International Logistics

Introduction

Every day, thousands of tonnes of goods move around the world via different transport systems, from air to ship to truck. Each commodity that moves is a finished product, a semi-finished product or a material necessary for the production of other materials that will fit into different supply chains that are useful to thousands. All these daily movements converge on thousands of points represented by companies that use these materials and transform them into finished products, which will in turn be moved to other companies up to the final consumer. From the end consumer, materials in the form of waste will be collected, transported to new companies, which will process them to make them useful to other supply chains, in the form of components or new raw materials. 

All these daily and continuous global flows, consisting of successive transports and transformations, involving the entire globe are called logistics.
Why is logistics a key function for the company?
Why is it necessary to consider global logistics? 

Logistics

La logistics is a fundamental function because it involves all industrial sectors. There is no sector that is not affected in some way by logistics flows. All production companies have incoming materials, processing and outgoing materials. Commercial companies are in turn affected by materials that are purchased, stored and then distributed to their customers. Service companies also have logistics flows, consumables, as well as service support materials have more or less distant origins and in turn remote destinations.
Health services provided by hospitals, for example, are affected by flows of drugs, foodstuffs, diagnostic instruments and their spare parts, or materials for hospital stays (pillowcases, sheets, mattresses, etc.). Catering in turn can be seen as a processing business. Transport services (railways or airlines), in addition to passenger management, must optimise the movement of vehicles (railway carriages and aeroplanes) and the material required for their maintenance.
Finally, software companies, whose main products are digitised solutions, are also affected by incoming flows of consumables needed for instrumentation management.

Global Logistics

Logistics is increasingly globalnot only complex and highly technological products arrive in the hands of the end consumer after thousands of kilometres (mobile phones, TV screens, etc.), but also products as simple as a cotton t-shirt travel on average more than 32,000 km before being worn.
Food is not exempt from this, just think that in Italian supermarkets you can routinely find apples and pears from Chile (12,000 km travelled before being eaten), bananas from Ecuador (5,400 km), pineapples from Kenya (5,300 km), grapes and oranges from South Africa (8,500 km), salmon from Norway (2,000 km).
Managing efficient and effective these flows is necessary not only to guarantee a margin for the companies involved in the various supply chains, thus containing costs, but is also necessary in order to have the lowest possible environmental impact.
As climate change events increase, it will become mandatory to rethinking logistics networks quickly in order to be able to cope on the one hand with events that could even become catastrophic and that could call into question the usual supplies, and on the other hand it will be necessary to rationalise appropriately in order to make the best possible use of resources with a view to the circular economy.

However, there is another factor that makes logistics management more difficult, namely the sudden change of a increasingly demanding market in terms not only of shorter delivery times of goods, but also in terms of adherence to schedule, which prompts companies to make the locations of individual materials visible in real time. Traceability e traceability thus become two keywords imposed by stricter regulations and more demanding customers. 

Opportunities

What are the opportunities linked to international logistics?

There are many reasons for companies to manage international flows of goods, the main ones being to

• find unavailable materials in their own country, such as raw materials like cotton or foodstuffs like exotic fruit;
• have components and products at lower costsfirst the countries of the East in the 1990s and later the Far East countries represented areas where labour was cheaper;
• cope with seasonalityas with foodstuffs, and allow some products to be sold even when the season is not suitable;
• access markets where there is greater competitiveness of suppliesgiven the specific presence in certain geographical areas of districts or areas with a strong vocation;
• reach new markets of outlet;
• diversifying supply riskaiming at a continuity of supply even in the presence of events that could jeopardise the supply from certain areas;
• reduce time of supply, organising the correct transport solutions;
• improving customer serviceand reach the market faster and at a more competitive cost.

Risks

It becomes necessary, however, to pay attention to the fact that internationality also entails the risksincluding:

• the country comes into conflict with others or political upheavals occur.
• The country enters an economic crisis.
• Lack of expertise in the area with difficulties in finding sufficiently qualified or trained personnel.
• Lack of connectivity, very important given the need to share information in real time .
• Lack of legal protection.
• Risk of cyber attacks.
• Lack of respect for civil rights or exploitation of minors or minorities.
• Environmental impact.
• Extreme weather events (hurricanes, typhoons, droughts).
• Natural (floods) or man-made disasters (nuclear accidents).
• Pandemics.

Logistics is a key function for companies to enable economic and environmental sustainability. Correctly organising material flows and their storage is a necessary condition for containing costs and enabling the company to adequately satisfy its market. Every company must be aware of the own supply chain structureincluding weak points. This requires a continuous monitoring of logistics flows in order to continuously evaluate operational performance.