Big Versus Small - Who Does Cargo Logistics Best?

When it comes to cargo logistics, the bottom line can sometimes be confusing. Some say the economy is such that only the large multinational firms will survive the times, because they are the only ones who have the structure, capability and network necessary. Others are saying that, in these difficult times, the multinationals are going down, while independents are surviving much better.

If the first is true, what does it mean for small players in the cargo logistics game? Does it mean it doesn’t make sense for small independents to stay in business? If the opposite is true, should an independent stop aiming for growth and building a bigger network?

Does Size Really Matter?

There are several aspects in the field of cargo logistics that determine whether or not a company will survive changing times and demands. Here are just a few.

Network and Coverage. When it comes to the transport industries, area coverage is a key requirement. This means those that can deliver to and from more areas have a bigger chance to win more businesses; this is why when it comes to coverage, multinationals with global networks are at an advantage.

While an independent freight forwarder may not be among the global multinationals with deep pockets and their own offices around the world, this doesn’t mean they can’t compete. Besides, while many independent hauliers may not have branches worldwide, they often either have offices in several countries (especially true for Europe) or are affiliated with groups and partners the world over.

Agility and Flexibility. Independent hauliers and freight forwarders are definitely stronger on this front. Because of their size and less rigid structure, independents are quick to adjust their operations to better suit client needs. When it comes to handling shipments, independents can be more flexible and adapt to specific requirements - such as in the case of special jobs that require expert handling. While multinationals are often bound to use their own overseas offices depending on the destination, independents are able to switch service providers or add personnel that may be required by a job.

When it comes to service and negotiations, smaller, independent firms are also freer to make concessions and adjustments to particular customers; big networks require a lot of red tape and clearances from people in the home office before being able to adjust to specialized requirements for the job. What’s more, independents are better able to provide person-to-person service, which leads to familiarity with the individual needs of different customers.

Price Competitiveness. This is a toss-up. On the one hand, economies of scale ensures that big global and multinational cargo logistics groups are able to offer lower rates because their size enables them to get better prices on equipment, services and supplies. On the other hand, smaller, independent firms can offer lower freight rates because of their lower overheads, expenses and carrier options. Often they have highly competitive pricing and can be easier to negotiate with - especially in those cases where it’s a one or two-man operation - and negotiation for lower rates and discounts don’t need to go through a home office.

Big or small, the size of your company really shouldn’t matter when it comes to competing - it’s your performance that counts.

Norman Dulwich is a correspondent for Haulage Exchange, the world's largest neutral trading hub and cargo logistics company for trading haulage work in the express freight industry. Over 2,500 transport exchange businesses are networked together through their website, trading jobs and capacity in a safe 'wholesale' environment.

Writer and Online Marketing Manager in London.