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Do logistics operations require a separate company?
The answer is yes unless the company is big enough to take care of the logistics operations on its own.
Think about those many companies that cannot take care of their logistics operations, hustling to expand their businesses. That's where logistics companies come in.
With logistics companies taking care of the transportation and storage of products, business owners can heave a sigh of relief and have a good night's sleep.
Okay, that's neat. But still, what exactly is a logistics company?
A logistics company is a company that helps other companies transport their goods and products from one place to another. However, their services aren’t limited to transportation alone. Most logistics companies’ services include planning, scheduling, executing, and monitoring the supply chain.
Furthermore, logistics companies ensure that faulty or damaged goods are returned to a company for a return/replacement solution. This inverted transportation chain is known as reverse logistics.
The functions of a logistics company include:
Warehousing refers to the storage of goods and inventory. Warehousing makes it easy to move goods as it keeps track of information related to all goods.
Generally, warehouses keep goods till we transport them to retail stores. But in the e-commerce sector, it is customary to sell products from a warehouse itself.
Packaging is about making goods ready to transport. Properly packaging a product is crucial for its safe transportation. Loose packaging may result in damage or, worse yet, loss of a product.
Proper packaging ensures customer satisfaction. But, on the other hand, one bad incident is enough to dent a company’s reputation. So, pack your products well!
Moving goods is, of course, the primary function of a logistics company. The goods need to be transported over short, medium, and long distances, as the work demands it.
Logistics involves complex operations across land and water alike. A logistics company employs a qualified freight team to get through all modes and terrains. For instance, an air freight team can transport goods across continents on time.
Another major function of a logistics company is to manage inventory. Inventory is the collection of goods that a company aims to sell to its customers. Inventory management comprises purchasing, storing, and selling goods.
Inventory management is about having the right product at the right time. In short, it is about advancing the accessibility of stored goods.
We live in a world where data is of the utmost importance. It is no different in the logistics industry. Collecting data helps a logistics firm better understand its qualities and shortcomings and enhance its transportation services.
Also, analyzing the collected data helps in greatly enhancing supply chain management with new insights. Finally, it aids a firm to have a nuanced logistics strategy, which would boost their logistics services.
The customer is the king. Therefore, answering all queries and helping customers with all the matters related to logistics services is of the utmost importance to logistics companies. So, logistics companies should have a reliable customer service center to address issues or questions and create positive experiences for the customers.
The logistics industry has a few different types of companies for varied purposes. These types are categorized based on their areas of operation.
A freight carrier is also known as a freight company or a shipping company. It is a logistics company that handles shipments directly. Freight companies include air freight companies, sea freight companies, rail freight companies, and freight trucking companies.
Freight forwarding refers to the planning and execution of transporting international goods across borders on behalf of a shipper.
Freight forwarding companies work as facilitators within the supply chain to optimize logistics operations. Their tasks include providing cost-effective shipping solutions, arranging storage for goods, dealing with customs, etc. Examples of some prominent freight forwarders are DHL Global and Kuehne + Nagel.
Third-party logistics companies, more commonly known as 3PLs, specialize in handling all or part of a business’s supply chain. They provide a range of distribution, storage, transportation, and fulfillment services. Some famous 3PLs include United Parcel Service (UPS), XPO Logistics, and Nippon Express.
Some of the top logistics companies in the world are:
With more than 150 years of experience in the logistics industry, DB Schenker is a leading provider of logistics services and supply chain solutions. In addition, DB Schenker is truly steering the world forward by focusing on diversity, inclusion, and sustainability.
Founded in 1969, DHL has grown to be one of the world’s largest logistics companies. With more than 1.6 billion parcels delivered around the world in a year, DHL is a big player in the logistics industry.
A Fortune 500 company based in Seattle, Expeditors is a global leader in supply chain solutions. Their services are available in more than 350 locations in 100+ countries.
Often used as a synonym for parcels, FedEx is one of the world’s leading logistics service providers. They believe that by connecting people with goods and services, they can improve lives and create new opportunities around the world.
Founded in 1950, Hitachi Transport System is a leading provider of logistics services based in Japan. Their corporate philosophy is to deliver high-quality services that make the world a better place for people and nature for generations to come.
Founded in Bremen, Germany, in 1890, Kuehne+Nagel has evolved from a traditional shipping company to a leading global logistics partner. Headquartered in Switzerland, Kuehne+Nagel’s number one priority is to satisfy their customers’ needs.
From its start as a single warehouse in 2008, Lineage Logistics has been an expert in cold storage. Their vision is to be the world’s most dynamic temperature-controlled logistics company.
Nippon Express is a Japan-based logistics company spanning over 732 locations across the globe. Founded in 1937, they are a leading logistics provider with more than 80 years of excellence to show for.
With more than 85 years of experience and a 99% on-time delivery rate, Ryder is a top logistics company that is relied upon by more than half of the Fortune 500 companies.
Delivering 24.7 million packages daily, UPS is one of the largest logistics companies in the world. Founded more than a century ago in 1907, UPS has grown to become a Fortune 500 company.
With its sole focus on freight transportation, XPO Logistics is one of the leading supply chain partners to blue-chip companies across every major industry. They are experts in transportation technology and provide innovative solutions in logistics.
With globalization churning out more and more products every day, the importance of logistics is skyrocketing in the modern world. A logistics company must support this technological evolution by ensuring that no product gets stuck or lost.
By making sure that the goods are transported everywhere globally, logistics companies have become pivotal to the modern world. In a flourishing world, logistics services never fall short of demand. In essence, logistics companies make certain that the world never stops accelerating in its progress.