1) Overview of International Logistics in Detail
The world of logistics is an exemplary display of charm in the chaos that is in this industry. Its very existence is based on a labyrinth of complicated activity, comprising a myriad of separate but connected processes. In this consumerist economy, the logistics industry gives meaning to modern creations, connecting origins to destinations.
The international logistics industry was formalised on an island almost 600 years ago, with the Milanese Courier Service delivering mail and goods between present-day Germany and Italy. However, the scope of international ecommerce logistics has come a long way since. It encompasses the flow of goods from before the origin, after it and post its demise. Through this article, we aim to explore the world of international logistics, why we need it and how it has helped shaped the world that we see today.
2) What is International Logistics?
While the term may seem intimidating, it is nothing more than the operation of the logistics industry on a global scale. Logistics, by definition, is the movement and management of goods. International logistics is simply the same process, however, on a scale that transcends borders.
The international logistics industry, although working on a similar goal as its simpler domestic counterparts, is much more complex. The industry is fundamentally a challenge by the fact that it connects an extremely divided world. Like domestic logistics institutions, it still does manage and move goods from one location to another, however, the two operate in different worlds. Where one connects various parts of unified geography, another is responsible for unifying various geographies.
3) Understanding the need for international logistics
Explorative feats performed by humans in previous centuries coupled with innovations in different corners of the globe have made modern civilization highly co-dependent. Over the course of changing regimes and civil uprisings, modern society realised its need for connecting the planet. Where in one corner of the world there was just potential, international logistics became the opportunity that brought the realisation to it. International logistics are now an inalienable part of the global economy.
The industry is now responsible for sustaining international trade, which in itself is the lifeblood of almost all nations in the world. International logistics has created such an intricately interconnected web of economies, that a self-sustaining state has become virtually impossible. While this may appear to be a demerit, it is instead a direct contributor to the prosperity of the world.
4) How modern international logistics helped create the contemporary global economy
Connecting vast distances is no minor feat, and the magnificent scale of the international logistics industry is often unappreciated. The industry has helped governments, kingdoms, and enterprises achieve their highest potentials through its colossal networks. It has opened new markets to businesses and new opportunities to aspirants.
Logistical operations on the global scale have helped curb several drawbacks in the otherwise domestic sector. Some ways the international logistics industry makes life easier for every faction of modern society are:
4.1) Sourcing
International logistics have improved access to resources throughout the world. Through the industry, economies have been able to fulfil their need for raw (and other) materials, creating opportunities for businesses around the world. The availability of requisite non-native materials in foreign lands has, in turn, helped fulfil the demand for products through unhindered supply. Logistics operations that span the globe have helped create a network where nations do not need to depend on their own natural (and manmade) resources to develop a thriving economy.
4.2) Outsourcing
Developed countries are composed of scores of skilled workers that command higher wages. Given the fact that these nations also have a higher cost of living, thus higher cost of production, several businesses need cheaper labour alternatives to compete in the market and create a feasible product. Big corporations often leverage cross-border logistics to outsource many of their operations to countries where labour costs are lower. These operations include, inter alia, assembling, manufacturing, packaging, labelling and more.
Such operations are usually outsourced to developing nations with an abundance of affordable labour and a lower cost of living. The intricate network that is international logistics, gives businesses an opportunity to save significantly even after sending products halfway across the planet to be finished (or processed in some manner) and bringing them back again.
4.3) Growth
The logistics industry through its vast network has allowed businesses to cross geographical borders. Only through this network, businesses are able to conduct business and get their products to the other side of the world, in an alien market far from the origins of the enterprise. This has helped improve the quality of life in countries that do not possess the necessary technology to develop the economy and allowed companies to expand beyond borders garnering more revenues and recognition. The international logistics industry has helped create a global economy where corporations can conduct multinational commercial activities without hindrance.
5) List of Key Services in the International Logistics Industry
In order to bring things into perspective, here are some of the most important services that comprise the international logistics industry.
5.1) Shipping
Shipping is one of the most primal activities performed by the international logistics industry. The very activity of moving commodities from one location to another is the foundation of the sector. Through international logistics, businesses are able to move their products from their origin to their destination without having to worry about boundaries.
Cross-border shipping services not only allow enterprises to reach customers in distant corners of the world but also to source their requirements from these places. By connecting locations that are otherwise too remote to conduct business smoothly, the global logistics industry allows international companies to thrive and innovate without restrictions.
5.2) Distribution
When products of an enterprise land in foreign regions, where, in several cases, the company does not maintain a presence, the logistics industry is what comes to lend a hand. Once in the target country, products need to reach destinations from where they could be sent to desiring customers. This is achieved through distribution services. Logistics companies help get products to the right place, from where they could be sent out to where they are required.
5.3) Delivery
Moving one step ahead, international logistics companies also help businesses make last-mile deliveries. Even after the products have reached a point from where they could be sent over to consumers, it is the logistics partners that make that happen. Moreover, the last-mile delivery activity concludes the process that began with shipping by helping bring the product to the final destination.
5.4) Warehousing
Another important service that international logistics companies provide is warehousing. Commodities require a place to be stored. This location is used to identify, process and dispatch those commodities through the right channels to their destination. The need for warehousing facilities is unalienable to the international logistics process.
Since logistics involve several steps, especially where cross-border commerce is involved. It requires halts and rests in the journey in order to determine the objective and purpose of a product. Without a warehousing facility, items cannot be processed and, therefore, are liable to be lost, damaged or misappropriated. Warehousing services allow businesses to ensure that their products are safely delivered.
6) Region-specific International Logistics operations
The world is a dynamic market, with requirements changing faster than the shift of the sun. To address the independent demands of several disparate regions, the international logistics industry has developed tailored solutions. These region-specific solutions allow companies and countries to fulfil their demands without following a one-size-fits-all approach.
For instance, developed countries in the west such as the United States, the United Kingdom, Canada, France and Germany have very different requirements than their counterparts in the east. In these rich countries, the standard of living is given more importance, therefore, the quality of products that they consume is inevitably high. Thus, there is demand for their products in less developed economies owing to the reliability factor; meaning the international logistics industry brings finished products from developed countries to developing nations to be consumed.
However, these developed economies face trouble with a higher cost of labour, which would raise the prices of commodities, thus making them unfeasible, probably even in the country of origin. Hence, the international logistics industry allows them to send unfinished goods to cheap labour markets such as South-East Asia to be assembled, manufactured, bundled or even packaged. By leveraging cheap labour rates, the products of developed economies become more affordable in domestic as well as foreign markets.
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- What is eCommerce Logistics in India
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- Top 10 Ways to Reduce eCommerce Logistics Costs
Final Words
The international logistics industry is arguably one of the most important aspects of an economy made possible on a global scale. The hindrances that the sector resolves makes it an indispensable asset at the side of enterprises. The industry creates markets, jobs and also allows optimum utilization of resources throughout the world making a truly global society possible. Humanity has exchanged goods for a millennia. Be it through the Silk Road or the Spice Routes, our need to explore provinces and products is satiated through trade, appointing souvenirs to reminisce experiences. Today, through industry and technology, humanity brought experience at doorsteps and we owe to international logistics.
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