July 23, 2023
Logistics: More Than a Commodity
Anybody in the logistics and transportation industry knows that many customers used to buy based on price alone. Fortunately, with innovation and specialization, the industry has become more acknowledged of the benefits of quality service differentiation.
It is easy to think of transportation as a hybrid of services and goods. It involves a physical space and operations to serve in that space. Moreover, many authors have played with the logistics definition and talked about how supply chain management has historically been taken as a commodity.
What does commodity mean?
In the context of shipping, a commodity refers to a valuable or useful item. However, in a business setting, a commodity is a product or service that is widely available, resulting in lower profit margins and making price the main factor of importance.
Historically, transportation services have been largely taken for granted, mainly because extreme competition and regulations have kept rates and fees relatively low. That created an illusion of consistent availability. However, during and since the Covid-19 pandemic, the economy’s volatility has exposed how critical transportation is to the supply chain’s stability.
The backbone of the supply chain
The importance of logistics management relies on the need for constant functioning operations that keep the businesses running. Transportation services are incredibly important as they serve almost every industry in some capacity. With them, commodities shipping would be completed and would therefore be valuable.
Have you ever wondered why some companies are willing to pay more for certain goods, like phones or coffee, but not for supply chain operations or commodity management? The answer may lie in the perception that logistics is a commodity – meaning that shippers see all logistics services as interchangeable. However, it’s important to choose a 3PL provider that stands out in terms of quality and service to ensure the best results for your business.
At Last Mile Logistics, we are proud to be a transportation company with more than 110 years of combined experience. We are part of a financially responsible 4 billion dollar private company with a strong history of success and a genuine 24/7/365 operations staff. We can also build cost savings of up to 27% over internal fleet costs by utilizing our extensive network.
We are communication, care, and concern driven, and passionate about our work. So please, call us if you have an RFP or any other questions.
