Detailed Study on Global Logistics, Trade, and Supply Chain Management

This report provides a detailed analysis of global logistics and international trade, covering key aspects of supply chain management, including primary logistics functions, complexities, and current issues. It explores international trade theories, assesses leading countries in world trade, and examines the impact of political, technological, and economic developments. The report delves into international market entry strategies, contracts, incoterms, and payment terms, along with risk management in international transactions. It also covers international commercial documents, insurance, and transportation methods, including ocean and air freight. Furthermore, the report addresses intermodal transport, packaging for export, warehousing, logistics security, and customs clearance processes, offering a comprehensive understanding of the global trade landscape.

GLOBAL LOGISTIC

TABLE OF CONTENTS
CHAPTER 1: INTERNATIONAL TRADE...................................................................................1
1. Meaning of primary logistic function in supply chain and how they are interconnected with
each other.....................................................................................................................................1
2. Identifying different additional complexities that are being introduced in the international
supply chain.................................................................................................................................1
3. Assessing different current issues affecting the international logistic.....................................2
4. Identifying different leading theories of international trade....................................................2
5. Assessing the country that account for share and growth of world trade................................3
6. Identifying political, technological and economic development that has played effective role
in the overall growth of international trade.................................................................................4
7. What are the drivers that lead the firm with regard to start operation in international market?
.....................................................................................................................................................4
8. Is there is a significance of culture in global business.............................................................5
CHAPTER 2 AND 3: INTERNATIONAL SUPPLY CHAIN MANAGEMENT.........................6
9. Assessing key elements, touchpoints, risks and partners in international supply chain..........6
10. What things are required with an aim to build infrastructure for global trade......................6
11. Assessing additional risks faced in international trade in comparison to domestic trade.....7
12. Assessing the issues that need to be considered by the logistic manager and what tactic
should be used with an aim to mitigate the risk...........................................................................7
CHAPTER 4 – INTERNATIONAL METHODS OF ENTRY.......................................................8
13 Ways to get an entry in the international market....................................................................8
14. Factors that affect a firm’s choice of international market entry as well as go to market
strategy and a major element of successful market entry strategy..............................................9
15. Assessing benefits and risks associated with international market entry and go to market
strategy.........................................................................................................................................9

CHAPTER 5 – INTERNATIONAL CONTRACTS.....................................................................10
16. Complexities in international contract vs. domestic contract..............................................10
17. The typical element related to a foreign distribution contract.............................................11
18. Ways in which country engaged in foreign sales activity...................................................12
CHAPTER 6 – TERMS OF TRADE OR INCOTERMS RULES................................................12
19. Terms for the sale for international orders..........................................................................12
20. Meaning of Incoterms and how responsibilities of exporter and importer can be addressed
...................................................................................................................................................13
CHAPTER 7 – TERMS OF PAYMENT......................................................................................13
21. The typical form of international payment..........................................................................13
Dharmadhikari, S., & Krishnamoorthy, G. (2019). U.S. Patent Application No. 10/198,766......14
22. Risk related to international payment process.....................................................................14
Lynch, H. F., Gelinas, L., & Largent, E. A. (2018). Mutual obligations in research and
withholding payment from deceptive participants. The American Journal of Bioethics, 18(4), 85-
87. 15
23. How export documentary collection and letter of credit transaction are completed?.........15
Soto, G., Tamblay, S., Herrera, J. C., & Guimpert, I. (2018). Social Cost Benefit Analysis for
Pre-Payment Bus Stops: An Application in Transantiago (No. 18-05500)...................................15
24. How the choice of payment terms offers a competitive advantage to the seller?................15
Beck, T., Pamuk, H., Ramrattan, R., & Uras, B. R. (2018). Payment instruments, finance and
development. Journal of Development Economics, 133, 162-186................................................16
CHAPTER 8 - MANAGING TRANSACTIONS RISK...............................................................16
25. How do countries operate with different currency pose risk in the international transaction?
...................................................................................................................................................16
Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers................................................16
26. Working process of currency exchange rate........................................................................16

Pereira, P., Silva, E. S., & Pereira, A. (2018). Operational risk management: the basel II. The
International Journal of Business Management and Technology, 2.............................................17
27. Ways to mitigate currency risk in the international transaction..........................................17
Srinivasan, S., & Kamalakannan, T. (2018). Multi criteria decision making in financial risk
management with a multi-objective genetic algorithm. Computational Economics, 52(2), 443-
457. 18
CHAPTERS 9 AND 10 – INTERNATIONAL COMMERCIAL
DOCUMENTS/INTERNATIONAL INSURANCE.....................................................................18
28. Paperwork in international transaction vs. domestic transaction.........................................18
29. Documents needed in export and import transaction..........................................................18
30. Purpose of US Export administration Regulation and unique requirement it contains.......19
31. Why international insurance is complex?............................................................................19
32. Risk related to international transaction and strategies to mitigate them............................20
CHAPTERS 11 AND 12 – INTERNATIONAL OCEAN TRANSPORT/INTERNATIONAL
AIR TRANSPORT........................................................................................................................21
33. When logistic manager ships goods by ocean.....................................................................21
34. Additional consideration related to ocean shipping.............................................................21
35. Role of the International Maritime Organization................................................................22
36. Types of international air services.......................................................................................22
37. Advantages and disadvantage of air shipments...................................................................23
38. Purpose of the International Air Transport Association......................................................24
39. International regulation for air freight.................................................................................24
CHAPTERS 13 AND 14 – INTERMODAL LAND AND MULTIMODAL
TRANSPORT/PACKAGING FOR EXPORT..............................................................................25
40. Types of transportation arrangement apart from ocean and air...........................................25
41. Things to be considered by the international logistic manager when using all these means
of transportation.........................................................................................................................26

42. Why export packaging is a consideration for international transportation?........................26
43. Different type of packaging.................................................................................................27
44. Commercial risk of sloppy packaging.................................................................................27
CHAPTERS 15, 16, AND 17 – INTERNATIONAL WAREHOUSES AND DISTRIBUTION
CENTERS/INTERNATIONAL LOGISTICS SECURITY/CUSTOMS CLEARANCE.............28
45. Purpose of country’s custom authority................................................................................28
46. Role of world’s custom organization...................................................................................29
47. Meaning of duty and how it is calculated............................................................................29
48. Customs clearance process for the goods imported into the US.........................................30
49. Non-tariff international trade barriers..................................................................................31
50. What is C-TPAT?................................................................................................................31

CHAPTER 1: INTERNATIONAL TRADE
1. Meaning of primary logistic function in supply chain and how they are interconnected with
each other.
The primary logistics in the supply chain are order processing, inventory management,
warehousing, and transportation etc. These all given functions are interrelated with each other.
For example, in the order processing function, the manager of the firm will get an order in
relation to the specific material. However, with the help of inventory management, the manager
will get an idea that whether it will have sufficient material with an aim to meet the needs and
demands of its respective buyers. On the other hand, with the help of the transportation facility,
the ordered material can be delivered by the firm to its respective customers. Thus, it is through
this way only firm will enhance the satisfaction level of its respective buyers by using its supply
chain operation (Kwak and et.al., 2018). In addition to this, these primary functions interface in
the overall business strategy of the corporation. For example, if a firm has the strategy to meet
the demands of its buyers and maintain their satisfaction level. Thus, the given thing can be
accomplished with the help of these all functions. This is because by using these functions
manager of a firm can track its material and it can assure that it will deliver the order within a
specific time.
Kwak, D. W., Rodrigues, V. S., Mason, R., Pettit, S., & Beresford, A. (2018). Risk interaction
identification in international supply chain logistics: Developing a holistic
model. International Journal of Operations & Production Management, 38(2), 372-389.
2. Identifying different additional complexities that are being introduced in the international
supply chain
The international supply chain is more complex than the domestic supply chain
operation. This is because; the international supply chain has greater time and distance difference
in comparison to the domestic supply chain. Herein, it is examined that additional costs that are
associated with transportation, inventory and local taxes are being regarded as one of the most
major complexity that is being related to the international supply chain operation. This is because
the given thing will tend to increase the overall cost of the offered product. Further, this thing
will also have an impact on the pricing strategy that is being set by the company in the
international market (Fernie & Sparks, 2018). In addition to this, cultural difference and foreign
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government regulations are another complexity that is being related to the international supply
chain. These factors affect a company’s decision of taking orders, organizing warehouse and
plans distribution. Thus, due to this firm overall time of delivering the good at the specific place
in the international market will be increased. The given thing will also increase the cost of the
firm. It is because of given reason only it is required by the manager of a firm that it should make
efforts in terms of managing these complexities in its international supply chain.
Fernie, J., & Sparks, L. (Eds.). (2018). Logistics and retail management: emerging issues and
new challenges in the retail supply chain. Kogan page publishers.
3. Assessing different current issues affecting the international logistic
These are all depicted below:
 Rising fuel cost: The rising fuel price all over the world is causing a direct impact on
transportation cost. For example, rising fuel prices are escalating the surcharge rates that
will be later added on to freight rate. The given thing is also affecting the pricing decision
of the company and forcing them to charge high prices on the offered product.
 Environmental issues: At present, there are many nations that are making efforts in terms
of protecting their environment with the use of eco-friendly emission. Thus, the given
thing is affecting the whole transportation facility of the company in the international
market (Kshetri, 2018). However, if the firm will not make changes then in this situation
it will become very difficult for it with regard to run its operation in the specific market.
 Driver shortages: Due to lower pay rates and a high level of stress it is very difficult to
find the drivers for the international supply chain operation.
Kshetri, N. (2018). 1 Blockchain’s roles in meeting key supply chain management
objectives. International Journal of Information Management, 39, 80-89.
4. Identifying different leading theories of international trade
These all are depicted below:
 Theory of absolute advantage: It is the type of advantage that is being gained by one
country from another. For example, here one country possesses the ability to produce
goods with the specific resources at limited cost. Similarly, if the same resources will be
given to another country then in this situation they will not be able to produce goods at a
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limited cost. Thus, if some kind of trade will happen in such a country then in this
condition the country that is in fault can gain absolute advantage from another country.
 Heckcher-Ohlin model theory: It is basically a type of mathematical model. Here, the
given theory states that a country will always have a competitive advantage in those
goods that are easily available in the nation (Perry, Fernie & Woods, 2018). For example,
some country will have a sufficient amount of land and capital but does not possess
enough labor. Then in this situation, such a nation should not opt for labor-intensive
production. This is because, if they will do then the given thing will prove as a very
costly affair for them. Thus, these theories guide in the decision-making process of the
company.
Perry, P., Fernie, J., & Woods, S. (2018). The international fashion supply chain and corporate
social responsibility.
5. Assessing the country that account for share and growth of world trade
International trade is being regarded as the practices of selling the goods and services of
the company across the national border. Herein, there are some countries identified that are
working very well in the international market (Kraude and et.al., 2018). European Union
possesses the first position in terms of international trade. In accordance with the given context,
on the basis of the analysis, it is identified that the country has around 42065 billion USD of total
international trade of goods and services. On the other hand, the United States comes under the
second position and it has around 5200 billion USD of total international trade of goods and
services. In a similar way, with the 4921 billion USD of total international trade of goods and
services, the country China resides in the third position. Thus, the given thing will also give an
indication of the power or the presence of the respective country in the international platform in
an effectual way.
Kraude, R., Narayanan, S., Talluri, S., Singh, P., & Kajiwara, T. (2018). Cultural Challenges in
Mitigating International Supply Chain Disruptions. IEEE Engineering Management
Review, 46(1), 98-105.
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6. Identifying political, technological and economic development that has played effective role in
the overall growth of international trade
The political, economic and technological development has effectively contributed to the
growth of world trade. The political development in the form of FDI (Foreign Direct Investment)
policy has effectively contributed to the growth of world trade. In this regard, it is identified that
there are many countries that are making efforts in terms of making their FDI policies more
lenient for the foreign investor. Thus, the given thing will tend to attract foreign investors with
regard to making an investment in a specific country. Thus, as a result of this, the growth of the
firm in the international market will be assured in an effectual manner.
In addition to this, economic development has seen in the form of giving concession on
taxes and providing land for production function to the foreign investor for free. The given type
of efforts from the side of political government tends to build a positive image of the nation in
the eyes of an international investor (Davé, Dotson & Stoddard, 2018). Thus, as a result of this,
they will not feel hesitate in the process of opening their production facility in the global market.
In a similar way, the development of e-commerce has also given support to the concept of world
trade. Here, it is because of the given technological development only it has become very easier
for firms with regard to sell its goods and services on the international platform. Further, it is
because of the given development only whole world has become one single market.
Davé, D. S., Dotson, M. J., & Stoddard, J. E. (2018). Consumer awareness of supply chain flows
in relation to consumer perceptions of value-added by supply chain
management. International Journal of Logistics Systems and Management, 31(3), 387-
401.
7. What are the drivers that lead the firm with regard to start operation in international market?
There are some drivers that lead a firm with respect to expanding its business in the
international market. These are all depicted below:
 To improve the overall sales of the firm: It is being regarded as one of the most
significant elements that force a firm with respect to starting its function in the
international market. This is because; each and every company main aim is to expand its
sales. However, this can be achieved if the firm will have a huge market for the purpose
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to perform its business operation. It is the reason why a firm will take the decision to
expand its operation.
 Increase innovation: Another most effective driver for international expansion is related
to innovation. There are some firms that want to get an idea about the type of innovative
techniques that are being used by another country with an aim to manufacture the specific
product. Thus, due to the given aspect only they tend to expand their business in the
international market in an effectual way (Kumar and et.al., 2019).
 Economies of scale: For example, the developed country always likes to outsource its
business function in the developing country like India and China. This is done with an
aim to earn economies of scale. Economies of scale are the practice of performing the
specific operation in a cost-effective manner.
Kumar, V., Kumar, V., Rao, Y. V., & Veeramalla, S. (2019). Supply Chain Performance
influencer in construction domain: A Key factor analysis. International Journal of Supply
Chain Management, 4(1), 1-7.
8. Is there is a significance of culture in global business
Yes, culture matter a lot in international business. This is because; it is by having the
knowledge about the culture of the specific country the only manager of a firm is able to make
their efforts in terms of molding their products and services as per the specific needs and
demands of the respective buyers. For example, the people of India do not eat beef meat. This is
because, as per their culture they worship cow as a god and thus they cannot eat the meat of the
same (Gerchak & Schwartz, 2018). However, while entering the Indian market McDonald has
completely ignored the given aspect. Thus, due to this, it has to stop its operation in the given
market. The given incident gives a clear indication that for the company it is very important that
they should gain good information about the international market. If not done then in this
condition the direct impact of the same will be seen on the sales and profitability related
condition of the enterprise.
Gerchak, Y., & Schwartz, G. (2018). Supply chain coordination with multiple retailers and
nonlinear production costs. International Journal of Operational Research, 32(2), 251-
265.
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CHAPTER 2 AND 3: INTERNATIONAL SUPPLY CHAIN
MANAGEMENT
9. Assessing key elements, touchpoints, risks and partners in international supply chain
Integration, operation, purchasing, and distribution are being regarded as the key
elements that are related to the international supply chain. Among all integration is the main
element. This is because it assures coordination between all other elements. It is through this way
only international supply chain function can be accomplished in a successful way. On the other
hand, supplier, wholesaler, and retailer are being regarded as the key partners in the supply
chain. They assure that all the activities in the supply chain should be performed smoothly. Their
main aim is to attain the goals and objectives of the corporation (Fontes & Freires, 2018). In
addition to this, excessive lead time in the production and distribution function can be regarded
as one of the touch points of international supply chain operation. The given thing will tend to
raise the overall cost of supplying good from one place to another. Thus, for the manager of firm,
it is very important that it should manage the same. Government collapses and interstate conflict
can be regarded as major risks that are related to the supply chain function. The given things will
have a direct impact on the type of plans that are being made by the firm.
Fontes, C. H. D. O., & Freires, F. G. M. (2018). Sustainable and renewable energy supply chain:
A system dynamics overview. Renewable and Sustainable Energy Reviews, 82, 247-259.
10. What things are required with an aim to build infrastructure for global trade
Transportation, communication and regulatory requirements are the major necessary
infrastructure for the global trade. In accordance with the given context, it can be said that with
the help of transportation the manager of a firm is able to supply the ordered goods within the
given specified time limit. However, apart from the effective transportation in supply chain
communication also have a very important role. This is due to the fact that with the help of
effective communication both sender and receiver of goods can get an idea about the
consignment (Kwak, Seo & Mason, 2018). In addition to this, communication also helps in the
process of resolving the different type of problems that arise in front of the international supply
chain manager in an effectual manner. Here, it is through given way only the supply chain
manager can attain its goals and objectives. Besides this, it is also important for the supply chain
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manager that it should follow rules and regulations of the specific country that are related to
supply chain function. If not followed then the survival of the firm in the specific market will
become quite difficult.
Kwak, D. W., Seo, Y. J., & Mason, R. (2018). Investigating the relationship between supply chain
innovation, risk management capabilities and competitive advantage in global supply
chains. International Journal of Operations & Production Management, 38(1), 2-21.
11. Assessing additional risks faced in international trade in comparison to domestic trade
There are different additional risks being faced by the firm in international trade in
comparison to domestic trade. In international trade, the firm will face commercial risk. It is the
type of risk in which the firm will not have any idea about the foreign market. In this situation
chances of getting a failure in the international platform will be increased. But, the respective
risk is not present in domestic trade. This is because a manager tends to have full knowledge of
its market (Watson IV and et.al., 2018). In addition to this, in international trade, the risk of
cargo is also present. This type of risk occurs when the manager of the firm sends it’s good to
another country via ships. Herein, it can be said that firm should have thorough knowledge about
the marine insurance as well as it should also have good information about the type of legislative
things being followed by respective country in relation to marine shipment. However, in
domestic trade, a firm will not have to worry about these all given things. This is due to the fact
that here with an aim to transfer goods from one place to another place many cheap options are
available to them. Further, they also get support from the side of the government.
Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International
market entry strategies: Relational, digital, and hybrid approaches. Journal of
International Marketing, 26(1), 30-60.
12. Assessing the issues that need to be considered by the logistic manager and what tactic
should be used with an aim to mitigate the risk
Among all the assessed risks, it is recommended to the logistics manager that it should
give major importance to the commercial and political risk of international trade. Here, both
assessed risks are given importance because these both can affect the operation of the firm in the
international market at the initial phase only (Surdu, Mellahi & Glaister, 2018). It is because of
7