2022 SHIPPING, PORT AND TRANSPORT

PROFESSIONAL TRAINING PROGRAMME

By
GLOBAL SEAFARERS AND TRANSPORT ACADEMY
LAGOS

MODULE 2
INTRODUCTION TO TRANSPORT LOGISTICS
MANAGEMENT

What is Transport Logistics Management

Transportation and logistics management are two closely related business units that
share a common objective. The primary goal is to transport inventory throughout a
company’s supply chain efficiently and effectively. While people use the terms
interchangeably, transportation management is a subdivision of logistics. It’s a
symbiotic relationship that requires care and attention. Actively managing supply
chain offers your company tremendous cost- and time-saving advantages. In other
words, you can’t afford to miss out on opportunities due to non-prioritization of this
essential service function.

Logistics focuses on the entire order fulfilment process

Logistics refers to the receipt, production, and distribution of goods and materials in the
customer-requested amounts to its final destination. It is also the strategy that
determines how your company stores products in its warehouse, tracks orders, and
delivers products to its customers.

Simply put, logistics is the overarching business unit that oversees the entire process of
order fulfilment and matching customers expectations. It’s both an art and a science.
Transportation Concentrates on Managing Physical Delivery

Transportation within the context of commerce is the movement of goods from one
location to another. It’s considered to be a sub-unit of logistics. Companies deliver
products by land, air, or sea. Sometimes referred to as transport logistics, it’s a function
divided into three significant areas in which a business must engage:

• Operations Management
• Vehicle and Fleet Organization
• Infrastructure Administration

Now that you can see how the two activities operate on their own, it’s time to shift our
focus toward how they can work together:

Leveraging Transportation Under the Logistics Umbrella

Practising logistics management, in an effective and efficient manner, requires you to

pave the foundation for a transportation network that responds with your business’
needs while remaining economical. Doing so allows you to address unanticipated
issues and improve customer service with zero downtime or disruption to your service
process.

Transportation is one element of the process. Logistics further provides for inventory
planning, goods storage, and demand forecasting in addition to delivery. Optimising
your supply chain’s performance means that you satisfy your customers’ needs at the
lowest cost possible.

A Balancing Act with a Moving Target

Consider this example to better understand the relationship between transportation and
logistics: a pharmaceutical company wants to keep the least amount of inventory on
hand to mitigate its investment exposure. The company’s management team attempts
to warehouse all stock in a central location since data collection and analysis tells them
that it is the best way to achieve this goal.

How does this strategy affect transportation? Deliveries taking place outside the
geographical location of the warehouse may experience delays which can lead to
disappointed customers. There is even greater potential for revenue loss, primarily
when serving industries that deal with temperature and shelf-life issues.
Using the same example above, if the company decides to focus on delivery times and
transportation by asking customers to augment their orders, it takes the same problem
and propels it in the opposite direction. Asking customers for unreasonably large orders
can slow down the process even further. This situation is fertile ground for
dissatisfaction.

Automation and Data Logging Bridge the Gap in New Ways

As you can see, transportation and logistics must work in tandem to fulfil customer
orders as expected at the lowest price possible. It’s one of the reasons why automation
technology is on the rise among transportation and logistics companies. Managers and
executives can systematise predictable, redundant tasks across the supply chain
network with zero error and at a fraction of the cost.

In addition to automation, data logging is on the rise as well. Both logistics and
transportation can participate in data collection and analysis separately and together.
Over the long-run horizon, it allows companies to access valuable insights about their
supply chain with circumstance monitoring information.

Why It’s Crucial to Actively Manage Your Transportation and Logistics Business
Units

Order fulfilment is only one aspect of transportation and logistics management. There
are several other reasons as to why it’s crucial to be proactive about this area of your
business. Let’s take a closer look at a few of them below:

Optimisation of Inventory Flows

Effectively managing your transport logistics allows your entire supply chain to run
seamlessly. You can keep your inventory lean using successful transportation
techniques. Plus, you can improve your warehouse’s operational efficiencies, reduce
lead times, and save on storage expenses.
 WHAT IS THE DIFFERENCE BETWEEN TRANSPORTATION AND LOGISTICS?

Transportation and Logistics

Logistics and transportation are two very important parts of transportation and distribution
services, and they are different. Transportation is the movement of goods and logistics is
the management of the inward and outward transportation of goods from the
manufacturer to the end user. These terms are often used interchangeably, but they are
two extremely different part of the supply chain. Logistics and transportation deals with
getting products and services from one location to another. Although logistics and
transportation are used interchangeability, the differences are simply logistics deals with
the integration of storage, transportation, cataloging, handling, and packaging of goods.
Transportation deals with the function of moving products from one location to another.

Logistics
Logistics is obtaining, producing, and distributing materials and products in the right
qualities and to an end user. Logistics includes the science of planning for managing
and implementing procedures for the most efficient and effective storage and
transportation of goods and services. Services and other information from the source
point to the consumer is sent through logistics channels to meet and fulfill customer
needs.
Logistics has added benefits and functions that are different from transportation
services. Logistics managers need to make decisions based on packaging,
containerization, documentation, and insurance, storage, importing and exporting,
regulations, and freight damage. They also deal with work and collaborating, claims,
managing vendors and partners, and risk mitigation.
Important tips for effective logistics management include:
Proper planning is the first step to accomplishing a task. Planning involves obtaining the
products, facilities to store the good before delivery, and transportation of products to
the end users.
Automaton plays a major role in increasing the efficiency of a transportation company.
Automation has a vital role in optimization.
Value relationships or the team is an essential aspect of a transportation organization.
The team is responsible for growth. From the delivery guy or the warehouse manager,
logistics means training employees and having a logistics manager with interpersonal
skills. Logistics requires an emergency back up plan and a reliable person who can sort
out problems and issues.
Warehouse management is part of effective logistics management. Warehouse
operations are dependent on the type of goods you are handling as well as the logistics
manager.
A good logistics network optimization needs to integrate analysis, feedback, and
measurement. When a logistic manager deploys new strategies in the system, you need
to analyze the output. Analyzation is important as it regulates the success or failure of
the industry.
Adapt the latest technology and innovative approaches to transportation and distribution
services. Effective logistics management is constantly evolving to improve the efficiency
of operations, ensuring customer satisfaction, and increasing productivity.
Transportation Services
Efficient transportation is important to the survival of a transportation and distribution
service. Efficient transportation should be analyzed for the best delivery route, as well
as cost-effective packaging that ensures low investment and safety of goods.
Transportation services include the movement of goods and services, people, and
animals from one location to another by rail, road, air, sea, cable, space, or pipeline.
Transportation services can be divided into three different areas: infrastructure,
vehicles, and operations. Transportation allows communication and trade between the
two parties.
When planning the shipment process, the method of transportation is a significant
consideration. You need to determine the costs, how important is it to get the shipment
to the end user in what period, the value of the goods as well as the size and weight of
the goods.
Corlett Express deals with road fright which is one of the most common and used of all
modes of transport. Road transportation has several advantages because of:
• Cost-effectiveness

• Quick and scheduled delivery

• Flexible service
• Track and trace of cargo and the truck

• Complete door-to-door services

• One of the most economical means of transportation for goods and services.

As new technologies are discovered and improved, there has been an enormous impact
on transforming both the transportation industry as well as the logistics industry.
Technology has allowed real-time monitoring of flow and resources and transparency
across multiple points. Technology has provided a seamless exchange of operational
information with key performance indicators that have streamlined and organized the
industry.
In the highly competitive transportation and distribution service industry, it is imperative
that information and physical products move with efficiency and at lower costs.
Customers are demanding improved services that only technology can provide.
Successful supply chain management and logistics are the difference between surviving
and success in transportation and distribution services. As the supply chain
management, logistics system is improved, immediate benefits can be seen in terms of
lower transportation costs and optimized deliveries.

5 Key Components Of Transport Logistics

Management – You Should Know

In a Supply chain, the logistics activities that take place are controlled and
influenced by some of the key components of Logistics management.

These various components define what all processes are undertaken in a Supply
chain. So it is highly essential to study these main components of Logistics
management in detail.

As we all know that Logistics service is an art and study of getting, delivering,
and distributing materials and goods in the correct spot and in legitimate
amounts. It should all be incorporated in logistics companies all through a system
of facilities.

It is a quickly developing business discipline that includes the following

• Management Of Order Processing
• Warehousing
• Transportation
• Materials Handling
• Packaging
Contents

5 Major Components Of Logistics Management:

1. Planning
2. Packaging and utilization
3. Inventory Control
4. Transportation
5. Information and Control

Now let us break the components of Logistics Management to have a deeper

knowledge and understanding.

1. Planning (Storage, Warehousing and Materials Handling)

Logistics planning serves to interface and synchronize the overall supply chain
as a constant procedure and is fundamental for powerful supply chain
connectivity.

The market conditions are always unpredictable and frequent situations occur
where there develops an imbalance between demand and supply. Logistics
management should ensure a constant and continuous supply of goods by the
manufacturers. For this, we need great Planning and that’s how it becomes one
of the most important components of Logistics management.
Manufacturers need to work in a highly efficient manner but due to the previously
mentioned imbalance; demand for the product is not at par with the supply of the
products. In such situations, we need storage units and warehouses to store the
surplus goods produced.

For the proper maintenance of the goods stored, the warehouses require special
storage equipment such as racks or shelving and materials handling equipment
in order to move them around and load them in and out of delivery vehicles.

As a procedure, material handling fuses a wide scope of manual, semi-robotized,

and computerized gear and frameworks that help logistics and make the supply
chain work. This helps in forecasting, resource allocation, production planning,
inventory reduction, customer delivery, and support.
Planning synchronizes the whole set of activities and procedures and thus
becomes a very significant part of a supply chain. Logistics management
involves the proper supply of goods and services at each stage and it cannot be
managed well without proper Logistics Planning.

At times, during demand-supply fluctuations and imbalance, there might be

situations like an insufficient supply of goods or we need storage units and
warehouses to store the surplus goods produced. All this cannot be achieved
without proper planning.

2. Packaging and Unitisation

We previously talked about how maintenance of a product is crucial. Another

aspect of maintenance is the care and conditioning of the products or goods,
which can be achieved by good Packaging and thus it qualifies as one of the key
components of Logistics management.

Packaging not just shields the item during travel from the producer to the retailer,
however it likewise forestalls harm while the item sits on retail retires. How an
item is packed might be what pulls in the purchaser to consider buying the item.

Thus, numerous organizations direct broad research on color schemes, designs,

and kinds of packaging that is the most attractive to its potential buyer.

Unitisation is the method of consolidating a number of individual things into one

huge delivery unit for simpler handling. It is also likewise significant as this helps
stockpiling and transportation.
Packaging and unitisation normally attempt to pack a product in a cuboidal form
as a cube is the easiest shape to move around, transport, and store.

Packaging not only protects an item or good during its movement from producer
to the retailer but it also maintains and conditions the product when it sits in the
warehouse.

How an item is packed also influences its potential consumer, therefore, many
companies invest in research on new designs, color schemes, and kinds of
packaging that are more attractive to the consumers.
Unitization or cuboidal packing is the method of how many individual items are
grouped together and packed as one unit. It helps the storage and transportation
of goods as a cube is the easiest shape to move around.

3. Inventory Control

Since we already discussed Packaging and storing, let us discuss another

component of Logistics management which is related to storage and
warehousing.

Inventory control refers to the procedure of guaranteeing that proper measures of

stock are kept up by a business, in order to have the option to satisfy client
needs immediately while keeping the costs related to storage to a minimum.

It consists of a key plan focusing on existing stock, maintaining information on

stock conditions, availability of warehouses, etc.

It determines decisions like,

• How much stock to store

• Where to store
• How much quantity is to be stored.

It involved studying the demand and supply prevailing in the marker as well as
predict the demand and manage the inventories accordingly.

Since demand is variable in nature, Inventory control acts as a very useful tool to
manage the flow of goods in the supply chain even though it is not a scientific
method.

With a key plan set up, that advances the way toward directing and overseeing
stock, including constant information of stock conditions and levels,

Organizations can accomplish inventory management benefits which includes

• Accurate Order Fulfillment

• Good Inventory Planning, and Organizing
• Organized Warehouse
• Save Time and Money
• Increased Productivity
 • Increased Consumer Satisfaction
• Retention.

The decisions like what stocks to store, where the stock should be located, and
how much quantity of goods are to be stored are some of the important functions
of Inventory control.

This involves studying the market condition and predicting the demand for the
goods. By having an idea about how much goods will be demanded by
consumers, it can be decided how much goods need to store. A variety of
statistical tools and mathematical techniques are employed for this purpose.

Since demand is variable in nature, Inventory control acts as a very useful tool to
manage the flow of goods in the supply chain even though it is not a scientific
method.

4. Transportation
Another key component of logistics management is Transportation which acts as
a connecting link between other logistics company activities. From the
manufacturing to the delivery of finished goods to consumers (also the returns),
transportation is required in the whole production procedures. It involves
planning, implementing, and controlling the effective and efficient forward and
reverse flow of goods in a supply chain.
Transportation serves as the link between various logistics activities. From the
manufacturing to the delivery of finished goods to consumers (also the returns),
transportation is required in the whole production procedures.

Transportation involves various modes like road vehicles, cargo

trains, freight shipping, and air transport.
A good Transportation Management System (TMS) is necessary for maintaining
proper transportation as it can automatically tender loads, track shipments,
improve efficiency and performance, and can also contribute effectively in
inventory control.

There are various methods of transportation in the logistics business, each

having its own benefits and hindrances. This incorporates all methods of
transport including road vehicles, cargo trains, freight shipping, and air transport.
Some perishable goods like food items etc. do not need to be transported to far
off places but the other durable and complex products are usually transported to
and from all over the world.

Proper transportation calls for a good Transportation Management System

(TMS), which will automatically tender the loads, track the shipments, and
maintain and analyze historical data to improve efficiency and performance. Also
with good TMS, inventory can be kept Lean and thus keeps the supply chain
process smooth.

Transportation is an emission-heavy industry and thus a good system is required

in order to reduce the carbon footprint and energy consumption thus leading to
sustainable Logistics Management.

Since the transportation process involves keeping direct contact with the
customer, timely management of the delivery of goods is highly important.
Constant late delivery of goods will lead to a negative impact on the customer.
Better the performance, better customer satisfaction.

5. Information and Control

It is a system that supports the management of an enterprise. Information and
control are needed to act as the basis for the smooth functioning of various
operational processes and procedures. This involves real-time delivery tracking
where the truck driver gets a real-time update on where to pock the next load and
where to deliver.

An organization involves a lot of procedures and activities. Information and

control manage the smooth functioning of these activities. It takes care of real-
time shipment tracking, order management, warehouse management, etc.

Information and control also have a major role in determining the possible
demand of goods by analyzing the market conditions which in turn is useful in
determining the number of goods that need to be stored in the warehouses.

It improves the efficiency and performance of activities in a supply chain and thus
makes it one of the key components of logistics management.
This is part of order levels that decide which orders are to be picked when and
from which warehouse. The whole transportation system also gets organized in
this process.

It is also important in forecasting demand and supply of goods which in turn

determines how much quantity of goods are to be stored in warehouses and
influences other processes of inventory control.

The aim is also to improve business efficiency and also eliminate and reduce
waste making it sustainable logistics. This is why information and control become
one unavoidable key component of Logistics management.
On one hand, information and control help in the functioning of the traditional
management process but on the other, it is a modern tool that helps in the
concentrate on the achievement of strategic goals.

It coordinates and integrates the management functions, activities like sales,

distribution, marketing, manufacturing and supply, and value chains which
involves integrating the needs of the customer and the market, with the company
potential in order to achieve financial goals and high business performance.

Frequently Asked Questions About Components Of Logistics

Management
Lets us see the most frequently asked question on this topic. We have answered
in our best possible way. If there are any other questions, feel free to drop in the
comments.

What are the major components of logistics management?

Planning

Packaging and unitization

Inventory Control

Transportation

Information and Control

What are the four major functions of logistics?

Price

Place

Promotion

What is Inventory Control in logistics management?

Inventory control is a method or a procedure that makes sure that adequate quantities
of goods are stored and kept by a company depending upon the requirement of the
product by the clients.

What are the decisions controlled by Inventory control?

Quantity of stock to store

Right location to store

Cost of the inventory

What makes Transportation management System as good?

We can call it as good when the below-mentioned points are taken care of

Automatically tender loads

Track shipments

Improve efficiency and performance

Contribute effectively to inventory control

Final Words On Various Components On Logistics Management

Logistics has been ped around the world for ages and yet man is trying to find out better
ways to improve it in order to achieve increased productivity and profit. This calls for the
need to analyze and understand the major components of Logistics management
thoroughly.
The 5 key components of logistics management have been jotted down and discussed
in depth. Conduct thorough research on each of them and also explore other aspects of
logistics as well as it is one of the most dynamic and challenging areas of Supply Chain
Management