The globalization of the supply chain continues despite disruption and trade tensions. New services and technologies offer value to managing global logistics and supply chains.
Common misconceptions influence the state of global logistics. Shippers need to think holistically about the challenges of managing global logistics. A transportation management system (TMS) can help overcome them.
Management of Global Logistics Means More Risks and Volatility
Technology advances and growing awareness about the benefits of supply chain management solutions is driving growth.
Global logistics market growth is forecast to continue at a 6.5% CAGR from 2021-2029, according to ResearchandMarkets. Global supply chains are inherently longer. They present more exposure to risks and disruption. Natural disasters, health epidemics, changing tariffs, and aging infrastructure affect supply chain volatility. Uncertainty becomes self-propagating, resulting in additional risks throughout the industry.
For instance, rising ocean shipping rates and U.S. diesel fuel prices, as well as changing surcharges can can drive higher transport across the supply chain. These risks contribute to the likelihood of less available capacity, undermining efficiency, and leading to volatility, notes Logistics Management.
Global Logistics Leads to More Variability and Trouble in Demand Planning
The complexity of managing global logistics also leads to added variability. Variability describes the difference between expectations and actual events.
Longer supply chains are subject to more risks, so the final activities may not reflect the planned activities. This creates challenges in demand planning, such as ordering raw materials, working with business-to-business retailers, and available capacity.
Longer Supply Chains Often Lack Visibility
Language and Cultural Barriers Remain
Barriers between countries, ports, trade regulators, freight forwarders, 3PLs, and business-to-business partners are another challenge in managing global logistics. Failure to consider the obstacles may result in inaccurate shipment processing and the inability to collect payment. Meanwhile, incompatible systems may lead to additional delays and headaches for shippers and logistics service providers.
Solving the Challenges with a Global Transportation Management Platform
Investing in a transportation management system (TMS), or a dedicated platform, overcomes the challenges of managing global logistics in several ways. Benefits include:
- Data-driven capabilities help manage volatility. Since the TMS gives you better control over all your transportation data, shippers and users can apply this data to handle fluctuations and changes in demand.
- Decreased variability. More information improves your ability to ensure actual activities reflect planned activities.
- Improved, centralized controls increase visibility. Breaking down data silos and sharing information through a centralized TMS increases visibility, improving responsiveness along the way.
- Cross-border use ensures compliance with applicable regulations and overcomes language and cultural barriers. Keeping all documents and compliance measures within the TMS improves compliance and eliminates concerns over language and cultural barriers.
- Advanced systems rely on EDI and APIs to connect to “incompatible” systems. Modern systems can communicate automatically and reduce the risk of lost information, while also optimizing scheduling and management.
- Cloud-based platforms transcend traditional, on-premise solutions. Relying on the cloud ensures global access and reduces the risk of disruption following an adverse effect, including weather-related disasters and trade conflicts.
Put the Power of an Advanced, Global TMS to Work Managing Logistics
An advanced TMS relies on software-as-a-service subscription models, artificial intelligence, and modern, RESTful connectivity to promote logistics management.
Globalization will continue as e-commerce expands, and supply chains will grow more reliant on one another. The evolution demands a cloud-based, scalable solution.