What to Look for  in a Reliable Logistics Company?

What is logistics and what do logistics companies do?

The term logistics was first coined in the 1840s describing the movement of arms, materials, supplies, and personnel in the military. Today, logistics is more than moving military items, it’s described as the transport of basically everything that surrounds us, from the tiniest chip in the device that you are using to read this article up to the chair that you are sitting on.

Logistics is an activity that connects and moves the industry of trade ever since the prehistoric times when ancient cultures brought their goods to a trade location to exchange them with other people’s products or services.

In essence, logistics is the overall management of the movement of a resource from its acquisition to storage to consumption. The main components that make up an effective logistics strategy are:

• transportation
• handling
• storage and warehousing
• packaging
• information control

Different types of products require different logistics solutions. It can be one or a combination of different activities.

But one thing is certain and applies to every logistics strategy, regardless of the nature of business: every logistics strategy requires a lot of planning and analysis, while a proper execution requires a lot of communication and coordination.

Why logistics is important?

Conventionally, logistics is a vital component that keeps the cogwheel of the economy spinning. Without it, all sorts of trade will come to a halt which in return will create a ripple of disruptions in the demand and supply chain. Take the blockage of the Suez Canal, for instance. A single day of stoppage costs several markets and economies hundreds of millions of dollars.

In effect, producers, manufacturers, and consumers have been heavily affected. This is just one example to justify the importance of finding a reliable logistics provider that is not only efficient but is also resilient and agile, especially in cases of an unforeseen disruption.

Seeing the bigger picture, we have realized that industrial conveyor belts will only be able to start when the raw materials are delivered and readily available at the manufacturing facilities. Moreover, delivering value to the customer will only be completed once the goods reach their doorstep.
 

Why you (might) need a third-party logistics partner?

3PL companies or third-party logistics companies are service providers to whom businesses outsource their logistics management needs. Logistics companies can specialize in only one logistics activity such as e-commerce fulfillment, courier servicing, or freight management. Some companies also offer 360° end-to-end logistics solutions which are integrated combinations of two or more services catering from the first mile up to the last mile.

With the increasing globalization, businesses started realizing that to keep up with the globally growing demand, they had to upscale their supply and delivery.

Knowing that the business of logistics entails a huge amount of assets, a wide network, and preferably, a global presence, businesses started to outsource their requirements to experienced logistics companies rather than spending a good fortune acquiring their own fleet for transportation, technology, and manpower.

If you are a business that regularly does  tons of logistics operations in-house even though your core business is not logistics, here are some reasons why you (might) need to consider 3PL services:

• Flexibility and focus on your core business.

Outsourcing a technical and often complex task of logistics management to a professional and experienced partner can take off the additional time investment in figuring out what to do. This will help in further boosting competence and productivity as you focus on your main expertise and devise a better plan on how you can add value to your customers to achieve scalability.

• Saving time and resources.

Not all businesses have the resources to manage their own logistics operations in-house, this is true, particularly for start-ups who are looking to scale while being smart with their capital. Even conglomerates are outsourcing their logistics requirements because it saves them resources that they would rather invest in other key growth areas of their business.

• An extension of your team and network.

Logistics management is not always linear. Depending on a project or requirement, there could be multiple points within your network where processes are relayed before a shipment reaches its destination.

Partnering with a 3PL company extends that network and makes the process easier as you are essentially eliminating the need to handle all the communication among the supply chain partners.

Think of it not only as an extension of your network but also of your team and overall operations. Using your partner's network, you will be able to deliver faster and even get the perks of testing a market without having to establish a base in a particular location.

• Reducing costs.

Logistics companies have a stronger buying and negotiation power when it comes to rates in transportation, handling, freight, and other charges. They can help you save a significant amount, especially if you have bulk and regular requirements.

Making sure that your logistics partner can provide secure, safe, and swift services safeguarding you from the additional cost of returns, errors, and lost shipments.

• Optimizing inventory and cashflow.

A competent logistics company is equipped with an effective technological system that enables better forecasting and reporting. This is essential in optimizing inventories and preventing losses from mismanaged stocks. Consequently, this will also optimize your cash flow and improve your asset management decisions.

When looking to partner with a trusted logistics service provider, know if they can solve your logistics challenges and provide the above-mentioned benefits.

What to look for in a reliable logistics company?

Having a reliable and trustworthy logistics partner can reap a lot of business advantages. Therefore it is essential to know what to look for in choosing the right logistics company to fully maximize the benefits.

1. Service portfolio

Managing an entire supply chain for a business or product can be complex, especially if done in-house. This is one reason why businesses are opting to outsource some, if not their entire logistics chain, to minimize the complications from administering the whole process.

That is why it is worth looking into the list of services and portfolio of a logistics company you are planning to partner with. Ideally, find a provider that can provide you with a start to finish logistics solution.

Benefits of partnering with a logistics company with a wide range of logistics solutions:

• Having a single point of contact eases the communication process compared to managing multiple logistics partners.
• Leverage the volume of your requirements. You are more likely to strike a great deal and value for money with a logistics company that can design a full logistics solution for you.

2. Capability, capacity, and location

Another factor to look for in a 3PL partner is their capabilities in different logistics segments, capacity, and location.

• Capacity and capabilities

Knowing the volume of the goods you need to transport, handle, or ship, you should be able to match your requirement with the capacity of your prospective logistics partner. A logistics company should be able to provide their capacity in pallet positions, total SQM in operations area, site locations, fleet, and operations staff.

• Geographical coverage

Location greatly affects the flow of goods within the supply chain so it is important to know where your logistics partner has a presence?

Do they have a network or presence where your markets or key suppliers are?

If you are regularly carrying time-sensitive goods, it would be strategic to have your logistics hub placed near an airport.

If your main business is to ship bulk, large volume items via sea freight, then the effective placement would be near seaports.  This particular advantage is what most of the top logistics companies in UAE boast, a strategic location inside the Dubai Logistics City, having a close proximity to the Jebel Ali Sea Port and Al Maktoum International Airport.


For e-commerce businesses, placing your fulfillment centers near your customers is the top choice. Online buyers prefer faster delivery nowadays- the sooner, the better. E-commerce fulfillment service is accomplished faster when operations are close to the end customers or are connected to main roads and highways for faster transport options.  

Manufacturing companies should look into localization as a strategy for building a resilient and more sustainable supply chain. This strategy includes moving key pieces of their supply chain and business operations, such as manufacturing, warehousing, or fulfillment closer to the demand location. The COVID-19 pandemic taught us of its importance as restrictions across borders grew bigger at the peak of the pandemic, making it harder for companies to import or export raw materials and manufacturing supplies or ship their finished goods to the demand location.

3. Technology

 In almost every industry, technology helps provide a better customer experience and we can certainly say the same for the logistics industry. It has become imperative for business owners to use technology in their daily operations. The level of advancement of technology in logistics nowadays can do so much more than just the conventional booking, tracking, or payments.

• Better forecast and informed decisions

Technology can now provide you with data and reveal insights on customer behavior, trends, and your overall operations efficiency so you can better understand what are its effects on your supply chain performance.

Using these insights, you are empowered to make better and informed decisions. You know when to react and move the necessary levers to control your assets or profit (inventory, fleet, sales orders) and plan and execute based on the forecasted product and information flow.

• Transparency in process and communication

Technology allows supply chain partners to have a more transparent view of the logistics process. It makes it easier for partners and stakeholders to communicate, track their projects, create reports and make their decisions. With technology in logistics, businesses can improve their service levels and distribution velocity while keeping their costs down.

• Integration for greater efficiency

When looking for the right logistics provider, technology is one of the top factors to look into.

Some companies are still yet to complete or start their transition to digitalization, so they must find a partner who offers an integrated and user-friendly platform to manage all logistics needs from freight management, warehouse and inventory, to regional and cross border transportation.

 Imagine the ease of having it all in a single click ecosystem, expect even greater visibility and efficiency!

4. Experience, industry knowledge, and portfolio

It is one thing to be knowledgeable and experienced in the general logistics industry and another to be a credible provider for a specific industry.

Different customers in different industries may require different sets of logistics solutions.

When looking for a reliable logistics partner, look beyond their experience and credibility in the wider logistics sector. Delve into their portfolio relating to your industry as well.

 Some questions you can ask your prospective logistics partner are:

• Have you worked in my industry before (FMCG, F&B, Chemicals, Industrial projects, e-commerce, retails, etc.)?
• Can you provide references from your previous or existing clients?

5. Speed, safety, and security

There is no doubt that when it comes to logistics and delivering our product offerings, speed, safety, and security are of utmost importance.

• Speed

68% of consumers said fast shipping would lead them to place an online order.
-https://bizrateinsights.com/

From the end consumer perspective,  delivery speed needs to become continuously faster. Speed is one of the top factors online buyers consider when ordering an item online.

 From the producer perspective, speed is also important for control and optimization of inventory and be able to keep up with the demand while steering clear of production disruptions. In times of disruption, speed of recovery is also key.

But, speed and price don’t always come hand in hand. There are price sacrifices to achieve a certain speed requirement. Remember to keep it at a reasonable measure to not tip off the balance between cost efficiency and profitability versus speed.

 In the end, you can always look into other factors such as proper planning, decision making, or technological aid to keep the speed and still realize profitability in other areas of the operation.   

• Safety

A customer who received a secure parcel to his doorstep is just the tip of the iceberg when it comes to safety and security.

Safety is to be observed at every point in the supply and logistics chain.

 Logistics activities comprise operating machinery and equipment for proper storage, retrieval, loading, unloading, and moving. A reliable logistics company puts the safety of its people at the heart of its operations, which, consequently, protects the customer's products as well.

 This is achieved by placing proper safety protocols such as the mandatory wearing of PPE, reporting any hazard that can cause near-miss incidents or actual accidents, and conducting safety induction to everyone who is entering a warehouse for the first time, particularly, customers who are doing site visits.

 Accidents at the workplace can be treated as disruptions in the logistics process. When safety protocols are in place and accidents are avoided, value delivery is more efficient as downtime is eliminated and the continuous flow is maintained.

6. Price

We placed the factor of price down below this list because we believe that price is very much dependent on other factors in choosing a logistics company to partner with.

Quality of service comes with a price. Decision-makers should be able to know when to invest and when to sacrifice other areas of a perfect logistics strategy.

Based on your priorities, gauge the returns of paying for value rather than cost.

7. Values and internal system

In the end, hiring a logistics company is equivalent to extending your team, company, or business. Take the time to get to know the people who will be managing your logistics processes making sure your valued products will reach your customers in time.

Are their values aligned with yours? Remember that you are not only choosing a ‘logistics vendor’ but a ‘logistics partner’.

When you have a trusted logistics or business partner, scalability, sustainability, and profitability follow. It benefits everyone down the line from employees to customers as you work together to develop top-notch solutions customer with the power of collaboration.

Landscape of the Logistics industry in the UAE

 The United Arab Emirates is a world-class logistics hub and is hailed by the World Bank as the top-performing trade logistics centre in the Gulf. With the planned and ongoing development projects such as the newly opened Al Maktoum Airport in Dubai South, the $1.6B investment to increase the total capacity of Jebel Ali Port, and other urban, economic, and environmental plans of the country, the logistics industry in the UAE is only expected to grow even further.

With the combination of outstanding infrastructure, focus on technology, and promising government policies, the UAE continues to boost trade activities domestically and extending it to its global outreach.

While the economy is driving in more businesses, logistics companies in the UAE are encouraged to strive for better processes, setup, and systems to cope up with the anticipated increase in demand for logistics services in the country. 

RSA Global is one of the top logistics companies in the UAE with global foot print and has largely invested in innovating its technology solutions, integrating every step of the logistics process into a unique and powerful click ecosystem with the help of an AI voice-enabled assistant. Using these digital interfaces, RSA Global’s customers can enjoy a seamless, cost-efficient, and resilient value delivery to consumers.

With the help of this advanced system, we can help our customers not only achieve efficient physical logistics operations but also provide them with the data and insights they need to understand the ever-changing market preferences and deliver what truly matters to the consumers.

During the challenging times of the pandemic, and other disrupting global events, RSA Global continuously contributes to keeping the trade moving and making sure that consumers from all around the world will receive what they need right in front of their doorstep – fast, safe and secure. This spirit of dependability and flexibility, despite disruptions, grew from years of constant innovation, fruitful partnerships, extension of our network, and simply caring about who and what matters – our people, their wellbeing and safety, the environment we are living in, and ultimately, our customers and their consumers.

Conclusion

Finding a reliable and strategic logistics partner can be a challenge for some business owners as there can be quite a few great choices in the market already, each possessing a different set of strengths. But even though this is the case, the benefits will surely outweigh the challenge.

In addition to the factors to look for in a dependable logistics company, business owners and procurement teams should also remember that there are other implications of partnering up with another business. Logistics operations, although happening in the background, is a clear reflection of your brand, customer service, and value delivery. When customers are satisfied with your product and service delivery, profit streamlines. And lastly, partnering up with a great logistics provider opens up more business opportunities and equips you with capabilities that will otherwise take time to build on your own.