Within each industry there is a specialized terminology of terms related to that industry. It happens that some terms find their way into common circulation and each of us uses them more or less precisely, with more or less understanding of the subject. We like to use new phrases we’ve heard, each of us has a fairly superficial knowledge of many specialties, and the superficiality of this knowledge is by no means an insult – it’s impossible to be a specialist in everything, we would have to have several lives to delve into many fields at the same time… supposedly cats have several of these lives, and they don’t seem to be specialists in many subjects either.
However, putting aside the cat jokes and the quibbles about the point of having knowledge in areas reserved for specialists in a particular industry, we want to give you a little insight into the definitions of the services that the industry offers, especially those offered by our company LCL Logistic. You can also find this information in the content of the website, but here it is gathered in one place and presented in the proverbial nutshell.
What is a warehouse?
What is a warehouse? Such a large hall in which one stores. And what does it mean to store? Well… it means that one stores products on some shelves in a warehouse. This is where the average person’s knowledge of logistics services usually ends.
Yes, commercial warehouses are usually simply halls of various sizes where customers can store their products. These premises must meet a number of sanitary and occupational health and safety requirements, have a certain temperature, be regularly deratized and disinfected and the employees employed are required to follow safety rules.
However, the operation of the warehouse does not end with the receipt of goods from the customer and their subsequent release. LCL Logistic is an example of a company that provides a full range of logistics services, such as consolidation and fulfillment.
And it is the meaning of these terms, the definitions of the services we offer, that we would like to introduce to you.
Outsourcing logistics services
An increasing number of entrepreneurs decide to separate from the structure of their company the implementation of certain tasks, entrusting them to external entities. This method has a name – it is outsourcing – and can apply to many areas of operation, such as IT, field service, marketing services or physical security.
In the case of entrusting storage and warehouse operations to an external company, we speak of contract logistics. This is simply a logistics service to which, in addition to the mere storage of goods, a number of operations carried out on the surface of a given warehouse are assigned. An entrepreneur opting for this type of cooperation does not have to incur the cost of investing in his own warehouse or hiring employees. The scope of contract logistics can include a number of services, depending on the needs of the customer and the offer of a given logistics company.
The scope of services, or rather their definitions, are our next terms that need clarification.
Palletizing, picking and packing
Goods in a warehouse are stored according to strict guidelines, usually stacked on industrial pallets of various sizes. Palletizing is nothing more than stacking retail goods in a specific order on a pallet. The customer can deliver the goods “in bulk”, bringing them in a car or delivering them in a container, warehouse employees will take care of the proper stacking.
On the other hand, the proper stacking of larger loads, separating them into individual goods or packages and putting them together on one pallet according to customer orders is called picking.
The above concept is often confused with the next one we want to introduce to you here – packaging. It involves the proper preparation of products for shipment, i.e. packing them. Goods are divided into batches and packed, forming kits ready for transport.
What does consolidation consist of?
Consolidation of shipments is a great way to reduce the cost of transportation, especially that over long distances, to be carried out in containers. In such a situation, an incomplete containerized cargo is combined with the cargo of another customer, which has the same or approximate destination point. Consolidation is the process of combining these smaller shipments so that they can be transported together and reduce costs. Here there is a clear advantage for the businessman using the services of a logistics company – without it, he would not have the opportunity to consolidate his shipments, lowering the cost of transporting them.
Inherent in this concept is the term deconsolidation, i.e. splitting the goods back into smaller shipments to properly deliver them to downstream or target customers.
What is Fulfillment?
At this point it would be appropriate to introduce the term fulfillment. This is the most complete model of logistics service, where the logistics company carries out the entire order process, from the point-of-sale request until the product is delivered to the customer. At the same time, at the customer’s request, this process can be handled only in a designated part. This is an attractive option for online store owners, who do not have to worry about warehousing and shipping and can focus on the sale itself. Fulfilment is a service designed with the e-commerce industry in mind.
Logistics, transportation and shipping
With the logistics business, inextricably linked is the concept of forwarding. Forwarding is an activity that involves organizing the transportation of goods. Its scope includes a number of activities such as matching the appropriate mode of transport, consulting and unloading the goods at the destination.
Transportation, on the other hand, according to the definition, is simply a set of activities involving the movement of people and/or goods using vehicles such as a car, ship, plane or rail.
So, as you can see, these three concepts – logistics, transportation and freight forwarding – will be inextricably linked, these industries function in close symbiosis, and a logistics company cannot do without cooperation with a transportation and freight forwarding company. Ideally, if in one location we can find an entity or entities operating in all of these industries. This is the case with our logistics company and its sister company, LCL Spedition, which has its own fleet of trucks and provides shipping and transportation services.
Of course, if one were to delve into the above issues and introduce other relevant ones that we have not mentioned here, a fat study of several volumes would result. Nevertheless, we hope that the basic concepts of the logistics and freight forwarding industries have been introduced to you, and that from now on you will be able to participate with greater confidence in conversations with people associated with the above-mentioned industries.
