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Businesses, irrespective of their size and audience, need to move goods from one place to another. Goods transportation can be done via road (i.e., rail, trucks) or air (i.e., flights) or water (i.e., ships). And that often makes it challenging for businesses to realise the best option – whether to go for a trucking company or a logistics company (for end-to-end transportation and value-added services).
In this article we take a look at the difference between a trucking company and logistics company, how logistics and transportation have similarities and differences, and how as a business owner you can select the most suitable option.
What is a trucking company vs a logistics company?
A Trucking company is defined as one that offers shipping services and moves goods from one place to another usually through trucks.
A logistics company on the other hand is a transportation service provider that offers logistics services including warehousing, packaging, distribution and delivery.
Role of trucking and logistics companies in goods transportation
Logistics and transportation are some of the key functions of any manufacturing business. Manufacturing companies are heavily reliant on logistics and transportation service providers for the movement of their raw materials as well as finished goods. Hence, it is important to have a reliable logistics or transportation partner.
To hire a transportation service provider or a third party logistics service provider, is an important decision as a business owner you will have to take. However, it depends on the goals and plans of your business and requirement. In order to make an informed decision, it is important to understand the difference between the two.
In the next sections, we will look at the differences between a trucking, logistics and transportation company.
Transportation/trucking vs logistics explained
Often people get confused between transportation and logistics and think they are one and the same. However, it is not true. Transportation is a narrower concept – limited to the transportation of goods from a pickup point to the destination. A transportation company is usually a trucking company that owns a fleet of trucks and provides transportation services. Since the company owns a fleet of trucks, its services are limited to road transport.
On the other hand, logistics has a wider scope. It includes shipping, storage, packaging, transportation and last mile delivery. A logistics company provides end-to-end logistics services. It includes the entire chain from picking up goods from the pick-up location to transportation, storage, sorting, packaging, and doorstep delivery. Logistics companies also handle reverse logistics efficiently.
In the case of import-export, it also takes care of documentation, insurance, freight management, and so on. Moreover, they offer transportation services through all modes of transport and even multi-modal transport if required. Most logistics companies do not own a fleet of vehicles but have tie ups with transportation or trucking companies. Some examples of leading logistics companies include Ekart, Gati, Delhivery, etc.
Logistics vs transportation/trucking company
| Transportation company | Logistics company | |
| Scope of work | Narrower scope | Wider scope |
| Service included | Services are limited to transportation | Services include shipping, warehousing, sorting, packaging, transportation, etc. |
| Mode of transport | Provides only road transport services | Offers multi-modal transport services |
| Ownership of fleet | Owns a fleet of trucks | Usually does not own any fleet of vehicles |
| Pricing | Pricing is usually lower than a logistics company as the scope of functions is narrow | Pricing is usually higher as compared to a transport service provider as multiple functions are involved |
Transportation company or logistics company: Which one should you choose?
There is no simple answer to this. It all depends on the needs of your business. Many companies have limited needs and hence transportation service providers can easily fulfill the requirements. For some companies, business needs are vast and the supply chain is complex, hence they may require the support of a third-party logistics company.
So, analyse your business needs. Make a list of your needs and services that you need to seek. This will help you to make the right choice.
Tips to help you choose between logistics vs transportation companies
- In-house capabilities: If your business needs are simple and you need to transport your products locally from your factory to the distributor’s facility regularly, a transport service is capable of undertaking the task. Based on your requirement, you can select PTL shipping (part truckload shipping) for efficient delivery and lower costs for goods transportation via trucks (road). However, if your supply chain is complex, but you already have a logistics department in place to handle the complexity, you can still take the help of transport services. Other logistics functions can easily be handled by your employees effectively. It is usually costlier to establish logistics functions in-house. In such cases, you can seek the help of a 3PL company. It will pick up goods from your factory, store them in the warehouse and when there is a need to dispatch, the required quantity will be packed and shipped to the specific distributor.
- Reverse logistics: Analyse the quantum of goods returning to the factory for any reason. Returns and repairs need to be handled carefully, there is paperwork involved for the same. A logistics company has an edge over a transportation company in such scenarios. This is because a logistics company has the required experience and expertise to deal with reverse logistics.
- Road transport or multi-modal transport: This is one of the crucial points to consider. Where are your goods being shipped? If only inland, then the trucking company may be able to help you. However, if it involves air or water transport, a logistics company becomes an obvious choice.
- Import-export: If you need logistical support in import-export, a logistics company is an obvious choice again. This is because it may involve multimodal transport and you may need storing facility. However, the important aspect here is documentation. Import-export involves a lot of documentation work. A logistics company has the experience to handle documentation work.
Frequently asked questions
Here are some of the frequently asked questions about transportation service and logistics service providers.
What if my quantity of goods to be shipped is low?
A transportation company’s charges are lesser than a logistics company’s pricing. Which should I choose?
What else should I keep in mind?
A transportation company’s charges are lesser than a logistics company’s pricing. Which should I choose?
What else should I keep in mind?
Swati is a passionate content writer with more than 10 years of experience crafting content for the business and manufacturing sectors, and helping MSMEs (Micro, Small and Medium Enterprises) navigate complexities in steel procurement, and business services. Her clear and informative writing empowers MSMEs to make informed decisions and thrive in the competitive landscape.
