The Meaning of Shipping and Other Terms Frequently Used in Logistics

Understanding the Importance of Shipping for Business Success

Logistics is a pillar of business activities with a very important role in from when raw materials are delivered to when products are distributed. Understandably, with good logistics management, people can have an effective and efficient production or distribution.

With an effective and efficient logistics management, a company could optimize and even maximize its profits as desired. In other words, logistics management really determines a company performance.

Before practicing a good logistics management, you should know the terms and types of work in the logistics process correctly. There are several terms you should know in this process.

The first one is shipping. Derived from the English word ‘ship’, this term refers to a process of distributing products from one region or city to another by sea using a ship.

However, over time, the meaning has extended and, nowadays, shipping also refers to product distribution by land and air using motor vehicles and airplanes.

Further, product distribution from one city to another, one point to another, or from warehouse to customer can also be considered as shipping. The distribution process will be carried out by the shipping or logistics company after being packaged.

FOB and its types

Product delivery in an agreed shipping process is known as Free on Board or FOB. Generally, when FOB is agreed by both the customer and the seller, the customer is responsible for the shipping cost from the seller’s warehouse to the hands of the customer.

It means that the ownership of the product has been transferred to the customer since the product left the seller’s warehouse. There are two commonly known types of FOB in the commercial business. The first is FOB Destination, under which the seller is responsible for the shipping cost and all kinds of risks that may occur to the product during the shipping process.

The responsibility of the seller is completed once the customer has received the product and the purchase has been recorded.

The second is FOB Shipping Point. Under this arrangement, the customer is responsible for the shipping costs and all shipping risks that may arise until the product arrived at the customer’s place.  The product ownerships and all inherent responsibilities are already transferred to the customer even if the product is still in the shipping process.

Important Documents in Shipping Process

There are several documents that must be included during the shipping process so that the product is shipped safely, transparently, and securely. These documents will be useful, especially when there is a misunderstanding between the seller and the customer:

Warehouse receiptThis document serves as evidence that the goods have been received from the seller.

Bill of ladingBill of lading (B/L) is the most important document if you decide to have your goods shipped by sea. B/L serves as a product receipt, product ownership documentation, and agreement.

Mate receiptThis document is issued by the ship appointed in the Bill of Lading.

Storage planThis document contains an illustration of the goods to be loaded onto the ship.

ManifestThis document is a collection of Bills of Lading that lists all cargoes according to the B/L.

Packing listThis document contains the materials to be shipped, including the weight and volume. Each item of the goods will be listed in detail.

InvoiceInvoice is evidence of the commercial transactions between the importer and the exporter. It is an important document when conducting an international trade.

Shipping orderAll shippers should have good knowledge of this document. Shipping order, or commonly referred to Shipping instruction, is an instruction from the seller to the shipping expedition regarding the delivery.

This document contains details of the goods, from weight, type, quantity, volume, and name. In addition, you also need to input the information regarding the seller and the customer in the Shipping instruction.SELOG One Stop Service

And effective and efficient product delivery is vital to ensure that the supply chain or product delivery is smooth and proper. Therefore, choosing the right logistics company is the key.

Talking about the right logistics company, PT Serasi Logistik Indonesia (SELOG) can be your go-to service. As trusted transportation and logistics company, this Astra Group subsidiary offers comprehensive logistics service solutions.

PT Serasi Logistik Indonesia (SELOG) provides a range of logistics services, from contract logistics, shipment, and warehouse management, to freight forwarding by land, sea, and air. The company also offers the SELOG Express service for sending documents and packages instantly.

Today, SELOG even serves various industrial sectors, such as automotive, consumer goods, heavy machinery, and basic staples. The company provides integrated logistics service through contract logistics, including planning, implementation, and monitoring.

For cargo shipping throughout Indonesia, shipping and distribution services by sea are available.  SELOG also opens a shipping agent service in collaboration with Jardine Shipping Services (JSS).

For heavy equipment, SELOG provides delivery services by various types of transportation modes with guarantees of safety, being on time, and having zero defect. Meanwhile, for supply chains, SELOG offers goods management and storage services using the Warehouse Management System (WMS) that allows a continuous tracking system.

WMS enables continuous tracking of every received, picked up, delivered, and detained good, including damaged goods and completed shipments.  Moreover, this system allows customers to monitor inventory, including low-stock goods, in real time.

SELOG provides additional services of inbound and outbound transportation to ensure the products arrive safely without any damage. With courier services, SELOG can also send your packages with a suit-to-your-needs method, ranging from the same-day service, the next-day service, and the regular service,

SELOG specializes in providing logistics solutions using land transportation and freight forwarding services. To this day, SELOG maintains a fleet of 575 trucks. SELOG also provides robust sea transport solutions through PT Toyofuji Serasi Indonesia, which maintains 5 roll-on/roll-off (RORO) ships.

Supported by the IT-based solutions provided by the Astra FMS (fleet management system), SELOG is committed to be the best solution for Indonesian customers. This system is very useful, particularly in managing the company’s transportation service for both passengers and logistics.