A business constitutes several processes involving marketing, customer service, sales, production, and distribution. Apart from these, enterprises pay much heed to shipping logistics and order fulfillment processes. They use transportation and warehousing to fulfill deliveries to customers.
With the rapid growth in the eCommerce sector, businesses are constantly improving their supply chain operations. Here, we will dig deeper into the relevance of shipping logistics and different ways to reimagine delivery operations.
What is Shipping Logistics?
Shipping logistics is a comprehensive process of managing the movement, stocking, and monitoring of goods in the supply chain.
It pertains to the entire journey of the item, starting with order creation and to the last-mile delivery to the customer. It strategizes your supply chain and delivery operations to deal with several challenges.
For example, the distance between your storage location and the customer’s delivery address can matter during last-mile fulfilments. Other factors in shipping logistics include carrier integrations, product returns management, and freight shipping.
What are the different types of Shipping logistics?
A well-managed logistics system can reduce costs and increase efficiency for businesses to achieve long-term profitability. There are three different types of shipping logistics.
1) Inbound Logistics
Inbound logistics refers to the procurement of raw materials and goods by the company. The process of handling these materials has several steps - order, receiving, storage, and transportation. Each step helps prepare the product for deliveries and makes them ready to move.
Every business has its inbound logistics approach and maintenance of buyer-seller relationships. They face challenges and make specific decisions to counter every inefficiency.
That is when most businesses optimize their inbound logistics workflows to make logistics operations faster and smoother.
2) Outbound Logistics
Outbound logistics is the next half of the shipping logistics trajectory. It involves inventory management, storage, and movement of goods according to customer demand. An efficient outbound logistics process prepares the order for on-time delivery for successful fulfillment.
Optimizing outbound delivery activities helps businesses achieve more sales and customer satisfaction. They also accomplish outbound logistics optimization through dispatch management and route optimization.
A precise outbound logistics workflow can contribute to a solid industry reputation.
3) Reverse Logistics
The procedure of sending back the product/ordered item from the customer to its origin warehouse is known as reverse shipping logistics.
This is when the customer wants to return the product and has requested its return. Reverse logistics plays a vital role in the supply chain process of the business.
A business may have a separate carrier that handles return orders. Reverse logistics promotes sustainability by reducing waste through regular disposal, recycling, and reusing of products.
What are the different processes in shipping logistics?
Shipping logistics consists of different processes that are pivotal for ensuring successful deliveries. Here are the 8 pillars of the shipping logistics process.
1) Procurement
A business procures cheap or low-cost raw materials from suppliers for manufacturing purposes. They calculate various costs like priority rankings and lockouts, extra fees, backorder delays, warehouse costs, and other costs based on the distance.
Businesses prioritize these contributing factors and differentiate between suppliers before picking out the best option for them.
The procurement or material sourcing process is also known as strategic sourcing. It is a crucial step in production planning, ensuring the right quantity, quality, and price of raw materials that are coming in.
2) Storage and Warehousing
Storage is a common pursuit of shipping logistics. A company stocks and stores its products to meet customer demands.
Storing the goods in the right conditions and organizing them in the warehouse is a part of outbound logistics. For example, logistics planning includes ensuring space availability, docking facilities, and cold storage.
Warehouses also use warehouse management systems (WMS) to manage storage and warehouse workflows. It helps businesses organize, keep track of their inventory, and run processes advantageously.
3) Order manifestation and Processing
Order manifestation is the process of packing and preparing the order before pickups. It is the process after order creation and its acceptance by the seller.
When an order is processed, the seller verifies it, selects the requested piece, and starts organizing its delivery process. Sellers calculate processing payments and ensure the product availability in this activity.
Businesses can integrate APIs (Application Programming Interfaces) to run the order creation and processing to reduce tedious tasks.
ClickPost uses powerful APIs to fast-forward the entire process and generates AWB (Airway Bill) numbers to help you track the orders in transit.
4) Payments
With the ever-growing logistics industry, much has changed. Payment methods are different and more convenient, thanks to digital wallets and mobile payment applications.
Businesses are adapting to the new payment trends and allowing customers to make transactions securely within seconds.
Payments are integral for businesses and logistics companies. They take full advantage of automated payment systems to ensure hassle-free payments and accurate accountability of goods and services within the shipping logistics processes.
5) Shipment Tracking
Tracking down your shipment and monitoring each milestone in real-time is the only way to know the exact location of your shipment during transit.
It is a popular logistics activity implemented by thousands of businesses to keep their customers informed and increase order transparency.
Shipment Tracking enables complete visibility of the shipment and offers proof of delivery to customers. Also, shipment tracking software replaces slow and inefficient traditional logistics processes.
6) Data Analytics
Data analytics is a fundamental asset of shipping logistics and businesses cannot do better without it. Supply chains are meaningless without data to make informed decisions and calculations.
Analytics empower supply chains and logistics processes by identifying routes for demand forecasting, real-time tracking, and more.
To leverage data analytics into your business and logistics operations, you require advanced software to maintain your supply chain data. An automated logistics system can house APIs to manage all data and implement business intelligence strategies.
7) Transportation Management
Transportation is the heart of logistics. It is the physical movement of goods from the origin source to the destination.
Goods are transported through several modes and shipping costs are calculated accordingly. Shipping rates vary differently for air, land, sea, urgent deliveries, and by the nature of the goods.
Effective transportation management requires automation software and the implementation of strategies. These tools can also keep customers in the loop and maintain unwavering communication with the personnel in delivery operations.
8) Returns Management
The reverse logistics process refers to the safe return of the unaccepted product from the customer’s doorstep to the seller’s origin. Returns can impact several businesses and their functionalities, from customer satisfaction to inventory management.
ClickPost offers the Returns Pro API to place return requests based on your business’s return policy. You can automatically allocate reverse pickups, manage exception pickups, and track your returns within a unified dashboard.
How can businesses improve shipping logistics efficiency?
Businesses need the best in the current era of logistics and shipping. They require strategies, automation, and whatnot. However, here is what they really need before anything else.
1) Maintain good relationships with suppliers
Maintaining good relationships with suppliers improves your business and your logistics efficiency. Suppliers offer you more than raw materials.
They are on the same page with you for long-term commitment, regular communication, timely feedback, and sharing ideas about your business.
Also, they expect you to understand their needs during challenging times which can further enhance your relationship with them
2) Monitor performance
Enterprises should monitor their performance metrics and run their logistics operations effectively to stay ahead of the competition.
Performance metrics include customer satisfaction, stock management, order accuracy, and successful delivery rates. By doing this, you can identify areas that need improvement and take action on the same.
3) Upgraded technology
Latest tech integrations are a plus point for your business. Automated tools like RFID tags, GPS tracking, and artificial intelligence can skyrocket your business in less time.
They can perform all operations without manual effort and reduce time and money. Upgraded technology improves the flow of data and overall logistics workflows.
4) Utilize data analysis
Data analysis can help you understand competitors and customers better. Data analytics tools provide a clearer view of market trends and inform you about customer behavior.
They track key performance indicators and identify various areas of improvement to work on. By leveraging data analytics, businesses can predict sales and demand to plan production accurately.
5) Reduce operational errors
Operational inefficiencies and challenges are part and parcel of shipping operations. They can also cost you more and make it difficult for your business to scale.
You can reduce these errors by effectively strategizing and deploying automation tools in logistics. As a result, it can maximize your savings and help make fruitful investments in your businesses.
Final word
In the current eCommerce landscape, it is impossible to imagine meeting customer demands without a concrete supply chain strategy.
Although businesses depend on third-party logistics providers to reduce transit times and shipping costs, overlooking shipping automation can slow down logistics operations.
This shipping logistics guide covers all important logistical aspects and supply chain knowledge to keep you updated and help you achieve maximum scalability in business. It includes a detailed view of shipping logistics to get you started.
FAQs
1) Is Shipping Logistics optimization important and beneficial for businesses?
Yes, shipping logistics optimization is crucial and advantageous for businesses. For example, leveraging GPS and RFID technology can increase operational efficiency through real-time tracking, asset allocation, and timely returns. Enterprises can effectively run their shipping operations and gain a competitive edge over the others.
2) What are Incoterms? How are they related to shipping logistics?
Incoterms are standard trade terms in a three-letter set, commonly used in product sales during international shipping. For example, CPT (Carriage Paid To), DPU (Delivery at Place Unloaded), FOB (Free on Board), CFR (Cost & Freight), etc are popular Incoterms.