Outbound logistics is the process of storing, transporting, and distributing goods to customers. The process starts when a customer places a sales order which is passed on to the warehouse for packing and ends in product delivery. In order to make outbound logistics run smoothly, businesses must pick the right distribution channels, maintain a practical inventory stocking system and optimize delivery options.
The process of Inbound Logistics refers to the inflow of raw materials from suppliers to manufacturing facilities. It involves activities such as the storage and distribution of raw materials and parts that are going to be used in production. It also includes sourcing materials, tracking inventory and optimizing the movement of goods from suppliers to the store, warehouse or manufacturing plant. This is the first stage in the value chain.
To summarise, Inbound logistics focuses on the transportation and storage of incoming goods. An important point to consider while signing contracts for inbound logistics between a seller and buyer is to clarify who is going to be the liable for the cost of damage which may occur in transportation and transit.
The shipper or exporter, is the party that is responsible for packing and preparing all the goods being shipped outward. They are also accountable for obtaining all the necessary paperwork and documents during the procedure, such as essential licenses and checking customs exemptions or restrictions to prevent problems during customs clearance both at origin and destination port.
A consignee is the receiver of the shipment and usually the owner of the goods. This may be an individual or a company. Unless stated otherwise, the party listed as the ‘consignee’ on the Bill of Lading is legally required to be physically present to collect the shipment
A Trade Agreement is a contractual arrangement between states regarding their trade relations. Trade agreements may be bilateral or multilateral—that is, between two states or more than two states.
Trade agreements occur when two or more nations agree on the terms of trade between them. They determine the tariffs and duties that countries impose on imports and exports. All trade agreements affect international trade.
Reefer: This is a refrigerated cargo ship used to transport perishable commodities that require temperature-controlled transportation such as fruit, meat, fish, vegetables, dairy products, and the likes.
Bulk cargo: Bulk cargo is commodity cargo that is transported unpackaged and in large quantities. The material can be in either liquid or granular, particulate form or as a mass of relatively small solids, such as petroleum/crude oil, grain, coal, or gravel. This cargo is usually dropped or poured, with a spout or shovel bucket, into a bulk carrier ship"s hold, railroad car/railway wagon, or tanker truck/trailer/semi-trailer body. Smaller quantities (still considered "bulk") can be boxed (or drummed) and palletized. Bulk cargo is classified as liquid or dry.
Haz cargo: Haz or Hazardous cargo, as the name suggests, refers to dangerous goods or substances, materials, and articlesthat are specifically covered by the IMDG Code because of their flammable, corrosive or poisonous nature.
General Cargo: Ships that carry goods that must be loaded individually , and not in intermodal containers nor in bulk (as with oil or grain) are called general cargo ships, while the cargo itself is called "break bulk cargo" or general cargo.
These goods may not be in shipping containers. Break bulk cargo is transported in bags, boxes, crates, drums, or barrels. Unit loads of items are secured to a pallet or skid. A break-in-bulk point is a place where goods are transferred from one mode of transport to another, for example the docks where goods transfer from ship to truck.
A forward freight agreement (FFA) is a financial forward contract thatallows ship owners, charterers, and speculators to hedge against the volatility of freight rates. It gives the contract owner the right to buy and sell the price of freight for future dates.
Freight charge refers to the “freight rate” or the price that is charged by a carrier for delivering cargo from the source location to the destination point. It is the charge that is paid by a person who wants the goods transported from one location to another.
|The term “cargo” is generally used for goods transported by ship or plane.||The term “freight” is typically for goods transport by train or truck.|
|We have cargo planes and cargo ships. Mail may also be called cargo.||The terms freight truck and freight trains are commonly used. However, this is not always the case, as the term “air freight” is acceptable usage too.|
|Used specifically for the goods only, “cargo” is not used to include the payment or the money being charged for the transport of goods.||“Freight” is also the term used for the payment when certain goods are transported.|
|Any product that is being transported can be called a cargo.||Freight can also mean a cargo being transported via truck, train, plane, or ship.|
|Large cargo containers are usually used in transporting the goods called cargo. Cargo can be transported on pallets, in cargo handling nets, or by other means.||Freight can denote many things. It may mean the product, merchandise, the amount payable, or the money charged.|
|The mailing services offered of parcels may also be known as cargo.Any item for consumption that is being transported can be referred to as cargo.||Mail cannot be considered freight, as it is only used to describe commercial goods.|
|Cargo being transported may be referred to as freight if referring to both the goods and the money charged for their transport.|
Ocean: Seaborne trade accounts for about 90% of the global trade, and as per UNCTAD, 1687 million tons (2015 estimate) were carried in around 177.6 million containers (2015 estimate) covering 998 billion ton-miles (2016 estimate).
Air: Over the next 15 years, as the world GDP grows, there will be a demand for higher value goods. As per Boeing’s 2016 – 2017 world air cargo forecast, there will be a proportionate growth in the value per ton of total traded goods around the world.
Rail: Another mode of transport which is also considered a ‘green’ option is rail. Trains burn less fuel per ton-mile than road vehicles and a train, which can have as many as 100 wagons, only needs one driver. There are, however, some additional costs which are incurred in a rail journey: at each end of the rail transit, a road delivery will be needed, and there will be a lift cost to transfer the container between the train and the road vehicle.
Road: Road freight is one of the most common of all modes of transportation. It is widely used in continents such as Europe, Africa, and North America. The single customs document process provides a seamless movement of goods even across various states and countries.
Multimodal: Multimodal is a combination of different modes of transportation such as rail, road, and sea which allows the customer to cost-effectively manage shipments from start-to-end, ensuring optimum care and efficiency every step of the way.
|3PL Logistics||4PL Logistics|
|In a 3PL model, an enterprise maintains management oversight, but outsources operations of transportation and logistics to a provider who may subcontract out some or all of the execution.||In a 4PL model, an enterprise outsources management of logistics activities as well as the execution across the supply chain.|
|Additional services may be performed such as crating, boxing and packaging to add value to the supply chain.||The 4PL provider typically offers more strategic insight and management over the enterprise's supply chain. A manufacturer will use a 4PL to essentially outsource its entire logistics operations.|
|In a farm-to-grocery store example, a 3PL may be responsible for packing the eggs in cartons in addition to moving the eggs from the farm to the grocery store.||In a farm-to-grocery store example, the 4PL may manage the communication with the farmer to produce more eggs as the grocery store's inventory decreases.|