The Benefits of an Integrated Logistics Provider
7 minutes to read
Businesses have various options when it comes to organising their freight logistics. But whether they’re an exporter, importer or a firm that trades domestically, they’ll ultimately be seeking a solution that consistently ensures the safe and timely delivery of their products.
What Options Are Available?
There are effectively three avenues available to companies, which can be summarised as follows:
The first option is to manage all aspects of logistics in-house, directly employing teams to oversee everything from warehouse management, order processing and packing, to customs procedures and freight forwarding.
Naturally this can involve a significant amount of capital expense when one considers wages, the running costs for a warehouse or distribution centre, and possibly the maintenance of a fleet of road vehicles to deliver goods to and from ports or airports, or between locations within the same country.
To really feel the benefit of this approach, it is vital that a company’s in-house logistics team has the necessary experience in all modes of shipment and customs compliance, as well as supply chain management expertise. This can be very difficult with just a small team.
The second option is to employ a variety of third-party organisations, chosen perhaps due to the main focus of their activities or as a result of a recommendation from a trusted source.
On the plus side, this can allow you to spread the load during any unusually busy periods. It also minimises the risk to your business should one company be unable to deal with a request or go out of business.
However, dealing with multiple contacts and keeping track of everything can be a headache, as can dealing with varying levels of service and expertise, and different pricing systems.
Arguably the most challenging aspect of this approach is maintaining control, which can require additional resource. If your primary role isn’t to look after logistics, it can take attention away from more important business activity such as sales, recruitment and product development.
One Logistics Partner
The third option is to work with a single third-party business and have them as your integrated logistics partner.
What Is Integrated Logistics?
Integrated logistics is an all-encompassing form of logistics management in which you partner with an organisation that has the capacity, skills and expertise to step in and handle all of your logistics needs – effectively acting as your logistics team.
What To Consider When Looking for an Integrated Solution;
As with any customer-supplier partnership, it’s important to conduct thorough due diligence on a prospective logistics partner ahead of signing a contract. You’ll want to ensure the company is accredited by recognised trade organisations such as IATA, RHA and UKWA, and also carries quality marks such as AEO and ISO9001. This will give you peace of mind that the company will handle your logistics professionally and to the required standards.
The breadth of service offered by a logistics partner is also a key consideration. Some third-party logistics (3PL) providers only offer a couple of logistics services, whereas others cover the full spectrum. Take a look at the company’s website to check that it offers all the services you require and has experience of working with other customers in your industry.
Customer case studies will give you a sense of the types of business and industry the company has worked with. It’s also worth asking for other client references or taking a look at any client reviews, whether on Trustpilot, Google or another reputable reviews platform.
Like any due diligence process, it is prudent to carry out a credit check on the prospective supplier to ensure they are financially secure. Last but not least, try to organise a visit to the company’s facilities (if it is safe to do so), so you can meet key personnel and get a real sense of how the organisation operates.
The Benefits of Using One Company
There are many benefits to using a single integrated logistics provider. Here are just a few of the key advantages of taking this approach.
By fully or partly outsourcing their logistics, companies can save a significant amount on employment costs as there is less or no requirement for an internal logistics department or training. A small in-house logistics team may struggle with illness and holiday cover, whereas an outsourced logistics partner will have the necessary resource to provide a dedicated team 52 weeks per year and should be able to scale with the growth of your business.
Working with a logistics partner that offers a warehousing solution will also save you the expense of renting your own storage facility, not to mention your own vehicles. If the company’s warehouse is strategically located close to a port or airport, there’s a good chance you’ll save on haulage costs too, while bonded warehouses allow you to defer duty on imports until they are ready for distribution.
It’s also possible to save on your overall logistics spend if you use an integrated logistics provider. Having one company deal with everything rather than different companies handing off responsibility at different stages is more economical. It allows that company to be more competitive on price, and they will typically be able to negotiate better rates with shipping lines and hauliers, with whom they’ll have long-term relationships.
Working with a single partner can make your logistics operation a lot more efficient, saving you the need to adapt to the different processes of multiple third parties, all of whom may have an alternative interpretation of your business needs and priorities. Having to negotiate with numerous different agencies can also consume a lot of time that could be better spent elsewhere.
On top of this, because your logistics partner will view the bigger picture around your supply chains, they should be able to spot opportunities for efficiencies such as shipper consolidations and amalgamating shipments to maximise container utilisation, thus shipping products more cost effectively.
Control and Visibility
With multiple parties managing your logistics, it can be difficult to keep track of all your shipments. By letting one company coordinate and manage every shipment on your behalf, you’ll enjoy a greater degree of control and visibility, saving yourself an unnecessary headache in the process.
Focus on Business-Critical Activity
Entrusting your logistics activities with a single provider will allow your team to focus on their core competencies, whether that’s marketing, business development, sales or product development. This means you can grow your business while somebody else takes care of the heavy lifting, negotiation and time-consuming paperwork that comes with logistics.
Working with one partner and having a single point of contact should result in a successful long-term partnership. Over time, the logistics company will come to know your business and internal processes as well as any employee, effectively aligning their services with your business objectives to drive growth and profitability.
By partnering with one company, it will also ensure that you receive a reliable and consistent service, which you won’t necessarily get working with multiple partners.
How HGL Delivers an Integrated Solution
At HGL, we serve as an integrated logistics provider for clients across multiple sectors, forging long-term relationships and taking the hassle of logistics off our clients’ plates.
No matter what is required – whether transport by sea, air, or road; warehousing; export packing; customs compliance; shipping documentation; coordination with factories/suppliers and end clients; order monitoring or reporting – we can help.
Ultimately, partnering with HGL gives you peace of mind that everything is in safe hands. It frees up your time to focus on your core business while having the confidence that your logistics is in the hands of competent, dedicated experts.
For more information on our integrated logistics offering, please don’t hesitate to get in touch today.