What Do Logistics Companies Do?
Logistics is an industry that deals with the movement of goods. It can be anything from moving freight to shipping commodities or managing the distribution of products. Logistics is a diverse industry that's constantly changing and evolving as technology advances. The following are some of the functions of logistics companies.
1. They provide the logistics services you take for granted every day
For many people, their first thought when they think of what a 'logistics company' does is to associate them with moving box-loads of products around the country or transporting random items from place to place. While this is undoubtedly part of what they do, logistics companies have a much more significant role in our day-to-day lives. They manage the whole logistical chain of any organization - from input to output. This includes everything from activities such as inventory management to packaging and transport.
2. They usually have a global presence
It's not just large corporations that have a logistics presence - many small to medium-sized enterprises have also developed a logistics arm. While usually not as extensive as those of larger organizations, their impact is often felt worldwide. The vast majority of companies that employ a small logistical department do so for reasons of scale and cost-effectiveness (see below).
3. They're responsible for over 70% of all trade
This may come as a surprise to many, but the fact remains that logistics companies are responsible for carrying 70% of all international trade - and 37.5% of total world trade - across borders. This makes them essential players in the global economy and a mighty force for economic growth and stability. The size of this market is estimated to be worth USD 15 trillion.
4. They're ultimately responsible for the smooth running of supply chains
Logistics companies may not control what goes on within a company's supply chain. Still, they are ultimately responsible for ensuring it runs as smoothly as possible between the business itself and its suppliers, customers, and other transaction partners. This is achieved by managing contracts, providing transport and warehousing services, and leveraging various software solutions to drive the entire logistical process from start to finish.
5. They're essential for keeping costs down
Logistics companies play a critical role in keeping costs down for businesses of all sizes. Without them, individual companies would have to handle logistical elements such as warehousing, transport, and inventory management, often leading to high costs. Logistics companies can remove logistical burdens from businesses by providing these services, allowing businesses to focus on what they do best.
6. They're the biggest employers in the world
While many people may think of giant multinational corporations when they think of the biggest employers in the world, this mantle belongs to logistics companies. The industry employs an incredible 44 million people worldwide - around one-tenth of the world's workforce. This makes it twice as big as the second-largest employer (the retail sector) and five times larger than any other industry.
7. They're a powerful force for economic stability
The sheer scale of logistics companies also makes them a powerful force for economic stability. A troubled economy with an unreliable workforce can often count on logistics companies to be there when they need help most - providing reliable employment in times of strife. This unwavering dedication to the supply chain has seen these very same services become incredibly beneficial during emergencies, such as providing clean water and food to areas affected by natural disasters.
8. They move over 95% of all manufactured products around the world
While some may think their shift towards automation is making our lives easier, the truth is that this shift has nothing on logistics companies. They're responsible for moving no less than 95% of manufactured goods around the world at any given time. Transportation may have become more accessible, but it's still an essential part of commerce - and this is something that logistics companies are more than aware of.
9. They use some of the most advanced technology available
One of the main things that set logistics companies apart from their competitors is their unparalleled desire for technological advancement. Whether it's warehousing, transport, or inventory management, these companies are constantly looking for ways to improve existing services and innovate new ways of working. In short, they're not afraid to try something different - or as the Americans would say, "to think outside of the box."
Ultimately, logistics companies do a lot of work behind the scenes to ensure that products are delivered on time and without damage. To stay competitive in this demanding industry, every company must have its own set of best practices to be as efficient as possible.