Why Global Logistics?

The globalization of the economies world over has created opportunities for doing business beyond the national boundaries of a country. Due to the rapid advancement in information and com­munication technologies during the last decade, the world has become a global village in the real sense. Today, Internet has made it easier to do business electronically in any part of the globe, from anywhere in the world. As business continues to globalize, attention has increasingly turned to logistics operation. Cargo movement needs to be done physically using the available means of transportation. The speed and efficiency of the movement of goods across national boundaries depends on the available modes of transportation, their capacity and capability, intermodal facility for movement, packaging and handling, and the logistical regulations in the countries where the buyers, sellers and carriers are located. For the physical movement of cargo, in the imports and exports business, the role of intermediaries—freight forwarders and customs-house brokers—is indispensable. Domain knowledge, connectivity with international cargo carriers and documenta­tion are the three crucial areas that need focus in global logistics.

As a consequence of globalization, managing logistics at the global level poses a challenge of considerable complexity. The complexity of this challenge varies with the nature of business and the operational environment. To face the logistical challenges there is no single standard solu­tion available. The individual companies will have to understand both strategic and management issues to clearly know the implications that globalization of their business will have on logistics (see Table 16.1) operation of their company.

Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.