Global L-7
The book International logistics: The management of international trade operations examines the concept of international trade, as well as the growth of trade. David (20130 posits that milestones like the creation of Euro, economic agreements like the treaty of Rome and the European Union, the World Trade Organizations, and the Bretton Wood Conference stimulating the growth of international trade. With the rise of exporting and importing countries, several factors such as cost, competition, market, and technology got attributed to driving the trade. The literature examines the international business environment through the lens of different theories of global trade, which include the theory of Absolute Advantage, theory of Comparative Advantage, Factor Endowment Theory, Product Life Cycle, Cluster, Theory, and Logistic Cluster Theory.
Correspondingly, David (2013) hypothesizes on the development of international Supply Chain Management through history. The advancement in Supply Chain Management attributes the strategic advantage and emphasis on customer satisfaction. Logistics has a close connectedness with supply chain management, and its elements play a significant role in defining the activities of logistics within supply chain management, thereby impacting several countries, both in the United States and globally. David (2013) argues that international infrastructure plays a significant role in facilitating the development of projects that are of significance to the emerging markets and the growing cities. These infrastructures include transportation, Communication, Utilities, Services, and Legal and Regulatory infrastructure.
Entry in International trade gets determined by strategic entry factors, indirect and active exporting, global productions or services, and the presence of parallel imports and counterfeit goods. Anti-bribery conventions, corporations of foreign sales, maquiladoras, and the zones of foreign trade also influences entry to international trade. David (2013) points out that international trade gets governed by the International Sales Contracts and the CISG with particular elements of Agency-Distributor agreements controlling legal issues through termination, mediation, and arbitration processes. The literature also outlines and defines the broad terms or rules of trades, as well as terms of payment as used in international trade. The currency used in the sales contract, the system of currency exchange rates, the theories that determine exchange rates, forecasting of exchange rates, management of transaction exposure, and identification of banking institutions are essential in managing transaction risks in international trade (David, 2013).
Moreover, international trade is a critical process that requires documentation of financial data such as invoices, import, export, and transportation documents. Insurance policies are in place to manage risks and manage the risks faced by international logistics. Notably, international trade gets underlined by different logistics that enabling the flow of goods via several means, including international ocean, air, land, and multimodal transportation (Long, 2003). Logistic management also encompasses the processes that range from the packaging of products for export and transportation to international warehouses and distribution centers. According to David (2013), disruptions in international logistics security are enhanced through corporate efforts and approaches distinct to different countries. Non-tariff barriers and duty are, therefore, included in customs clearance between different zones of foreign trade.