AN EXAMINATION OF INTERNATIONAL LOGISTICS PRACTICES OF U.S. LOGISTICS PROFESSIONALS.

The world of the late 20th century is often characterized by the globalization of business activities. In the present era of globalization, multinational firms (MNFs) must re-formulate and reorient their strategies to cope with the dynamics of a changing global environment. Otherwise, they may suffer from unexpected barriers or impasses stemming from differences in culture, business custom, language, tastes and preferences, laws, and ethics. These barriers may include unnecessary distribution bottlenecks at the importing/exporting ports, unwanted shipping damages during international transit, unacceptable delays at the customs office, and unprovoked miscommunication among shippers, carriers, and third-party logisticians. To obviate these barriers, logistics professionals should develop innovative, flexible logistics strategies which help them adapt to the changing international environment and to respond effectively to their foreign customers' needs. Without formulating such strategies, they cannot gain the full benefits of international logistics. As such, the objectives of this study are to assist logistics professionals with the identification of the main issues of international logistics and the formulation of effective international logistics strategies for their MNFs. First, the study investigates specific international logistics practices of firms engaged in international trade. Second, it explores the key factors affecting the movement of goods in international trade. To accomplish the study objectives, the authors have researched the prevalent practices of 63 MNFs located in the United States. STUDY METHODOLOGY A special questionnaire was developed to determine the ways U.S. logistics professionals have dealt with international distribution operations. The questionnaire (see Appendix) addresses the respondents' company profile, international shipping practices, international modal choice, international freight term negotiation process, overriding factors in international port selection and packaging, and important barriers to overcome in international logistics. The questionnaire was mailed in April 1994 to approximately 800 U.S. logistics professionals randomly selected from the recent membership directory of the Council of Logistics Management (CLM). Since we did not know ahead of time which respondents were genuinely involved in global trade, only those whose firms were actively engaged in international logistics were asked to respond. From this group, 63 responded. Although this response rate (7.9%) is relatively low, the low survey response rate is not unusual in the empirical studies1 dealing with international logistics/sourcing issues. Another reason for a low response rate may be a lack of willingness of CLM members to respond to the high number of mail surveys that they receive each year. To extract more meaningful statistical information from this small sample, a test for non-response bias involving comparisons of "early" (e.g., responses received within three weeks of the initial mailing) and "late" respondents in terms of item responses could have been performed. However, only a very small number of late responses that we received precluded such a test. Thus, some caution should be exercised in generalizing our survey results due to a potential non-response bias. Represented in our sample are many types and sizes of multinational firms. As expected, a majority (61.9%) of the responding firms are in the manufacturing sector (33.3% in consumer goods and 28.6% in industrial goods). Other major sectors include transportation and warehousing (12.7%), wholesale and retail trade (7.9%), and wholesale trade (7.9%). The remaining sectors are retail trade (4.8%) and other service sectors. Most of the sample firms (93.7 %) had more than 100 employees; 72 percent had more than 500 employees. Ninety-five percent of the responding firms employed more than three logistics professionals. …