What Are Global Logistics?
The rise of global commerce has created a world where people and businesses have become more connected than ever before. If your business relies upon global transportation systems for shipping or receiving freight, it is critical for you to develop an understanding of global logistics.
Understanding Global Logistics
As you would expect, global logistics is a complex and constantly evolving field. Still, in the most simple terms, global logistics is the process of managing the flow of goods from the location they are produced to the location where the end-user consumes them. While the concept of global logistics is a simple one, in practice, it becomes much more complex. Taking the time to visit the website of a freight forwarding company like Ocean-Air Freight Ltd. can save you and your company both time and resources.
Just take a minute to think about the amount of planning and logistics that goes into something as simple as a fruit salad. It may have oranges from Florida, grapes from Mexico, bananas from India, and apples from Canada. The travel distance alone makes it impressive that your morning fruit salad even exists, but now imagine the extra complications that occur due to rotating harvest seasons, storage and preservation, import/export documents, political obstacles, unexpected weather events. Complicated right? Now do the same exercise with every product you use in your personal life and for your business. It doesn’t take long to realize how important it is for your business to stay up to date with the latest trends and news in the global logistics field.
How are goods transported globally?
Logistics companies use four main methods to transport goods globally, they are:
- Trucking
- Shipping
- Rail
- Air-Freight
No matter the method of transportation, if a product will be shipped across borders, companies must ensure the product is appropriately packaged, insured, and accompanied by the proper documentation.
Documentation Requirements
A major benefit of working with logistics companies is that you get access to their expertise regarding required documentation for shipments. When you are busy trying to run your company, the last thing you need is another mountain of paperwork to get slammed on your desk. Examples of documentation that you may require include:
- Commercial Invoices
- Packing Lists
- Certificates of Origin
- Some products, like firearms or dangerous goods, require more specific documentation.
Incoterms (International Delivery Systems)
The International Chamber of Commerce has established a set of rules used to explain the most used trade terms in foreign trade. These “incoterms” help trade partners avoid any misunderstandings, litigation and disputes. Incoterms are a set of 13 abbreviated terms that, in practice, are used to define the roles and responsibilities of both the buyer and seller, such as:
- The duties of the buyer and seller
- Who takes care of the insurances, licenses, permissions and all other formalities
- Who arranges the transport until which point and who is responsible for this
- The point where the costs and risks pass on from the seller to the buyer.
Logistics companies can help you learn the roles and responsibilities defined under each intercom and how that affects the actions that your company must undertake to uphold the agreement.
How can my business incorporate global logistics?
The field of global logistics is vast, and logistics companies work tirelessly to stay up to date with ever-evolving supply chains, laws and regulations, market pressures and unexpected disruptions (like the blockage of the Suez Canal). Working in partnership with logistics companies will help you navigate the turbulent waters of global logistics by providing you with knowledge, expertise and experience. Read more articles at europeanmagazine.
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