International Trade Logistics Essay

International trade and logistics can be defined as the transportation of goods and services from one country to another can be done through either import or export (David, 2013). Global logistics involves the coordination of raw materials, mode of transportation, logistics management, packaging and storing of the product from destination to the point of arrival. In the trade, a country may have either comparative or absolute advantage over others. Comparative advantage means lower production cost while absolute advantage means that the state will only require a small amount of input to produce a large quantity of output(David, 2013). Importing goods is essential because certain goods are not available in the local market while exporting creates a wide array of opportunities for exporters; it extends the lifespan of a product and allows continued production for the demand of such goods. The movement of goods from one country to another is what is known as international logistics.

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International trade continues to rise and as it does there is more and more demand for transportation to get the goods to the consumers (Coates, 2003). Maritime transit depends on the waterways to get their goods across the seas. Water transportation is so much easier than trying to transport goods over the land. Long ago things like furs and natural resources were carried over the waterways for trade. International trade also depends on the waterways to get their goods where they are going. The main elements of maritime transportation are deep waterways and canals; they facilitate movement of containers and cargo on the ship. Canals and waterways must be large and are fixed with the required sized locks which support ships of varying sizes to enable sailing (Coates, 2003). Secondly, the port which is the facility where cargo is received or transferred to a vessel, they are characterized with access to intermodal transport like trucks and trains, navigation aid such as buoys, seam marks, and lighthouses. They also must have warehouse spaces which act as storage for cargo before they are dispatched to their required destination, and cranes with appropriate berth spaces which can handle large ships (Coates, 2003).

The first international traders were the ones that figured out how much their ships or "beasts" haul, how much food was needed to feed the crew, and the best way to package everything for the journey (David, 2013). Before a cargo boat can move, it needs to be loaded. Port regulations seem to always be an issue with water cargo (Murphy, Dalenberg & Daley, 1991). The quality of service that the customer receives should be across the board, which is not the case. Ports in the past have been on strike or made it where ships cannot load (David, 2013). If a port goes on strike, it affects not only the goods on the ship that can't be offloaded but also the other transport companies.

About eighty percent of the trade done in the world is transported by ships (Frittelli, 2005). The Cargo Preference Act of the United States that at least fifty percent of government goods and cargo in trades supported by the Ex-Im Bank must be transported by ships that display the United States flag (David, 2013).The cargo vessels that fly the American flag are compensated by the government for several million a year to the vessel owners (David, 2013). The government does this because of the military and not because it costs so much money to run an American ship (David, 2013). In case of a conflict, the government wants to make sure they have enough cargo vessels to move military equipment to the conflict areas (David, 2013). All sorts of ships are made to accommodate what needs to be hauled and the weight they can safely carry. The vessels are built in specific dimensions, all of the locks and canals have the aspects that they can accommodate. The ship also comes in many different shapes and sizes. The Handymax and the Supramax are smaller vessels and can pretty much go into any port because they are small cargo ships. A very Large Ore Carrier transports coal and iron ore and when they dock they need deep water because of the size of the vessel. The Chinamax ships carry the bulk product and its restriction when building them cannot exceed 1180 feet and a width of 213 feet, the draft also could not exceed 79 feet. The Chinamax has to be told if they can dock at specific ports because of the size (Coates, 2003).

Not all ports can take every size cargo ship. Port infrastructure is made up of different types of boats an also what can be transported on them (David, 2013). Shipping vessels are being made bigger and wider, and not all ports can handle the larger ships. The new larger vessels will be able to take care of six thousand 42-feet containers which shall be offloaded, then unloaded, and that process will take longer than the smaller ships (David, 2013). Both the old and the New Panamax travel via the canal of Panama; therefore the construction has to adhere to the canal authority of Panama. The canal is not big, and it can only accommodate specific and small sized vessels, unlike other ports. With the larger ships, it also means that the port has to be enough water depth to accommodate the vessel. For the ships to be offloaded and on loaded when they get there, it needs to be a safe environment.

Port security has changed after the attacks of American soil on 11 September 2001. After the attacks, the government has made keeping America safe its top priority. The government Joined forces with the FBI and many other departments to keep America safe. The Merchant Shipping Act of 2003 that gives the authorities more rights to go onto ships and inspect them. Security has been added to the waterways in the means of patrol boats, training security personnel to patrol the ports, and underwater devices to detect a threat (Terrorism, 2011).

Container boxes or large metal box is one of the most efficient ways to transport material on a boat because it can go from boat to truck or rail without any issues. It is more efficient to load and unload containers than to load and unload things one piece at a time. When a crane offloaded a container, it could pick one up and load it onto the ship (David, 2013). Containers can be loaded and offloaded at a quicker rate that saves on human resources, the customer saved shipping cost, and the vessels are in port a lot less time because it does not take long for loading and offloading. Intermodal freight containers or shipping container come with a twist lock on the corners of the boxes so they can be locked into each other (Lstiburek, 2014). Depending on the size of the cargo ship will depend on how high, and how many the vessel can carry.

The September 11th attacks on America has made the port security a top priority; containers make smuggling weapons of mass destruction, weapons and other items that can harm the United States. It is estimated that if a major port is shut down because of security reasons, such terrorist act can cause the economy about 60 billion US dollars (Bier, and Haphuriwat, 2011). The containers are inspected for gamma or any neutron radiation every time they enter the port. While the vessels are in transit or at the port, security becomes a more severe activity hence they are always monitored.

Container transportation can cost a shipping vessel a lot of money for many reasons. They include; documentation issues with the containers, blunders in traditions administrative consistency and security consistency. Others could be booking and invoicing mistakes, robbery and load misfortune, strikes and transport clogs, theft, and militant psychological assaults (Chang, Xu, & Song, 2015). All of these issues can cause a delay not only in transit but also while getting loaded and unloaded. It could cause a delay in going through customs also, which will make the vessel lose money if they had a time restraint on any of the goods on the ship.

Piracy is still an authentic thing, even today. Theft has caused transport vessels to change course and get directed to a different destination (Chang, Xu, & Song, 2015). Greece's latest bill in will allow cargo vessels to be secured by having armed security personnel for all vessels travelling international waters. Each vessel will be allowed six armed guards to protect the vessel from pirates. The pirates would take over the cargo and want ransom money to have the vessel returned; this request came from the vessel owners. If something is not done to protect the ships from the pirates, the owners will no longer transport goods if something is not done to protect the ships.

Seaports are not only for transporting goods but also used to keep America safe. Security of America is expensive but worth the money (Bier & Haphuriwat, 2011). Transporting by ocean plays a huge part in transporting goods internationally. Many things affect transport vessel carriers such as the price of oil, items not being declared on the ship or in shipping containers and frozen and refrigerator goods if power is lost on the vessel (Bier & Haphuriwat, 2011). Vessels losing payment due to goods being damaged, delay in customs clearance, and piracy. Transport fees have to be converted to American money, and when it is not, payment for the goods being transported may be short, depending on where the product is originating. The size of the ship will depend if the ship can pull into ports or sail through different canals (Bier & Haphuriwat, 2011).

For international logistics to occur specific procedures must be observed this include documentation, packaging, labeling and insurance requirements needed based on the type of good. The third-party logistics companies were too established to facilitate the stated procedures and deliver the goods to consumers on time regardless of location. Increase in demand for goods that were previously regarded exclusive to some geographical regions has necessitated international trade and logistics. International logistics and trade have therefore facilitated outsourcing. Specialization and division of labour have also necessitated countries to embrace international trade and logistics. Information technology is a crucial integral that serves to allow a flow of logistics in discrete networks. This helps in transmission of information between manufacturers and customers. Specialized software has been developed to aid this processes. Trade creates employment opportunities, decreased manufacturing cost among other benefits. Globalization has made it possible for manufacturers to relocate to different places across the globe for convenience with factors of production in mind among other facilitating factors.

Conclusion

International trade is a covenant between two parties involving the buyer and seller. Purchase orders are issued to and accepted by sellers or suppliers, and from that point, both parties should fulfill to each other. International trade is not; therefore, legal measures have been put in place to ensure the interest and safety of the two parties is protected. Institutions such as banks, insurance companies also reduce the risk by ensuring proper conduct of transactions, (David, 2013). The complexity of international trade is faced with a range of barriers. For instance currency and measurement metrics, individual laws and regulations across countries limit the level of trade. Government policies play a significant role in the regulation of trade; this may be in the form of taxation or a barn on some items. The nature of the market in an international trade plays a vital role in the success of trade; this depends solely on the type of government present. Thus it is important for importers to be aware of the government systems in place. Competition is also essential in controlling the qualit...