Logistics services are all the elements of your supply chain, from the factory to the end customer. They include transportation from manufacturer to warehouse, warehousing and order fulfillment, and delivery to the end customer.
Transport from the factory to the fulfillment warehouse.
Warehousing and order fulfillment.
Outbound shipping and order delivery to customers.
That is a simplified overview of logistics services. When you drill down, there are different options, choices, and dynamics at each of these stages in the supply chain. You can choose different types of logistics services to meet the needs of your eCommerce company.
Here are some of the most common types of managed logistics services, otherwise known as 4PL services, used by eCommerce companies.
When you place a purchase order with your manufacturer, a wholesale supplier, or a distributor, logistics are involved in getting the freight from the point of origin to your fulfillment warehouse. Freight forwarding is the process of shepherding a shipment from the manufacturer to the fulfillment center.
Domestic freight forwarding includes arranging for trucking, rail shipment, or air transport. Transport for full truckload (FTL) or less than truckload (LTL) shipments of bulky or heavy items is almost always by rail or truck. Freight forwarders might use air freight for orders that need expedited shipping or high-value products.
International freight forwarding involves additional layers of complexity, including customs paperwork at both ends of the journey, duties, and multi-modal transport. International freight typically travels by container ship in either FCL or LCL (less than container load) shipments or, for lighter or more valuable products, via air freight. During the COVID-19 pandemic, orders of PPE shipped by air freight. Electronics manufacturers also commonly use air freight to transport their goods. Container ships transport everything from automotive parts to clothing.
As supply chains become ever more global, international freight forwarding is something that many eCommerce businesses need.
You can work directly with a freight forwarding company to handle the paperwork and arrange transport for your goods. Or you can use a logistics services provider to manage international freight forwarding along with other 4PL services. Which option you choose will depend, at least in part, on the size of your company.
A 4PL or freight forwarding company can bundle your LCL shipments with those of other companies to save you money on shipping. The advantage of using a logistics services provider is that the 4PL aggregates a large volume of shipments, so the freight forwarders it works with have an incentive to provide better service.
Inventory planning and management are foundational to every successful eCommerce business. Managing inventory can also be a pain in the neck. The best way to relieve the pain is to automate your inventory management as much as possible.
A logistics services provider may have an inventory management solution that integrates with warehousing services. For example, Red Stag Fulfillment’s inventory management system offers you inventory visibility, stockout projections, and data on order trends.
An inventory management solution from your logistics provider can provide data to help you generate inventory forecasts and improve your inventory replenishment processes. The net result of better inventory management is fewer backorders and greater profitability.
Third-party logistics is a catch-all for a range of logistics services. Most 3PL services companies will provide the basics of eCommerce fulfillment: receiving, warehousing, pick and pack order fulfillment, and outbound shipping.
Returns (reverse logistics)
Kitting and assembly
FTL and LTL shipping
For eCommerce companies that outsource their order fulfillment, third-party logistics companies become valuable business partners. At Red Stag Fulfillment, we provide all the services listed above, and we go above and beyond. We want our logistics services to drive your eCommerce success.
It’s easier to understand how logistics services work by looking at an example. Let’s start with a hypothetical furniture company called Sit Still.
Sit Still sells comfy chairs and couches online to U.S. consumers. The furniture is manufactured in China, so the company needs help with the logistics to transport the products to its U.S. third-party logistics company. Its shipments weigh a minimum of 40 pounds. When someone orders a living room set, the total weight can top 150 pounds.
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