Financial Strategy in Logistics
When talking about the development of the logistics industry along with the growth of e-commerce, it is necessary to take into account that companies in the Georgian market are faced with a choice - either they have to build/manage a warehouse with their own funds, or outsource the services.
With outsourcing you can save both human, financial and time resources. In order to forget about logistical problems, hand over the inventory to ALC's experienced team and leave more time to focus on business growth. Bacho Khitarishvili, the financial manager of the leading logistics company in Georgia, shares business visions and strategic planning principles with logistics challenges.
What are the main financial challenges facing a logistics company in Georgia today and how does our company deal with these challenges effectively?
First, I will touch on the general situation of the transportation and logistics market. Logistics and warehousing services in general depend on the development of the country's economy. In other words, the development of the economy leads to an increase in the demand for transportation and, accordingly, warehousing services.
The volume of transported cargo has shown an upward trend in recent years. In the last 9 months of 2023, the volume of cargo transported from Georgia or via Georgia increased by 4%. It should be noted that due to the geopolitical situation caused in recent years, the market of Georgia acquired more strategic importance and received more attention. As a logistics company that includes more than 150+ accounts in our client portfolio, we are constantly trying to keep up with current economic and market changes and remain a relevant partner for our customers.
80% of warehouses in Georgia are concentrated in Tbilisi. It is worth noting that in terms of locations, our warehouses are distributed in one of the most strategic places in Tbilisi, both for the supply of the city, as well as for the optimal use of the coverage area. For companies, keeping warehouses in Tbilisi is more and more expensive, due to the fact that the demand for land within the city has increased.
The way to solve this problem is outsourcing logistics services and developing high-class warehouses near Tbilisi or in the regions in the future. In 2024, A Logistics Company completed the construction of an A class warehouse, which once again met the demand of customers by offering modern and safe warehouses. It is important that the business meets the challenges correctly. Anticipate market demands and be ready to meet them in advance. For this, we use several methods in the company, one of them is the diversification of services and products. Our list of logistics services covers different industries and markets.
We offer our customers warehousing, office and commercial space, as well as distribution, freight forwarding and value-added services. This type of diversification helps to reduce the risks associated with specific sectors. Customized tariff modules that respond to market conditions are also important. This may include periodic discounts on large volume shipments, as well as customized pricing packages for different customer segments based on customer traffic.
In conclusion, despite the challenges of the market, we continue to meet the demands of our customers as a leading Georgian logistics company. Since 1996, our company has been improving operational processes and providing quality and reliable logistics services to our clients with modern technologies, a customer-oriented approach and many years of experience.
Logistics for successful businesses - A Logistics company
