Business Performance Improvement Technologies - an Introduction

Logistics Management


When it comes to business performance improvement, Logistics can easily become the forgotten element.

Yet Logistics has the potential for multiple impacts; it can greatly influence issues of service level to the customer, issues of cost to the customer or the supplier, and product quality.

This has always been true but is today more valid than ever; high transportation costs can make a black ink/red ink difference while increased price and service competition is placing even more emphasis on the need for improvement.

Freight Logistics is just one of many areas worth examining.

A Guide to Freight Logistics

By Bob Smiths

In today's context where freight has increasingly gained importance with the growth of international trade, the matter of understanding freight logistics becomes vital if one is to have any success in this industry. The essence of freight logistics revolves on managing freight in such a way that it focuses on winning the competitive race by ensuring prompt delivery of high quality goods at relatively low costs.

While earlier suppliers were chosen mainly on the basis of the quality of goods they offered, today the grounds have shifted to a combination of quality and low pricing. This can be credited to technological advancements as well as the standardisation of certain industrial goods. Thus, while quality remains important, companies are now looking at new ways to attract clients and customers in new ways by providing irresistible competitive prices that give them an edge over others.

It is a known fact that the costs involved in transferring freight from the place of manufacture to the final destination are high and are included in product rates. Thus, this is one essential sector where companies try to save on freight rates and subsequently provide goods at competitive rates to customers. This is where freight logistics comes into the picture.

Freight logistics refers to all aspects of freight transfer. A freight logistician is required to ensure that that the right quantity of freight is delivered to right customers in good condition, at the right location and right time at the best costs. The importance of freight logistics and the services of a freight logistician have become indispensable.

Efficient freight logistics revolves around some basic practices like transportation planning. Selection of the best mode for freight movement that can meet transportation requirements while also creating opportunities for saving on costs is the first step towards freight logistics application. Once this has been decided, transportation procurement is the next step as it not only gives visibility across multiple carriers and allows for negotiation on carriers but is also capable of cutting costs by almost 7%.

Route planning is essential in freight logistics as it can help in automating routes to oft-delivered destinations and reduce routing costs if efficiently looked after. While transportation management increases order and shipment visibility while also improving customer services with prompt and timely delivery; awareness of international trade regulations and knowledge of international trade logistics can cut down on administrative and trade costs while reducing customs delays and eliminating fines associated with non-compliance to rules.

Overall, effective application of freight logistics can help a company cut down on its freight costs by almost 15% and help provide customers with unmatchable services in terms of quality, time and price. Not only will it result in asset turnover in the long run, help build a company's reputation and lead to complete customer satisfaction but will also help companies in creating loyal customers and growing simultaneously.

Bob writes for the Devon Freight Company, UK and about Freight to China Asia.

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