7.2 International logistics
8 min read•august 21, 2024
International logistics is a critical component of multinational corporate strategies, enabling global market access and competitive advantage. It involves complex processes of planning and controlling the flow of goods across borders, requiring an understanding of diverse cultural, legal, and economic environments.
coordinates activities across multiple countries to deliver products efficiently. It balances efficiency, responsiveness, and risk management in a complex international business environment, potentially leading to significant cost savings and improved market share for multinational corporations.
Overview of international logistics
- International logistics encompasses the complex processes of planning, implementing, and controlling the flow of goods, services, and information across international borders
- Plays a crucial role in multinational corporate strategies by enabling global market access, cost optimization, and competitive advantage
- Requires understanding of diverse cultural, legal, and economic environments to effectively manage global supply chains
Global supply chain management
- Global supply chain management () involves coordinating and integrating activities across multiple countries and organizations to deliver products to end customers
- Effective global SCM can lead to significant cost savings, improved customer service, and increased market share for multinational corporations
- Requires balancing efficiency, responsiveness, and risk management in a complex international business environment
Key components of global SCM
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- involve sourcing materials and components from global suppliers to optimize cost and quality
- Manufacturing and production planning across multiple international locations to leverage regional advantages
- balances stock levels across different markets to meet demand while minimizing holding costs
- Transportation and logistics coordination ensures efficient movement of goods across borders and modes
- enables real-time visibility and decision-making across the global supply chain
Challenges in global SCM
- Cultural and language barriers can lead to miscommunication and misunderstandings between international partners
- Longer due to increased distances and border crossings complicate inventory management and demand forecasting
- varies by country, requiring adaptable processes and documentation
- impact costs and pricing strategies across different markets
- (trade wars, sanctions) can disrupt established supply chain networks
International transportation modes
Ocean freight vs air cargo
- offers lower costs for bulk shipments and is suitable for non-time-sensitive goods
- Container ships can carry large volumes (20-foot and 40-foot containers)
- Slower transit times (weeks) compared to
- Air cargo provides faster delivery for high-value or time-sensitive products
- Higher cost per unit but enables rapid market response
- Limited capacity compared to ocean freight
- Mode selection depends on factors such as product value, urgency, and volume
- combines ocean and air for optimized cost and speed
Rail and road transport options
- excels in long-distance, high-volume shipments across continents
- Efficient for landlocked countries or regions with developed rail infrastructure (Trans-Siberian Railway)
- Lower environmental impact compared to
- Road transport offers flexibility for door-to-door delivery and short to medium distances
- Trucking networks allow for easy access to diverse locations
- (NAFTA) facilitate regional trade
- Intermodal solutions combine rail and road to optimize efficiency and cost
- Infrastructure quality and border crossing procedures impact transit times and reliability
Customs and trade regulations
Import/export documentation
- details the transaction between buyer and seller, including product description, quantity, and value
- verifies the country where goods were manufactured or processed
- serves as a receipt of goods shipped and a contract between shipper and carrier
- itemizes the contents of each package in a shipment
- may be required for certain restricted goods or in specific countries
Tariffs and duties
- are taxes imposed on imported goods to protect domestic industries or raise revenue
- Harmonized System (HS) codes classify products internationally for consistent tariff application
- vary based on product type, origin country, and trade agreements
- (NAFTA, EU) can reduce or eliminate tariffs between member countries
- allows for refunds on duties paid for imported materials used in exported products
Warehousing and distribution
Global distribution centers
- Strategically located facilities serve as hubs for inventory storage and order fulfillment across regions
- consolidate inventory to reduce overall stock levels and improve efficiency
- balance local market responsiveness with economies of scale
- or bonded warehouses defer duty payments until goods enter the domestic market
- (AS/RS) enhance efficiency in large-scale operations
Cross-docking strategies
- minimizes storage time by transferring incoming shipments directly to outbound vehicles
- Reduces handling costs and accelerates order fulfillment for time-sensitive products
- Requires precise coordination of inbound and outbound logistics
- Pre-distribution cross-docking sorts incoming goods for multiple destinations before shipping
- Post-distribution cross-docking consolidates incoming shipments into full truckloads for final delivery
Inventory management across borders
Just-in-time vs safety stock
- Just-in-time (JIT) inventory minimizes holding costs by synchronizing deliveries with production needs
- Requires reliable suppliers and transportation to avoid stockouts
- Challenging to implement in global supply chains due to longer lead times and variability
- buffers against supply chain disruptions and demand fluctuations
- Inventory levels vary based on lead time variability and desired service levels
- Higher safety stock often required for international operations due to increased uncertainties
- Hybrid approaches balance JIT efficiency with strategic safety stock placement
Demand forecasting challenges
- Longer lead times in global supply chains require more accurate long-term forecasts
- Seasonal variations differ across global markets, complicating aggregate demand planning
- Economic factors (GDP growth, exchange rates) impact demand patterns in different countries
- New product introductions face varying adoption rates across cultures
- (CPFR) improves accuracy through information sharing
Risk management in global logistics
Political and economic risks
- Trade policy changes (tariffs, quotas) can suddenly impact supply chain costs and viability
- Currency exchange rate fluctuations affect procurement costs and revenue repatriation
- Political instability or conflict may disrupt operations or transportation routes
- Economic downturns in key markets can lead to demand volatility and financial risks
- Intellectual property protection varies across countries, risking technology or design theft
Natural disaster contingencies
- Geographic diversification of suppliers and production facilities mitigates regional disaster impacts
- Business continuity plans outline procedures for maintaining operations during disruptions
- Insurance policies (cargo insurance, business interruption) provide financial protection
- Alternative transportation routes and modes identified for rapid response to infrastructure damage
- Inventory pre-positioning in safe locations ensures supply continuity during recovery periods
Technology in international logistics
Track and trace systems
- GPS and RFID technologies enable real-time visibility of shipments across global supply chains
- (EDI) facilitates seamless information flow between supply chain partners
- provide centralized tracking accessible to multiple stakeholders
- use historical data to forecast potential delays or disruptions
- Mobile applications allow for on-the-go monitoring and status updates
Blockchain in supply chains
- Distributed ledger technology ensures transparency and immutability of supply chain transactions
- automate execution of agreements when predefined conditions are met
- Enhances traceability for product authenticity and ethical sourcing verification
- Streamlines documentation processes, reducing paperwork and potential for fraud
- Facilitates faster payments and reduces disputes through shared, trusted information
Reverse logistics internationally
Returns management across borders
- Reverse logistics processes must comply with customs regulations for re-importing goods
- Centralized returns centers consolidate international returns for efficient processing
- Local return options (in-country processing) balance customer convenience with logistics costs
- Duty and tax recovery procedures vary by country, impacting the financial impact of returns
- Refurbishment and resale strategies must consider regional market conditions and regulations
Recycling and sustainability concerns
- Extended Producer Responsibility (EPR) regulations in some countries require manufacturers to manage product end-of-life
- International shipment of waste materials faces strict regulations (Basel Convention)
- promote design for disassembly and material recovery
- Carbon footprint considerations in reverse logistics network design
- Local recycling partnerships can reduce transportation costs and environmental impact
Cost considerations
Total landed cost analysis
- Total landed cost includes purchase price, transportation, customs duties, insurance, and handling fees
- Helps in supplier selection and manufacturing location decisions by revealing true costs
- Considers both direct costs and indirect costs (inventory carrying costs, risk factors)
- Dynamic modeling accounts for potential changes in exchange rates and trade policies
- Scenario analysis evaluates cost impacts of different supply chain configurations
Currency fluctuation impacts
- Exchange rate volatility affects the relative costs of global sourcing and production
- Natural hedging aligns revenues and costs in the same currency to reduce exposure
- Financial hedging instruments (forwards, options) protect against adverse currency movements
- Pricing strategies may include currency adjustment factors to pass through exchange rate impacts
- Long-term contracts may specify currency terms to allocate risk between parties
Third-party logistics providers
3PL vs 4PL services
- offer operational logistics services (transportation, warehousing, customs brokerage)
- Allow companies to outsource non-core logistics functions
- Provide economies of scale and specialized expertise
- manage entire supply chains, including 3PL selection and integration
- Act as a single point of contact for all logistics needs
- Offer strategic planning and optimization across the supply chain
- Selection between 3PL and 4PL depends on desired level of control and in-house capabilities
Selecting global logistics partners
- Geographic coverage aligns with current and future market expansion plans
- Industry expertise ensures understanding of specific product handling requirements
- Technology capabilities enable seamless integration with company systems
- Financial stability reduces risk of service disruptions
- Cultural fit and communication practices facilitate effective collaboration
- and continuous improvement processes drive ongoing optimization
Performance metrics
Key performance indicators
- On-time delivery measures the percentage of shipments arriving within the agreed timeframe
- Order fulfillment accuracy tracks the rate of orders shipped without errors
- Inventory turnover ratio indicates how efficiently inventory is managed
- Cash-to-cash cycle time measures the efficiency of working capital management
- Perfect order rate combines multiple metrics to assess overall logistics performance
- Cost as a percentage of sales benchmarks logistics efficiency against revenue
Benchmarking international operations
- Internal benchmarking compares performance across different regions or business units
- External benchmarking against industry peers identifies areas for improvement
- Best-in-class benchmarking sets aspirational targets based on top performers
- Process benchmarking focuses on specific logistics activities for detailed comparison
- Considers regional variations in infrastructure and market conditions when setting benchmarks
- Regular benchmarking exercises drive continuous improvement in global logistics operations
Key Terms to Review (56)
3PL providers: 3PL providers, or third-party logistics providers, are companies that offer outsourced logistics services to businesses. These services can include transportation, warehousing, inventory management, and order fulfillment, allowing companies to focus on their core competencies while leveraging the expertise of logistics specialists. Utilizing 3PL providers can significantly improve supply chain efficiency and flexibility in international markets.
4PL Providers: Fourth-party logistics (4PL) providers are firms that manage and integrate the entire supply chain on behalf of their clients. They go beyond traditional logistics services by offering comprehensive solutions, including planning, management, and optimization of logistics operations, which can lead to improved efficiency and cost savings.
Air cargo: Air cargo refers to the transportation of goods and freight via aircraft, allowing for rapid delivery across domestic and international borders. This method of shipping is crucial for businesses that need to move products quickly, especially perishable items or high-value goods that require prompt handling. Air cargo plays a significant role in global supply chains, connecting manufacturers, suppliers, and consumers in an increasingly interconnected world economy.
Automated storage and retrieval systems: Automated storage and retrieval systems (AS/RS) are computer-controlled systems that store and retrieve products or materials automatically. These systems enhance efficiency by minimizing human intervention and optimizing space in warehouses, which is crucial for effective international logistics. By streamlining inventory management, AS/RS can significantly reduce costs and improve accuracy in order fulfillment across global supply chains.
Bill of lading: A bill of lading is a legal document issued by a carrier to a shipper, acknowledging receipt of cargo for shipment. It serves multiple purposes: as a receipt for the goods, as a document of title, and as a contract between the shipper and carrier. This document is crucial for both exporting and importing activities, ensuring that goods are transported under agreed terms, while also playing an essential role in international logistics by outlining the responsibilities and rights of each party involved in the shipping process.
Blockchain in supply chains: Blockchain in supply chains refers to the use of blockchain technology to enhance transparency, traceability, and security in the movement of goods and services across various stakeholders. This technology allows for a decentralized and immutable ledger that records every transaction in real-time, creating a secure and efficient system for managing complex global supply chains. The adoption of blockchain can streamline international logistics and improve inventory management by providing a clear view of the entire supply chain process.
Centralized distribution centers: Centralized distribution centers are large facilities that manage the storage and distribution of goods to various locations, typically serving a wide geographic area. These centers are designed to streamline the supply chain by consolidating inventory in one location, allowing for efficient order fulfillment and lower shipping costs. By centralizing logistics operations, companies can improve inventory management, reduce redundancy, and respond more quickly to customer demands.
Certificate of origin: A certificate of origin is an official document used in international trade that certifies the country where a product was manufactured or produced. This document serves multiple purposes, including customs clearance, eligibility for preferential trade agreements, and adherence to various trade regulations. It plays a crucial role in ensuring compliance with import and export laws and can impact tariffs and duties applied to goods.
Circular economy initiatives: Circular economy initiatives refer to strategies and practices designed to minimize waste and make the most of resources by promoting recycling, reuse, and sustainable production processes. These initiatives aim to create closed-loop systems where products, materials, and resources are continuously cycled back into the economy, reducing the need for new raw materials and minimizing environmental impact. They are increasingly vital for companies looking to enhance efficiency in international logistics by streamlining supply chains and reducing carbon footprints.
Cloud-based platforms: Cloud-based platforms are online systems that provide users with the ability to store, manage, and process data over the internet rather than on local servers or personal computers. These platforms offer scalable resources and tools for various applications, enabling businesses to enhance their operational efficiencies and streamline their logistics processes across international borders.
Collaborative Planning, Forecasting, and Replenishment: Collaborative Planning, Forecasting, and Replenishment (CPFR) is a business practice that involves multiple organizations working together to enhance the accuracy of forecasting and streamline the supply chain process. This approach fosters communication and collaboration among partners, which leads to improved inventory management and demand fulfillment. By sharing data and insights, companies can better anticipate customer needs, reduce stockouts, and minimize excess inventory.
Commercial Invoice: A commercial invoice is a document provided by the seller to the buyer that details the goods sold, including descriptions, quantities, prices, and payment terms. This document serves as a crucial component in international trade as it is often used by customs authorities to assess duties and taxes, ensuring compliance with both exporting and importing regulations.
Cross-border trucking agreements: Cross-border trucking agreements are contracts that facilitate the movement of goods across national borders using trucks. These agreements are crucial for ensuring the smooth transportation of freight between countries, addressing regulatory issues, tariffs, and the standards needed for compliance in different jurisdictions.
Cross-docking: Cross-docking is a logistics practice where incoming shipments are directly transferred to outgoing transportation with minimal or no storage time in between. This method streamlines the flow of goods through a distribution center, enhancing efficiency and reducing handling costs. By connecting suppliers and customers quickly, cross-docking plays a crucial role in international logistics and inventory management, allowing businesses to maintain lean inventories while meeting global demand.
Cultural barriers: Cultural barriers refer to the obstacles that arise due to differences in cultural backgrounds, values, and practices between individuals or groups. These barriers can impact communication, understanding, and collaboration, often leading to misunderstandings or conflicts. Overcoming cultural barriers is essential for effective interaction in a globalized environment, especially when dealing with international logistics and the concept of reverse innovation.
Currency fluctuation impacts: Currency fluctuation impacts refer to the changes in value of one currency relative to another, which can significantly affect international trade and investment. These fluctuations can lead to variations in the cost of goods and services across borders, influencing pricing strategies, profit margins, and overall financial performance for multinational corporations. Understanding these impacts is essential for effectively managing international logistics, as they can alter shipping costs, lead times, and market competitiveness.
Currency fluctuations: Currency fluctuations refer to the changes in the value of one currency compared to another over time. These changes can have significant impacts on international trade, investment decisions, and overall economic stability. Fluctuations can be caused by various factors such as interest rates, economic indicators, geopolitical events, and market speculation.
Demand forecasting challenges: Demand forecasting challenges refer to the difficulties organizations face in predicting customer demand for products or services accurately. These challenges can arise from various factors such as market volatility, seasonality, and changing consumer preferences, making it essential for businesses to develop robust forecasting methods to manage their international logistics effectively.
Duty drawback: Duty drawback is a customs refund program that allows importers to receive a refund on duties paid for imported goods that are later exported or destroyed. This system encourages international trade by reducing the overall costs associated with importing and exporting, thus making it more financially feasible for companies to participate in global markets. It also helps to enhance competitiveness by alleviating the financial burden imposed by customs duties on imported raw materials or components used in production.
Duty Rates: Duty rates are taxes imposed by governments on imported and exported goods, determined based on the value, weight, or quantity of the goods. These rates can significantly affect the cost of doing business internationally, influencing pricing strategies and overall competitiveness in foreign markets. Understanding duty rates is essential for companies engaged in international trade as they impact supply chain decisions and logistics planning.
Economic risks: Economic risks refer to the potential financial losses that businesses may face due to changes in economic conditions, such as inflation, exchange rates, interest rates, and overall economic stability. These risks can significantly impact multinational corporations as they navigate complex international markets, supply chains, and logistics. Understanding these risks is crucial for effective decision-making and strategic planning in an increasingly interconnected global economy.
Electronic Data Interchange: Electronic Data Interchange (EDI) is the structured transmission of data between organizations by electronic means. It enables the seamless exchange of documents like purchase orders and invoices, reducing manual errors and speeding up transactions, which is crucial for international logistics where timely communication is key to managing supply chains efficiently.
Extended Producer Responsibility Regulations: Extended producer responsibility (EPR) regulations are policies that hold producers accountable for the entire lifecycle of their products, particularly in terms of waste management and environmental impact. These regulations encourage manufacturers to design products that are easier to recycle or dispose of, ultimately reducing waste in landfills and promoting sustainability. By shifting the financial and physical responsibility for waste management onto producers, EPR aims to incentivize eco-friendly practices and product stewardship.
Free Trade Zones: Free trade zones are designated areas within a country where goods can be imported, stored, and re-exported without the usual customs duties and tariffs. These zones are intended to promote international trade by reducing costs and bureaucratic hurdles for businesses. They can enhance international logistics by streamlining supply chains, enabling faster movement of goods across borders, and attracting foreign investment.
Geopolitical risks: Geopolitical risks refer to the potential for political events or conditions in a country or region to adversely affect the operations and profitability of businesses. These risks can arise from factors such as political instability, changes in government policies, conflicts, or tensions between countries, and can have a significant impact on international logistics by disrupting supply chains and affecting trade routes.
Global Distribution Centers: Global distribution centers are strategically located facilities that serve as central hubs for the storage, sorting, and distribution of goods on an international scale. These centers streamline the supply chain by enabling companies to efficiently manage inventory and optimize delivery times across different regions, ultimately enhancing customer satisfaction and operational efficiency.
Global Supply Chain Management: Global supply chain management involves the planning, control, and execution of supply chain activities across international borders, aiming to maximize customer value and achieve a sustainable competitive advantage. It connects various elements like production, distribution, and logistics, while leveraging technological advancements to enhance efficiency and decision-making. Effective global supply chain management is essential for businesses looking to optimize operations and respond swiftly to market demands.
Harmonized System Codes: Harmonized System Codes (HS Codes) are standardized numerical codes used to classify traded products for customs and international trade purposes. These codes are essential for determining tariffs, trade statistics, and compliance with regulations across countries. By providing a uniform classification system, HS Codes facilitate smoother international logistics and customs clearance, reducing delays and enhancing the efficiency of global trade operations.
Import licenses: Import licenses are official permits issued by a government that allow the importation of specific goods into a country. These licenses are often required for controlled or regulated items, and they help ensure compliance with national laws, trade agreements, and safety standards. By controlling which products can enter a market, import licenses play a critical role in international trade and logistics.
Information systems integration: Information systems integration refers to the process of combining different computing systems and software applications physically or functionally to act as a coordinated whole. This involves ensuring that data flows seamlessly across various platforms and departments, leading to improved efficiency and real-time decision-making capabilities. It is crucial for facilitating international logistics by providing timely and accurate information that supports supply chain management and operational coordination across borders.
Intermodal transportation: Intermodal transportation refers to the use of more than one mode of transport to move goods from their origin to their destination. This method combines various transport systems—like rail, truck, and ship—into a seamless process, enhancing efficiency and reducing costs. By leveraging the strengths of different transport methods, intermodal transportation plays a crucial role in international logistics, facilitating global trade and enabling businesses to optimize their supply chains.
Inventory Management: Inventory management refers to the process of overseeing and controlling the ordering, storage, and use of a company's inventory. This includes managing raw materials, work-in-progress products, and finished goods to ensure that a company has the right amount of inventory at the right time. Effective inventory management is crucial for maintaining operational efficiency and meeting customer demand while minimizing costs.
Just-in-time inventory: Just-in-time inventory is a management strategy aimed at reducing flow times within production systems as well as response times from suppliers and to customers. This approach minimizes waste by keeping inventory levels as low as possible, allowing companies to respond more swiftly to market demands. It emphasizes efficiency, coordination, and reducing storage costs, making it essential in global markets where speed and adaptability are crucial.
Lead Times: Lead times refer to the total time taken from the initiation of a process to its completion, particularly in logistics and supply chain management. Understanding lead times is crucial for efficient planning and inventory management, as they help companies anticipate when products will arrive and ensure that they meet customer demand without overstocking or stockouts.
Manufacturing planning: Manufacturing planning is the process of coordinating and strategizing the production of goods to ensure efficiency, quality, and cost-effectiveness. This involves determining what products to produce, how much to produce, and the timing of production activities, all while considering supply chain constraints and customer demand.
Natural disaster contingencies: Natural disaster contingencies are plans and strategies that organizations implement to prepare for, respond to, and recover from unforeseen natural events such as earthquakes, floods, hurricanes, and wildfires. These contingencies aim to ensure the continuity of operations, minimize disruptions in supply chains, and safeguard assets during such disasters. By having these plans in place, companies can enhance resilience and maintain international logistics operations even in challenging circumstances.
Ocean freight: Ocean freight refers to the transportation of goods and cargo via cargo ships across oceans and seas. This method is essential for international trade, as it allows for the movement of large quantities of goods at a relatively low cost compared to other modes of transport. Ocean freight plays a crucial role in global supply chains and logistics, facilitating trade between countries and contributing to the efficiency of multinational operations.
Packing List: A packing list is a detailed document that itemizes all the goods and materials being shipped or transported in a shipment. It serves as an important tool in international logistics, ensuring that all items are accounted for, facilitating customs clearance, and enabling efficient inventory management throughout the shipping process.
Performance metrics: Performance metrics are quantifiable measures used to evaluate the effectiveness and efficiency of various operations within a business. These metrics provide insights into how well an organization is achieving its key objectives, allowing for informed decision-making. By tracking performance metrics, companies can assess logistics efficiency and the effectiveness of distribution channels, leading to improved strategies and increased competitiveness in the global market.
Political Risks: Political risks refer to the potential for losses or negative impacts on a business due to political events or changes in a country. These risks can arise from government actions, instability, changes in regulations, or geopolitical tensions that affect how companies operate in foreign markets. Understanding political risks is crucial for effective international logistics, as they can disrupt supply chains and influence operational decisions.
Predictive analytics: Predictive analytics refers to the use of statistical techniques, machine learning, and data mining to analyze current and historical data to make predictions about future events. This approach is essential for businesses aiming to enhance decision-making processes by anticipating trends and behaviors, ultimately driving better strategic outcomes. In a global context, it helps organizations understand market dynamics and customer preferences, while optimizing operations like logistics and supply chain management.
Preferential Trade Agreements: Preferential trade agreements (PTAs) are treaties between two or more countries that provide reduced tariffs or other trade advantages for certain products. These agreements are designed to enhance trade flows and economic cooperation among the signatory countries, often leading to increased market access for goods and services. PTAs can significantly impact international logistics by altering the supply chain dynamics, shipping costs, and customs procedures.
Procurement Strategies: Procurement strategies refer to the systematic approach organizations use to acquire goods and services necessary for their operations, focusing on optimizing costs, improving quality, and ensuring timely delivery. These strategies are crucial in the context of international logistics as they directly impact supply chain efficiency, inventory management, and relationships with suppliers across different countries. Effective procurement strategies also consider global sourcing options, compliance with local regulations, and cultural differences in supplier interactions.
Rail transport: Rail transport refers to the movement of goods and passengers using trains on railways. This mode of transportation is known for its efficiency in moving large quantities of freight over long distances, and it connects various regions through a network of tracks. Rail transport is an essential component of international logistics, as it plays a significant role in the supply chain by facilitating the timely delivery of products and materials across countries.
Regional distribution centers: Regional distribution centers are strategically located warehouses designed to efficiently manage and distribute products to various locations within a specific geographic area. These centers play a crucial role in streamlining logistics and supply chain operations, ensuring timely delivery of goods while minimizing transportation costs. By serving as hubs for inventory management, regional distribution centers enhance the overall efficiency of international logistics.
Regulatory Compliance: Regulatory compliance refers to the processes and practices that organizations must follow to adhere to laws, regulations, guidelines, and specifications relevant to their operations. In a global context, companies must navigate various regulatory frameworks across different countries, which can influence corporate governance structures, management models, product development stages, logistics operations, and stakeholder interactions.
Returns Management: Returns management refers to the systematic process of handling the return of goods from customers to the manufacturer or retailer. This process includes receiving returned items, assessing their condition, restocking, and managing any necessary refunds or exchanges. Effective returns management is crucial for maintaining customer satisfaction, minimizing losses, and optimizing supply chain efficiency.
RFID Technology: RFID technology, or Radio Frequency Identification, is a wireless system that uses radio waves to automatically identify and track tags attached to objects. This technology enhances supply chain efficiency by enabling real-time tracking of products, improving inventory management, and facilitating seamless international logistics operations.
Road transport: Road transport refers to the movement of goods and people using vehicles on road networks, which is a crucial component of international logistics. This mode of transport is essential for connecting different modes, such as sea and air transport, making it a key link in the supply chain. Its flexibility and ability to access remote areas often make it the preferred choice for both short and long distances.
Safety Stock: Safety stock refers to a buffer inventory that is maintained to mitigate the risk of stockouts caused by uncertainties in supply and demand. This extra inventory acts as a safeguard against fluctuations in lead times, unexpected demand spikes, and delays in restocking. Safety stock plays a crucial role in ensuring smooth operations, especially in international logistics and global supply chains where variability is common.
Scm: Supply Chain Management (SCM) refers to the strategic coordination of all activities involved in the flow of goods, services, and information from raw materials to end consumers. It encompasses a wide range of processes, including sourcing, production, logistics, and distribution, all aimed at maximizing efficiency and customer satisfaction. In an international context, SCM is critical for navigating complex global supply chains, ensuring timely delivery and compliance with diverse regulations across different countries.
Smart Contracts: Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They automatically enforce and execute contractual obligations when predetermined conditions are met, making transactions more efficient and reducing the need for intermediaries. This technology is increasingly relevant in areas such as international logistics, where it can streamline processes and enhance transparency between parties involved in the supply chain.
Tariffs: Tariffs are taxes imposed by a government on imported goods and services, designed to raise revenue and protect domestic industries by making foreign products more expensive. They play a crucial role in international trade by influencing trade patterns, market dynamics, and the strategies of businesses operating in the global arena.
Total landed cost analysis: Total landed cost analysis is a method used to determine the complete cost of bringing a product to market, including all expenses from production to delivery. This analysis considers factors like shipping costs, customs duties, taxes, insurance, and handling fees, providing a comprehensive view of what it truly costs to get goods from suppliers to consumers. Understanding total landed costs is crucial for making informed decisions in international logistics, allowing companies to optimize their supply chain operations and improve profitability.
Track and Trace Systems: Track and trace systems are technological solutions that enable the monitoring and tracking of products throughout the supply chain from production to delivery. These systems provide real-time data on the location, status, and movement of goods, which is essential for enhancing transparency, ensuring compliance, and improving operational efficiency in international logistics.
Transportation coordination: Transportation coordination refers to the systematic management and synchronization of transportation activities across different modes and routes to ensure the efficient movement of goods. This process is vital in international logistics, as it helps to minimize delays, reduce costs, and optimize supply chain operations by effectively aligning various transportation resources and schedules.