The Importance of Logistics to the Average Transport Company

An illustration of a company's supply chain

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Logistics is generally defined as the management of the dissemination of goods, services or information between two parties, the producer and the consumer. Every company that is involved in this growing industry most take account of warehousing, inventory, packaging and transportation. Like all businesses, transport companies rely on a set of rules and standards to help them save money and maximize profits.

The term “logistics” can be traced back to the Greek word “logos,” which means reason or rationality. But the word developed a new meaning when it was used as a military strategy to help the military get weapons and supplies to troops in the field as quickly and efficiently as possible. From that point on, the term logistics has always related to transportation in either military or business affairs. Of course, it has come a long way from the Greek battlefield.

All modern businesses that ship or transport good rely on logistics management as an integral part of the supply chain. It is the job of this department to plan and control the storage and shipment of good according to current legal requirements. The experts who work in this growing field are known as logisticians.  

However, not all companies that rely on professional logicians have the financial resources to employ them on a fulltime basis. As a result, these businesses must contact a third-party logistics provider. These companies are responsible for all of the logistics-related activities that are ordinarily executed in-house.

The most common example of a company that may employ a third party logistics service is a small warehouse that does not have a team of logicians. Perhaps they do not require a fulltime team or they believe they can cut costs with an external transport company. Whatever the case may be, the company will hire the third-party service provider whenever they need them.

Though logistics has been used on the battlefield for several centuries, it is relatively new as a business strategy. The term was virtually unheard of until the 1950s when the companies started going international and shipping products required an increasingly complex supply chain. The first experts in this newfangled field were known as supply chain ogisticians.  It was their job to get the right product to the right place at the right time. Of course, that is a decidedly simplistic explanation of what the early experts did, but it is accurate.