There are a few similarities between “Supply Chain Management (SCM) and Logistics” and “Freight Forwarding” but there are key differences that separate the two practices. Understanding each role can help companies make operational improvements, improve customer service and build a competitive advantage. Let’s start by understanding supply chain management and logistics, followed by what does it mean by the term Freight Forwarding, one by one. Supply Chain Management and Logistics In simple words, Supply Chain Management forms the strategy and activities that go into planning, sourcing, producing, and delivering goods to the customer. Along with that, supply chain management helps in handling returns. Logistics focuses on the right products being in the right place at the right time, and how to get them there on time. What Do You Understand by Freight Forwarding? Freight Forwarders act as a mediator between the organization that makes the shipment and the final destination for the goods. Freight Forwarders do not carry out the shipments themselves but offer multiple transport modes such as sea/ocean freight, rail freight, road transport, and air freight shipment to help the producers deliver their product on time to the consumers. Benefits of Supply Chain Management and Logistics VS Freight Forwarding Effective supply chain management is influential for business performance and can have a range of benefits, including the streamlined flow of goods and services as well as better customer satisfaction. Benefits of Supply Chain Management and Logistics Here are some of the benefits of supply chain management:
Benefits of Freight Forwarding Here are some of the benefits of Freight Forwarding:
Why Use Logistics and Supply Chain Management? Logistics and supply chain management help businesses stay competitive. These practices track and coordinate the efficient and cost-effective movement of goods and services, which is key to an organization’s profitability. Logistical Components of the Supply Chain Supply chain logistical components help to manage goods or services. Each element helps move materials, finished goods, and services through the many steps in the supply chain. The following are the logistical components of supply chains:
Why Use Freight Forwarding Services? Hiring freight forwarders to overlook the shipping of your products offers a number of benefits. If you are in two minds deciding if freight forwarding is the best move for your company, here are the advantages you need to consider:
Conclusion:
Logistics & Supply Chain Management and Freight Forwarding are completely different from each other as they have their own roles and services to offer. You can choose any of them as per your requirements. The function of a freight forwarder is far broader than simply scheduling transportation. Today’s freight forwarding partner should adopt a consultative approach. Whereas, supply chain management and logistics help you. Having real-time data metrics at your fingertips will enable you to put in place contingency plans to enable your business to ride out storms and take advantage of opportunities as they arise.
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Logistics is the science of the process of moving a product or service from the starting point (producer) to the endpoint (consumer). Any successful company leader understands the critical nature of well-organized logistics. They recognize that delivering friction less logistics is critical to meeting consumer needs and surpassing the competition. Importance of Logistics Companies
Conclusion
Logistics companies help organizations to stay top in the race and lead the market. It will guarantee that there will be streamlined operations with an assurance of a positive customer experience. Regardless of the niche, business owners will be looking at the need to have impactful logistics. In an era of a competitive market, it is crucial to meet the changing trends and customer demands. Freight cost is an important aspect of the shipment of goods across borders. Especially, for international shipping, shippers need to ensure that the freight charges are relevant to be profitable. While there are several factors that determine international container shipping freight rates, ocean freight is cheaper than air freight. This is just a comparison and the type of service to choose for freight shipment depends on your shipping requirements. Whatever the type of service used for the shipment of goods, you must ensure that you do not pay unnecessary charges for freight shipment. Moreover, you must follow certain strategies that can help you reduce the cost of shipment. Here we will discuss some important factors and strategies that can help you reduce the freight cost when shipping goods internationally: Tips to Reduce Freight Rates When we talk about the freight rates, the total cost of shipment has to be taken into consideration. It includes the transportation cost, inventory management cost, taxes, customs duties, and any other additional charges defined by the freight forwarders. Only when you have a clear understanding of the freight cost and freight rates charged by the service service provider, can you consider the following strategies to reduce the freight rates.
Freight Services by CARGOES CARGOES is a digital logistics service provider that offers international and domestic ocean freight services. It maintains transparent pricing and offers multiple solutions that can help you reduce freight costs. To know the estimated freight rates, you can enter your shipment details on the portal and hereafter receive the freight quotes. The implementation of technological and innovative solutions helps CAROGES to make optimal use of resources and reduce waiting time which significantly helps you reduce the freight cost. Some of the services offered by CAROGES to optimize logistics services are:
Conclusion: Globally there has been significant growth in international freight demand. With this also comes shipping challenges. Optimizing shipping costs is one of them. While the freight rates vary depending on various factors, the above-defined strategies can help reduce the shipping cost significantly. Moreover, choosing the right freight forwarding services is most important when it comes to international shipment. Today it is easy to compare freight rates, freight services, and reviews online to choose the best freight shipping partner. In this way, you can avail transparent service and avoid paying high prices on shipment of goods internationally.
Freight transportation has always been a point of concern for international shipping. Any geopolitical changes across the globe impact international shipping of freight first and foremost. Reports suggest freight charges have skyrocketed to almost 5 times that in per-pandemic years. More recently, the Russia-Ukraine war has been another factor to impact fuel prices, and hence freight transportation costs are further hiked. But for the smooth functioning of international shipping, we must find ways to tackle these challenges. What Causes a Rise in Freight Rates? Before we jump on how to manage rising freight costs, let us first understand what factors impact freight rates directly or indirectly. For this, consider what details are required when you check for custom freight rates. They are mostly:
What Causes Delivery Delays? Global events are the most common cause of delayed deliveries. In recent times, the pandemic caused delays because of covid restrictions, travel bans, labor shortages, and port congestion. Events such as the blocking of the Suez Canal and the Russia-Ukraine war also forced the re-routing of several ships causing delivery delays across the world. These unforeseen events disrupt the entire logistics industry and need quick resolutions to mitigate losses and incidents of poor customer satisfaction. The recent uprising demands for quicker deliveries are adding further pressure on the logistics industry calling for quick resolutions. How to Manage Freight Rates Inflation & Delivery Delays In 2022? When it comes to managing the current price rise in international shipping of freight, and handling delivery delays here are a few suggestions that can help:
Cost & time efficiency matter the most in supply chains that are dependent on international shipping. Going through such disruptions is challenging. It requires quick and informed decision-making to avoid heavy losses. Since supply chain efficiencies are impacted by freight rates and delivery delays, hiring a logistics freight forwarder equipped with technology and industry know-how works as a great help in managing them. Partnering with efficient logistics partners that allow for custom freight tracking can curb the losses that occur due to such unforeseen circumstances.
There’s not even an iota of doubt that companies involved in trade are primarily focused on sustainability. Companies want them to be seen as leaders in environmental regulation and the consumers want to know everything related to where the products they purchase come from and what they are made of. Effective supply chain management is possible with sustainable practices for sourcing, procurement and logistics. This article will further explain everything about sustainable procurement and sustainable sourcing and how they can help grow your business without hurting the environment. Sustainable Procurement This is an important aspect of any successful supply chain and procurement management process that defines what business can do to discover and mitigate the environmental impacts of their supply chains. This includes:
The Benefits of Sustainable Procurement: Reduced risks and increased reputation: brands who follow the social and ethical ways of supply chains gain success in the long run. However, suppliers with bad practices such as child labor and excessive pollution create a financial blow back on the company and eventually hurt its brand value.
Sustainable Sourcing Sustainable sourcing is crucial across all industries. With the global expansion of supply chains into developing countries, looking for lower costs and enhanced productivity, sustainable sourcing becomes more important. The term refers to the integration of social, ethical and environmental performance factors into the process of supplier selection. For effective and successful supply chain management companies involved in trade must comply with state laws and regulations along with meeting expectations of stakeholders, employees, customers, labour unions, NGOs and trade associations. As conservation and sustainability are the most prominent keys, businesses widely embed sustainable sourcing into their supply chain and procurement management processes to mitigate risks and welcome opportunities. While there’s no secret that sourcing comes with a wide array of risks including supply disruption, threats to brand reputation, cost volatility and disobedience to local laws and regulations, sustainable sourcing aims to establish long-term relationships with suppliers while improving companies performance on ethical, social and environmental parameters. Ways to achieve sustainable sourcing in your organisation:
If implemented successfully, sustainable sourcing and sustainable procurement can drive growth and success. They help logistics companies improve their finances and prepare them against a range of challenges that may disrupt supply chains. In addition, following sustainable supply chain management processes show the organisations are aware of future impacts and consider them while making any decisions.
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