International logistics plays an important role in the production, processing and distribution of goods, regardless of the industry in which the company operates. If you run an online store, missing out on the benefits of global logistics, international shipping and logistics centers is probably costing you more than you think. Discover what international logistics is, its advantages, the types of logistics available, and the five main components of any optimized international logistics process.
What is International Logistics?
International logistics includes the production and management of products and/or the processing of orders and the shipment of these products to a customer located outside the country where the production or transformation phase takes place. For international logistics to happen, a company must have an international target audience and headquarters in a single country or run different stages of the supply chain in multiple countries. In other words, for international logistics, a company may need international warehouses, international logistics centers or international freight forwarders to deliver goods to customers outside its borders.
What are the Advantages of International Logistics?
International logistics is positive for a business for different reasons:
Moving the supply chain to other countries can be a financial advantage by reducing production costs and shifting the focus to purchasing experience and international shipping. Generally speaking, it is common practice in industry to move production to a more profitable environment. This also allows companies to invest their resources in more meaningful and effective business aspects that impact the customer experience: digital touchpoints with customers.
International Market Opportunities
By working with international logistics centers and using global shipping services, global logistics means more market opportunities. While there are some differences in consumer habits from country to country, most e-commerce businesses are able to sell their products worldwide with little or no modifications to the products.
In an age where international shipping is affordable and easy, the decision not to include other markets is an “all eggs in one basket” approach that can put your business at risk. Instead, use other markets and diversify risks as a backup plan for your business. In fact, these additional audiences may turn out to be even more profitable than your original buyers.
Küresel lojistik, uluslararası ölçekte çalışan bir e-Ticaret işletmesini büyüterek, bir çevrimiçi mağazanın itibarını birçok pazarda düşük maliyetle geliştirmek ve artırmak için bir pazarlama stratejisi olarak kullanılabilir. Bir şirketin ürünlerini farklı pazarlarda sattığını bilmek, bir işletmenin başarılı ve itibarlı olduğunun sosyal kanıtı olarak işlev görür. Dünya çapında marka bilinirliğinizi artırmanın bir yolu olarak uluslararası lojistiği kullanma fırsatını kaçırmayın.
Lower CO2 Emissions
Simply moving parts of your business can only make your e-commerce business more sustainable in a limited way. If you make your global logistics more efficient and reduce the costs of your operations with international warehouses, international logistics companies and global transportation will also have an impact on the CO2 levels associated with your business. By shortening the shipping time and using local couriers, you will be able to reduce the environmental impact of your business. With the increasing environmental awareness of consumers today, caring for the planet benefits your business in terms of branding and costs. Go back to the previous point and see how the benefits of a more carbon neutral business can play in your favor to build a solid reputation online.
Economies of Scale
Operating on a global scale means that production volume will likely increase. The results of this increase are larger profit margins and more room to negotiate shipping charges with other suppliers, such as international shipping companies and packaging companies. Optimizing your international logistics leads to more efficient processes and higher revenue, thanks to the benefits of economies of scale.
What Are The Three Types of Logistics?
The three types of logistics are the most common concepts in logistics. These are inbound logistics, outbound logistics and reverse logistics.
Inbound logistics takes over all the processes required for the arrival of raw materials or semi-finished products. Inbound logistics may include dealing with suppliers, inventory, and the shipping of such materials. Procurement is the main task of inbound logistics. As we have seen in the recent pandemic and supply crisis, this part can be particularly difficult when materials come from different countries and suppliers.
Outbound logistics refers to all the processes carried out to deliver finished products to customers. International e-commerce companies know the importance of shipping and delivery processes for the online buyer. That’s why more and more online stores are offering last-mile delivery as a competitive advantage. The outbound logistics and distribution strategy, channels and couriers chosen by an e-commerce business will be the determining factors for customer loyalty and retention.
Reverse logistics is the process of moving products back from the buyer to their origin in order to recover a product that for any reason does not meet the buyer’s expectations. These items may need to be refurbished or discarded, but there is most likely nothing really wrong with the product. Instead, the problem may be related to the marketing strategy or the buyer’s expectations. This means that most of the time, the reverse logistics process of an e-commerce business will be devoted to bringing products from destination to point of origin for resale.
How Can You Improve International Logistics?
There may be some steps to be taken to improve international logistics. For example, it can be integrated with your 3PL solution and other third-party solutions, the platform on which your online store is built, and dozens of local and international couriers to meet the needs of each customer and market. Process orders in batches, automate the selection of shipping methods using smart rules according to the most convenient or appropriate, and offer a self-service returns portal for customers to speed up the process and save costs on your reverse logistics process.
If you want to offer the best purchasing experience and make your e-commerce operations efficient and profitable on a global scale, international logistics is an aspect of e-commerce that needs to be perfected. Now that you know what international logistics is and the benefits it can bring to your e-commerce business, it’s time to improve planning, inventory management, fulfillment and shipping activities in your inbound, outbound and reverse logistics.