Logistics is a complex function for any business. For an emerging business to hire a professional logistics solutions provider to cater to its multifaceted needs such as transportation, warehousing, storage, packaging, shipping, and delivery of goods. There are various types of logistics companies in India. However, before going to the list of logistics companies, let’s understand what a logistics company is and what functions it can undertake for your business.
What is a logistics company?
What is a logistics company? In simple words, a logistics company undertakes movement of goods on your behalf. However, the process is not just limited to moving goods. Professional logistics companies also carry out other activities such as warehousing, shipping, packaging, etc. The importance of logistics and transportation services were defined during the outbreak of COVID-19, when businesses faced a major challenge of timely delivery of their consignment.
In India, there are several prominent logistics service providers, specialising in a range of supply chain and logistics services, such as cargo services, freight forwarding, courier services, road transportation services, domestic and international shipping services, and more. Some of top logistics companies, known for reliable services are:
- Blue Dart logistics services
- Delhivery logistics
- RIVIGO (by Mahindra logistics)
- Ekart logistics services
- DHL logistics company
- DTDC logistics company
Types of logistics companies in India
There are various types of logistics companies in India. Some of the notable ones include:
- First party logistics companies: These companies only provide required fleet of vehicles for transportation of goods. Their services do not involve shipping and warehousing.
- Second party logistics companies: These types of logistic companies offer shipping and transportation services through multimodal shipping. However, warehousing needs are not served by second party logistics companies.
- Third party logistics companies (3PL): 3PL services are popular among MSMEs in India. Many emerging businesses prefer third party logistics services as they take care of various aspects of the supply chain including warehousing, inventory management, packaging, shipping, transportation, etc. For example, a 3PL company can store your inventory, pack it and ship it when required on your behalf.
- Fourth party logistics companies: Fourth party logistics companies handle your entire supply chain management. These companies become a single point of contact for the business for all its supply chain-related activities. This is generally more suitable for large-sized businesses.
Tips to find the right logistics services company for your business
Having different kinds of logistics companies, may create confusion for MSME owners like you. Choosing the right one amongst them is difficult. Here are some tips for you to select the right for your business.
Analyse your logistic needs
First step is understanding your business needs. As a business owner, it is important for you to analyse and understand your logistics needs before partnering with any logistics company. You can list down your requirements and expectations from the logistics partner. Accordingly, you can formulate the logistics strategy and decide which type of the logistics company best suits your business needs.
For example, your business needs may be limited to transportation and you do not require warehousing services. In this case, you can focus on companies that specialise in transportation.
However, 3PL or third-party logistics providers are popular amongst small businesses as all needs such as shipping, inventory, packaging and transportation are taken care of them.
On the other hand, you also need to consider nature of your business while choosing a logistics solution provider. Shortlist only those who have the required expertise and experience. For example, pharma manufacturing companies and food and beverage companies have special requirements in storage and transportation. These goods need to be stored and transported in controlled temperatures and humidity to ensure product quality. Additionally, packaging plays a critical role. Hence, you need to consider areas of expertise that the logistics company while choosing a partner for your business.
Flexibility is essential if quantum of shipment is low
While choosing a logistics partner, flexibility is one of the crucial aspects for MSMEs and emerging businesses in India. Depending on the quantum of your shipment, you may prefer to have a logistics partner that gives you flexibility of full or partial-truck loading. This will help you to save cost as well as deliver goods timely despite the lower quantum.
Effective customer support will ensure hassle-free shipping
Customer service offered by the logistic partner is an extremely important aspect. The logistics provider company should be responsive and able to give you accurate information. Also, customer service should be able to offer a quick and effective resolution in case of a problem. Mostly all the logistics players claim to have a robust customer service support. However, ground reality can vary. Hence, it is a good idea to verify how well they serve the customers in terms of value-added services like order tracking, responsive customer support, reverse logistics for goods returned, and assistance in documentation. This will ensure hassle-free shipping for you.
Additionally, check the credibility of the company before forging any partnership. You can speak to their other customers and read testimonials to verify customer support and credibility.
Wide coverage will help your business
Ensure that the logistics solutions provider serves the geographies that your business caters to. Additionally, if you have expansion on plans, it would be a good idea to consider future needs while choosing a logistics partner. In fact, it is better to choose a logistics partner that has wider reach within the country and globally.
Lowest pricing is not always the best
You must know that lowest pricing does not mean the best value. Many companies claim to offer services low cost logistics services. However, a point to ponder here is that – are they meeting your criteria? Are they efficient enough to cater to your business needs? If yes, then comes the next point to consider, pricing. Ensure that there are no hidden costs involved. You need to be sure that the pricing policy of the logistic partner is transparent. You can do so by checking the quotation. Verify that the quotation includes all pricing points such as transportation, warehousing, packing, shipping, insurance, and other services that are promised by the company.
Safety cannot be compromised
Think about unfortunate situations such as a fire in the warehouse where your goods are stored. This will lead to damage and losses. It is important therefore that your logistics partner is aware and conscious about the unlikely events and is proactive in taking preventive actions. It would be beneficial for you to check the company’s approach towards handling such uneventful situations.
Technology is an added advantage
You also need to consider technological capabilities of the logistics company. It should have the capability of real time monitoring. Additionally, Radio-frequency Identification (RFID) technology makes warehousing management hassle-free. These technologies offer enhanced experience, added safety, hassle-free and timely deliveries and transparent operations.
Points to remember when finding a logistics services company:
- Understand your business needs and nature
- Evaluate the capability of the logistics company
- Ensure prompt customer support is available
- Prioritise quality of service over logistics service cost
Closing thoughts: Logistics service for small businesses
The logistics sector in India is fragmented, with many regional logistics partners catering to the needs of MSMEs and emerging businesses. While this has created employment opportunities for many and contributed to India’s GDP, it comes with its own challenges. There are different types of logistics services for MSMEs available today, and as a business owner, it is advisable to understand the services you need and select a logistics partner accordingly.
When selecting a logistics company for your business, keep the following in mind:
- Scalability: Does the logistics provider have the infrastructure to support your business as it scales and grows?
- Cost comparison: Are you getting the best rates on logistics services? Have you compared rates with other service providers?
- Value-added services: What additional services can be provided? Do they support with customs, freight forwarding, insurance, taxes and the like?
- Terms and Conditions: Read the fine print, especially related to reverse logistics, insurance, and policies against damaged goods.