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How Does Logistics Play a Role in Transportation of Goods

What is Logistics?

Logistics is the subset of supply chain management that defines how business commodities will move from one point to another. Think of it as the oxygen of the supply chain—the activity besides which transportation of goods would be impossible. Whether you want to move goods from your store or warehouse to an intermediary or end consumer, proper logistical support is essential for seamless operations.

 

How Do Logistics Affect the Trucking Industry?

Gone are the days when trucking was simply about transporting goods from one point to another. Both private and for-hire fleet hauling companies moved commodities without any definite plan or strategies. The government restricted the number of clients that for-hire companies could have at any instance to eight.

 

eCommerce on the Rise

Today, the freight transportation market has switched to a whole new phase. With eCommerce brands taking over the internet, many people are now purchasing products online. So that means there must be well-outlined procedures on how and when the customers will get their products. When a customer clicks “buy” on the website, the company must have definite transportation mechanisms to get the products to the customer.

 

Politics and Trade Wars

The Trump administration has time and again threatened to close borders at some entry points, which implies interference with the usual supply chain. Also, considering the massive tariffs imposed on Chinese goods, that means a disruption in Chinese imports, causing interference in the supply chain.

These two concerns zero into one point—all trucking agencies need to revisit their logistics strategies to survive in the current market.

 

What are the Benefits of Good Logistics?

Enhanced Efficiency

The last thing you want in your company is to lose customers because of late shipments or exhausting stock when you need it most. Fortunately, you can avoid that by deploying a culture of well-defined logistics practices among your employees. That includes keeping real-time data on all resources your company depends on, and the products it outsources. With that, it becomes efficient to meet customers’ demands all the time—every business’s goal.

 

Better Information Flow

Good communication and proper sharing of information are vital indicators of a company likely to succeed. However, statistics from Oracle seem disturbing. Seventy-six percent of US companies have not automated their flow of information, and half of them associate this challenge with loss of prospects.

However, integrating the right technologies can enhance the seamless flow of information to remove communication bottlenecks, foster the supply chain, and make sound decisions backed-up by data.

 

Future Demand Prediction

According to VISA analysis, a 5 percent increment in sales over a week makes a retailer order a 7 percent stock. Now that this appears like a 7 percent demand increase, the retailer keeps scaling up the stock. With time, this stock may increase even up to 20 percent. This phenomenon is called the Bullwhip effect—characterized by a mismatch of demand and supply.

However, the real-time information about the actual market performance, every supply chain specialist will make wise logistics decisions to aid in good demand-supply management.

 

Cutting Down Overhead Costs

From a well-thought-of demand analysis and predictions, it is easy to identify the low-demand (low-velocity) products and high-demand (high-velocity) products. That is particularly important for warehouse operators. Minimizing low-velocity commodities and optimizing high-velocity goods goes a long way in cutting down overhead costs.

Besides, you can further reduce the cost by automating the warehouse, improving its layout, and adopting a better inventory management system.

 

Effective Risk Management

The foundation of sound risk management is the proper analysis of business performance from real, accurate data. By taking an in-depth statistical look from a broader perspective, it is possible to spot points of weakness. That helps companies adopt proactive risk management measures to minimize the chances of encountering losses when the unfortunate incident happens.

Also, understanding potential risks help businesses reduce unnecessary engagements, which could ultimately be their big wins. The Oracle report shows that 87 percent of companies trust they could scale down their inventory by 22 percent, only if they understood how to manage their risks well.

 

Better CASH Flow

Efficient communication, sound decisions, reasonable predictions, and informed risk management translate seamless engagements with other entities in the supply chain. And that means invoices get processed within a short duration and with minimal hiccups. Also, the fast processing of payments helps your company to minimize overhead costs and maximize cash flow.

 

Who Offers the Best Logistics for Trucking Companies?

Osage Specialized Transport

Osage Specialized Transport company is among the leading heavy equipment transport and logistics service providers in the US. It has headquarters in three states—Colorado and McKinney, Denver, and Texas. For effective service delivery, the company has collaborated with many carriers and heavy equipment-related companies across the United States.

 

XPO Logistics

The company operates globally. In the 2018’s Transportation Topic Magazine, XPO logistics was featured as the US’s best logistics brand. In its 2016 financial year, the company reported an increase of 18.4 percent, a net profit of USD 4.19 billion.

 

DHL Supply Chain North America (Exel)

DHL is among the 13 companies recognized by the Top Employers Institute as the top employers. The logistics company ships products to anywhere in the world. In 2017, it realized a profit of USD 68.31million, a 3.1 percent rise from the previous year.

 

Americold

This transportation brand is best known for transporting perishable goods such as groceries and foods for restaurants. All its warehouses have temperature control features to keep commodities fresh. In 2017, the company experienced a 6.1 percent growth.

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