Impact of Globalization
Domestically, logistics is complicated enough; however, globalization has layered on many other complexities. According to Murphy & Knemeyer (2018), some additional complexities include:
- Various laws and regulations that differ from country to country.
- Tariffs, which are import taxes charged by the government.
- Import restrictions or quotas as well as prohibition, called embargoes falling under the categorization of nontariff barriers.
- Increased potential for theft and creative theft preventative methods such as changing labels.
- Increased risk of non-payment or non- receipt of goods.
Brexit is one good example of how quickly things can change the global logistics playing field. Several key impacts occurred between the UK and EU including:
- The need for more paperwork and customs declarations.
- More inspections on A slow in commercial transactions.
- Increased freight costs.
- Supply chain issues (The Cooperative Logistics Network, 2022).
Another recent example was the threat of tariffs placed on Mexico, which was to be imposed as a penalty for ineffective border control. The mere threat had an impact on the peso and stocks in both the US and Asian markets for fear of how the tariffs would impact the global industry (The Guardian, 2019).
In a personal experience, I ordered a Jelly Cat stuffed animal for my granddaughter, coming from France and due to a strike, orders were delayed significantly. Although a stuffed animal is not critical to a supply chain, I suspect my granddaughters delivery was not the only issue and suspect many supply chain issues occurred, creating havoc for logistics managers.
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