INTERNATIONAL LOGISTICS AND

DISTRIBUTION
INTRODUCTION

International business is a term used to collectively describe all commercial transactions that
take place between two or more nations. Usually, private companies undertake such transactions
for profit , governments undertake them for profit and for political reasons. It refers to all those
business activities which involves cross border transactions of goods, services, resources
between two or more nations. Transaction of economic resources include capital, skills, people
etc. for international production of physical goods and services such as finance, banking,
insurance, construction etc. International Business in India looks really lucrative and every
passing day, it is coming up with only more possibilities. The growth in the international
business sector in India is more than 7% annually. There is scope for more improvement if only
the relations with the neighboring countries are stabilized.
GLOBAL SUPPLY CHAIN MANAGEMENT

With increased globalization and offshore sourcing, global supply chain management is
becoming an important issue for many businesses. Like traditional, supply chain management,
the underlying factors behind the trend are reducing the costs of procurement and decreasing the
risks related to purchasing activities. The big difference is that global supply chain management
involves a company's worldwide interests and suppliers rather than simply a local or national
orientation. Global supply chain management usually involves a plethora of countries, it also
usually comes with a plethora of new difficulties that need to be dealt with appropriately. The
companies need to consider is the overall costs. While local labor costs may be significantly
lower, companies must also focus on the costs of space, tariffs, and other expenses related to
doing business overseas. Additionally, companies need to factor in the exchange rate.

Global supply chains pose challenges regarding both quantity and value:
Supply and Value Chain Trends

• Globalization
• Increased cross border sourcing
• Collaboration for parts of value chain with low-cost providers
• Shared service centers for logistical and administrative functions
• Increasingly global operations, which require increasingly global
coordination and planning to achieve global optimums
• Complex problems involve also midsized companies to an increasing
degree.

These trends have many benefits for manufacturers because they make possible larger lot sizes,
lower taxes, and better environments (culture, infrastructure, special tax zones, sophisticated
OEM) for their products. Meanwhile, on top of the problems recognized in supply chain
management, there will be many more challenges when the scope of supply chains is global.
This is because with a supply chain of a larger scope, the lead time is much longer.

EXAMPLE

OHL , flexible and scalable global supply chain solutions offers a comprehensive set of
logistics solutions to support customer needs throughout the world. Their services include
transportation, warehousing and distribution, customs brokerage, freight forwarding and trade
consulting services. These services are flexible and they meet the needs of companies of varying
sizes and complexities. Their services can be integrated together to deliver powerful, end-to-end
supply chain solutions that will help you achieve your strategic business objectives while driving
costs out of the supply chain .

With experience in a wide range of industries including automotive, apparel, healthcare, retail,
chemical, electronics, food and beverage, industrial products, high value commodities,
pharmaceutical, steel and forestry, OHL can handle any size, weight, or value of shipment.

INTERNATIONAL LOGISTICS
 The negotiating, planning, and implementation of supporting logistic arrangements between
nations, their forces, and agencies. It includes furnishing logistic support to, or receiving logistic
support from, one or more friendly foreign governments, international organizations, or military
forces, with or without reimbursement. For the international firm, customer locations and
sourcing opportunities are widely dispersed. The firm can attain a strategically advantageous
position only if it is able to successfully manage complex networks, consisting of its vendors,
suppliers, other third parties, and its customers. Logistics costs comprise between 10% and 30%
of the total landed costs of an international order. Thus, international logistics is a competitive
tool. Effective international logistics and supply-chain management can produce higher earnings
and greater corporate efficiency.International freight logistics , International cargo logistics,
International customs logistics and sea cargo logistics are some of the types of international
logistics.

EXAMPLE
Japan, as an island country, is naturally dependent on foreign trade. Imports and exports for
2003 totaled 984 million tons; of that amount, ships transported 99.7% by volume, or 68% by
value. The MOL Group, centered on ocean shipping transport, plays a key role in transporting a
range of cargoes that are essential to consumers and businesses around the world. As an
indispensable industry for sustainable worldwide economic growth, the MOL Group is
expanding its business while focusing on environmental protection and social needs.

INTERNATIONAL CUSTOMS LOGISTICS

CUSTOMS BROKERS

In recent years, large multinational and other larger freight companies have leaned towards
selling short the importance of the customs broker, preferring to market freight as the key
to successful import program.

Increased pressures on forwarders to provide quicker delivery times has led to many forwarders
cutting costs in their customs departments through reducing the number of tariff experienced
staff and reducing clearance cycle times. The result has been a decline over time in the ability of
brokers to identify all opportunities to reduce their customer’s duty payable.

EXAMPLES

(1)Toyota Motor Sales, U.S.A., Inc., the car maker's marketing arm in the United States,
selected Expeditors International of Washington Inc. (NASDAQ:EXPD) as customs broker for
the automobiles and parts it brings into the United States .Toyota Motor Sales, U.S.A. Inc.
selected Expeditors from a field of four contenders. Toyota preferred Expeditors'. automated
reporting systems

(2) Joseph Smith Company has been providing Customs clearance, International Freight
Forwarding, and Logistics consulting services to the international community for over 20 years.
They offer a full range of import and export services They help companies manage their supply
chains and solve their toughest logistics problems. Their clients range from Fortune 500
companies to sole proprietors. They also provide outsourcing solutions to air carriers and fellow
freight forwarders.

(3) Primex Customs and Logistics Inc. was formed with one vision in mind, to provide their
customers with a service that would add value to their firms through optimizing their supply and
distribution chains. In today’s increasingly competitive environment logistics has become a
fundamental differentiator in any company’s success. At the same time with the globalization of
business, the logistics process is becoming increasingly complex. Primex has the expertise that
can provide any company with a competitive advantage through their logistics processes . Today
Primex is a full service international logistics provider and freight forwarder dedicated to being a
seamless extension of their customer’s distribution and supply chains.

INTERNATIONAL FRIEGHT LOGISTICS

Freight logistics is the movement of goods from point A to point B by air, truck, rail, water, and
pipeline. Nationally, the volume of freight and goods moved throughout the transportation
system has grown significantly over the past few decades and is projected to increase nearly 70
percent by 2020. As the demand for goods and services grows, there is a greater concern about
increasing congestion, safety and security, and the environment. Therefore, understanding and
improving freight transportation is becoming a higher priority at all levels of government and in
the private sector.

EXAMPLES

(1) A premium worldwide logistics network, project & supply chain management provider.

IFLN Group is dedicated to the provision of logistics services worldwide. The business
philosophy on which the Group is founded delivers supply chain solutions in a unique way,
benefiting end-users of both regular high volume shipments as well as those involved with large
and small project moves .The Network of independent freight transport specialists in every part
of the world has been knitted together to ensure that IFLN's service is presented as a united
entity. Each Member of the Network is a well-established logistics company with country-based
offices and facilities. The Network enables Members to cooperate with like-minded logistics
companies in all corners of the world and in turn offer a truly global service to their customers.

The Group's established services, IFLN Network and VAL Management have been designed and
developed in response to specific customer needs. The IFLN Group has discerned a significant
demand for relationship-based service provision by logistics companies; service that delivers fast
and innovative supply chain solutions with locally available expertise. IFLN Group achieves
these goals through uniting such local resources in a centralized and professionally managed
way.
(2) Challenge Logistics Pvt. Ltd., One of India's leading agencies engaged in the business of
International Freight Forwarding by Air and Sea, to and from India. The Company offers its
clients complete logistic solutions and tailormade packages with special focus on services.
Founded in 1997, Challenge Logistics Pvt. Ltd., prides itself on its exceptional service, ability to
meet tight time constraints, deadlines and service to a multitude of industries and is IATA
approved.

(3) Navigator Shipping & Logistics is an international class organization engaged mainly into
activities of Freight forwarding, (Air, Sea) Shipping & Clearing, Forwarding, Warehousing
Agent and Consolidation. They offer a wide variety of services relating to freight forwarding,
logistics, cargo clearance and consolidation through sea, air and road . Established in the year
2000, its one of India's leading freight forwarder. Over the last three years, they have developed
a complete range of services to respond to all of their customers' logistics and transportation
needs - air, ocean, and land transportation services; brokerage and customs consulting services;
warehousing and distribution.Their import services are efficient, cost effective and time definite.
They specialize in imports from China, Taiwan, Hong Kong, Far East and South East Asian
countries.

GLOBAL FREIGHT MANAGEMENT (GFM) SYSTEM

The Global Freight Management (GFM) system is an automated DoD-wide freight traffic
management system. The Surface Deployment and Distribution Command (SDDC) is the single
manager of DoD surface freight movements and is responsible for acceptance and approval of
tenders of service from the U.S. carrier industry. SDDC developed a standard tender in 1987 and
requires all carriers to submit tenders using that standard. This allowed, for the first time,
automation of the tenders, carrier rates, and costing equations used by the carriers. SDDC has
developed the GFM system as a web-based DoD-wide freight traffic management system with a
carrier tender database as an integral part

INTERNATIONAL DISTRIBUTION
 The fourth P of the international marketing mix is place, more commonly referred to as
distribution. Distribution involves moving products and services from the firm to its customers.
Distribution, though it looks routine , is important because the goods and services must be
available where people want to buy them . In the absence of such an arrangement all the earlier
efforts such as designing, developing , pricing and promoting a product or services will be a
waste .

INTERNATIONAL CHANNEL SYSTEM

The international distribution system consists of two subsystems, namely the the domestic
systems and foreign systems . The nature of the channel system is affected by ,among the other
things, by the method of exporting .They are direct exporting and indirect exporting . The
indirect export involves home based independent middlemen who constitute the domestic
system. No such independent system is involved in direct export .When th export system is direct
the producer makes direct sale to any one or more of the foreign customers.

GLOBAL DISTRIBUTION SYSTEM (GDS)

Worldwide computerized reservation network used as a single point of access for reserving
airline seats, hotel rooms, rental cars, and other travel related items by travel agents, online
reservation sites, and large corporations. The premier GDS are Amadeus, Galileo, Sabre, and
Worldspan owned and operated as joint ventures by major airlines, car rental firms, and hotel
groups. Also called automated reservation system (ARS) or computerized reservation system

Today’s era of globalization has seen the emergence of the ‘global’ corporation. Such a
corporation has operations scattered over multiple locations across the globe. One of the most
important aspects of the ‘global’ corporation is the international distribution system employed
for the distribution of product to customers in different parts of the world.

EXAMPLES

(1) The four Global Distribution Systems (GDS) - Amadeus, Galileo, Sabre and Worldspan -
have been referred to as the backbone of the modern travel distribution system. They have
processed more than 1 billion air bookings each, and another 250 million for hotels, cruises and
other non-air content, generating over US$6 billion in revenues. Sabre and Amadeus own the
largest civilian data-processing centres in the US and Europe respectively. The volume of global
transactions through the GDS has risen 4% year-on-year to 343 million.Worldwide , the GDS
reaches some 230,000 points of sale. The four major systems have enjoyed traditionally what has
been, in effect, an oligopoly sustained by the high entry costs required to build the IT booking
systems to link airlines, hotels and car rental operators with travel agents and consumers. They
are operating in a fast-changing market typified by evolving patterns of consumer behaviour , the
emergence of new online sales channels, and a low-cost air model.

(2) A computer reservations system (CRS) is a computerized system used to store and retrieve
information and conduct transactions related to air travel. Originally designed and operated by
airlines, CRSes were later extended for the use of travel agencies; major CRS operations that
book and sell tickets for multiple airlines are known as global distribution systems (GDS).
Airlines have divested most of their direct holdings to dedicated GDS companies, who make
their systems accessible to consumers through Internet gateways. Modern GDSes typically allow
users to book hotel rooms and rental cars as well as airline tickets

(3) The FTSE Global Distribution Service may be obtained in a real-time or delayed data feed
directly from FTSE. Vendors act as distributors of real-time and delayed market data from FTSE
to both investors and to other data vendors. To support the growing use of its international
indices and provide clients with the option to receive FTSE indices directly, FTSE Group
provides and maintains a data distribution service from which clients can receive all of its real
time equity and bond index data. To deliver the high quality service our clients expect, they
selected BTRadianzNet , the leading global financial extranet from BTRadianz
www.btradianz.com, to provide a robust and reliable delivery mechanism.

Users and distributors of market data have the capability to access their network from all major
cities worldwide. The real time indices are accessible:
 • In all markets
• Throughout the global trading day
• Every day of the year

GLOBAL SUPPLY CHAIN MANAGEMENT SYSTEM

Global supply chain management systems enable real-time exchange of data and information
between concerned parties from different countries in the supply chain network. It is the
management of a network of interconnected businesses involved in the ultimate provision of
product and service packages required by end customers (Harland, 1996). It spans all movement
and storage of raw materials, work-in-process inventory, and finished goods from point of origin
to point of consumption (supply chain) between the countries. It has changed business operations
through the flow of information ,control over operations remote in distance and across
organizational boundaries, and by automation of processes. IT also shapes the future
development of the supply chain with internet technology that currently offers fast and easy ways
to transit complicated information and has considerable future potential. The most important
contribution is to bring visibility to the entire supply chain.

EXAMPLE
GLOBAL SUPPLY CHAIN EVENT MANAGEMENT (SCEM)

As importers or exporters, we need information about the status of your orders and shipments,
notifications about potential problems that may cause shipment delays, and real-time location of
inventory across our global supply chain. TradeBeam’s SCEM solution gives real-time visibility
into our order and shipment status across our global supply chain by leveraging electronic
integration with trading partners. These partners include freight forwarding agents, carriers,
customs brokers, and government agencies. The TradeBeam solution replaces cumbersome,
time-consuming and error-prone tracking via phone, fax, e-mail and provider portals.
Productivity tools such as automated Bar Code Label management enable importers to
streamline their processes. TradeBeam’s intelligent alerts enable you to manage efficiently by
exception .e.g., missed shipping milestones, or deviations in quantity or weight.

CONCLUSION

The development of international trade is driven by international logistics and management and
the provision of the global supply chain. The ultimate objective of global supply chain
management is to link the market place, distribution network,manufacturing/processing/assembly
process, and procurement activity in such a way that customers are serviced at a higher level yet
lower cost .Nowadays with globalization , global supply chain management is becoming very
important issue for most of businesses. On the other hand , improved reliability can be obtained
as a consequence of closer relationship with suppliers. Obviously, companies must do their
research and give serious consideration to all of these different elements as part of their global
supply management approach.

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