What Do Logistics Companies Do and Why Are They Important?

No matter what type of business, shipping has a direct impact on a company’s overall profitability.  The complex nature of transportation and shipping requires the coordination of goods from the origin to the destination.   This is what logistics companies do to make transactions seamless. In the U.S. the logistics industry is growing—in 2018, the value of the new private warehouse construction rose to U.S $33.8 billion.  

 

What Logistics Companies Do

Logistics providers can assist in several different areas.  Businesses outsource their logistics operations such as warehousing, picking, packing, and transportation to a third-party company in order to effectively manage them.  The logistics company then plans, implements, and controls the movement of goods along the supply chain. Logistics companies can handle some or all of these tasks, depending on what a business needs.  

 

Logistics providers offer services that can be customized to their customers’ needs based on market conditions.  These services may include value-adds such as procurement of goods or other supply chain tasks.  The business sector uses logistics to handle the flow and storage of goods from the origin to the point of consumption.   The supply chain is what manages the receiving, storage, transportation, and shipping of goods, which also includes information, inventory, and material handling.  It is a complex process with many moving parts.  

 

Man Wrapping Boxes For Shipment

 

Logistics Company Services

Because supply chains are becoming more involved, many businesses are choosing to outsource these functions to a third-party logistics company.  Working with a logistics provider provides several advantages that would not be achieved alone.  

 

Freight Forwarding:  Freight forwarding is involved in every aspect of planning and executing the movement of goods.   A freight broker works with owners and operators to coordinate each shipment. This is how much of the truck transport in the U.S. is conducted.  

 

Transportation by Truck:  The transportation process included packing and loading, transit, and delivery to the destination. The main advantage of working with a logistics company is being able to optimize this part of the process.  Logistics companies can utilize their resources, to scale to a business’s demand. And, most often, they are able to deliver orders with greater reliability and speed. This results in a higher level of customer satisfaction.  

 

Customs Clearance:  Global shipping can be a hassle as regulations differ among counties.  An experienced logistics company will ensure goods clear customs accurately so that costs are minimized and deliveries happen on time.  

 

Moving Services:  Did you know that logistics companies can provide moving services as well?  Logistics providers will consolidate, pack, and ship items anywhere they need to go cost-effectively.  

 

As global trade expands, the complexity of the shipping and transportation industry will grow.  Business managers see the need for an outside logistics company that can increase efficiency while reducing costs in order to remain competitive and keep up with customer demand.  A logistics company has relationships with many different carriers, which results in more solutions that are customized to a business’s needs. As a result, the delivery window for orders shortens, and customer satisfaction rises.   Contact the experts at HLOG today to learn more about logistics and how it can help your company.