Choose One Of The Following To Answer And Then Comment On Tw

Choose One Of The Following To Answerand Then Commenton Twoof The Answ

Choose one of the following to answer and then comment on two of the answers of your classmates: What are the major costs of international logistics? Given what you know read in Chapter One about the WTO, what trend do you expect these costs to follow? Please answer and then provide comments to at least two other classmates' contribution plus web links, and please list who you are addressing your comments! Or What are the advantages and disadvantages of using a subsidiary rather than a joint venture for a firm interested in manufacturing abroad? Please answer and then provide comments to at least two other classmates' contribution plus web links, and please list who you are addressing your comments!

Paper For Above instruction

International logistics plays a critical role in the success of global trade by managing the transportation, storage, and distribution of goods across borders. The major costs associated with international logistics include transportation expenses, warehousing and storage costs, customs duties and tariffs, insurance, and documentation fees. These costs are influenced by factors such as geographical distances, infrastructure quality, regulatory requirements, and fuel prices. Due to the complexity and variability of these elements, logistics costs can significantly impact overall supply chain profitability and efficiency.

Transportation costs are generally the largest component of international logistics expenses, encompassing shipping, air freight, rail, and trucking charges. Among these, maritime shipping tends to be more economical for large-volume freight over long distances but can be affected by fuel prices and port congestion. Air freight, although more expensive, offers faster delivery, which can be crucial for perishable or high-value goods. Warehousing and storage costs add to logistics expenses, especially when goods require long-term or regional storage near markets.

Customs duties, tariffs, and associated fees are major cost drivers that vary depending on trade policies, tariffs, and tariffs' fluctuation over time. The WTO aims to promote free trade and reduce tariff barriers among member countries, which influences these costs significantly. As WTO member countries continue to liberalize trade policies, it is expected that customs-related costs will decrease, thereby improving the efficiency of international logistics.

Insurance costs, covering risks such as damage, theft, or loss during transit, also constitute a notable expense. Fluctuations in global risk environments and changes in insurance premium structures impact total logistics costs and operational risk management strategies.

Documentation and administrative costs are additional expenses, often resulting from compliance requirements with international trade regulations, customs clearance procedures, and transportation documentation. The digitization of logistics processes and the adoption of global trade management platforms are expected to streamline these costs over time.

Looking ahead, the trend due to WTO efforts and global trade liberalization suggests a decrease in many of these costs. Reductions in tariffs and improved trade facilitation measures are likely to make international logistics more cost-efficient. Additionally, technological advancements such as blockchain, IoT, and AI-driven supply chain management systems promise to optimize logistics operations further, lowering operational costs and increasing transparency.

In conclusion, while international logistics costs currently pose significant challenges to global trade, ongoing WTO initiatives and technological progress are anticipated to reduce these expenses over time. This will enable companies to expand their international operations more efficiently, fostering economic growth and enhanced global trade connectivity.

Comments on Classmates' Contributions

(As specific classmates' answers are not provided in this prompt, comments would typically be tailored to their posts. For illustration:)

Comment to Classmate 1: Your analysis of transportation costs highlights important factors such as fuel prices and port congestion. I agree that technological innovations like real-time tracking and better port infrastructure can help mitigate these expenses. Here's a useful resource on recent improvements in maritime logistics: Maritime Innovation Advances.

Comment to Classmate 2: You mentioned customs duties and tariffs as major costs and discussed WTO efforts effectively. It's interesting to consider how digital customs clearance platforms are accelerating trade and reducing costs. Check out this article on digital trade facilitation: Digital Trade Facilitation.

References

  • Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management. McGraw-Hill Education.
  • Jain, P., & Jain, R. (2019). International Logistics and Supply Chain Management. Springer.
  • World Trade Organization. (2022). Trade Facilitation and Customs Modernization. WTO Publications.
  • Rodrigue, J.-P., Comtois, C., & Slack, B. (2017). The Geography of Transport Systems. Routledge.
  • Hummels, D. (2007). Transportation costs and international trade in the second era of globalization. Journal of Economic Perspectives, 21(3), 131-154.
  • Gereffi, G., & Fernandez-Stark, K. (2016). Global Value Chain Analysis: A Primer. Center on Globalization, Governance & Competitiveness.
  • UNCTAD. (2020). Review of Maritime Transport 2020. United Nations Conference on Trade and Development.
  • Notteboom, T., & Rodrigue, J.-P. (2018). The future of container shipping and ports: Trends, drivers, and scenarios. Maritime Economics & Logistics, 20(2), 185-209.
  • World Bank. (2021). Doing Business Report: Streamlining Customs Procedures. World Bank Publications.
  • Manuj, I., & Mentzer, J. T. (2008). Global Supply Chain Risk Management. Journal of Business Logistics, 29(1), 133-155.

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