Logistics services are an essential aspect of supply chain management. Essentially, these services include all the elements of the supply chain, right from the inventory, warehousing, order fulfillment, and delivery execution to the final customer. There are several types of logistics services, including warehouse management companies, freight forwarding services, and order management firms. Together, these services form the beating heart of global trade and commerce. Here are some details about logistics services:

Key uses of logistics services
Although there are some other sub-classifications, the uses of logistics services can be broadly broken down into four elements:

1. Storing goods in warehouses
While businesses wait for orders to come in, their products must be stored in a safe, clean, and accessible space like a warehouse for a while. As manufacturing and consumption cycles do not always match, the storage function is critical to an organization’s supply chain. Large companies tend to have their own warehouses and workers to manage them. Smaller manufacturers tend to outsource their warehousing duties to dedicated service providers who offer them low-cost options for the same. At reasonable rates, warehousing companies perform many supply chain tasks, including receiving goods from suppliers and plants, storing goods, and keeping them ready for transportation to retailers for sale.

2. Managing inventory
Modern inventory management companies use technologies such as AI and robotics to gauge material quantity in warehouses and also to contact suppliers to receive more raw materials for manufacturing. Inventory management is a foundational logistics service on which a manufacturer’s supply chain operates.

Put simply, inventory management stores certain raw materials and finished goods in stock for manufacturers. If the raw material levels go below a certain threshold, inventory managers order with their suppliers to deliver more material. This is done so that there are no disruptions in a company’s manufacturing process.

3. Handling transportation
Goods and services are constantly moving from the point of manufacture to that of the final consumer. In that sense, transportation is the essence of the supply chain. Across the supply chain, transportation takes place in multiple successive phases: from the supplier to the warehouse (raw materials), the warehouse to the manufacturer, the manufacturer back to the warehouse (finished goods), the warehouse to retailers, and the retailers to the end customers.

4. Processing orders
Orders can be received through several channels: telephone, emails, computers, and salespeople. In multiple situations, orders are generated by the suppliers for their clients. Once received, an order needs to be processed quickly. Order processing services manage this aspect of the supply chain. When time is used efficiently in order processing, manufacturers, retailers, suppliers, and other supply chain partners can profit. This is why, over the last decade, many companies have computerized their order reception and processing to remove wasted time from their order-shipping-billing cycles.

Types of logistics services
Here are some real-world examples of logistics service providers:

1. Freight forwarding
Freight forwarders perform the task of connecting manufacturers to freight transporters. These companies essentially ensure that the shipments get from manufacturers to fulfillment centers. These businesses use technology and their contacts to advise manufacturers to use various types of transportation channels, such as trucks, trains, or planes, to get deliveries done to fulfillment centers in the shortest possible time. Freight forwarders come in especially handy for international shipping.

As they handle so many of the shipment aspects, manufacturers can simply hire them without losing focus on their core manufacturing activities.

2. Third-party logistics
Third-party logistics providers are versatile companies that handle supply chain operations, including inventory management, order fulfillment, and warehousing. Manufacturers can benefit from hiring such companies, as they allow them to not spend time on anything apart from their core manufacturing operations.

3. Port services
Ocean freight involves frequent contact between manufacturers and ports. Port services perform tasks such as order handling on ports, managing the paperwork before products are shipped, and, essentially, being the connective tissue between port authorities and manufacturers.

4. Last-mile delivery handlers
As their name implies, these logistics service providers handle the task of transporting the goods to the final customer after they have been shipped to international ports. These service providers have to make sure that the expected time of arrival (ETA) of delivery provided to customers is fulfilled.

5. In-house logistics
Large retail companies with branches and offices worldwide tend to handle their logistics activities by themselves. This gives them greater control and transparency over every micro-aspect of their supply chain. In that sense, this logistics service is somewhat similar to that of third-party logistics providers, as they, too, handle all aspects, such as warehousing, inventory management and tracking, and delivery fulfillment.