What does a logistics company do?

While it’s more than likely the case that you have heard of logistics companies before, have you ever stopped to think what they do? If you are already using their services, you probably are familiar with how important they are, but if you are just starting out in shipping goods and products to your customers or have only recently developed and grown your business enough that your delivery schedule has ballooned, you may need some of the gaps filled in.

That’s what we aim to do with this post – we want to make it clear what a logistics company does and why utilizing the experience of a logistics company is so important.

What Does a Logistics Company Actually Do?

A logistics company is one that not only devises the plans for storing and moving goods and products on behalf of their customers but also implements those plans and monitors and manages the whole entire process from start to finish. They normally work as part of a larger supply chain and are a midpoint between where the products and goods were made and store and where they are going.

Different Kinds of Logistics Companies

The term logistics company does not just apply to one specific type of company. Rather, within the logistics sector, many different companies provide different levels of service, who all count in some way as being logistics companies. The best way to understand the differences between businesses operating within logistics is by separating them into four distinct categories:

Third-Party Logistics Companies (Often referred to in shorthand as 3PL Companies) – these companies specialize particularly in providing part or all the logistics within the supply chain for a business. The extent of the chain that they supply depends on each customer’s needs. It could be that they only supply the storage and transportation side of things or act as an integral part of the business model involved operating a warehouse and taking care of picking, packing, management ordering and delivery.

Carriers – as the name suggests, carriers are companies that handle the delivery of cargo, whether its materials, products or something else. They include ocean freight, air cargo and rail companies.

Freight Forwarders – interestingly, most freight forwarders do not have freight transportation, but act as a middleman or facilitator in each supply chain, collaborating with a network they have established to find the best transportation solutions for their customers. They not only coordinate the transportation but also deal with the associate documentation like export and import forms.

Freight Companies – as the straightforward name suggests, freight companies are those that take your shipments from one point to another. They can range from small, local businesses to large, international ones. While many handle just one type of transportation, others provide many different options to suit a company’s needs.

Why Hire a Logistics Company?

The success of any business often comes down to how organized and efficient their supply chain is. Logistics has an integral role in ensuring your business can continue to grow and expand. It may be fine to handle your own deliveries when you are still a small and relatively local company, but as the volume of orders increase and you start to offer deliveries further afield, it makes sense to hire an experienced logistics company to handle that part of your supply chain.