Establishing a logistics network: What are the advantages?
Optimising the supply chain with reliable business partners
In the freight forwarding industry, a broad logistics network is more than just important – it is essential. Recent events such as the coronavirus pandemic, Brexit and the war in Ukraine have made it clear how vulnerable our supply chains can be, from reliable delivery to customers and the punctual arrival of important raw materials to fulfilment of transport orders at peak times.
A smooth supply chain ensures satisfied customers. If your supply chain management (SCM) is not running smoothly, you will quickly find yourself with production lines at a standstill and complaints from customers. Nowadays, digital tools (including artificial intelligence) can help to establish new and broader business relationships with the goal of avoiding disruptions in the supply chain.
This blog article shows you the advantages of networking with the right business partners. We have also put together some helpful tips to help you quickly build a network of reliable partners for the long term – whether you are a freight forwarder, haulier or industrial or commercial enterprise.
The importance of the right logistics network for the supply chain
A transportation business network usually centres on customers and suppliers. They are directly responsible for our success. However, the many companies involved in the supply chain also play an important role in ensuring everything runs smoothly. Although these companies are often not directly involved, they are playing an increasingly important role in determining economic success or failure. These include freight forwarders and individual hauliers, but also warehouses or customs agents. Building strong partnerships in all areas can therefore be worthwhile in order to protect yourself in an uncertain market situation or for peak periods.
Establishing a logistics network: Benefits for companies in the manufacturing and retail sectors
‘How do I find suitable transport partners?’ Companies in the manufacturing and retail sectors in particular rely on common logistics network with the necessary expertise to transport their products from A to B efficiently and cost-effectively. This enables them to improve not only their reliability but also their customers’ satisfaction. With the TIMOCOM Messenger, you are able to communicate directly with logistics professionals.
Supply chain optimisation: Increasing supply chain efficiency
An established transportation network improves the efficiency of your supply chain, as you can respond quickly to enquiries and effectively speed up the delivery of goods with the help of suitable partners. This may involve re-scheduling in the event of unexpected problems or failures, but also optimising processes in a solution-oriented manner. An established freight network ensures the punctual and efficient delivery of goods, raw materials and components needed for the manufacture of products.
After all, fast and reliable delivery is crucial in today’s world. It increases customer satisfaction and fulfils the company’s own promise of excellent service. Having the right partners also makes it possible to optimise processes, as it is easier to coordinate with each other.
Reduce logistics costs
Something that is always an issue for companies is cost-effective logistics. Close cooperation with various hauliers allows you to reduce your costs. For example, freight costs and storage capacities can be shared or used on a situational and order-related basis. TIMOCOM has prepared a whitepaper with the best tips and tricks to reduce your costs as a business.
Instead of always using the same freight forwarder, you can choose the haulier that is already close to your goods or that has the right kind of vehicle space or individual certifications for your specific order. Additionally, using synergy effects and optimising routes can also help to reduce transport costs in an effective logistics network.
Flexible logistics network
Having a large pool of transport service providers allows you to respond more flexibly to changing requirements. Not only seasonal peak times, but also external factors increasingly require a fast response time. To be able to react flexibly to changes in the market and adapt your supply chains, you should not rely on just one source for your logistics processes.
Increase reliability
Another advantage of a well-functioning business network is that you can develop coordinated processes and establish common standards. This enables you to increase supply chain reliability. One area where this is useful is ramp management, in connection with waiting and arrival times. With the right business partners, you can keep an eye on your goods at all times, for example via Live Shipment Tracking, and seamlessly coordinate processes.
Another complex process that can be facilitated by a well-structured logistics network is compliance with international customs regulations and laws. For international trips, it may be useful to rely on service providers who are familiar with the respective borders and regulations.
Inventory management and efficient warehouse logistics
The right logistics network can also pay off in terms of logistics costs for warehousing and inventory. It can help companies to organise their warehousing more effectively, reduce inventory costs and at the same time ensure greater availability of products. In addition, warehouse exchanges enable you to react to market changes as they occur and to book additional storage space in a cost-effective way, ideally in the direct vicinity of your production site or customers.
Strengthening your logistics business network: Advantages for freight forwarders and hauliers
For freight forwarders and hauliers, it can pay to always keep an eye out for new business partners. After all, if you limit yourself to just a few customers, you run the risk of becoming economically dependent. This can quickly become a business risk if crises or failures occur.
A large and reliable network can help to improve efficiency and reach. In the closely interconnected logistics industry, this kind of networking brings many advantages:
- Greater efficiency: By building a network, you can improve your efficiency by sharing resources, planning joint transport and optimising capacity utilisation. Above all, you can avoid empty running trucks by optimally combining individual orders.
- Wider reach: By working with other companies, you can expand your reach to new regions and markets without having to invest directly in them.
- Access to more resources: A logistics network also offers you access to vehicles, storage facilities, expertise and IT systems, which will help you to better position yourself, optimise processes and thus scale your business.
- Stronger negotiating position: With an established business network, you automatically have a stronger negotiating position with customers. You don’t have to take on every job, only the ones that suit you best.
- Increased flexibility: A strong network enables you to respond even more flexibly to customer requirements and to offer services that you could not provide on your own, such as drivers with special certifications or lorries for special goods.
How do I build a logistics network?
In the fast-moving logistics industry, relying on just a few partners can quickly become a business risk. Of course, it is particularly important in new partnerships to coordinate the mutual requirements and expectations and to determine whether or not there is real added value.
You can easily search for suitable transport partners on the TIMOCOM Marketplace, where you can use company profiles and ratings to get an idea of their reliability and flexibility. Invite trusted service providers to your own Closed Freight Exchange. Sign up for a free trial with TIMOCOM now.
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Paula Bongers
Content Marketing Manager
