From the course: Supply Chain and Operations Careers: Certification Tips and Tricks (2019)

Shipping overview

From the course: Supply Chain and Operations Careers: Certification Tips and Tricks (2019)

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Shipping overview

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- One of the ways that supply chains add value to a product is by getting it to the right place at the right time. That could mean moving raw materials to a factory, or moving finished goods to a distribution center. No matter where you work in a supply chain, you'll need to deal with shipping. So let's cover the basics. The stuff that your company moves is called freight. Or it might be called cargo, or a load or a shipment of goods. The shipments you send to your customers are outbound freight, and the shipments you receive from your suppliers are called inbound freight. There are lots of ways to move freight. For example, ships, trains, trucks and airplanes. Each of these is a mode of transportation. The company that needs the freight moved is called the shipper. The technical term is the beneficial cargo owner, or the BCO. The company that transport their freight is the carrier. For ships, you call the carrier a vessel operating common carrier. Or for trucks, you call them an asset-based logistics provider. Airlines and railroads are called, well, airlines and railroads. Shippers don't always work directly with carriers. Sometimes the relationship is managed by a third party logistics company. The 3PL might act as a broker between the shipper and the carrier, matching loads with transportation capacity. For international shipments, this is called freight forwarding. Or the 3PL could act more like a carrier who then subcontracts the shipping to other carriers. For international shipments, this kind of 3PL is called a non-vessel operating common carrier. Choosing the right mode of transportation for a shipment can be challenging. In general, the further you need to send it, the faster you need it to arrive and the more special handling that's required, the more you'll need to pay for your transportation. By understanding the basics of shipping, you can make smart choices about mode selection and mange the costs and the risks of transportation in your supply chain.

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