What is a Logistics Company?

Many people think they know what a logistics services company is, but the actual reality is their knowledge only scratches the surface. That’s not a bad thing, why do you need to be an expert at anything logistics services when there are specialist couriers operating nationwide? In this blog post, I shall explain exactly what a logistics services company is, what they do and why you should hire one.

So what is a Logistics Company?

Simply put, a logistics services company assists other companies to move goods from ‘Point A’ to ‘Point B’. This could be anything from manufactured goods, services or information. Essentially, anything that needs to be transported from one location to another can be done by a logistics company.

A good example to use for a logistics services company would be same day couriers. Their primary function is to move goods from one place to another on the same day. Courier companies such as these can be used by anyone from online retailers to businesses selling hoses.

Overall, logistics services company will help to plan, implement and execute the movement of anything from one point to another. Some companies will only help with certain parts of the logistics process, such as the actual delivery of goods. However, some companies will be able to take part in the full process.

What does a Logistics Company do?

As mentioned a little bit above, a logistics services company is a company that assists with the movement of goods, information and/or services from one place to another. There are many types of companies, multi-drop couriers, international hauliers and shipping companies. However, there are some specialist terms you need to know.

For most business owners, air cargo and air freight are used interchangeably to refer to the transport of goods by air. These two means of long-distance shipping are similar. Yet, there are also distinct and vital differences between them that could affect which form of transportation is appropriate and suitable for your needs.

Using air freight is an essential component of international shipping, acting as a crucial link in the chain with other forms of freight services to transport your goods seamlessly from one location to another.

Learn about which form will best suit your business needs so you can send and receive goods with confidence.

The Efficiency of Shipping via Air

When time is of the essence, you need air transportation. This mode of transport is time-sensitive, and you’re able to send goods to virtually anywhere worldwide using in-depth tracking and enhanced security.

If you were to send a package by sea using ocean freight, you would need to wait several weeks for your chosen destination to receive your goods. Although ocean freight is the most common form of long-distance shipping for both importers and exporters, it comes with distinct disadvantages that sometimes make it unsuitable.

Exploring Basic Definitions

It’s easy to see initial differences when you examine the meaning of the words freight or cargo. The terms freight or cargo refer to the transportation of goods from one place to another, but the term cargo is typically only used for goods transported by plane or ship. Freight has a much broader definition and can also be applied to the transportation of goods via road, ocean, rail as well as air.

To clarify this further, cargo refers to the goods carried by a third-party aircraft, while an air freight company moves this cargo onto their plane. While the term cargo can be used interchangeably with freight, it more specifically refers to what a plane carries vs. the means by which it’s carried.

The Benefits of Choosing Air Freight Services

There are many advantages to choosing air freight services, which is why this shipping method is so popular. The major disadvantage of this form of shipment is the higher cost; but once you understand the benefits and everything you get with air freight shipment, the cost becomes easy to justify.

Here are some benefits of sending goods via air. International air shipment:

• Is faster than other methods

• Has a worldwide reach

• Includes a high level of security, with less risk of theft or damage

• Suits time-sensitive goods, such as perishable items

• Is easy to track

• Can be used with well-known courier companies

• Doesn’t require as much packaging as sea freight

• Doesn’t involve LCL shipments

• Has a reliable schedule with dependable arrival and departure times that are only affected by harsh weather

Factors That Will Influence Your Shipment Choice

Weighing up pros and cons is a crucial part of any decision-making process and can help you make the right choice. The following points are important factors to consider whenever undertaking an international shipment.

Freight Rate

When goods are transported via air, rates are charged according to the package’s volume and weight. Other factors such as the distance between your location and the destination and the package’s urgency will affect the ultimate cost.

Shipping goods by air is more expensive than other forms of transportation, so if time isn’t an enormous factor for you and you want to save money, shipping by air may not be a budget-friendly choice.

Transit Time

If there’s no shipping rush, then another form of transportation may suit you just as well as air freight. It can take weeks for your goods to successfully reach their destination via sea freight when air freight could deliver the same goods in hours or days.

Weight

Cargo planes and other forms of aircraft have limited space and impose size and weight limits on the goods they carry. If you’re sending a small package, this shouldn’t amount to much chargeable weight, but it can derail larger shipments.

Package type

What you want to send will also influence how it can be sent. Air freight won’t transport specific items such as flammables, gases, or biological waste. Airports and airlines rigorously follow these guidelines, so you must follow the rules. Plus, your goods will need to pass through a customs clearance process, whether sent by air or sea.

Final Verdict

So is there a difference between air freight vs. air cargo? It turns out that there isn’t such a big difference between the two. In the shipping industry, these terms are often interchangeable, and the only time these terms are differentiated depends on the shipping company you use.

Figuring out the shipping world can be complex, and terminology only adds to this complexity. Thankfully, when considering freight vs. cargo, the only actual difference is terminology, but this doesn’t alter the overall outcome. This is especially true if you hire a company that takes care of these details for you and can explain some trickier parts of freight shipping.

Air freight services are one of the best ways to transport your goods over a long distance, but figuring out logistics and details can be complicated.

At Asiana USA, we offer door-to-door services so that you can track your goods throughout the shipping process. Contact us at (323) 250-9407. We are here to answer your questions and use our expertise and knowledge of the industry to help you navigate the complex world of freight shipment with ease.

The unwritten rule across any industry is that disruptive forces are constantly at play, reshaping the way organizations think about technology, conduct business, and look to the future. This is, of course, true for the logistics industry where market trends are impacting the sector to a great degree. From new technologies to explore and take advantage of, to shifting regulations that require new strategies and tactics to ensure compliance, logistics companies must stay plugged into new and emerging trends to stay at the bleeding edge and remain competitive. Companies that succeed are the ones who embrace a combination of the latest trends and utilize them in a way that capitalizes on traditional and established technologies.

Going forward, how will the current trends in logistics impact you?

1. RFID

For over a decade, Radio-frequency Identity (RFID) chips have promised to provide real-time tracking information. However, while many OFD (out-for-delivery) companies have invested a lot of money in RFID, they have yet to see a real ROI from the technology.

So why is that?

Simply having RFID chips doesn’t mean you have better access to the data, because you need computers near the data to collect it and share it.

Companies also need file-based integration technology that is able to connect devices and edge computing systems back to the core enterprise systems to transfer reporting documents and where the data can be stored and analyzed for insight and business decision making.

Further, the logistics companies that do utilize RFID technology to a value-producing extent are the ones that are able to blend traditional line-of-sight technology such as barcode labels with RFID. Barcode labels are well-established and relatively low cost. The underlying systems and business processes are well-understood and common.

By comparison, RFID implementation can be a high-cost addition to the logistics supply chain. Some estimate a 10X cost factor for implementing RFID tags versus bar codes.

The price barrier for investment is one reason a blended approach to traditional and new makes sense. Additional concerns around data accuracy and reliability should also play a role in how a company chooses to leverage RFID.

There are however viable applications companies should investigate.

RFID in logistics has potential particularly in route optimization, and the real-time tracking of goods. When effectively integrated, RFID systems can provide precise location and quantity data in real-time. For instance, tagging trucks, pallets, and inventory provides multi-lateral views of what is happening across the supply chain.

The importance of knowing exactly where a specific truck is at any given moment can allow a logistics company to be more proactive, to change a delivery route given unpredictable events such as accidents and weather.

Companies that mix-and-match traditional and legacy technology with next-generation advancements are the ones who end up most successful. Those companies understand that attempting to completely replace established technology and business processes is unwise. New technology tends to perform better in conjunction with what is established and standardized.

2. Omnichannel Shipping

Omni-channel fulfillment is an increasing reality in the logistics industry, one that is being spurred on by a shifting approach to meeting customer expectations in the retail industry.

According to the Harvard Business Review, the Amazon effect is driving traditional retailers to offer more omnichannel touchpoints to increase customer loyalty. The goal is to provide a seamless and easy way to shop, regardless of whether it’s conducted digitally or in-store.

In this context, successful logistics companies are those that have evolved to offer more creative approaches to shipping to navigate growing omnichannel complexities within the supply chain.

Here is a simplified look at possible omnichannel fulfillment and return order flows directly to (and from) the end customer:

• Warehouse to consumer and back

• Supplier to consumer and back

• Store to consumer and back

• Distribution center to consumer and back

Traditionally, the shoppers would travel to the purchased item. The “last mile,” so to speak, was thereby on the customer. Now, last-mile-logistics are falling on the shoulders of the retail logistics providers and their partners. The changing expectation is for retail logistics deliveries to operate like USPS. In fact, companies such as Amazon actually contract USPS to handle these deliveries since their system is already in place.

Walmart is approaching the challenge of last-mile logistics in a uniquely alternate fashion. They have implemented an employee drop-off system, incentivizing employees to drop off packages as they travel home at the end of a shift. Additionally, in September 2017, Walmart acquired New York-based last-mile delivery specialist, Parcel.

Because of e-commerce and omnichannel trends, the last-mile evolution of shipping methods has increased the complexity of the supply chain. And further, no longer is one-way logistics enough to compete.

3. The Big Promise of Big Data

UPS may be the biggest success story for big data in the logistics industry. Through data collection, analysis, and demand forecasting, the company has made massive strides in operational efficiencies and cost savings.

Some 80,000 vehicles each have more than 200 onboard sensors that measure speed, braking, backing up, location, and idling time. Some of the sensors collect diagnostic data on the vehicle battery and tire pressure, allowing for preemptive maintenance. The goal is to maximize the time a vehicle is on the road versus in the shop. Further, big-data-driven predictive modeling is the basis for massive gains in route optimization.

Because of the proliferation of GPS and location sensors, along with real-time traffic updates, companies now are able to optimize delivery windows regardless of construction, parades, accidents, and the like. Companies utilizing big data technology, create systems to allow them to change their route in real-time. This is done for a couple of reasons.

The first, of course, is to minimize fuel consumption. UPS has leveraged big data to reduce fuel usage by an estimated 1.5 million gallons in 2012, greatly reducing the environmental impact and increasing operating margins through efficiency gains.

Another big data outcome related to route optimization is to decrease mileage. The level of savings that companies in terms of mileage, impact the wear and tear on vehicles.

UPS further specializes inefficiency in an unusual way. According to their CEO, UPS “trucks never turn left.” When a route optimization specialist maps out the optimal path, they provide right-turn-only directions to drivers. It’s an innovative solution built on decreasing the amount of time a vehicle spends at red lights, and it works.

While some forward-thinking companies are starting to invest in greener technology as well as big data initiatives. Many supply chain companies are coming up with new techniques that parallel the outcome of route optimization through how a mastery of inventory logistics management, optimizing shipments for efficiency.

4. Embedded Integration Technology

Logistics companies are also utilizing embedded technology to better connect with their customers. They recognize that they need a data movement platform to seamlessly share data reliably back-and-forth between their customers.

Embedded integration capabilities provide SaaS companies in the logistics space to offer value-added services related to logistics and supply chain data. This is a true encapsulation of digital transformation as more traditional logistics enterprises are evolving to data-centric services companies.

Organizations are taking advantage of modern services and solutions to take in data, process it, and provide insight to customers. The ability to be more dynamic than ever before by providing fast and critical information to and from customers is central to a business’ success.

An embedded data platform provides secure communications protocol flexibility that enables robust transactional business flows. You need to be able to connect, transform, and integrate data through capabilities that are already built into the solution. Customers want to know everything, and information is of the utmost importance. Service-level agreements (SLA) must also be met, and companies are taking advantage of embedded software with business-level dashboard views and 24/7 monitoring to extend visibility throughout the process to ensure compliance with tough SLAs.

5. Globalization and Compliance

Globalization is forcing many logistics companies to focus on a strategy of achieving delivery KPIs while keeping costs in check.

The need for increased flexibility across the supply chain is paramount along with recognizing that no single solution to the growing complexity will be one-size-fits-all.

The landscape of global trade is one that is constantly shifting. There is an unwavering need for logistics companies to stay ahead of evolving compliance requirements.

This rings especially true for all the ways the enterprise needs to manage critical customer and partner data.

Take the recently created Federal Maritime Commission plan to reform regulatory priorities. One recent change in governance directly affected the New York Shipping Exchange and aimed to combat shippers leaving less lucrative cargo behind. While this is a positive change, it is still a change – one that increasingly is happening everywhere.

Further, across the globe, the ability to comply with the plethora of data-related mandates is tied to how capable a company is in its ability to find, view, record, and report on the data. The regulation calls for full auditability and companies need to provide full audit trails to keep track of their data and customers’ data throughout the process with built-in governance and control.

Without the proper ability to comply with provable digital documentation, trucks could end up sitting at the dock, ships get stuck in the harbor, and goods are stranded on trains or tarmac – for hours or even days.

The average cost of a rejected food logistics shipment due to non-compliance ranges from $300 to $40,000. And extrapolated to a global scale, the cost of not being able to clear goods on is extraordinarily significant.

6. Integrated 3PL Services   

As e-commerce continues to expand beyond epic proportions, many companies are also seeing quite a bit of potential in integrated 3PL services. Businesses are seeing this by bringing in heavy assets in trucking and adding freight brokerage capabilities and warehouse facilities to provide deep integration into customers’ systems.

As customers advance through their own use of modern technology, logistics companies are embracing logistics automation trends by utilizing API integrations to connect e-commerce stores with a fulfillment center in addition to traditional EDI.

Because supply chains have so many different channels and change so quickly in order to meet consumer demand, fulfillment practices must evolve along with it in order to cope with COVID-19 and any other supply chain disruption that may arise.

Logistics industry trends demand that customers have options when it comes to delivery, from last-mile services to same day and next day delivery and it’s up to providers to make sure that customers have those very delivery options.

7. Re-Optimized Service Lines

When COVID-19 first struck, one of the ways logistics companies started to recover was to re-optimize service lines in order to focus on industries that thrived the most during the pandemic, such as food, paper, and packaging.

This allowed these logistics enterprises to have more of a regular fleet, rather than a non-dedicated, irregular fleet. No, it certainly is not easy for companies to transition and pivot their strategic initiatives, but the end result is one that will prove beneficial for years to come.

8. Embracing Modern Integration Technology

Logistics companies are recognizing the importance of upgrading their legacy environment and evolving to a modern integration platform.

The allure of a modern integration platform is one that provides quicker onboarding of customers, trading partners, and suppliers, as well as provides end-to-end visibility so logistics companies can conduct business quicker.

From frictionless supplier integration to have the ability to unlock back-office systems that are critical to third-party logistics (3PL) services, modernized integration technology can do it all. Logistics businesses everywhere see the value that integration technology has for their supply chain.

Those companies that migrated to a modern integration platform prior to COVID-19 were the ones that put themselves in the very best position to manage disruption to their supply chain. COVID-19 has shined a light on the importance of a modern integration platform.

Conclusion

Today, the logistics industry looks entirely different than it did 10 years ago, the question now becomes... what will it look like in another 10?

Market trends, such as those outlined above, are going to continue to impact the logistics sector well into the future. However, the success of trend-shaping nascent technologies requires that they are integrated with existing solutions and infrastructure. Not only do logistics operation needs to be able to enable processes like ingesting an EDI load tender, but also, companies need to look to how future technology can be leveraged to reduce margins. Businesses can then create a next-generation stack that leverages previous technology investments while incubating big data, IoT, and omnichannel solutions.

Furthermore, the events of 2022 have disrupted the entire supply chain and the logistics industry is no exception. The logistics landscape is plagued by uncertainty and disruption, but it is also ripe for digital transformation.

Companies that succeed in 2022 and beyond are those that will embrace a combination of the top trends in logistics management to become resilient to supply chain shocks.

As you finish 2021, think about how the current trends in logistics impact your business.

What is Air cargo Services?

Air cargo services is another term for air freight. It is the carriage or the transportation of goods through an air carrier. Transport services via airAir cargo services are the most valuable when it comes to moving express shipments around the globe and it consists of air mail, air freight and air express. Air cargo services also flies in the same gateway as the commercial or passenger airlines.