Logistics involves the prearranged coordination of the flow ofinformation and goods in a company (Davis & Brown, 2014).Multinational logistics entails handling productsthat go beyond, to the international borders while domestic logisticsare within the precincts of a given nation or locality. In thisregard, one difference is the requirements of transportation.Domestic logistics has a variety of optionslike road, sea, and airtransportation. However, multinational logistics requireeither air or sea transportation, limiting the options (Higginbotham,2012). Another difference is the cost factors. In multinationallogistics, the factors may include theforeign nation’s tariffs and taxes, and the rates of exchangingcurrencies which may affect your business. However, domesticlogistics just require coverage of local costs like transport with noworries of exchange rates and levies(Higginbotham, 2012). Again, the coordination and management of thetwo forms vary. In domestic logistics, one manager can handle many ofthe logistics, but multinational logisticsneed coordination between local and international managers thus,incurring more costs. Some of the difficulties in transitioning tointernational markets include high costs inmarket assessment, transportation, personnel among others. Secondly,politics affect the economic structure and instability can causefluctuations in the currency, which may harm the business("Multinational Logistics,"2016).
Logistics’ managers have an option of either employing centralizedor decentralized management styles. In centralized management, themanager at the headquarters is mandated tomake decisions for both the local and international branches of thefirm. However, the decentralized option allows the branchmanagers to make logistics decisions. This canease the workload and pressure on managing logistics. Moreover, themanagers can outsource logistics expertise from an external sourceand work together or concentrate on other organizational operations.More so, the managers can improve the management by upgrading theirknowledge and skills through educational advancement ("MultinationalLogistics," 2016).
Third party logistics (3PLs) exist to help companies in handlingissues of supply of goods and services in the market or to helpmanage logistics for a parent company("Multinational Logistics,"2016). The 3PLs are important because they have expertise inlogistics and help save time for the enterprise.A company hires 3PLs for relieving thestrain especially in handling multinational logistics ("MultinationalLogistics," 2016). Thishelps the firm to concentrate on other issues like improvingthe core competencies. The company also relinquishes some controlthus, reducing unnecessary costs because 3PLs are the experts in thearea. It is a form of sharing responsibility (Higginbotham, 2012).3PLs also help in the re-engineering of the networks of distributionespecially when the company made a mistake earlier (Higginbotham,2012).
In conclusion, multinational logistics are more involving thandomestic logistics, although it depends on the size of the firm’soperations. Multinational logistics entail going beyond nationalborders whereas domesticlogistics involve remaining within a locality.
Davis, G. & Brown, S. (2014). Logisticsmanagement. Lexington, Mass.:Lexington Books.
Higginbotham, M. (2012). Multinationallogistics joint task force. [Placeof publication not identified]: Biblioscholar.
Multinational Logistics.(2016). Globaledge.msu.edu.Retrieved 3 November 2016, fromhttp://globaledge.msu.edu/content/onlinecoursemodules/31/multinational-logistics/player.html