The sharing economy and peer-to-peer network services open a completely new mental model. Old service industries can be reshaped with new data and mobile technology. One of those is the postal service. A service operating since the 18th century in many countries now experiences a boom in parcel delivery. A growing trend of internet purchases make sure that parcel deliverers flourish the last 5 to 10 years. But what if we just removed all those distribution centers? It’s just another object going from A to B in a society where there are already so many forms of transportation, movements of persons, cars and people searching for some extra job and cash. A networking platform such as AirBnB or Uber could easily connect a seller with the purchaser.

Traditionally a store has a distribution center and, within it, a fulfillment service of order pickers putting goods into packages, which will be taken by truck to a parcel service distribution center. The network of delivery addresses covered are huge, and the costs are shared by all of us. The business model is mainly driven on economy of scale and efficiency.

The two requirements needed for the current delivery logistics is a fulfilment service or location and a central distribution point. In case the goods are decentralized, or in the store itself, then a peer-to-peer system can be beneficial. Currently an ordered good or parcel from a store around the corner will travel hundreds of miles in order to be delivered at your door the next day. Which is not efficient at all. Wouldn’t it be easier if you can continue to do the shopping, and a neighbor can drive to the store and pick up your parcel? The only requirements here are: a marketplace function and deliverers who are on time.

Crowdsourced Logistics is born! Average citizens, and small entrepreneurs deliver parcels during their normal daily commute. The platform is a peer-to-peer app on your smartphone. This idea of a sharing economy offers even new possibilities. Same day delivery is now within reach. Parcels which normally would be picked up to be transferred to a distribution center have the ability to reach the customer instantly and for a competitive price.

Several companies start experimenting with these kind of new logistic solutions. The most notable is Amazon with their Amazon Flex Program. Also Start-ups as Uber Rush, Instacart, and Parcify in Belgium, and known logistic giants as DHL with the MyWays app in Sweden. Now the initiatives are there, only the legal and logistical implications need to be figured out.

Like all specialties in logistics there are often blurred lines between disciplines but there are key differences between Freight Forwarders and Customs Brokers that are important to understand.

Photo by Glyn Lowe

Freight Forwarders focus on the movement of cargo from one country to another by either sea or air serving as a middleman between the shipping lines and air freight companies helping the importer/exporter to book space and to receive and load cargo. Freight forwarders also specialize in advising importers/exporters on freight costs, port charges, consular fees, costs of special documentation, insurance costs, and handling fees.

Customs Brokers on the other hand traditionally serve as agents of the importers/exporters providing their expertise in the clearance or “clearing” of goods through international customs checkpoints. As you can imagine customs clearance is a very technical and high regulated activity focusing on the entry and admissibility of merchandise; its classification and valuation; the payment of duties, taxes, or other charges assessed; or the refund, rebate, or drawback thereof.

It’s also important to understand that there are also firms which offer both freight forwarding and customs brokerage services. In these cases, these firms will typically have completely separate team/departments handling these activities due to the differences in the skill sets and expertise needed.

Image credit: Alberto G.

Whether you are a seasoned logistics practitioner or an undergraduate student working towards a degree in logistics it is always valuable to stay up to date on the latest trends in logistics and supply chain management.

In order to advance your career in logistics it is important to first master the fundamentals and then continue to evolve by reading/exploring more challenging concepts and trends and look for opportunities innovate within your organization.

For those looking for some good books and resources to get started we’re happy to share our new list of some of the Best Logistics Books available out there today. Check it out here

Chicago is well known as one of the most important logistics and transportation hubs in the United States. With its superior access to all major modes of transportation and its central location and proximity to one of the largest metropolitan areas in the country it has long been a sought after location for distribution hubs.

Image credit: Seth Anderson

Trucking Services
With 6 interstate highways that cross the region, connecting both east and west for more than 2,000 miles there are only two states in the US that have more interstate highway miles than Illinois. (California and Texas) Chicago is also conveniently located within a day’s drive of 70 percent of the country’s population making it a very common location for companies to locate their main distribution centers and is home to most of the country’s leading logistics companies in at least some capacity.

Rail Transport
Chicago is home to six of the seven major railroads and more than 50 railroads in total, accounting for a quarter of all rail traffic in the US.

Water Transport
Chicago is one of the largest inland cargo ports in the country and is the world’s third-largest handler of shipping containers (after Hong Kong and Singapore) with the Port of Chicago

Air Transport
86 million passengers and nearly 1.6 million tons of cargo pass through Chicago annually with two highly trafficked airports in O’Hare and Midway.

Warehousing and Distribution
With more than 1.3 billion square feet of warehouse property, Chicago easily has one of the largest concentrations of industrial space in the United States. As with any major metropolitan area, the costs of maintaining a physical distribution center in Chicago proper tend to be prohibitive so it is very common for companies to locate their distribution centers in the suburbs of Chicago as part of what locals call “Chicagoland.” It is also not uncommon for distribution centers to be located as far away as Indiana.

There is no question that over the years there are a number of different key cities in the US that can lay claim to being one of the most important from a logistics perspective at a particular moment in time but from a strategic level Chicago will endure as one of the top markets that just about anyone working in the logistic and supply chain function will end up engaged with at least on some level one way or another.