The Difference Between Shipping and Logistics

UPS has, for the last few months, sought to position themselves as a logistics company rather than a shipping company.  Though logistics is considered as one of the four types of intelligence in the Myers-Briggs personality test [1] [2], along with strategic, tactical, and diplomatic intelligence, and the special domain of the traditionalist and materially minded SJ personality types, the term itself is an unfamiliar one.  Why UPS would choose such an unfamiliar word to brand its company is a worthwhile question to bring up a more important underlying issue.

First, though, we must understand what logistics is.  Specifically, logistics is supply management, the ability to monitor, control, organize, and direct supplies.  Logistics has always been among the more important military arts (this is probably why I’m familiar with it), responsible for keeping soldiers well-fed, well-armed, and well-supplied and thus able to fight.  George Washington is considered the nonpareil logistical general within the American military experience, keeping the American Revolution alive by keeping his army whole, despite the rudimentary state of supply within the early American Republic (and that is putting it generously).  Logistics may have been decisive in the Civil War, despite its obscurity as a field.  The fact that logistics involves the prompt transfer of supplies from where they are stored to where they are needed is itself involved deeply with shipping, it is clearly an area of core competence for UPS, so it makes intellectual sense to use the word (so long as one is willing to explain what one means).

The larger question, though, is why UPS would choose to market itself using such an unfamiliar term?  Since UPS is known as a shipping company, it must have some greater strategy in positioning itself as a logistics company rather than merely a shipping company?  Let us speculate some of the likeliest reasons and their implications on the larger business culture of the United States.

The difference between shipping and logistics is largely in semantics and perception, but it is an important perceptual difference in the larger cultural divide of businesses.  It is essentially a question of status and class (and such questions deeply interest me).  Shipping is largely “blue collar” service work.  It is a low-skill, low-status profession where one simply takes packages from one person or company and delivers it to another.  It is a menial task delegated to servants or an unpleasant duty that is outsourced to others.  Logistics, on the other hand, is a “white collar” profession, an aspect of management, a high-status task requiring considerable expertise (specifically in supply chain management) and thus a profession with honor, glory, and widely recognized worth.  It is, in a sense, the “bigger picture” that shipping is a small and not very prestigious part of.

And that is the genius of the UPS labeling of itself as a logistics firm rather than a shipping firm.  Since logistics is the bigger picture, it can expand its business to related core competencies in the “logistics” family that serve as higher profit and higher status positions, increasing the reputation of its company and its employees, and leveraging its considerable and hard-earned expertise in supply chain management to lucrative consulting opportunities to businesses.  By labeling itself under a term obscure enough that no one else has taken it and that is descriptive enough to describe its core competence in a broad, brief, and compelling way, UPS has cornered the domain of “logistics” as its own domain in its entire span as a company, allowing it to preserve its standing in shipping and expand into more lucrative and higher status consulting opportunities for businesses, while increasing the status of the company and its employees.  In the process, UPS is also serving (at least indirectly) to educate the business world to the often-neglected importance and value of logistics as a field while positioning itself as a leader in that field.  Time will tell if the effort of UPS to corner the market and increase its status and profitability and range of core competencies is successful, but it is a bold initiative that deserves high praise however it turns out.



About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
This entry was posted in American Civil War, American History, History, Military History, Musings and tagged , , , , . Bookmark the permalink.

12 Responses to The Difference Between Shipping and Logistics

  1. Derrick Coy says:

    Great analysis. Reminds me of a few other companies that rebranded their slogans in order to change with the times–Xerox and IBM for example.

    • IBM was definitely a company I had thought of that had done precisely the same trick–seeking to rebrand in order to gain a larger and more prestigious competence. UPS seems to have done so, however, without forfeiting its original competence, making perhaps a better example to follow.

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