When you take your business global, the international logistics can get complex—fast. Shipping freight to and from new areas of the world, clearing cargo through customs, and coordinating multiple modes of transportation all require new levels of bandwidth and types of expertise.
If you’re thinking of expanding your operations internationally, check out our business owners’ guide below. We’ll show you what you need to know about moving freight internationally and synchronizing all of the elements that keep your supply chain moving. We’ll also discuss some of the benefits of expanding into international logistics, as well as some of the resources and tools that can help you optimize your international freight shipments, saving you time and money.
In This Article:
- Coordinating Multiple Modes of Transportation
- Arranging Logistics in Unfamiliar Countries
- Customs Compliance and Documentation
- Inventory and Warehousing Management
Market Expansion and Customer Growth
Cost Savings
A Competitive Advantage in Your Marketplace
Start Small and Scale Gradually
Invest in Technology
Understand Your Incoterms
Core Considerations of International Freight Shipping & Logistics
Expanding into international freight shipping and logistics means adding some new considerations to your plate. Some of these may be new to you. Others may be familiar from your domestic logistics operations. However, they can take on extra weight when you expand internationally. Let’s explore four considerations when you move into international freight and logistics.
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Coordinating Multiple Modes of Transportation
When you start shipping international freight, careful coordination of your transportation modes becomes even more critical.
Expanding into international logistics will likely require you to leverage all available freight modes, including ocean freight, air freight, over-the-road freight, and rail freight. This means additional links in your supply chain. If not coordinated carefully, these additional links can introduce delays into your operations.
In addition to passing through more modes, international freight simply has to travel longer distances, which means a higher chance of supply chain disruption. Severe weather, natural disasters, geopolitical strife, and logistics incidents (like the 2021 blockage of the Suez Canal) can all impact freight timelines. As you enter the world of international logistics, you’ll need to be ready to react to these disruptions to minimize impact to your operations.
You’ll also need to choose the right modes for your operations—and your budget. International freight is always a balance between cost and speed:
- Although ocean freight can take weeks, it can be much more cost-effective than air freight. To take advantage of the lower costs, you’ll need to plan ahead to keep your operations well-supplied—but not over-supplied.
- Air freight, on the other hand, is the fastest way to move goods internationally. Even though it can be expensive, it can make sense for high-margin goods like electronics and time-sensitive cargo like pharmaceuticals.
An experienced international freight forwarder can help you navigate all of these issues, including coordinating freight modes seamlessly, creating backup plans in case of disruption, and keeping your international freight on time and on budget.
As you expand into international logistics, you might consider investing in a transportation management system (TMS). This logistics software can help you better plan, execute, and analyze all of your supply chain activities by aggregating data from several different sources into useful dashboards and reports. Plus, new cloud-based options have made it easier for smaller businesses to afford a TMS.
Read more in our article on how a transportation management system can improve your supply chain.
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Arranging Logistics in Unfamiliar Countries
In addition to coordinating new modes, you’ll also need to coordinate them in new areas of the world. For example, you may be experienced with booking LTL or FTL shipments within the U.S., but you may not know who to call when you need a container in China moved from a supplier to the Port of Shanghai. (And you might not be sure if the price your supplier is offering for that service is astronomical or a great deal.)
An international freight forwarder can make this process easy for you. Your forwarder can leverage their network of trusted carriers to handle cargo movement around the world. They can also advise you on international freight pricing so you’re not accidentally overpaying for transportation services.
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Customs Compliance and Documentation
If you’ve never shipped international freight, customs regulations will present a new challenge for you. Each country has its own import and export regulations, all of which come with their own documentation requirements.
Two experts can help you navigate the sea of regulations, taxes, tariffs, and documentation: an experienced international freight forwarder and a customs broker.
- Your freight forwarder can help you prepare the necessary documentation to keep your shipment moving through international borders—including commercial invoices, bills of lading, packing lists, and certificates of origin.
- In case of challenges, a customs broker can step in and resolve any problems to get your shipments moving again. Sometimes this might mean resolving a paperwork error or paying additional tariffs on your behalf. Other times, through no fault of your own, your shipment may be selected for inspection, which can mean inspection fees and delays. An experienced customs broker can help pave the way for expedited release of your cargo in all of these circumstances.
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Inventory and Warehousing Management
A strong inventory and warehousing plan plays a critical role as you move into international logistics. Since international freight can mean longer timelines—and more complex supply chains—effective inventory management will be critical for maintaining stock levels. A well-thought out plan will ensure that you have the supplies and inventory you need to operate your business smoothly and efficiently—but not so much inventory that your storage costs (and carrying costs) go through the roof.
If you haven’t already, it might be time to invest in a warehouse management system (WMS) to help you monitor stock levels and track inventory in real time. A WMS can give you greater visibility by delivering the information you need to respond quickly to changes in demand, avoid carrying excess inventory, and minimize storage costs, ultimately making your international operations more cost-effective.
Now that you understand some of the factors at play, let’s discuss the benefits that come with expanding into international logistics.
The Benefits of Expanding into International Logistics
While moving into international logistics and freight shipping can introduce new levels of complexity to your business, it can also offer you several advantages:
Market Expansion and Customer Growth
Whether you’re importing a new line of goods from abroad or exporting goods to new audiences outside your home country, going international can offer you opportunities to expand your product line, grow your customer base, and scale your business. All of this hinges, of course, on establishing a well-oiled, optimized supply chain that delivers goods consistently.
Cost Savings
For some businesses, sourcing materials and goods from abroad can offer new ways to lower costs and improve margins. You may find raw materials, supplies, and even finished goods at lower prices internationally than you can find domestically.
However, if your transportation costs spiral out of control as you expand into international logistics, your cost savings will evaporate. Planning your inventory needs ahead of time with the help of an experienced international freight forwarder can position you to leverage cheaper modes of transportation, such as ocean freight, and make the most of your transportation budget.
A Competitive Advantage in Your Marketplace
Expanding into international logistics can offer you a competitive advantage in several respects. First, you may be able to leverage international raw materials, supplies, and/or finished goods to offer goods and services that your competitors don’t offer. Alternatively, you may be able to offer these goods and services at a lower price—or at a higher margin for you. With higher margins, you may be able to deliver superior customer service, setting you apart in the marketplace. Finally, moving into international logistics may mean you can deliver goods to consumers in markets your competitors haven’t entered, giving you a solid foothold in an new market.
International Logistics Tips for Business Owners
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Start Small and Scale Gradually
For businesses new to international logistics, starting with smaller shipments can help build confidence in this new arena. If there are any challenges or hiccups, you’ll have the chance to iron them out on a smaller scale before ramping up.
Additionally, if you choose to partner with a new international freight forwarder, starting small can give you the opportunity to try out the relationship in a lower-stakes environment. If all goes well, you can expand your partnership—and your operations.
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Invest in Technology
When you go international, your logistics will become significantly more complex. Investing in platforms that can offer you real-time tracking and inventory management capabilities will offer you greater control and visibility. A transportation management system (TMS) or warehouse management system (WMS) will put the information in your hands that you need to make smart business decisions around your international logistics.
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Understand Your Incoterms
The Incoterms® rules, created by the International Chamber of Commerce (ICC), define the responsibilities of buyers and sellers around the international delivery of goods. These rules clarify who will pay for loading and unloading costs, customs export procedures, insurance, import costs, and more.
Understanding the Incoterm rule defined in your contract can give you a firm grasp on your costs—and your margins. However, if you choose an Incoterm you don’t fully understand, you may end up with a higher cost than you anticipated.
To learn more about Incoterms—and pick the right ones for your shipments—check out our article on the newest version, the Incoterms 2020 rules.
Partnering with a Freight Forwarder for Your International Logistics & Freight Shipping
Working with a freight forwarder delivers a number of advantages where international logistics are concerned, including:
- Access to your forwarder’s expertise on freight mode selection and global route planning to minimize your costs and optimize cargo movement.
- Expert coordination of each segment of your cargo’s journey to improve timelines avoid delays.
- Assistance in preparing documentation for import/export processes and customs procedures.
- Experience in uncovering efficiencies and optimizing your logistics flow to maximize your transportation budget.
Even if you already have some logistics expertise in house, a solid freight forwarder can immediately add a layer of international experience to shorten your learning curve and minimize early hiccups.
If you’re looking for an experienced partner to assist with your international logistics, our experienced team would love to help. Just schedule a complimentary consultation. We’ll discuss how we can help you streamline your international freight shipments—and position you for global success.
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