Shipping in the Fulfillment Process

Shipping refers to the process of moving materials and goods from one location to a separate external location. Shipping is accomplished using many forms of transportation, including automobiles, trucks, ships, airplanes, trains, or various combinations of the above. Shipping is used to facilitate the delivery of goods to customers, retailers, distributors, or to other locations that are part of a manufacturing process. Shipping is also typically used to receive goods that are inputs into a manufacturing process, or for sortation and allocation within a fulfillment process.

Shipping and Handling Providers

For many organizations, shipping and handling is outsourced to third party logistics organizations. These organizations facilitate the transportation of goods and packages at scale, and charge fees for the transportation of goods. These organizations can include government postal services, or private shipping and handling organizations such as UPS for FedEx.

Some organizations may choose to handle shipping internally for various reasons. This may include technical challenges that make outsourced shipping and handling difficult or highly risky, or simply to try to reduce costs.

Roles of Various Forms of Shipping

Different forms of transportation play different roles in shipping and handling, with various benefits and drawbacks.

Trucking / Over the road (OTR) Delivery: Delivery by road network is typically more expensive per item than other methods of shipping. But the importance here is that this is the only form of shipping that can reach almost any local destination for product drop-off, typically within a reasonable timeframe. The limitation to road shipping is that it cannot be scaled in the same way that other forms of shipping can.

Water / Maritime Shipping: Delivery by waterway has traditionally been the cheapest way to transport goods, and this remains the case today. Maritime shipping can scale larger than any other type of shipping, making it ideal for the transportation for massive quantities of raw materials, heavy machinery, or transportation of goods internationally. The drawback to international shipping is that it’s relatively slow, and rarely is the only method necessary to deliver goods to their final destination.

Airplane / Air Shipping: Delivery by air is extremely fast and can be easily accomplished across difficult terrain or borders. The drawbacks to air shipping are that it is capacity limited due to size limitations of aircraft, and typically more expensive. Similar to maritime shipping, air shipping is typically an intermediate step between other forms of shipping.

Train / Rail Shipping: Rail shipping tends to be used for domestic, large capacity shipping where maritime shipping is not a viable option. Rail shipping is especially important for raw materials and minerals, which would not be practical to transport by truck due to the weight of the materials needed to be shipped.