Demand on logistic
companies flourishing

High tech systems and

expertise behind their success

The Logistics business is growing rapidly. Demand from distribution and wholesale companies for outsourcing logistic companies is increasing, especially among foreign brands dealing with this model abroad.

Ziad Harb, Regional Vice President at Beirut Cargo Center (BCC) Logistics, said: “The international trend is outsourcing third party logistics. The distributor-client can focus on its core business and leave the logistics headache for someone else to handle.”

Companies that are family-owned, favor the close seller-buyer relationship. But Magdi Ghossainy, Deputy General Manager at Radec Logistics, a third party logistics (3PL) company, said: “These businesses once had owners whose mentality was traditional. The second and third generations are changing things. They are now aware that it is better to use a third party.”

The logistics business is mainly composed of warehousing, equipment, fleet, and operating staff. It is an intricate operation that requires comprehensive cooperation from those involved in the supply chain.

Software is also becoming an important component. Logistics companies are using Warehouse Management Systems (WMS), software sourced from outside the company or developed in-house. The system processes merchandise from when it arrives at the port till delivery to the client.

BCC uses a system called Infor, which is used by global giants like Amazon. It uses the software to measure performance indicators, such as the time taken to unload a container or from picking up an order to delivery. Logistics companies also use Fleet Management Systems (FMS) to keep track of their GPS-equipped trucks.
Excel Logistics owned by Fattal Holding uses yet another software, Distribution Management System (DMS). The DMS decides which routes the trucks should take to reach their destination. Radec has designed its own software in-house to manage routing.

Ghossainy said: “Using international route planning software is not efficient enough here, as we have unclear addresses.”

Logistics companies are providing additional services such as ‘shrink-wrap’ and ‘inkjet’. Shrink wrapping is packing two items by enclosing them in transparent plastic film. This is mostly done for promotional offers at supermarkets. Inkjetting is a type of computer printing on products.

Logistic companies put sizable investments to operate. These include warehouses, the fleet, and material handling equipment. There are additional investments that are even more substantial. The biggest one for BCC Logistics is in IT infrastructure. The WMS costs $200,000 alone.

Reported by Rania Ghanem and Yassmine Allieh