The distribution center may also act as a warehouse of sorts. However, it appears at a different point in the supply chain when compared to the fulfillment center. The most basic definition of a distribution center is any waystation that allows for products to be redistributed. In some cases, the products can be warehoused in a distribution center.
One critical difference between a fulfillment and distribution center is that the latter does not directly ship to customers. Instead, it acts as a transit point for products to change the mode of trans-distribution. For example, freight may change to shipping or truck transport via the distribution center.
There have been cases where products are sent from a distribution center to a fulfillment center before being passed on to the customer. Large retailers tend to use distribution centers as merchandise hubs. Examples of this include grocery chains that rely on distribution centers to maintain appropriate levels of stock in their stores.
This is particularly important where customer demand means that products are bought very quickly on the shelves and need to be replenished so that there are no shortages. In this way, the supply chain for major supermarkets remains responsive and up to date. Perhaps the imaginative use of distribution centers has led to a misunderstanding of their role and subsequent failure to distinguish them from the fulfillment centers.
These are smaller vehicles — they can be anywhere from 10-26 feet in length — that are used to transport cargo, often for final mile delivery.
Box Truck & Sprinter Van Market Characteristics
There are low barriers to entry in this market because driving a box truck or sprinter van doesn’t require a commercial driver’s license (CDL) and because the vehicles are much cheaper than Class 8 trucks.
While there are many private box truck/sprinter van drivers in the U.S., there are also consolidator companies who operate as single carriers in this space
Less than truckload (LTL) shipping is when a single truck moves freight from multiple shippers at once — you are only booking a certain amount of space in the truck.
LTL carriers have specialized operations and complex, dense networks. When you ship via LTL, your freight will typically move through a series of drivers and terminals in that carrier’s network before it reaches its final destination.
Though most use a hub-and-spoke model, with local drivers and consolidation terminals, there are actually7 distinct types of LTL carriers with different strategies and service footprints.
LTL Market Characteristics
Standard LTL is for shipments of between 1 and 6 pallets. If you need to ship between 6 and 12 pallets, you will want to consider volume LTL or shared truckload. Above that, you’ll need a full truck.
LTL is often the go-to shipping mode for small and growing businesses, as they may not have enough freight to fill a full truck.
If you’re shipping LTL, be aware that any individual service needs (accessorials like lift gates, indoor delivery, etc.) factor into your rate, so disclose them early during the quoting process.
While similar to full truckload shipping in several ways, there are a few important differences that every shipper should be aware of before using LTL.
Full Truckload, sometimes abbreviated as FTL, TL or OTR (over the road), is when one shipper hires one entire semi-truck (typically a 53’ tractor trailer) to move freight from one facility to another.
In terms of freight moved in the U.S., full truckload dwarfs every other mode.
According to the Bureau of Transportation Statistics, trucks haul 11.5 billion tons of freight annually. — that’s over 3 times as much as the next closest mode, pipelines, and nearly 10 times as much as rail.
Truckload Market Characteristics
It’s massive, with over 900,000 carriers and $800 billion in annual revenue.
It’s fragmented — 97% of carriers have 20 trucks or less. Pricing and capacity can be volatile due to extreme fragmentation.
The other major logistics modes of transportation are:
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