For a person who does not have much to do with the transportation industry, many terms within it remain unclear, even if specialized terms related to the industry are in common circulation and most of us encounter the terms in question regularly.
Such a situation certainly applies to the terms forwarding and logistics, which are used interchangeably by many people, which is a huge mistake, because these terms are definitely not synonymous, although when defining one of them, it is impossible to omit the definition of the other.
So what is the difference between logistics and freight forwarding? In order to be able to clarify this, let’s start with what forwarding itself is and what its areas of activity and goals are.
What does forwarding involve?
In the simplest terms, we can say that forwarding is all activities aimed at the efficient organization of the transportation of goods. The most important areas of activity and, at the same time, the tasks of a forwarding specialist include:
- consulting in the field of forwarding,
- searching for and accepting orders,
- selection of appropriate means of transport
- organization of transport,
- comprehensive coordination of the forwarding process – from the moment of contact with the customer to the final documentary settlements,
- monitoring the route and responding to problems arising during the execution of the order,
- preparation of documentation such as forwarding contracts, waybills; control of transport documents,
- preparing goods for customs clearance and insuring them.
Forwarding itself can be divided into several categories. Depending on the scope of its activities, we speak of domestic or international forwarding. Not all forwarding companies offer their services outside our country, some of them focus only on service in Poland – the scope of services provided by LCL Spedition includes both domestic and international forwarding.
Another division of forwarding types is based on the type of means of transport. Thus, we can distinguish between sea forwarding, air forwarding, rail forwarding and road forwarding – LCL Spedition bases its services on the latter. Road forwarding focuses on transportation by buses and trucks.
We speak of intermodal forwarding when several modes of transport are used in a single order. For example – from a given company a truck sets off goods loaded in containers, to then reach China by sea. In a situation when we use only one means of transport, we talk about branch forwarding.
We can assume that forwarding is an organizational activity, the area of their activities is purely practical, focused on the mechanisms for optimizing the processes of transporting goods, excluding passenger transport.
What is logistics?
Logistics, on the other hand, is planning and the activities performed in its field concern not only the movement of goods, but also people and information.Forwarding focuses on the very moment of transporting goods, logistics is not only transportation, but also the organization and management of all activities aimed at the efficient delivery of a shipment to a given place. Design, implementation, execution, control and supervision – these are the main tasks of a logistics employee, so the area of these activities is much broader than that of a freight forwarder.
Logistics activities include:
- demand forecasting,
- comprehensive customer service,
- information flow, handling activities,
- inventory and stock control of goods,
- order processing,
- procurement processes, packaging,
- returns handling,
- transportation and storage,
- waste management.
A logistics employee should have full knowledge of the cargo at every stage of its handling – already during the planning process, care should be taken to eliminate errors that can cause huge financial losses, and every effort should be made to ensure the optimal route and conditions for the transport of goods.
So, as you can see, logistics is also the organization of warehouse operations – in the case of LCL Spedition, there is close cooperation with its sister company LCL Logistic.
Comparison of freight forwarding with logistics
In conclusion, we may be tempted to say that the scope of forwarding is narrower, more specialized. One and the other field combines both theory and practice in different proportions – as we know, theory alone without practice has no raison d’être outside the halls of universities, in turn, leaving practice without the support of theory, we condemn it to intuitive actions, chaos and the risk of allowing a number of errors.
Theoretical and practical activities must go hand in hand for each industry. Logistics and freight forwarding are two closely correlated areas that cannot stand alone.