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The Significance of Logistics in the Global Economy

The Significance of Logistics in the Global Economy

With or without consumers’ awareness, logistics has become one of the top industries that play a crucial role in today’s economy. It significantly influences trade logistics infrastructure such as roads and highways, airports including dry ports, railways, and many other sectors that are essential for the sustainable and balanced development of the economy. Also, the industry provides a prominent macro contribution to the national economy by creating employment, national income, and foreign investment influx. On the other hand, on the micro-scale, it considerably increases the competitiveness of corporations. In short, logistics not only about the transportation of products, but it is one of the best tools to nourish the economy by helping organizations to stay competitive in the market. 

Now, let’s have a brief discussion about how logistics is becoming a significant aspect of global trade and economy. 

  • Achieve Customer Satisfaction

The demand for products in several industries has significantly improved over the years. Several reasons like increased mobility, smooth delivery services, and best logistics infrastructures are some of the major factors contributing to this improvement. And, because of this, enhanced trade and logistics infrastructure create a place, time, and utilities for customers and users. From this, both of them can be serviced at any time and place. Thus, improved international logistics infrastructure helps in increasing the overall sales of the company’s products.

  • Help to Reduce Business Costs 

One of the biggest advantages of improved logistical infrastructure is it helps businesses to reduce production costs as transportation gets uninterrupted due to inconveniences. For example, due to better road connectivity in China, a truck can travel 1,300 km into this country in about 74 hours. And, the same distance, which is equivalent to the distance between Delhi-Kolkata, is covered in about 144 hours in India. This delay not only extends the trade cycle, but the quality of certain goods get poor and fetches lower prices in the market.

  • Gaining Clients from Each Part of the World 

Transportation in logistics always helps solution providers to have a tap on the customers in every nook and corner of the world. For example, some country’s logistics have many potential fields such as electronics, engineering, chip designing, auto components, etc. It can contribute to the world markets only if the country has improved trade logistics infrastructure and networking systems; otherwise, the business opportunities can be outpaced by one country’s rivals from other developed countries. Hence, every country needs to have a quality logistics infrastructure to tap clients all over the world.

Wrapping It Up

It is indubitably clear that economic growth is one of the leading factors that play a vital role in every country’s development. The logistics industry makes this possible by expanding the trade and logistics infrastructure that creates demand in the economic system for the production of essential materials and services.

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