Freight vs Shipping: Comprehensive Guide
In ecommerce, many businesses get confused about the difference between freight and shipping. A lot of people use these terms interchangeably, but they’re different parts of the logistics process.
In a nutshell, shipping usually refers to small parcel deliveries, while freight has to do with the bulk transportation of goods. The difference matters.
Whether you’re talking about logistics planning, transportation costs, or fulfillment operations, the difference is critical. In this article, we’ll dive into the definitions and differences of freight and shipping, as well as how both work together in ecommerce supply chains.
What Is Shipping?
Shipping means moving small packages from one location to another. In ecommerce, it normally means sending orders from a warehouse to customers.
The typical shipping carriers are familiar to most people:
- UPS
- FedEx
- USPS
- regional parcel carriers
Characteristics of shipping
Shipping is characterized by small parcels, individual customer orders, lightweight packages, and direct-to-consumer delivery.
Example shipping scenario
A typical shipping flow goes something like this:
- The customer places an order
- The warehouse picks and packs item
- The parcel carrier delivers the package
What Is Freight?
Freight is defined as transporting large quantities of goods, often between businesses rather than directly to consumers. Freight shipments normally move in bulk quantities.
Common freight transportation methods
When we discuss freight, we can think of the typical methods as:
- truck freight
- rail freight
- ocean freight
- air freight
Typical freight shipments
Freight shipments often include palletized inventory, large commercial orders, international cargo shipments, and containerized goods.
Example freight scenario
A standard freight scenario can go like this:
- The manufacturer sends inventory to warehouse
- Shipment travels on pallets or in containers.
Freight vs Shipping: Key Differences
Both freight and shipping move goods, but work on different scales. Here are some of the primary differences.
| Factor | Shipping | Freight |
| Shipment size | Small packages | Large bulk shipments |
| Packaging | Individual boxes | Pallets or containers |
| Delivery network | Parcel carriers | Truck, rail, ocean, air |
| Typical purpose | Customer orders | Inventory transportation |
| Pricing model | Per package | Weight, volume, distance |
Generally, freight usually happens earlier in the supply chain, while shipping has to do with final delivery.
Find out more about the nuances of shipping and freight in our article, Ecommerce Shipping Costs: Guide for Every Brand.
How Freight and Shipping Work Together
Although they are different, freight and shipping mesh together. In ecommerce, here is the typical logistics flow:
- The manufacturer produces products
- The goods travel to warehouse using freight transportation
- The warehouse stores inventory
- A customer places order
- Parcel shipping delivers the product
The keys to remember are that freight supplies the warehouse, shipping fulfills customer orders, and both systems depend on each other.
In our Ecommerce Warehouse Management: The Essential Guide, we go into depth about the processes involved.
Types of Freight Transportation
If we break down freight transportation into categories, the process is much clearer.
Full Truckload (FTL)
In FTL, the entire truck is dedicated to one shipment. This leads to faster transit times and is ideal for large shipments.
Less Than Truckload (LTL)
In LTL, multiple shipments share one truck. This method usually is a lower cost option but slower delivery. It is common for mid-size shipments.
Ocean Freight
With ocean freight, container ships move goods internationally. This approach is cost effective, particularly for large volumes.
Air Freight
In air freight, you’ll find the fastest option for freight. The tradeoff is that it is typically the most expensive.
Cost Differences Between Freight and Shipping
There are distinct differences between freight and shipping. Let’s take a quick look at them.
Shipping cost factors
- package weight
- dimensional weight
- delivery speed
- shipping distance
Freight cost factors
- total shipment weight
- pallet dimensions
- freight classification
- distance and fuel costs
In general, freight may cost more overall but has a lower cost per unit.
For a detailed breakdown of these factors, check out our article, Ecommerce Shipping Costs: Guide for Every Brand.
Why Ecommerce Businesses Should Understand Freight vs Shipping
These terms are both so crucial to ecommerce, and it is important to see how each impacts your business.
Inventory planning
When you’re planning inventory logistics, remember that freight determines how inventory reaches warehouses.
Cost control
Shipping impacts your revenue. Shipping costs affect profit margins, so it matters a lot to your business flow.
Supply chain efficiency
Understanding and harnessing both freight and shipping methods is critical for your supply chain efficiency. Coordinating freight and shipping improves operations.
Customer experience
The always-important aspect of customer experience is directly connected to freight and shipping. Faster and more reliable shipping improves satisfaction.
Final Thoughts
Freight and shipping are both essential in logistics. While freight moves inventory in bulk between businesses, shipping delivers individual packages to customers. Ecommerce companies must manage both systems as they grow.
Here at Phase V, we help brands optimize their logistics and fulfillment strategies.
Get in touch with us to get started today.
