England 01/07/2013 – In the UK, more people are self-employed than ever before, something that would not have been possible without modern logistics firms.
Most businesses need logistics in order to function. Firms who sell any kind of product need somewhere to store their goods, and a way of delivering them to the homes or business premises of their clients. This is the case regardless of the size of the firm, for all firms reliable fulfilment services are vital.
Large corporations can afford to run their own logistics should they want to. They own or lease entire warehouses, and run their own fleet of vehicles or have a contract with a third party transport company.
However, in the UK, the vast majority of companies are not large corporations. They are SMEs or sole trader businesses. For these firms running their own logistics operations is out of the question. The overheads involved in running and staffing even a small warehouse are astronomical. Maintaining a warehouse is only viable when there is a very high throughput. Fortunately, several decades ago, the UK’s logistics industry realised that SMEs needed another option. They searched for and found a way to offer flexible third party distribution services. Computer systems, held the key. They opened up the option for logistics firms to hold and distribute the products from numerous companies from one large distribution centre.
Low overheads and flexible distribution
An approach that revolutionised logistics. It opened up a world of commerce to hundreds of thousands of small businesses. Combined with the internet it is viable for someone to set up a small business selling anything from craft items, to products brought from China and sold on at a profit.
It is a business model tens of thousands of people in the UK follow, and many multinationals started out exactly like that. Whilst the business is small products can be stored at home and despatched via the post, but when sales takes off things have to change. In the past, a warehouse had to be set up. Something most small firms could not afford, this stopped many firms in their tracks. Today, firms such as 3P Logistics step in and store the product, and despatch it on behalf of a growing band of SMEs. Because they charge by the pallet firms can start small and grow until they are selling hundreds of thousands of items each year across the globe. Without flexible fulfilment services the UK economy would be much smaller than it is today.