International commerce is increasingly popular, but many people are unaware of the complex logistics and transport processes that go into managing it. To help individuals gain a better understanding of logistical operations and international transportation, this guide provides an overview of the four main types of logistics management and the six stages of enterprise costing. Additionally, readers will gain insights into how freight forwarding and other third-party logistics services fit into the overall picture and the potential risks associated with them.
Four Main Types of Logistics Management
The first step in understanding logistics transport is to become acquainted with the four main types of logistics management: supply management and logistics, production logistics, distribution logistics, and reverse logistics.
Starting with supply management and logistics, this type of logistics involves the procurement, planning and coordination of all materials needed for a production task at a certain place and time. On the other hand, production logistics encompasses inventory control, warehousing and quality control, with the goal of creating production processes that are as cost-effective and efficient as possible.
The third type of logistics management, distribution logistics, allows the finished products of a production task to reach the end user in a timely and cost-efficient manner. And finally, reverse logistics pertains to inbound shipping and the safe, efficient handling of product returns.
Six Stages of Enterprise Costing
In international commerce, it’s important for logistics managers to understand the six stages of enterprise costing, as outlined by Marien. The first stage is the direct cost or acquisition price of purchased materials; stage two is the net deliverance cost of purchased goods; stage three is the net absorbed cost of a manufactured product; stage four is the cost of both executing and supervising production; stage five is the cost of customer service, marketing, and any related activities; and finally, stage six is the cost of other services associated with production, such as utilities, taxes and insurance.
Freight Forwarding and Third-Party Logistics Services
Another key element of international logistics and transport is freight forwarding, a $1.4 trillion industry with far-reaching global operations. This type of logistics covers air, water, ground and rail transportation, as well as storage and services for nearly every type of manufacturing operation.
Furthermore, third-party logistics (3PL) providers are companies that partner with organizations to provide them with essential logistics services. These services range from multi-modal transport to packaging and warehousing. By outsourcing logistics to an experienced service provider, companies can optimize their supply chain, reduce costs, and ensure global compliance with ever-changing trade regulations.
Risks Associated with International Logistics Transport
There are certain risks associated with international logistics transport that are important for logistics managers to be aware of. For instance, fluctuations in exchange rates can result in unexpected costs and delays, which can have a major impact on profits. Additionally, inconsistencies between transport methods are a real concern, as different types of shipping can lead to confusion and other unforeseen issues. It’s also important to be aware of unforeseen rises in material and labor costs, which can lead to the disruption of processes and schedules.
Overview of Logistics Transport
Overall, logistics transport is an important and complex aspect of global commerce. By understanding the four main types of logistics management and the six stages of enterprise costing, as well as the risks associated with international shipments, companies can better prepare to manage their own operations effectively. Additionally, partnering with an experienced third-party logistics service can help optimize the overall supply chain, reduce costs and ensure compliance with global standards.