Sample Article Review Paper on Global Logistics

Globalization refers to the integration of the global economy that steers economic and financial integration between different countries (Alkanaani, 2013, p. 2). Globalization encourages trade between different economies where companies make their goods and services available to various part of the world. Globalization offers new opportunities for businesses and creates a global supply chain as well as logistic operations. According to Schoenherr (2009, p. 2) global logistics is the process of managing movement of goods from the suppliers to consumers to meet their need. Today, there are several international companies that offer logistic services in different parts of the world. Among the major logistic services, include transportation, warehousing, distribution, shipping, designing, and financing among other services (Schoenherr, 2009, p. 6).

Factors that Influence Businesses to use Global Logistics

There are various factors that influence organizations to use global logistics services offered by various logistic companies around the world. Among these factors, include increased trade between nations, high cost of operations, complexity of trade, expansion of transitional companies, technological advancement, and high risk exposure (Ioan, Gabriela, & Mihai, 2013, p. 163).

Increased Trade

Several companies have expanded their operations to different countries around the world. As a result, there has been an escalating demand for logistic services to facilitate delivery of goods from the suppliers to the final consumers in different countries. The increased demand for logistic services has led several firms to engage in global logistics operations (Ioan, Gabriela, & Mihai, 2013, p. 163).

High Cost of Operations

Companies incur huge operation costs when they engage in international trade. Most of the operation costs are incurred in transportation and distribution of their goods and services in foreign countries. To solve the problem, several companies have emerged to offer global logistics operations to help the company reduce operation costs.  These companies offer transportation, warehousing, and distribution services for the companies’ products and services at a lower cost (Francis, Fisher, Thomas, & Rowlands, 2014, p. 65).

Complexity of International Trade

Operating a business in a foreign country is usually very complex due to various external factors that affect business operations such as political, economic, social, cultural, and legal factors. To solve the complexity issue, several global logistic companies have emerged to facilitate business operations. These companies have mastered the art of business in different countries hence helping the business organization to carry out their business effectively and efficiently (Schoenherr, 2009, p. 8).

Expansion of Transitional Companies

Several business organizations have expanded their operations across their borders as a result of reduced trade barrier in different economic regions. Several countries have also reduced regulations to encourage foreign investment in their countries. According to Francis, Fisher, Thomas, and Rowlands (2014 p. 98) several companies have invested in different countries to take advantage of labor, raw materials, market and efficiency of production among other advantages. As companies expand their operations, they have created the need for global logistic services to facilitate movement of raw materials and goods and services from one location to the other.

Technology Advancement

According to Kiessling, Harvey, and Akdeniz (2014, p. 672) technology advancement has accelerated the growth of international trade. Modern communication technology has enabled business organizations to transform the way they interact with their customers in different parts of the world. Information has also become readily available to companies, and this has increased business integrations across borders. Most of the businesses today are conducted through the internet. Nevertheless, there is a need for physical delivery of goods from the seller to final consumers. This has created the need for global logistics operations to facilitate delivery of the products (Kiessling, Harvey, M., & Akdeniz, 2014, p. 673).

High Risk Exposure

Although globalization offers numerous opportunities to a company such as increased market, the efficiency of production, and low operation cost among others, it also exposes the company to various risks (Xiang, 2014 p. 4). The risks include, political, economic, and regulatory risks and they may have negative consequences on a business. To minimize the risk companies involves logistic companies that have versed information of the area of operation. The increased demand for logistic services has led to global logistics operations (Xiang, 2014, p. 4).

Factors that Leads Firm To Shift from Domestic to Global Logistics

The world has experienced a drastic shift from domestic to global logistics in the past. There are several factors that enhance the move from domestic logistics to global logistics. These factors include increased globalization, offshore manufacturing, emerging global markets, global cost forces, and macro- economic factors.

Increased Globalization

The increased need for the firm to expand their operations across their borders has influenced the move from domestic logistics to global logistics (Mothilal, et al,. 2012, p. 240). Increased globalization creates the need for movement of goods and information from one country to the other. Hence, there is increased need for global logistic services to facilitate the operations.

Emerging Global Market

Several business organizations are trying to exploit new emerging markets by offering their products and services. There is a huge demand for global logistic services to provide the firms with market information as well as facilitate delivery of their products across different countries (Schoenherr, 2009, p. 10).

Cost Forces

Operating in a foreign market can lead to increased cost. However, several companies are using logistic companies that offer logistic services to cut cost. Logistics companies take advantage of economies of scale to reduce the cost of operations (Schoenherr, 2009, p. 6).

Macro-Economic Factors

There are several macroeconomic factors that affect business operating internationally such as political, economic, and legal factors. These factors have contributed to shifting from domestic to global logistics since firms need to understand factors that are likely to influence their business in a foreign country. Global logistics helps in supply chain integration between different countries hence reduce the risk associated with macroeconomic factors (Barton, & Fairbrother, 2009, p. 685).

Benefits of Global Logistics to Firms and Customers

Global logistics offers several benefits to business firms and their customers. Some of the benefits of global logistics to a business firm include low-cost sourcing, increased markets and benefits of economies of scale and increased customer satisfaction (Alkanaani, 2013, p. 3).

Low-Cost Sourcing

Global logistics helps firms in transportation, warehousing, and storage of products and services. As a result, firms are able to source raw materials from different countries at a lower cost and transport them to their area of production. For example, several technological companies in the US source their raw material from China hence reducing cost (Omar, Davis-Sramek, Myers, & Mentzer, 2012, p. 129).

Increased Markets

Global logistics has helped several markets to accesses different market around the world. It helps in distribution and supply of companies’ products across the world. For example, Apple sell most of its products online and they are distributed to their customers through third party logistic services such as DHL across the globe (Omar, Davis-Sramek, Myers, & Mentzer, 2012, p. 129).

Economies of Scale

Through the use of global logistic services, companies are able to benefit from economies of scale hence lowering the cost of sales. Logistic companies usually serve multiple clients hence they distribute goods in large batches hence benefiting from economies of scale (Omar, Davis-Sramek, Myers, & Mentzer, 2012, p. 129).

Increased Customer Satisfaction

Global logistics ensures that customers access goods and services in the right time and in the right place hence increasing their satisfaction (Wu, et al., 2013, p. 317).


Globalization has created the need for global logistics operations. Global logistics helps companies to transport goods and services as well as information from the source to the place of consumption. There are several drivers of global logistics such as the high cost of operations, the complexity of international trade, expansion of transitional companies, technological advancement, and high-risk exposure. The world has also experienced a drastic shift globally. This has been beneficial to business organizations and to the end customers by helping business to lower their cost of operation, access new markets, and increase customer satisfaction (Ioan, Gabriela, & Mihai, 2013, p. 161).




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Barton, R, & Fairbrother, P 2009, ‘The Local is Now Global: Building a Union Coalition in the International Transport and Logistics Sector’, Relations Industrielles / Industrial Relations, 64, 4, pp. 685-703

Francis, M, Fisher, R, Thomas, A, & Rowlands, H 2014, ‘The meaning of ‘value’ in purchasing, logistics and operations management’, International Journal Of Production Research, 52, 22, pp. 6576-6589.

Ioan, P, Gabriela, B, & Mihai, P 2013, ‘Global Logistics, Competitiveness and the New Incoterms’, Annals of The University Of Oradea, Economic Science Series, 22, 1, pp. 159-166.

Kiessling, T., Harvey, M., & Akdeniz, L. 2014, ‘The evolving role of supply chain managers in global channels of distribution and logistics systems’, International Journal of Physical Distribution & Logistics Management, 44(8/9), 671-688.

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Wu, Y, Huang, S, Goh, M, & Hsieh, Y 2013, ‘Global logistics management curriculum: perspective from practitioners in Taiwan’, Supply Chain Management, 18, 4, pp. 376-388.

Xiang, L 2014, ‘Operations Management of Logistics and Supply Chain: Issues and Directions’, Discrete Dynamics In Nature & Society, pp. 1-7.