Global logistics brings both challenges and opportunities for today’s shippers. Here, we break down the nitty-gritty details every importer and exporter needs to know. By Karen Kroll T he pandemic pushed global trade into the spotlight the world’s largest shipping companies suspended cargo services to and from Russian ports, severely affecting Russia’s supplies to many countries. Russia has been a major supplier of a range of aluminum, nickel, and other raw materials.
like never before—and its importance is only growing. Global trade in goods hit $25 trillion in 2022, up 10% from one year earlier, according to the United Nations Conference on Trade and Development. Importing and exporting continues to grow in volume and complexity, with transactions impacted by an increasing number of regulations, agreements, and policies, as well as evolving geopolitical events. Global logistics operations also are vulnerable to labor disputes as well as weather and other events largely outside any one organization’s control. Given the dif culty and importance of effectively managing global logistics, supply chain organizations involved in importing or exporting “need to be on top of their game,” says Mark Ludwig, national leader of trade and tariff advisory services with consulting rm RSM US. They should have an understanding of the laws and agreements that govern importing and exporting, and an appreciation of the tools and expertise that can streamline these transactions. It’s a daunting undertaking, but also a time of opportunity. Supply chain organizations that can successfully manage global logistics can reduce costs, improve compliance, and even increase market share. SPOTLIGHT ON GEOPOLITICAL CONTEXT Navigating global logistics requires a clear understanding of the evolving global geopolitical landscape. Events like Russia’s invasion of Ukraine, for instance, continue to impact trade and logistics. As a result of the invasion, beginning in March 2022,
“Companies that source or sell into these markets are all impacted by changes in the geographical, economic, and political spheres,” Ludwig says. Also at play are shifts in U.S. policy. The Biden administration has moved forward with a “more muscular trade policy,” says Lauren Pittelli, founder and principal of Baker Logistics Consulting. The goal, she says, is protecting American industries that are considered militarily important, as well as those important to the economy overall. One example comes from the Department of Commerce. In October 2022, it announced updates to its export controls, with a goal of restricting the ability of the People’s Republic of China to obtain advanced computing chips, among other changes. U.S. importers and exporters also need to monitor lists of individuals and companies that U.S. entities are prohibited from engaging in business with. The Of ce of Foreign Assets Control, for instance, publishes a list of specially designated nationals—or SDNs—whose assets are blocked and U.S. persons are generally prohibited from dealing with. The lists, however, are just a starting point. “Shippers can be deceived if they don’t dig further,” says Joanna Rangarajan, managing director with the consumer and retail group of Alvarez & Marsal, a global professional services rm.
July 2023 • Inbound Logistics 149
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