In today’s economy, many small businesses struggle to recover from financial losses caused by the COVID-19 pandemic. With slowdowns and bottlenecks in thethe global supply chain, small business owners feel the impact more than ever. Facing rising expenses and reduced inventory while meeting increased consumer demand is a challenging balancing act that requires efficient management and organization.
Small businesses must continue to adapt by providing services in a high-demand, constrained-capacity supply chain world impacted by rising logistics costs. Using logistics parks as ideal locations for small businesses doing light assembly, processing, and packaging is the perfect solution for saving money, enhancing operations, and simplifying storage and shipping.
Saving money with logistics parks
The pandemic reshaped how consumers make purchases, boosting e-commerce by over 30 percent, according to CSMP’s 2020 State of Logistics Report. This demand for goods affects logistics costs by leading to high transportation fees, delayed arrivals at ports, delayed deliveries to consumers, and increased warehousing expenses. With their all-in-one method of streamlining small business needs, logistics parks offer solutions that reduce such expenses and enhance customer service.
The reason logistics parks naturally help businesses save money
One main advantage of logistics parks is their strategic location. They directly connect to multiple modes of supply chain transportation, including seaports, international airports, freeways, and railways. This allows businesses to connect easily to local, regional and international networks of suppliers and customers, which can significantly reduce logistics costs.
Direct connectivity to transportation along with extensive trucking space also means small businesses can eliminate or marginalize costs of using transportation middlemen. The result is that assembly, processing, and packaging sectors can focus on and better control output and distribution.
Ready-built warehouse design is another advantage of logistics parks and makes them ideal for saving money while still meeting a variety of storage needs. The large, well-managed, on-site warehouses promote optimized use of resources and eliminate the expense of building or renting external warehouse space. Furthermore, with optimal layouts, ideal methods for picking and moving goods, and superior inventory management, they significantly improve warehousing efficiency and processing.
The fiscal relationship between logistics parks and small businesses
With ample storage unit space, direct transportation connectivity, increased employment opportunities, and increased efficiency, logistics parks come with a multitude of financial benefits. Located in the centers of industrial areas, near capital cities and growing companies, logistics parks attract business and promote economic development. The convenience of managing processing, packaging, storage, and distribution all in one space boosts productivity while minimizing costs. Small businesses can assemble, sort, store, and manage their product fulfillment process from a single hub, allowing them to efficiently serve local, regional, and international markets.
Logistics parks also offer small businesses the capability of organizing and managing operations from a central location, which lowers costs and improves communication among suppliers, consumers, and staff. What’s more, logistics parks create employment opportunities by providing light assembly jobs, retailer and convenience store space, office space, and data centers with specialized software.
Additional financial benefits of logistics parks via sustainability practices
With an over 70 percent increase in consumer interest in sustainability, according to BRINK News, consumers challenge industrial businesses around the world to minimize their carbon footprints. Sustainable logistics parks meet this consumer demand by operating with low emissions and incorporating eco-friendly features such as LED lighting and solar panels. They also reduce toxic odors, sounds, and vibrations. By following sustainability practices, logistics parks also lower costs for water and energy and fulfill international environmental standards, helping to minimize compliance fees and reduce CO2 emission taxes.
The convenience of storage and shipping at logistics parks
The efficient flow and storage of goods is paramount for any business. Logistics parks reduce the need for overhead in setting up a storage facility and provide efficient transportation connectivity. With simplified storage and shipping, logistics parks reduce delivery times, optimize costs for storage and transport, and improve quality of operations.
How logistics parks simplify storage
What better way to simplify storage and inventory management than by having on-site warehousing with open layouts, flexible sizing, and the option to expand? From a centralized hub, small businesses in the light manufacturing industry can plan out inventory, operate and move equipment efficiently and safely, and easily adjust storage space.
A company in light industry can use the convenient on-site park warehouses not only for storage but also for processing, assembly, maintenance, and distribution. For businesses requiring outdoor space, logistics parks provide open storage, truck parks, and repair yards adjacent to wide roads for practical distribution.
How logistics parks simplify shipping
Multimodal access to shipping ports and direct connections with distribution centers make logistics parks ideal for simplifying shipping. According to a comprehensive analysis of port economics by Theo Notteboom and Jean-Paul Rodrigue, one key element of supply chains is their relationship with seaports. With a seaport-centric logistics park, a business owner can streamline supply chain management and operations by centralizing their activities near seaport terminals.
Traditional seaport-based parks accommodate pre-container material input and are within free trade zones exclusive of strict customs regulations. Container-oriented parks are adjacent to storage warehouses and feature container freight stations for consolidating and separating cargo for export and distribution. The central, all-in-one nature of park hubs enhances dock management and the movement of cargo. Such attributes of logistics parks promote accessibility and speed and minimize receiving and shipping cost.
Logistics parks that are close to airports, and national hubs that are located near freeways, are also prime real estate, simplifying shipping by air and land. Because they are concentrated in urban locations near capital cities, logistics parks facilitate the transfer of goods between local industrial businesses.
Enhancing operations management at a logistics park
Another reason experts see logistics parks as ideal locations for small businesses doing light assembly, processing, and packaging is the primary function of streamlining and enhancing operations. The comprehensive and all-inclusive nature of logistics parks expedites and smooths functions across all areas, including processing, assembly, packaging, and distribution.
Operations management inside and outside of a logistics park
Designed for integration and cooperation among all areas of management, operations, production, and distribution, logistics parks boost internal productivity and enhance organization. Rather than dealing with external service providers and middlemen, small businesses in light industry can focus on planning, the management of daily activities, and order fulfillment. They can also control inventory management, warehouse management, and self-storage.
Businesses in light industry must also keep sanitation, security, and safety in mind. Working with reliable and proven outside companies, logistics parks come ready-built with waste collection services, camera monitoring, fire sprinklers, and controlled entry.
How operations management is conducted for small businesses in logistics parks
With Agility’s logistics park 2PL services, small businesses focus on their operations and leave security, waste management, maintenance and overall facilities management to Agility.
Any successful business pays attention to value—the value of the goods or the service they provide to consumers and the value of their place in the industry. Because each logistics park is its own regional distribution network, value-added logistics services become vital contributors to effective operations management. Notteboom and Rodrigue note that these services provide connectivity between production and transport, are a prime source for revenue generation, and facilitate strategy planning for locational value and market impact. Combined, such factors enhance operations through consolidating a supply chain’s production and distribution divisions.
When choosing a park location, businesses in light manufacturing industries must understand the nature of their business and recognize their main sources of spending. Does the business require offices, IT infrastructure, retailer space, a showroom area, employee amenities, data centers, special software, assembly equipment, open floor space, or outdoor yards? Where is the majority of logistics spending going? The answer to such questions determines the size and characteristics needed for the facility and its operations.
Finding the best possible location and recognizing what to look for in a logistics park
The fluctuating nature of e-commerce and the economy requires businesses to remain flexible; accordingly, businesses must consider facilities that give them the opportunity to quickly adapt. Ideally functioning logistics parks offer flexible sizing and ready-built, move-in-ready space as well as custom built-to-suit facilities. They provide flexible leasing and include open layouts with ample space for Class A warehousing. Layouts, office spaces, and warehouses have an expandable design, allowing the facilities to adjust or grow with shifting supply and demand.
Businesses in the light assembly, processing, and packaging industries must also ensure the logistics park is connected to the modes of transportation that best suit their needs. The most successful parks offerconnections to freeways, railways, airports, and seaports. Additionally, they must have sufficient space for docking and loading.
Light industrial businesses have other special considerations, such as natural lighting, secure workspaces, and safety features for assembly, processing, and packaging work. Finding a logistics park that meets these needs is essential.
Negotiating with logistics parks when interested in relocating
When considering a move to a logistics park, businesses and park developers must clearly define their expectations and negotiate for each party’s needs. Both need to define transport procedures and determine the shipment volume the park can handle. Does the business need sea, air, or ground transport, and how will the park accommodate this?
Of course, parties need to discuss operational costs, be explicit with the terms of the lease, and agree to the responsibilities of each side. They must also review procedures regarding damaged freight, customs brokerage, and operational reviews. If business managers believe they might need to expand, they need to negotiate time frames and the terms of expansion costs. Ensuring both parties understand each other’s expectations and needs increases the chance for a successful move and acclimation to a logistics park.
Logistics parks: Supporting worldwide small business growth and productivity
By nature and design, logistics parks come with a variety of benefits. While reducing risk, they help businesses save money, enhance operations, and simplify storage and shipping.
Small manufacturers reach consumers around the world and often provide specialized products that larger manufacturers are unable to produce profitably. Logistics parks, as ideal locations for small businesses doing light assembly, processing, and packaging, support such businesses and promote their growth.
See all the logistics park solutions Agility has to offer small businesses worldwide, and chat with a representative today.