Overcoming logistical constraints in large-scale import and export operations
As global markets become increasingly interconnected there is subsequently a significant increase in global trade. Import and export is vital to the world economy and for many nations, it is a pivotal driver of economic activity that carries great weight in the country’s economic performance. Large-scale import and export operations naturally come with a plethora of logistical challenges. Overcoming such challenges necessitates the cooperation of governments in setting policy that is advantageous as well as adapting emerging technologies to promote efficiency.
The challenges obstructing improved performance in import and export can be resumed to the following:
- Policy, Customs, and Regulatory Compliance
Policies and regulations are central to ensuring that global trade is done safely, securely, and in accordance with fair trade practices however, they can also be an obstacle for businesses involved in international trade. Beyond the standard tariffs that are applied by each respective nation, regulations concerning technical requirements and licensing exigencies. Import and export quotas place great strain on businesses’ ability to transport their products in great numbers. Moreover, the increase in import and export costs results in businesses raising the prices of their products which affects the consumer market. This in turn restricts economic potential and limits direct and indirect growth in relevant sectors. The World Economic Forum estimates that inefficient customs procedures can increase trade costs by up to 5%, impacting the competitiveness of businesses.
- Infrastructure Constraints
An often overlooked factor in improving the efficiency of global trade (notably in developed nations) is the physical infrastructure of ports, the management of the ports, and storage capacity. Ports that are outdated lack the infrastructure to handle high-volume imports at an acceptable standard. Naturally, this causes delays at various stages of the port process from docking, processing, and unloading. Ports that lack insufficient storage capacity are another factor that causes setbacks for businesses when determining their schedules for restocking and resupplying. It is vital that nations continue to prioritize investing in infrastructure to accommodate the growing market.
- Supply Chain Visibility
According to a survey done by Geodis, approximately 72% of import-export companies expressed that supply chain visibility was a primary concern. The ability to obtain real-time data is still a common issue in global trade, even in the year 2023. The most effective way to overcome this obstacle is by taking advantage of emerging technologies that have real and beneficial applications. It goes without saying that AI technology, IoT sensors, and RFID tags rank among the leading technologies that logistics companies believe will have the biggest impact on driving efficiency throughout the industry.
Import and export afford countries an expanded dimension of markets across various borders. These activities are strong stimulants for economic growth as they aid in the expansion of numerous industries. On the export side of the spectrum, export-heavy economies create jobs in manufacturing, logistics, retail, and B2B services. These factors can contribute to the formation of diversified and competitive economies for developing nations that already rely on imports and exports to maintain activity in principal sectors.