How to navigate logistical challenges and efficiently fulfill orders globally

Navigating the Complexities of Global Fulfillment Logistics: Challenges and Solutions

Businesses face a myriad of challenges when it comes to managing their fulfillment logistics. Every step of the supply chain poses unique obstacles.

While challenges persist, there are solutions. In this article, we’ll outline:

  1. The state of the logistics industry.

  2. Common fulfillment challenges.

  3. Tried-and-true solutions to fulfillment challenges.

The State of the Logistics Industry

The logistics industry is a massive and fast-growing market. In 2022, the market size, in terms of revenue in the US, was $405.5 billion.

3PL revenue in the United States

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And the global logistics market is expected to grow at a CAGR of 10.7% from 2023 to 2030.

logistics market size and CAGR

With the US shipping an estimated 165 billion packages annually, it’s no surprise e-commerce fulfillment is a major growth driver, and its market is expected to reach $198.62 billion by 2030.

Despite the rapid growth, businesses face several hurdles, so over 50% prefer third-party logistics and outsource to fulfillment companies.

Let’s explore some of these common challenges.

Regulatory Challenges

Each country has its own set of rules and requirements, ranging from customs documentation to import/export restrictions.

Ensuring compliance with these regulations can be daunting, as failure to do so can result in delays, fines, and reputational damage. 

Regulatory requirements also differ by industry.

For example, pharmaceutical companies face stringent regulations on transporting and storing temperature-sensitive products, requiring specialized packaging and handling procedures to maintain product efficacy and safety.

On the other hand, e-commerce fulfillment must comply with complex international laws and consumer protection regulations to serve its global audience.

The rise of international shipping and its regulations has further complicated things.

With the increasing volume of international shipments, regulatory bodies are implementing stricter controls to prevent fraud, counterfeiting, and the illegal movement of goods. 

While your company is doing honest work, these controls may affect you.

Technological Barriers

Technology is the lifeblood of modern-day logistics — but there are complex challenges such as:

  • Integrating legacy systems with new ones.

  • The ever-evolving cybersecurity threats.

  • Compatibility issues.

These hinder efficiency and productivity, which directly impacts customer service.

Another common barrier is the lack of skilled IT professionals to implement and maintain complex logistics systems effectively.

Without the necessary expertise, you may struggle to capitalize on the technology’s full potential, leading to inefficiencies and operational setbacks.

Furthermore, technology is advancing at the speed of light. Keeping up with the latest trends and innovations can be overwhelming, especially for companies with limited resources.

Top logistics technology trends

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Supply Chain Visibility

Supply chain visibility is the capacity of a business to continuously monitor and trace all components of its supply chain in the present moment.

This includes:

  • Visibility of the movement of goods from suppliers to customers.

  • Having a clear view of inventory levels

  • Transparency on order status

Achieving high levels of visibility is essential for efficient operations and forecasting demand in a timely manner.

Supply chain graphic

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Achieving full visibility in international logistics presents numerous obstacles.

One major challenge is data fragmentation across different systems and stakeholders, including: 

  • Logistics providers

  • Customers

  • Suppliers

Another barrier is the lack of standardization in data reporting and communication protocols across countries, which complicates the aggregation and interpretation of supply chain data.

Additionally, geopolitical issues and varying regulations can restrict data sharing between entities, further obscuring visibility. 

These challenges make it difficult to gain a complete and accurate picture of your global supply chains, impacting decision-making and operational efficiency.

Transportation Issues

Transportation challenges in global logistics span sea, air, and land, with each delivery route bringing unique issues that can disrupt supply chains.

Sea freight often experiences delays due to port congestion, customs clearance, and unpredictable weather conditions, which can disrupt schedules and increase costs.

Bridge collapse imapcting US supply chain

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While faster, air freight is considerably more expensive. It’s vulnerable to strict airport regulations and limited capacity, especially during peak times.

Land transportation encounters challenges such as:

  • Issues with cross-border transportation (including lengthy customs procedures)

  • Regulatory compliance across different regions

  • Varying road conditions

Additionally, all modes are susceptible to risks of damage to goods, requiring robust packaging and handling procedures.

Route optimization is another critical issue, as inefficiencies in planning transport routes can lead to: 

  • A poor delivery experience

  • Increased fuel costs

  • Time delays

Currency Fluctuations

Exchange rate volatility can dramatically alter the cost structure of international fulfillment, affecting everything from procurement and production costs to pricing strategies.

For example, a company purchasing materials in a foreign currency may find its additional costs increase unexpectedly when its domestic currency weakens.

Headline sharing weakness in Yen compared to USD

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Similarly, sales in a country with a strengthening currency might yield less revenue when converted back to the company’s home currency.

This unpredictability can make creating a budget and financial strategy challenging, resulting in difficulties sustaining a steady profit level.

Infrastructure Limitations

Infrastructure limitations pose significant challenges in developing regions where the foundation for efficient transport and communication may be less robust.

Poor road conditions can severely hinder the movement of goods, leading to:

  • Escalated transport costs

  • Higher risks of damage

  • Increased transit times

Inadequate port facilities can result in prolonged loading and unloading times, increased congestion, and delayed shipments, complicating scheduling and reducing overall supply chain efficiency.

Unreliable power supplies can disrupt operations in warehouses and distribution centers, affecting everything from the refrigeration of perishable goods to basic logistics management.

These infrastructure issues impact the direct flow of goods. It complicates planning and increases operational costs, presenting a continuous challenge to maintaining smooth and efficient logistics networks in less-developed regions.

8 Solutions to Fulfillment Challenges

The challenges feel overwhelming, but there are practical solutions.

1. Choose the Right Business Structure

Establishing a limited liability company (LLC) is advisable for any business when managing global fulfillment logistics. 

Opening an LLC can enhance the efficiency of logistics operations, particularly in international environments. This business structure not only provides liability protection but also offers flexibility in taxation, which is beneficial for anyone looking to expand globally. 

Factoring in the costs associated with setting up an LLC is essential for comprehensive financial planning. This inclusion helps businesses navigate the regulatory and financial landscapes more effectively, ensuring smooth operations and scalability in their logistics networks.

2. Leverage Technology To Your Advantage

Technology continues to revolutionize fulfillment logistics. From robotic process automation to machine learning algorithms, you now have access to innovative tools that can optimize your operations.

The right technology infrastructure can:

  • Reduce errors in areas like predicting correct inventory levels

  • Automate manual processes

  • Enhance overall efficiency

Additionally, smart technology integrations offer advanced analytics capabilities that can provide valuable insights into customer behavior and demand patterns.

OpenCart dashboard

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Embracing technology to stay ahead of the competition and meet customer expectations in the global marketplace.

One key aspect of technology is the implementation of Internet of Things (IoT) devices. These interconnected devices can track shipments in real time, monitor warehouse conditions, and even predict equipment maintenance needs.

Employing IoT devices is one of the best ways to improve supply chain visibility, ensure timely deliveries, and proactively address potential issues before they escalate.

Blockchain technology is also gaining traction in the logistics industry.

Blockchain offers a secure and transparent way to record transactions and track goods throughout the supply chain.

Its decentralized nature enhances data integrity and reduces the risk of fraud or tampering.

By integrating blockchain into your operations, you can:

  • Establish a more efficient and secure logistics network.

  • Build trust with strategic partners and customers

  • Streamline processes

3. Establish Local Partnerships

From customs brokers to warehouse providers, these partners can help navigate local regulations, provide local market expertise, and offer on-the-ground support.

Spending time building strong relationships with local partners opens ‌doors to new opportunities. You can overcome language barriers, cultural differences, and logistical challenges, ultimately leading to a smoother fulfillment process.

However, it’s crucial to conduct thorough due diligence before entering into any agreements. 

Research potential partners’ reputations, capabilities, and track records to ensure they align with your business goals and values.

Verify their credentials, certifications, and compliance with local laws and regulations to mitigate any risks associated with the partnership. 

Once you have trustworthy partners, the focus shifts to nurturing the partnerships.

This is achieved through ongoing communication and collaboration to address any issues.

4. Build a Rock-Solid Team

In the intricate web of global fulfillment logistics, where the synchronization of various elements is paramount, the role of HRIS software becomes subtly pivotal. 


As you navigate the complexities of managing a diverse workforce spread across different geographies, consolidating HR data and processes into a unified platform streamlines operations. 


That way, the human component of the supply chain functions with as much efficiency and precision as the mechanical parts.


HRIS software example

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This integration not only facilitates seamless communication and compliance with local labor laws but also provides actionable insights that can lead to more informed decision-making, ultimately enhancing the overall efficacy of global logistics strategies.

5. Prioritize Training and Development

Employees must keep up with changes in regulations, technologies, and best practices in supply chain management.

Training programs should empower employees with the knowledge and skills to navigate challenges and adapt to changing circumstances.

For instance, implementing effective employee time tracking systems can be a solution to streamline operations and overcome challenges. 

How?

They provide real-time visibility into labor activities, allowing logistics managers to monitor work progress, identify bottlenecks, and allocate resources efficiently. 

In short, you can analyze performance metrics, identify areas for improvement, and implement strategic adjustments to enhance overall operational efficiency.  

6. Optimize Your Transportation Strategies

Logistics costs, including transportation, can account for 25–45% of a company’s total costs and up to 20% of a product’s final price.

Transportation costs

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Here are a few simple ways you can optimize your transportation. 

Use multiple modes of transportation, such as rail, truck, and ocean freight. This approach allows for greater adaptability to changing market conditions and helps mitigate risks associated with disruptions in a single mode of transport.

Implement sustainable transport to reduce environmental impact, such as using electric cars or combining multiple smaller shipments into one larger shipment.

Sustainability also extends to packaging. As companies like Maadho demonstrate, the transition towards sustainable and eco-friendly retail packaging solutions isn’t just a trend but a strategic move to address international markets’ environmental concerns and regulatory demands.

Analyzing data on transportation costs, delivery times, and inventory levels can help you make informed decisions to streamline your transportation strategies and drive cost savings.

7. Address Currency Fluctuations Head-On

Hedging strategies, such as entering into forward contracts, options, and futures, can lock in exchange rates for a future date, thereby stabilizing overhead costs and revenues against unforeseen changes in currency value.

Additionally, maintaining multicurrency accounts can allow businesses to manage revenues and expenses in multiple currencies without converting them immediately, reducing the impact of adverse currency movements.

Another effective strategy is to diversify the geographic distribution of both suppliers and customer markets to offset potential losses in one region with gains in another.

Moreover, regularly reviewing and adjusting prices in foreign markets and renegotiating supplier contracts can also help manage the risks associated with currency volatility.

You can better predict costs and reduce the impact on profit margins through these measures.

8. Invest in Infrastructure Where You Can

A multifaceted approach is essential to address the challenges posed by infrastructure limitations.

If the budget allows, consider investing in local infrastructure improvements. Look for independent or partnership opportunities with governments and other stakeholders. The goal is to enhance roads, ports, and power facilities, which directly affect logistics operations.

Explore alternative transportation methods, such as using smaller, more maneuverable vehicles to navigate poor road conditions or employing air freight where port limitations hinder sea transport.

Additionally, implementing advanced logistics technologies like GPS tracking and real-time data analytics can help optimize routes and schedules to circumvent bottlenecks.

GPS tracking on delivery trucks

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For example, adding GPS tracking to delivery trucks ensures that delicate products such as tea subscription boxes arrive safely and in perfect condition at their destination. There will be no more delays that impact freshness, just happy customers sipping on their favorite teas. 

For power issues, invest in backup generators and renewable energy sources to protect operations continuity if you ever lose power. 

By adopting these strategies, you can mitigate the impacts of infrastructure deficiencies as much as possible. 

Wrapping Up

While the challenges of global fulfillment logistics are considerable, they can be effectively managed with careful planning and strategic partnerships.

Through the measures described in this blog, you can strengthen your global supply chains, reduce vulnerabilities, and maintain a competitive advantage.

Here’s to your success!