Therefore, the proper integration of both freight and logistics determines the overall success of any project.
It is crucial to understand whether you need a freight shipping service or an end-to-end logistics management to carry out a successful and cost-effective transportation or goods movement project. This often depends on the scale and budget of your project. In any case, it is a must that you partner with a trustworthy, reputed, and experienced freight or logistics provider.