Virtually every company needs to be efficient in storing and distributing goods to meet their customer demands. It has become even more critical as e-commerce, affiliate marketing, and other online business platforms become more rampant. This is why logistics companies and their services seem to be gaining more ground.
Online platforms and transactions make the purchasing and processing of goods much faster and have increased customers’ expectations on fast order delivery. Hence, people now look for companies that deliver or supply goods in the shortest time possible, whether locally or internationally. As such, logistics have become an integral part of every company.
Logistics companies usually offer a wide range of services to help businesses manage their storage and transportation needs. In this post, you’ll learn everything you need to know about what logistics companies do and how they work.
How Does A Logistics Company Work?
A freight company partners with other organizations to take care of their logistics needs. In this sense, they cover activities ranging from transportation and shipping of goods to packaging, storage, and delivery as the case may be.
These companies invest in diverse facilities needed for logistics, such as a fleet of vehicles, warehouses, inventory software, manual labor, etc. They utilize these facilities to execute their contracts with other businesses and get paid for their services.
While some specialize in one or two aspects of logistics, others operate a broader scope. For instance, one company may be running only transportation logistics while another cut across transport, inventory, warehousing, etc.
Common Services Rendered By Logistics Companies
#1. Local Movement of Goods
Many companies, especially suppliers of goods, often find it expensive to purchase or hire the vehicle and manpower for moving the goods. Instead, they may include the transportation costs in their pricing and outsource the transportation to a logistics company.
For instance, say, Company A produces bottled wines and has depots all over the country. To save time and minimize capital cost, they may contract a logistics company to help them distribute their products to their depots or even their wholesale customers from time to time.
Another good example is a local logistics company helping a large-scale production company move their raw materials from the production site to their processing site.
#2. International Shipping
Shipping is a term often associated with the international movement of goods. Logistics companies in this category can transport goods from one country or continent to another. To do this, they often need to obtain licensing and possibly have an office(s) within the countries they operate in.
This type of logistics is most common to online stores and drop shippers. With the rise of e-commerce, you no longer need to have a physical store before you can market, sell, package, and deliver your goods. Logistics companies can easily manage these operations for you.
#3. Storage and Warehousing of Goods
Even with the increased demand for fast delivery, it is sometimes impossible to get goods across distant locations in one day. As such, many companies still need to leverage logistics companies to cater to their storage needs.
Such logistics companies can help your business find more affordable and well-situated sites to build or purchase your warehouses. They can also help you manage the storage locations and the necessary transport arrangements needed for access and easy distribution of goods and materials.
Also, some logistics companies build or provide warehouses and other storage spaces that companies can rent. That way, your company will not have to bother too much about accommodation costs when you move into a new business location.
Especially for e-commerce companies, your packaging is most likely your customers’ first actual contact with your business. If your business deals with goods on a large scale, managing the packaging can be overwhelming and expensive sometimes. So, in this case, what do logistics companies do?
Logistics companies can help make your products stand out and appear original through custom packaging. They can help your company with custom brand designs and packaging patterns that improve customer satisfaction through a remarkable unboxing experience.
#5. Inventory Management and Product Tracking
Most logistics companies offer software solutions for inventory management to help organizations keep accurate track of their goods. This is often particular to the ones that specialize in warehousing and storage logistics services.
On the other hand, transport and shipping logistics companies usually provide tracking systems for the movement of their goods. The tracking solutions help the clients to monitor their shipments and ensure safe delivery to the correct destinations.
Why Do You Need a Logistics Company?
There are many business benefits your company stands to get by partnering with a logistics company. Some of such advantages include:
- Reduced Costs
Most logistics companies already have the capital facilities you need. This can be particularly beneficial to small businesses with less capital.
- Risk Management
With the services of registered logistics companies, you can be sure your goods are in safe hands. They also help minimize the risk of spoilage in long-distance shipping since most of them have “goods only” arrangements.
- Wide Coverage
International logistics companies can help your goods easily get to locations outside your region. It is also an easier way to handle customs and other export protocols.
Your company may not have enough resources to manage your transportation, storage, and other logistics needs. But that’s why logistics companies are there for you. By leveraging their services, you can save some money and time and add some ease to your company operations.