How Will Climate Change Affect Global Supply Chains?

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How Will Climate Change Affect Global Supply Chains?

December 16th, 2021 Dylan Berger Leave a comment

The world relies on global supply chains, but these networks are prone to disruption. Disease outbreaks, worker shortages, technological issues, and more can all cause substantial delays and expenses, but one factor is more threatening to supply chains than any other. Logistics professionals today must consider the impact of climate change.

Carbon dioxide in the atmosphere is increasing more than 250 times faster than in the last Ice Age, mostly due to human activity. That’s led to rising temperatures, glacial ice loss, sea-level rise, extreme weather events, and more. As climate change worsens, these factors will grow more severe.

Here’s how that could affect global supply chains.

Declining Supplies

One of the most disruptive effects climate change will have on supply chains is on the supply side. Rapidly warming oceans and increasingly extreme weather have already started to affect multiple industries, decreasing their output. As this trend continues, supply chains will have fewer and fewer reliable sources for some products.

For example, New York’s registered lobster landings decreased by 97.7% between 1996 and 2014, thanks to warmer oceans. Similarly, droughts have hampered agricultural production, with products like rice and coffee seeing dramatically smaller harvests. Supply chains will have an increasingly difficult time finding sufficient sources to meet demand as this problem grows.

Extreme weather events could reduce global supplies even faster. Wildfires in North American forests are a severe threat to the lumber industry, and they’ll become more frequent as climate change worsens. Hurricanes, flooding, and similar events will have a similar effect on oceanic and seaside industries.

Workplace Disruptions

Climate change also poses a threat to the workplaces that sustain global supply chains. The most straightforward way this would happen is through temperature-related worker exhaustion and illness. Every increase of 1° Celsius could reduce worker productivity by 1-3% for those outside or without air conditioning.

While those percentages seem small, they could add up to the equivalent of 80 million job losses by 2030. That would result in global losses of $2.4 trillion. Rising sea levels and extreme weather would also displace many workers, making it difficult for some warehouses and other facilities to maintain adequate staffing levels.

These facilities themselves could face physical damage as well. Inclement weather events like tornadoes, hurricanes, floods, and fires have all become more frequent and severe amid climate change. As those trends continue, the workplaces that supply chains rely on could see increased physical damage, disrupting workflows and lowering output.

Over time, some entire facilities could become unusable. If sea levels rise by just 1 meter, 80 airports could be underwater, limiting supply chains’ transportation options.

Transportation Risks

That leads to the next effect of climate change on global supply chains. Transporting parts and products across the world will become an increasingly challenging and even dangerous task. All of the previously mentioned severe weather events would delay transportation at best and endanger employees at worst.

Many of climate change’s effects on transportation aren’t dramatic but are still damaging. For example, climate change has increased the frequency and intensity of heavy rainfall. That alone can slow ground transportation, cause storms at sea, affect ocean transport, and delay flights, causing global disruptions.

Of course, the rising frequency of extreme weather events will also cause substantial transportation delays. Flooding will make ground transportation impossible in some areas until the waters subside and emergency responders clear the damage. Hurricanes and other storms will delay or reroute flights.

These delays will ripple throughout the supply chain and the industries that rely on it. Time-sensitive shipments could turn to waste in the face of slowed transport. Manufacturers will have to slow production in light of part shortages. Events like this already occur, and climate change makes them more common.

Rising Costs

Many of these factors will also contribute to rising operational costs throughout global supply chains. For example, as workplaces face rising worker shortages due to environmentally driven displacement, and suppliers decline, output will likely fall. As their output decreases and demand stays the same, they’ll have to raise costs to make up for it.

Supply shortages alone could have a tremendous impact on costs. The price of coffee futures nearly doubled in July 2021 as record droughts struck Brazil. Similar price hikes could affect the cost of items supply chain organizations need, like trucks, equipment parts, and fuel.

As extreme weather displaces employees, staffing costs may rise as well. Supply chains may have to offer higher wages to entice workers to remain in the area or move, raising their ongoing expenses. Some smaller companies may not be able to adapt in this way and face going out of business.

How Can Supply Chains Respond?

Climate change will undoubtedly have a tremendous negative impact on global supply chains. Many of these trends have already started to take shape. In the face of these threats, supply chain organizations must take steps to adapt to a changing world and lessen their environmental impact.

One of the most important changes is to decarbonize the supply chain. Switching to zero-emission vehicles would take a considerable amount of greenhouse gas emissions out of the equation, fighting climate change. With electric vehicles boasting ranges above 400 miles today, this option is becoming increasingly viable, too.

Switching to renewable energy in warehousing operations will further decarbonize supply chain operations. Logistics companies can encourage other businesses to follow suit by partnering with green manufacturing facilities, eliminating their third-party emissions as well.

Supply chains must also become more resilient to minimize disruptions from near-term environmental hazards. Distributed sourcing, asset and environmental monitoring, supplier due diligence, and creating formal disaster recovery plans can all help. Steps like this can cause a company to lose just 5% of its revenue amid a disaster, compared to 35% for an unprepared party.

None of these steps can happen in isolation. Supply chains are complex, interconnected networks, and climate change is similarly multifaceted. As logistics companies seek to improve their own operations, they must partner with other organizations for more cohesive, global action.

Climate Change Is a Serious Threat to Global Supply Chains

Climate change is the most significant threat facing global supply chains today. It’s already causing shortages and disruptions in some industries, and these challenges will only grow more frequent and severe if organizations don’t take action.

The threat of climate change is grave, but it’s not inevitable. If supply chain companies and their partners can embrace more sustainable operations, they can mitigate climate change and protect future operations. The world and the global economy will be better off for it.

Archives, Global Trade Daily, Special Reports

Improving Security Along Your Supply Chain: 7 Pointers

December 13th, 2021 Dylan Berger Leave a comment

Disruptions in the supply chain can ripple throughout entire industries. As the world becomes more interconnected, these threats become increasingly worrisome, with widespread issues throughout the COVID-19 pandemic highlighting their severity.

Supply chain attacks rose by 42% in Q1 2021 in the U.S. alone, impacting 7 million people. In light of these rising threats, supply chain security is more important than ever. Here are seven pointers for improving safety.

1. Restrict Access Privileges

One of the primary drivers behind rising supply chain attacks is these networks’ wealth of valuable data. Logistics organizations have gone digital and now generate and store vast amounts of information that cybercriminals can steal or hold for ransom. Restricting access privileges can help mitigate these threats.

The more people have access to a system or database, the more potential entry points there are for cybercriminals. Supply chains can eliminate these vulnerabilities by restricting who can see or interact with which systems. A good practice to follow is the least privilege principle: Only those who absolutely need given data to perform their duties can access it.

Tighter access privileges should pair with thorough authentication measures. Users must verify their identity through multifactor authentication (MFA) before accessing anything they’re authorized to.

2. Verify Third Parties’ Security

Third-party actors are another common vulnerability among supply chains. As an example of how pressing this issue is, the now-infamous SolarWinds hack, the biggest cyberattack of 2020, came from a third party. Hackers gained access to thousands of businesses and agencies by infiltrating SolarWinds, a third-party service they all used.

Supply chains must verify the security of any third party before doing business with them. That can mean asking for proof of security measures, only partnering with certified organizations or auditing third parties’ security through independent specialists.

Organizations should also apply the principle of least privilege here. Third parties should only have access to the systems and data they need and nothing more. That way, a breach on their end will cause minimal damage.

3. Secure All IoT Devices

Many have unknowingly created new vulnerabilities as supply chains have embraced new technologies. The widespread use of Internet of Things (IoT) devices to track inventories and shipments can put supply chains at risk. While these gadgets are extraordinarily helpful, they’re notoriously risky if companies don’t secure them properly.

A seemingly innocuous IoT device can act as a gateway to more sensitive systems and data on the same network. Thankfully, the steps to mitigate this threat are relatively straightforward. First, supply chains should host IoT devices on separate networks from other systems so hackers can’t access more sensitive data through them.

Next, supply chains must encrypt all IoT communications to secure their data transmissions. Encryption is often disabled by default, so this step is easy to overlook. Enabling automatic updates will help keep these devices secure, too.

4. Equip Workers Appropriately

While cyber threats may be the most pressing aspect of supply chain security, organizations shouldn’t neglect physical security, either. Piracy, physical theft and similar crimes are still relevant dangers. Supply chains can protect against these by hiring security staff and equipping them appropriately.

New padding technologies can consist of 0.01% solid material but still provide sufficient protection. Equipment like that will help security workers stay safe while not restricting their comfort or range of motion. Other tools like metal detectors, flashlights and ID scanners can further provide these employees with the utmost protection.

Equipping drivers and other supply chain workers with emergency resources is crucial, too. Radios, medical kits, rations and similar supplies should be standard in trucks, ships and other vehicles.

5. Improve Supply Chain Transparency

Supply chains can improve physical and digital security by increasing transparency. The more an organization can see about its operations, the faster it can respond to any incoming threats.

IoT security systems can let workers monitor cameras from their phones, giving quick access to security information. Similarly, organizations can employ smart sensors to monitor for break-ins, fires, leaks and other threats to alert employees when a situation arises. When companies learn of these risks faster, they can respond more effectively.

Similarly, network monitoring tools can give IT teams insight into potential data breaches. Artificial intelligence (AI) systems can continuously monitor for suspicious activity, alerting workers when there’s a possible cybercrime attempt.

6. Train Employees in Security Best Practices

No matter what other security steps an organization takes, employees must be taught about them. All it takes is one misstep from a worker to jeopardize a supply chain’s security, regardless of how strong its other defenses are. For this reason, as many as 85% of data breaches result from human error.

Every employee should receive security training covering relevant risks, best practices and emergency procedures. It’s important to stress why these methods are important so workers understand the gravity of their actions in some situations.

In addition to initial security training sessions, supply chain organizations should host regular refresher training. That way, proper procedures will remain fresh in employees’ minds, preventing mistakes related to them forgetting best practices.

7. Create an Incident Response Plan

Supply chains must understand that no defense system is perfect. Disruptions in this industry are too risky, and it’s likely they will someday experience an emergency. They should create a formal incident response plan to enable quick, effective action should an unexpected event occur.

More than half of all companies have experienced downtime that’s lasted eight hours or more in the past five years. Supply chains can prevent this through a disaster recovery plan. What this looks like will vary among organizations, but it should include backup resources, communication strategies, specific protocols for each department and contingency plans.

Supply chains don’t need to prepare for every emergency but should determine which events are the most likely or potentially destructive. These incidents deserve formal, detailed response plans, which all employees should know. To ensure ongoing efficacy, organizations should periodically review and update these plans.

Supply Chain Security Is Essential

If a supply chain experiences a security breach, it could affect far more than the logistics company itself. That risk, coupled with the rising trend of supply chain attacks, makes these security steps essential.

These seven points are not a comprehensive list of security procedures but cover the most important factors. Supply chain organizations should ensure they consider these steps and take further action if necessary.

Archives, Global Trade Daily, Special Reports

8 Effective Holiday Incentives for Supply Chain Employees

December 9th, 2021 Dylan Berger Leave a comment

The holiday season can be the busiest time of year for supply chain companies. USPS alone delivers nearly 16 billion packages and pieces of mail during the holidays. With e-commerce continuing to grow, logistics professionals can expect these peak seasons to become increasingly busy.

This skyrocketing demand puts increased pressure on the workforce. Supply chains often need more employees and higher productivity from their current workers to remain efficient through the season. As labor shortages continue to plague the industry, that can be a challenge.

Logistics businesses need ways to attract new workers or incentivize current ones to be productive or work longer hours. Here are eight such incentives that could prove effective during the holiday season.

1. Cash Bonuses

One of the most effective incentives is also the most straightforward. Money is a powerful motivator at any time of year, but during the holidays, when workers are likely spending more, it may be even more enticing. According to one survey, 44% of employees quit to earn more money elsewhere, so monetary incentives can convince them to stay through the holidays.

Supply chain companies can take multiple routes to this end. The most straightforward is to increase hourly wages during peak seasons, but that’s not the only option. Businesses can also offer a one-time holiday bonus, tiered rewards for shifts taken, or other financial incentives. The holiday shopping peak may help offset these costs, too.

2. Extra Time Off

A similar option is to give employees who work extra during the holiday season additional time off. Providing days away from work at another time of year makes up for the time they put in around the holidays. These incentives can also follow a tier system, with workers earning more time off as they work more holiday hours or reach new productivity goals.

Like cash incentives, these rewards can take several forms. One option is to give workers an extra paid vacation day or two to use at their discretion. Another is to increase their number of sick days, or companies could give workers more flex time.

This last option may be the most effective. Studies show that 82% of employees today would be more loyal if they had flexible work options.

3. Discounts at Local Establishments

One more unique alternative is to offer gift cards or discounts at businesses in the area. Many businesses have programs where employers can provide discounts or free services to their employees, and if that’s not available, gift cards likely are. These incentives are similar to cash bonuses but offer a specific chance for workers to try something new or visit their favorite place.

For example, employers could give employees working overtime a complimentary month’s gym membership. As workers gear up for their New Year’s resolutions, they may appreciate the opportunity. Other items, like gift cards for local businesses, can help them complete their holiday shopping or treat themselves.

4. Holiday Parties

Supply chain organizations could also embrace the holiday spirit and throw a party for their employees. This time to unwind and have fun with co-workers can help mitigate the stress of working during this season, motivating employees to push through it. Social events also make excellent incentives because a sense of community can improve worker satisfaction and productivity.

Parties should include food, drinks, games, and if employees would be interested, optional gift exchanges. Employers can even find alternatives to the classic Christmas turkey to keep things fresh and appeal to more people.

5. New Equipment

Sometimes, holiday incentives can lead to longer-term benefits for employers. One such example is to provide new workplace equipment if enough employees work through the holidays or reach a pre-defined productivity goal. This could include more comfortable office chairs, easier-to-handle pallet jacks, elevators to provide a way around stairs, or similar upgrades.

These new tools will boost productivity in the long run, so they help employers too. Workers will appreciate them because they make their jobs easier. While this option may not be as enticing to employees, it can still be effective, and it offers a win-win scenario.

To determine what upgrades will be the most enticing, employers should listen to their workers’ complaints. If there are any consistent issues that new equipment can solve, that should be the prize.

6. Charitable Donations

Around this time of year, employees may feel more charitable, thanks to the holiday spirit. That gives employers another less conventional but effective incentive: charitable giving. Instead of rewarding workers directly, businesses can make donations in their name to the charity of their choice.

Companies can either ask individual workers where they’d like donations to go or poll the workforce. In either case, the business will end up giving to a cause that employees care about in return for their hard work. Knowing they’re making a profound difference can give employees the motivation they need to work through the holidays.

7. Professional Development Opportunities

One of the most common reasons employees feel dissatisfied with and leave a position is a lack of career development opportunities. In fact, 20% of workers who quit in 2019 did so for professional development reasons. Offering opportunities for employees to advance their careers could have the opposite effect.

As a reward for working through the holidays, supply chain organizations could provide a choice of development paths. Workers could take complimentary classes in an area, attend training seminars, or work briefly in another department. Employees who long for more options in their careers will be motivated to push through the holiday season for these incentives.

8. Public Recognition

Sometimes, all an employee needs to feel motivated is recognition for a job well done. Reports show that nearly half of all Americans feel lonelier now than usual, so knowing that someone else recognizes and appreciates them can go a long way.

Supply chain companies can offer recognition-related incentives in several ways. One option is to create a friendly competition where top-performing employees during the holiday peak receive public recognition and a place on a “wall of fame.” Alternatively, employers could write handwritten notes of appreciation to all workers.

This reward pairs nicely with others, too. Employers could recognize exceptional workers in front of their peers at holiday parties or reward top performers with vacation days or material prizes.

Motivate Employees This Holiday Season

It can be challenging to keep workers motivated through the holidays, but it’s not impossible. Any of these eight ideas, or a mixture of several, could push employees to perform at their best through this annual peak.

As labor shortages continue and e-commerce rises, holiday motivation becomes increasingly crucial. Regardless of the specifics, every supply chain organization should consider rewarding their employees around this time of year.

Archives, Global Logistics, Global Trade Daily, Trucking

What New Fleet Managers Can Expect From Maintenance Inspections

December 6th, 2021 Dylan Berger Leave a comment

Managing a fleet can be a fulfilling experience, but it also includes a lot of responsibility. New managers must understand and anticipate these responsibilities so that they can operate legally, safely and efficiently.

One of the many considerations new fleet managers must keep in mind is the need for regular maintenance inspections. While anyone in the industry understands that regular maintenance is important, the specifics may be less clear.

With that in mind, here’s what new managers should expect in this area.

Why are Maintenance Inspections Necessary?

First, it’s important to understand that regular maintenance checks aren’t just recommended but mandatory. The Federal Motor Carrier Safety Administration (FMCSA) requires all motor carriers to regularly inspect, repair and maintain all of their vehicles. Failure to do so can result in hefty fines and other legal damages.

Apart from the legality of the situation, these inspections can help fleet managers minimize operating costs. Failing to inspect some components can lead to costly repairs and replacements, so it’s best to catch any potential issues early when repairs are more straightforward.

These inspections are also a critical part of vehicle safety. Without them, drivers may unknowingly be putting themselves and others at risk, as equipment failures can cause accidents.

How Often Do You Need Maintenance Inspections?

Fleet managers should also know how often to perform these inspections to optimize their schedules. Since every vehicle carries unique maintenance needs, the FMCSA leaves some room for interpretation in this area. Fleets must perform inspections at least annually, but some emergency systems, like emergency doors, need inspections every 90 days.

For optimal performance and safety, inspections should be more frequent than the minimum requirement. Diesel vehicles require work less frequently than their gas counterparts, which can help save costs, but it’s still best to check them regularly. What this schedule should look like varies between use cases, but going by miles driven may be more effective than going by time.

What Should Maintenance Inspections Include?

When it comes time for the actual inspection, fleet managers should keep a few factors in mind. First, they can choose to either perform the inspection themselves or have a qualified third party do it. The former option may be more cost-effective, but it also requires a knowledge base and reporting system that smaller companies may not have.

Whether fleet managers perform their own inspections or rely on a third party, they should look for a few specific factors. Here’s a closer look at these specifics.

Qualified Inspectors

The FMCSA outlines some requirements for who can perform these maintenance inspections. These qualifications are fairly straightforward for most of the inspection process. Employees or third parties must have knowledge and proficiency in the necessary methods, procedures and tools, but the FMCSA doesn’t define what that specifically entails.

Brake inspection qualifications are more rigid. Brake inspectors must either complete a state, Canadian province or union-sponsored apprenticeship program or have at least one year’s experience in brake maintenance.

When looking for third-party inspectors, fleet managers should look for these qualifications or, ideally, higher standards. Similarly, if fleets inspect their own vehicles, they should require employees to meet these qualifications.

Parts and Accessories Necessary for Safe Operation

Fleet managers should also understand what specific components and systems they should check. The FMCSA says maintenance inspections must cover “parts and accessories which may affect safety,” which can apply to most parts of a vehicle. Inspectors can refer to the FMCSA’s extensive list of parts for reference, but the most important areas to cover are fairly evident.

Engines, steering systems, brakes, seatbelts, wheels and the like all fall under this scope. Some of these parts will require more regular inspection than others, so fleets should schedule inspections of varying depth. As for how often to inspect each area, it’s safest to go by the manufacturer’s guidelines.

Emergency Features

Vehicles with some extra emergency features need to undergo additional inspections, too. Many buses, for example, have systems like emergency doors, pushout windows and lights marking these features. If fleets have any vehicles with these types of systems, they need to check them every 90 days to ensure they work properly.

These emergency features can mean the difference between life and death in some scenarios, so the FMCSA takes them seriously. Fleet managers should likewise pay close attention to these systems, ensuring they receive more maintenance and inspection than other parts. If there’s anything wrong with them, fleets should repair or replace them as soon as possible.

Driver Vehicle Inspection Reports

Driver vehicle inspection reports (DVIRs) are another important part of maintenance inspections. These are reports that drivers write up at the end of each driving day that identify any potential issues they’ve noticed. Fleet managers likely already collect these records, but they must save them and ensure they meet standards to satisfy the FMCSA.

According to FMCSA guidelines, DVIRs should cover:

-Brakes

-Steering mechanisms

-Lighting devices and reflectors

-Tires

-Horns

-Windshield wipers

-Mirrors

-Coupling devices

-Wheels and rims

-Emergency equipment

Drivers can look at other parts and accessories, too, but these are the only required factors. If DVIRs report any issues, fleets must resolve them before operating the vehicle again.

Thorough Records

No matter what the specifics of a maintenance inspection look like, fleet managers must keep thorough records. Every time an employee performs a check, the company should record it in a safe, accessible place. If the fleet faces an audit from the FMCSA or needs to check the maintenance history to inform a repair, these records are crucial.

The FMCSA requires fleets to keep DVIRs for at least three months and records of annual and roadside inspections for at least a year. That will quickly add to a lot of storage, so fleet managers should consider using an electronic system for recording and organizing this information.

Fleets should also record any repairs they have to perform on vehicles. To help keep things organized, all reports should include vehicle identification information like the make, model, year and serial number.

Maintenance Inspections Are a Crucial Part of Fleet Management

Maintenance inspections can account for a significant portion of fleet operations. New fleet managers must understand these factors to prepare accordingly, enabling efficient, safe and compliant operations.

Every fleet’s maintenance inspections will look slightly different, but these general guidelines apply across every fleet. Managers should take these guidelines, then apply and adjust them to their specific situation. They can then meet relevant regulatory requirements and keep drivers safe.

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How Executives Can Increase Their Company’s Financial Efficiency

November 25th, 2021 Dylan Berger Leave a comment

As the world becomes increasingly interconnected, opportunities for logistic companies expand. While this is good news, it also means competition within the industry is rising. If supply chain businesses want to stand out from competitors, they must increase their financial efficiency.

Many investors and potential business partners use financial efficiency metrics to determine a company’s economic health. Consequently, financially inefficient businesses may miss out on valuable strategic opportunities. Partnerships and investment aside, an efficient company is a more successful one.

Here are seven ways executives can increase their company’s financial efficiency to attain these benefits.

Automate Back-Office Tasks

Most businesses have repetitive, manual tasks that take time away from more valuable work. According to one study, more than 40% of workers spend at least 25% of their time on these tasks. Since these inefficiencies are so common and so impactful, automation can bring considerable rewards.

Many of these inefficiencies are in back-office operations like data entry, scheduling, and approvals. These tasks are also easily automatable through robotic process automation (RPA) solutions. By implementing these tools, companies can free their employees to focus on other, more important work, accomplishing these goals sooner.

RPA is also often faster than humans at these repetitive tasks. As a result, companies will improve the efficiency of these back-office processes as well as the more valuable manual operations.

Increase Fleet Visibility

Another common source of financial inefficiency in logistics companies is a lack of visibility. Fleet operations are prone to disruption, and when businesses can’t predict or see them as they unfold, these disruptions can have far-reaching consequences. In contrast, increasing visibility can help respond to developing situations faster, minimizing delays and costs.

Many companies now track fleets with GPS systems, but businesses can go further, too. Internet of Things (IoT) sensors can monitor and communicate data like location, driving patterns, maintenance info, and product quality in real-time. With this timely information, fleet managers can see issues as they arise, leading to quicker, more effective responses.

Faster reactions lead to better customer service, less disruption, and sometimes avoiding serious delays entirely. Businesses’ financial efficiency will rise as a result.

Address Accounts Receivable

Accounts receivable turnover is one of the most popular metrics for financial efficiency, so businesses should strive to collect debts as quickly as possible. In the delay-heavy and prone-to-disruption world of logistics, that can be complicated. However, a few options can help.

One way to improve this ratio is to provide multiple payment methods for clients. This allows customers to use whatever best suits their needs, leading to quicker reactions from them. Similarly, payments will be faster when customers can use a process they’re already familiar with.

Another way to improve accounts receivable turnover ratios is to employ automation. Automated billing, reminders, and processing services are abundant today and can streamline the process for both companies and their clients. Employing these solutions while providing multiple payment methods will ensure businesses collect outstanding payments as quickly as possible.

Refinance or Consolidate Outstanding Debts

Outstanding debts are another common obstacle to financial efficiency. Having debts is normal for a business, but that doesn’t mean companies shouldn’t continuously reevaluate their loans. Periodically addressing these to see if there’s a way to refinance or consolidate them can help cultivate financial agility.

Many logistics companies may have outstanding vehicle loans, for example. These ongoing payments can easily fade into the background, but refinancing them can save $150 per vehicle per month in some cases. That seemingly small change frees up extra monthly revenue that companies can then put towards something else.

Alternatively, some companies may want to consolidate some of their debts. Doing so can make it easier to manage them and lower interest rates. Businesses may then be able to pay them off sooner.

Improve Cross-Department Communication

One aspect of the business that may fly under the company’s radar is communication between departments. When things get lost in translation moving between teams, it can lead to mistakes or take more time to achieve the desired goal. These mistakes and delays hinder financial efficiency, so improving communication can increase it.

Communication barriers cost $62.4 million annually in lost productivity on average. Consequently, companies should strive to remove barriers to effective collaboration, especially between different departments. Using collaborative software, holding frequent meetings, using instant messaging apps, and similar steps can do that.

When teams can communicate efficiently, confusion-related errors will decrease. Similarly, cross-department projects will have shorter completion times thanks to easier collaboration.

Reorganize Inventory

Inventory turnover is another aspect of financial efficiency to address. The longer items sit in warehouses or distribution centers, the less agile a company is. While logistics businesses may not be directly involved in the sales side of this issue, they can take steps to improve inventory inefficiencies.

Like fleets themselves, most inefficiencies in this area come from a lack of visibility. When organizations don’t know exactly where every item is at all times, it can take time to retrieve the correct one. Similarly, this lack of transparency can lead to confusion and errors that require correction down the road, leading to delays.

According to one survey, 34% of businesses have shipped items late because they sold out-of-stock items. Warehouse management systems, IoT tracking, and RFID tags can all help keep better track of inventory levels, avoiding mistakes like this. Logistics businesses can then pass these benefits along to their partners, creating positive ripple effects.

Train Employees More Thoroughly

One risk factor that can affect financial efficiency in any department in any business is human error. Even small mistakes can lead to considerable disruptions over time as more employees make them. Many may suggest automation as an answer, but that isn’t applicable in every circumstance and isn’t always necessary.

The solution to this problem is to put more emphasis on employee training. Organizations should look for common mistakes and, as trends emerge, emphasize these points in training. Periodic refresher courses over high-value or complicated processes can help too.

When workers better understand how to perform their jobs correctly, they’ll also work faster. More thorough training will boost confidence, leading to less second-guessing and higher efficiency.

Financial Efficiency Is Critical for Any Logistics Business

As the logistics market grows increasingly crowded, businesses must improve their financial efficiency to stay competitive. Higher efficiency will lower operating costs, attract investors, and open new strategic opportunities. These seven steps can help any business increase its financial efficiency. Companies can then become as agile and profitable as possible.

Archives, Global Logistics, Global Trade Daily, Warehousing

Creating an Accessible Warehouse for Workers with Disabilities

November 17th, 2021 Dylan Berger Leave a comment

The warehousing industry faces a growing labor shortage, yet many facilities are overlooking a ready and willing workforce. According to the Bureau of Labor Statistics, just 19.3% of people with disabilities are currently employed. At the same time, 877,400 people with disabilities are actively looking for work.

These workers could help warehouses become far more productive, but the facilities need to become more accessible first. Accessibility issues are common in the industry, and they stand in the way of hiring these eager employers. With that in mind, here are seven ways warehouses can become more accessible for those with disabilities.

Customize Mobile Computers

Mobile computers are some of the most important tools in the warehousing business. Despite how crucial they are to the job, many facilities may not be getting all they can out of them. Their default settings may limit their accessibility, leading to errors and inefficiencies.

For example, the text on these devices’ displays is often small, and scanning distances are short. This can make it difficult for workers with visual impairments to read correctly and lead to discomfort for those with restricted mobility. Using computers with longer scan distances and customizing them to show larger text will solve these issues.

Text-to-speech options, high-contrast displays and customizable color coding are other personalizations that could make these tools more helpful. When they’re easier to use for more workers, picking and related processes will accelerate.

Employ Robotic Assistance

Another way to make warehouses more accessible is to capitalize on automated systems. Some tasks, like picking items off high shelves or moving heavy materials, may be too physically strenuous for some workers. Automating them, at least in part, can open these tasks up to a broader workforce.

Musculoskeletal disorders (MSDs) account for one-third of all worker injuries and illnesses and often come from overexertion. If workers have a disability that limits their mobility, they’re at even higher risk of these injuries. Automating processes likely to cause MSDs would then make workplaces significantly safer and more efficient.

Automated guided vehicles or powered forklifts could also help workers with disabilities move materials throughout the warehouse. As an added benefit, these technologies make workflows faster as well as more accessible.

Rethink Shelving

Some facilities may need to reorganize or redesign their shelving systems. If items are too high or too low, workers may need to bend over or reach above their heads to retrieve them. While some exercises can improve flexibility by 25%, these actions can still be hazardous, especially for workers with disabilities.

The most frequently picked items should be between waist and chest height. That way, workers can reach them without overextending themselves. Shelves can use automated retrieval systems to grab higher-up items to make the most of vertical space. Alternatively, facilities could implement mezzanine racking.

Mobile shelves that shift to meet workers according to their specific needs could also help, though these may be more expensive.

Replace Stairs

Capitalizing on vertical space is one of the best ways to optimize warehouse layouts, but it poses a problem. Stairs are an obstacle for workers with some disabilities, so they limit who can access which items. As a result, they can hinder a facility’s productivity, keeping it from getting the most from the whole workforce.

Stairways are unavoidable, but warehouses can replace some of them with ramps. Some facilities may be able to install elevators as well. These options are more accessible, letting any worker reach higher-level items if necessary.

In addition to making warehouses more accessible, traveling up a ramp is often faster. They also allow for more vehicle traffic between levels, making automation more efficient.

Provide Wheelchair-Friendly Transportation

If warehouses have company vehicles for employees to use, they should consider wheelchair-friendly options. These cars are of limited utility if not every employee can drive them. Adding at least one wheelchair-friendly vehicle makes them more useful.

In today’s market, warehouses have plenty of options for wheelchair-friendly transportation, too. Companies can outfit most vehicles with hand controls, and multiple systems exist for helping wheelchair users into the driver’s seat.

Having an accessible company vehicle could also improve worker morale. When employees show they appreciate their workplace, they’ll be more productive as a result. Warehouses and their workers will benefit all around from these changes.

Enable Multiple Picking Methods

Picking is often one of the most inefficient processes in a warehouse. Similarly, it’s also one of the most frequently inaccessible for workers with disabilities. One of the ways to address this problem is to use multiple systems that account for everyone’s needs.

As mentioned earlier, some mobile computer displays can be challenging to read. Pick-to-light systems could replace text-based solutions, guiding workers to the correct items without reading a small, possibly low-contrast screen. These systems also typically improve pick rates by 30%-50%, so they offer multiple benefits.

Voice picking systems are another alternative. Offering voice, light and traditional systems will let workers use whichever works best for them. That way, no matter what conditions an employee deals with, they can work efficiently.

Keep Aisles Wide and Open

Many warehouses reduce their aisle space to accommodate more shelves. However, this can make facilities less accessible for workers with some disabilities. Keeping them open allows for smoother traffic and easier picking.

If aisles are too narrow, workers with wheelchairs may not be able to pass through if there’s another employee there. Similarly, those that need to use robotic assistance tools may not have room to maneuver. Making aisles wider lets any people and machinery pass through more easily, removing this barrier.

Wider aisles also let workers pick items off low or high shelves without taking up as much of the path. That way, more employees can reach objects without impeding the productivity of others.

An Accessible Warehouse Is a Productive One

When warehouses become more accessible, they can welcome more workers with disabilities. This benefits both parties, giving people a source of income while helping employers overcome persistent labor shortages. Facilities that already have disabled employees can help prevent injury and become more productive, too.

Changes like these let employees work more efficiently and safely. As a result, overall morale and productivity will improve. No matter what a warehouse’s workforce looks like now, improving accessibility could boost their efficiency.

Archives, Commentary, Global Trade Daily, Special Reports

8 Small Policy Changes That Can Significantly Strengthen Retention

November 12th, 2021 Dylan Berger Leave a comment

Worker shortages are plaguing the warehousing and logistics industry. While many companies are looking for new ways to attract workers to remediate the situation, retention is just as, if not more, important.

Without strong retention, recruitment will do little good. Replacing a salaried employee also costs six to nine months’ salary on average, so retention is far more affordable. Thankfully, even small policy changes can strengthen employee retention. Here are eight examples.

1. Tighten the Recruitment Process

Retention starts with hiring. Employers can prevent many turnover cases by hiring workers who are more likely to stay in the first place. The first step to achieve that is to ensure that job postings are accurate and transparent.

One study found that nearly half of all workers have left a job because it didn’t meet their expectations. Instead of relying on vague language and buzzwords, job descriptions should offer specific details about the position. That way, any applicants understand the roles they’re taking on, preventing disillusionment down the line.

Job seekers will also appreciate honesty. Being transparent in the recruitment process may give new hires a better starting impression of the workplace.

2. Create Upward Mobility Opportunities

One of the most crucial policy changes for better retention is to enable upward mobility. In 2019, 20% of workers who left a job did so because of career development-related reasons. In fact, career development has been the number one reason employees leave for 10 straight years.

This issue has a relatively straightforward fix, too. When a new position opens up, instead of looking for outside hires, companies should promote from within. Businesses should also look to create plenty of opportunities for advancement to give workers a career growth goal.

Career development opportunities can be more than raises and promotions, too. Courses to teach employees new skills or fund their education will help increase retention, too.

3. Accept Anonymous Feedback

Another simple yet effective policy change to make is to have a system for anonymous feedback. Workers may have suggestions for improving the workplace but may fear retribution if management can trace their comments back to them. Anonymous feedback forms let employees speak up confidently.

It’s important to respond to this feedback, too. Making changes that workers want can help ensure the workplace fosters a positive environment. Employees will also feel empowered if they see how their actions impact the workplace, and empowered workers are 33% more likely to stay for three years.

It can help to encourage workers to use these systems, too. That encouragement will promote an air of trust and transparency and empower them further.

4. Support Worker Health

Lifestyle-related benefits are easy to overlook but can be an effective policy change to retain employees. Healthy workers are likely to feel happier and more satisfied, and employers can help them be healthy. By offering perks that support healthy worker lifestyles, businesses can show their employees that they care about their well-being.

Providing nutritious food options in company cafeterias is an easy change to make. Foods high in nutrients like vitamin C can boost workers’ immune systems, helping them feel stronger and healthier. Providing exercise programs or occasional on-site massage therapy can help too.

5. Communicate With Employees Often

Along similar lines, it’s important to maintain communication with employees. Studies show that nearly half of Americans feel lonelier than usual, so feeling seen and valued in the workplace can make a significant difference. Talking with workers will help them feel valued and bring any issues they have to light.

Remember that this communication goes both ways. In addition to listening to employees, management should inform them of any upcoming opportunities and changes often. If workers don’t understand what’s going on at the company, they’ll feel underutilized and unimportant, leading to turnover. In contrast, feeling involved can convince them to stay.

6. Maintain Competitive Compensation

Most employers already understand that higher pay and more competitive benefits will help convince workers to stay. This issue goes beyond bumping up a starting salary once or offering new perks, though. Businesses should have a policy to review industry compensation rates periodically to see how theirs compares.

Workers quitting because of pay and benefits-related reasons have increased by more than 26% since 2010. This trend also coincides with the growing movement of more businesses offering new perks and adjusting pay rates. What constitutes competitive compensation is changing and changes regularly, so a one-time fix is insufficient.

Periodically reviewing industry trends can reveal whether an employer offers sufficient compensation or if they need to adjust. This prevents underpaying compared to competitors as well as unnecessarily raising rates.

7. Recognize and Reward Commendable Behavior

According to one survey, 79% of employees who quit their jobs cite a lack of appreciation as a major factor. Thankfully, employers can address that with relatively straightforward policy changes.

Workplaces should have a policy of recognizing and rewarding positive behavior in their workers. Regular awards given to the highest-performing employees or praising workers’ actions and achievements in company newsletters can help workers feel valued. These rewards, though seemingly small, can go a long way in employee retention.

Workers don’t often expect much in return for good service. Typically, recognition of a job well done is sufficient. While monetary incentives don’t hurt, taking the time to praise commendable behavior can make a significant difference.

8. Encourage Employees to Take Advantage of Perks

Another seemingly small but significant change for employee retention is letting workers know it’s okay to use their benefits. Poor experiences with other employers may leave workers feeling like they shouldn’t use their time off or other perks. Encouraging them to do so can assuage those concerns, making them feel more welcome.

When workers take advantage of their benefits, they’ll likely feel more relaxed and fulfilled. When management doesn’t just allow but encourages it, they’ll feel appreciated, too. If employees feel like their employers care for their work-life balance, they’ll be less likely to leave.

Small Changes Can Have a Big Impact

Workplace changes don’t need to be disruptive to have a substantial impact on employee retention. It’s often an amalgamation of multiple “little” things that convince workers to leave a job. In the same way, making several little changes can convince workers to stay with their current employer.

These eight changes represent some of the most effective yet straightforward improvements to strengthen retention. By implementing these fixes, businesses can reduce turnover and related costs and foster a more motivated, positive workforce.

3pls, Archives, Global Logistics, Global Trade Daily, Warehousing

7 Proven Strategies That Eliminate Downtime in the Supply Chain

November 9th, 2021 Dylan Berger Leave a comment

Eliminating downtime is a concern for any business, but supply chains face more pressure than most. Disruptions and delays will ripple throughout the industries that rely on them, potentially causing massive losses. By the same logic, reducing supply chain downtime likewise reduces it elsewhere.

While most organizations likely understand the importance of eliminating logistics downtime, the path to that end is less clear. Frequent delays showcase considerable room for improvement in the world’s supply chains.

Thankfully, several companies have also found effective strategies for eliminating these delays. Here are seven of these proven methods.

1. Optimized Warehouse Layouts

Poor warehouse arrangements are easy to overlook, but they’re a common source of supply chain delays. A poorly laid-out warehouse slows the picking process and makes it harder to track inventory levels. With less insight into their stock, companies are more likely to run into shortages they could’ve otherwise avoided.

Lack of stock visibility is all too common an issue, with 43% of small businesses not tracking inventory. As a result, the U.S. retail industry has an inventory accuracy rate of just 63%. Without an accurate picture of stock levels, companies can’t expect to order new items in time, leading to delays.

Better warehouse layouts improve inventory visibility, informing more accurate orders. One of the most important changes to make is implementing an electronic tracking solution, like a warehouse management system (WMS). These systems will help keep track of stock levels, eliminating downtime from inventory issues.

2. Predictive Maintenance

Equipment breakdowns are another one of the most common causes of unplanned downtime. While these situations are common and highly disruptive, they also have a fairly straightforward solution. Supply chains should implement predictive maintenance systems to keep all machinery in optimal condition.

Predictive maintenance analyzes equipment performance data to determine when it will need upkeep. While this comes with high upfront costs from the necessary equipment, the results are impressive. Operating off these predictions lets facilities prevent unplanned downtime from breakdowns and unnecessary repairs.

These benefits aren’t just theoretical, either. Studies show that predictive maintenance increases equipment availability by 5%-15% and reduces maintenance costs by up to 25%. Those savings across an entire supply chain add to a tremendous reduction in downtime.

3. Distributed Sourcing

Another common source of downtime in supply chains is delays or interruptions from suppliers. Many supply chains get parts or products from a single source, which keeps costs down but exacerbates these disruptions. When an unforeseen event occurs at these suppliers, everything else comes to a standstill.

For example, in 2017, a fire at an auto part supplier in the Czech Republic stopped production. An automaker who relied on this plant as its single supplier consequently couldn’t produce 20,000 vehicles in time. Supply chains must embrace distributed sourcing to avoid massive disruptions like this.

When a supply chain has multiple suppliers, a shortage at one won’t affect the entire operation. Other companies can make up for it, and if not, the overall loss still won’t be as significant.

4. Contingency Plans

Similarly, supply chains must also create contingency plans for likely or potentially disruptive events. Companies can’t afford to expect that no unexpected circumstances will ever arise. Having a backup plan for any possible emergencies reduces downtime from these situations and shortens the recovery period.

Some emergency response plans can be relatively simple, but companies should still standardize and record them. For example, if a vehicle dies, drivers can start it without jumper cables fairly easily if need be. However, if there’s no standard practice in place for this situation, they may waste time thinking of what to do and who to contact first.

Having a specific, codified contingency plan ensures workers can respond quickly to any eventuality. The faster they can adapt, the less likely an unforeseen event is to cause significant downtime.

5. Employee Training

Some strategies to eliminate downtime are relatively straightforward but can have a significant impact. Employee training is the perfect example. While a single worker’s mistakes may not seem to have a considerable effect on overall operations, most downtime comes from user error.

Mistakes in data entry can lead to incorrect inventory information, causing order-related shortages. Similarly, machine usage errors can end in equipment failure, leading to downtime for repairs. Employee errors can cause substantial disruption, but that also means better training can prevent many stoppages.

Periodic refresher training can ensure workers remember proper techniques and best practices. Supply chains can also look to employees themselves for information on how to improve the training process. Workers can report what types of onboarding experiences they wish they had, revealing how to improve.

6. Emphasizing Workplace Safety

On a similar note, improving workplace safety can help eliminate supply chain downtime, too. On-the-job injuries have a considerable impact on productivity, resulting in 105 million lost days in 2019 alone. That figure doesn’t include non-disabling injuries, either, which may still hinder worker efficiency, making downtime more likely.

If supply chains can reduce employee injuries, they’ll decrease these days of lost work. One of the most important parts of improving safety is better safety training. When employees know what risks they face and how to avoid them, they’ll pay more attention to workplace hazards.

Other steps like automating the most dangerous tasks and using data analytics to find where most injuries occur will also help. Even seemingly small improvements can have a substantial effect on reduced downtime.

7. Improving Staff Communication

Another minor adjustment that can have significant ramifications is communication. Supply chains should ensure employees understand the causes of downtime and how they affect profits. This communication can help build a spirit of shared responsibility, helping workers understand their impact on the business as a whole.

Improving communication also means making it easier for staff to suggest improvements. Supply chains should reward employees whose suggestions lead to meaningful reductions in overall downtime. This will encourage more workers to take an active role in ensuring operations run as smoothly as possible.

Supply Chains Must Actively Reduce Downtime

Reducing downtime in the supply chain can minimize disruptions across an entire industry. Similarly, if supply chains don’t eliminate downtime, they could cause massive, far-reaching damage.

These seven strategies represent proven methods for eliminating downtime. Supply chains that implement them can become far more resilient and efficient.

Archives, Global Logistics, Global Trade Daily, International Trade

Integrating Risk Management Into Supply Chains: 5 Points to Cover

November 5th, 2021 Dylan Berger Leave a comment

Risk management is central to running any business, but it’s especially important for supply chains. Disruptions in the supply chain have far-reaching ripple effects, as the COVID-19 pandemic has made painfully evident. With logistics serving as the backbone of virtually every other operation, risks here are risks everywhere.

Supply chains must identify, document and respond to all potential dangers to maximize efficiency and resiliency. However, while many organizations are aware of this need, fewer understand how to implement proper risk management.

Why Supply Chains Need Better Risk Management

According to a PWC survey, 60% of supply chains pay only marginal attention to risk reduction processes. The study also revealed that most of these companies focus on maximizing profit, minimizing costs or maintaining service levels. Ironically, had they prioritized risk management, they’d be better equipped to meet those goals in the face of disruption.

Widespread supply chain issues amid the COVID-19 pandemic further illustrate the subpar state of risk management. Early in the outbreak, 75% of U.S. companies saw capacity disruptions from the pandemic, and many continued to face similar challenges throughout the year. The world’s supply chains were clearly unprepared to handle these risks.

Understanding the importance of risk management is the first step towards improvement. As supply chain managers start to create a risk management plan, here are five points to cover.

1. Identify and Organize Risks

Risk management in any operation begins with identifying the risks an organization faces. These can be internal, like poor user behavior leading to a data breach, or external, like a natural disaster. This may also take careful analysis, as some risks, such as changes in customer preferences, may not come to mind immediately.

Supply chain managers should break down every node and link to find risks. When recording these, it’s also crucial to determine their potential impact on the company, which is often more substantial than initially evident. For example, worker’s compensation claims can incur ongoing care expenses and disability payments on top of the original cost of care.

After compiling a list of risks and their potential impacts, supply chains should prioritize them. Weigh each hazard according to its likelihood and the size of its consequences. The most likely and most disruptive deserve the most attention in planning to prevent and mitigate them.

2. Create Response Plans for Known Risks

This organized list represents a supply chain’s known risks. These are the things that a company can predict and quantify, and as such, managers can create a response plan for them. Businesses may not be able to create a detailed plan for every item, but they should for at least the most threatening eventualities.

Some hazards don’t require extensive planning and preparation. For example, if a truck battery dies, drivers can start it without jumper cables if need be to take it to a repair shop. Even though the solution here is fairly straightforward, businesses should still write down what to do to ensure quick responses.

Other events need a more detailed and lengthy response plan. A supply shortage from an overseas supplier, for example, may require backup sources, a transition plan and steps to mitigate customer reactions. Creating these plans can take tremendous effort, but emergency responses will be slow and ineffective without them.

3. Ensure Flexibility for Unknown Risks

Of course, supply chain managers can’t predict every possible eventuality. In fact, unknown risks like the COVID-19 pandemic can be the most disruptive because businesses don’t have a specific action plan for them. While supply chains can’t predict the details of these events, they can prepare for them.

The key to preparing for unknown risks is to ensure flexibility. When a supply chain can’t predict a disruption, it must be able to adapt to it in the moment. If the chain is flexible by design, it can adapt more easily, minimizing the effects of unforeseen events.

Segment, stock and plan (SSP) strategies can reduce part shortages by 50 to 90%, helping supply chains become more flexible. Supply chains should also consider distributed sourcing, which mitigates the impact of a disruption in one location. Creating more transparency through internet of things (IoT) technology and data analytics will also help.

4. Build a Risk-Aware Culture

One easily overlookable point of supply chain risk management is cultivating a risk-aware culture. Supply chain managers can’t expect to discover every potential disruption on their own, much less fully understand their impact. Employees throughout the supply chain may have a more personal understanding of these things, making them indispensable assets.

Just as effective cybersecurity involves all employees, so does the rest of risk management. All workers should be able to report risks they notice, requiring easy and open communication tools. Similarly, management must be open to change and ensure employees that bad news is a welcome alert, not something to punish.

Some supply chains may even consider rewarding employees whose insights lead to meaningful risk management improvements. When everyone can report and discuss potential hazards, supply chains can get a more comprehensive picture of their risk environment. This communication will also improve flexibility for unknown risks.

5. Monitor and Review Risks

Finally, supply chains must understand that risk management is an ongoing process. Some experts claim that constant monitoring is the best way to strengthen the supply chain, as it enables quick, effective responses. The first step here is expanding visibility through data collection and reporting.

Regular reports from all supply chain nodes provide an updated picture of a supply chain’s risk environment. Similarly, IoT tracking and data analytics can enable real-time visibility across an organization and help predict incoming changes. When relying on data analytics, supply chains must ensure they’re gathering extensive, high-quality data, as poor or insufficient datasets can be misleading.

Monitoring this data to predict incoming disruptions is only part of the ongoing risk management process. Supply chains must also periodically review their risk management framework as their situation changes. What’s most threatening today may not be tomorrow, so these plans should evolve over time.

Risk Management Is Crucial for Supply Chains Today

The sheer size and complexity of supply chains today make risk management essential. Disruptions can come from anywhere and have far-reaching consequences if these organizations don’t prepare to counteract them.

As supply chain managers tackle their risk management framework, they must be sure to cover these five points. If not, they could fall short when an emergency arises. By contrast, following these steps can help them ensure ongoing efficiency and minimal disruption in the face of adversity.

Archives, Global Site Selection, Global Trade Daily, International Trade

Making Inroads Overseas: Strategies for Winning International Business

October 22nd, 2021 Dylan Berger Leave a comment

While the U.S. may have the largest third-party logistics market of any nation, there’s plenty of global opportunity to capitalize on. Companies that can break into international markets could reap considerable rewards.

The rise of e-commerce and other internet-based businesses has made the world more interconnected than ever. Consequently, there’s a rising demand for fleets that operate between borders. Smaller, up-and-coming economies with less saturated markets pose an enticing growth opportunity, too.

While expanding into overseas markets can be highly profitable, it’s also often challenging. These six strategies can help companies overcome these challenges to win international business.

1. Research Ideal Markets

One of the biggest mistakes a company can make is expanding into new territory without researching first. Different countries come with different legal restrictions, economic considerations, and market atmospheres. Companies must understand these before choosing where to start their international growth strategy.

For example, Germany has the world’s highest-performing logistics market, which would make it seem like the ideal place for expansion. But since it’s also home to DHL, which holds 39% of the global market share, it may be hard to succeed there. Preliminary market research would’ve revealed that, informing more effective expansion.

Businesses should research the local markets in different countries to find the most profitable area to expand into. That includes looking at tax considerations, competition, and customer needs. Without considering all of these factors, globalization initiatives will likely cost more than they bring in.

2. Understand the Local Culture

Similarly, after deciding on the ideal market, businesses should understand any cultural differences they’ll encounter. Tapping into the local culture can make marketing initiatives more effective and help impress potential clients. Alternatively, if businesses don’t understand these differences, they may accidentally offend or disinterest customers and partners.

Understanding cultural divides can make or break a company’s success, especially when meeting potential international partners. For example, while it’s a rule of thumb in the U.S. to show up five to 10 minutes before a meeting, it may be longer or shorter in other countries. Not understanding that could hinder a meeting’s productivity.

Other countries may have differently structured workweeks and holidays that could affect business, too. The United Arab Emirates, for example, observes the weekend on Friday and Saturday, not Saturday and Sunday. Knowing this before going in can determine whether a business thrives internationally or struggles to get its footing.

3. Partner With Regional Businesses

Another crucial strategy for expanding internationally is partnering with overseas businesses. Companies based in the area will already have the cultural and legal knowledge needed to navigate the local market environment. They will also already have consumer and business connections, giving U.S. companies a foot in the door.

An important step in this strategy is to meet these potential partners in-person as much as possible. Taking the time and money to fly out to meet them shows a willingness to invest in their company. This can give businesses a leg up on any other competitors for the partnership.

Without a local partner, it can be challenging to succeed in a foreign market. Companies will have to establish their brand name, build a customer base, and navigate potentially complicated legal considerations. Foreign partners can cover all of these factors early, letting businesses get off the ground sooner.

4. Adapt Your Marketing Strategies

Since every country has its own culture and values, effective marketing materials are rarely universal. As such, logistics companies trying to expand into overseas markets must adapt their marketing strategies. Research and international partners can reveal local customers’ habits and preferences, informing more effective ads and promotions.

Large restaurant chains serve as excellent examples for adapting international marketing strategies. In France, McDonald’s offers a free illustrated book with every Happy Meal purchased on the first Wednesday of the month. This doesn’t make much sense in the U.S., but children in France don’t go to school on Wednesdays, making this an effective strategy.

Promotions that work in the states may not be as appealing overseas. Similarly, other countries may have holidays, customs, or trends that present unique marketing opportunities that wouldn’t succeed in America. If companies want to be as successful as possible overseas, they must adapt.

5. Localize Your Website

It’s hard to overstate the importance of having an appealing website in today’s market. In many countries, the number of internet users has doubled in the last three years, and websites often serve as customers’ first impressions of a business. While this may be true across borders, what constitutes an ideal website may not be as consistent.

Businesses must localize their sites to fit global audiences. The most obvious step in this process is translating all of the text, but that’s not all localization entails. There are also various cultural connotations and preferences about design and business practices to consider.

Some colors may be appealing in the U.S. but carry a negative connotation in other cultures. While English reads from left to right, not all languages do, so websites in some countries may need to be mirrored to account for this. Turning to contacts in these countries or localization firms can help account for these differences.

6. Capitalize on Local Resources

Many globalization strategies involve taking steps to navigate unique challenges in overseas markets. While these are crucial, the most effective international expansion efforts also look for other areas’ unique benefits. Every country has unique resources to offer, so businesses should take advantage of these opportunities.

One example of a company implementing this strategy is the grocery store chain H-E-B. When H-E-B went international, it bought blueberries from Chile and Peru, giving it access to fresh blueberries year-round. Capitalizing on these warmer climates helped the company expand its offerings, pushing revenue higher.

Businesses should look for what resources different areas have, such as relaxed tax codes or cheap transportation markets. Taking advantage of these instead of keeping business models the same across all countries will maximize international success.

Make the Most of International Expansion

As the world becomes more interconnected, global expansion becomes an increasingly enticing strategy. Companies that can capitalize on it early will see the most success in the future. These six strategies provide a roadmap for doing so.

Winning international business can be a challenge, but it also presents several opportunities. If businesses can act on these steps, they can expand into foreign markets more effectively. They can then enjoy all international business has to offer.