INTERNATIONAL PHYSICAL DISTRIBUTION

Technologist in international negotiation

2066471

PREPARED BY: Bernardo Pérez Garcia

CC 1110557434

PRESENTED TO: Alejandra Osorio Mendoza

SENA REGIONAL TOLIMA

COMMERCE AND SERVICES CENTER
2021
 International Physical Distribution

What are the advantages of reducing logistics and transportation costs in

International Physical Distribution and the disadvantages of high costs in it?

The International Physical Distribution (DFI) is the logistical process of operations

that are carried out to move a product from a point of origin to an international market,
according to the terms previously negotiated between the seller and the buyer. Its
main objective is to minimize the time, costs and risk that can be generated during
the journey, from the point of departure at origin to the point of delivery at destination.

In this process, a large number of factors must be taken into account, such as the
type of load, packaging and packaging, type of transport, logistics operators,
INCOTERMS, among others, that intervene and positively or negatively sense the
entire logistics process. Therefore, it is important to know what are the advantages
and disadvantages that occur when an adequate and mismanagement of the
logistics process is carried out in terms of costs and other factors that intervene.

Optimal logistics is key to maximum efficiency and effectiveness, since the less time
a product remains in each of the stages of a logistics chain, the lower costs will be,
and thus, obtain greater operational profits.

Regarding transport logistics, it is very susceptible to changes in the environment,

such as variations in market demand, social problems, the price of fuel, weather
conditions, among others. Regulating and reducing these costs is important since it
impacts various logistics areas of the company and ultimately customers and
consumers. Some benefits of carrying out proper management of this area are:
- Helps to optimize processes
By reducing transportation costs and identifying obsolete processes that lead to cost
overruns, it is possible to optimize all processes within the company, such as
inefficient routes, obsolete technologies.
- Promotes savings and reinvestment.

The savings from the reduction of transport costs can be reinvested in other
important areas for the same logistical land transport, for example, through the
implementation of mobile technologies, the acquisition of more suitable vehicles, the
training of transporters, among others.
- Lower costs for the end customer.
By reducing transportation costs in distribution logistics, greater productivity and
competitiveness are achieved, reflecting this in lower prices for customers.
- Higher profits.
Lowering costs will bring more profit for business owners
- Ability to invest in new markets.

Allocating the money saved, it will be possible to carry out market studies to cover
new market niches.

On the other hand, the disadvantages that the mismanagement of transport logistics
costs brings are:
- Loss of markets
When a company does not plan its distribution routes optimally, higher costs are
assumed, therefore the opportunity to discover new and better routes for the
transport of goods is being wasted.
- Loss of clients

the cost overruns assumed by the company are passed on to the consumer, prices
increase.
- Excess inventories

By having higher prices, due to cost overruns, sales will decrease and inventories
will increase.
- Loss of competitiveness
- Misuse of available resources
- Waste of competitive advantages.
From the above, it can be concluded that a large number of factors intervene in
international physical distribution (DFI) that affect the logistics process in all the
phases involved in preparing a product to transport it from a starting point to an
arrival point, either locally. or international. Similarly, it is extremely important to
properly manage the entire logistics process, since this can bring a large number of
benefits and losses for the company, such as increasing or decreasing customers,
being able to direct resources to new projects, obtain higher profits, among others
mentioned above.
 REFERENCES
https://www.beetrack.com/es/blog/costos-de-transporte-terrestre-logistica
https://bibliotecadigital.ccb.org.co/bitstream/handle/11520/11675/100000048.pdf