{"id":20606,"date":"2021-04-26T09:23:07","date_gmt":"2021-04-26T00:23:07","guid":{"rendered":"https:\/\/news.samsungcnt.com\/en\/?p=20606"},"modified":"2023-02-16T17:35:48","modified_gmt":"2023-02-16T08:35:48","slug":"logistics-bloodstream-international-trading","status":"publish","type":"post","link":"https:\/\/news.samsungcnt.com\/en\/features\/trading-investment\/2021-04-logistics-bloodstream-international-trading\/","title":{"rendered":"Logistics: The bloodstream of international trading"},"content":{"rendered":"\t\t
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What kind of device are you using to read this article? Whether it is a smartphone or a laptop, one thing is certain: that device was not produced from scratch in just one country. For example, the lithium in the battery of your phone may be from Chile, while it is quite possible that each component was assembled in a factory located in Southeast Asia, and you could have bought it just about anywhere in the world.<\/p>

The importance of logistics is that it forms a global chain linking all the parts of production, supply, and consumption together. On that point, recently when a large ship got stuck for almost a week in\u00a0the Suez Canal<\/a>, the\u00a0cost was felt far and wide<\/a>, with about 12% of global trade passing through the canal every day. Its blockage also held up an estimated USD 9.6 billion of trade each day until it was cleared \u2013 or USD 6.6 million per minute! This feature will look more closely at the global logistics chain.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Via sea or air? A question of timing<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Land, maritime, and air transportation all play vital roles in logistics. Among them, we will focus on the latter two in this feature.<\/p>

Maritime transportation stretches back thousands of years, but it remains a major part of global trading. It allows the movement of a\u00a0huge amount<\/a>\u00a0of commodities including crude oil, iron ore, grains, chemicals, and even manufactured goods. The major advantage is that it offers much cheaper prices than air transportation, and even road and rail.\u00a0Shipping containers<\/a>\u00a0have also become both iconic and practical, being easily transferrable to trucks and trains.<\/p>

By comparison, aviation freight has obviously only been facilitated by the advent of air travel generally. It is more costly than maritime logistics, but is seen as a good way to move\u00a0time-sensitive goods<\/a>\u00a0such as documents, pharmaceuticals including\u00a0vaccines<\/a>, fashion garments, production samples, electronic consumer goods, and perishable agricultural and seafood products.<\/p>

The infographic below shows major logistics routes and what kind of trade they support.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The rewards and risks of global logistics<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The modernization of transport and logistics has brought vast benefits to trade and the availability of consumer goods worldwide, connecting the world to each other more closely.<\/p>

As an example, the import of fresh fruit to the U.S.\u00a0increased by USD 8.9 billion<\/a>\u00a0in 2019 compared to 2009, allowing Americans to enjoy them throughout the year regardless of season. This kind of trade is possible thanks to the\u00a0development of logistics<\/a>, including cold chain technology.<\/p>

Another feature of globalization is how the process of sourcing materials, manufacturing goods, and selling them can take place across numerous countries \u2013 creating\u00a0longer and more complex<\/a>\u00a0supply chains. This is especially true of tech-heavy products with many, varied parts.<\/p>

The Suez and Panama Canals are also good cases of logistics advancements, significantly\u00a0cutting shipping times and distances<\/a>. The Suez Canal has shortened the journey from Asia to Europe, saving 7 to 10 days of shipping time, while the Panama Canal has reduced maritime distances between the East and West Coasts of the U.S. by 13,000 kilometers.<\/p>

One thing to keep in mind is that these logistics chains come with risks attached. The recent Suez Canal blockage and the impact of COVID-19 might seem like rare cases, but significant problems do happen fairly regularly \u2013 companies across industries can expect\u00a0supply chain disruptions every 3.7 years<\/a>. In the case of\u00a0maritime transport<\/a>, logistics can be delayed by floods and drought, piracy, disrepair, and so on. Air freight does not escape\u00a0risks<\/a>\u00a0either \u2013 partly because it is part of a longer chain and partly because specific factors like environmental regulations and oil prices need to be continuously considered.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Preparation is key for Samsung C&T<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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As logistics forms an important part of the global supply chain as shown above, companies make efforts to mitigate risks as far as possible and guarantee timely deliveries. For example, purchasing insurance is one of the ways to prepare for potential problems. In fact, the\u00a0global marine insurance market<\/a>\u00a0is expected to grow by USD 8.42 billion by 2024, at a CAGR of over 4%.<\/p>

As a trading company, Samsung C&T also works as efficiently in this area. \u201cWe are endeavoring to respond to and reduce risks by securing as many logistics routes as we can,\u201d explains Principal Professional Kim Kyoo-hak, head of the Corporate Logistics Planning Group of T&I Group. \u201cWe also secure adequate insurance to hedge risks, while generally looking for more efficient ways to transport goods.\u201d<\/p>

Knowing about all these efforts may make it feel that bit more special to use our various smart gadgets \u2013 or even make imported fruit taste that much sweeter!<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

What kind of device are you using to read this article? Whether it is a smartphone or a laptop, one thing is certain: that device was not produced from scratch in just one country. For example, the lithium in the battery of your phone may be from Chile, while it is quite possible that each […]<\/p>\n","protected":false},"author":1,"featured_media":20665,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-20606","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trading-investment"],"acf":[],"yoast_head":"\nLogistics: The bloodstream of international trading - Samsung C&T Newsroom<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.samsungcnt.com\/en\/features\/trading-investment\/2021-04-logistics-bloodstream-international-trading\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Logistics: The bloodstream of international trading - Samsung C&T Newsroom\" \/>\n<meta property=\"og:description\" content=\"What kind of device are you using to read this article? 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