Rob Pursell, Chief Financial Officer, NSC Global
In 2011, thousands of flights were grounded due to the Icelandic Volcano eruption. More recently the Suez Canal blockage saw the vital trade artery, with a daily flow of goods worth $10bn, blocked for six days. Countless businesses, from domestic transport providers to retailers, supermarkets and manufacturers were severely impacted.
These events help illustrate the infinite number of points at which things can start to go wrong with Global logistics. However, enterprises that are undertaking IT Logistics Globally no longer just face the traditional challenges of transport; they must now carefully traverse local customs and cultures, regulatory differences and the impact of digital transformation – making up-to-date and expert knowledge essential.
Understanding local customs and cultures
Effective communication can be the difference between succeeding or failing in a new market. Culture influences the way people behave, communicate and think. Businesses operating in a globalized economy, need to understand that cultural differences can impact how they perform in local markets.
It’s important to do your research when doing business across borders – even down to the planning of work on a national holiday. With a sound working knowledge of local cultures, enterprises will benefit from faster transit when transporting goods within a country.
Regulatory knowledge is essential
To avoid goods being rendered useless in the destination country, understanding regulatory differences is vital. Moving hardware between continents involves warehouse staff, lawyers, project managers, drivers, fixers and more, making in-house Logistics financially unviable for some enterprises.
Almost all countries charge taxes on imported goods – but it’s rarely a flat rate even within countries. The tax paid on imports can depend on agreements with other countries, set annual quotas on the materials being imported, or quantities being shipped.
There is a huge amount of hidden costs in logistics which can impact businesses P&L, and therefore, requires careful management. When shipping millions of pounds’ worth of goods, having the knowledge to take advantage of tax exemptions or discounts can be extremely economical; equally, so can knowing when not to ship goods, but purchase them in the country where they’re required.
Efficiency, optimisation, speed and timing have always been crucial in global logistics. Although speed-to-market is key – don’t let that be a substitute for poor planning. Where possible consolidate loads to ship more effectively and look for flexible services. Sea-freight may be a fifth of the cost of airfreight door-to-door but if you don’t have the correct clearance requests and product specific licenses/permits, pay the right taxes and duties and meet the varying audit requirements – you risk delaying or even stopping the clearance of goods.
Finally, software licensing is often overlooked when thousands of devices need to be moved around the world. After all, software will work in any country, and won’t be damaged in transit. However, while software will work, the licence of that software may not be intact once the hardware has travelled. In addition, IT equipment may be classified as controlled goods or having dual use and therefore special licences are required to validate their use. A specialist IT logistics partner will ensure this doesn’t happen, by screening all goods for compliance requirements, asking the right questions and procuring the right licenses on behalf of the client.
The impact of digital transformation
Global Logistics has traditionally relied on human intervention however the rapid advancement in new technology such as: Digitalisation, DaaS and Autonomous Vehicles are revolutionising the industry.
The digitalisation of logistics can reduce fraud, facilitate seamless transactions, enhance accuracy and will allow for an accurate recording of data. This level of transparency provides absolute clarity on where goods have come from, where and what slows down the supply chain, how it can be made more economical, and where accountability for supply chain failures lie.
The digitally accumulated data can also help to address ethical concerns around child labour, origin of materials and packaging waste while enabling faster action related to changing customer demand, optimum routes, fuel consumption and overall turnaround times.
Device as a Service (DaaS)
With the pace of change in tech, waiting for a new budgetary year to start to replace equipment could be more costly than just the outlay on hardware. Device as a Service (DaaS) follows the increasingly popular “aaS” model, rolling product and maintenance into one, and is moving from a niche alternative to becoming a strategic imperative for many businesses. One of the most obvious advantages of DaaS is always having up to date tech, while also removing operational expenditure.
However, DaaS is also emerging as a highly desirable supply chain model for both customers and providers. Customers benefit from lower costs, and freedom from device management, while providers add new services revenue, a more predictable revenue stream, and reduced sourcing costs through device re-deployment.
Transportation is incredibly resource heavy. Self-driving boats, lorries and cars will save Logistics companies millions of pounds. This autonomous revolution is also taking place in warehouses, with robots gathering goods. It’s conceivable that one day hardware will be transported from A to B, untouched by human hands.
In order for business providing global logistics to continue to thrive in a globalized economy, they must invest the time to address and understand cultural, regulatory differences and the available technology.
Working with a global IT logistics expert that provides an end-to-end service, businesses benefit from the efficiency of single partner with the expert knowledge of local customs and legalities even in complex and unusual locations.