Manning a startup is tough. Manning a startup that ships internationally is tougher. Global logistics is a pretty wide sphere, but there are a few key things that can go wrong wherever you’re shipping your products. Logistical issues pose a very special problem, as by their very nature they don’t allow for you to be on hand to fix them. Some problems are more macro and are more easily solved by dedicated planning, strategy and simply having a competent and forward-thinking logistical team.
Here are some of the biggest logistical problems that you should be aware of if you’re a startup that has an international focus. These are all considerations that should be taken into account at the earliest possible stage. They are easier to address before they become a problem than after you have noticed an issue. If it has already got to the point where there is a disparity in what you would expect to see in your multi currency bank account, then you’ll be firefighting rather than taking control. Remember that it’s always better to anticipate and prevent than respond and treat.
Fluctuating Customer Needs
50 years ago, you could provide a service that could fit all types of customers. Now, customers have a wide variety of needs, which your logistical solution should be equipped to deliver. There are some needs, however, that are so common that they have almost become standard. These include giving your customer transparency about the stage of the product, from raw material to final production to arriving on their doorstep.
Reverse logistics has also become something that many modern commodity companies need to think about before they’re even asked about it, not least for sustainability quotas and corporate citizenship.
There’s a tremendous amount of competition in the contemporary climate, which means that if you don’t meet a particular customer’s needs, there’s a very real chance that they’ll find somebody else who will, and it’s a rare business model that benefits from high customer churn.
Thanks to Amazon, incredibly fast delivery is becoming more and more expected, whether you’re running a B2B or B2C company. This poses an additional difficulty for a startup, as global shipping is subject to uncontrollable events, acts of god. Whether it’s piracy in Somalia, Chinese New Year or a strike at a factory in India, small events can have knock-on effects down the supply chain.
The demand for fast delivery puts additional pressures on all elements of the supply chain when one component has a problem.
Safety and Security
Safety and security is increasingly becoming a concern due to the amount of hands that one product passes through on its journey. Cargo is typically taken from producers with local truckers to local warehouses to trucks to ports to ships etc. There are a lot of steps involved, which naturally amplifies the risk undertaken when handling the product. Due diligence needs to be really high, which it often isn’t.
If any party breaks their procedures, the risk will increase massively. This is why there has been a boom in technology that increases the security of products during the long logistics process. Blockchain is a famous candidate for increasing transparency along the supply chain, so much so that China is now using Vechain to track luxury goods as they move from France.
Blockchain can help the recipient validate the product as being legitimate before it’s bought. Hardware developments have also progressed, an example of which being the shock recorder. This powerful piece of kit monitors the package as it’s being handled across the supply chain to let you know if the handling is unacceptable. Not only can this allow you to amend your logistical planning, but it also allows you to isolate the cause of the problem, notify those responsible and, if proper prevention measures aren’t taken, find an alternative to that particular aspect of the supply chain.
Infrastructural problems can make shipping to certain locations next to impossible. This is especially frustrating if you have found a niche in a particular market, but that niche becomes unprofitable due to the difficulty of penetration. What good are thousands of ships serving major trading countries if they have nowhere to dock at the location of your choosing?
Infrastructural problems are causing issues in terms of congestion too as docks become overcrowded, and shipping hence becomes more expensive – infrastructure then becomes the bottleneck of the supply chain. These problems are significant in developing countries.
These problems are the biggest in international logistics, and where there are some getarounds like shock recorders if you’re a budding startup that needs to rely on international trade, in some cases you may need to let go of your ambition to ship to certain countries or penetrate certain markets. It feels strange in a world that is so connected for this to be the case, and hopefully things will improve in the future.