Having trouble dealing with the intricacies of international logistics? Our blog provides suggestions to simplify the global trade processes and avoid any disruptions.
International logistics encompasses the complete transit of cargo across international boundaries, from its origin to its ultimate destination. To move the cargo from its starting point to its endpoint, securing a container for transportation is essential.
What is international logistics?
Breaking it down simply, international logistics involves the intricate planning, strategizing, and management of the flow and storage of goods, right from your client’s warehouse to the end customer.
The term ‘logistics’ encompasses the handling and transportation of goods along the supply chain. It’s a multifaceted process, managing the movement of goods from one country to another.
How does the international logistics chain work?
The logistics chain is the path of goods from the manufacturer’s factory to the end user. Along the way, there are several procedures and resources used to ensure that the goods reach their desired location safely.
To break it down with an example, let’s say your client is a large American jewelry company based in Los Angeles. The company has a widespread international supply chain and they need to send out an order of diamond rings to India. They’ve hired you to help with their shipment. We’ll take you through a basic logistical process that you need to undertake to get the shipment to India from Los Angeles.
Your Responsibilities for this International Shipping Logistics order will include:
- Picking up the order from your client’s warehouse and taking it to the depot. Here you’ll have to ensure the goods are packed safely onto the truck and remain secure during transit with good packaging.
- Next comes, choosing the right mode of transportation, for your client. This is where you need to help your client choose the most affordable form of freight shipping and bargain for the best cargo shipping rates. The goal is to provide your client with reliable freight transportation to India at competitive rates.
- Your next step is to secure the best container type for the rings to be transported safely.
- Then comes the preparation of transport and trade documents required for export and import, such as the Bill of Lading. You need to review all of the documents to make sure everything is perfect and in order to avoid any unexpected problems during custom clearance.
- You then move on to assist in the customs clearance processes. Here you need to interact with customs agents in India to ensure that goods and documents comply with the customs regulations of the land.
- Another important factor you need to keep in mind is advising your client on export costs, including freight costs, port expenses, consular fees, special documentation costs, insurance costs, and merchandise costs.
Importance and Advantages of International Logistics
So, then what could be the importance of international logistics for you? As you can see above, logistics centers around the movement of goods. Managing logistics, the right way can lead to:
- Increased efficiency
- Lower costs
- Easy and hassle-free custom clearance
- Better inventory control of goods
- Smarter and economical use of freight transportation
- Increased client trust and satisfaction
- Improved client experience
You can now see how investing in coming up with a strong logistics plan can do wonders for your international shipping logistics orders.
Disadvantages of International Logistics
So far, it’s been a positive ride when it comes to international logistics. But we want to make you aware of its challenges too so you can make informed decisions.
If not managed properly, the entire process can take up a lot of time. From the cross-border supply chain, to figuring out custom rules and documentation to transit times, it’s a lengthy process. And let’s not forget procuring containers and negotiating shipping rates. This also adds to the time consumption.
2. Late shipments
There are a lot of reasons for shipments getting delayed. From far away drop-off destinations, to customs clearance, and port delays. There are lots of causes for postponements in delivery.
3. International customs & taxes
Speaking of customs, each product has a tariff code associated with it for customs. You’ll need to ensure that your client puts in the right codes assigned to each SKU (Stock Keeping Unit), taxes and other import costs. Otherwise, they can face costly delays if they accidentally assign the wrong code.
Key components of international shipping logistics
So the first step to efficiently managing your logistics flow is understanding the key components that it entails.
1. Planning– This includes storage, warehousing, and goods handling. Your responsibilities will include storing your clients goods at warehouses before delivering them to the final location.
2. Packaging– You’ll also need to pack the goods for your client, paying close attention to the condition of the products. Proper handling and storing of products are crucial in logistics management.
3. Inventory control– Along with warehousing you’ll need to take care of the arrangement and storage of inventory. This is crucial to the global supply chain.
4. Transportation– Providing your client with affordable means of transportation and giving them the best cargo shipping rates can do wonders for your business and business relations.
5. Information and control– From inventory flow to warehouses and transportation, digitizing your information improves the efficiency and performance of activities throughout the supply chain. So be sure to include that in your plan.
The below captures the 5 major components of international logistics.
5 Tips to Improve International Shipping Logistics
With the proper knowledge of the key components secured, you can now optimize your logistics flow, let’s take a look.
With international orders, goods have to travel long distances and are more prone to packaging tears and damages. You need to pay extra attention to packaging. This is why it’s important to secure the right container for the cargo and make sure the goods are packed safely. You also need to ensure this when it comes to loading and unloading of goods, especially, when they need to be moved via roadways. For your shipments pay attention to the weight, because the weight may likely apply to cargo and cause the shipping cost to increase.
Calculate international shipping charges
Keep in mind the shipping costs based on package measurements, shipment type, weight, international destination, etc. Also make a note of import laws, taxes, and import duties to determine your costs. This is where you can use your bargaining skills to provide your client with the best shipping rates.
Efficiency in custom clearance
Before sending out your client’s international shipment be sure to check that all of the products are allowed to cross and enter foreign borders. There are restrictions on many types of goods that are imported from other countries. Try to avoid customs issues at all costs. Make sure all your customs clearance documentation is up-to-date and accurate.
Digitize your shipping logistics
Opt for shipping container tracking
Now, when it comes to international logistics, often the term international shipping logistics comes up. And it has also popped up on our blog in the sections above. So, before we move ahead, we wanted to clear the air about these two terms.
International Logistics vs International Shipping Logistics
International shipping logistics involves the transfer or movement of goods from one place to another via ships. Global logistics on the other hand is a larger process that involves several steps one of which is shipping itself.
So, what is the difference between the two you may be wondering? Well, the primary distinction between international shipping logistics and international logistics is scope and scale. Logistics operates on a significantly larger scale than shipping. Shipping has a smaller scale and is a part of the international shipping process. They both need to work in unison for businesses to operate efficiently.
You can see how certain international occurrences such as lockdowns affect international logistics and container prices. This will be valuable for you in making decisions for your client’s shipments.
Become part of the Digital Global Community Platform and Smoothen your International Logistics
Streamline Your International Shipping with Confidence: Our platform ensures safe and confident deals through mandatory vetting, eliminating uncertified companies. Gain access to industry giants like Kuehne and Nagel, Seaco, Conway, and Trident, typically challenging for smaller players to engage with.
1. Save on Costs: Choose from over 1,000 rigorously vetted suppliers for your international logistics needs, and lease SOCs to significantly reduce demurrage and detention charges. Avoid surcharges even during delays, thanks to our shipper-owned containers.
2. Price Transparency and Competitive Offers: Benefit from clear market pricing, allowing you to compare, negotiate, and find the perfect deal without hidden fees.
3. Make Informed Decisions: View company profiles, ratings, and reviews to select the best partners for your logistics requirements.
4. Simplify Your Logistics Journey: Let us help you navigate the complexities of international logistics. Discover great deals from certified members and receive expert guidance for a hassle-free shipping experience.
We know how tricky the international logistics process can be. So let us help make your international shipping logistics a smoother and easier process. Find hot deals on a variety of boxes directly from certified members by clicking the banner below and letting our expert team guide the way.
Now coming to the 3 types of logistics, there is inbound, outbound and reverse logistics. For all 3 types, your client will need you to help them with their shipments.
|Inbound logistics refers to the movement of goods from suppliers to production. For example, if a company produces automobile parts in a factory, it will need to use door-to-door inbound transport to send the car parts to various recipients. This is where you could help them with the transportation of the various parts to manufacturers or retailers and distributors.
|You can assist your client with outbound logistics by helping them ship the finished products from your client’s production facility to the next supply chain link which is the customer. Taking the same example above, after the manufactured vehicle parts make their way through the inbound logistics flow to a retailer, they will then be sold and distributed to the end-user. Thus, moving through the outbound logistics flow to reach the desired final destination.
|Reverse logistics flows the opposite way, where goods from the end-users are moved back through the supply chain to the manufacturer. Now you go backward, you help ship back the items from the customer to your client again. Sticking to the same example, let’s say a specific part may be faulty when fitted into a consumer’s vehicle. This part will need to be returned to the manufacturer for replacement or repair.
International logistics: Legislation and the international sales contract
Before we leave you, here’s some extra information regarding legal matters when it comes to international logistics. An international sales contract is an agreement between a buyer and a seller. It chalks out the different parties involved in the transaction, the goods or services being sold, the terms and conditions of the sale, and the price to be paid. This contract protects both parties legally.
An incoterm is one such document that is especially important in international shipping logistics. They are universal marketable rules and regulations that buyers and sellers use in an international sales contract.
International Logistics: Common FAQs
What is international logistics?
International logistics is the process of planning, implementing, and controlling the flow and storage of goods from one country to another. It covers activities such as transportation, customs clearance, warehousing, packaging, and inventory management to ensure the safe and efficient delivery of products across international borders.
How does the international logistics chain work?
The international logistics chain is a sequence of processes where goods are transported from a manufacturer or supplier to the end-user in another country. It involves choosing the right mode of transport, securing packaging, preparing necessary documents, handling customs procedures, and managing costs effectively to ensure the goods reach their destination safely and on time.
What are the key components of international logistics?
The main components of international logistics include:
1. Planning – Organizing how goods will be stored and managed. 2. Packaging – Securing products for long-distance transportation. 3. Inventory Control – Managing the storage and flow of goods. 4. Transportation – Selecting and negotiating the best modes of freight shipment. 5. Information and Control – Using digital tools to track and optimize the supply chain.
What are the advantages of effective international logistics?
The benefits of effective international logistics include increased efficiency in moving goods, reduced costs via optimal routes and carriers, smoother customs clearances, improved inventory control, economic use of transport resources, and enhanced customer satisfaction and trust.
What challenges can arise in international logistics?
Common challenges in international logistics are:
– Time-consuming processes due to complex international trade regulations and long transit times – Potential for late shipments because of delays in customs or transportation – Variations in international customs and tax regulations that can impact the flow of goods if not handled correctly
How can you improve international logistics efficiency?
Improving international logistics efficiency can be achieved by:
– Ensuring robust and suitable packaging for international transit – Precisely calculating international shipping charges – Streamlining customs clearance procedures – Digitizing logistics documents and processes – Implementing shipping container tracking systems
What is the difference between international logistics and international shipping logistics?
International shipping logistics specifically refers to the transport of goods by sea. It is a component of the broader international logistics process, which covers a wider range of activities, including planning, warehousing, and other modes of transport beyond shipping.
How do different types of logistics affect the supply chain?
The three main types of logistics—Inbound, Outbound, and Reverse—play distinct roles in the supply chain:
– Inbound logistics focuses on the transport of raw materials and components to producers. – Outbound logistics deals with the delivery of finished products to customers or retailers. – Reverse logistics involves the return of products from consumers back to the sellers or manufacturers for repair, replacement, or recycling.
What should you consider in an international logistics plan?
When creating an international logistics plan, consider factors like cost management, regulatory compliance, optimal modes of transportation, effective packing, customs clearance, and technology integration for real-time tracking and data management.
How does legislation influence international logistics?
Legislation influences international logistics by dictating the terms of trade between countries, including the preparation of international sales contracts and adherence to Incoterms, which define the responsibilities of buyers and sellers involved in shipping goods internationally.
Why is it important to digitize your logistics process?
Digitizing the logistics process is crucial for improving efficiency, reducing human error, and providing better transparency. It allows for easy access to documents, streamlined communication, and real-time tracking, which enhances decision-making and customer service throughout the supply chain.