Can we use the terms logistics and freight forwarding interchangeably, as many people not completely connected with the transportation industry do? Specialized terminology in many fields is in common circulation, and most of us regularly encounter terms whose meaning, as it turns out, we simply do not know or mistakenly define.
Logistics and shipping – these terms are definitely not synonymous, although in explaining the significance of one, it is difficult to ignore the other, they are so closely correlated.
So what is the difference between logistics and freight forwarding?
Let’s start with what logistics is in general and what its areas of activity and goals are. The main tasks of a logistics employee are design, implementation, execution, supervision and control. General terms that denote a very wide range of activities. At the same time, the first aspect in which the difference between a logistician and a freight forwarder becomes apparent, since the main tasks of the latter will include all activities aimed at the efficient organization of the transportation of goods, that is, focused on the moment of transport itself.
Logistics activities include:
- establishing demand forecasts,
- multifaceted customer service,
- efficient flow of information and negotiation activities,
- ongoing supervision of inventory levels,
- order processing,
- procurement and packaging processes,
- handling complaints and returns,
- transportation, constant cooperation with carriers,
- storage, control of warehouse operations,
- management of possible waste.
A logistics employee must have full knowledge of the cargo – as early as the planning stage, care must be taken to eliminate errors that can cause financial losses, and every effort must be made to ensure the optimal route and conditions for the transport of goods. Warehouse management is an important function of a logistician’s work, in the case of our company – LCL Logistic – it is even a key task of our employees.
In addition to experience in handling and transportation technologies, a logistician should have the ability to design logistics processes, as well as knowledge of marketing, information technology, economics and often the basics of law.
Cooperation with the freight forwarding company
Cooperation with a forwarding company and a carrier is the basis for the operation of any logistics service provider. In the case of our company, we are in an extremely comfortable situation, cooperating with our sister company LCL Spedition, which has its own fleet of vehicles, with headquarters located in the same location as LCL Logistic.
Speaking of the differences between logistics and forwarding, it is worth emphasizing again that forwarding is focused on the very moment of transport, while the field of logistics also concerns the movement of people and information, not just goods. A logistician deals not only with transportation, but also with the organization and management of activities in the broadest sense.
Forwarding , on the other hand, is purely organizational activities, their area is practical, focused on optimizing the process of transporting goods – in addition, passenger transportation does not concern the forwarding industry.
The main areas of activity and, at the same time, the tasks of a forwarding specialist are:
- consulting on forwarding services,
- acceptance of orders, active search for them,
- selection of the most suitable means of transport,
- organization of the entire transport process,
- coordinating the forwarding process – from the moment of contact with the customer to documentary settlements,
- monitoring the route, responding dynamically to problems arising on the route during the execution of the order,
- Preparation and management of documentation such as forwarding contracts, waybills; close control of transport documents,
- preparing shipments for customs clearance and insuring it accordingly.
Logistics vs. freight forwarding
So, as you can see, the differences between what areas of activity pertain to logistics and what pertain to freight forwarding are clear – at the same time, the two industries are closely intertwined. The scope of forwarding is narrower, somewhat more specialized, while logistics covers a wider area. There can be no success in either of these fields without the smooth cooperation of both.