Logistics: the critical element in international trade

Published on May 31, 2020   18 min

A selection of talks on Technology & Operations

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"Logistics, The Critical Element in International Trade", Dr. Darren Prokop, Professor of Logistics, University of Alaska Anchorage.
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What is logistics? It is the art and the science of managing three constraints, time, physical space, and location. Every organization relies on logistics, to some degree, in order to conduct business. Organizations across the world may link up in a supply chain in order to meet some strategic goal, but it is logistics that will make or break that strategy.
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Logistics is about getting seven things right, get the right item, in the right quantity, and in the right condition, delivered to the right customer, at the right time, in the right location, and do all of this at the right price.
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Logistics makes or breaks international trade. It facilitates trade when carriers and third party logistics providers are available to move shipments from one country to another. It also facilitates trade when the support infrastructure is in working order. But logistics hinders trade when the infrastructure is subpar or congested. It also hinders trade when any lack of competition among available carriers keeps freight rates too high.
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Logistics keeps international trade in a state of flux. Exporters look to expand their customer base into different countries. Importers look to expand their supplier base from different countries. Each depends on logistics facilitating and not hindering these activities. But when new and viable markets are found, the flows of international trade will readjust. Changes in carriers, routes, and trade volumes at ports of entry and exit will be the result.

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