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Logistics Services vs Freight Forwarding: Understanding the Distinctions

Trade plays a crucial role in a nation’s economy. The trade sector is pivotal in determining consumers’ growth, which has long been recognized as contributing to national economic development.


Conversely, changes in consumer consumption patterns significantly impact the trade sector. This is because of the close relationship between the sector’s growth and the demand for consumer goods.


The fact is supported by data from the Ministry of Finance of the Republic of Indonesia, released in February 2023. It reveals that in the past year, consumer consumption increased from 2 percent in 2021 to 4.9 percent in 2022, indicating a growth of 2.9 percent.


With the increase in consumption, the trade sector also experienced a surge. In 2022, this sector grew by 5.5 percent. Simultaneously, the national economy surged 5.3 percent, significantly higher than 3.7 percent in 2021.


These facts confirm the trade sector’s vital role in the country’s economy, as it offers lucrative and prosperous opportunitiesfrom its substantial profit.


See also: Understanding Warehouses, Types, and Functions in Logistics Services


Moreover, in line with the evolving lifestyles, consumption levels are rising. The methods for conducting trade are expanding thanks to digital technology’s advancement.


However, it is important to understand that other sectors also significantly influence the trade processes to be efficient.


Efficient and effective trade processes maximize profits, while inefficiencies have the opposite effect.


Distinguishing Logistics Services from Freight Forwarding

These processes are known as logistics. Those involved in this process, especially in export-import or inter-island trade, need to understand the distinctions between logistics services and freight forwarding.


Although both are part of goods distribution, they differ in operation. Logistics services are focused on local delivery.


See also: Key Standards of a Reliable Logistics Warehouse for Goods Storage


The services include delivery duration, costs, routes, and coverage. They also are commonly door-to-door and door-to-port, ensuring straightforward access to customers.


On the other hand, freight forwarding specializes in international shipments, such as exports and imports. Beyond goods shipment, it encompasses warehouse rental, document handling, taxation, and shipping.


Freight forwarding provides a broader range of services compared to logistics services.


Regarding operational permits, logistics services are limited to goods transportation and logistics. Meanwhile, freight forwarding requires more extensive permits, including the Sea Freight Forwarding Business License (EMKL), Air Freight Forwarding Business License (EMPU), and other documents.


See also: Find Out About Stevedoring, The Act of Loading and Unloading Goods at The Port


Another distinction is that logistics services typically handle shipments with a maximum cargo weight of 10 tonnes, whereas freight forwarding can shipments starting from 10 tonnes.


Choosing a High-Quality Logistics Company

Understanding these distinctions is essential to optimize profitability before participating in trade businesses.


However, it’s worth noting that everything also depends on the credibility of the logistics service companies that become business partners.


One reliable logistics company is SELOG, a subsidiary of PT Serasi Autoraya or SERA, and part of PT Astra International Tbk with extensive experience in the industry.


SERA began as a company that specialized in vehicle rental solutions, and over the years, it has become the largest, industry-leading transportation service provider.


See also: Tips for Choosing an Ideal Logistics Company


With over 32 years of experience, SERA continues innovating, providing effective, efficient, and high-quality logistics services through SERA Logistics (SELOG).


SELOG is here to serve the customers’ needs in end-to-end logistics through diverse services, including Contract Logistics, Shipping Services, Shipping Agency, Freight Forwarding, Warehouse and Yard Management, and Courier Services.


SELOG services are supported by cutting-edge digital technology, making customers’ businesses easier, more effective, and more efficient.


With its Astra Fleet Management Solution (FMS), SELOG provides businesses in Indonesia with IT-based comprehensive solutions for managing fleet vehicles.


This company also has a well-maintained fleet of vehicles and equipment. Thus, they are ready to use anytime. To learn more about SERA’s profile and its services, including SELOG, visit its official website at https://www.sera.astra.co.id/


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