One of the economic indicators of a country is the logistics company that operates within it. Logistics companies and its services as an indicator is a great parameter because it has significant impact on the macro and micro economic dynamics within a country because it touches all the levels of business in a country from the higher tier corporations to the small-scale businesses that operates locally.
Thus, it has its important roles to play in the industry such as employment, production, and even foreign investment. To point it clearly, here are the important roles that logistics companies play in the economic development of a country.
Competition
Through logistical companies’ healthy competition between businesses are stoked due to the ability of smaller companies to compete with bigger companies with their own product or that because it is easier for small scale companies to get raw materials from companies stationed overseas giving them the edge and ability to render services and produce goods that are capable to competing in any market that they belong to.
For example, as a rail freight is perfect for moving large volumes of materials and resources, it can deliver larger volumes of such materials to places that are landlocked, giving those companies the ability to produce goods and compete with locally sourced businesses.
Flow of Goods
With flow of goods comes the flow of cash and transaction. They said that the economy is the lifeblood of any country, and while this is true it also because of the ability of businesses to produce goods and moving these goods to be sold in other areas thus creating a flow of goods with an equal trade of flow of money together with those produce. The flow of goods facilitate the supply and demand chain of any country, without a supply demand would inflate to the point that its price become too high for the common people to be able to afford.
Pricing Factor
The more goods are available the more the price is regulated. This is in reference to the idea of monopoly. For example, if only one business can supply a place with a simple bread, then that business has the unrestricted ability to control the price of its commodities since the people has no alternative when it comes to purchasing such product.
But with logistics companies being able to deliver raw materials and goods, it also meant that monopoly is less likely to occur because more businesses are supplied with materials that will enable them to produce the same goods, thus price is regulated.
Possession Utility
With logistics comes another benefit the possession utility. This pertains to the ability of a person to purchase a product and utilize that product to the fullest of its capacity to be utilized and used thus justifying the price that such product has been purchased with. This can be shown through the purchase of vehicles in which it can be used to transport its owners and also be used to give service and transport others as well, such as uber and taxi, this enables the purchaser of the vehicle to utilize the vehicle and use it to profit as well in the process of acquiring and using it.
It is no secret that a country needed some sort of services that aids in the delivery of goods thus facilitating the flow of money and other currency thus facilitating the dynamics of economy and helping it grow.
