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In the globalized world of trade, logistics is one of the most crucial components of the supply chain. Choosing the right logistics company has the potential to not only enhance cost efficiency for businesses but also maximize customer satisfaction.
One of the most important decisions a business can make in its supply chain is selecting the logistics company it will work with. Factors such as on-time delivery, network accessibility, cost, and technology will significantly influence this decision. In this article, we will discuss the top 5 key factors businesses should consider when choosing a logistics company.
What Do Logistics Companies Do?
A logistics company organizes and manages services such as transportation, warehousing, customs clearance, and distribution throughout the process from the point of production to the consumer. Fundamentally, logistics companies specialize in logistics processes to ensure the efficient and seamless operation of the supply chain, delivering materials and products to the right place, at the right time, and in the right quantity. In this context, logistics companies offer several critical services:
Transportation and Shipping Management: Ensuring the fast and safe delivery of products and materials to their destination using various transportation methods such as road, sea, air, and rail.
Warehousing and Inventory Management: Providing temporary storage and inventory management services to ensure traceability and safe storage of products and materials under the required conditions.
Distribution and Delivery: As the final stage of the logistics process, offering distribution and delivery services to ensure fast and secure deliveries with a focus on customer satisfaction.
Supply Chain Management: In larger logistics companies, offering supply chain management services to coordinate the process from production to distribution, increasing business continuity and efficiency.
How Do Logistics Companies Operate?
While the general business processes of logistics companies are well-established, in recent years, they have increasingly offered customized solutions to meet their clients' needs. Typically, a logistics company operates as follows:
Planning and Route Optimization: The first step involves planning the loads to be transported. Factors such as delivery points, transportation time, cost, and transportation methods are determined. Route optimization is carried out to ensure that the loads reach their destination in the shortest time and at the lowest cost. Technologies such as GPS and Geographic Information Systems (GIS) are used for this purpose.
Transportation Method: The most suitable transportation method is chosen based on the characteristics of the load and the delivery time. For example, sea freight may be chosen for large-volume loads, while air freight may be preferred for time-sensitive deliveries. Additionally, multiple transportation methods can be used depending on the destination’s features (such as road accessibility, proximity to ports or airports, etc.).
Warehousing and Inventory Management: In cases where storage is required, either during the transition between transportation methods or for other reasons, the logistics company stores the loads according to their characteristics. For example, if pharmaceuticals, food, or chemicals are being transported, storage is done in accordance with safety standards.
Customs Clearance and Legal Procedures: For the international transportation of goods and materials, customs clearance and related legal procedures are involved. Logistics companies provide consultancy services to their clients in areas such as preparing the necessary documents and ensuring that the transportation process complies with regulations and laws.
Delivery and Distribution: The final step is the distribution and delivery process. Products are delivered to their destination quickly, safely, and securely. Today, systems are in place that allow both the customer and the recipient to track their shipments in real time. This ensures traceability and enhances customer satisfaction.
In summary, logistics companies generally follow these processes to offer their clients fast, cost-effective, and reliable services. However, as mentioned, customized processes can be planned according to the client's specific needs, and processes outside of the standard procedure can also be implemented.
What Are Logistics Companies?
There are different types of companies operating in the logistics sector. The first type is comprehensive transportation companies that offer various transportation methods under one umbrella. These companies can integrate different transportation methods to provide flexible solutions to their clients and can use intermodal transportation, which combines multiple methods.
International logistics and customs clearance companies, on the other hand, specialize in customs procedures and regulations. They can also offer consultancy services to their clients on topics such as obtaining the necessary documents, ensuring legal compliance, and managing tax regulations.
Third-party logistics (3PL) companies manage transportation, warehousing, inventory management, order processing, and distribution processes, especially for large-scale companies looking to optimize their logistics costs. By delegating logistics processes to these companies, businesses can focus on their core activities.
Finally, there are e-commerce logistics companies, which have become more prevalent with the growth of e-commerce. These companies handle order management, warehousing, packaging, and delivery, helping ensure the smooth operation of e-commerce processes.
Why Is Choosing the Right Logistics Company Important?
Choosing the right logistics company is crucial for supply chain optimization, cost savings, and ensuring customer satisfaction. It is critical for businesses to select the logistics company that best suits their operations to effectively manage logistics processes. Here are the advantages a business can gain when the right logistics company is chosen:
Operational Efficiency: A well-planned logistics process guarantees that products are delivered to the right place at the right time in the most efficient way. By working with the right logistics company, this process can run smoothly while also providing cost advantages, helping businesses gain a competitive edge in the market.
Customer Satisfaction: Factors like timely and undamaged delivery, offering flexible options at the delivery point, and other advantages increase customer satisfaction. If the logistics company meets the customer's expectations, the likelihood of the customer returning to do business again increases, enhancing brand loyalty. Although the logistics company is an external entity, customers often associate their experiences with the logistics firm as a reflection of the business itself. Therefore, the more satisfied the customer is with the logistics process, the more satisfied they will be with the product or service they received from the business.
Reliability: Elements such as insurance against damages and defects in the logistics process and customs services for businesses engaged in international trade make risk management easier.
Scalability: As businesses grow or enter new markets, their logistics needs increase. In this context, working with a logistics company that can scale up to meet the demand during seasonal or promotional surges is a sign that the business has chosen the right logistics partner.
To ensure that you can satisfy your customers throughout the process from purchase to delivery, reduce losses by managing risks effectively, and easily adapt to fluctuations in logistics needs, you must work with a logistics company that is most suitable for your business, business model, and industry. To achieve this, there are several key factors you should pay attention to.
5 Key Factors to Consider When Choosing a Logistics Company
As mentioned earlier, choosing the right logistics company offers many advantages, from supply chain management to customer satisfaction. To minimize extra costs, delays, and losses, you should consider the following five key factors when selecting a logistics company:
1. Expertise
Some logistics companies specialize in specific sectors or types of transportation, while others have the capability to manage the entire supply chain from end to end. Processes like international operations require different expertise, and while some companies may offer excellent services domestically, they might lack experience in international transportation. At this point, you should choose a logistics company that focuses on the specific services your business needs.
2. Technology
Another important factor to consider when choosing a logistics company, which will ultimately represent your brand in the eyes of your customers, is their technology and digital solutions. Logistics companies that invest in technologies like real-time tracking, route optimization software, and warehouse management programs can further enhance your operational efficiency. Additionally, a logistics company with a strong technological infrastructure can quickly identify disruptions in the process and take corrective actions swiftly to minimize losses. Therefore, it is crucial that the logistics company's technological infrastructure, digital services, and most importantly, their compatibility with your own systems are taken into account.
3. Reliability
One of the most critical factors in the decision-making process is the company's reliability. Positive feedback from businesses the company has worked with previously, its reputation in the industry, and reliable references offer valuable insights into the company's trustworthiness.
4. Cost and Pricing
The most significant factor affecting a business's budget is pricing. However, it's a mistake to assume that the logistics company offering the lowest cost is the best option. When evaluating a company's costs, you need to consider the scope of the services they offer. While a logistics company may not be the cheapest option, a good one will ensure transparency in its pricing structure. Such a company will clearly outline additional costs, providing advantages in long-term budget planning. Moreover, solely evaluating costs isn’t enough. Some companies, with their added services, flexibility, and customized options for your business, may appear to have higher costs in the short term but can provide cost advantages in the long run due to the benefits gained from the services offered.
5. Geographical Coverage
The geographical coverage of the logistics company you choose is crucial for its effectiveness in the regions where you operate. Not every logistics company needs to have a presence in every region or country worldwide. Many logistics companies collaborate locally, outsourcing transportation and storage services to third parties. It’s important to carefully examine the local partnerships of your logistics company. If you operate internationally, it is also vital to research their partners in different countries. You should ensure not only the reputation of the logistics company but also the reputation of their business partners is high.
In conclusion, when choosing a logistics company with whom you'll likely establish a long-term business partnership, you shouldn't decide based on superficial research. The right logistics company for you is one that can adapt to your business's evolving needs, aligns with your operational methods, minimizes risks, and has a broad scope of operations.
TackLog, which has quickly become a key player with its extensive service network, strong fleet, and processes developed specifically for its clients, provides services to every region in Türkiye with its expert team. By thoroughly analyzing its customers’ needs and offering the most suitable services with a flexible approach, the company carries out its operations based on the principle of timely and safe delivery. TackLog continues to be a reliable partner, backed by nearly half a century of Asmira experience and reflecting the unique Asmira service in the fields of transportation and warehousing. For detailed information and contact, please visit our website: asmiragroup.com