Physical distribution is the process whereby the producer moves products to the consumer. Often, it involves several intermediaries. Transportation is an important part of the process. Physical distribution includes order processing, inventory control, and warehousing. Producers must meet the needs of both their intermediaries, and their customers*.

Physical distribution systems are strategic in nature. Goods must arrive quickly, efficiently, responsibly, and ready for sale.

 
 

*Where transportation is a factor, the customer is not just the end consumer. A wholesaler is a customer of a producer; a retailer is a customer of a wholesaler.