What is Global Logistics?

Global Logistics Definition

Global logistics refers to the process of managing the flow of goods, information, and other resources, including energy and people, from the point of origin to the point of consumption on a global scale.

 It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, often in a multinational network. This complex process considers a multitude of factors such as various trade laws, political boundaries, economic fluctuations, and geographical challenges, all to ensure the efficient and effective movement and storage of goods and services.

Understanding these aspects can guide shipping optimization efforts, ultimately leading to reduced costs and enhanced service levels.

Why is Global Logistics Important?

From procuring raw materials in one country to manufacturing in another, then selling the final product across various countries, global logistics facilitates the entire lifecycle of trade operations. It is an essential aspect of supply chain management that allows businesses to reach new markets, expand their customer base, and operate more efficiently in today's interconnected world economy.

In the face of an increasingly globalized economy, an in-depth understanding of global logistics is critical for businesses aiming to gain a competitive edge. 

Custom global logistics strategies will allow you to expand your firm and its operations internationally without taking on untenable consulting fees or operational deficits. 

Custom global logistics consultants should always be able to justify their price by demonstrating the amount that you save from every initiative they undertake while they are within your employ. Cost savings should add up to significant fractions of each transaction.

Logistics, as you likely already know, covers the entire gamut of operations involved in delivering your product (or service) to your end consumer. Global logistics management requires the development of global logistics solutions that are much more complex than what you would encounter while working on a national or even on a regional basis. When you consider logistics of a global scope, you are dealing not only with the obvious challenges that are part of every logistics operation, but also with the following:

• A more extensive network of suppliers and vendors, often operating under foreign laws.
• The added complications of customs and associated fees, which can impact your global operations.
• More intricate insurance structures, which may complicate claim processes.
• Varied expectations from consumers regarding logistics quality.
• Different norms, standards, and communication protocols from international vendors.

Since global logistics management has to take all of these factors into account, powerful global logistics solutions are more sophisticated than local solutions. To secure global logistics that will work for you, you will often have to deploy larger systems that demand a higher level of savvy from every member of your organization, including all of your shipping managers. Plus, you must take extra steps to ensure that you have secure global logistics that will not fall prey to the kinds of exceptions caused by issues such as loss, theft, and other problems that are not typically part of the market landscape in the United States, but may be a factor in some other areas.

When making the transition from a regional to a worldwide logistics model, one of the most important factors is to unite global operations using the right kind of technology. Without true shipping analytics visualization that includes features such as package routing, carrier shopping and logistics handling, it is virtually impossible to initiate a new global scope of operations without losing significant funds per transaction. That being the case, it is a good idea to not only institute the right technology and the change controls to go along with it, but to seek the expertise of an enterprise with a global scope that can imbue your team with best practices from the start.

Advantages/Benefits of Global Logistics

Advancing to a global logistics model has several benefits:

1. Expanded Market Reach: Going global broadens your customer base, providing more opportunities for revenue and growth.
2. Supply Chain Optimization: Global logistics can lead to more efficient and cost-effective supply chain management, primarily through the diversification of supplier networks.
3. Competitive Advantage: Being able to operate and deliver goods or services efficiently on a global scale can give your business a significant edge over competitors that only operate locally or regionally.

Examples of Global Logistics Providers

Numerous providers have excelled in offering global logistics solutions. Renowned examples include DHL, FedEx, and UPS, all of which have an extensive international presence and offer a broad range of services to facilitate global trade.

Major Functions of a Global Logistics Provider

Global logistics providers perform a myriad of functions to streamline international trade:

1. Transportation and Distribution: Providers manage the movement of goods via multiple transport modes (air, sea, rail, road), ensuring efficient and timely deliveries.
2. Customs Clearance: They handle the complexities of customs processes, including documentation and fees, simplifying the import/export process for businesses.
3. Warehousing and Storage: Global providers offer strategic warehousing solutions, enabling safe storage and easy accessibility of goods.
4. Supply Chain Management: They optimize the entire supply chain, managing everything from procurement to last-mile delivery.

Remember, partnering with a provider like Lojistic can further enhance the efficiency and cost-effectiveness of your global logistics operations. Create a FREE Lojistic account today! With detailed shipping reports about package characteristics, carrier performance, and service type usage, you can make data-driven decisions to optimize your shipping operations on a global scale.

Author

Bryan Van Suchtelen

Bryan Van Suchtelen

Corporate Director of Parcel Rate Services

With more than 34 years of parcel experience, Bryan Van Suchtelen is the Corporate Director of Parcel Rate Services at Lojistic, one of the nation’s top logistics and transportation cost management companies.

Prior to joining Lojistic in 2015, Bryan enjoyed a 26-year career with UPS where his roles included Pricing, Field Sales and Director-level Sales Management of some of UPS’s largest customers.

At Lojistic, Bryan leverages his wealth of experience/expertise to identify and execute supply chain cost management solutions for parcel shippers of all sizes. Bryan has helped his customers reduce their shipping spend by tens of millions of dollars.