How to Manage Big Challenges in Global Logistics?

Updated 3 November 2022

Events that are causing issues in global logistics:

Global logistics is the part of SCM (Supply chain management) across international borders that refers to the movement and storage of goods. We keep track of the execution of transportation and the storage of the products in logistics.

People are very particular about time management in recent times. In eCommerce, people have the advantage of buying goods and services online. So in eCommerce, the timely delivery of goods matters a lot.

The logistic companies have a challenge in committing and delivering the goods per their commitment. Logistics companies must manage transportation, supplies, and deliveries to fulfill their promises.

The logistics services include warehousing, storing, material handling, packaging, inventory management, and transportation.
global logistics

Supply chain management:

Supply chain management is a vast industry that includes various processes of collecting raw materials to delivering the final products to the end users.

In eCommerce, supply chain management is responsible for maintaining the flow of goods and services. It transforms raw materials into final products between businesses and locations.

Events:

Covid 19 Pandemic:

The global logistics industry was affected by the pandemic in many ways. One of the most significant impacts was on shipping. The fuel costs, increased port congestions, and delays in arrival are the cause of the pandemic. It also reduced port throughput. Ports also had fewer ships coming in. That means they were less busy. So the ports did not have as much throughput as they would usually have done.

Ukraine-Russia war:

The Russian-Ukrainian conflict has had a significant impact on global logistics. The war has disrupted transport routes and increased the cost of logistics.

ukraine russia war

The conflict between Russia and Ukraine has been the main reason for the increase in transportation costs. Furthermore, many of the Ukrain eastern regions are now experiencing political instability and violence, which has led to a decrease in cargo shipments to those areas.

The China-Taiwan conflict:

The Taiwan Strait is a vital waterway for global trade. Strait is the shortest route between mainland China and the island of Taiwan, and it connects the East China Sea with the South China Sea.
This conflict has already impacted the global logistics in Asia. Because of how crucial this strait is for trade between these two countries.

Renesas Electronics factory fire:

The Renesas Electronics factory fire, which happened on April 17th, 2017, had a vastly negative impact on global logistics. The fire caused the company to stop the production of semiconductors and caused a shortage of them worldwide.
This incident impacted global logistics in many ways because many industries were importing the Renesas electronics product as consumer electronics, automotive, industrial equipment, communications, and more.

Brexit

Brexit has harmed the logistics industry. The UK will no longer be a member of the EU, which means it will also leave the Customs Union and Single Market. It is impacting widely the free movement of goods in and out of the UK. 

The result was that Britain became less competitive on the global stage and lost access to its biggest trading partner, Europe.

How to manage the setbacks in global logistics?

The global logistics industry is facing a lot of challenges. There is an issue of data security and trust that has been brought up in recent years. The global logistics industry is a data-driven one, and it needs to be able to collect data from all over the world for its operations.

We can set up automation tools to deliver the data in a faster way. The company should always give the tracking information to the customers. That will help them to track the shipment. Distributing the tracking data will rise the confidence level of the customers to use the eCommerce platform to buy products. In our Bagisto platform, we have integrated multiple shipping carriers that offer better tracking facilities to the customer.

There are also issues with labor costs because of the rising wage rates in developing countries such as India, China, and Bangladesh. These workers are gradually demanding higher wages which might make it difficult for companies to maintain their profit margins. In this case, the companies should maintain a standard for distributing wages. The companies can raise the wage level a bit to compete and sustain in the market.

The increasing fuel cost could pose a significant problem because many companies rely on trucks for their deliveries  If the vehicles used in transportation could use electric engines, then the cost can be reduced. The more warehouses will be, the less transportation cost will be. To overcome the fuel costs, if possible, the companies should set up warehouses in different countries and save the transportation.

Companies should use vehicles with refined engines. Such kinds of vehicles consume less fuel. Also, a vehicle with enhanced aerodynamics and lightweight will use less fuel.

Companies can maximize managerial vigilance in order to prevent the theft of goods.

Conclusion:

In eCommerce, logistics play a vitally important role. Logistics companies have been facing issues because of international problems time by time. The companies should adopt new technologies and strategies to overcome the challenges and sustain in the market. Before hiring a new warehouse staff, a logistics company should check the background of the person. The company should limit warehouse access and always be attentive while boarding and unloading the goods. This will prevent the theft of goods.

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