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What is International Logistics

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International logistics involves the management of resources in a company’s supply chain across at
least one international border.

International logistics includes a close consideration of every factor involved in the flow of products,
people, and paperwork, starting from the acquisition of raw materials and ending with the product’s
purchase. In a traditional framework, the flow of goods is as follows: raw materials are harvested,
components are produced from the raw materials, the final product is produced, goods travel to
wholesalers, wholesalers distribute the goods to retailers, and customers purchase and use the goods.
Along the way, the business will need to take every possible step to control costs and maintain an
efficient supply chain.

Given the large scope of this process, minor inefficiencies can become glaring issues, which is why
careful planning is an essential element of an international strategy. If your business intends to
manufacture goods in one country and market them in another, your ability to manage international
logistics will play an important role in your success.

While businesses use hundreds of different international logistics strategies, the goals of these
strategies are identical: to limit costs while maintaining good customer service and product quality.
The second half of that sentence is important — logistics doesn’t mean sacrificing your brand. Think of
it as streamlining the paperwork, improving your workflow, cutting material costs, and perhaps most
importantly, monitoring everything to spot inefficiencies before they become major issues.

Few components of international logistics are as important as material handling and warehousing. In
order to sell products outside of their physical country of origin, you need to be able to make reliable,
timely, and cost-effective shipments.

Domestic and International Logistics

Domestic logistics is the distribution of goods within a country, while international logistics is the
distribution of goods beyond the country boundaries. Managing logistics domestically is very different
from managing logistics internationally because of the much narrower geographic scope in a domestic
operation. Let us now compare the different aspects of both domestic and international logistics.
 Management – Domestic logistics companies have a single logistics manager to supervise and
manage all sides of planning and execution related to the movement of goods. On the other
hand, international logistics will have a corporate logistics manager who will coordinate logistics
activities with other managers. This will require clear plans on execution and distribution
processes, and may lead to challenges in decision making.
Transportation – Domestic logistics can utilize a variety of transportation options for moving
goods, out of which road transport is the most common preference. Road transport in itself also
provides a variety of options. With international logistics, you have limited transportation
options – some would require only rail while others would require only flight or sea transport.
International logistics may also involve using multiple transportation alternatives for a single
transaction.
Costs involved – In both domestic and international logistics, you have to consider the costs
involved with store facilities, transportation, workers and technology. But, in international
logistics, there are some additional costs to be considered too which include tariffs, government
taxes, fees and currency exchange fluctuations.
Supply chain relationships – In order to build relationships between businesses or between a
business and the customers, trust is the most important factor, which decides on the nature of
the relationship. It gets easier to build trustworthy relationships domestically but, in
international cases, different country regulations, geography and economic roadblocks present
more challenges in building reliable relationships.

Guidelines for effective international logistics

Strong partnerships. International supply chain partners share a general lack of trust. Many
companies have been burned in the past, and are unwilling to make a commitment to do
anything out of the reactive norm.
Even if they do agree to work within a standardized, proactive model that provides
communication and visibility, they likely will be unable to deliver on the commitment due to
inefficient processes in other international logistics relationships. Building strong partnerships
requires a serious effort to communicate and demonstrate your own level of commitment to
achieving your vision.
It is critical to establish standards for each supply chain partner. These standards not only
benefit your company, but also drive the same consistent, reliable flow for each partner.
To establish trust within your supply chain, consider all parties involved. In a truckload shipment
from the United States to Mexico, for example, the Mexican carrier must be confident that the
shipper, U.S. carrier, Mexican customs broker, and border/drayage carrier are meeting their
standards. When the Mexican carrier knows a trailer will arrive by a designated time, it can
proactively allocate a tractor and a rested driver.
Now assume the Mexican carrier delivers and drops the trailer on time at the consignee in
Mexico, and the consignee unloads the trailer within the standard. The carrier is able to
proactively plan for pickup at the designated time, ensuring efficient equipment utilization.
Sharing service standards builds a foundation for efficient, consistent, and reliable logistics flow.
Full visibility for each partner in your supply chain enables efficiency. Workload imbalances are
amplified in the international realm, but as your supply chain partners look upstream, each one
is able to plan and allocate resources to assist overall efficiency, and ensure high service levels
to your organization.
 Factors affecting the standardized flow of a complex global supply chain—such as inclement
weather or heightened border security—will always be present. Enabling proactive
communication downstream allows each supply chain partner to take immediate action as
needed.
The need for controls is amplified in the international realm. More parties are involved, creating
greater complexity. There are also internal dynamics to consider within an organization. Lacking
full alignment toward strategic goals results in higher direct costs, and can challenge the day-
to-day flow of logistics operations.
Consider implementing a centralized decision-making process, proper organizational structure
and division of responsibilities, internal audits, and a formal problem-solving process.

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What is International Logistics

International Freight Mode Selection

International Distribution Channel

International Trade Operations

International Commercial Terms (Incoterm)

Transportation of Hazardous Materials

Documentation for Export

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Integrated Logistics
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