There is an issue facing logistics performance not only in one country but in a global scale. This is because people have observed that the costs of logistics are not getting lower but higher, and the levels of service are also getting lower. These, then, are nothing less than blocks to the progress of global trade. Majority of economic development is stunted because of custom laws, bad border trading management, transport regulations, and global transport infrastructure.
Logistics performance is a measurement of how effective logistics management is. Simply defined, logistics is what is called as the “physical Internet.” The goal here is to bring goods and services from point A to point B in the fastest, most reliable, and cheapest way possible to help reduce hunger and poverty. Technology has always helped bridge the gap between effective logistics management and the issues it faces. As our technology advances, more and more opportunities are seen between countries to advance global marketing strategies.
What affects logistics performance? The first thing to consider in logistics, freight shipping services as always, is cost. Any businessman worth his salt knows that he will be in the losing end if the tries to reach for a global market yet incur high overhead expenses. It will not be a wise move to ship items to another location if the actual costs of the activities are not going to be retrieved by the expected profit. Another thing to consider is the time that it will take for the goods and services to be delivered to their destination.
In many instances, perishable goods do not reach the destination in the same fresh condition. This poses a risk to any businessman since the products will not be sold anymore. Sometimes, the products do reach the destination, albeit late. The downside here is that they would have just a few shelf days remaining. In a very short span of time, the products will perish and will no longer be fit for consumption. Ironically, this scenario means that it would take more days to transport the goods than the days they would be displayed on market shelves. As such, business owners simply refuse to ship items since they lose money instead of earning it.
In relation to this, geography also plays a crucial role in logistics management. If a target global market is too remote, there is almost no practical way of reaching out to that geography. What needs to be identified is the source of the product and then a study is made regarding the feasibility of transport to that specifically remote location. With today’s airplanes, this does not really post much of a challenge. However, you still have to consider the associated costs with effective transport of goods.