NAME: OMAR ALFONSO ZARATE RODRIGUEZ

INTERNATIONAL NEGOTATION
1749901

1. ANSWERS

A. The strategic shifts of companies to reduce transportation costs and thus

obtain benefits in them and in their financial performance.

B. The realities have led to high transportation costs are:

-. Imbalance of supply and demand for freight transport services
-Crude oil prices that have significantly increase
-Capacity limitations

C. FIRST SHIFT: From offshoring to nearshoring sourcing strategies in an effort

to reduce the number of miles shipments travel

SECOND SHIFT: From designing products and packaging for marketability

and more efficient production toward designs that also incorporate “shipability”
considerations, these include: customizing packaging for individual products
sizes and dimensions for space efficiency and easy handling, providing
protection of goods in transit, and facilitating multiple processes of offloading,
repackaging and reloading.

THIRD SHIFTS: From lean inventory strategies to hybrid lean

inventory/transportation strategies

D. Freight movement in most modes remains largely dependent on ever more

expensive and finite fossil fuels. Crude oil price have risen significantly is the
dominant factor every year.

E. these shifts also help to improve both supply chain and financial performance
due to lower costs and more productive investments.
- companies can adjust freight movements more quickly to changes in customer
demand
- these changes translate into savings in freight costs, packing costs and space
utilization

F. these strategic shifts represent the manifestation of a renewed approach to

long-established transport management principles. Distance, density and
shipping size are the main drivers of transportation costs.

LINK: https://www.supplychainquarterly.com/topics/Strategy/20140311-the-real-
impact-of-high-transportation-costs/%20(fantastic%20article)/
 ESSAY

COMMERCIAL STRATEGIES TO REDICE TRANSPORTATION COSTS

ADVANTAGES AND DISADVANTAGES

INTRODUCTION

In the international physical distribution we see that it is important to reduce

logistics costs to generate greater profitability for a company and increase
competitiveness in the international marjet, it is also important to avoid high
operating costs and transportation that affects the profits of the company. Its
main objective is to minimize the times, costs and risk that may be generated
during the journey from the point of departure at origin to the point of delivery at
destination.

What are the advantages of reducing logistics and transportation costs in

international physical distribution and the disadvantages of high costs?

The international physical distribution this being a product export process, its
main objective is to reduce risks, time and costs as much as posible, it is
necessary to take into account that the logistics and the internationak physical
distribution are important in the operations of foreign trade, logistics is essential
to achieve máximum efficiency and effectiveness, the positive aspects that
Benefit companies, as well as the creation os strategies to offset distances and
be able to transport products at a lower cost.

Transportation costs can be an important part of a Companys overall logistics

expense, so it is necessary to consider strategies to help reduce transportation
costs an advantage of reducing costs with respect to logistics is the increase in
competitiveness and better process management, this generates efficiency
because the less time a product remains in each of the stages of a smaller
logistics chain, the cost incurred in the different processes and in the final
product, the product wiil be delivered more quickly and effectively and lower
costs can translate into higher profits

A disadvantage of not achieving this goal os that we must bear in mind that the
increase in the cost of transport generates operating costs and profits can be
affected, also that for the company the profits can be minimal or the product Will
have to be sold more expensive.
The high costs in international logistics mean a stagnation with respect to
production since if the costs exceed 60% of the value of the product could be
classified as a problema, based on this it would be necessary to implement the
mechanisms to lower these costs

CONCLUSION
Today in companies there is a basic system that facilitates its smooth operation,
it is the logistics system that is related to the Flow of materials from supplies to
end users, these require an analysis and a study to ensure that the company
has a fully integrate system, also that generates cost and profit effectiveness for
the international physical distribution logistics is very important because it
optimizes your process saving time and costs

-https://www.referenceforbusiness.com/small/Op-Qu/Physical-Distribution.html
-https://www.thebalancesmb.com/reducing-transportation-costs-2221049