Chapter 13. Global supply chains and distribution networks

• Supply chains and distribution channels
• Hub and spoke concept in physical supply and distribution
• Transport modes and concepts
• Terminals and warehouses in international business
• Responsibilities of actors in international transportation
• Questions for chapter review
• Chapter bibliography

This chapter is dedicated to examining the architecture of physical distribution in global business. The reader is introduced with the principle of hub and spoke in transportation, which allows ensuring a significant reduction in costs, but at the same time creates conditions for the concentration of production and distribution in just a dozen places around the world. Gigantic logistics centres, seaports and airports serving international trade form a certain backbone of the global supply system. These critical locations of logistics and cargo concentration become essential, which even determine the choice of location for new factories and even define growth of cities and formation of megalopolis.

The chapter provides a structured presentation of raw material and component supply chain concepts. Depending on the global business model and the product, choice of the transport modes of vary greatly. The chapter describes the criteria for election of transport solutions for individual cases.

The reader is also introducing with the importance of warehouses and terminals in the global trade system, understand the concept of a bonded warehouse and its advantages. The chapter links the concepts of distance, type of goods to duration and price of delivery.

In international trade, when sending goods, the question of payment for the goods and responsibility for the loss or damage of the goods during transportation always arises. The chapter explains international commerce terms – INCOTERMS. By examining them, the reader can understand how the price of the same product for the same quantity can vary significantly depending on the trade terms chosen, including the place of transfer of the product, insurance, risk and payment for transport.

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