In an increasingly globalised world, most companies work with customers, retailers or distributors from all over the world. This means that shipments of materials, products or manufactured parts are continuous and account for a large part of a company’s budgeted costs.
In this context, a type of intermediary has emerged that reduces the company’s transport costs, and that is logistics.
You often hear terms like ‘logistics department’, ‘logistics intermediary’ or ‘ a company logistics plan’ and it´s not always very clear what logistics is, how a company’s logistics works or how it is beneficial for BtoB transport throughout Europe.
Business logistics is not a new concept or a newly discovered tool. Since classical antiquity, producers have needed to transport their products to buyers’ homes or to workshops belonging to other producers or retailers.
The term ‘logistics’ first appeared in the early 19th century in England. A treaty by William Muller gave this name to the strategies and methods adopted for transporting and storing food, weapons and defence tools in different villages.
And in essence, those who wonder what logistics is, find the answer in this 200-year-old book: it´s the ability to efficiently store and transport what is produced, without damage whilst ensuring the economic viability of the company. Logistics involves the control and planning of the storage and transport phases of goods between production and intermediaries or sales.
What is logistics today, what is it for and how does it benefit freight transport?
In order to understand this, the concept of ‘optimisation’ must come into play.
Specialised in getting goods from one company to another, the logistics company has perfected its routes, storage space and fleet to arrive at the destination at the required time. These professionals know the best way to handle each type of goods, maintain strict stock control and offer a real-time service so that the customer knows where their shipment is at all times.
Centralising and leaving different types of shipments in the hands of a logistics company ultimately leads to a significant reduction in the cost of transporting goods.
Any company that regularly and continuously delivers to suppliers or to other companies knows that it´s impossible to reduce costs on their own. However, entrusting this to a specialised company is more economical as well as safer.
It is therefore important to know what logistics is and how it works in order to be aware of the benefits it has on the financial statement as well as the image of the manufacturing company.