Logistics is the designing and managing of a system in order to control the flow of material throughout a corporation. This is a very important part of an international company because of geographical barriers. Logistics of an international company includes movement of raw materials, coordinating flows into and out of different countries, choices of transportation, cost of the transportation, packaging the product for shipment, storing the product, and managing the entire process. The concept of logistics is fairly new in the business world. The theoretical development was not used until 1966. Since then, many business practices have evolved and logistics currently costs between 10 and 25 percent of the total cost of an international
All alternatives must be fully researched before ocean service can be considered as a valid option. The biggest advantage of ocean shipping is cost. Typically, ocean service is the least costly option, however is also has the slowest travel time. Accidents are infrequent, however if one would happen, large quantities of material are lost all at once. Certain operations could not sustain long periods of down-time caused by lost goods, which could prove devastating. Additionally, not all countries have adequate docking facilities and material may have to be delivered in another manner. Sometimes, the material can be ocean shipped to a neighboring country, and then trucked across land. Air freight is the quickest method for shipping goods. It also is the most costly. While the airfreight industry has had tremendous growth over the years, it still makes up less than 1 percent of all international freight. Typically, airfreight is used for high value items, and those required to have a short transit time. Perishable goods for instance, practically requires air shipment. Another advantage to air freight is the abundance of facilities throughout the world that are accessible by air. Transit time is another important aspect of international logistics, and is closely related to the manner in which the material is shipped. Because the ocean freight takes longer,