Domestic companies typically can use a variety of transportation options to move goods. Ground transportation is a common preference for many Indian companies. With a MNE, though, you have more limited transportation options. You can’t drive freight from Delhi to western Europe, for instance. In fact, many multinational companies use multiple transportation methods to get goods from warehouses to stores or to buyers.
You have more cost factors to consider in planning global logistics as well. In a domestic business, your costs generally include technology, store facilities, logistics workers and transportation. In an MNE, you typically have these same costs, but you also have to consider tariffs when you trade internationally, as well as additional government taxes and fees. Currency exchange rates also fluctuate, which can positively or negatively affect you as you pay out or receive money across borders.
Management and Coordination
Many Indian companies have a single logistics manager that oversees all facets of planning and executing the movement of information and goods. While you can have a corporate logistics manager for an MNE, that person often coordinates logistics activities with geographically-dispersed, regional logistics managers. The coordinated effort may cause challenges in decision-making and requires clear plans on how to execute information-sharing and distribution processes.
Supply Chain Partnerships
Many industry suppliers and resellers rely on strong, trusting relationships with core suppliers. An Indian wholesaler or retailer might have an exclusive agreement to buy certain goods from a key supplier, for instance. These partnerships are still common in MNE’s, but different country regulations, geography and economic roadblocks definitely present more challenges in building loyal supply chain relationships. Some MNE’s implement an international strategy, whereby each country’s operation manages its own supplier or buyer partnerships locally.
With domestic transportation, you’re only concerned with the laws of your state or your country. With international transportation, you’re also concerned with the laws of the country of destination.
National Transportation modes
National transportation companies can use a variety of transportation methods for moving goods as detailed below:
Road transportation is often favoured over rail. Trucks are used for the distribution of goods from manufacturing units and warehouses to stores around the country. There are many advantages in using trucks including:
- Cost-effectiveness as vehicle costs is low and expansion can be made within any budget.
- Delivery is speedy as long as the road network is good.
- Ongoing location of goods is simple to monitor.
- Communication with the driver is easy.
- Short distances don’t pose any problems.
Rail transportation is popular for long-distance shipping and used for the distribution of heavy goods that need to be moved safely. Goods normally finish the journey on a truck to get into the allocated stores. Benefits of using rail transport consist of:
- A more environmentally friendly mode of transport.
- Reliability and efficiency of the service.
- Options that provide access to greater capacity.
- Lower fuel costs when shipping a high volume of freight.
- Trains aren’t hindered by traffic and weather.
International Transportation methods
International transport and logistics modes are used to distribute goods globally by sea or by air. Sea shipping will be through linear ships that travel on regular routes and are scheduled at determined ports. Or via container ships that travel to the destination where the cargo needs to be delivered. The pros of sea shipping cover:
- The ability to ship large volumes at low costs.
- Shipping containers can be used for further transportation.
- Sea freight shipping can be up to six times less expensive than air.
- Ships are designed to carry hazardous materials and dangerous cargo safely.
Air transportation can be expensive but is suitable for goods that need immediate delivery. Air freighters, Charters, and passenger planes are all used for this method of transportation. The plusses of air freight are:
- It’s the fastest method of transport available, especially over long distances.
- Airfreight shipments are highly reliable and extremely secure.
- You can easily track your goods ongoing.
- Remote destinations are not a problem; You can ship your goods almost anywhere.