What Are Logistics Parks?
Most successful organizations these days rely on outsourcing. What is outsourcing? It is a successful business strategy where an organization makes use of third-party service providers to carry out some of its operations.
Outsourcing helps an organization to focus on its core activity without having to worry about non-core ones. Third-party service providers are experts in their field and have the necessary expertise and equipment to provide services to organizations. Besides, outsourcing helps to cut costs.
Some common examples of services that are outsourced by organizations are warehousing, packing, transport, and sometimes even customer services.
The logistics industry is one where outsourcing is applied extensively. Worth a few trillion US dollars, the global logistics industry continues to be one of the fast-growing sectors in the world today.
A logistics park is a collection of several warehouses – both readymade as well as custom-built, office complexes, data centres, transport depots, fuel pumps, piers or bays, labour accommodations, retail facilities, customs houses, etc. Clients can choose the services according to their requirements.
Logistics parks offer state-of-art logistics facilities to clients. Space is leased out to logistics companies for setting up logistics operations within the park.
Companies that wish to set up operations in such logistics parks have to meet certain criteria. They must have the necessary financial backup and the expertise and experience in running effective supply chains.
Some of the leading modern logistics parks have warehousing space exceeding several million square feet. For example, the DP World London Gateway Logistics Park has a warehousing space of 9.25 million square feet. The upcoming Adani Ports & SEZ Ltd. Multimodal Logistics Park at Sanand, Gujarat, India has an industrial area of 9 million square feet.
Warehousing, skilled labour, transport, customs clearance, order processing, repackaging and packing, data processing and reporting, and goods tracking facilities are some of the services that are offered to clients by logistics parks. Warehouses that specialize in the storage and handling of dry, chill, or frozen items besides several other bespoke services are available for lease to clients.
Typically, those companies that do not want to be encumbered by the hassles of running their logistics operations opt for services from a logistics park. It helps them cut costs on capital and overhead expenditure.
Logistics parks are usually located near a major seaport, airport, railway depot, or industrial area. Ideally, they are located in areas where all these different modes of transport converge or are easily accessible. Having an excellent transportation infrastructure that can handle high-volume cargo traffic is key to any successful logistics park.
Well-connected by road, rail, sea, or air, logistics parks provide storage space, processing, and distribution facilities to companies. The warehouses in such parks offer the facility of consolidation or groupage. Consolidation is the collection, segregation, and transport of several Less than Container Load (LCL) cargo as Full Container Load (FCL).
Traditional logistics operations are stand-alone setups. Logistics parks, on the other hand, offer the option of choosing the right logistics operation to suit a particular company’s needs, from several such organizations within the park.
Logistics parks provide office working space to companies with electricity, high-speed internet, water, and catering facilities. They have restaurants, banking and financial institutions, and in some cases boarding and lodging too.
Besides these, all other infrastructure required for running an office can be found inside logistics parks. They can be considered as separate townships with all the facilities required to run the logistics operations of organizations successfully.
Within these parks, it is common to find areas segregated by the type of logistics operations. For example, food logistics, logistics of chemicals, pharmaceuticals, industrial parts, etc. tend to be located in separate and specific areas within the park.
Digital Platforms and Automated Solutions
Leading logistics parks to offer the latest supply chain and associated financial services to companies through easy-to-use digital platforms.
What are digital platforms? In simple terms, a digital platform is a network that helps sellers and buyers to exchange goods and services conveniently. The user can select the best routes and freight charges besides other facilities through these digital platforms.
They also provide secure payment facilities to clients. Digital financial services include insurance cover for cargo exports and imports as well as inventory warehousing. In most such cases, the cargo is the collateral and claims procedures are easy.
With automated solutions, logistics parks help to streamline the shipping process that includes container services, customs and brokerage services, etc. They provide multimodal as well as intermodal transport facilities to carry cargo nationally or internationally with advanced cargo tracking facilities.
Another important factor in logistics is the provision of 24/7 security to inventory and infrastructure. A security breakdown can lead to huge losses to the logistics company as well as its clients. A security breach may be in the form of theft of inventory or assets, digital theft, arson, or vandalism.
Walled individual compounds with a well-equipped and trained security force, security cameras and closed-circuit TV (CCTV), and alarm systems connected to the nearest security outpost deter break-ins and pilferage. The latest security software prevents data breaches and data thefts.
Modern fire-fighting equipment and fire alarm systems are a common feature of most logistics parks. Efficient and effective security solutions provided by logistics parks protect the client’s assets and increase their confidence in the system.
Logistics parks often house bonded warehouses to store imported goods or goods that are to be exported. Bonded warehouses are storage facilities partly under the control of the customs authorities where goods can be stored without having to pay customs duty.
Duty is imposed only on goods when they are taken out of such a bonded warehouse either for export or for consumption in the local market. Such parks offer all the facilities required by a client who wishes to store goods without having to pay customs duty upfront.
Sustainable Logistics and Carbon Footprint
With more and more logistics organizations moving towards and adopting sustainability, logistics parks are striving towards reducing their overall carbon footprint. Sustainable logistics is one where an organization aims to maintain optimum ecological balance by reducing the use of natural resources such as those used in packaging and packing of cargo, fuels, etc.
Sustainability encompasses the use of modern technology to reduce the impact of these materials on the environment.
Carbon footprint means the volume of emissions of certain gases that cause environmental pollution and global warming. The main among these gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and ozone (O3). Carbon footprint is normally measured in carbon dioxide equivalent (CO2e) or Tons of carbon dioxide.
The competitive nature of the industry has prompted many logistics companies to include several specialized value-added services in their repertoire of services.
These value-added services are aimed at attracting and retaining clients. With the latest cutting-edge technologies, logistics parks provide hassle-free end-to-end services to stay in front of the race.
You might also like to read:
- What is Sustainable Logistics?
- Understanding Internet of Things (IoT) in Logistics
- What is Integrated Logistics Management?
- 11 Basic Components of Logistics Cost
- Key Performance Indicators (KPI) in Logistics
Disclaimer: The authors’ views expressed in this article do not necessarily reflect the views of Marine Insight. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Marine Insight do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendations on any course of action to be followed by the reader.
Hari Menon is a Freelance writer with close to 20 years of professional experience in Logistics, Warehousing, Supply chain, and Contracts administration. An avid fitness freak, and bibliophile, he loves travelling too.