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Essential Guide to Logistics Companies [Part 2]

What Does It Mean to Have a Logistics Company

Having a logistics company means having a partner who manages the flow of goods from the point of origin to the point of consumption. They handle all the moving parts, from warehousing and storage to transportation and delivery.

Think of it like this: you have a delicious apple pie, but it’s still hot and sitting in your kitchen (origin point). You want your friend across town to enjoy it warm and fresh (consumption point). That’s where the logistics company comes in.

They’ll:

  • Pick up the pie from your kitchen (warehousing and storage).
  • Package it carefully to ensure it arrives safely (packaging and labelling).
  • Choose the best transportation method based on speed, cost, and freshness (air freight, shipping container, etc.).
  • Track the pie’s journey every step of the way (shipment tracking).
  • Deliver the pie to your friend in perfect condition (delivery and fulfilment).

A logistics company takes the burden of moving goods off your shoulders. They have the expertise, resources, and network to do it efficiently, cost-effectively, and reliably.

Here are some of the benefits of having a logistics company:

  • Saved time and effort: You can focus on your core business while they handle the moving and shaking.
  • Reduced costs: They can negotiate better rates with transporters and optimize routes.
  • Increased efficiency: They have the tools and technology to streamline the process.
  • Improved customer satisfaction: Your customers get their goods faster and in better condition.
  • Scalability: You can easily adjust your logistics needs as your business grows or shrinks.

Having a reliable logistics partner can be a game-changer for a small business owner or a large corporation. It frees you up to focus on what you do best while ensuring your goods get where they need to be when they need to be there.

Examples of a Logistics Company

Here are examples of three types of logistics businesses.

1. Third-party logistics (3PL) companies

3PL companies provide a wide range of logistics services to businesses on an outsourced basis. These services include transportation, warehousing, inventory management, and order fulfilment. 3PL companies can help enterprises to reduce costs, improve efficiency, and improve customer service.

  • Example: Amazon Logistics is a 3PL company that provides logistics services to Amazon.com and other businesses.

2. Freight forwarders

Freight forwarders specialize in shipping goods internationally. They handle the customs clearance, paperwork, and other logistics involved in international shipping. Freight forwarders can help businesses navigate the complex world of international shipping and ensure that their goods are shipped safely and on time.

  • Example: DB Schenker is a German freight forwarder that provides international shipping services to businesses worldwide.

3. Couriers

Couriers provide door-to-door delivery services for goods. They typically specialize in small packages and shipments. Couriers can help businesses get their goods to customers quickly and efficiently.

  • Example: UPS is a courier that provides door-to-door delivery services for businesses and consumers worldwide.

What is the Function of a Logistics Company

The function of a logistics company is to plan, implement, and control the efficient movement and storage of goods, services, or information within a supply chain and between the points of origin and consumption. They essentially act as the bridge that connects businesses with their customers.

Here are some of the critical functions that logistics companies perform:

Transportation: This involves moving goods from one location to another using various modes like air, sea, road, or rail. Logistics companies choose the most efficient and cost-effective method based on the shipment’s size, weight, and urgency.

Warehousing and storage: This involves providing secure and well-organized facilities for storing goods before, during, and after transportation. Logistics companies manage inventory levels, optimize storage space, and ensure proper handling of goods.

Inventory management: This involves tracking and controlling the stock of goods throughout the supply chain. Logistics companies use sophisticated systems to monitor stock levels, prevent shortages, and ensure timely deliveries.

Packaging and labelling: This involves ensuring that goods are adequately packaged and labelled for safe and secure transportation. Logistics companies choose suitable packaging materials, apply necessary labels and markings, and comply with regulations.

Customs clearance: Logistics companies handle the paperwork and procedures for international shipments to ensure smooth border crossings. This includes preparing invoices, certificates, and other documents.

Order fulfilment involves picking, packing, and shipping individual orders to customers. Logistics companies have efficient fulfilment centres and processes to ensure accuracy and speed.

Track and trace: This involves real-time visibility into the location and status of goods in transit. Customers can track their shipments online or through mobile apps, offering peace of mind.

Returns and exchanges: This involves efficiently managing the return and exchange of goods. Logistics companies handle reverse logistics, ensuring proper return processing and restocking.

Supply chain management involves coordinating and optimizing the entire flow of goods from origin to consumption. Logistics companies work closely with manufacturers, distributors, and retailers to ensure seamless movement and minimize disruptions.

In addition to these core functions, many logistics companies offer value-added services such as:

  • Cross-docking: Transferring goods directly between incoming and outgoing shipments without warehousing them, saving time and money.
  • Cold chain logistics: Handling temperature-sensitive goods like food and pharmaceuticals with specialized equipment and procedures.
  • Third-party logistics (3PL): Providing a complete outsourcing solution for all logistics needs, from storage to transportation to fulfilment.

By offering these comprehensive services, logistics companies play a crucial role in today’s globalized economy. They enable businesses to deliver their products to customers quickly, efficiently, and cost-effectively, ultimately contributing to economic growth and consumer satisfaction.

What Does a Logistics Company Do

A logistics company is a business that plans, implements, and controls the efficient, cost-effective flow and storage of goods and materials between the point of origin and the point of consumption. They play a vital role in the supply chain by ensuring that goods are delivered to customers on time and in good condition.

Essential logistics services:

  • Transportation: Logistics companies provide transportation services for air, land, and sea goods. They have a network of trucks, ships, and planes to move goods from one place to another.
  • Warehousing: Logistics companies provide warehousing services to store goods before they are shipped to customers. They have strategically placed warehouses to ensure that goods are near their destination.
  • Inventory management: Logistics companies manage inventory levels for their customers. They track the movement of goods and ensure that there is enough inventory on hand to meet customer demand.
  • Order fulfilment: Logistics companies fulfil orders for their customers. They pick, pack, and ship orders to customers promptly and efficiently.
  • Freight forwarding: Logistics companies provide freight forwarding services to help customers navigate the complexities of international shipping. They handle customs clearance, paperwork, and other logistics involved in shipping goods internationally.

Benefits of using a logistics company:

  • Reduced costs: Logistics companies can help businesses reduce costs by optimizing their supply chains and negotiating better rates with carriers.
  • Increased efficiency: Logistics companies can help businesses improve efficiency by streamlining their logistics processes and using technology to track and manage shipments.
  • Improved customer service: Logistics companies can help businesses improve customer service by delivering goods on time and in good condition.
  • Access to expertise: Logistics companies have expertise in all aspects of the supply chain, which can help businesses avoid costly mistakes.

Overall, logistics companies play a critical role in the global economy by ensuring that goods are delivered to customers efficiently and cost-effectively.

What Does Business Logistics Do

Business logistics manages the flow of goods, services, and information throughout the entire supply chain, from the procurement of raw materials to the delivery of finished products to the customer. It encompasses a wide range of activities, including:

Inbound logistics:

  • Purchasing: Negotiating contracts with suppliers for raw materials and finished goods.
  • Transportation: Managing the transportation of materials to the company’s facilities.
  • Warehousing: Storing and managing inventory in warehouses.

Outbound logistics:

  • Order processing: Receive, process, and fulfil customer orders.
  • Transportation: Managing the transportation of finished goods to customers.
  • Distribution: Delivering products to customers.

Logistics also includes:

  • Inventory management: Tracking and optimizing inventory levels to avoid stockouts and minimize carrying costs.
  • Packaging: Designing and selecting packaging materials to protect products during transportation.
  • Customs clearance: Ensuring that goods comply with customs regulations and can be imported or exported.
  • Information technology: Using technology to track and manage the flow of goods and information throughout the supply chain.

Business logistics aims to efficiently and effectively move goods from point A to point B while minimizing costs and meeting customer requirements. Efficient logistics can give businesses a significant competitive advantage by:

  • Reducing costs: By optimizing transportation routes, warehousing space, and inventory levels, businesses can save money on logistics expenses.
  • Improving customer service: By ensuring that products are delivered on time and in full, businesses can improve customer satisfaction.
  • Increasing responsiveness: By having a flexible and responsive logistics system, businesses can quickly adapt to changes in demand.
  • Gaining a competitive advantage: Businesses can differentiate themselves from their competitors by providing reliable and efficient logistics services.

Here are some specific examples of how business logistics is used in different industries:

  • Retail: Retailers use logistics to ensure they are stocked with the right products at the right time. This includes managing inventory levels, forecasting demand, and arranging transportation.
  • Manufacturing: Manufacturers use logistics to manage the flow of raw materials, parts, and finished goods throughout their production processes. This includes scheduling production runs, coordinating with suppliers, and managing transportation.
  • E-commerce: E-commerce businesses rely heavily on logistics to deliver products to their customers quickly and efficiently. This includes managing inventory levels, picking and packing orders, and choosing the suitable shipping methods.

Business logistics is a complex and ever-evolving field. However, by understanding the basics of logistics, businesses can improve their efficiency, reduce costs, and provide better customer service.

Who Uses Logistics Companies

Logistics companies are used by a wide variety of businesses and organizations, including:

  • Manufacturers: Manufacturers use logistics companies to transport raw materials and finished goods to and from their factories and warehouses.
  • Retailers: Retailers use logistics companies to transport goods from their suppliers to distribution centres and retail stores.
  • E-commerce businesses: E-commerce businesses use logistics companies to fulfil customer orders.
  • Importers and exporters: Importers and exporters use logistics companies to ship goods internationally.
  • Government agencies use logistics companies to transport goods and supplies, such as food and medicine, to their facilities and distribution centres.
  • Non-profit organizations: Non-profit organizations use logistics companies to transport goods and supplies to their beneficiaries.

In addition to these businesses and organizations, individuals also use logistics companies to ship personal belongings, such as furniture and household goods, when moving or travelling.

Which is the Number One Logistics Company in Malaysia

According to the most recent available data, DHL Malaysia is the only logistics company in Malaysia that has consistently generated the highest revenue within the country. In 2023, DHL Malaysia reported a revenue of approximately 7.9 billion USD, representing a significant portion of the Malaysian logistics market. This dominance is attributed to DHL’s comprehensive range of services, extensive network, and strong brand reputation.

While other logistics companies like Kuehne + Nagel Malaysia, FedEx Malaysia, UPS Malaysia, and DB Schenker Malaysia also hold substantial positions in the Malaysian market, DHL’s consistent revenue lead and market share of 30% solidify its position as the undisputed leader in logistics services within Malaysia.

Which is the Best Company for Logistics

Based on the three types of logistics companies, here are the best companies for logistics in Malaysia.

3PL: DHL Supply Chain

  • Comprehensive suite of services: DHL Supply Chain offers a wide range of services, including warehousing, distribution, transportation, and supply chain management. This makes them a one-stop shop for businesses that need a comprehensive logistics solution.
  • Solid global network: DHL Supply Chain has a robust global network with facilities in over 150 countries. This allows them to handle complex supply chains that span multiple continents.
  • Experienced team of professionals: DHL Supply Chain has a team of experienced professionals in logistics and supply chain management. This team can help businesses optimize their supply chains and improve their efficiency.

Freight Forwarder: DHL Global Forwarding

  • Comprehensive range of services: DHL Global Forwarding offers an extensive range of services, including air and sea freight, land transport, and customs brokerage. This makes them a good choice for businesses that ship goods by various methods.
  • Solid global presence: DHL Global Forwarding has a strong international presence with offices and agents in over 220 countries. This gives them the ability to handle complex shipments that involve multiple countries.
  • Reliable delivery: DHL Global Forwarding is known for its reliable delivery. They have a good track record of delivering goods on time and in good condition.

Courier: Pos Malaysia

  • Extensive domestic network: Pos Malaysia has an extensive domestic network with post offices and delivery personnel across Malaysia. This allows them to deliver goods to all parts of the country.
  • National postal and courier service provider: Pos Malaysia is Malaysia’s national postal and courier service provider. This gives them high credibility and trust among Malaysian businesses and consumers.
  • Reliable delivery: Pos Malaysia is known for its reliable delivery. They have a good track record of delivering goods on time and in good condition.