What is global logistics?
It’s the fundamental characteristic of our age. Every minute, of every hour, of every day, an enormous amount of goods, materials and commodities are in motion. In 2016, the global annual volume of trade in merchandise was $16 trillion, according to the World Trade Organization. The global logistics industry is what makes it happen.
Global logistics is the process—largely a science but also an art—of managing the flow of goods through the supply chain, from the place where they are made to the place where they are consumed. It could involve shipping seeds and fertilizer to a grain farmer, sending harvested grain to a processing mill, trucking flour to an industrial bakery, sending containers full of loaves of bread to a distribution center, and then delivering them to restaurants. Global logistics involves the movement of goods—by truck, train, ship, or plane—as well as the storage of goods in distribution centers and other logistics real estate facilities.
What kinds of companies operate in the global logistics industry?
Global logistics requires close and intricate collaboration between a host of partners. Manufacturers often operate their own fleets of transport and networks of logistics real estate. Shipping companies, airlines, railroads and trucking companies provide the heavy muscle in moving goods around. Global delivery services manage the movement of goods from the point of production to the point of consumption. Logistics real estate companies own and operate the vital facilities that are important nodes for transport, management and storage, while a host of service providers provide the vital software, security, labor, and business intelligence that makes the global logistics system work.
What drives demand for the global logistics industry?
The continual growth of global logistics is powered by three fundamental trends: the general growth of trade,the rise of e-commercand the reconfiguration of supply chains. The endurance and strengthening of these trends throughout the world means global logistics will play an increasingly important role in the global economy.
What considerations do companies make in considering where to build components of the global logistics system?
In a word, location. Because global logistics is all about connecting the crucial components of the supply chain—from the point of origin of products to the point of consumption—it really matters where distribution centers, transport hubs, terminals and other infrastructure is built. Typically, the most functional and compelling infrastructure is located near or adjacent to highly trafficked transport routes that can service large numbers of consumers.