Trade & Industry Advisory

29 April 2020 • 9 min read

5 Key Factors for Choosing a Logistics Partner

Editorial Team

Key attributes to look for when choosing a logistics service provider . How you select and manage your logistics service providers will impact the outcome of your carefully crafted business strategies.

The success of your sales efforts, go-to-market strategies, and new product launches is, to a large extent, dependent on how well you’ve linked the different touch points of your supply chain – starting from procuring raw material to delivering the finished product to the right market at the right time.

Logistics is the backbone of business; local or global. No business can succeed without effective and efficient logistics partners. How you select and manage your logistics service providers will impact the outcome of your carefully crafted business strategies.

More often than not, most companies identify and select logistics partners based on the cost of service projected by the potential service providers. A select few give importance to efficiency and base their vendor selection on this parameter alone.

While both cost and efficiency are important attributes of a logistics partner, neither can be looked at in isolation nor is it enough to base your vendor selection on only these two attributes.

What should one look for in a logistics partner?

An ideal logistics partner is one who is invested in your organization’s success as much as you are. The right partner should, along with optimal pricing and efficient service, also possess the following attributes:

1. Technology: Supply chain is evolving. It is becoming digital, functionally inter-dependent, and highly complicated. One can no longer expect operational efficiencies by following age-old manual methods or by working in silos. Thus, when choosing a partner to lead your logistics function, it is imperative to bring on board a company that understands the importance of integrating different touch points in the supply chain and functions in a digital environment.

E.g. If you’re looking for a transport provider, then check whether they offer multi-modal transport solutions? How do they take bookings? Do they offer a digital platform to book cargo loads? In case of road transport, ask if their carriers are equipped with GPS? For all modes of transport, find out if the company provides real-time cargo tracking?

Similarly, if you’re looking for a warehouse partner, check if they have the latest equipment to handle inventory. Find out how they keep stock records. Ask if their system can be integrated with yours?

Another point that you must ascertain is the tech savviness of the team. Specially the team-on-the-ground. Is their team trained to work in a digital environment? Can they adapt to new systems and processes with ease?

If it is an end-to-end logistics management company that you want to partner with, then along with all the above aspects, you also need to understand how they integrate the various logistical functions within their organization and how their technology can be synchronised with your organization’s processes and systems.

2. Market Acumen: Right from the top management to the team that will handle the day-to-day activities for your organisation, should have an understanding of the industry and the market that you operate in. These insights will help them serve you better, which in turn will benefit your end customers.

3. Business Reach and Scale: Global is the new local. A logistics partner is a key contributor in ensuring that your products reach customers around the globe with minimum effort, on-time and in good (saleable) condition.

Scale of operations is another crucial aspect that you need to consider when partnering with a logistics service provider. Understand their business development plan. Will they be able to service your business growth? Can they manage sudden market-driven demand? If in the event they themselves do not possess the ability to cater to unplanned trade, do they have a network of trusted business partners who can provide the required support?

4. Business Ethics: Assume technology, systems, and processes are in place. The pricing is competitive and the team is stellar. Is this enough to appoint this organization as your business partner?

No. Given the important role that logistics plays in making your business successful, along with the operational efficiencies, you must also conduct due diligence on their work ethics and business practices. This goes beyond the regular credit and KYC checks.

Before signing on the dotted line, seek out the responses to the following questions - are their transactions and dealings transparent? Are they reliable? What is their reputation in the market? How do they treat their resources and manage their team? How do they manage their finances? Do they follow industry best practices? And, in case of transport providers – are they following the rules laid down for carriers and drivers?

It is necessary to carry out a hygiene check for business partners, because in the long run their reputation and standing in the market will affect yours too.

5. Responsiveness to Business Needs: Customer service is another key factor that needs to be assessed before partnering with a logistics service provider.

Before you finalise on a vendor, find out if their customer service team is willing to go the extra mile to find the most optimum solutions for your business? Is the team proactive? Can they take ownership of the business process outsourced to them? Can they foresee problems and work on finding the most optimum solutions for your business?

A dedicated customer service team is necessary for ensuring successful management and execution of logistics plans.

Keep these key attributes in mind when you are looking to appoint a logistics partner. It will help you weed out partners that may not be in a position to offer you the logistical support you need to grow your business.

Reliability, transparency, and a dedicated customer success team is the hallmark of Cogoport! Register Now to know more about how we can help you optimise your import and export logistics.

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