Author: TASS GROUP

The complexity of providing timely and cost-effective distribution of finished goods from industrial facilities to customers all in the correct amounts in a timely fashion and coordination with production processes, despite suspicion due to the self-sufficient decision-making of clients, is daunting. As your business needs to know the freight costs of your logistics, this blog will try, unpack and help you understand the freight charges and their different types.

Freight is the transportation of goods, thus, the charge that gets levied to deliver cargo from its site to its destination by any carrier is recognized as freight charges. The freight charge is calculated based on the type of mode of transportation that you select for the transportation of your goods and that includes packaging, palletizing, load or unload costs, carrier fees, and insurance costs. The amount of freight charge depends on the distance between the pickup place and the place of destination to deliver the cargo and is paid by the person who wants the goods transported. 

Freight companies charge different freight charges as the total weight of the goods, and the distance that the goods will travel is also taken into account while calculating. 

The shipment of goods may be transported from one location to another using freight prepaid or freight collected based on the incoterm rules. For calculating freight charges, many shipping services, especially air carriers, use a dimensional weight that takes into account both weight and the volume of the transporting goods. 

The purpose of taking the volume into account is to assess the space that the freight will take up in the transporting mode and you can select to transport your freight on a ship or airplane among other modes. 

There are over ten types of freight charges and among those; the prevalent type is the consignee collect.  Let’s check out the detailed explanations of the different types of freight charges that are important for smooth and profitable freight shipping.

1. Consignee Collects

The consignee is a buyer responsible for paying all the freight charges once they get the delivery. The consignee, typically the buyer, is considered responsible for customs declarations (a statement showing goods being imported) and they will also have to fill out forms and file necessary taxes.

2. Cash on Delivery (COD)

Once the goods are delivered, the carrier collects freight charges and then forwards the payment submitting them to the shipper for reimbursement. For this type, the carrier usually charges an additional fee for the service. 

3. Third-Party

A third party typically refers to a professional logistics company that pays the freight charges on behalf of a shipper or consignee. This option is especially helpful when the freight order is more complicated or the consignee receiving the shipment is new to the business and lacks experience. 

4. Prepay and Add

In this type of charge, the shipper pays for freight and then charges the customer. This option benefits the customer and works if the customer-shipper relationship is good. In this situation, the shipper can often negotiate better deals than the customer could do on his own. 

5. Free-on-Board (FOB) Origin

Free-on-Board (FOB) implies that the supplier gives up its rights to the merchandise and pays for the shipping cost which usually includes insurance costs from production to a specified destination, after which it becomes the responsibility of the buyer. 

In FOB Origin the buyer is accountable for freight and damaged goods even if no FOB terms were communicated or mentioned in the contract or purchase order and in a FOB charging situation, the same goes for consignees at the shipper’s dock. The same rule gets applied to the consignee, the consignee pays all of the associated costs and it will be the buyer’s responsibility if the goods get damaged in any way. 

6. FOB Destination

In this case, the freight charges are paid by the shipper after the title for goods passes at the consignee’s dock. Therefore, the charge of the freight is prepaid before shipment.

7. FOB Origin, Freight Prepaid

This charge is similar to FOB Origin because the freight becomes the responsibility of the consignee at the shipper’s dock and here, the shipper pays all the necessary local freight charges.

8. FOB Destination, Freight Collect

As part of FOB Destination, the title for goods passes at the consignee dock, and the consignee must pay all freight charges.

9. FOB Origin, Freight Prepaid and Charged Back

In this system, the freight becomes the responsibility of the consignee at the shipper’s dock while the charges for the freight are paid by the agent of the consignee at the origin. The shipper later sends an invoice to the consignee for the freight charges paid by the shipper.

10. FOB Destination, Freight Collect, and Allowed

Once the goods reach the destination after the title for goods passes at the consignee dock, the consignee pays the carrier’s freight charges along with the local carrier charges. Then deducts the freight charges from the seller’s invoice for the goods but here the risk and responsibility fall on the consignee to pay and settle all the charges at the destination.

Technology is breaking the boundaries and is accelerating its ability to help businesses do more with less. The effects of technological change are creating immense transformations and changing how people do business globally. 

Disruptive forces are always at work, reshaping the way companies think about innovation, and the disruptive innovations originate in low-end or new-market footholds. They operate a business, developing strategic thoughts on technology and the future. 

Logistics evolved into a business concept and now leads to a significant increase in workflow flexibility and performance. 

The logistics industry has always been one of the most critical industries in any country and has been facing several challenges in recent years, from new regulations to changing customer demands and more. 

As more companies join this dynamic sector, the industry will undergo significant change and will have important implications for businesses around the globe. Newer technology has also improved the logistics sector by lowering costs and reducing mistakes as the latest trends connect them to capitalize on established and traditional technologies. 

Logistics trends show that it also results in a significant impact on customer service and a major increase in customer loyalty. Knowing the industry trends, the logistics sector is already being set in motion to help shape how we live and work for generations to come. Like every other industry, it becomes increasingly important to stay ahead of trends and innovations shaping the future of logistics. 

In this blog, we’ll cover the top ten trends shaping the future of logistics.

1. Artificial Intelligence

Advanced AI-based cognitive automation technology helps to make more accurate predictions and route planning. Artificial Intelligence plays a crucial role in managing warehouses, enhances administrative intelligence, and speeds up data-intensive operations in the logistics sector. AI solutions have numerous applications and can be combined with machine learning to cope with market fluctuations.

2. 5G

The digital management of logistics with the advent of 5G opens up a whole new set of opportunities as warehouse efficiency, performance management, and the most efficient use of logistical resources can all be improved with data analytics. 5G might potentially push the logistics industry to full digitalization and the logistics industry could add so much to the global economy in the future.

3. Blockchain

Blockchain technology is a distributed, encrypted computer filing system designed to allow real-time, free from tamper records that is a relatively new concept in the logistics sector. It will enable smarter logistics automating commercial processes offering new solutions that could make logistics operations more efficient, secure, and transparent.

4. Environmental regulation and sustainability

The drive to have a sustainable environment is integral and businesses in the past have adopted a compliance-led approach to sustainability or have taken steps to minimize the environmental effect. The objective of attaining a net-zero environment will considerably impact operators’ logistics and warehouses’ construction. 

5. Last-Mile Delivery

The trend of businesses moving towards last-mile delivery is often ineffective and represents a substantial proportion of the total cost of the movement of goods. To achieve sustainability, logistics firms will also direct a lot of their strength into last-mile efficiencies. Seeing how this shift will affect their future business models and methods, various technical outcomes can be deployed.

6. Globalization

Globalization has a dramatic impact on strategic sourcing, and logistics excellence as ‘international’ has become the standard and logistic solution providers need to enable that trend. As businesses go global, mature and emerging markets have become a part of the overall business growth strategy for many companies.

7. Cloud Computing

Cloud-based logistics systems are becoming more and more popular in the logistics industry as they eliminate connectivity barriers, allowing businesses to collaborate and exchange data without risk. Businesses in logistics can find significant benefits by adopting this new technology and pay-per-use models with a low capital investment are even possible with cloud computing solutions for logistics companies.

8. Internet of Things

IoT devices provide information to logistics companies and increase inventory management efficiency by increasing visibility. The Internet of Things will connect nearly everything in logistics together, increasing efficiency, real-time inventory visibility, and fleet management. This allows for more precise visibility of goods and helps in theft reduction.

9. Electric fleets

Gaining a foothold now in the electric mobility sector will give you an edge over your competitors and logistics companies can do a lot. Electrifying an entire fleet often poses greater challenges than electrifying individual vehicles and those vehicles will have the capacity to run dense and short routes when providing retail practice.

10. Autonomous Vehicles

Autonomous vehicles are to be a trend in the logistics industry and can reduce human errors, boost vehicle safety, and transport products safely. These vehicles improve first- and last-mile delivery quality making it easier than ever before to ship goods around the world without worrying about driver shortages.

The logistics industry is a global and complex business that has significantly benefited from recent technological advancements and it will continue to do so as further progress is made. Due to fast development in emerging technologies staying up-to-date on the latest trends in logistics is more important than ever. As technology advances, the right strategy can help you thrive for the future of your business.

Shippers play a vital role in the economy of most countries and international trade. It is a global network that connects nations, economies, enterprises, goods, and consumers. 

Sea transportation and air transport are the most common types of transportation in international trade. With this technology, goods can be imported and exported in a timely and efficient way that was otherwise not possible.

The term shipping refers to the process of dispatching goods for export. 

Organizing a shipment involves many steps and stages and is a labor-intensive process. It comprises booking the goods with a transportation company and delivering them to their destination. The exporter and importer interact throughout the entire supply chain facilitating international shipping.

Exporters can choose between two shipping options when shipping by the sea – Full Container Load (FCL) or Less Than Container Load (LCL). 

The full container load shipping method occurs when the consignment fills a whole shipping container. Transport of large consignments by the sea in the shortest possible time can be accomplished via this method.

For exporters with smaller shipments, sharing a container with other exporters is an option that requires paying only for what they need. This type of shipping is known as LCL, and it can be used for low or moderate volume, non-time-critical shipments. 

What is international shipping?

International shipping can be defined as the process of transporting goods and materials from one country to another. It is a vital part of the global economy, and enables businesses to trade with customers in other parts of the world. 

There are a number of different methods for transporting goods internationally,  including air freight, sea freight, and road transport. Each method has its own advantages and disadvantages, so it is important to choose the right option for each shipment.

There are many rules and regulations involved in international shipping, which can be a complicated process. 

To effectively import or export freight, you must be aware of and adhere to various procedures and documentation for your shipment to clear customs. It is for this reason that most businesses dealing in import and export partner with freight forwarding companies. 

International Shipping Process

 1.  Request freight quotes  

The initial step is to request a freight estimate. Before you do that, you must make sure to share with all freight forwarders in your network the following information: shipping date, origin and destination port, commodity and packing details, and type of freight. 

When this is done, you will either be able to request quotes directly from your freight forwarders or you will be able to opt for digital freight forwarders to automate these processes and get quotes within seconds.

 2. Select freight forwarders

We must finalize the freight forwarder or carrier whose rates & other factors like network and support are the best match for our needs. 

Recommended Read: How to Choose a Shipping Carrier?

It is best to choose the best freight forwarders to get real-time delivery. Only digital freight forwarding provides real-time quotes, and the shipment process is monitored through the application, enabling exporters to maintain monitoring of their supply chains.

3. Preparation of Required Documents

After deciding on a freight forwarder, the following step is to prepare the relevant paperwork. The following documents are included:

• Performa invoice
• Commercial invoice
• Packing list
• Certificates of origin
• Shipper’s letter of instruction
• Bills of lading
• Dangerous goods form
• Bank draft

4. Validate the shipment’s details

When you’ve finished preparing for the shipping procedure, double-check and validate the shipment information. The origin of the shipment, the B/L number, the type and quantity of containers, and the reference type and number must all be verified. 

5. Raise booking request/ delivery order to the carrier

You can now book your freight provider once all of the confirmations have been completed. All you have to do now is update all of the information with the freight forwarder you’ve chosen. Date and location of origin, destination date and location, container type, and so on. 

6. Keep track of shipments

You can begin tracking your shipment after you get a booking email confirmation from the freight forwarder. They provide more than simply tracking service and real-time management; they also provide platforms for invoicing, document, and contract management. 

7. The shipment passes through customs

Customs will evaluate your shipment to see if it complies with their requirements. The shipment will not be set up with an issue and can pass through. Unless you pay the balance, your shipment will be held in customs custody. 

8. The bill for customs duties and taxes should be reimbursed

Taxes and duties are included in the bill directly from the forwarder, so they must be paid by the forwarder. Several forwarders do not accept checks or bank transfers. You will be billed immediately whenever you order an inspection service. 

9. Receive the shipment

You will receive the consignment as soon as it arrives at the port if everything goes correctly. 

As a result, the shipping process encompasses the movement of commodities and documents from one location to another. The movement of goods and papers from one country to another must be highly coordinated for the procedure to be completed properly. 

In conclusion, there are a few things to keep in mind when shipping goods to other countries. Remember to research the country’s customs regulations, choose the right shipping method, and package your goods securely. By following these tips, you can ensure that your shipment arrives safely and on time.

If you are looking for a reliable international shipping service? Look no further than TASS group! With years of experience in the industry, we can get your packages to their destination safe and sound. Contact us today for a free quote!

Although supply chain management and logistics have many parallels, there is a difference between logistics and supply chains. Recognizing every function could assist businesses to improve procedures, improve consumer relations, and achieve a competitive edge.

Logistics is concerned with the internal flow of commodities, whereas supply chain management is concerned with operations involving independent companies.

Despite certain similarities among these two systems, they are distinct constructs with distinct connotations. Logistics relates to the transportation, warehousing, and transfer of commodities, services, and communication inside the broader supply chain, whereas supply chain management is an encompassing process that includes all different operations to generate market edge.

Defining Supply Chain Management

The action that produces final commodities and distributes those to consumers is referred to as supply chain management. SCM additionally concentrates on streamlining supply chain procedures for the convenience of consumers and business associates. 

If an organization maintains transparency over its supply chain, it will only maximize and continuously refine SCM. This transparency allows businesses to monitor commodities and services that progress through the supply chain, making it far simpler to watch whether everything is functioning as expected. It moreover provides an additional chance for decision-makers to adjust to distractions or other barriers.

SCM entails managing a wide array of sub-suppliers (such as raw material suppliers), distributors, producers, logistics operators, distribution companies, dealers, and end consumers. The supply chain’s numerous partners have a variety of practices. Relationships can be straight, including between components and resources providers, producers and merchants, or horizontal, such as when a corporation unites with or obtains a related business that works around a similar supply chain phase. 

What Exactly Is Logistics?

Organizing and implementing the preservation and transit of items among various stages in the supply chain is part of logistics. Logistics integrates infrastructures, persons, technology, as well as other assets to guarantee that goods arrive at their destination on time and in good condition. Logistics encompasses order processing, shipping (such as fleet management), inventory control, warehouse management, and delivery of products.

A company’s financial position might be harmed by improper logistics. Weak logistics result in late delivery, inability to satisfy customer requirements, and, as a result, the firm suffers. The word “logistics” is becoming widely popular in the business sector, particularly among factories, to characterize how goods are handled and moved throughout the supply chain.

To minimize expenses and maximize productivity, an effective supply chain and fine logistical operations are required. To fulfill the need for faster, better efficient delivery of a greater selection of items, suppliers, producers, marketers, and retailers have had to upgrade their logistics procedures. All of the components require the aspect of information and control to operate as catalysts for numerous operating processes.

Differentiating Logistics and Supply Chain Management

The policy and operations which go with planning, procuring, manufacturing, and distributing items, and also handling returns, are covered in supply chain management. 

Logistics is concerned with getting the right items to the correct spot at the right time and figuring out how to get them there. As should be obvious at around this time, supply chain management and logistics overlap however they are distinct in terms of extent and concentration. The following are the main difference between logistics and supply chain: 

• Supply chain management operations include logistics. Production and inventory planning, workforce planning, equipment and supplies management, producing and distributing products and services are all covered under Supply Chain Management.
• Supply Chain Management focuses on refining processes to gain a competitive edge, whereas logistics focuses on satisfying consumer demands and preferences.
• The goal of logistics is to deliver items to clients in a timely and cost-friendly manner.
• The conversion of raw resources into final products that flow from the provider to the manufacturer to the warehouse to merchants and/or customers is regulated by supply chain management.
• Logistics is a phrase that has been around for a great many years, originating in the military, although supply chain management is a newer one.
• Logistics is managed by a single company, while Supply Chain Management is done by many companies.

Consumer requirements are fulfilled, and the purchase environment is enhanced with the help of supply chain management and logistics. Consumer requirement is represented in logistics. This information is used by SCM to determine what customers need and to manage manufacturing and inventory levels.

Logistics that are both dependable and cost-friendly serve as a stepping stone for efficient supply chain management. Delivering orders precisely and on schedule is the outcome of a well-developed supply chain that will entice prospective consumers and expand the profit margins over time.

Conclusion

Logistics is an old phrase that was formed during the military to describe the administration, warehousing, and movement of army personnel and supplies. Just after the expansion of the notion of Supply Chain Management, this phrase is now used in a variety of fields, including the military.

 It’s also been argued that Supply Chain Management is a supplement to Logistics Management and that SCM includes logistics. Both are inextricably linked. As a result, they complement rather than oppose one other. Logistics can communicate with the transportation, warehousing, and marketing teams with the use of Supply Chain Management.

The freight forwarding sector offers businesses the most efficient transportation solution. Without freight forwarders, the whole shipping operation may not only be slowed but may also encounter significant shortcomings that are simply too difficult for businesses to resolve. 

Freight forwarding solutions offer that commodities move across international borders and worldwide appropriately and effectively. Freight forwarders have demonstrated to be a significant boon to international businesses, alleviating a lot of anxiety while providing dependable transportation for a wide range of goods at fair costs.

What is Freight Forwarding?

The planning and coordination of the transportation of commodities across the international line on behalf of shippers are known as freight forwarding. Warehouse planning, custom brokerage supplying cargo insurance are the major tasks included in the freight forwarding process. Entrepreneurs who want to develop and flourish should think about trading on a global scale. 

Shipping items in and out may show a chance to broaden the customer base, but it can quickly become very complex. Logistics for global trade can become challenging, necessitating the assistance of freight forwarders. Their goals are to ensure that a company’s commodities are adequately shipped and arrive on time. 

Who is a Freight forwarder?

A freight forwarder is someone who arranges transportation of goods and services for both domestic and international trade. Seamless importing and exporting goods and services across international borders is what a freight forwarder does. They plan how goods will be transferred and stored during transport and collaborate with importers and exporters to ensure that all customs procedures and other paperwork are in order. 

International freight forwarders effectively manage global shipments and have specialist knowledge in planning and handling customs documentation as well as performing international shipments-related activities. They generally offer a comprehensive suite of services such as tracking inland transportation, preparing shipping and export documents, storage of goods, scheduling cargo space, bargaining freight charges, and insurance claim filing. 

Role of a Freight Forwarder

Freight forwarders are responsible for a wide range of tasks. Freight forwarders are third-party logistics providers who act on behalf of service providers. Their major tasks include undertaking freight rate research and arranging shipments between locations via asset-based transportation companies. 

Let’s take a closer look at how freight forwarders maintain international trade moving:

Shipment Tracing

A Transportation Management System (TMS) is used by freight forwarders to trace the status of the movement of shipment at each stage. 

Custom brokerage

Producing customs-compliant documentation necessitates close attention to detail and a level of experience in international laws. You also need the authorization to do it. Many forwarders also act as customs brokers, helping to make them a one-stop-shop for all of your logistical requirements. A forwarder will also provide exporters with advice on regulatory requirements, marking and labeling, potential obstacles to their shipment, and more.

Warehousing

Some of the freight forwarders have their storage facilities to stock goods and commodities. Your forwarder will offer to arrange for stockpiling at a storeroom owned and operated by a nearby franchisee. 

Negotiating

Forwarders understand the importance of a good carrier and work hard to cultivate meaningful relationships with favored cargo ship lines. An efficient forwarder is someone who can achieve a balance between convincing trusted partnerships and engaging in astute deal-making, even if the latter requires them to leave their business open to bids from other carriers.

Negotiating low-cost freight costs with carriers is a difficult task. The art of this deal is to appeal to carriers’ interests by balancing the benefits and drawbacks of your freight type, flexibility, credit status, space/tonnage prerequisites, and other factors.

Cargo space scheduling

The demonstrable aspects of a forwarder’s skill set are adept collaboration and cargo space scheduling. If you decided to hire a freight forwarder for shipping requirements, they’ll get a chance to show off their skills. It takes a careful planner to determine whether consolidating a shipment is profitable, securing timely sailings, and weighing the viability of intermodal shipping methods. 

Networking

Freight forwarders establish and maintain good connections among carriers, shippers, port officials, and other forwarders. Close collaboration enables expedited shipments and also increases the probability of satisfactory shipping rates. As a result, forwarder relationships not only reduce overall friction between steps of a supply network but can also contribute bottom-line worth to it.

Providing Cargo Insurance

Cargo insurance, also known as freight insurance, can be obtained from forwarders. Cargo insurance is designed to compensate the loss payee; if goods are stolen or damaged while in transit.

Enabling a specialist to manage shipping can strengthen processes while reducing stress on a company’s employee assets and workflows. This also enables you to focus on other significant aspects of your business about which you are more knowledgeable. Freight forwarders are typically able to improve the efficiency and effectiveness of shipping methods to promote the safe and timely delivery of goods to satisfied customers.

When it relates to supply chain management and demand delivery, logistics leads a vital role that is critical in the burgeoning e-commerce industry. As a consequence, considering the productivity, performance, and security of transportation management, collaborating with a dependable logistics partner is critical. A dependable logistics partner can assist you in improving your operations by utilizing their experience.

There are many things that you need to take into consideration while choosing a logistic partner. Following are some of the best tips to choose the right logistic partner for your business. 

• Consistency and client service

The significance of client service cannot be overstated. You may deliberately see this by analyzing their communication attentiveness and problem-solving skills. It is good to cooperate with a logistic firm that provides full-time client service as you will be accessible to connect with them irrespective of time.

All competitors will say that they have had a great client experience. But that cannot be always true. It is best to get direct suggestions from customers. You can request a recommendation from them, particularly from clients in the same field and with similar requirements.

 Find out how their consumers think about the logistics company’s service quality. If the company’s service quality is reliably excellent, it appears that it has developed a competent client service strategy throughout the year.      

• Expertise field

Transportation, manufacturing, marketing, exporting, collecting are all examples of the logistics provider. Not every logistics firms offer all services. The majority of them seem to have their very own area of specialty. Connect your requirements to the logistics company’s service and capabilities. 

Assure the logistics company’s competence is a great asset to your team. There would also be a set of functions that would fulfill your short and long-term requirements. You should inquire pertinent to the logistic partner concerning their standard business capabilities. Learn about the options for your short- and long-term business requirements. 

• Enterprise longevity

The logistics partner’s long-term viability is critical to your company’s future. As a reason, you must partner with a corporation that has a track record of long-term performance and functioning. All probable difficulties and important matters will be handled by a reliable strategic partner.

For the best logistical services, try to attempt to work with an economically stable company. Verify the payment record and income statement from the previous years. Choose a long-term partner who will keep investing in buildings, hardware, and people resources to provide the best logistic services.

• Reputation

If you would like to form a long-term logistical collaboration, you need to be credible. Ascertain that the collaboration can be put to the test. To identify a reliable logistic partner, you must first determine whether the service provider is willing to fulfill its contractual obligations with honesty.

• Security

There is no doubting that you must pay close attention to your logistic partner’s security practices. A competent logistics firm will provide frequent safety training to its personnel, post-security advisories in prominent locations, inspect their premises constantly, and publish a company-wide safety regulation following national industry safety policies and standards.

• Innovative technology

To deliver accountable and productive solutions to the customers, logistics companies need to invest in cutting-edge technology. They can take advantage of technology such as warehouse automation, cloud-based services, and an internet-based scheduling and monitoring system, among other things. These technologies will enable them to give error-free and efficient service, as well as timely reporting and a well-organized delivery network. You may get real-time information about where your assets are at any moment.  

• Cost

The cost charged by a logistic partner is an important measure to evaluate. Before concluding, you must make note of the cost per distribution. Travel costs, collecting costs, storage charges, pick-and-pack expenses, delivery charges, account-fixed charges, and monthly minimums are typically comprised in the fines imposed by logistics businesses. 

• Growth and reach of business

With rapid networking and widely affordable transportation, the world has become smaller. An efficient logistics partner guarantees that your package arrives at your consumer’s hand at the moment and in good shape, irrespective of where they are situated on the planet.

A logistic partner with a large reach ought to be able to accelerate your company’s expansion. One essential factor to evaluate is if they can grow up or down quickly in response to increased demand.

• Adaptability to your requirements

Client relationship management is becoming highly relevant to firms because consumer trust accounts for the majority of income. Your logistic partner must provide a swift and attentive customer support team that will go far to provide you with the remedy you require. They should be dependable in moments of extreme emergency. 

It is also critical that your logistic partner has the ability to anticipate difficulties and move quickly to identify the best option. For the logistical machinery to work effectively, a specialized customer service crew is required.