Tue Jan 10 2023 05:11:26 GMT+0000 (Coordinated Universal Time) - QikTruck Media
Are you working in the logistics industry in South Africa? Chances are you hear or use many of the terms your colleagues or customers use on a regular basis. It’s important for those in the logistics business to have a good grasp of the key terminology in order to provide the best services for their customers.
By understanding the different words and concepts related to supply chain and logistics, you can better serve your customers, partners and other individuals who form part of the logistics cycle. These key terms serve as the cornerstone of all logistics operations, including, but not limited to the pricing, freight forwarding, distribution, warehousing and customs clearance process.
Let’s look at some of the most important logistics and supply chain-related terms you should know to navigate the industry in South Africa:
Incoterms, which stands for “international commercial terms”, is a series of pre-defined commercial terms used by traders when conducting the buying and selling of goods. Incoterms are rules created by the International Chamber of Commerce (ICC) to help buyers and sellers alike define the rights and obligations of each party during the international trade process. The latest version of Incoterms, Incoterms 2020, contains eleven terms, each of which are abbreviations (e.g. EXW, FCA, FOB, etc).
A customs broker is an individual or company that is authorized to act as an intermediary between customs authorities and traders to facilitate the efficient clearance of goods through customs. In South Africa, brokers are also referred to as “customs clearance agents”. The broker’s services include preparing and filing the necessary paperwork to complete the customs process, submitting the shipment’s documents to the customs office, advising traders on the applicable taxes or duties for imported goods, and making sure the goods are released from customs in a timely manner.
Logistics consolidation, also referred to as freight consolidation, is a process where a company combines multiple small shipments into one, larger shipment. Rather than shipping individual packages, companies can choose to consolidate their shipments into one container. This eliminates the need for multiple shipments and helps to reduce costs associated with transporting the goods. Additionally, consolidation can also improve the efficiency of the logistics process by helping to streamline the movement of goods.
Freight forwarding is a service that helps customers move goods from one location to another in a safe and timely manner. Freight forwarders are logistics companies or professionals who coordinate and manage the transportation of goods from one point to another. A freight forwarder can act as a bridge between two parties, often with multiple stops and trans-shipments, unless both parties are using one logistics provider for the entire transport process.
NVOCC stands for “non-vessel operating common carrier” and is a licensed ocean cargo carrier that does not operate its own vessels. Instead, these companies ‘lease’ or broker their services to other companies who have their own vessels or who have a contract with a vessel operator. They provide a number of services such as booking cargo space, arranging for loading and unloading of containers, and negotiating a competitive rate for the customer.
Cargo tracking technology is an essential part of the modern logistics landscape. It allows companies and customers to track their shipments in real time, eliminating the need to rely on costly and time-consuming manual processes. Companies can access easily accessible data and analytics to ensure they are making the best decisions to ensure the most efficient and reliable delivery of goods. Logistics companies are increasingly adapting advancements in technology to provide customers with the most up-to-date freight tracking tools.
Cross docking is a logistics operation in which goods are transferred from one truck to another with little or no additional handling or storage. The primary benefit of this process is that it reduces the amount of time needed for transportation and storage, as well as reducing labour costs. In South Africa, cross docking is commonly used by retail companies to move goods from supplier or distributor warehouses to store warehouses quickly and efficiently. Cross docking also helps optimise inventory management as it requires efficient communication between the warehouses and stores.
As a business looking to stay competitive in the South African logistics industry, it is critical to understand these industry-specific terms. By doing so, you can communicate more effectively with customers and ensure that your supply chain processes are running efficiently and cost-effectively.
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