How Does the Logistics Industry Work?

What Is the Logistics Industry?

Logistics is an expansive industry that serves several different areas of business management. The simplest way to describe the function of logistics would be the act of transporting products from their original location to the waiting consumer or retailer successfully. However, this process can be more complex than it seems.

In addition to being responsible for transporting and storing goods effectively. Logistics management also concerns itself with handling customs and other border-crossing details, fulfillment and delivery of orders, product returns, and many more.

Utilization of Third-Party Companies

Many product-based companies enlist the help of a third-party logistics company, or 3PL, in order to diminish the likelihood of error in the process of fulfillment, delivery, and everything in between. These companies handle every aspect of logistics industry including:

  • Storage
  • Warehouse management practices
  • Fulfillment
  • Distribution
  • Transportation
  • Border customs clearance
  • Reverse logistics
  • And many more

As you can see, logistics includes many different aspects of the product moving process, inside the warehouse and beyond. We’ve included more details on some of the most important sectors of logistics management.

The Basics of Transportation

Whether a company has a logistics team or utilizes a 3PL, the logistics personnel have to maintain a high level of constant communication with the transportation specialists. These two teams collaborate to find the most efficient ways of transporting product. Whether that be through utilizing planes, ships, trucks, trains, or a mixture of methods.

Depending on the type of product, company budget, timetables, and other factors, different shipping methods will be more effective than others, although all shipping forms have their own specific sets of pros and cons.

The Basics of Customs Clearance

If your company regularly moves product across borders or overseas, you will need a logistics team that is well-versed in customs clearance. In order for a shipment to pass customs and enter the U.S., the shipper is responsible for completing all mandatory documentation. Packaging products in ways that are compliant with all laws applicable to the specific state or to the country as a whole.

Though many customs requirements depend on what’s being shipped, there are some universal requirements in place, such as:

  • Custom’s Bond
  • Commercial invoice
  • Bill of Lading

The Basics of Warehouse Management

In order for a warehouse to function smoothly and avoid fulfillment errors, it needs to be tightly monitored and controlled at all times. A logistics team will handle all aspects of organization, layout, picking, packing, and more. With every detail depending on the size of the company, its warehousing and transportation needs, and the types of products stored.

Many logistic teams utilize a Warehouse Management System, or WMS. This is a software system that automatically tracks the flow of goods in and out of the warehouse. Efficiently streamlining warehouse procedures. An effective WMS will also perform in-depth tracking and tracing procedures. This keep a detailed record of all of a product’s movements throughout the shipping and handling process.

Looking to incorporate a logistics team into your company’s day-to-day operations? Overflo offers high-level logistics management for companies of all types and scopes, prioritizing fast and accurate transportation and order fulfillment. With computerized inventory control and a host of heavy-duty transport equipment, you can rest assured knowing that Overflo has all of your logistical details efficiently handled.