Big businesses have routine activities and operations all over the world. But expanding a business overseas can be riskier if they are running out of cost and proper strategy. The foundational problem they face is transporting goods to other countries.
There are various risks businesses can face while transporting goods from one country to another. For example, many established businesses in China have difficulty in goods shipping from China to USA due to worrisome trade relations between both countries.
Organizations must consider every logistical aspect in international trade, especially the freight area. It does not revolve only around the cost factor, but also various other factors such as danger to life, etc. These challenges are common to every business. The following section will highlight these problems & challenges in detail.
Key Freight Problems Found in International Trade
There are several problems in the logistics industry regarding international businesses. But the most impactful issues are shown as follows.
1. Major Inefficiencies Pertaining to Transportation
While transporting goods to neighboring countries, companies mainly rely on road or rail transport. There are various problems faced by them during transit through the road. For example, the tariff rates for rail transport are significantly high in most countries.
Besides, transporting goods through trucks can be prone to damage through accidents and harsh weather conditions. These moving trucks also face uncertain events like unnecessary inspection of goods. Apart from these goods may also witness congestion, damage due to poor roads and infrastructure, multiple checkpoints and many other unforeseen factors.
2. Trade and Economic Barriers
As stated earlier, laws and policies of different countries vary according to the legal * political relations between them. Countries with favorable trade policies will encourage more investment from other countries. Therefore, transportation to these countries will be smooth sailing.
But, the problem arises when the countries have strict terms on international trade. This makes the transportation and payment process challenging for both parties. This not only poses a challenge but also limits the companies to expand their operations.
3. Rise in Fuel Prices
One of the most common challenges faced during international transportation of goods is the increasing fuel prices. Transferring goods between gulf countries can be safe and pocket-friendly considering this factor. But usually transporting goods to other countries depends on the prices of fuel.
It might affect the overall profitability of the logistics department. Increment in fuel costs indirectly affects the choice of trucks. The mode of transportation also varies on this basis. Companies shift to sea transport due to petrol and diesel prices. If a business has difficulties selecting the best freight mode, service providers like Shipo.com are the right choice for solving such logistical problems.
4. Receiving and Transportation of Bulk Orders
It is difficult for companies to stay updated and loaded with bulk orders. Timely transportation of bulk orders has been a troublesome problem for many years. It has increased more due to paced up competition and traffic level.
This keeping up with the supply-chain timeline is a challenge even in interstate transportation. You can imagine how gruesome this challenge becomes when it comes to international transportation.
Due to the significant time gap in some countries, managing the timelines and transport cycle becomes more difficult. Festivals can also delay the payment cycle and transportation of bulk orders. The situation turns more challenging when the company is not financially sound and possesses limited resources.
5. Unknown and Unpredictable Delays in Transit
It is common to find variations in terrain in different countries. This problem minimizes when you transport goods within the national boundaries. These changes in weather and geographical conditions lead to postponement of delivery.
There are two phases of transportation. The first one occurs to carry goods from manufacturing plants to warehouses, and the second occurs to carry goods from warehouses to the final destination (retailer or customer). At both stages, rough and rugged terrain delays the reaching of trucks.
Sometimes, these delays occur due to accidents and calamities like landslides, vulnerable avalanches, etc. Traffic also results in these delays. These delays are minimal when an organization opts for air transportation.
6. Lack of Skilled Human Resources
Many global companies lack a proper system of recruitment, selection, and training of the workforce in the logistics department, especially in the transportation sector. They hire people on the basis of low recruitment costs.
As a result, they cannot handle many things while transporting goods. In case of hazardous goods like chemicals, a driver must be aware of do’s and don’ts. They should not light up a cigarette or flammable things. Due to a lack of knowledge and skills, they damage the goods.
Such problems indirectly lead to high labor turnover. SO, this problem acts as twin challenges for companies. There is a high need for companies to train the personnel to make the process smoother & more efficient.