Logistics is an efficient transportation and storage system created to ensure the smooth movement of goods. Logistics covers the entire gamut of transportation. It begins with processes to collect and deliver raw material and follows through to the delivery of finished products to retail outlets. Companies often hire professional logistics providers because they are experts in managing distribution methods and can help cut costs.

Obtain Customer Satisfaction

Logistics providers balance cost and customer service to make sure customers get the products they want. Customers often need only a limited number of products at a time, and logistics providers make sure they get the quantities they need. For example, electronics manufacturers produce goods in large amounts, but customers typically buy products one at a time. Customers also need to choose from a varied range of products, and logistics providers must provide that variety. Logistics providers also inform customers of the products available in the market and assist manufacturers by looking for new untapped markets for their products.

Select Optimum Transportation Mode

Logistics providers try to reduce transportation costs by choosing the right transportation method for the given products. They consider weight and the space the products occupy, because transportation costs mainly depend on the weight a particular mode can carry at a given time, as well as handling and labor costs. For example, steel is heavy, so it’s more economical to move it by water or road instead of by air. Conversely, although paper is light in weight, it takes up a lot of space, and is, therefore, equally expensive to transport. Logistics providers also take into account the product’s value. For example, jewelry and electronics are expensive, but you need less space to store or transport them. Moving these products is, therefore, comparatively low cost.

Provide Optimum Storage

Depending on their features, some products need careful handling and storage. Logistics providers make sure these items are safe and often need to incur extra costs to preserve them properly. If products are fragile or perishable, logistics providers need to make sure they’re packaged and stored properly. Some products, such as fresh fruit, meat, fish and vaccines might also need refrigeration for storage and transportation. If the products are hazardous or contaminating, logistics providers need to make sure they keep them isolated and stored safely. They also need to arrange special security for expensive products, and if the products are time-sensitive, such as newspapers or seasonal items, they have to arrange for timely distribution.

Ensure Cost Efficiency

Logistics providers can operate with more cost efficiency because of the large scale of their operations. They also reduce their expenses by hiring professionals who are highly trained in the workings of the transportation industry. They make sure the latest technological know-how is within their reach, and they integrate it into their operations. They use new technology to present cost-efficient solutions for new challenges that might arise in the distribution market. In doing so, they are able to offer lower prices and more efficient services while maintaining an edge over their competitors.

Manage Inbound Transportation

Logistics providers are also concerned with moving goods that customers rejected and want to return to vendors. They also manage damaged merchandise and take care of proper storage of inventory that can be used in the next season. Their goals include creating eco-friendly means for disposal and recycling, so they make use of packaging that can be reused, and they transport defective and obsolete products to manufacturers for refurbishing. Logistics providers also make sure that hazardous waste is disposed of safely.