Shipping Company

A shipping company facilitates the transfer of packages or items from the place of its manufacture to the destination or doorstep of the customer. 

However, a lot happens in between that doesn’t meet the eye. The shipping company is an integral part of supply chain management, and it is as important as any other aspect of the process of order fulfillment. 

What is a Shipping Company?

A shipping company is an organization or corporation involved in transporting goods and packages. A shipping company mainly deals with Maritime shipping. It is also called a shipping line. As the shipping mainly happens to waterways, the company shipping owner is associated with worldwide maritime shipping or shipping through inland waterways.

An important feature of a shipping company is that not every shipping company has its ships. That means it is possible that a shipping company may be involved in the shipment of packages, but that company may not own a ship. In that case, the shipping company operates through ship charters. 

Statistical analysis and evidence show that only half the shipping companies in the world have their fleets, and the other half operate through ship charters.

How Does a Shipping Company Operate?

Shipping companies work through various mechanisms, and no particular mode of operation exists for the same. A shipping company can be characterized by the fact that a legal entity, a partnership, or a merchant becomes the owner of the shipping company.

There is a fine line between one-ship companies and partnership shipping companies. Several shipping companies and charters join forces in the latter to become one big entity. There is another category of liner shipping companies where people do not necessarily have to owe the ships. Nowadays, liner shipping companies are the most profitable and successful form of shipping company where both the mechanism of owning ships and working with charter ships exist. 

Equipment and maintenance of a ship are the prime purposes of a shipping company. Shipping companies can delegate some work to ship owners, such as the responsibility of their personnel on boards and paying wages. The task of ship maintenance can be outsourced to the ship owners, which will help shipping companies get rid of the responsibility of managing the entire ship. 

Another important feature of a shipping company is chartering. Although the responsibility of chartering can also be outsourced, most of it is performed by ship brokers. The doubt in your mind between a ship owner and a shipping company can be cleared by stating that the former is always the owner of the ship, and the latter may or may not be the ship owner.

The shipping companies that do not operate with their ships as owners are ‘de facto’ shipping companies by the law. When the ship owner is a company, we can often use the term ‘shipping company with partnership’.

Which Shipping Company is Important Worldwide?

According to the recent statistics for 2019, the most important shipping companies worldwide are exclusively container shipping companies. The world’s largest and most important shipping companies list includes companies from Europe and Asia.

The number one container shipping company is Denmark with 707 container ships. It is followed by a leading shipping company in Switzerland with 515 ships and so on.

What Does a Shipping Company Do?

A shipping company does a lot to complete the process of order fulfillment. The services or work done by a shipping company can be categorized as follows:

• Shipping services: It is the most obvious service that a shipping company provides. It provides shipping services through various modes of transportation, such as road, rail, maritime, and air shipments. 

• Digital warehousing: Nowadays, warehousing depends on computerized management as inventory trackers track inventory coming in and going out throughout the warehouse. Each warehouse portion depends upon e-management systems, electronic logging devices, and scanners for real-time recording. A shipping company performs the function of digital warehousing as well.

• Inbound processes: We should ensure the incoming new inventory is quick and accurate. Errors in recording recently arrived inventory create descriptions throughout the warehouse and its management. A shipping company makes sure it handles the new inventory and records the same without errors.

• Outbound processes: It is also the responsibility of a shipping company to pick and pack the various orders placed by customers and make sure that the packages reach their destination.

• Warehouse fulfillment: Shipping companies allow the completion of warehouse fulfillment by incorporating third-party logistics professionals for managing and storing the raw materials properly. It improves engagement with manufacturers and retailers and substantially reduces space requirements.

What to Consider When Choosing a Shipping Company?

Think of the shipping company you choose for your brand. Seamless services will enhance customer satisfaction as well as the goodwill of your company. 

Here’s what you need to consider when choosing a shipping company:

• Know your customers, products, and competitors: Before engaging with shipping companies, you first need to know your customers, products, and competitors. You will choose a shipping company according to your customer’s need for faster delivery. If your competitors provide better shipping facilities, you must match them and choose the best shipping company for your brand.

• Delivery speed and range: Delivery speed is very important when considering customer satisfaction as customers more and more want quicker and same-day delivery. If they get the product sooner, they are willing to pay more.
  

You should go for a local shipping company if you need to deliver the product in a small range or the same city. That will reduce the expenses and also meet the purpose. If you must transport the package overseas or to a different state, you should go for a worldwide shipping company.

• Tracking capability: Tracking helps customers keep tabs on the whereabouts of their packages. It brings transparency to the delivery process. A tracking option should be provided to the customers to track their orders.

• Customer services: The cheapest shipping company is not always the best. You must do your background checks while choosing a shipping company for your brand. 

What is the Difference Between the Shipper and the Carrier?

Many people often get confused between a ship and a carrier. Most think that a shipper is also a carrier and vice versa. The idea of shipper and carrier can often be confusing, but these are two distinct areas and not the same.

A shipper is a person or a company who owns the commodities or products to be shipped. A shipper can also be the supplier of such commodities. Consignor is another term that means shipper. 

A carrier is a person or a company that transports the goods or packages from the manufacturer’s destination to its delivery destination. It means the transportation of the packages from the warehouse to the doorstep of the customers is the responsibility of a carrier. 

A shipper cannot be held liable for the loss of goods in transport. Also, you cannot charge them if the goods become damaged in transport.

A carrier is responsible for the goods. So it is the sole responsibility of the carrier if they lose the goods in transit or damage them.

Therefore, these two major distinctions are enough to make you understand the difference between a shipper and a carrier. It also makes it clear that they are not inclusive of each other but works hand in hand.

How to Choose a Shipping Company?

Choosing a shipping company is not a cakewalk as it requires considering various important points that determine the customer’s perception of your company.

Choose the best shipping company while considering the following points:

What types of products are you shipping?

A lot depends upon the type of product you are shipping. If you are shipping something very fragile that needs to be handled with care, then you would like to deliver such a package as soon as possible. For that, you should choose a shipping company that provides air shipping. 

On the other hand, if a package you need to deliver is large and not delicate to handle, you can book a company that provides shipping through roads or maritime shipping.  It will consume more time, but that won’t be a problem in this case.

Where will you be shipping your products from and to?

The destination of the product shipment is very important as to where the package will be picked up and where it will be delivered. This is called the delivery range. You should choose a shipping company based on the package’s delivery range.

If you ship a package within the city or local limits of the area, you may easily go for a local shipping company. As such a shipping company operates locally, it will be cost-effective, and the delivery of the package will be more convenient with a shipping company that knows the local area well.

If you are to ship a package overseas or to some other state, you may go for air or maritime shipping based on the delivery time needs. 

When do you want orders to arrive?

Delivery time must be of top priority when considering choosing a shipping company. Before choosing a shipping company, you should note the expected delivery time of your packages. Several customers are willing to pay more if they receive same-day delivery or next-day delivery. In such cases, it is advisable to go for a shipping company that provides better air shipment facilities. 

While there is another pool of customers who can wait for their orders to arrive and are in no hurry to receive the package. For such customers, it is advisable to go for maritime shipping or rail shipping. 

Also, different shipping companies provide different estimated delivery times even if the mode of transportation is the same. For instance, a shipping company provides an estimated three days of the delivery time for rail shipment, whereas another shipping company provides five days of the estimated delivery time. In that case, it is better to go with the shipping company that provides a shorter estimated delivery time.

Hyperlocal delivery

It is another critical factor you should consider while selecting a shipping company for your brand. Hyperlocal delivery means delivering the goods directly from the vendor to the customers. 

As conducted within a small geographical area, the package is picked up and delivered to the customers within a few hours. Go for a shipping company that provides an agent for hyper-local delivery. In this case, you can avoid shipping, and an agent who picks up the product from the seller and delivers it to the customers can quickly help with the delivery of the products.

Do they provide self-scheduling?

Self-scheduling gives customers access to constantly track their orders. Hence, this feature allows the customers to see the whereabouts of their orders. You should always choose the shipping company that provides order tracking. 

The customers eagerly wait for the packages to arrive. Tracking their orders will make them less restless, and they will know exactly where their order is and when it will likely arrive. The order is also transparent as a result.

How easily can you integrate your logistics process with a potential carrier?

Integrated logistics is vital in a business management process that is increasingly concerned and is used to accelerate project delivery, increasing customer satisfaction. Hence, while choosing a shipping company, you must keep in mind whether the potential career is capable of integrating your logistics process or not. 

In a business model, all departments and compartments work together and complete sync for an integrated logistics process. All the processes and resources are aligned to work in a cohesive unit.

Do they offer insurance?

There is always a chance of losing your package in transit or of damaged package or theft and the likes. So it is better to get the packages insured if they are of very high value. Normally, expensive packages are insured, so the insurance company will reimburse the money even if the package is lost or damaged.

Shipping insurance is a policy where shippers get the expensive packages insured and can get reimbursement for the same if the package gets lost, damaged, or stolen.

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