In businesses that require movement and transportation of goods, logistics management and freight management are commonly heard of. Both are essential in streamlining your supply chain, especially when executed properly.
While there are similarities between the two, there are also differences that you need to know to further understand how they work.
The Differences between Logistics Management and Freight Management Explained
Logistics management and Freight management may be synonymous but the tasks they involve mainly set the two apart.
In a nutshell, logistics is the overall process of managing the acquisition, storage and transportation of resources until they reach their final destination. Logistics management is a term that covers a wide range of activities. It is an all-inclusive term that covers freight, transportation, and management, and a wide range of activities which include:
- Order management with Customers
- Order management with Vendors
- Planning and management of warehouse and distribution centers
- Materials handling
- Production scheduling and management
- Transportation management
- Logistics, both inbound and outbound
- Strategic and tactical planning of supply chain and materials movement
- Node design and optimization of the supply chain network
- Information flow
- Tracking management
- Traceability management
- Supplier relationship selection
- Supplier relationship management
- Analytics and optimization of materials flow
- End to End Supply Chain visibility and flow management
- Asset management including inventory and infrastructure
On the other hand, Freight management is the process of overseeing freight transportation. It may appear as a subset of Logistics management but it plays an important role wherein the ability for logistics management to function and complete its goals is dependent on the freight management process and the people behind it.
Aside from that, successful freight management also helps in cost reduction, improves efficiency, and facilitates the best customer service.
As with logistics management, there are also other activities involved in freight management.
- Establishing contacts
- Selection and engagement of carriers and transportation companies
- Negotiation of terms and conditions, rates, and expectations related to product transport
- Preparation of appropriate labelling and paperwork needed to transport goods
- Dispatching and scheduling carriers for the pickup and delivery of goods according to schedule
- Planning for optimized vehicle routing and load balancing
- Tracking of product movement throughout the supply chain
- Partnership with customs brokers to ensure customs compliance
- Employment of the appropriate insurance that can cover the cost of goods in transit
- Freight claims handling
- Management and overseeing of receipts and payment invoices related to the transport of goods
- Exploration of opportunities to streamline the movement of goods that can improve delivery performance, decrease transit time, lower costs, and reduce environmental impact
There are certain tasks that set a clear difference between logistics management and freight management. Both render a significant impact on any business and play a role in the success and growth of any enterprise.
Worklink Services, Inc. has been helping businesses since 1999 by offering top-notch logistics management and freight management services. Send us a message to know how we can also be instrumental in your business growth.