Plan, procure, execute, & track transportation for every shipment across your supply chain & logistics operations
A SaaS solution to help grow your business by achieving 100% perfect order execution at high volumes
Increase vehicle capacity utilization and customer promise adherence
Grow your business with omnichannel presence and automated pickups
Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
Reduce freight costs & get end to end visibility across shipments
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The international logistics market touched $4.92 trillion in 2021 and is expected to reach $6.55 trillion by 2027, exhibiting a CAGR of 4.7%. This growth is primarily led by the rapid proliferation of trade agreements among different countries and several initiatives that aim at increasing global trade activities to meet the rising demands of exporters and importers.
However, as the international logistics market grows, managing logistics operations such as inventory databases, packing, production, transportation, storage, distribution, increasing container freight rates, etc., will also become hard. This is because businesses still rely on obsolete logistics management solutions that offer zero visibility over the operations.
To survive in the highly competitive international logistics market, businesses need to opt for end-to-end logistics management solutions. Such solutions offer better visibility and control over operations and allow businesses to become more efficient and profitable.
This blog discusses the core processes and terms related to international logistics, the common challenges it involves, and how an integrated end-to-end logistics management software can help businesses manage international logistics effectively.
Cross-border shipping can be divided into the following phases:
One of the most important processes or aspects of international logistics is freight procurement, wherein businesses acquire freight to haul the shipments from source to destination. This process is important because it’ll help determine how much the business will pay to get the products shipped or delivered to the customer.
Businesses must opt for modern solutions that help compare different vendors, their pricing, and the features they offer to get the best bang for their buck.
Once the shipper confirms the rate and the contract is signed, then comes the shipment execution phase. During this phase, the shipper gets booking confirmation, and an empty container is sent to the shipper’s location for loading the shipments.
After the shipment leaves the facility, the custom housing agent or the freight forwarder takes care of the documentation needed for shipment execution. Once the formalities are complete, the shipment proceeds to the delivery location. And because so many steps are involved, this phase must be completely optimized for better visibility into the operations.
This is the phase when the shipment starts its journey from source to destination. Businesses have to keep an eye on the shipment to ensure they’re moving as expected and tackle contingencies to ensure timely deliveries and good customer experience.
This is the last leg of the journey that involves the transportation of the shipment from the nearest distribution hub to the final destination. Last Mile operations are directly related to customer experience and are highly expensive, accounting for 53% of the total shipment costs.
Once the goods are delivered, the carrier issues an invoice to the shipper. The shipper then validates the invoice and gets the payment done. The invoice data (delivery deadline, weight, quantity, and other information) is then stored, and the details are audited and analyzed later. While this process may seem simple, it’s really complex as tens of invoices might need clearance. And handling all this manually is time-consuming and prone to errors.
In this entire process, there are two most critical phases, which, if poorly managed, can lead to unprecedented cost ballooning – freight procurement and the Last Mile.
Let us find out how.
When it comes to freight procurement, businesses have to reach out to different freight forwarders and shipping lines to get the best bang for their buck. And this is a tiring and time-consuming process. Also, sometimes, businesses cannot make an in-depth comparison, leading to poor freight procurement.
Businesses have to send RFQs to different vendors/suppliers or service providers to submit their price quotations so they can choose the best one. However, sending RFQs manually is an inefficient process. Also, there’s only a limited number of suppliers businesses can reach manually, because of which they might have to settle for a less worthy candidate.
Sometimes because of unpredictable logistics demands, businesses have to send spot rate inquiries to the carriers to get started with their operations. However, doing this manually requires time as all the details, such as delivery time, load type, etc., have to be clearly communicated.
Often, businesses choose the wrong (low-performing) carrier for their project because of a lack of carrier ranking information. And this leads to shipment delays, bad customer experience, and additional transportation costs.
However, businesses can opt for smart logistics solutions that offer carrier ranking based on delivery ETAs, service reliability, pricing, customer feedback, previous performance, etc. This way, businesses can compare and choose the best.
The Last Mile is the most crucial leg of the journey and is equally complex and costly. Customers demand faster deliveries without having to pay for any shipping. And to ensure a good customer experience, businesses have to bear the cost. Also, because of inefficient route planning, shipments often get delayed and aren’t delivered on the first attempt leading to redelivery attempts and, thus, higher costs.
Here are some challenge challenges businesses face in the Last Mile delivery:
When the shipments arrive at the nearest distribution center, businesses have to rely on 3Pls for the last leg of the journey: The Last Mile. However, because of the lack of 3Pl management and automated solutions, businesses have to opt for manual allocation and route planning. And this leads to delays in deliveries as humans aren’t able to consider factors like traffic, driver familiarity, availability, shipment type, etc.
Another issue businesses face is a lack of visibility into the operations. Because of this, stakeholders cannot exercise control over the processes, making it hard for them to spot any inefficiencies and work on them.
Ineffective route planning often leads to the rerouting of the vehicles and, thus, shipment delays. However, because of the lack of dynamic ETAs, customers aren’t informed of the updated ETA. And this leads to failed delivery attempts, as the customer may not be home at the time of delivery, adding to the logistics cost.
Real-time order tracking helps stakeholders have a 360-degree view of all the processes, including the movement of orders, drivers, and delivery vehicles. This helps them deal with any contingencies en route. Also, customers can track their orders on their own, reducing calls to the service center and improving customer experience. However, all of this becomes impossible when businesses rely on manual methods of managing Last Mile, lacking real-time order movement and tracking.
While we have two challenging phases in international logistics management, container freight rates continue to be disruptive in the industry.
The actual cost businesses have to pay for freight containers relies on several factors such as season, foreign currency, geographic location, container availability, reefer equipment, etc. However, as businesses lack direct control over these factors, the costs that fluctuate negatively impact the operations of planned shipments.
Container shortage has always been a problem and was quite evident during the pandemic. Businesses are always in line to acquire containers and are ready to pay premium prices for the same. And this is significantly increasing the container ocean freight rates across the globe by a massive 300-350%.
Another reason international container freight rates continue to be a challenge is the cost disparity based on geographic location. For instance, the rates in Western Africa and South America are higher as compared to any other major trade regions. Also, freight rates from China to South America jumped by a massive 433%, while there was a 63% rise between the Eastern coast of North America and Asia.
Due to a lack of complete visibility and a unified platform for comparing carriers, businesses are unable to prioritize the carriers based on the costs. This makes it hard for businesses to find the most affordable carriers, adding to the transportation costs.
While international container freight rates are undoubtedly a major challenge of ocean freight, there are several other complexities businesses have to tackle, such as:
Port Congestion
Apart from high prices, one of the biggest challenges in ocean freight is port congestion. When the ships arrive, the containers are often stuck where they shouldn’t be, making it impossible to load or unload as the port is already full. Because of this, ships have to wait for the port to clear, which delays the shipments and adds to the costs.
Yet another challenge businesses come across during international logistics are the incidental costs such as demurrage, storage expenses, detention, etc. Such costs are often unpredictable and can lead to shipment delays based on the event and significantly bring down the business’s profits.
Businesses suffer from poor operational visibility and are often caught off-guard by surcharges, additional costs, and fees. Also, because of the lack of visibility, businesses cannot track their shipments, making it hard to take timely and appropriate action in case of incidental damages.
Because of the lack of modern logistics management solutions, businesses suffer from operational silos wherein different departments or infrastructures aren’t integrated. For instance, there’s no integration between the warehouse and order management systems, leading to a disconnect and, thus, operational inefficiencies. Also, without actively sharing information across departments, businesses cannot improve, making it hard for them to stand out in this competitive industry.
Shipments frequently get stuck at customs because of several reasons, such as improper documentation. Businesses often use manual documentation, which is hard to maintain, and access and impossible to dynamically update in case the requirements change. Because of this, the shipments get delayed, directly impacting the Last Mile deliveries and, thus, customer experience.
The majority of businesses lack modern logistics management solutions. Because of this, they have to rely on manual elements to manage all redundant operations. And this leads to poor visibility and operational inefficiencies. Businesses need to opt for modern solutions that help them with delivery orchestration: allow businesses to automate all the tasks and streamline and manage them easily.
Shipsy’s EXIM comes with digital freight procurement. This enables businesses to engage with multiple vendors and get the best cargo shipping rates each time using a single dashboard, saving them time and money.
With Shipsy’s EXIM, businesses can enjoy complete visibility over their operations. This way, businesses can handle unprecedented situations and minimize incidental costs such as demurrage, detention, etc.
Delivery orchestration is easy with Shipsy. Businesses can automate and orchestrate different processes, creating an automated workflow that is efficient and easier to manage.
With Shipsy, businesses can see carrier rankings based on prices, previous performance, delivery rate, etc. This gives them the authority to negotiate and choose the best carrier at the best possible price.
Using Shipsy’s EXIM, businesses can find an optimized route for their shipments using various filters to ensure low transportation costs. Also, the route planner automatically reroutes in case there’s a contingency en route, saving businesses time.
Businesses that have to manage shipments across multiple modes of transport, such as air, road, sea, and rail, can easily knit them together with Shipsy’s EXIM. Shipsy allows businesses to manage all modes of transport on a single dashboard, making management a breeze.
All stakeholders can track the containers in real-time. This helps them ensure the orders are moving as expected. It also allows them to take appropriate measures in case of any contingencies.
Businesses can access crucial data, such as shipment reports, daily, for better data analysis and reporting.
With Shipsy’s EXIM, businesses can manage transportation documents and comply with international rules and regulations, ensuring seamless operations and border clearance processes.
With real-time visibility into all the operations and reporting, businesses can ensure seamless operations and store, process, query, and visualize data to draw useful insights.
Lastly, Shipsy’s EXIM offers real-time prompts and reminders for overdue services, shipment status, deadlines, documentation updates, and other important detections that managers often forget, saving them a lot of hassle.
Shipsy’s smart EXIM platform has helped businesses unlock:
For more information, or to get started with Shipsy’s smart international logistics management platform, please schedule a customized demo today!
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