A Look at International Distribution

As U.S. markets continue to expand abroad due to increased overseas demand for American products, globalization, and other economic forces, operations managers are being thrust into the strange new world of international distribution.

But international shipping involves factors such as multiple service providers, language and cultural barriers as well as delays due to time differences. Each government has specific documentation requirements to monitor the entry of goods into its country. Commodity restrictions, currencies, duties and taxes vary from one country to the next.

With increased trading partners and transit times, there’s also a greater chance that something can go wrong with your shipment. And perhaps most significant, international shipping is considerably more costly than delivering goods in North America. So you have to be well prepared before you take the plunge into overseas distribution.

What are the steps to preparing an international logistics strategy? First, narrow your focus by transportation mode. Will the shipment require vessel, airfreight, parcel, or postal services? What’s the transit requirement?

What are you shipping? Is your shipment dutiable or non-dutiable? What’s the value? Generally, the commodity, weight, product value, and transit requirement will determine mode.

Next, research destination country information. Where are you shipping? What are the customs regulations and/or restrictions for each country? What documentation is required? Commercial or proforma invoice, shipper’s export declaration, certificate of origin, NAFTA certificate of origin?

Finally, research potential suppliers and enabling technologies. The major U.S. parcel carriers, such as DHL, FedEx, United Parcel Service, and the U.S. Postal Service provide several international delivery options. Many also offer tools to help U.S. shippers manage documentation requirements and trade compliance.

Rob Martinez is a partner at Navigo Consulting Group (www.navigoinc.com), a Long Beach, CA-based firm specializing in contract benchmarking, distribution analysis, and carrier negotiations.

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