Global logistics plays a vital role in world trade by efficiently delivering products internationally at low cost. Developments in intermodal transportation and electronic tracking have increased logistical efficiency. Global logistics involves designing and managing the flow of materials like raw materials, components, and finished goods from suppliers to customers around the world. This includes transportation, warehousing, inventory management, and administration across national boundaries at minimum cost. Key challenges include the increased complexity and expenses associated with longer distances, exchange rate fluctuations, foreign intermediaries, and security measures.

1. Global Logistics

2. Introduction
● Companies need to deliver products: effectively
and efficiently.
● Global Logistics has played vital role towards
growth of world trade.
● Lower the logistics cost, lower the overall cost of
finished product.
● Development of “Intermodal transportation” and
“Electronic tracking technology” increased
efficiency of Global Logistics.

3. Components of Global Logistics
Design and management
Direct and control flow of materials
National boundaries
Achieving objective at minimum cost

4. Flow of Global Logistics
Raw materials
Components
Supplies
Processing
Assembly
Finished goods
Customers
around the
world
Materials
Management Transportation
Warehousing
Inventory
Administration

5. Factors contributing towards
increase in complexity and cost
of Global Logistics
- Distance
- Exchange rate fluctuations
- Foreign intermediaries
- Security

6. Distance
Longer distance results in higher direct costs of
transportation and insurance for damages,
deterioration and pilferage in transit.
It also includes higher indirect costs of
warehousing and inventory.

7. Exchange rate fluctuations
Companies must adjust its planning to
incorporate the existence of currencies and
changes in exchange rates.

8. Foreign intermediaries
The need to negotiate border regulations of
countries and deal with local government
officials and distributors, brings participation of
intermediaries.

9. Security
Transportation costs for exporters have
increased due to extra security measures.
Higher fees and carrier surcharges imposed by
governments leads to exporters losing overseas
market.

10. Factors determining optimal mode
of transportation
1. Volume-to-volume ratio
It is determined by how much value is added to the
materials used in the product.
1. Perishability of the product
It refers to the quality degradation over time and
product obsolescence along product life cycle.
1. Cost of transportation
It should be considered in light of the value-to-
volume and perishability of the product.

11. Modes of Transportation in
Global Logistics

12. Ocean Shipping
Used for bulky, heavy and non-perishable products.
It has three types: -
- Liner service: Regularly scheduled passage on
established routes.
- Bulk shipping: Contractual service for specified periods
of time.
- Irregular runs

13. Air Freight
Shipping goods by air.
High-value goods with high volume-to-value
ratio and perishable products are shipped via air
freight.
Example: Diamonds, LCD screens,
semiconductor chips

14. Free Trade Zone
An area located within a nation, but is
considered outside of the customs territory.
It offers tax benefits and marketing flexibility
and thus, an integral part of Global Logistics.
Government attracts investments and
employment by maintaining FTZ.

15. Top 10 Global Logistics
1. Japan Post Group
2. YRC Worldwide
3. POST NL
4. Schenker
5. Royal Mail
6. Fedex
7. DHL
8. UPS
9. Harvey
10. Maersk

16. Thank you