Overcoming the challenges of managing global freight

Transportation management

June 8, 2021

Managing global freight and ocean container movement now requires more dedicated insight as companies have expanded internationally. And no event outside of COVID-19 has exposed just how extensive, yet fragile, logistics networks and capacity flows have become over the last several decades.

To adapt, some manufacturers have adopted progressive supply chain approaches that move away from "lean models to more flexible ones like "sense and respond." But not all businesses have successfully met the challenges.

Globalization forces supply chains to consider all events from regional holidays and ocean weather patterns to geo-political turmoil and currency fluctuations. The year 2020 introduced yet another element: navigating a global pandemic.

Challenges and changes

Supply chains, or rather supply networks as they exist now, are multi-national and prioritize agility, resilience, and flexibility for just to keep the lights on. Sophisticated supply chain characteristics often place added pressure on logistics operations and the constant strive for cost reduction. In addition, there are several other challenges to manage.

  • The SKU explosion: Customers want all options now, not just a few colors, sizes, designs, you name it. What’s harder is preferences can vary by country, by region, and even by city in many cases.
  • Customer expectations: Customer satisfaction, and retention, rides on availability and speed. Essentially “I want this now.” Ensuring globally goods are on-hand so fulfillment can execute in hours rather than days or weeks places enormous pressure on companies today.
  • Cost compression: Business revenue and profitability are paramount and supply chains exist to drive both. Margins are constantly attacked from a myriad of forces. Even small increases in margin can translate to large shifts in shareholder value and market capitalization, which in turn can fuel R&D, market expansions, M&A activity, and other avenues to growth.
  • Hyper-competition: With technology driving innovation, many once stable industries have been upended by novel competitors. The digital-first models that blow-apart traditional market barriers to entry add more pressure to companies and rapidly compressing innovation cycles continues to mount.

A globalized supply chain puts many critical product and raw material streams far away from the final customer. As distance increases, and visibility lessens but not knowing what inventory is in motion and where it’s located is unacceptable. A global health crisis has highlighted how fragile most extended supply chains really are. Those that invested in more agile sense and respond capabilities have been able to rapidly scale down and back up again as opportunity arose.

What those companies have in common is the ability to compress the time required to re-set when the ground beneath them shifts. As global supply chains continue to navigate the bullwhip effect causing price increases, freight capacity challenges, and port congestion, having a global freight management platform that allows for increased visibility and streamlined data sharing has become a critical need.

To learn more about best practices for managing global transportation, read the best practices guide.

To learn more about Infor Nexus Global Freight Management, visit the product page.

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