Although businesses seem to focus on a single field of activity, they continue their existence in a chain of activities that complement each other. Each of these processes fulfills a different function for businesses. One of the indispensable processes for businesses is transportation. Especially manufacturing enterprises need a great deal of transportation service in order to deliver the products they produce to their buyers in the market. However, this situation creates an additional expense item such as handling fees for businesses. Although some large-scale businesses make their own shipments with their own vehicles to overcome this situation, there is a certain cost associated with this process. Different items need to be taken into account in calculating the shipping cost. The most important issue in this direction is the way in which the transportation process will be made.
Transportation operations are carried out by sea, air, and road. In addition, rail transport is one of the methods used in this regard. Each method has its own price values, advantages, and disadvantages. For this, the method that is suitable in line with the business needs and in terms of service fee should be preferred. Air transport has the disadvantage of carrying less freight at a time. However, it is preferred because it is both safe and extremely fast. Airways usually carry light but expensive loads. It is possible to transport heavy goods by sea.
A single ship can carry the load of hundreds of trucks, but the disadvantage of ship transportation is that it is very slow. Maritime transport, In addition, the threats of pirate attacks in some seas pose a security risk. Road transport is moderate in terms of both speed and load capacity. It is mostly preferred for short distance or transportation between close countries. The freight concept is used instead of the concept of handling fees. This concept, which was used only in sea transportation in the first periods, has become used for all shipping operations over time.
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Shipping vs. Handling: What’s The Difference?
Shipping and distribution words are now intertwined and used interchangeably. However, both concepts correspond to different meanings. The word shipping is more equivalent to the word logistics. The main difference between these two concepts is that transportation has a wider scope. It can be said that transportation or logistics is an upper roof and distribution is a sub-field under this roof. The shipping process should not be understood as simply moving the product from one place to another. Calculation of all necessary actions from the source warehouse to the destination warehouse can be called shipping. Distribution, on the other hand, is the distribution of the product to customers within a certain area at the lowest cost. Distribution mostly concerns customers and end-sales points. Transport or logistics is the domain of manufacturing companies or distributors.
How To Outsource Your Shipping And Handling
It is a situation that should be decided by considering how the businesses that need transportation service will provide this service. Businesses can provide the transportation services they need with a unit that they will create within their own organization. However, in this case, issues such as high costs of purchasing a vehicle and operation planning may be disadvantages. This is a logical method only if businesses with high and continuous transportation needs apply to reduce their transportation costs in the long term.
Another method by which the transportation service can be provided is to receive this service from the transportation companies that provide this service outside the business in return for a handling fee. The shipping company to be selected must have transportation vehicles suitable for the products that the business wants to transport. A freight contract should be made after the company to be served is determined. This contract is a contract that determines the rules between the company that receives the transportation service, the company to which the products will be delivered, and the shipping company.
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Why Do Businesses Add Handling Charges At All?
Businesses should make the correct cost calculation in order to ensure profitability. It is one of the common mistakes to calculate the cost only over the purchase or production cost of the product to be sold. All stages that the product passes until it reaches the final consumer cause certain costs to occur. One of these costs is the distribution service fee. This cost is also taken into account in the calculation of the sales price. Since the money that businesses spend for distribution causes the price of the product to rise and the product to cost the business a higher price; businesses also add a handling fee on this product.
How Much To Charge for Shipping And Handling
It is not possible to talk about the exact amount of shipping and handling fees. Because there are many factors that play a role in determining this. The most important issue in this regard is the method of transportation. Transportation by sea, land, or air causes a noticeable change in costs. It is important to consider the needs of the business in terms of which method to choose. It is possible to talk about the load volume and weight as another issue that should be considered after the method is selected.
If the loads are enough to fill a container, the method called partial transportation is generally used. However, container type and size are also factors that have a say on the price. A twenty-foot container and a forty-sized container cannot be expected to be the same in terms of handling fees. The last factor that determines the price in transportation and distribution processes is time. The longer the delivery time, the lower the cost.
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