Distinguishing Maritime, Shipping, Freight, Logistics, SCM

For many people, even those working in these industries, they often confuse the concepts: Maritime with Shipping, Shipping with Freight, Logistics with Supply Chain… because there are many relevant functions between them. However, they are actually different industries from the work, the assets, the structure, to requiring very different levels of qualifications, experience, expertise, knowledge and working styles. This article will explain the differences between these terms.

Maritime

Maritime is the industry which includes anything related to the ocean, sea, ships, ship routes, crew, and other related activities. Maritime transportation has been the key transportation industry for global trade since ancient times. (See also: Maritime Transport at a glance).

According to World Bank estimates, more than 80% of traded goods are now transported by sea. Developing countries are almost entirely dependent on maritime transport, accounting for about 55% of seaborne exports and 61% of imports.

According to UNCTAD data, in 2022, although maritime trade growth and port traffic growth both decreased, world seaborne trade reached a volume of more than 12 billion tons with a forecast growth rate of +2.4% in 2023 and an average annual growth rate of +2.1% in the period 2024-2028.

The growth, numbers and volumes involved have made the maritime industry one of the most globalised in the world in terms of ownership and operation. There are over 50,000 international merchant ships, transporting all types of cargo, registered in over 150 countries and employing nearly 2 million seafarers operating worldwide.

Shipping

Shipping (hay cụ thể là Shipping Business) là ngành kinh doanh vận tải biển, gồm các hoạt động chuyên chở hàng hóa từ nơi này đến nơi khác bằng những con tàu biển (thuộc lĩnh vực hàng hải kể trên). Các con tàu này gồm nhiều thể loại như: tàu container, tàu bách hóa, tàu rời, tàu chở khí hóa lỏng, tàu RORO,… như đã trình bày trong bài “Vận tải biển khái quát“.

Shipping includes the activities of transporting goods from one place to another by seagoing ships which fall under the above mentioned maritime industry. These ships include many types such as: container ships, general cargo ships, bulk carriers, liquefied gas carriers, RORO ships,… as presented in the article “Maritime transport at a glance“.

Cargo ships are commercially operated by shipping lines (or liners). Shipping lines may own their own fleets or may charter ships from shipowners. Shipping lines often operate ships on fixed routes (liner service) or on undefined routes (tramp service). Currently, most container shipping lines operate liner services, while tramp services are mainly services for bulk carriers

In summary, shipping includes, but is not limited to, the following activities:

• Booking cargo on a particular vessel, sometimes weeks or months in advance of the vessel’s arrival.
• Ensuring that the booked cargo is scheduled on the correct vessel.
• Ensuring that the cargo is actually loaded onto the vessel.
• Ensuring that the loading plan is executed correctly to optimize the vessel’s carrying capacity.
• Ensuring that all containers loaded onto the vessel have a VGM (Verified Gross Mass).
• Ensuring the safe loading and unloading of cargo.
• Issuing bills of lading and related documents for the cargo loaded onto the vessel.

Freight

By convention, we often think that Freight means as a matter of “money”. However, the basic meaning of Freight is to refer to “goods” transported from one place to another by means of transport (ship, plane, train, truck, etc.). That is, with the same package, if left in a warehouse/yard, is not called Freight, but if put on a vehicle to be transported to another place, during that transport process, this package is Freight.

Thus, in the context of maritime transport, Freight is the goods transported on ships which operated by shipping lines. Freight can be transported in many different sizes, from parcels weighing a few hundred grams by bicycle to hundreds of thousands of tons by Chinamax ships.

Logistics

The concept of Logistics has been presented in detail in the article What is Logistics? Do you really understand logistics correctly? Along with that, Blog of Logistics also clarifies about Logistics Services in Vietnam. Therefore, in this article, we will not explain more about this term, but we understand that, with the characteristics of a chain of activities related to the transportation of goods (including related import and export procedures) from the place of production, origin, .. to the recipient, Logistics will include the activities of Shipping and Freight in it.

Supply Chain

In a narrow sense, the supply chain is the entire overall process that includes all aspects in a product cycle, such as planning the procurement of raw materials, transferring raw materials to the production process, distributing manufactured goods to consumers, recycling collection, etc. There is a “parent-child” relationship between Supply Chain Management (SCM) and Logistics, in which SCM includes all logistics activities and processes between departments and between companies. However, there are still many views on this issue as presented in the article “Distinguishing Logistics and SCM (Supply Chain Management)”.

As you can see, there is a big difference between Maritime and Shipping, between Shipping and Freight, between Logistics and Supply Chain, terms that are very close and often confused and used interchangeably in practice. If you need further discussion, need advice or have a need for Logistics services, please comment below or contact our team of experts immediately to receive the earliest support.