What are logistics services? Classification, Process, Characteristics – Things You Need to Know

In the era of e-commerce and increasingly developed global supply chains, logistics services play an indispensable role. So, What are logistics services ?, what are their characteristics, and how do they operate? Let’s explore in detail with HDG Logistics in this article to understand logistics better.

I. What are logistics services?

What are logistics services? According to the 2005 Commercial Law (Article 233), logistics is a commercial activity that includes the receipt of goods, transportation, warehousing, marking and labeling, customs procedures, other paperwork, customer consultation, packaging, delivery, or other services related to goods as agreed with customers.

Currently, the concept of logistics services has expanded into many different fields and aspects.

For example, with the increasing popularity of online shopping and consumer trends, the concept of E-Logistics (management of transportation flows on online platforms) has emerged, supplementing traditional logistics services.

Additionally, a new concept has appeared: Reverse Logistics. Unlike traditional logistics, Reverse Logistics focuses on planning and managing the flow of products retrieved from distribution and consumption points back to the production point and activities related to material reuse. In other words, Reverse Logistics includes all activities related to retrieving, repairing, upgrading, and recycling products or materials.

However, in this article, we will focus solely on pure logistics to grasp the basic knowledge before delving deeper into advanced concepts in subsequent articles.

II. Characteristics of Logistics Services

Logistics services have the following characteristics:

• Performed by merchants: Companies providing logistics services must be registered businesses and meet conditions regarding equipment, means, personnel, and safety standards.
• High completion: Logistics services encompass the entire supply chain, from production, transportation, warehousing to distribution. Processes are executed in sequence to meet customer needs.
• Important role: Logistics services play an important role in the entire business process, helping businesses optimize costs, time, and enhance competitiveness.
• Contractual execution: Logistics services are performed based on a contract between parties, clearly stipulating the terms of responsibility, benefits, and compensation.

III. Classification of Logistics Services in Vietnam

In Vietnam, logistics services are classified into three main groups:

1. Primary Logistics Services: Including services such as cargo handling, warehousing, transport agency, cargo preservation, warehousing, order processing, inventory inspection, and redistribution of goods.
2. Transport Logistics Services: Handling the transportation of goods by road, rail, sea, and air, both domestically and internationally.
3. Related Logistics Services: Providing services such as product inspection, technical transport consultation, goods classification, import-export procedures consultation, wholesale and retail trade services, and postal services.

IV. Logistics Service Process

The basic logistics service process includes the following steps:

1. Receiving request: Customers send their goods transportation request to the logistics service provider.
2. Transport planning: The logistics service company analyzes the customer’s request, creates a detailed transport plan, including selecting transport means, route, time, and cost.
3. Transport execution: Goods are packed, loaded onto transport means, and transported to the destination as planned.
4. Monitoring and supervision: During transportation, the logistics service company monitors and supervises the condition of goods to ensure they are transported safely and on time.
5. Delivery and completion: Upon arrival at the destination, the logistics service company delivers the goods to the recipient and completes the related procedures.