Every year, Americans spend more than $231 billion on logistics service providers. American businesses depend on logistics to run their day-to-day operations, and the economy would crumble without this vital service.
But what is logistics in the first place?
If you’re a small business just starting out, it’s easy to feel overwhelmed by all the complex terminology surrounding shipping and logistics. That’s why we’ve put together this informative guide to the basics of logistics and shipping terms, along with how to choose a dedicated logistics provider who can fulfill your business’ shipping and transportation needs.
What is logistics?
In its simplest sense, the word “logistics” refers to the art of handling all the details of an operation. Logistics was originally a military term referencing the process of distributing equipment, supplies, and troops to wherever they were needed. It’s still used for that today, with each branch of the military having dedicated logistics personnel in their ranks.
In business, logistics is the art of transporting goods through your supply chain. A logistics provider handles all the fine details of transporting materials and products for your business, wherever you need them. Without logistics, your products would never get into the hands of your customers. Your manufacturing facility would never even receive the materials it needs to create your products in the first place. Your dreams of running a thriving business could never become a reality. Logistics is the lifeblood of any retail supply chain, and no business could operate without it.
However, while the process of transporting an item from one place to another seems simple on paper, handling logistics can be a lot more complicated than it seems at first glance. Laws, regulations, and technicalities create plenty of challenges in the shipping process, which is where having a dedicated third-party logistics provider for your business comes in handy.
What is third-party logistics?
A third-party logistics provider (3pl) is an independent company that handles all your business’ logistics services for you. Instead of shipping and delivering products yourself, a third-party logistics provider will handle all the shipping and transport services for you. You don’t have to lift a finger yourself, beyond coordinating with the 3pl provider and telling them what to ship and where. They’ll handle the transportation, warehousing, distribution, and other shipping services for you.
They are perhaps the most crucial link in your supply chain, and having a good 3pl provider is absolutely imperative to streamline your efficiency model. You’ll want to choose a solid provider with a proven track record behind them. You’ll also want to ensure that they can fulfill your business’s most crucial logistical needs, like inbound, outbound, and reverse logistics.
What are inbound logistics and outbound logistics?
Inbound and outbound logistics are two of the most commonly used terms in business transportation. They’re dual sides of the same coin, and you’ll hear both of them used frequently. While they may sound complicated, they’re easy to understand once you know a few details. The main difference between inbound and outbound logistics is what’s being delivered and to whom.
Inbound logistics refers to the process of moving raw materials or products from a manufacturer to another distribution facility, like a warehouse. This part of the supply chain is purely internal and doesn’t yet involve the customer. Inbound logistics help your manufacturing facility receive the materials that it needs to create a finished product.
Outbound logistics refers to the process of transporting finished products to the end-user. Products are transported from a distribution facility or warehouse and sent out to their final destination. This may mean transporting the products to a retail store or making individual deliveries directly to a customer’s door.
Having a system in place for handling both inbound and outbound logistics is essential for any business, and enlisting a single 3pl provider to handle both services can save you time, money, and energy.
What is reverse logistics?
It may seem natural that once your end product has reached the customer’s hands, the logistics process is over. But that’s not strictly true. What if the product is defective, or the customer decides that it doesn’t suit their needs? The customer will want to return the product to you for an exchange or a refund. That’s where reverse logistics comes into play.
Reverse logistics, just like the name suggests, is the process of sending products backward through your supply chain. Instead of the customer being your endpoint, they’re your starting point, and your manufacturing facility is the ending point. Reverse logistics helps bring your products back to their point of origin. Once the products have been returned to you, you can either repair them, recycle them or re-package them to ship to another customer, depending on what you’re selling.
Because reverse logistics doesn’t directly earn any profit, it’s often overlooked in the supply chain. But it can’t be underestimated how important reverse logistics is for customer satisfaction. Having a way for customers to return items improves customer satisfaction and builds trust in your company. Having a reliable and easy return system is paramount in the age of online shopping. It’s imperative that you choose a 3pl provider who can provide reverse logistics services if you want to build a reputation as a reliable company.
Who’s the best New England 3pl company?
If you’re looking for a dedicated 3pl provider to streamline your supply chain in the New England area, we’re here to help you. N&D Transportation Company, Inc. is your one-stop third-party logistics provider. We have over 125 years of combined experience in the trucking, distribution, and warehousing industries, directly serving states like Rhode Island, Massachusetts, Connecticut, New Hampshire, Maine, Vermont, New York, New Jersey, and Pennsylvania.
N&D Transportation Company, Inc. can fulfill all your inbound, outbound, and reverse logistics needs throughout the New England area directly and nationally through the help of our partner carriers. We have a vast fleet of vehicles and drivers in our service and can ship just about anything safely and securely.
If you want to streamline your business’s supply chain, give us a call. We pride ourselves on our extensive customer service. We’d love to work with you and help you satisfy your customers like we do our own.