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The Indian logistics sector is booming and witnessing significant changes across channels and mode of transportation. Transport and logistics are both key processes of the overall supply chain operation, but while logistics encompasses the entire management of goods storage, packing and delivery, transportation refers primarily to the actual movement of goods. We take a closer look at the meaning of transport vs logistics, how they are different, and their role in overall freight management.
What is transportation?
Let us begin with transport and logistics meaning.
Transport meaning – Transportation refers to the actual movement of goods, people and animals from one place to another. Transportation services can be availed via air, sea, and road based on the nature of goods being shipped, distance, availability and budget. In India, road transport is one of the most widely used form of transportation, owing to its nation-wide roadways network.
Transport example –
- People availing taxi or bus service to move from one place to another
- Businesses using air transport for moving freight cargo from one city to another
- Businesses using trucking companies to for the movement of freight between points
What is logistics?
Logistics meaning – Logistics management on the other hand refers to planning, receiving, and delivery of goods. It involves managing inventory, storage and warehousing, materials handling, packaging, distribution and delivery.
Transportation, therefore, is a component of logistics operation whereby it manages the actual movement of goods. Logistics is more strategic whereby transportation in more tactical.
Logistics example –
- Warehouse logistics involving planning for optimal storage space
- Reverse logistics involving returns management, product exchange, refunds and more
- Logistics compliance requiring documentation/paperwork e.g., bill of lading, addresses for consignor and consignee, etc.
Now that we have looked at the definition and understand transport and logistics meaning, through these transportation logistics examples, let us look at the main transport and logistics differences.
Transport vs Logistics – Key differences
Through the examples of logistics and transportation, it’s fairly simple to comprehend the key differences between the two – how transportation is a key component of logistics management. For instance, automotive logistics would involve the supply chain planning of auto parts, vehicles, and more. Transportation would involve the actual movement of parts and vehicles from one point to another (Note – this may include both inbound and outbound logistics). On that note, let’s understand the main difference between transport and logistics.
Transport and logistics difference
|Strategic involves planning, demand forecasting for logistics operations, data analytics, and overall freight management.
|Tactical involves the actual movement of goods/freight to the customer using appropriate mode of transport.
|Functions include managing inventory (also vendor managed inventory), warehousing, materials handling, packaging, labelling, distribution, and delivery. Also, order management, payments, insurance, regulations, customs, taxation (e.g., GST on logistics), risk mitigation, import and export, etc.
|Functions mainly involve fleet management and route optimisation, and using one or more mode of transport to move goods optimally. Also involve loading-unloading (e.g., when changing vehicles/transport), packaging, compliance. Also, payments (e.g., cash on delivery), return and exchange pickups, etc.
|Automation and technology driven to optimise process and bring efficiency.
|Medium reliance on technology. E.g., though vehicles are GPS enabled, real-time tracking is based on multiple other factors including infrastructure and network support.
|Collaborates with vendors, suppliers and distributors, and other third and fourth party service providers (3PLs and 4PLs), across the supply chain.
|Collaboration usually with 3PLs for transportation services, courier and logistics services.
|Multiple stakeholders involved across the value-chain. Requires training and skill development through in-house programmes and specific transport and logistics courses and logistics certifications.
|Training provided on programmes for transportation management. E.g., trucking companies provide practical lessons to drivers on driving different types of vehicles, driver’s safety, extreme weather driving, traffic rules etc.
Importance of transport and logistics in supply chain
From the above table, it is clear that transport and logistics have their own role in the overall supply chain operations of any organisation. The impact they have on the overall outcome depends on how an organisation leverages the two. For instance, in D2C businesses and eCommerce, customer satisfaction is primarily dependant on the condition in which the customer receives the parcel. In B2B businesses however, minor delivery delays are acceptable. However, the order quantity, quality, compliance, these are of greater importance.
Importance of transport and logistics in supply chain operations
- Cost reduction – As two of the most important processes of the supply chain, managing logistics and transport optimally enables better supply chain visibility. This allows the business to procure goods in time, reduce inventory wastage and warehouse storage expenses, minimise number of reorder quantity orders, and cut overall logistics expenses. Based on the goods being transported, packaging style, mode of transport, expenses, routes, etc. can be determined (e.g., having provision for PTL, FTL and LTL services based on goods, demand, destination). This enables businesses to provide cost effective logistics services for customers and in turn, reduce their overall logistics expenses.
- Inventory and warehouse optimisation – Proper planning and awareness can prevent stockouts, overstocking and damages. Visibility across the supply chain enables organisation to place reorders based on inventory levels, warehouse storage availability, transport feasibility, etc. Considering that any lapse in one process will directly impact the next, it enables organisations to identify gaps and misses and take corrective actions for prevention.
- Organisational efficiency – Transport and logistics management are crucial for overall organisational efficiency. For instance, optimising manufacturing logistics can redefine how large and small manufacturing units operate. Instead of relying on manual updates, by using digital technologies in logistics processes, accurate, real-time updates can be accessed by authorised users in quickly. This includes using tools to track delivery status, check production inventories, move spares/parts from one unit to another, quality checks and optimal packaging before shipping to distributors, etc. This enables manufacturing facilities to focus on production without having to manually manage supply chain operations.
Transport and logistics companies in India
There are several reputed transport and logistics companies in India today. There are also logistics startup companies that are creating a niche for themselves by providing specialist services (e.g., dropshipping services). This not only enables customers to choose service providers as per their unique needs, but also creates opportunity for healthy market competition and quality services.
If you are looking at beginning your own logistics and transport company, here are some suggestions on naming ideas for logistics companies to get started.
Listed below are some of the popular transport and logistics companies in India:
- Ekart Logistics
- Blue Dart
- Transport Corporation of India Ltd.
- VRL Logistics Ltd.
- Allcargo Logistics
Getting started – Transport and logistics courses
If you are looking to start a logistics company or grow an existing business, enrolling for logistics and SCM programme is a great way to upgrade and upskill.
Today, logistics business is a global function and requires knowledge of taxes, compliances, regulations, import and export rules, packaging norms, among other things. Moreover, there’s also the need for adopting technology solutions to bring efficiency, innovation and in turn customer satisfaction.
Though there are several transport and logistics courses in India that you may consider, here are some subjects that will help you shortlist a suitable programme:
- Import Export management – for those businesses looking at taking their logistics business global
- Integrated logistics management – a programme on overall logistics operations including SCM, inbound-outbound logistics, reverse logistics, transportation systems etc.
- Inventory and warehouse management – specialisation on how to manage inventory, how to order/reorder, how to collaborate with 3PLs on warehouses, how to select a warehouse, how to manage warehouses, dispatch and distribution etc.
- Logistics and procurement – understand the different functions and how seamless coordination between logistics and procurement impact overall outcomes.
- eCommerce logistics – to understand the role of logistics and transportation in the eCommerce industry, how to drive efficiency, streamline processes, build collaborations, adopt technology, etc.
- Industry specific logistics courses – E.g., programmes on telecom logistics, printed material logistics, logistics for fashion and apparel industry, and more