How to keep Supply Chains up and running during the COVID-19 Pandemic

One of the biggest economic concerns regarding the COVID-19 pandemic is the disruption to supply chains. Fears are that, despite the increased demand for essential goods, the reduction of labor and the restriction of non-essential services across all levels of global industry will bring the economy to a grinding halt.

While such government and business mandates are essential for stopping the spread of this highly contagious disease, there is the reality that if we must support food security, and health and safety or risk an additional unprecedented loss of life.

The online food retail industry provides a useful business model for understanding timely operational responses to the sudden shift in customer demand for essential goods. This is a sector that has had to pivot sharply for emergency response, ensuring people can safely purchase food and supplies with limited human contact or even contact-free delivery.

If you’re thinking of ways to position your business to both combat the current global health crisis and create needed new economic opportunities, consider e-commerce grocery delivery. Here’s how:

Develop an E-Commerce Platform

For web developers and grocery store owners, now’s the time to partner up! Web developers have the needed expertise to assist grocery stores transition from relying on brick-and-mortar operations, allowing them to adapt to current needs, and maintain their businesses in new circumstances – and beyond.

Quickly developing an online grocery shopping platform for grocery stores enables them to meet the rise in customer demands, deliver products and services, and prepare for a future where more and more business will be conducted virtually.

Expand to offer new services

With the recent rise in e-commerce in Saudi Arabia, there’s an equal need to boost delivery services. As the pandemic continues, online retailer BinDawood, with two grocery and household supplies e-commerce platforms, has not only kept all its 72 stores open but has also hired additional packers and drivers to meet delivery demands.

If you run a small delivery company, or a large supplier or distributor, or even a taxi service, now’s the time to get creative and expand and diversify your product and service offerings to include food transport solutions.

Become Tech-Enabled

Automation and digitization are in demand across industries, and especially in those businesses that support the delivery of goods and services. Not only does the digitization of business maintain and increase supply chain channels, but it also provides the needed means for taking hygiene precautions at all exchange points.

Investors, such as Saudi Technology Ventures and Middle East Venture Partners, are investing in tech-enabled businesses. Nana grocery shopping and delivery service app has just received funding to expand its e-commerce platform and reach everyone in need during the COVID-19 crisis.

Increase Marketing Focus

E-marketing is a great opportunity to spread positive messages during this tough time, while also boosting your business. Motivating customers during a time of crisis helps you stay ahead of your competition and boost your reputation as a company that looks after the wellbeing of its customers.

If you’re running an e-commerce platform for a grocery business, including sales, special offers, incentives, and discounts. Another great idea is to include an electronic tip option so that customers can safely reward delivery workers.

For innovative tips on expanding or moving into the supply chain industry in a global economy, contact SBT here.

Summary

With rising customer expectations and intense competition in the market, businesses around the world have turned to third-party logistics (3PL) providers to professionalize their supply chain management.

Business managers understand that 3PL and 4PL providers allow them to tap into more sophisticated supply chain resources, such as the latest operations technology to support increasingly complex logistics operations.

By eliminating the need to invest in transportation and warehouse rent, equipment and personnel, and in taking over the entire supply chain operations, from billing and auditing to staffing and training, a 3PL and 4PL provider cuts an entire department’s expenditures from the operational costs of a business. Additionally, due to their expertise, 3PL and 4PL providers also improve the efficiency of your supply chain, allowing your business to develop a robust logistical network with higher returns and lower risks.

When 3PL and 4PL vendors are not efficient, businesses end up hiring extra manpower to compensate for the shortfall, which ultimately increases labor costs. Apart from wasted monetary resources, a poor 3PL and 4PL vendor will also cost your business time and thus, potential money. On the other hand, if your 3PL and 4PL vendor was delivering an efficient end-to-end supply chain, your business would produce inventory in the required amounts and quickly ship to customers in the correct timeframe and quantities. 

With an increasingly digitized business environment, vendors are expected to be able to provide real-time status updates about shipments, order tracking and the availability of inventory at warehouses. Moreover, a major function outsourced to a 3PL and 4PL vendor is inventory control. Remember that when this is compromised, several business outcomes are adversely impacted. 

Index

1. Your logistics costs will be higher than the industry average for your business volume
2. Your business productivity suffers, which affects profitability
3. You don’t have access to the right information for effective decision-making
4. You lose control over your inventory
5. You suffer losses in the form of frequently damaged inventory
6. Your reputation for delivery timelines gets damaged
7. Employee turnover increases at warehouses
8. You will lack the necessary technological support

8 Ways a Poor Logistics Services Provider Impacts Your Business

With rising customer expectations and intense competition in the market, businesses around the world have turned to third-party logistics (3PL) and fourth-party logistics (4PL) providers to professionalize their supply chain management. The latest research by Gartner Inc. indicates that more than 80% of professionals plan to expand their logistics outsourcing budgets beyond warehousing and fulfillment in 2020. 

The rationale behind this trend is that specialists will simply do the job better, leading to improved order turnaround times, fewer losses, more transparency and increased overall efficiency. Moreover, business managers believe that 3PL providers allow them to tap into more sophisticated supply chain resources such as the latest operations technology to support increasingly complex logistics operations. 

In theory, this is all correct. However, a key aspect of ensuring improved operations is making the right choice of 3PL and 4PL provider for your business. While there are many benefits of outsourcing your company’s logistics, there are as many disadvantages to bringing on board an inadequate 3PL and 4PL provider.  

Below is a breakdown of the many ways a poor choice of logistics service provider can hamper your business growth:

1) Your logistics costs will be higher than the industry average for your business volume

On paper, a 3PL provider is meant to ultimately save your business money in the long term in the following ways:

• Costs elimination: By eliminating the need to invest in transportation and warehouse rent, equipment and personnel, and taking over the entire supply chain operations, from billing and auditing to staffing and training, a 3PL and 4PL provider cuts an entire department’s expenditures from the operational costs of your business. 
• Improved operations: Due to their expertise, 3PL and 4PL providers also improve the efficiency of your supply chain, allowing your business to develop a robust logistical network with higher returns and lower risks. 

However, all of this cost-cutting is contingent on the efficiency of the vendors themselves. If the quality of a vendor’s operations is below industry standard, or they simply do not possess the expertise necessary for your industry, then they will not be able to deliver on the capital-saving front. In fact, the opposite will be true. 

As a result of the vendor’s inability to adequately manage your supply chain, businesses can incur numerous kinds of additional costs:

• Increased raw material costs: When businesses do not have a clear picture of customer demands, they can underestimate the quantity of raw material needed during a particular buying season. As a result, raw materials may need to be ordered on an urgent basis, which raises costs. 
• Higher shipping costs: To compensate consumers for lost or delayed packages, and retain dissatisfied customers, businesses will have to undertake a higher volume of rush orders, which are costlier to ship. These costs take away from the profits of the generated business. 
• Increased labor costs: When a  vendor is not efficient, businesses often have to hire extra manpower to compensate for the shortfall. This higher than expected staffing cost impacts the business’s costs of goods sold and cuts into the expected profits. 

These serve as expensive endeavors for businesses, costing valuable time, significant human resources and redirected capital. Ultimately, finding a replacement 3PL and 4PL vendor will be an additional big expense. 

In contrast, your market competitors who have found better-suited partners are likely to be reaping the benefits of cost savings and be leveraging the freed-up time and capital for business growth. 

2) Your business productivity suffers, which affects profitability

Apart from wasted monetary resources, a poor 3PL and 4PL vendor will also cost your business time — and thus, potential money your business could have earned.  Instead of enjoying the liberty of a hands-off approach, your company’s management will have to intervene in the supply chain management to compensate for shortfalls in the system. 

This affects your business productivity in multiple ways:

• Inefficiency: This is an incredibly haphazard way of managing the business and renders the purpose of outsourcing the supply chain management ineffective. 
• Disruptions: It prevents managers from focusing on the business outcomes that are assigned to them in their roles. 
• Future growth issues: It compromises focus on long-term planning. If they are constantly putting out fires, then managers cannot focus on strategic thinking. 

Moreover, manufacturing and warehouse personnel’s performance is also negatively affected:

• Delays: They are unable to deliver work on time, given the prolonged wait for raw materials to reach their worksites, and delayed instructions about order shipping requirements. 
• Reduced revenues: As a business’s overall productivity decreases, its cost of goods sold rises. This impacts their profits and their ability to increase prices in the future. When a business is struggling to maintain consistency in its supply and delivery, even a nominal increase in product pricing can turn away customers permanently. 

The investment that is put into outsourcing logistics is, therefore, more or less wasted, and the business’s bottom line is also compromised.  

Management will notice the ill effects of a poor 3PL and 4PL partnership particularly in peak sales seasons, such as the major holidays. If a vendor is struggling with your business logistics in regular months, they will be doubly struggling in Ramadan. And it will be hard to ignore the opportunity cost when a prolonged period of poor service translates into lost sales, disenchanted customers, and a tarnished reputation. 

On the other hand, if your vendor was delivering an efficient end-to-end supply chain, your business would produce inventory in the required amounts, and quickly ship to customers in the correct timeframe and quantities. 

3) You don’t have access to the right information for effective decision-making

A litmus test for a good 3PL and 4PL partnership is the level of transparency offered by the supplier. With an increasingly digitized business environment, suppliers are expected to be able to provide real-time status updates about shipments, order tracking and the availability of inventory at warehouses. In doing so, they help their clients’ operations and shipments flow smoothly and seamlessly. 


Therefore, businesses know they’ve entered into a bad deal when their partner is unable to provide requested information promptly and accurately. When a company is unable to readily communicate with customers about their orders, this can result in a negative chain reaction that culminates in lost sales and customers — an outcome most businesses cannot, and will not tolerate for long. 

Moreover, without the necessary data, you can’t make many other fundamental decisions as well, such as whether there is a need to hire more employees or order more raw materials.

When companies are not able to receive timely updates about purchasing and sales history, marketing projections, stock availability, quotations, and product development requirements, their managers’ ability to make agile decisions is curtailed. 

This ultimately causes the business’s potential for growth to be compromised. It also hampers the impression of the business in front of external stakeholders who scrutinize these aspects of the business performance. 

4) You lose control over your inventory

A major function outsourced to a 3PL and 4PL vendor is inventory control. When this is compromised, several business outcomes are negatively impacted:

• Inefficient stocking: With a lack of clarity about inventory, there is a danger of overstocking it. Unsold inventory is a waste of raw materials and occupies expensive warehouse space. 
• Order delivery issues: If a 3PL vendor fails to deliver on the inventory control and reporting front, your company will experience issues in receiving and picking orders. Plus, a warehouse that is full of unsold goods is likely to fall into a disorganized mess, leading to difficulties in shipping orders in a timely manner. This ultimately leads to unhappy customers and lost business. 
• Stock level discrepancies: The lack of transparency will also make it impossible to determine when supply levels at warehouses need replenishing and lost products will be difficult to track. Low inventory can also impact a company’s ability to deliver their products on time and on target, negatively impacting their reputation and, again, potentially resulting in lost business.

As such issues mar the efficiency of the inventory control, costs will rise and customer service suffers. To retain unhappy customers, the business may need to implement measures like expedited shipping, which will increase your transportation budget unnecessarily. 

5) You suffer losses in the form of frequently damaged inventory

A telltale sign of an inadequate 3PL and 4PL vendor is the inability to manage a warehouse effectively. There are inventory horror stories circulating throughout the kingdom, indicating that not all 3PL and 4PL companies are quality conscious, which ultimately results in damaged and wasted stock. 

There are some key areas of warehouse management where poor 3PL and 4PL vendors are lacking:

• Process improvements: A good partner would be vigilant about identifying process improvements at your company’s warehouse, like minimizing direct handling of goods and manual tracking, ensuring proper labeling, and timely storage of incoming and outgoing goods. All of these processes contribute to the safety of the stock in the warehouse. A poor vendor is fairly lax about these practices, which translates into losses at the warehouse. 
• Material handling equipment: A good vendor would also see the value of investing in material handling equipment where it is necessary. Equipment like pallet jacks, pallet inverters, hoists, and conveyor belts require heavy initial investment as well as costs associated with maintenance and future modifications.
• Shelving and racking: A good 3PL and 4PL vendor would scrutinize the racking system at warehouses, ensuring that their design suits the type of stock, and that protection is added where necessary, as well as monitor other warehouse design factors, such as overhead lighting. While the costs of such upgrades would deter a poor vendor, a high-quality service provider would see a long-term return on investment. 
• Packing protocols: A good vendor will make sure that proper packing protocols are implemented at the warehouse. When freight is improperly packaged, there is a higher risk of damage during shipment. It is also becoming increasingly difficult to claim damages as carriers do not accept liability for improper packaging.
• Staff management: A good vendor will ensure that warehouse personnel is regularly trained and is held to a reasonable work schedule that is not likely to bring about exhaustion or burnout. Failure to do this would result in workplace accidents, which can also damage stock.   

6) Your reputation for delivery timelines gets damaged

One of the costliest outcomes of a poor 3PL and 4PL partnership is damage to your company’s reputation. All it takes is a couple of botched deliveries for customers to lose trust in your company. Winning customers back not only takes up managers’ time and energy but also requires a budget allotment, especially if you’re continuing to work with the same vendor. 

In this scenario, as you cannot rely on your inventory reporting, your company will need to arrange for additional safety stock to mitigate the risk of any further issues in-order delivery. Some estimates say that companies have to add up to 50 percent more for backup, which requires increased storage space and raises inventory costs.

7) Employee turnover increases at warehouses

Some businesses may feel forced into needing to hire an inventory planner to supplement the 3PL and 4PL company’s operations with an internal employee to bring efficiency into the vendor’s management. However, this shouldn’t be the case with a competent vendor, unless agreed upon at the outset.

This haphazard management also threatens employee satisfaction at the warehouse, as the staff is more likely to quit due to a lack of clear direction and a frustrating work environment. 

8) You will lack the necessary technological support

It is necessary to determine the long-term vision of a 3PL and 4PL vendor before engaging them. A vendor that regularly invests in research and development and keeps its operations at par with technological advancements will be able to support your company’s future growth as well. 

These include transparency-enhancing software that provides real-time data and tracking facilities that help optimize costs and automated systems that reduce human error. These companies recognize that adopting the latest software and technology into the supply chain offers significant advantages to them and their clients. 

An inadequate 3PL company will not have its eye on the bigger picture and keep your company’s growth mired in the status quo. In contrast, your rival businesses may be exploiting the advantages that come with a logistics partner that is committed to optimizing the supply chain at every point in time. 

Knowing what can go wrong using a poor 3PL and 4PL vendor can be the difference between a successful and unsuccessful logistics operation. Those looking to connect with a leading 3PL and 4PL provider, in order to set up a sophisticated supply chain, using the latest operations technology, should get in touch with SBT to see how we can add value to your operations. Click here to arrange a consultation. 

State-owned Saudi Railway Company (SAR) plans projects to enhance transport and logistic services in KSA

In line with Vision 2030, Saudi Arabia continues developing its logistics industry with the aim of achieving economic growth by both strengthening its own domestic supply chain capabilities and transforming into a major international logistic hub that leads the region in the sector.

SAR has planned significant rail projects that will enhance Saudi Arabia’s logistics reputation whilst substantially expanding capabilities across the country, starting with:

1.    A 40-kilometer-long line connecting the North-South Railway and the Riyadh-Dammam Network.

This new project will link the existing North-South Railway, which runs from the Northern Province, passing through Al-Jawf and Hail, and reaches Al Baithah Junction in Qassim Province, and the Riyadh-Dammam network, which is a 449-km passenger line, with four stations, connecting the Eastern Province’s capital city with the Saudi capital.

The track is estimated to cost SR 600 million (USD 160 million) and will carry both passengers and heavy freight. This double-tracked, non-electrified line will run along the eastern perimeter of Riyadh, between the Riyadh terminus of the North-South Railway and the capital’s main passenger station on the Riyadh-Dammam line.

The new line is expected to have:

• A total axle load of 32.4 tons
• Passenger train speeds of up to 200 km/h
• General freight speeds of up to 120 km/h
• Heavy freight speeds of up 80 km/h

It’s estimated it will take between three and four years for the project to be completed and will have a substantial impact on local and international logistics.

2.    A 200-kilometer long line linking Yanbu and King Abdullah Port at King Abdullah Economic City.

The well-publicized megacity will contain six strategic areas including an industrial zone, a seaport, residential areas, a sea resort, an educational zone, and a central business district. Similar to the other line, it too will be non-electrified with an axle load of 32.4 tons.

It is estimated that the line will carry up to 100,000 passengers a year. The costs of this particular construction are understood to be in the range of SR 2 billion up to SR 6 billion, with an estimated timeline of four and five years for completion.

Saudi Arabia continues to be on track to create a diverse rail infrastructure, which is not only part of a national push, but a GCC-wide ramp-up of improvement, accessibility, and efficiency of transportation networks.

For more information on how a third-party logistics provider can help facilitate your business’s supply chain management through Saudi Arabia, get in touch with SBT by clicking here.

Summary

In today’s increasingly digitized world, expectations from businesses are at an all-time high. Customers want same-day shipping, return policies that prioritize their needs, and high quality of personalized service. Failure to deliver on any of these points, and will take their business to a rival company that provides them with the facilities they want. Supply chains around the world are transitioning to faster and more innovative models by the day, and every company is judged by rapidly rising standards.

In this fast-changing and intensely competitive market, the challenge businesses face is that of becoming (and remaining) agile. Customer-demand levels tend to fluctuate, while supply issues also occur. Businesses need to handle both factors without negatively impacting overall service. Supply chains around the world are transitioning to ensure they can fulfill your business’s needs. 

This is where third-party logistics come in to help support businesses with the smooth movement of goods and services. Given a 3PL and 4PL’s industry-specific expertise, these vendors are able to offer seamless supply chain services regardless of market conditions, while giving access to facilities, infrastructure, and know-how that may otherwise remain unavailable for businesses. 

If your company also decides to embrace the rising trend of outsourced supply chain management, there are a number of factors to consider before partnering with a 3PL or a 4PL provider. As each business is unique, a qualified vendor should be ready to tailor their supply chain solutions to your exact business needs and objectives.

Index

1. Does the Provider Have the Capabilities You Need to Meet Your Objectives?
2. Is Their Network Large Enough to Efficiently and Effectively Satisfy Your Logistics Requirements?
3. What Kind of Customer Support Does The Provider Offer?
4. Does the Provider Have Experience Working With Your Industry?
5. Is the Provider Financially Sound?
6. Does the Provider Have a Reputation For Flexibility and Agility?
7. Have the Provider’s Services Been Certified?
8. Is the Provider Technologically Advanced Enough to Offer Total Transparency?
9. What is the Provider’s Ideal Client?

9 Questions You Need to Ask About Your Supply Chain and Logistics Services Provider

A New Supply Chain Trend: Outsourcing

In order to maintain customer satisfaction, outsourcing has advanced as a solution for optimizing the efficiency of many businesses’ supply chains. 

Saving time and money 

Companies are coming to the realization that inhouse management of the supply chain can be both inefficient and costly, given the fact that business managers are responsible for multiple outcomes and their generalist approach may not be best suited for this aspect of operations. 

In contrast, an external supply chain and logistics management vendor offers specialized services that can quickly adapt to industry developments. 

They are able to efficiently see a company’s products through development to consumer phases, which can include such distribution activities as: 

• Domestic transportation
• Warehousing 
• Freight forwarding 

Industry expertise

Given their industry-specific expertise, these vendors are able to offer seamless supply chain services, regardless of market conditions. At the same time, outsourcing services give access to facilities, infrastructure, and know-how that may otherwise remain unavailable for businesses. 

Thus, companies stand to benefit from increased efficiency and lower costs, which in turn gives businesses increased economies of scale, which can be transformed into a competitive edge over their market rivals. 

Choosing Your Service Provider

Outsourcing supply chain management has emerged as a major trend in 2020. The latest research by Gartner Inc. indicated that a large majority of supply chain managers (85%) had forecast an increase in outsourcing in 2020. A significant amount of that budget will be allocated for hiring a third-party logistics provider (3PL) or a fourth-party logistics provider (4PL). 

When you make the right choice of a supply chain management partner, it translates into a smooth and fruitful long-term solution for your company’s logistics. Businesses should consider it a direct investment in their future success. 

If your company also decides to embrace the rising outsourced supply chain management trend, there are a number of factors to consider before partnering with a 3PL or a 4PL provider. 

An external vendor should not be merely considered as a quick fix for ongoing supply chain issues. In order for businesses to reap the maximum benefits of engaging an external vendor, it is important that the hired supply chain management partner is a good fit for a company. 

Scrutinizing their offering

Unfortunately, there is no secret formula to supply chain success. However, by scrutinizing the right aspects of potential vendors’ operations, you can mitigate risk and set the stage for a potentially mutually beneficial partnership. 

Below is a breakdown of the questions your company should ask before hiring a supply chain and logistics services provider.

1) Does the Provider Have the Capabilities You Need to Meet Your Objectives?

Where are the gaps? 

By partnering with the right vendor, your company will obtain access to highly specialized knowledge and expertise, which will go a long way in streamlining your supply chain. But before beginning the search for a 3PL or a 4PL provider, companies need to determine their exact requirements for an effective supply chain. 

It is recommended that you establish a cross-functional team, drawn from the following departments: 

• IT
• Distribution 
• Logistics
• Customer service 

The executive management should also collectively share their opinions on the gaps in your company’s supply chain. After arriving at a more comprehensive understanding of your current challenges, you can match them to your business goals to get a fuller picture of what you expect from your partnership with a 3PL or a 4PL provider. 

After doing that, you can begin your hunt. With a sophisticated understanding of your requirements, you can now determine whether a prospective vendor has the capacity to meet your exact needs and if they are a good fit for your company. 

2) Is Their Network Large Enough to Efficiently and Effectively Satisfy Your Logistics Requirements?

When considering partnering with a third-party supply chain vendor, two of the obvious factors to keep in mind are its location and contacts. In order for the partnership to work, the vendor must operate in the regions where you have demand and a wide range of contacts to call on for your business. 

Room for growth

A worthwhile logistics company’s network of contacts should be geographically diverse enough for your business’s future growth. Because you should think long-term when partnering with a logistics vendor, it’s advisable to consider the regions where your business may expand. Determine whether you’ll require logistical support and then analyze if a prospective supply chain partner will be able to deliver in those areas. 

If not, then that company is not a good fit, as you will need to engage an additional second vendor for other geographic locations. Doing so will generate unnecessary paperwork and coordination that can be easily avoided. 

International logistics

In the case of international logistics, your vendor should be able to exhibit a cultural understanding of how business is done in those target locations. Work ethic, business rules, and legal requirements vary across countries and even different cities within the same country. Familiarity with these cultural nuances is an essential aspect of your ideal logistics partner’s knowledge base. 

Remember if your logistics partners run afoul of international legal requirements, your company may be held accountable as well! 

3) What Kind of Customer Support Does The Provider Offer?

In the fast-paced world of business, a company wants its problems addressed and questions answered on a priority basis. When a vendor is not able to deliver on that front, it can make for a very frustrating partnership and be the cause for broken agreements.  

When researching options, it’s, therefore, worth the effort to inquire about the customer support offered by a vendor. 

If they have outsourced it, you are likely to be stuck having long phone conversations with a person who may not even be familiar with your business environment and market conditions. Add to that the nuisance of different business hours and the potential language barrier, and you’ll quickly see that this vendor is not a good fit for your company.

In contrast, a vendor that mobilizes a support team on your first call and promises rapid resolutions of any supply chain issues is a worthwhile partner for your business. 

This vendor should also appear ready to consider your feedback when fine-tuning their service offerings in the future. It shows that they are motivated to win your business and will strive hard to retain your company as its customer. 

4) Does the Provider Have Experience Working With Your Industry?

When reviewing the portfolio of prospective logistical partners, consider what kind of industry experience is demonstrated by their customer profiles. 

Of course, the basic requirements are:

• Sufficient company size to meet your demands
• Previously served other companies in your industry 
• Knowledge and capacity to deal with industry-specific demands 

A good choice of logistics partner will have previously catered to businesses with your order volume and larger, to accommodate for your business’s future growth. A portfolio consisting of several large clients shows that the vendor has the capacity to run the business. 

5) Is the Provider Financially Sound?

It is not uncommon for business partnerships to begin in good faith and, later, suffer due to poor revenue models. Before taking on a 3PL or 4PL partner, examine their financial background thoroughly. 

Consider the kind of information that will give you a good sense of their financial acumen and ask for it early during negotiations.  A basic set of financial documents can include cash-on-hand, outstanding debts, disaster recovery plans, sourcing areas, costs, and customer concentrations.

If a company is not forthcoming with its financial information, that is a major red flag. 

6) Does the Provider Have a Reputation For Flexibility and Agility?

Supply chain and logistics vendors tend to market themselves based on industry expertise; however, it’s important to remember that there are key differences in operations even while there are similarities in pricing and distribution strategies within an industry. Each business is unique, and a qualified vendor will be ready to tailor their supply chain solutions to your exact business needs and objectives. 

Moreover, the right vendor will also mold their offerings to suit the ongoing business processes at your company. 

An overhaul of the complex operational systems in a business to accommodate the entry of a new logistics vendor would be an impractical and costly mistake. A vendor who is motivated to earn your business will deliver the necessary functionality and require minimal changes later on. 

For this to happen, the vendor must operate using the same or greater level of technical expertise as your company. 

Finally, with an increased emphasis on agile development in business these days, the vendor should also have an informed game plan for how they intend to achieve more with less and how to share those savings.  

7) Have the Provider’s Services Been Certified?

Another important factor is the quality of the services rendered by external supply chain vendors. In order to determine whether their practices conform to industry standards, ask to see their ISO (or similar) certifications. This allows you to independently verify their quality of work without relying too heavily on customer testimonials or their own presentations. 

ISO 9001 is one of the relevant quality management systems certifications, which attests to the provider’s compliance with regulations related to your business, as well as requirements related to quality planning, order review, and resource management. 

While certifications only serve as a mark of baseline competence, they are a guarantee that the vendor’s business is standing on strong foundational practices.  

8) Is the Provider Technologically Advanced Enough to Offer Total Transparency?

Modern-day logistics has gone digital and that means your company’s supply chain data can (and should be) at your fingertips. This kind of transparency is non-negotiable in this day and age. 

When hiring a 3PL or 4PL provider for your company, it’s a good idea to determine whether they will be able to give your company real-time information. A good service would provide a fully synchronized solution that gives its clients immediate and accurate updates about the location of goods at all times. 

Moreover, they would offer buyers access to:

• Purchasing history
• Sales demands
• Marketing budgets
• Inventory availability
• Quotations and product development requirements 

Each of these empowers customers to make quick and cost-effective buying decisions, while forecasting and budgeting those accurately.  

9) What is the Provider’s Ideal Client?

Finally, consider the vendor’s own company size. A vendor may be ticking quite a few of your own boxes but remember that they’re running a business too, and may screen clients based on whether they fit their own criteria. 

Is your operation big enough? 

Large logistics companies expect to work with high-volume manufacturers who do business on a global scale. 

They may take on smaller clients, but may not offer the same quality of service, so you may find higher satisfaction with a smaller vendor that is motivated to do a good job for your company. Still, you’d have to make sure their portfolio demonstrates enough experience to handle your business. 

By completing a thorough screening process when searching for your 3PL and 4PL provider, ensure your company goes into business with a logistics partner that takes your company’s productivity, profits, and reputation to the next level. To see if SBT is the right fit for your business, get in touch with us here to arrange a consultation. 

Summary

With a new plan to recreate its identity and economic profitability over the next decade under Vision 2030, the Kingdom of Saudi Arabia is charting a new phase in its development.

The Vision 2030 goals focus on diversifying the Saudi economy away from oil to develop other sectors like tourism, hospitality, health care, agriculture, education, retail and wholesale trade. For the fulfillment of this goal, the country is undertaking large-scale construction projects at the Red Sea, Neom, Qiddiya, and AlUla, along with others across the country.

These projects require extensive support to streamline the movement of construction goods and services. Set for completion over the next decade, these projects are also creating opportunities for other expanding businesses that relate to and support these industries.

The government is heavily investing in strategic infrastructure to further strengthen its advantageous geographical position on trade routes across Africa, Asia, and Europe. To make the most of this environment fostering growth in the country, the importance of using the correct logistics and transportation methodologies becomes vital for businesses that are looking to scale and grow.

Index

1. Saudi Arabia – Regional Logistics Hub
2. Opportunities for Businesses to Grow under Sectors of the Economy
3. KSA Logistics and Transportation Framework
4. A growing need for Niche Logistics
5. 3PL Logistics and Transport Networks

Saudi Arabia is positioned at the crossroads of international trade routes, between the continents of Asia, Europe, and Africa. Saudi Vision 2030 aims to maximize the benefits of the country’s exceptional and strategic geographical position by building a unique transport and logistics hub in the region.  

As a roadmap for that ideal, the kingdom has phased in multiple ambitious projects driven by public-private-led partnerships for completion between now and 2030. These projects are also driving nation-wide social and economic developments that are aimed at carrying the country through the next decade, helping it to modernize, diversify and globalize its economy.

Saudi Arabia – Regional Logistics Hub

Saudi Arabia occupies a unique geographical position when it comes to logistics and trade. This strategic position gives it an advantage when distributing goods from Asia, Africa, and Europe throughout the region. The Saudi Arabia logistics market:

• accounts for 55% of the total GCC logistics market
• is ranked third-most attractive with emerging markets

Holding the largest regional share in the logistics market, the country’s role as a freight-forwarding leader is expected to increase in the future, giving businesses within the kingdom and the broader region more opportunities to diversify and expand.

Equally, with the largest maritime network in the Middle East, one of the most extensive road networks in the world, and a new state-of-the-art industrial city hub system, the country is poised to facilitate multiple industries across the whole region.

Throughout the region, there is a boom in the movement of goods. People and services are coming in from outside Saudi Arabia to work on projects within the country. To facilitate this, the expanding logistics and transportation network within the country is being rapidly developed.

Opportunities for Businesses to Grow under Sectors of the Economy

Some of the projects under Vision 2030 that are heavily dependent on the country’s expanding logistics and transportation network include:

Construction

Of all the areas of business making up the country’s economy, the one with the largest growth under the Vision 2030 plan is construction. These businesses, which are involved in the development of some 5,000 projects estimated at a value of USD 1 trillion, are using the logistics and transportation network within the country to manage efficient warehousing and supply chains in order to keep timelines on track.

Megaprojects like Neom supercity, Qiddiya, UNESCO World Heritage site of AlUla, Red Sea Project, Amaala, Makkah Grand Mosque expansion, Jeddah Tower, Widyan, and Jabal Omar, among others are driving new innovations in the logistics and transportation industry to ensure the efficient and timely movement of goods.

Large infrastructure projects like:

• King Salman International Complex
• King Abdulaziz International Airport
• Haramain High-Speed Railway
• King Abdullah Port
• Riyadh Metro

are also being expanded to serve as important economic multipliers for the region. 

To support the construction of these megaprojects, there is an increased demand for qualified logistics and warehousing solutions. This means that there are additional, supporting opportunities for people streamlining processes within telecommunications and IT to further strengthen supply chains.

Tourism, Hospitality, and Leisure

For businesses that are looking to expand to meet opportunities offered by Vision 2030, another industry that is booming is tourism and hospitality.

There are many business options being created for secure communication and coordination between tourist destinations – how to get goods and people there, and what entertainment, leisure, and retail options to offer. This is a niche area where established 3PLs and 4PLs are coming in to fill the gap.

With established routes, digital tech, and security networks already in place, they are facilitating access for new businesses in these areas. The increased coordination between projects relating to tourism and hospitality is also highlighting the importance of efficient network management and collaborated command centers.

• Coordination between projects: Projects like those at the Red Sea, with 14 luxury hotels across five islands, two inland resorts, a yacht marina, and leisure and lifestyle facilities, require an increased need for logistics and utility infrastructure.
  This is one project under development in a country with many others. The same requirements for logistics support and communication hold for the other mega projects currently underway in the country.
• Religious tourism: Under Vision 2030, there are plans to increase the number of Muslims making the pilgrimage to Mecca to 30 million a year. This means that multiple small-to-medium businesses will need to facilitate the accommodations, security, and safe movement of such large numbers of people between cities.
• Healthier lifestyles: With Vision 2030 directing people within the country to more sustainable, healthier lifestyle options, there will be an increase in demand for sports facilities, goods, state-of-the-art equipment, healthy food options, athleisure retail, and leisure venues. All these niche products have specific supply chains and management methodologies.
• Cinemas and galleries: With more museums, art galleries, and libraries slated to open in line with the Vision 2030 goals, the country will have to communicate more clearly with regional and international partners. 

In this regard, one of the biggest sectors to benefit from this growth in the kingdom is cinema. The industry is starting in the country from scratch and will offer multiple avenues – from national distribution of films, to related merchandising, etc., for development. This will offer unique opportunities for theatre owners and technology suppliers.

Hospitals and Healthcare

The healthcare industry is also seeing a boom with the construction and completion of 35 new hospitals in the country, which will eventually serve at a capacity of 8,850 beds.

• There are seven private hospitals planned in Riyadh.
• King Fahd Medical City requires the expansion of a 1,395-bed medical campus by 231 units, as well as the development of cancer centers, a neuroscience institute, a cardiovascular hub, a six-floor laboratory and office building, and a central energy plant.
• King Abdullah Bin Abdulaziz Medical Complexes include building and stocking a medical city each in Riyadh and Jeddah.
• The Riyadh Security Forces Medical City includes three hospital buildings, an academic and clinical center, research areas, plus specialist hospitals for mental health, and a gynecology and obstetrics hospital.
• Construction work is also underway at the Jeddah Security Forces Medical City, which will feature 1,864 beds, and includes similar health facilities as its Riyadh counterpart.

These hospitals will need highly specialized, expensive equipment, as well as continued supplies to keep them running efficiently. Local, regional, and international producers and equipment suppliers will find multiple opportunities to grow in this sector.

Education

Education is also a key area that the country is aiming to develop under Vision 2030. To keep pace with this ambitious growth, the government has earmarked a huge budget for education, offering private-sector involvement with a target of increasing the percentage of students in non-government higher education from 6% up to 15% through foreign direct investments.

Saudi Arabia aims to have at least five Saudi universities among the top 200 universities in international rankings by 2030. This means that there will need to be an investment in:

• Qualified academics and educationalists
• Curriculum advisors and implementors
• Teachers
• Learning support
• Educational equipment
• Digital technology

Supplying area specialists, along with the correct equipment, will require the deployment of specific methodologies and supply chains.

Opportunities for SMEs to support public-private partnerships

This 2030-related spur in economic activity is driving huge opportunities for SMEs. The government is providing administrative, technical, financial, marketing, and human resource support across many sectors.

However, for SMEs to take advantage of this business-friendly environment, they need to:

• Understand import-export rules, duties, and regulations
• Navigate logistics ports across the country
• Familiarize themselves with laws regulating movement
• Quickly remove logistical obstacles
• Streamline supply chains, warehousing, and inventories
• Facilitate quick resolutions of finances

KSA Logistics and Transportation Framework

To lead the country into the future under Vision 2030, the government is already heavily investing in the construction of transportation and infrastructure. These include ports, railways, roads, and airports, which are facilitating the movement of goods not just across the world, but also within the country.

The current KSA logistics and transportation infrastructure includes:

• 6 container ports
• 27 airports (5 new airports, plus extensions to Jeddah, Riyadh, and 17 others)
• Capacity to move 99 million air passengers (2019)
• Capacity to move 1.2 million tons air cargo (2015)
• 1,500 km of new railways
• Capacity to move 240 million tons of cargo by seaports (2017)

The logistics market out of Saudi Arabia was estimated at USD 25 billion at the end of 2019. Saudi Vision 2030 looks towards increased private-sector participation, creating multiple opportunities for businesses over the next decade.

This is driving a productivity-led economic transformation that seeks to double the kingdom’s GDP and create as many as 6 million new jobs by 2030.

• As of January 2019, the government announced that it was raising USD 36 billion for logistics infrastructure to develop Saudi Arabia into a gateway for African, Asian, and European trade supply chains. For businesses looking at new markets on these continents, there are huge opportunities for growth.
• The government is also keen to encourage private entities to collaborate as they develop the country’s transport infrastructure. A partnership is being sought for the operation of seaports, airports, and their related supply chains. Public-private partnerships are being pursued to fund several key schemes, while a number of the country’s publicly operated transportation facilities are being prepared for full privatization.
• Technology is improving the security, transparency, and control over the import-export processes in the country. Logistics companies operating at ports are tracking the progress of shipments in real-time, making the process even faster and more efficient.

The growing need for Niche Logistics

Freight forwarding 

As of this year, the market for freight forwarding in the country is estimated at USD 19 billion. As Saudi Arabia continues to open under Vision 2030, the expanding expatriate population, fluctuating fuel prices, rising industrialization, and the advancement of the e-commerce industry are relying more heavily on the freight forwarding arm of the logistics sector. Freight forwarding by sea is the most popular means of transport, accounting for USD 7 billion.

Cold Chain

The requirement for cold chain management within the country has significantly increased. This is because businesses are using cold chain logistics to meet the shift in lifestyle and dietary requirements in a more urbanized, aware, and opinionated population.

This increase in demand is also driven by a surge in the health sector, due to more active participation by the pharmaceutical industry, as well as the agriculture sector, where there is more demand for fresh/processed fruits, vegetables, meat, and dairy.

Warehousing 

As with freight forwarding and cold chain management, growing businesses are causing a surge in warehousing. This is because of more manufacturing activity, burgeoning international trade, rising domestic consumption, and the easing of government regulations.

3PL Logistics and Transport Networks

As trade relations between Saudi Arabia and other countries are improving, there is a rising demand for 3PL logistics. New businesses are showing interest in KSA export and import values on account of the need for better supply-chain management services. Rather than expanding individual business abilities, entrepreneurs are turning towards 3PLs and 4PLs for better access and ease of movement.

Geographical advantages

As mentioned, the country’s strategic location puts it at proximity from a vast array of global consumers:

• European markets are under 7-hours’ flight time
• Asian markets are a 4-hour plane journey
• Half the world’s population lives within a 5-hour flight from Saudi Arabia

This connects businesses within the country to regional markets consisting of more than 3.5 billion potential customers over three continents.

KSA’s central location also provides it with a cost advantage in the Arabian Peninsula, North Africa, and East Africa. Cost distribution advantages of more than 10% exist for Greater Arab Free Trade countries (GAFTA) and to nations within the Arabian Peninsula, enabling favorable conditions for the movement of goods between the regions.

Robust transport infrastructure

Saudi Arabia has a wide transport network with niche strength in maritime transport, air transport, and road transportation. This means that the existing infrastructure is more than capable of supporting businesses that are looking to scale and grow.

• Maritime transport:  Saudi Arabia’s maritime has a handling capacity of approximately 8 million twenty-foot equivalent containers per year and can receive 11,000 ships annually. The network consists of 10 primary harbors for non-oil trade, 200 piers, 216 berths, and 6 leading container ports located along a critical intersection of the East-West shipping routes.
  More than 270 million tons of cargo move through the Saudi maritime network on a yearly basis. The country’s ports dominate the regional transit market, handling more than 90% of Red Sea trade transits and 30% of the East African trade transits. These routes offer Saudi businesses a chance to access more markets and grow in profitability.
• Air transport: Saudi Arabia’s aviation infrastructure is comprised of 6 international, 9 regional, and 12 domestic airports. Three of its airports are amongst the busiest in the GCC, transporting the bulk of the 99 million passengers who pass through the kingdom on a yearly basis. KSA also connects to 81 airports in 45 countries, allowing for more than 1.2 million tons of cargo to be shuttled around the globe.
• Road transport: The kingdom has one of the largest road networks in the world covering more than 200,000 km of roads, including 66,000 km of roadways connecting major cities and providing access to railways, ports, and airports. This vast and growing ground network benefits from 5,000 km of highways and 6,000 km of bridges, providing extensive means to transport passengers and goods in and around the kingdom.

Saudi Arabia has an established and well-equipped logistics infrastructure that is in the process of further modernization and adaptation to meet the requirements of a rapidly expanding market.

Logistics companies are benefitting businesses by using this infrastructure to:

• Expedite trade
• Improve transportation
• Curtail waiting times

Economic growth, population maturation, and rapid urbanization are catalyzing the massive expansion of transportation networks. The government is working to meet this through the introduction of urban transport systems, such as metros and buses, and inter-urban networks, including freight and high-speed railways, to further help businesses capitalize on untapped potential.

The Saudi Vision 2030 offers multiple opportunities for public-private partnerships to increase productivity, enhance long-term growth and generate higher revenues. The opportunities for businesses, however, will depend on the willingness, ability, and speed with which the private sector can pivot and mobilize themselves to take advantage of new, high-growth sectors of the economy.

For more information on how SBT can help your business grow through efficient logistics support and supply-chain methodologies, get in touch with us here.

With 27 airports – five of which are international, 10 regional, and 13 domestic – the Kingdom of Saudi Arabia is connected to more than 81 airports in 45 countries.

In today’s piece, we look specifically at the KFIA, built-in 1990, and serving as the third major aviation and cargo hub in the Kingdom.

Expanding Capacity and Going Green

KFIA, based in Dammam, is the largest city in the Eastern Province, and the fifth largest in Saudi Arabia, after Riyadh, Jeddah, Mecca, and Medina. The city is growing at an exceptionally high rate of 12% per year. Neighboring Al Khobar, which is home to Aramco and many Western companies, also use the KFIA for the movement of goods and air cargo.

The airport, the largest in the world according to the Guinness Book of World Records, serves 43 destinations, with 10+ million passengers passing through per year. It’s expected to expand its capacity to 21 million passengers in the near future.

And taking passengers to and from the airport will be the new hybrid Hyundai Sonata, with Hyundai supplying 1000 units of its new model, which is being hailed as a more modern and eco-friendly approach. This new fleet of green taxis will operate at airports around KSA.

Air Cargo Through KFIA

Recently, Saudi Arabia ranked #62 on the World Bank’s Ease of Doing Business report, jumping significantly due to improvements in the time and cost involved in exporting and importing goods. Currently, the infrastructure allows for more than 1.2 million tons of cargo to be moved around the world. The country’s objective is to increase total air cargo capacity in the Kingdom from an approximated million tons a year to 6 million tons per year in 2030.

KFIA will play an important role in helping the country achieve this goal. The cargo village is over 5,400,000 sq. ft. and offers ease of shipping and cargo services. Working as a hub for global companies, it directly serving the Eastern Province and the rest of the Kingdom.  Setting up the cargo village also gives businesses direct access to Saudi Arabia, and eliminates the need to ship through neighboring countries.

Air Cargo Highlights

• With a fully-automated system constructed over 425,000 sq. ft. and equipped with multi-level racks and a container stacking system, the cargo facilities at KFIA can function at a capacity of 176,000 tons a year.
• The introduction of a second new cargo facility, still under construction and expected to be completed sometime this year, will result in enhanced services, options, and a further increased air cargo capacity of up to 150,000 tons annually.
• The new terminal also incorporates a dedicated cold-chain facility to meet the growing needs of the pharmaceutical and food industries to ship high-value, temperature-sensitive goods.

For more information on how a third-party logistics provider can help facilitate your business’s supply chain management through KFIA and the Kingdom as a whole, get in touch with SBT by clicking here.

Satisfied clients are fundamental for a business’s growth. For a company to enjoy repeat business from its customers, it must be able to deliver high-quality products through quick and efficient means. The latest industry reports indicate that after factors such as product price and convenience, shipping cost and wait time is one of the top considerations for customers when making a purchase. 

It’s no surprise then that top businesses around the world recognize the importance of an efficient, streamlined supply chain and are willing to invest to achieve this. In Saudi Arabia, the logistics and warehousing market is showing a steady growth rate and is expected to garner revenue amounting to more than USD 17.5 billion by 2023. Indeed, with the rise of e-commerce across the kingdom, more businesses are outsourcing their warehouse management than ever before. 

What is warehousing? 

Before many businesses sell or distribute their goods, they store the items in an on-site or off-site warehouse. Businesses handle their warehousing needs in a variety of ways. They can choose to store stock in their own storage spaces or in a rented warehouse. The stock is organized and controlled by in-house staff or third-party warehousing companies. Many warehousing tasks are automated using the software while other processes are still handled manually by human staff.

When companies hire third-party companies, they are provided with more than just warehouses for rent. Warehousing companies offer a range of services that ensure the safety of the goods on their premises, while also managing incoming stock, picking, packing, and shipping orders correctly. A major consideration in this region is the warehouse air temperature. With high seasonal temperatures, a professional warehouse setup will include strict temperature controls to avoid heat damage to goods. When all of these processes occur efficiently, a company saves on its overheads and in turn, increases its profits. 

What does warehouse management involve? 

In simple terms, warehouse management refers to all the processes involved in the effective day-to-day management of the inventory and equipment in a warehouse. When a company rents a warehouse, they can expect the facility to handle the following processes for them: 

1. Inbound processing – in which goods are received by the warehouse, checked and documented, before being stored away in their assigned location on the site. Sometimes, inefficient warehouse facilities, goods are packed and immediately dispatched to the customer without a requirement for storage. 
2. Warehouse layout and slotting – in which goods are organized into categories and placed accordingly. Generally speaking, high-demand, fast-moving goods are assigned locations close to the front of the warehouse. Goods that tend to be bought together are stored in spaces near to each other. Similar goods that can be mistaken for each other should be placed well away from each other. 
3. Picking – in which goods are placed in an organized system so the packers can quickly and conveniently locate them.
4. Packing – in which workers pack goods according to their corresponding packing protocol, which includes the provision of a content slip and delivery manifest.
5. Shipping – in which workers carefully move packed orders from their storage space to the assigned freight vehicle promptly. 
6. Managing returns – in which returned goods are unloaded, checked off against the original order, and logged against the customer’s account.

Many businesses, particularly those operating on a large scale, also hire warehousing companies for the more targeted services they offer: 

Inventory management

One of the most important services provided by a warehousing company is inventory management. Effective inventory management means that goods are ordered, stored, and dispatched in a way that ensures the business always has a sufficient supply of goods.

There are different models of inventory management. Two of the most popular ones are just in time and ABC analysis. With just-in-time inventory management, goods are scheduled to arrive precisely when they are forecast to be required. In ABC analysis, goods are sorted and allotted storage space based on their consumption value, with category A goods being high-value items that are stocked in the highest amounts and category C goods being low-value items that are stocked in the least amounts. 

Outsourcing inventory management to storage experts frees up managers and business owners for other core business activities. When a dedicated, reliable warehouse team manages inventory effectively, a business will not lose sales due to low inventory or waste capital due to excess stock taking up the available storage space.   

Some companies also opt for the drop-shipping model, where goods are directly transferred from their manufacturing site to the customers with no intermediary stop at a warehouse at all. These businesses are not likely to rent a warehouse. 

Cross-docking

Cross-docking is another inventory management strategy involving the direct transfer of goods from the manufacturer to the consumer. However, unlike drop shipping, the goods do actually arrive at a warehouse but are directly loaded into outgoing freight vehicles and dispatched to the customer. 

This is a popular strategy with businesses that produce perishable goods, in-demand products, high-quality items that do not require additional warehouse inspection, and promotional or new-to-market goods. When businesses exclusively use cross-docking as a means of goods transfer, it’s possible they may not need a warehouse for rent.  

Cross-docking is beneficial for companies because it saves both time, costs, and space by eliminating the need for warehouse workers to sort, store and pack the items. However, it comes with the risk of creating discrepancies in inventory control as the items are never transferred to a warehouse for logging. Additional processes need to be incorporated into the standard inventory management system for cross-docking items to enter the system. 

Palletization

Palletization is a time-saving practice at warehouses where individual items are placed on a wooden base called a pallet, allowing multiple goods to be stored, handled, and transported simultaneously. Compared to lose cargo, palletized goods are loaded and unloaded faster, resulting in the faster turnaround of freight vehicles and greater overall transport efficiency. Palletized handling and storage also allows for the warehouse to be available for subsequent shipments faster.

It also has several other operational benefits, including a reduction in labor costs and a lower chance of injury to goods and workers. 

One drawback of palletization is the challenge of allocating adequate storage space for empty pallets, which take up substantial room in a warehouse when they are not in use. Most warehousing companies, however, offer storage space solutions for idle pallets. 

Empty pallet provision

Warehouses that use palletized handling methods should also employ best practices for allocating safe and efficient storage space for unused pallets. Depending on whether pallets are being stored indoors or outdoors, there are some general rules to follow to ensure that they do not pose a fire or toppling hazard.  

When stored inside, pallets must be stacked vertically, that is, stored with their broad horizontal base on the ground. In other words, pallets can’t be stacked on their sides to save storage space, as that would increase their chances of falling over and causing harm to workers and damage to property. 

It is also necessary for pallets to be stored away from flammable materials, gas sources as well as other storage spaces to reduce the extent of damage in the event of a fire. It’s also recommended for damaged pallets to be disposed of immediately.

When being placed in outdoor storage space, pallets need to be covered with a tarp to protect them from weather damage, especially in areas with high temperatures such as Saudi Arabia and the Middle East in general. There are protocols provided by insurance companies that limit the number of pallets that can be stored outside. 

Shrink and stretch wrapping

In order to protect items stored and moved on pallets, warehousing companies offer shrink wrapping and stretch wrapping facilities. 

Both wrapping methods involve the use of highly resistant plastic film to envelop the pallets and use different means to accomplish this. Shrinkwrapping uses heat to shrink and tighten plastic wrap around a product. It is commonly used to preserve food and beverages during shipping. 

Stretch wrapping uses a turntable platform to spin a unit load while a machine or hand-powered mechanism wraps plastic around it. Machine wrap is more commonly used for large loads and in high-volume warehouses, while the opposite is true for hand wrap. 

By shrink or stretch wrapping pallets, warehouse companies prevent damage to goods through mishandling or movement during transportation. It also protects the unit load from being discolored by dust and dirt or weakened by moisture. 

Labeling

Although it sounds like a basic process, labeling is one of the most crucial functions that warehouse companies serve for businesses. Without a proper labeling system, products can be considered as good as lost in a warehouse’s numerous storage spaces. This is often the case when overburdened or undertrained staff are in charge of organizing stock at a company warehouse. 

Professional warehouse companies have highly trained staff and a stringent labeling protocol that maximizes handling efficiency and guarantees accurate order delivery for their clients. Once an item enters a warehouse, it is continually identified as it passes through various stages of the storage process. Moreover, the various storage spaces of the warehouse are also labeled, along with any rules or regulations that need to be followed to maintain a safe work environment.

Inspection

Before goods are shipped to customers from warehouses, warehouse companies perform a quality inspection to guarantee that the product did not suffer damage in the storage space. Some products are sensitive to environmental conditions and changes in temperature or moisture can cause them to deteriorate. Regular inspections in the warehouse ensure that goods are still in a viable condition for shipping to customers.

In today’s increasingly global economy, businesses look outward, beyond the borders of their country of origin, to grow their customer base. This international expansion may promise big dividends but it’s far from straightforward to execute. Before a business can begin its exports, it must navigate through the complicated customs laws and the associated red tape from each country it wishes to engage with.

For most businesses, handling this cumbersome process internally is a daunting task. Not only is it extremely resource-intensive, involving the purchase of technology licensing, hiring of knowledgeable personnel, and a heavy increase in the logistics budget, but it also presents completely new territory for managers, making the margin for error unacceptably high. It also diverts their focus from the everyday operations of their business, which could negatively performance.

Many would agree that a more shrewd investment is to hire a freight forwarding company, who specializes in handling the logistics of exports and imports for other businesses.

Let’s take a closer look at the services offered by a forwarder:

What is a freight forwarding company?

Import/export mechanisms are murky and often leave business owners mystified. However, the opportunity to trade overseas is too lucrative to pass over. Cargo forwarding companies help bridge the gap between businesses and their potential clients abroad by taking complete ownership of the storage and shipping processes.

Sea forwarding companies boast expertise in the customs laws and commercial regulations surrounding imports and exports. They are well versed in the trade routes leading to and from the countries in which they operate. And they have numerous contracts in transportation services, ranging from air and sea cargo services to rail and road fleet operators.

These resources allow forwarding companies to offer clients highly customized shipping solutions, that take into account the nature of the shipments and their intended destination. It matches a business’s specific requirements in terms of speed, affordability, and reliability with an ideal trade route for its shipments, and ensures that its goods will safely reach its international clients on schedule.

Typical Services Offered by freight forwarders

The inherent premise of a forwarder’s service is that it will allow its client to trade internationally, without its staff having to do any of the legwork. That means it takes care of all the documentation and correspondence with transportation services, customs officials, and other handlers. This typically takes the form of a multi-phase process spanning multiple locations.

It begins with the export haulage stage, where goods are transferred from the client to the forwarder’s warehouse. At this point, forwarders offer several value-added services, including packaging and labeling, according to customs regulations.

Packaging

Cargo forwarders take care of the specialized packaging requirements for goods being shipped overseas.

Contrary to the relatively simpler packaging requirements of local goods transport, many more factors have to be taken into consideration when packaging goods for international travel. Depending on the nature of the product and its final destination, this task can have varying levels of complexity.

To illustrate, a package going overseas will go along an extended trade route, where it will be loaded and unloaded multiple times. This increases the chances of damage due to mishandling and measures have to be taken at the time of packaging to ensure that it can withstand a robust journey.

Similarly, items that are being transported via cargo ships or air may experience volatile weather conditions and need extra insulation to prevent possible damage due to impacts with other shipment or container walls. Palletizing the goods and using other safeguards such as straps, seals and stretch wrapping can also protect shipments during transport.

Packages must also withstand extreme temperatures, which is often the environment in which they are stored during shipping. Another consideration during air travel is the weight. Items being expedited by air travel have to be packaged using lighter-weight materials to economize shipping costs.

Labeling

In order to track packages and meet customs regulations, all export packages must be appropriately labeled before they are shipped. Lost labels and mislabeled cargo result in delays, loss of customer confidence, and damage to a business’s reputation. When a business engages a freight forwarder, one of the procedures it outsources is this labeling protocol.

The labels generally include the following essential information: a list of all the products being shipped; a declaration of any hazardous items, the shipment’s country of origin and weight, port of entry details, and any details that are mandatory to provide in the destination country’s language.

In addition to this labeling process, forwarding companies also possess expertise in effectively handling all the complex documentation that is involved in import/export operations. They oversee the export customs clearance phase, in which the goods receive clearance to leave their country of origin, the origin handling phase, where cargo is unloaded, inspected, and checked against the booking documents and the import customs clearance, where customs paperwork is scrutinized.

Documents typically handled by forwarding companies include a bill of landing, which is a contract between the business and the carrier, a Commercial Invoice, which is the bill for goods stating their value, often used to assess the amount of customs duty owed, an inspection certificate to confirm that the quality of goods was vetted by official authorities, an export license to prove that the export was authorized by the government, a certificate of origin that states where the package comes from, and an export packing list, which details each item in the shipment, the type of packaging used, and the package’s weight and measurements.

After all of these processes have taken place, the goods are shipped. The forwarding company then supervises the destination handling phase, in which the goods are transferred to the import warehouse upon reaching the destination country. Finally, in the import haulage phase, the goods are taken from the import warehouse to the end consumer.

Benefits of freight forwarding

 

Freight forwarders specialize in cutting costs and facilitating the logistics of transportation. By simplifying imports and exports for businesses, forwarding companies allow their customers to gain a competitive advantage in the industry.

Below is a more specific breakdown of benefits offered by forwarding companies:

Affordability

As forwarding companies handle a high volume of shipments and have developed relationships with various carriers, they have access to discounted rates for shipping and related services, which they can pass on to their customers.

This economic advantage is compounded when forwarders negotiate with multiple service providers on behalf of their clients and sift through a range of bids to select the most affordable trade route for their shipments.

At times, forwarders can take multiple shipments when the trade routes for multiple clients align. This further brings down costs for their clients.

A simple, single contract

For most businesses’ export needs, their shipments are likely to be handled by multiple cargo services, ranging from trucking companies, to ocean liners, to air cargo companies. When independently managing its exports, a company would have to individually enter into contracts with each of these service providers, which would require a considerable investment of time and administrative effort. However, a forwarding company saves you from this hassle, handling all the contractual work on their end while you only enter into a single contract with the forwarder.

Trust with the experts

Given that import/exports is likely to be unfamiliar territory for manager lacking experience in the area, managing international trade operations within a company’s existing structure would be extremely challenging.

When a business outsources the tedious and time-consuming paperwork and correspondence to a forwarding, its managers are confident that experts are following due processes and making informed decisions on their behalf.

Even as the particulars of their export operations are handled remotely, managers are kept in the loop and are always in control of their shipments.

Agility

In international trade, there are days when there are more elements out of your control than within it. From ever-changing geopolitical scenarios to unexpected weather conditions, a number of critical situations can thwart your business plan and schedule.

While a regular business manager may be unable to handle rerouted shipments or carrier delays, a forwarding company would possess the resources, knowledge, and contacts to handle the situation with minimal losses for both business and consumer.

How to choose a sea freight forwarding company for your business

 

A forwarding company is essentially the logistics partner of a business. For export operations to run smoothly, it is important for the relationship between the forwarder and company managers to be amicable and expectations to be clear on both sides.

When bringing a forwarder on board, a business should consider a number of key factors before entrusting their business to their professional care.

1. Assess the business needs

Before a company partners with a forwarding company, it must know exactly what its business’s transportation needs are.

This initial assessment should cover the kind of cargo services the business wants to use and its expected volume of shipping.

Once these needs have been evaluated, the company will be in a better position to evaluate the specific type of forwarding company that will fulfill its business requirements.

2. Examine the prospective profiles

When examining pitches from prospective freight forwarders, a company should consider the kind of industry experience and reach demonstrated by each bidder.

Even forwarding companies develop niches and can specialize in catering to specific industries. If they lack experience in a certain business’s market, they may not have the expertise needed to meet its needs.

The forwarding company should also be able to demonstrate its strategic reach. They must be able to handle regular correspondence with both a business’s customers and its manufacturing units.

3. Evaluate risk management strategies

An efficient forwarder who cares about its client’s profits will be proactive in mitigating the risks posed to its international business. Exports and imports are vulnerable to unstable conditions such as inclement weather and geopolitical tension, which can cause delays, reroutes, or a loss of goods.

By proactively planning for such conditions, a forwarding company can solve issues as they occur and minimize damages. Moreover, a competent forwarder should be able to provide a cargo insurance solution to its clients, without which the risk of shipping goods overseas is prohibitively high.

4. Confirm the range of services

Businesses should clearly and comprehensively communicate their expected needs to prospective forwarding companies and confirm that bidders will be able to fulfill all aspects of their supply chain.

In most cases, businesses require shipments to travel via a range of transportation services, including air cargo, sea freight, road, and rail transport. When engaging a forwarder, it is worthwhile to ensure that it would be able to facilitate multimodal transportation. At times, businesses also require warehousing services and a full-service forwarder should have access to them. If forwarders offer a limited range of services or have only local reach, a business can quickly outgrow the partnership, which will prove to be a poor investment in the long run. It is better to begin a long-term relationship with a versatile forwarder than have several one-off engagements.

It is also recommended to check how a forwarder communicates with its clients. Online tracking systems, instantaneous updates, and regular check-ins are some of the ways forwarding companies keep their clients informed about the status of their shipments. Businesses should ensure that possible forwarders are eager to provide detailed quotes, answer questions, convey issues, and handle concerns.

5. Check licenses

In order for forwarders to legally handle commercial cargo, they must have the updated permits or the purpose. Some products are sensitive and require special licensing. Before taking on a forwarder, businesses should ensure that they have all the appropriate licenses.

SBT offers a range of freight forwarding and other logistics services. Get in touch to learn how we can assist your business at every stage of the supply chain.

In an increasingly globalized world, a logistics company should use best practices in logistics services to connect markets and drive customer confidence  

Logistics services refer to the comprehensive supervision of a product or service, from its origin to final point of delivery, meeting the specific requirements of the customer and corporation, at both ends of a business supply chain. This involves a complex operation of processes, which includes multiple parties. The organization and implementation of logistics services are best handled by a logistics company.

What is a logistics company?

A logistics company is a specialized organization that manages, plans, implements, and controls the efficient, forward, and reverse flow and storage of goods. It also follows information related to a commodity from a point of origin to a point of consumption. The cargo managed by a logistics services provider may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items. The processes within a logistics and shipping company include the integration of information flow, special equipment, and training of personnel handling particular materials, client-specific packaging, detailed inventory, transportation, warehousing, and security.

What is the role of logistics?

A professional logistics company provides the smooth support and movement of commodities across a supply chain. Warehouses, distribution centers, storage hubs, delivery stations, and the air, land, and sea freight facilities supporting the movement of goods, all fall within the realm of logistics. 

When someone thinks of logistics, the easiest way to explain the depth and dimension of the word is to visualize the e-commerce giant Amazon. Considered one of the Big Four technology companies along with Google, Apple, and Facebook, industry gurus estimate that Amazon provides logistics services for about 12%  of business-to-consumer shipments worldwide. To serve its customers, Amazon has built an enormous network of warehouses and distribution centers, with over 850 facilities across 22 countries, occupying 220 million square feet! This kind of efficient logistics and distribution system plays a huge role in the success of Amazon. 

What are key logistics services?

A successful business is one that sells products, that are not only in demand but also find their way easily to customers. In today’s highly digitalized world, where a lot of items are sold online, goods still need to be moved from a point of origin (vendor) to a final destination (customer) through physical transport. This process of moving things from Point A to Point B, usually through shipping companies, is the arena of logistics. As organizations expand, they outgrow a person-to-person sales model, with multiple factors influencing the way products are moved. This is where logistics services providers come in. They specialize in managing the shipping processes for businesses, coordinating things so that products end up where they need to be in as efficient a manner as possible.

For a logistics services provider, the processes involved in the management of goods, from origin to end source, form the chain of movement. These include the following: 

Inventory Management:

A professional logistics company manages its inventory to deliver optimized storage of goods and materials for multiple customers. With digitalized technology looking at inventory in real-time, logistics companies are now able to deliver customizable solutions to clients. 

Warehousing:

The warehouse is the central nervous system managing the flow and storage of commodities within a logistics company. It acts as the control room and is the true test of a transportation company’s mettle. Factors like location, number, size, layout, and design play a huge role in how the movement and logistics of customer goods are managed.

Supporting Transport and Freight Services:

Transport, including freight services, is what keeps the customer supply chain moving smoothly without hiccups. The physical transfer of goods, from picking them at source, deciding on the best method of shipping along with the transport infrastructure, to its final destination, is the professional area of expertise for an experienced logistics company. Transportation of commodities can be tricky, especially if the routes by land, air, or sea are prone to weather disruptions, political upheavals, or security issues. A professional logistics company oversees the coordination of transportation services to deliver on a maximum utilization of space, strategically routing and timing multiple client consignments to ensure that there are no delays.

Handling of Goods:

A professional logistics company ensures the proper handling of goods through trained personnel and the use of the correct supporting infrastructure. The introduction of digitalization and automation to the handling of goods has added to logistical productivity. To go back to the example of Amazon, the company has long used robots to help move merchandise around warehouses. Equally, the introduction of Systems Applications and Products (SAP) in data processing for warehouses, inventory management, and handling of goods has increased the volume, speed, and level of service through which a logistics company now transports cargo.

Packaging:

Logistical or industrial packaging is different from the product packaging directed by market trends and consumer behavior. A logistics company provides packaging that guarantees minimal damage to commodities during material handling and movement. Understanding merchandise and how it needs to be packed, handled, and transported is a very important part of the movement of goods.  

Integrated Information Systems:

A logistics company employs information systems that play a crucial role in delivering efficient logistics services to customers. Information technology tools are constantly used to identify, access, store, analyze and retrieve information on goods. A logistics company will work regionally, as well as across international state lines. Logistics services providers now use technology to help manage the movement of goods in the most optimal way. Integrated software helps professionals in the field determine best routes, as well as deal with complications as they arise. 

Logistics management best practices

Logistics management, or logistics services management, often confused with supply chain management (SCM) is actually a subset of the latter. SCM includes inter-enterprise, multi-functional processes that target everything from the supplier’s inbound freight to the end consumer. Logistics management is the more practical, hands-on part of the supply chain where goods are transported into a facility, properly stored, handled, and transported out.

Logistics management, or logistics services management, plays a significant role in the success of any company’s operations and has a direct impact on its bottom line. 

Logistics Strategy:

A fine-tuned logistics strategy, helps a logistics company make quick, informed decisions that can save clients up to 40% on logistics costs. As the supply chain is constantly changing, so are logistics processes involved in the movement of clients’ goods. Using developed and implementable formal logistics strategies add flexibility to the decision-making process and increase the error-response time. Equally, professional logistics companies are adept at predicting disruptions and responses, ensuring that logistics services and support to a client’s supply chain stay at peak performance. 

Having a business’s logistics functions and its overall supply chain cycle assessed by a logistics company, helps a business determine the best transport solutions. 

Some client-specific questions that a logistics company will consider include:

• What are the benefits of handling a client’s diverse kinds of consignments differently – such as, expedited shipping versus slower-moving cargo? 
• When should items be inventoried and when should they be forwarded directly to an end customer?
• What role can a shipping company play in the transportation and distribution network of a business’s goods, and how can it be improved for more expedient and efficient transfer of products. 
• Does a change of carrier, or a particular mode of transport save money, or improve service, for a client in outbound transportation?
• How much client inventory should a logistics company carry at a given time to be functioning at an optimal level?
• What are the specific customer-oriented goals? Speed? Safety?

For every business, there are different logistics needs and different ways to evaluate operational success. A static logistics strategy will cause serious harm to a business’s service and its bottom line. 

While the logistics environment changes frequently, and the amount of data available for analysis grows, logistics service providers and shipping companies actively strategize in order to stay ahead of the fluctuations to avoid disorder within a business’s supply chain. A professional logistics provider, therefore, is always asking questions about logistics processes, evaluating successes and inefficiencies, and altering logistics management strategies to fit clients’ changing needs.

An efficient logistics services company regularly analyzes its inbound and outbound logistics management, while taking into consideration vendor compliance programs. Equally, a successful freight company always has practical and implementable reverse logistics in place, so that in the event of a return on goods, the movement of products does not impact the client’s supply chain management or bottom line. 

Third-party logistics companies

Businesses need to take a strategic approach to collaboration and outsourcing with third-party logistics (3PL) companies if they want to grow and expand. 3PLs offer improved customer service and more effective procedures. Working closely with a 3PL allows the logistics provider to see a client’s challenges and opportunities from every possible angle. 

The year 2018 saw a huge growth in third-party logistics services providers within the United States. The two main factors driving this growth were an unusual buildup in inventory on imported products as domestic suppliers fought import tariffs. This, along with tight domestic-carrier capacity drove up rates and increased fuel surcharge revenue. As businesses were faced with tough measures, they increasingly turned to 3PL companies to move goods. 

Regionally within the Middle East as well, as businesses tighten their belt to ride shrinking economies to their end, there has been an increase in 3PLs to help businesses effectively coordinate within their supply chain. An example can be seen in the auto industry where a reduction in domestic motor-carrier capacity is seeing growth within the more mature, 3PL asset-heavy, dedicated contract-carriage segment. 

Advantages and disadvantages of working with 3pls

At some point within the growth cycle of a business, it will have too much on its plate. Printing labels, finding correct postage, and managing inventories is a complicated task, in addition to the production of a good.  That is why any small-to-medium-sized operation looking to grow its client base, will at some point or the other, need to go the way of third-party logistics support. This will help a business scale its shipping-fulfillment process while focusing on the core strengths of its business. 

Advantages:

Market’s today favor companies that focus on their strengths, devoting as much of their time and resources to product development. Outsourcing shipping and warehousing solutions to 3PLs, therefore, allows even smaller boutique operations to have a national, regional, or international reach, that is easily scalable to meet market demands. 

Some of the benefits of using 3PLs include the following:

• Reach new markets through an easier movement of goods. Experienced 3PL logistics providers already have existing relationships. They can facilitate introductions in a new market, where a smaller business is looking to grow, making the transition easier.
• Take advantage of an existing logistics infrastructure and an experienced logistics mover who is up to speed on national, regional, and international tariffs, laws, and regulations. 
• Utilize economies of scale by rapidly scaling to demand, by piggybacking off a 3PLs logistical and warehousing support. Additionally, as 3PLs service other clients as well, it saves business money on every stage of the logistics chain. 
• Benefit from reduced transport costs. Using a 3PL logistics provider allows businesses to skip the costly trial-and-error process involved in growing, as well as, the significant investment of time and resources required to build a shipping and fulfillment network. 
• Gain a turnkey customer-service and returns system. Some 3PL logistics providers also offer other services in addition to shipping, which can allow a business to focus even more on its core strengths.

The only disadvantage of outsourcing to a 3PL is the loss of control a business may feel over the movement of its products. However, with a professional and trustworthy logistics company on board, a business can be confident that its products are in the safest hands.

There are many third-party logistics providers to choose from today, so a business is advised to explore all available options before making a decision. While the price is an important factor to consider, it is a good idea for businesses to look at the size, reach, and maturity of a 3PL, as well as at the other services (if any) that they can offer. Perhaps the most important factor to consider is whether a 3PL is trustworthy and capable, as they are likely to be default partners in the success of a business. 
For more information on logistics solutions and logistics-partnering options, get in touch or click here. 

It is a good time to be in a transportation company in Saudi Arabia. With its strategic position at the crossroads of Asia, Europe, and Africa, the country has a key role in the regional trade landscape and requires a booming local economy to effectively play that part. With trade diversification high up on the government’s agenda, the transportation sector is enjoying significant state investment to ensure that the growing industrial and e-commerce activities in the country remain unencumbered. 

At present, Saudi Arabia boasts a massive 200,000-kilometer road network, including 5000 kilometers of highways and 6000 kilometers of bridges, that connects the country’s major cities and gives ready access to its railways, sea, and airports. This means people and goods can be transported around the kingdom rapidly — and this infrastructural boom is expected to continue at pace in the years to come. 

By the end of the government’s current expansion plans in 2020, the road infrastructure would have grown by more than 3500 kilometers. Many large-scale projects, such as the construction of the mega-bridge over the Obhur Creek near Jeddah, should also have materialized. 

As a result of these economic trends and developments, freight transportation is expected to thrive in Saudi Arabia. The government is actively seeking to engage business owners in the management of its sea and airports, while the privatization of many publicly operated transportation facilities is also on the cards. 

The infrastructural improvements and investments made by the government have also empowered logistics companies in the private sector. As competition is high, these third-party transportation companies strive to retain clientele by providing them with high-quality services. This, in turn, helps those businesses further their growth in today’s dynamic economy.

Interested in learning more about third-party logistic services? Below is a breakdown of how transportation companies can serve businesses in Saudi Arabia today.

What is a transportation company?

Around the world, the transportation sector is huge. It spans various industries, including airlines, marine, road, and rail. The freight sector is spread across all of these industries. 

While Saudi Arabia’s road network handles the majority of freight work in the country, the ongoing expansions in the rail industry suggest that it won’t trail behind for much longer. For long-distance and urgent deliveries, of course, businesses rely on air and marine freight. 

Simply put, a transportation company is one that transports freight from one location, usually the producer, to another, such as the consumer. From the transfer of raw materials from its producers to manufacturing companies, and the transfer of finished goods to the consumer, transportation companies play an integral role in commercial and industrial activities at every scale. Transportation companies tend to focus on B2B operations but there are also have smaller-scale, B2C operations, such as those catering to individual clients seeking home moving services or delivery services. 

Depending on the exact nature of its business, a transportation company can take many forms, ranging from a single owner-operator in the possession of a single truck to a company that owns large fleets of freight trucks and has an expansive organizational structure. 

The variety of structures signifies the inherent versatility of the local logistics industry.  There is a transportation company for every business’s needs. Here’s how they can help a business meet its goals:

Benefits of hiring a transportation company

The efficient transportation of goods is essential for the success of any business. Not only does timely product delivery build trust and enhance brand reputation, but smooth logistical operations also ensure that goods safely reach their intended destination. Sloppy handling can result in damages to freight, leading to financial loss and reputational damage.

So, there are numerous advantages of hiring a professional third-party transportation company to manage logistics for a company. We take a closer look at the benefits below:

1. Transportation services save businesses from making heavy logistical investments. 

Different types of products require different kinds of trucks and trailers for transport. If a company makes the choice of organizing shipping in-house, it would require a significant investment compared with hiring a transportation company. Leasing or purchasing costs, multiple vehicle maintenance, driver costs, insurance bills, and an in-house logistics team are just some of the costs the business would need to budget for. 

In contrast, when businesses hire a professional transportation company, they can rest assured that the contractor maintains a fleet of different trucks and trailers and can match every shipping requirement with the appropriate type of vehicle. 

Instead of investing in a transportation fleet, businesses then have the freedom to divert their time and profits to meet other operational needs. 

2. Transportation companies are a one-stop-shop for numerous logistical services. 

When businesses engage a transportation company, they are getting more than just one kind of trucking service for their goods. Transportation services are highly specialized, offering tailor-made solutions to suit a diverse range of business needs. 

Companies can choose between LTL (less than truckload) and FTL (full truckload) shipping, depending on the volume of their business. LTL shipping is better suited to smaller businesses with shipments that aren’t likely to occupy an entire truck. It allows them to share the truck with other small businesses’ shipments and divide the costs of transport with them. While this saves costs, it is more time-consuming and harder to schedule as trucks are loaded and unloaded at multiple stops.

For larger, high-volume businesses, FTL shipping offers a dedicated truck, which is higher in cost but a faster method of transporting goods. At times, small businesses do opt for FTL shipping to reserve an exclusive truck for themselves. Usually, in such cases, the businesses are transporting delicate items or high-value products to customers and cannot tolerate the risk of damaged or lost goods.  

For extremely heavy items or oversized items such as industrial machinery, transportation companies offer heavy haulage services that take care of the special handling, optimized routing, and additional licensing required to transfer these kinds of goods. There is also the option of availing flatbed trucking for particularly large or wide items, where goods are transported on an open trailer that allows for quicker and easier loading.

Businesses may find many other value-added shipping services provided by transportation companies such as intermodal transport services, where a single transportation company manages cargo handling across multiple modes of transport such as air, sea, rail, and road, useful. For this, goods are placed in special standardized steel containers that can be secured to trailers on different types of vehicles. Intermodal shipping is ideal for goods that have to travel a long distance for delivery as it allows goods to reach their destination far quicker. 

Transportation companies also have the resources to cater to urgent orders. Most contractors provide a same-day, and next-day delivery service, as well as expedited shipping. 

3. Transportation companies can save businesses the hassle of managing their own warehouses. 

Many third-party transportation companies offer additional logistical support services. They offer to handle freight management, logistics, and warehousing for their clients. This saves a business from having to maintain its own warehouse space, which in turn eliminates several costs such as warehouse rent, inventory management software, warehouse equipment, trained staff, and the warehouse utilities bills.

Therefore, when businesses take on a transportation company, they can rest assured that all their logistical needs will be met by a single contractor. This is a highly efficient way of doing business with a single investment in one relationship serving multiple purposes. These translate into cost savings for the business compared to the costs of setting up your own logistics system. 

4. Hiring a transportation company is good for business growth, 

Having a third-party transportation company means that a business’s managers no longer have to micro-manage the logistical end of their operations. This frees up their time and energy to focus on other aspects of the business. It also allows their company’s human resources to devote its manpower to more value-adding activities. This improved productivity can lead to higher profits and faster expansion for the business. 

Modern, customer-focused transportation companies offer specialized services and work for hand in hand with their clients. They are able to adapt to their client’s changing needs as their business scales up.

In summary, hiring a transportation company is a positive step towards business growth. It allows a company to dedicate its key resources, time and manpower, to accelerate its growth and expansion. A trusted partner takes control of all its logistical needs and ensures consistent delivery of its products to its clients. This plays a key role in establishing a company as a major player in its respective market.

Are you looking for a reliable transportation company partner to help your business expand? SBT offers a wide range of logistical services for businesses in Saudi Arabia and the wider region. For more information on logistics services and freight services offered by SBT, click here.