Logistics is an integral aspect of the supply chain connecting warehouses, manufacturers, and end-users such as vendors, customers, suppliers, and other third parties. It encompasses a wide range of activities that ensure material movement takes place seamlessly from one destination to the other. Global logistics includes the movement of materials and goods between countries, which requires highly optimized processes to meet the time and delivery targets. However, global logistics face 5 major challenges that need to be addressed efficiently in order to ensure a smooth flow of materials and finished goods.
The following are the 5 Major Challenges of Global Logistics
Since global logistics serves multiple continents, a number of vessels including flights, cargo ships, and trucks, move along international trade lines. The lack of storage infrastructure for large vessels in the destination sites or ports causes delays in material unloading. This causes congestion problems at the shipment port, with materials hauled up in trucks for a long time. Some of the other challenging factors include lack of technological developments, bad road conditions, and weather problems.
2. Delivery Time
Delivery time is a competitive factor in global logistics but there are often factors that delay delivery time. For instance, the US West Coast port is a busy destination servicing a number of vessels starting for overseas deliveries. However, the port has faced many delays with vessels stuck at the port for many days due to delays in the arrival of pick-up containers. This creates backlogs in the distribution warehouses and eventually, a large gap in the final delivery timeline. Political insurgencies, war, storage charges, and holiday seasons also affect the delivery time for global logistics.
3. Carrier Capacity
With container carriers servicing a large number of customers, overcapacity in ocean shipping is becoming a great challenge in global logistics. The alternating twin problem of lack of demand and oversupply has been a cause for this. Inside the US, trucker shortages have led to delayed deliveries to ports. An aging workforce and increased regulations are also negatively affecting the overall domestic truck movement.
4. Government Security Regulations Compliance
In global logistics, material moves through many channels such as road, sea, and air to reach the final destination. Since shipment is passing through various modes of transportation and a number of logistics dealers, security has become a serious concern. Logistics companies that operate internally and overseas need to be familiar with the US customs security programs such as C-TPAT or AEO to secure their supply chain networks.
5. Transparency of Operations
Similar to other industries, logistics is also dictated by customer demands. Offering complete transparency of supply chain deliveries involves too many parties, that may not work in tandem for global logistics. Complete integration of activities within the organization and with other external players is required to make this possible for customers.
Each of the above factors is critical to the success of global logistics, and hence, the need to solve the impending issues is high. Effective logistics involves rising above these challenges, to offer top-class delivery service to global customers. In case you are interested in improving your logistics operations, InApp can be the right partner. InApp has over 20+ years of experience in delivering expert logistics solutions, that provide clear process visibility, and much-needed analytics to identify areas of improvement. If you want to learn more about our shipment and fleet management, or smart warehousing solutions, get in touch with us today.