Company logistics activities used to focus more on moving goods via logistics transportation. However, as supply chains become more complex and business competition intensifies, companies now also prioritize operational efficiency, distribution visibility, and customer experience in logistics operations.
As a result, many companies use logistics services to help them adapt to changes and improve business competitiveness.
So, what exactly is the concept of logistics services? Check out the full discussion, starting from the definition, benefits, and types in the following explanation!
What Is a Logistics Service?
Logistics services assist in the movement of goods within the supply chain, from the transportation of materials to the company through warehousing to their receipt by the customer.
Logistics services help simplify the complex distribution process, ensuring it runs in a more integrated and orderly manner. Some examples of logistics services include trucking services, shipping, container unloading, warehouse rental, and customs handling.
By utilizing logistics services, companies have the potential to gain the following benefits:
- Lower operational costs: By simplifying the distribution process, companies can reduce transportation costs, improve warehouse storage efficiency, and optimize inventory management.
- More efficient supply chain: Logistics services help companies monitor stock across multiple warehouses simultaneously. This is important to ensure that goods are available when needed.
- Increased customer satisfaction: This is supported by delivery speed, the accuracy of quantity and condition of goods, and the minimal risk of errors and delivery delays.
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Types of Logistics Services
Logistics service practices are generally divided into several types. Here is the explanation:
1. Distribution Services
Distribution services help companies manage the process of delivering goods from distribution centers to various distribution channels such as wholesale stores, retailers, or direct consumers.
In addition to delivering finished goods from producers to consumers, distribution services can include transporting raw materials from suppliers to warehouses or production facilities.
For company distribution needs, PT Chandra Daya Investasi Tbk (CDI), through PT Chandra Shipping International (CSI), provides marine logistics solutions, such as gas and chemical vessels.
CSI focuses on the shipping industry and has now managed more than 10 LPG and chemical transport vessels. These ships have capacities ranging from 4,200 to 9,600 DWT and are classified as chemical, gas, and petroleum ships. This fleet has the potential to grow along with the increase in industrial materials and energy distribution.
2. Cold Chain Logistics Services
Cold chain logistics services help maintain a specific temperature during the storage and distribution of perishable products, which are prone to spoilage or rapid quality deterioration.
These products include medicines, vaccines, and fresh foods. With cold chain logistics services, these products can last longer and maintain their quality.
CDI also provides land logistics solutions through PT SCG Barito Logistics (SBL) and PT Chandra Cold Chain (CCC). These services include inter-island services, sea transportation, export-import, customs clearance, and warehouse management.
All these services are supported by over 200 truck fleets and warehouses in the Java and Cilegon areas. Additionally, CCC also involves modern cold storage facilities with a capacity of up to 700 pallet positions.
Read also: Green Supply Chain Management: Definition and Benefits
3. Port Services
Port services are usually provided by logistics companies that manage or own ports. These services assist ship operations and the movement of goods in port areas.
Port services typically include dock services, port yard services, port warehousing, and ship docking services.
CDI provides port and raw material storage solutions through PT Redeco Petrolin Utama (RPU). These services include providing docks and storage facilities for petrochemical raw materials, specifically for loading and unloading oil and LPG.
In this service, RPU provides two docks, each 200 meters long, suitable for up to 35,000 DWT ships with a 10-meter draft, as well as 70+ tanks with a total capacity of 125,000+ m³.
There are also supporting assets such as a fueling station for tanker ships, a Customer Order Service (COS) system, and an oil boom.
4. Freight Forwarding Services
Freight forwarding services act as intermediaries between the shipping company and the final destination, using various modes of transportation, including land, sea, and air.
At first glance, freight forwarding may seem similar to distribution services, but their areas of focus differ. The main focus of distribution services is the dissemination of products to markets, such as retail stores and wholesale centers. Meanwhile, the main focus of freight forwarding is cross-border shipping and logistics administration.
Some examples of freight forwarding services are air freight (shipping goods by airplane) and FCL freight (sea shipping using containers). There are also customs clearance services that assist in handling documents and customs permits for export and import.
5. 3PL (Third-Party Logistics) Services
3PL services are third-party logistics services that help companies handle various logistics activities in an integrated manner, from planning to execution.
In the 3PL scheme, companies can hand over part or all of their logistics operations to third-party service providers who operate their own warehouses, transportation fleets, and logistics systems.
Some examples of 3PL service applications in Indonesia can be found in e-commerce or MSME business services that use third parties to:
- Pack order products.
- Store inventory in warehouses.
- Deliver orders to customers in various regions.
Another example is food and beverage companies that require a third party to distribute products to supermarkets, minimarkets, and distributors in various cities.
6. Reverse Logistics Services
This logistics service facilitates the return of products from consumers to producers, whether due to damaged goods, incorrect orders, recycling needs, or other reasons. The focus is on managing shipments to maintain optimal goods value and minimize waste.
Although product returns are often associated with problems, this moment can actually be an opportunity to improve the relationship between the brand and its customers.
After all, customers will view the brand more favorably when it provides a good attitude and service, even when problems arise. As a result, their satisfaction and loyalty may increase.
7. Cargo Handling Services
This type of logistics service involves handling goods, including loading, unloading, sorting, scanning, and preparing cargo for the next distribution. The goal is to ensure that these processes run safely and efficiently.
Cargo handling affects many aspects of the supply chain, including the condition of goods and delivery speed. For example, poor handling can damage goods, and messy coordination can cause delivery delays.
This service actually involves a lot of manual labor, but it should be supported by modern technology such as Warehouse Management Systems (WMS), barcode scanning, dock scheduling, and tracking systems.
That concludes the explanation regarding logistics services and their types that you need to know. Given the complexity of logistics processes and the significant benefits available, make sure you do not choose the wrong service provider.
If your company needs a reliable, integrated logistics service provider, CDI is ready to be #YourGrowthPartner, providing logistics, port, and storage solutions to make your business more competitive and adaptive.
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