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What Are the Different Methods of International Trade Logistics?

Peter Hann
Peter Hann

Approaches to international trade logistics include management of the whole supply chain to optimize sourcing of raw materials and other inputs, plan transportation and storage requirements, and arrange the most effective distribution network. The objective is to achieve and maintain the lowest possible input, transportation, warehousing and distribution costs while also maintaining speed and efficiency. International trade logistics also may involve arranging the fastest possible transit of goods through customs procedures, taking advantage of customs reliefs, customs warehousing or free zones where advantageous to the enterprise. The approach to international trade logistics also may include dealing with national regulations on product safety, corporate governance, accounting standards, customs and tax regulations in the international supply chain and overseeing the security of assets, employees, products and processes. Global trading conditions and enterprise strategy are continuously evolving, so international trade logistics must be reviewed on a regular basis.

International trade logistics may include planning the sourcing of raw materials from various locations with a view to reducing production costs. Costs also may be reduced by calculating the most favorable transportation routes and arranging for the lowest possible freight charges. Freight shipments to warehouse or factory locations may be arranged in the most efficient manner, including agreement with the importer on contract terms for freight and insurance to safeguard the goods and prevent disputes.

Man holding a globe
Man holding a globe

Locations for storage and distribution must be adapted to ensure efficient transportation. The logistics of international trade also may require prompt completion of export and import procedures and a review of methods for cross-border payment. The transportation arrangements must be under constant review for changes in available methods of transport, the opening of new routes, introduction of new technology, new payment procedures and changes in standard contract terms.

International trade logistics may be assisted by the installation of adequate information systems within the enterprise to ensure the international trade situation is constantly monitored and the supply chain is set up as efficiently as possible. Enterprises concerned with customer service and the need to deliver on time must ensure that the supply chain is correctly managed. The need to prevent delays and speed delivery times drives the need to increase the efficiency of the supply chain. A more efficient supply chain may help to reduce costs by reducing the need to keep large inventories and by reducing the amount of rejection or return of products resulting from damage or late delivery. Efficient handling of customs procedures ensures there are no delays in the supply chain and also avoids the imposition of fines for breaches of customs regulations.

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