We disassemble the links of the logistics chain by definition and purpose

This article is intended for those who are still only learning the basics of logistics, for example, for customers of services that have faced the task of establishing a functional delivery system for the production of raw materials, and the transportation of finished products to stores or warehouses of counterparties. We briefly analyze the basic concepts and the system of functioning of the “logistics chain”.

The definition of “chain” is found in the literature along with such as “logistic system” and “logistic channel”. Often there is no clear distinction between them, but there are differences, and obvious ones.

“Logistic channel” is usually only a partially ordered chain of intermediaries on the way of cargo movement from the manufacturer to the buyer.
As soon as the participants in the process change from conditional ones to concrete ones (you choose the forwarder), the channel is transformed into a “logistic chain”.
“Logistic system” is also called a complex structure of several subsystems and “chains”, which has a developed relationship with the commodity market.

Summarizing, it should be noted that the task of the Logistics company is to create a stable and orderly set of process participants who carry out operations to bring the material flow from one “system” to another.

A simple example is the production of pencils. Raw materials for the enterprise must be delivered from the system of the woodworking plant to the factory system for the manufacture of office supplies, and after the finished products it should be transported to the wholesale warehouse system and from it at retail outlets. Fortunately, in the “chain” usually involves several links. Obligatory only two:

The carrier is the owner of the transport, who assumes responsibility for the transportation. Performs only the mechanical part of the work, ensuring the serviceability of the vehicle and the ability to deliver cargo on it according to agreed terms and conditions.
Forwarder or dispatcher – realizes the “chain”, controlling the entire logistics process, including the actions of the carrier. He also sells the service to the end customer and is responsible for the quality and timeliness of its execution.

When the carrier begins to take on the role of freight forwarder, i.e. searches for clients, sells a service, concludes a forwarding service contract, expands its own responsibility area, then it becomes a freight forwarder.

Today, the hybrid system is popular, when the Logistics company has its own vehicle fleet and a staff of specialists, but, if necessary or lack of rolling stock, addresses private carriers-owners of transport, acting as an intermediary.

Also in the “logistics chain” customs representatives from among the forwarders can meet. Their task is to collect information about the cargo, calculate customs payments, prepare documentation and resolve all related issues.

Simply put, a “Logistics company” similar to the Neolit Logistics group of companies is a freight forwarder with the functions of a carrier and a customs representative. The task of the enterprise is to “assemble” the “logistics chain” into one, and a huge advantage over private carriers in guarantees and the ability to offer several schemes for the delivery of goods.