Most people know that we live in a global economy. The global supply chain is critical for many businesses to keep running. This has been made even more apparent over the years, as international logistics has even been in the news (like in 2021 when a container ship got stuck in the Suez Canal, impacting companies around the world). If your company is looking to expand internationally or take parts of your supply chain overseas, you must understand how international logistics works. This will allow you to be prepared to navigate the global world we are living in, and know exactly how to find partners for your business that can help you take advantage of all the global supply chain has to offer. Here is what you need to know about international logistics, and what it can mean for your eCommerce business.
What is International Logistics?
International logistics involves the transportation of products through the international supply chain, including cross-border shipping and international distribution. The goal of international logistics is to efficiently deliver goods to consumers around the world.
Examples of International Logistics
When you are working with an international supply chain for your eCommerce business, there is an additional level of challenge and complexity to having your supply chain run smoothly. International logistics is not just transportation. Here are some examples of what international logistics can include for businesses like yours.
Handling of Goods
- When you are working with international goods transportation, you need to know your inventory is going to be properly handled at all times. This is especially true when you are selling items that are delicate, perishable, or prone to damage. With international logistics, goods handling will ensure items are packed correctly and efficiently, safely stored in warehouses in the country of origin and the destination country, and moved across borders for a reduced shipping cost with partnerships logistics companies have developed for cargo and carriers. We have locations scattered across the US to help with the delivery of goods when your eCommerce business begins expanding to Canada, Mexico, or Europe. This brings the warehouses closer to those customers, helping to improve customer delivery times and reduce shipping costs with warehouses to store your inventory.
- With international transportation, there are many different modes to consider. Inventory can be moved by air or sea across the oceans, or by train or truck across borders. Which option you choose will depend on the cost and timeline you are looking for. The other factor to consider is reliability, as some options are more or less dependent on good weather conditions and can adhere to stricter timelines.
Customs and Import or Export Documentation
- When you deal with global shipping, you have to deal with additional fees and paperwork for customs and import taxes. Any international orders need to be cleared by customs in the destination country, and all of the correct paperwork needs to be in order. All the details need to be there – and correct – so that nothing is delayed. International logistics professionals are used to this and can help your eCommerce business handle customs documentation and taxes quickly and efficiently. This is so everything is correct the first time and your goods get to where they need to be.
- When people hear logistics, this is the primary thing they think about. The transportation process can include multiple carriers throughout the entire process. You may use freight forwarders and other shipping companies to get your goods from the country of origin to wherever it needs to go. You may use ships, planes, trucks, or trains to move your goods between different locations (like manufacturing plants, warehouses, distribution centers, stores, etc.). This often depends on timelines and pricing. You need to double-check all documentation to comply with regulations and rules in the different countries (and even with the different carriers and shipping partners). Transportation management includes many moving parts and a lot of communication to ensure a smooth process from beginning to end.
What are the 5 Major Components of Logistics?
Logistics includes a lot of parts, but they can be categorized into five major elements. These are planning, packaging, inventory management, transportation, and data. Take a look below to learn more about what each of these elements entails and what makes up international logistics.
Logistics planning can involve storage, warehousing, and materials handling. Having a good plan can make the entire supply chain process run much more smoothly. It can also help you be better prepared for when there are challenges, fluctuations, or disruptions to your supply chain. It can include ensuring inventory is stored correctly, like temperature or climate-controlled storage. Also, this includes the physical location of the warehouses being convenient to customers for speedy shipping. The planning stage of logistics management is where a lot of the communication and organization come in. This is to make sure every partner in the process is on the same page and the coordinated efforts will pay off for your business in the long run.
Handling the inventory well and making sure they are safe and secure through transportation is a key to logistics management. This includes whether they are local or international. Items can be stored individually or as units with other like items (and dissimilar items on occasion). This can include the size, shape, and material of the box or envelope the items are shipped to customers. Also, it can include the size, shape, and material of boxes, pallets, and bins used during storage. However, packaging in logistics management can also include the color, design, and branding of all of those elements. All of it reflects on your company, so ensuring a good first impression from your packaging is key for a good customer experience. High customers experience also consists of secure packaging for safe transport of the items.
Inventory management is critical to a successful business. It is related to storage and warehousing, as that is typically where inventory management and inventory cycle counts happen. Inventory management includes how many items of each SKU you have in stock, but also is related to how many and where to store each of those items. If you have a certain item that is a big seller in one part of the country but not others, then keeping that inventory in a warehouse in that area makes the most sense. Inventory management helps you to know where the best place to store items is and helps you keep track of your inventory so nothing gets misplaced along the way.
This is one of the biggest, most time-consuming, and most expensive parts of logistics management. Transportation for your goods might need to be fast, cheap, or a mix of the two depending on your business’s specific needs. Finding the right carriers for international transportation, domestic transport, and then shipping to your end-users is critical to keeping your business running smoothly and keeping your customers happy. You may need to move things quickly, or you may want to save the most amount of money, but sometimes working with a 3PL or other logistics partner can get you the best of both worlds with existing relationships they have developed for transportation needs.
Data is the lifeblood of eCommerce businesses. It’s no different when it comes to logistics for your company. You need to have the information to provide quick, accurate communication to customers, suppliers, and partners. From inventory to transportation to warehousing, having good information on all aspects of your inventory will allow you to make better decisions about manufacturing, product development, storage, and sales. After all, without information about your logistics, you would not know how many items you have and where they are located, so you cannot make any decisions about what your business needs to do next.
What are the Advantages of International Logistics?
When considering how international logistics can impact your eCommerce business, you should know the advantages it can bring you. This is a great way to expand or grow your business, and sometimes it can even be necessary depending on the products and industry you work in.
- When you are looking at the international supply chain, sometimes other countries can manufacture goods for less than it costs here, even when you factor in the cost of transportation. When you want to grow your business and use an international manufacturer or supplier, international logistics with competitive rates will come into play.
- You will have more options of suppliers, materials, and manufacturers when you look at the entire world versus just your country. Depending on what you make and sell, this can be a great way to grow your business. You can become more innovative when you work internationally, and you will be able to offer a wider selection of inventory to your customers, too.
- When you work with companies in different countries, you may be exposed to new perspectives that give you new ideas to grow your business. You can be exposed to different ideas and cultures that can help you find new ways of doing business.
- With a global supply chain, you will have more opportunities to create products and sell to your customers at a higher volume. This means more sales for you and can even mean lower cost or higher efficiency systems in other countries to achieve this growth.
Some Disadvantages and Challenges in International Logistics
However, there are some disadvantages and challenges when dealing with international logistics.
- When you are shipping things around the world, it can take a lot of time to move goods from one place to another. They can get delayed by a storm or stuck in customs. That’s why making sure you have a good strategy in place is key to navigating these challenges.
Customs and Taxes
- There is additional documentation needed with international shipping. Making sure the documents are correct and any taxes are paid is important to reduce the changes these items get stuck in customs – and to reduce the headaches you may experience if that happens.
- Late shipments can happen, whether you are shipping domestically or internationally. However, when weather, customs, or transportation challenges cause late shipments, it can be frustrating and can even impact your business’s sales.
Benefits of Working With a 3PL for International Logistics
A third-party logistics provider, or 3PL, can bring expertise and experience to your international logistics management. Their knowledge will make the whole process easy for you, allowing you to focus on other important aspects of your business.
Save Time and Money
- A 3PL will provide you with warehouse space so that you do not have to provide your own. They will bring the software and other technology for warehouse management, and they will assist with customs documentation and transportation coordination. You can cut costs related to technology, labor, and specialized equipment. Save time by giving specialized tasks to the experts.
- The best business owners hire or partner with experts so they can benefit from the knowledge of others. A 3PL knows order fulfillment, international customs clearance, transportation, freight forwarding, and logistics. They have the latest tech. They know the best practices. They have the training to get the job done quickly and accurately. When you leverage their expertise, you can grow your business while they focus on the logistics side of things.
Expand Your Reach
- 3PLs often have multiple warehouses over a large geographic region. This means that you can utilize their distribution network to grow your business and expand your global reach into new parts of the country, the continent, and even the world. You may be able to open your business to international shipping and find new customers in new places that would be difficult to do on your own.
Learn How Rakuten Super Logistics Can Help
If you are looking for a partner for your international logistics, Rakuten Super Logistics has helped companies just like yours navigate the global supply chain. From international shipping to warehousing to customs documentation, our experienced professionals have seen it all and can help you develop a plan to deal with any unexpected challenges that come up. Get a quote today to see how our international logistics team can help manage your business.
Rakuten Super Logistics is a leading eCommerce order fulfillment company that provides the scalability, flexibility, and cost savings retailers demand.
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