International Logistics

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The globalization of production means a company can procure or process resources from just about anywhere on the planet. This may be efficient when a resource either is not available locally or costs less when purchased from international markets.

international logistics

Before filing for bankruptcy in , Nippon Kakoh Seishi was Japan's largest paper company; it owned forests and processing facilities in various countries around the world to produce wood pulp -- a key ingredient needed to create paper for its clients. For a small business, production inputs may include outsourcing production processes or importing finished products or raw materials from international manufacturers. Packing, labeling, transportation and insurance are also part of international logistics.

Sea, air, rail and interstate road systems are important aspects of transportation logistics. The cost of transporting materials and finished goods affects any decision about where to locate manufacturing facilities or which supplier to use to deliver a given production input.

international logistics

Keep in mind that some products cost very little to transport while others cost a great deal, and you'll need to look at transportation logistics relevant to your business. Foreign goods imported into the United States must be processed by the U. Customs and Border Protection, a federal agency charged with the enforcement of trade and tariff laws.

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International Logistics and Distribution. In addition to the costs inherent to all logistical operations, the main elements that must be considered include: Nature and characteristics of the goods. The mode of transport. Logistics in the international sales contract. It is worth making a distinction between: General cargo in loose units fractionated cargo or grouped in pallets unitary cargo , which is mostly shipped in containers.

Bulk cargo, which can be shipped in containers or other cargo transport units, or else in bulk ship holds, oil tankers, tanker lorries, etc. Oversized cargo, which requires special conditions for handling or transport. Dangerous goods, particularly those included under international regulations: Rolling cargo, made up of platforms that can be rolled on wheels, lorry trailers, trucks, train cars, etc. Other goods such as valuable goods or live animals. The transit company must advise the exporter with respect to the itineraries and the shipping mode or combination of modes intermodal transport, under the scope of a single transport contract , which must be contracted for each leg of the journey: Maritime , regulated by the Hague Rules , and where the contract is formalised in the bill of lading.

Air , regulated by the Montreal Conventio n and with the contract formalised in the air carrier letter. Although there are many details that can vary, the international shipping chain has a series of common processes: Although the international logistics operator is the party responsible for advising the exporting or importing company on the applicable laws and standards for each shipping operation, it is important to have the most detailed knowledge possible of certain issues that relate exclusively to the loading company, such as those related to, among others: Packing and securing of cargo.

Production Inputs

Storage and transport of dangerous goods. Log in or sign up to add this lesson to a Custom Course. Login or Sign up. According to the Council of Logistics Management, logistics is the management process of 'planning, implementing, and controlling the physical and information flows concerned with materials and final goods from the point of origin to the point of usage. It may sound complicated, but logistics is basically the management of stuff, and information regarding the stuff, from one place to another until it reaches the consumer.

The logistical management of physical items may include integration of information such as inventory databases and shipping schedules , material handling, production, packaging, inventory, transportation, distribution, storage, and security for the resources. Let's look at a simple example. Just pretend for a moment that you work as a logistics manager for a large American jewelry company based out of New York.

Your company has an extensive international supply chain.

We'll walk through a simplified logistical process for a diamond ring. Your diamond supplier is in South Africa. You get your gold from a supplier in China. The jewelry itself is assembled in Switzerland. Your job is to manage the supply chain from acquisition of a resource through its transformation into a finished product and until it is sold to a customer.

Your responsibilities may include the following:. If you look closely at the earlier example, you can discern three different types of processes involved in international logistics that we will call logistics channels:.

Get access risk-free, just create an account. International logistics usually requires at least a rudimentary knowledge of parts of international law, such as international trade treaties, free trade agreements, and the law of the sea. You should also have a firm understanding of foreign laws that may affect your supply chain, such as laws relating to contract enforcement, the commercial sale of goods, and the responsibilities of warehouses and common carriers such as foreign maritime shippers and railroad companies.

So What Is International Logistics?

It is often important to have a well-seasoned local intermediary to help assist with foreign transactions. They can help with local laws and customs. They can also help establish and maintain smooth relationships with local firms. International logistics is the process of planning and managing the flow of goods and products in your company's supply chain from acquisition to customer purchase, where part of the process involves crossing at least one international border.

Managers in international logistics must be aware of relevant international and foreign law to protect the company's interests. Use of experienced local intermediaries will be a great advantage to companies working in foreign countries. To unlock this lesson you must be a Study. Did you know… We have over college courses that prepare you to earn credit by exam that is accepted by over 1, colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

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Five Ways to Drive Efficiency In International Logistics - Inbound Logistics

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