Logistics services aid in improving management efficiency, lowering production costs, and increasing business competitiveness.
According to statistics from a number of logistics research organizations as well as the American Institute of Logistics, the cost of logistics activities accounts for approximately 10-13 percent of GDP in developed countries, and this figure is higher in developing countries. Growth is approximately 15-20% higher. According to one study, logistics activities in the Chinese market grow at a rate of 33% per year on average, while in Brazil it grows at a rate of 20% per year. This demonstrates that the cost of logistics is extremely high. As a result, the formation and development of logistics services are enormous.
As a result of the formation and development of logistics services, businesses, as well as the entire national economy, will be able to reduce costs in the logistics chain, making the production and business processes more streamlined and efficient. Reducing production costs, streamlining production and business processes, improving production and business efficiency, and contributing to increased market competitiveness of enterprises. In fact, logistics costs in European countries have fallen dramatically in recent years and are expected to fall even further in the coming years.
Logistics services have the effect of saving and lowering distribution and circulation costs.
The main market price of goods is equal to the price at the point of production plus the cost of circulation. The cost of goods circulation, primarily transportation fees, accounts for a significant portion of the cost of goods in the market and is a component of the price of goods in the market, particularly for goods in international trade. Transportation is a critical component of circulation. “Meaningful circulation is the actual journey of goods in space solved by transportation,” C. Marx once said.
Transport is in charge of bringing goods to the point of consumption and creating the ability to realize and use the value of goods.
Logistics services help to increase the business value of transportation and forwarding companies.
Logistics service is a broader and more complex type of service than pure transportation and forwarding activities. Previously, freight forwarders only offered simple, pure, and single services to customers.
Because of the advancements in production and distribution, the details of a product can now be supplied by many countries, and vice versa, an enterprise’s product can be consumed in many countries and markets. Customers require diverse and rich services from freight forwarders because they operate in various markets.
Today’s freight forwarders have deployed to provide services that are tailored to the specific needs of their customers. They transform into logistics service providers. Clearly, logistics services have contributed to the increased business value of transportation and forwarding companies. According to experience in developed countries, using package logistics services can reduce the time it takes from receiving orders to delivering products to customers by 5 to 5 years. Six months have been reduced to two months. This service business has a profit margin that is three to four times that of production and one to two times that of other foreign trade services.
The development of logistics contributes to the expansion of markets in international trade.
Because production serves the purpose of serving consumption, the market is always an important issue in production and business, and manufacturers and businesses are always concerned about it. Manufacturers and businesses that want to dominate and expand their product markets require the assistance of logistics services. Logistics services act as a link in the transportation of goods over new routes to new markets at the right time and place. The development of logistics services has a significant impact on businesses’ ability to exploit and expand their business markets.
The development of logistics services contributes to cost reduction, document completion, and standardization in international business.
Logistics has provided a wide range of package services that have significantly reduced the costs of papers and documents in international trade. Logistics service providers’ multimodal transport services have saved a lot of money on paperwork, upgrading and standardizing documents, and reducing office workload in goods circulation. As a result, international trade efficiency improves.
Furthermore, the development of electronic logistics (electronic logistics) will create a revolution in transport and logistics services, lowering the cost of papers and documents in the circulation of goods to the greatest extent possible. The increasing quality of logistics services will reduce spatial and temporal barriers to the flow of materials and goods. Countries will be more closely linked in terms of production and circulation.
