Ariel Arturo Gómez Tuiran – Negociación Internacional

Ficha: 1565301

a. What is the main idea of the text?

High transportation cost and major changes in supply chain strategies

b. What realities have led to high transportation costs?

The high prices of oil, and the imbalance of the supply and demand of goods transport
services

c. What are the three such shifts that are having a notable impact today in transportation
costs?
The first is a change from offshoring to sourcing strategies close to the port in an effort to
reduce the number of miles that shipments travel.

The second is a change from the design of products and packaging to its commercialization
and more efficient.

Production towards designs that also incorporate "boarding" considerations. These include:

Customization of packages for sizes and dimensions of individual products for space
efficiency and easy handling; protection of goods in transit; and facilitating multiple
processes of unloading, repackaging and recharging.

The third is a shift from lean to lean hybrid inventory strategies Inventory / transport
strategies.

d. What is the principal factor, the center of the factor to have high prices in
transportation?
Center of today's transport challenges are oil prices.
An equally influential factor in transportation costs, the demand-supply imbalance of freight
transport services, is a repercussion of trade growth that has outpaced the availability of
transport
Services to such an extent that it has led to serious issues of congestion and capacity
constraint in the United States.

e. What has happened to the companies which have adopted the three transport driven
shifts in supply chain?
The results that we have observed in several companies that have adopted these changes
in the strategy; they indicate that their benefits go beyond improving transportation
challenges. These changes also help improve the supply chain and financial performance
due to lower costs and more productive investments.

f. The strategic shifts represent the manifestation of a renewed focus on the long-
established principles of transportation management. What are the key drivers of
transportation costs?
 Costs of transportation. Based on this exercise, we underscore that those strategic shifts
represent the manifestation of a renewed focus on the long-established principles of
transportation management that distance, density, and shipment size are key drivers of
transportation costs.

https://www.mbaskool.com/business-concepts/operations-logistics-supply-chain-
terms/14446-logistics-costs.html

Advantages and disadvantages of Costs and their influence on

transportation.
For any company that wants to export one of the choices that must be controlled are those of
international transport and distribution in the destination market, these factors must be handled
correctly by the company so that the product arrives in appropriate times and forms the final
consumers

For every entrepreneur, distribution is a cost issue that must be faced, these costs are normally
high, generating an extra cost in the product that the consumer ultimately pays. It is therefore
understandable that in a product different actors can intervene from their productive chain to the
distribution chain. That is, any failure in one of the stages of a product can suspend the distribution
system affecting international business.

It is for this purpose that the international physical distribution exists, being the logistic process that
is carried out in the export of products and that as main objective is to reduce costs, times and risks
to the maximum from the point of departure at the origin to the Delivery point to the final destination.

In order for a company to expand and look for better opportunities in the market, it must consider
the investments of time, effort and capital, therefore the correct logistics that it carries out is
possible to reduce the costs of the products for the benefit of the consumers and the costs. Of
production for the benefit of the company. The impact of the logistics department within the
companies is visible in the degree of customer satisfaction, as well as in the fluidity of the internal
processes of tracking, production and transportation, if the correct efforts are being made that will
ultimately be seen reflected in the reduction of costs.

That is why the advantages of reducing logistics costs can trigger in which the company is forced to
increase its productivity since it must be directed more and more to improve competitively, this also
applies to the improvement of the company's management of the company, thus same redounds in
the possibility of expanding markets by accessing products and markets that without the correct
export are unattainable ending in one of the best assets of companies: the increase of their
customers

On the other hand, if you do not have control over the costs, you can incur high operational risks,
which leads to economic and political risks for the company, as well as " whip effects" that can
disrupt the real demand, and finally The greatest danger that the organization has in not protecting
itself from cost overruns is that it has zero margin of error or reduced inventories to supply market
needs.

As a conclusion, this is why strategies and international physical distribution should be

characterized by creating the capacity in companies to generate support to internationalize from
their production or from their market, always remembering that corporate success because it is no
longer measured so easily at present in the quantitative and qualitative, being a factor of
competitiveness to generate profitability in import operations.