A logistics company is a business that specializes in managing the flow of goods, information, and resources from one point to another in a supply chain. The primary goal of a logistics company is to ensure that products or services are delivered efficiently and effectively to the intended destination, while minimizing costs and optimizing overall operations. Logistics companies typically offer a wide range of services, including transportation, warehousing, inventory management, packaging, freight forwarding, customs brokerage, and supply chain consulting.
Here are some key functions and services provided by logistics companies:
1. Transportation: Logistics companies arrange for the movement of goods by various modes of transport, such as trucks, ships, airplanes, or railways. They handle the coordination, routing, and tracking of shipments.
Warehousing and Distribution: These companies provide storage facilities where goods can be stored temporarily before distribution. They manage inventory, order fulfillment, and shipment consolidation.
2. Freight Forwarding: Logistics companies act as intermediaries between shippers and carriers, facilitating the movement of goods across different transportation modes and managing documentation and customs clearance.
3. Supply Chain Management: They analyze and optimize the entire supply chain, from sourcing raw materials to delivering finished products to customers. This includes demand forecasting, procurement, inventory management, and order fulfillment.
4. Last-Mile Delivery: Logistics companies often handle the final leg of the delivery process, ensuring that goods are transported from a distribution center to the end customer’s doorstep.
5. Customs Clearance: They assist with navigating complex customs regulations and ensuring compliance when goods cross international borders.
6. Reverse Logistics: Logistics companies manage the process of returning products, handling repairs, recycling, or disposing of goods in an environmentally responsible manner.
WHAT IS A FREIGHT BROKER?
A freight broker will often focus on one single shipment and act as a non-asset bearing intermediary between a shipper with goods to transport and a carrier who actually moves the freight. Essentially, a Freight broker works directly with owner-operators nationwide to coordinate individual shipments. Freight brokers currently handle significant amounts of truck transport in North America.
In the grand scheme of things, freight brokers often connect with hundreds or even thousands of small to medium-sized freight carriers to provide a large network of shipment options. This then affords shippers alternatives to larger freight carrier providers. Smaller carrier operations often rely more on brokers for business than larger carrier providers, because these larger carriers often have long standing relationships with 3PL companies.
WHAT IS A THIRD PARTY LOGISTICS COMPANY?
A third-party logistics company is typically an asset-bearing firm that establishes relationships with shippers on a broader scale. Third-party logistics companies typically make an investment in physical and human capital including brick-and-mortar locations and wheels on the ground.
3PL applies to any service contract that involves the storing or shipping of a commodity. A 3rd party logistics company may only offer a single service, like transportation, warehouses in Reno NV, or inventory management. However, it may also offer a system-wide bundling of services and management of a client’s entire supply chain. Many 3rd party logistics companies integrate operations. Warehousing and transportation services are all tailored to a client’s needs.
5 Benefits of Partnering with a Logistics Company
Logistics companies have a wide range of experience in managing the movement of goods, which means they’ll probably know the most efficient, cost-effective, and streamlined way to do so. While some organizations manage certain parts, or all, of their supply chain logistics, partnering with a professional logistics company offers numerous benefits including:
Warehousing – With several factors to consider, warehousing is becoming increasingly complex and expensive. Logistics companies can take on the responsibility of finding appropriate, affordable storage space in an optimal location and save their client the stress and time of doing so themselves.
Packaging – Accurately fulfilling customer orders on time is a service that demands an experienced workforce and specialist equipment. Having already invested in the necessary technology and staffing, logistics companies can minimize errors and delays to ensure an organization meets customer demand and maintains its reputation.
Shipping and transportation – Manufacturers won’t typically invest in their own fleet of vehicles and drivers. It takes a lot of effort and great expense to gain the necessary licensing to do so and train staff – time and money that could be better spent elsewhere. Logistics companies already have these services in place, which means they’ll be well-established and reliable.
Flexibility – Logistics companies have the capacity to scale up or down, reducing the risk of delays should customer demand suddenly spike. They also have the resources and proficiency to adapt processes and adjust shipping routes or transportation methods in the event of supply chain disruptions.
Technology – Logistics companies have access to sophisticated technology to digitize the supply chain and ultimately drive greater efficiency and reliability. For example, collaborative transportation management software enables the automation of load scheduling. Other technology often used includes tracking software, Internet of Things devices (IoT), and long-range RFID tracking.
6 Key Considerations Before Partnering with a Logistics Company
Before partnering with a logistics company, organizations ought to consider the following six factors:
Expertise – Not all logistics companies will be experts in every aspect of supply chain management. Organizations must consider their priorities, e.g. packaging, shipping, etc., and find a company that best meets their needs.
Price – Organizations must establish whether a logistics company’s pricing is transparent. Are there any hidden costs, and does the quote provided match the level of service promised?
Efficiency – Can the logistics company commit to processing orders within a certain time frame? It’s no use partnering with a company that cannot provide the service that your clients have grown to expect.
Reliability – Particularly when entering into a long-term relationship with a 3PL, it’s important that organizations find a trustworthy, reliable partner. Background checks and market research can help confirm if a logistics company will deliver on its promises.
Sustainability – Supply chain sustainability is increasingly becoming a priority for organizations across the globe, which extends to partnerships with logistics companies.
Health and safety – It’s so important to partner with a logistics company that prioritizes the wellbeing of its employees and is compliant with health and safety regulations. This should include an extensive policy, adequate training, and third-party auditing.
Basenton Logistics Company
As a China freight forwarder, Custom Basenton Logistics Company provides a one-stop customs clearance solution and cargo insurance services in China for all transport modes, import and export with a 5-star and A grade organization in China. Working with us, you don’t have to face these local issues in China alone,you can free yourself from dealing with China’s customs document and clearance to focus on managing your core business operations. We understand the importance of customs brokerage in getting your products to their destination efficiently.
Basenton Logistics Company have lots of senior specialists at major cities/seaports in China who have multi-lingual capability and a clear understanding of the intricacies of trade regulations and agreements at global, to design your customs processes as simple as possible, minimizing risk, controlling cost and optimizing customs clearance time.