Monthly Archives: August 2014

Logistics and Transportation – 5 Facts That You Must Know

If you have read business or industry magazines, then you would have surely come across these terms – logistics and transportation. For those, who do not know what these terms actually refer – Logistics is nothing but a cost-efficient process for devising, executing and supervising the effective movement of goods from one point to another. There, the transportation is defined as the movement of people or items from one place to another. Transportation and logistics have become an important aspect of business and industry these days. Now let us look into some of the facts about transportation and logistics industry that you would find interesting.

The logistics and transportation industry has so far created six sectors of industry, and they are rail, road transportation, aviation, warehousing, maritime and storage services. This is one of the biggest industries in the world. Another interesting fact is that U.S economy relies on trucks for 70% of the shipped goods that accounts to $671 billion.

There are nearly 3.5 millions of truck drivers involved in moving freight. It means one in fifteen people in the U.S are working in the transportation industry. Shippers who collaborate with outsourced logistics companies report 13% of cost reduction in average.

88% of shippers and 94% of 3PLs conclude that the exchange of information, adaptability and open-mindedness are the crucial factors that help to turn them very successful. There are also many fun and interesting facts about the transportation industry. If you want to read all the fun facts, simply browse the Internet.

Difference Between Alliance and Vessel Sharing Agreement

Though there are so many container companies for you to choose from, the choices are limited when you want to choose vessel sharing partners and carrier alliances. There is a considerable difference between vessel sharing agreement and alliance. Now let us look into the difference.

As the name says, Vessel Sharing Agreement (VSA) is when member carrier allows to share space with each other. The prices are fixed for every shared and allocated space. Here, the member carrier just shares space and does not operate the trade routes. On the other hand, in the alliance, member carriers not only share space but also collaboratively operate and plan on service routes. They can also introduce new services and control capacity.

It is quite obvious that alliances dominate much than vessel sharing agreements. The former’s decision can significantly affect the customers and individual carriers. These days, there are many VSA and alliance operating at the trans-pacific market.

Many companies are finding difficult to choose between alliance and VSA. Depending on the quantity of goods and nature of the business, you can choose the number of alliances and VSA. There are so many resources on the Internet, where you could find effective ideas and tips on this matter.