For logistics companies, the choice of location can make the difference between success and failure. Locations have a huge impact on overall business operations, from logistical efficiency to cost and tax savings, so this aspect should not be taken lightly. Logistics companies should consider several variables before selecting a suitable location.
FACTORS FOR THE CHOICE OF LOCATION
Choosing a location for a logistics center or warehouse is of great importance, especially in times of e-commerce, and needs to be carefully considered. Companies have to deal with so-called hard and soft location factors.
Both are procurement, labor, production and sales-oriented in their own way. The difference is that soft factors are constantly changing, while hard factors remain the same or change only very slowly. Ultimately, all points must be weighed up in order to select a suitable company location.
For example, when choosing a location, it is important to ensure that there is an appropriate balance between the affordable cost of the property and a reliable workforce capable of carrying out the work.
HARD LOCATION FACTORS
Hard factors for the choice of location are, for example:
- Location
- Transport links
- Availability of raw materials
- Rental costs
- Taxes
- Subsidies
- Sales opportunities
- Environmental regulations
- Opportunities for expansion
First, it is important to carefully evaluate the location as it affects the accessibility of the site for employees and customers. In addition, other considerations such as access to public transportation, available infrastructure, labor costs and local regulations should be taken into account as part of the decision-making process.
Having a location in close proximity to major transportation links such as highways, airports or ports can be an invaluable advantage when it comes to enabling fast and efficient delivery of goods and services.
A location with optimal logistical performance and favorable cost and tax advantages will have a positive impact on the success of a logistics company in the long term.
In addition to these factors, infrastructural conditions also play a role: Is there enough space? Is there enough storage space available? Are there opportunities for expansion?
SOFT LOCATION FACTORS
Soft factors for the choice of location are, for example:
- Demographic characteristics (e.g. level of education, age distribution)
- Salary level
- Public infrastructure (e.g. schools, kindergartens, hospitals)
- Cultural and leisure activities
- Competition
- Possible business partners
With regard to the soft location factors, it is important to look at the local circumstances of certain points such as demographic characteristics.
It is also relevant to analyze the direct competition in the environment. High competition can lead to lower prices, but at the same time to greater pressure on the company.
THE INFLUENCE OF E-COMMERCE ON THE CHOICE OF LOCATION
The triumph of e-commerce has significantly increased customer expectations in terms of service levels and delivery speed. Choosing the right logistics location therefore requires increased attention and reorganization of distribution structures – especially with regard to multi- or omni-channel strategies.
More and more companies are not only focusing on a physical presence, but are also implementing online concepts. The decisive factor here is to be able to create the optimum balance between potential cost savings and customer expectations.
IS A LOGISTICS CENTER NECESSARY?
The introduction of a logistics center is becoming increasingly relevant, particularly due to the growing demand for services and high traffic density. All factors, such as customer groups, staff availability and investments, must be thoroughly considered when making this decision. This is the only way to increase efficiency and reduce costs.
In most industries, a decentralized structure with regional warehouses is a good idea, as this offers advantages, particularly due to the necessary speed of delivery. Central warehouses can also be of great benefit – depending on the sector in which a company operates.
For example, Amazon has established logistics centers in various regions of Germany in order to work more efficiently and reduce inventory and handling costs. Ultimately, both central and regional warehouses can be simulated so that the best possible solution can be found for the respective company.
IDEAL LOCATIONS FOR VARIOUS LOGISTICS SERVICE PROVIDERS
Logistics is essential in many areas of modern life. Companies and organizations therefore need specialist logistics service providers to deliver their products on time and ensure that operations run efficiently.
Parcel services
Parcel services offer customers an invaluable service by allowing them to have their orders conveniently delivered to their homes. Generally, delivery is smooth and timely within a specified time window. This type of service is suitable for a wide range of business and private customers.
There are a number of factors to consider when choosing a parcel delivery location. These include, for example
- the availability of transport connections to the destination,
- access to local resources such as customer service,
- Warehousing and HUB (main transshipment base)
- and cost efficiency.
In addition to these factors, the security of the parcels should be ensured when determining the best parcel delivery location for your needs.
FORWARDING OF GENERAL OR GROUPAGE CARGO
General or groupage freight forwarding involves the transportation of goods in a large area, where not too much attention needs to be paid to detail. The tasks of delivery companies are diverse and cover a wide range of services. These include the transport of vehicles, the provision of parts for machines and the delivery of a variety of goods to larger organizations and groups.
For any type of general or groupage freight forwarder, location is one of the most important factors to consider. A location with good access to roads and highways allows for efficient and faster transportation of goods. Proximity to rail hubs can also be a great advantage, as it ensures cost-efficient transportation while optimizing the transportation system as a whole.
The ideal location should be large enough for the storage and sorting of various equipment and goods. In addition, proximity to large commercial cities is desirable, as this enables fast deliveries and thus increases the efficiency and speed of operations.
LOGISTICS PARTNER FOR LOCAL CONSTRUCTION COMPANIES
Logistics partners are a special type of freight forwarder. In addition to regular transportation, they can provide tippers for earth transport or other special machinery such as excavators that have been specially developed for use in the construction sector. This allows construction projects to be handled more efficiently, thus saving costs and reducing deadline pressure.
Proximity to a project’s construction sites or roads is an essential requirement for a logistics company that wants to provide optimal support to local construction companies. As they are located directly on the project, they are easily accessible. They can also adapt to the changing needs of their customers, making them the ideal partner for any construction project.
In addition, it is important to choose an area with good access to public transportation and nearby suppliers as well as waste disposal and recycling stations. This would allow for more efficient transportation of supplies and waste and ultimately save time and money.
LOGISTICS COMPANY FOR HEAVY AND SPECIAL TRANSPORTS
This specialist logistics provider specializes in transporting heavy loads that require careful preparation and are subject to strict safety guidelines in order to minimize damage to the material.
There are various companies worldwide that carry out such heavy and special transports on a daily basis as specialist providers and therefore have extensive expertise that the client lacks. Regardless of whether it is for private or commercial purposes.
Depending on the situation, helicopter landing pads may need to be set up, boat transporters used or custom-made containers designed to ensure that each delivery arrives within the agreed deadline.
A great location for a logistics company specializing in heavy and special transports is close to a modern freight transport center. Ideally, this will be fully equipped with the latest technology and facilities required for efficient operations. This ensures easy access to all the necessary resources and provides an ideal platform to handle high value loads with the utmost safety and precision.
With access to the right connections and facilities, companies are able to move large and heavy loads quickly and efficiently by land, sea or air. The cost-effective and punctual delivery of goods is of course also beneficial for customers.
In addition, the chosen location should be economically viable in order to achieve cost savings in transportation and logistics services that have a positive impact on the company’s overall financial performance.
Other important aspects to consider when investing in a new region:
- good infrastructure such as efficient road networks and
- low tolls and taxes that make the region financially attractive for companies.
LOGISTICS COMPANY FOR HEAVY AND SPECIAL TRANSPORTS
Almost every warehouse offers additional services alongside conventional storage and sorting activities: These include, for example, picking work, i.e. the re-sorting of goods (a logistically demanding task), as well as stocktaking activities and the like.
There are also services where customer goods are not only stored, but also packed and made ready for dispatch. Many warehouse managers also offer consulting services in order to optimally meet customer requirements – whether in relation to individual design issues or planning processes, for example in connection with pallet transportation. In short: when it comes to logistics expertise, everything that is needed is represented here.
A centrally located warehouse is of the utmost importance for warehousing services and order picking work. With a strategic location, you ensure a more efficient exchange of goods and, with good transport connections, easier access and greater efficiency.
To be ready for occupancy, the location should also fit in with its surroundings. This includes elements such as
- Climate,
- natural resources,
- Access to electricity,
- Water supply and
- other infrastructural requirements.
All these factors must be taken into account when choosing a location for a new building or plant.
Proximity to the customer is a key factor when planning logistics costs, as it helps to reduce overall expenditure. This is particularly beneficial for companies that require frequent shipments, as they can work with local suppliers and service providers to optimize their expenses. In addition, being close to the customer makes it easier for companies to respond quickly and effectively when they encounter problems or requests.
CONCLUSION
Deciding on a specific location can be difficult. The availability and price level of land and the salary of the workforce are important factors. Other regions and countries can also be included in the new logistics location in order to increase delivery reliability. Outsourcing options should also be taken into account when considering the establishment of a distribution network.
The shelf life and nature of the products also determine the choice of location. Criteria such as the organization of production, the function of the warehouse, investments and operating or employee costs as well as the degree of automation must also be used to decide which type of warehouse is required. All these aspects play a decisive role in the selection of a suitable location.
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Image 1: stock.adobe.com © netsay
Image 2: stock.adobe.com © MaxSafaniuk
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Image 4: stock.adobe.com © Reinhard Tiburzy
Image 5: stock.adobe.com © juergenphilipps
