What is truly integrated logistics?

In all honesty, logistics can be overwhelming. Typically, when businesses need to transport their product from one place to another, logistics can be a very complicated task to tackle. From factory to customer, a business usually needs to juggle different providers for the different steps of their supply chain. Airfreight, ocean freight, inland, sometimes all of them combined. Every piece more fragile and complicated than the other. Then, the paperwork, which seems infinite and never correct. Then local customs.

When all of this is managed by several different companies, located in different parts of the world, in different time zones, using different systems, it’s a lot. Moreover, it's not unusual for the process to have more than twenty parties involved for a single shipping. Imagine having to deal with all this while international politics, national restrictions and the global economy influences and changes the flow from one day to the other. A single issue can impact the entire chain.

What is truly integrated logistics?

When looking into the various definitions given over the years to identify logistics, one provided by Mark S. Daskin clearly states it as “the design and operation of the physical, managerial, and informational systems needed to allow goods to overcome time and space”. When we then talk of integrated logistics, we can say that this new perspective identifies it as a level of global logistics where everything is connected. Where all the pieces of the puzzle are interlinked, digitally advanced, and sustainably managed all the way from start to finish. Contrary to common belief, the idea of connecting all aspects of logistics isn’t new. As explained by Alan McKinnon, the development of this concept began around 40 years ago “with the integration at a local level of transport and warehousing operations into physical distribution systems”. What is new, however, is the capacity of today’s providers to bring this to a completely new level. Offering to integrate supply networks by using different transport modes, now strongly supported by the latest technology advancements.

What are the components of truly integrated logistics?

Today, not many providers can offer truly integrated logistics solutions. This is because a high level of network (global reach) needs to be combined with an equally high-level of flexibility, digital capabilities, and resilience. The majority of logistics providers “compete at different legs of the transport and fulfilment services, and at several critical junctures in the market – at the nexus between transportation products and integrated solution offerings” confirms A. Kinra (2023). To be true, integrated logistics requires:

• Partnership: prospecting customer’s needs and pain points identification.
• Infrastructure: asset’s availability and network capabilities for multimodal solutions.
• Transportation: connections via land, air, water, etc.
• Storage: warehousing and handling (with continuous enhancements).
• Technology: programming and tools to enhance pre-existing and future networks.
• Digitalisation: easily provided visibility, real-time data mapping and AI forecasting.
• Expertise: people-driven and proactive support with prompt solution.

What are the benefits of integrated logistics for businesses?

Why is integrated logistics important and how can it help? Truly integrated logistics eliminates confusion and makes it easy for customers to deal with just one brand, one legal entity, one expert, one support service - one partner all the way through. It’s about visibility, knowing where all cargo is at every step of the journey. It enables businesses to:

1. Realise untapped business potential
2. Enter new markets
3. Maximise sales
4. Pivot towards new opportunities
5. Capitalise on demand
6. Minimise inventory holding

And combing all of this together, ultimately, gain a competitive advantage

An example of integrated logistics

What does this mean for an exporter/ importer? Let’s take as example a customer that needs to change its supply chain to avoid additional costs and inefficiencies. Let’s imagine this customer has to drive many kilometres with his precious cargo to unload it at a warehouse, hold it there for a few days (with the costs that that entails) then restock it, load it onto another type of transportation to take it to the nearest port. After this, manually deal with all the paperwork and the administration procedures for it to go onto a cargo ship.

With truly integrated logistics, instead of all this, a provider would be able to bring a container directly to the production centre, where they can be loaded, then pick it up and proceed to take care of the entire journey, including the bureaucracy associated with it such as export paperwork, customs, etc.

A truly integrated provider brings value for business. It helps drive change, eliminating complexity, making businesses resilient for today and tomorrow. It co-creates with a kind of partnership that can save effort, cost, and that on top ensures the end-to-end process is as sustainable as it can be, using the latest innovation. This process can generate real value, taking advantage of digital services that can assist throughout the entire operational supply chain, guided by insightful knowledge on always-changing industry trends.