As the ever-changing logistics industry continues to transform, one of the major changes emerging is the scope for smaller players to step up and act as intermediaries. Increasingly large companies’ ‘one size fits all’ approach struggles with local presence. Tony Hughes, CEO of global sales, negotiation and communication specialist, Huthwaite International, considers how the impact of a rise in local logistics will benefit the sector, enabling smaller, local and niche markets to thrive.
“Big logistics companies often have issues with local presence, their one-size-fits-all approach sometimes can’t make use of local optimisations or contacts that would be known to local players. Consequently, they often use resellers to reach local or niche markets. During sales and negotiation discussions with each other, large companies can sell their access to global services and well- established household brands, while smaller companies can leverage their local presence and influence in return. When executed well, it’s a two-sided, mutually beneficial discussion.
“Due to the rise of micro-enterprises we may see the emergence of intermediate logistics companies, and so to combat being taken over by these intermediaries, small business owners must leverage their local contacts and connections as part of a successful deal, placing an emphasis on them being able to help these larger businesses to deliver true end-to-end service. There’s much to gain commercially, and competitively, if the deal is right.
“When it comes to selling and negotiating, a prominent concern for smaller logistics businesses will be in preventing companies from using intermediaries due to ease – here it’s important for micro-businesses to stress the benefits of dealing directly with them, including overall savings for the larger businesses in question. Although their role will be valuable, care will be needed to create deals that work for all parties without greed or force.
“Each party will be aware of their own value, unique offerings, strengths and weaknesses, but only those with sharp sales and negotiation skills will leverage them fully. Large companies will also want the ability offered by smaller logistics businesses to enter local markets, and can offer access to global services in reciprocation. But underpinning all of this is a mismatch of cultures – geographic, industrial and corporate. The business potential is huge but this will be no landscape for average performers. Those trained in multicultural selling and negotiating will win out over those that aren’t.
“New deals, new terms – ultimately many large companies have terms and conditions that aren’t applicable to a smaller client or supplier. The smaller players skilled in selling and negotiating will have the upper hand here, with the ability and confidence to leave familiar ground by refusing standard terms and negotiating deals instead based on scope of project.”