Like in most parts of the world, the consumer packaged goods (CPG) market makes up a significant chunk of the Canadian retail economy. The CPG supply chain ensures that vital, everyday products such as food and beverages, health-related products, and household goods are available on demand to customers. As with many industries, the supply and demand for these goods often cross international borders. This makes CPG logistics essential for ensuring products are available when and where they are needed.
Given that the CPG logistics market leverages international markets to meet its customers’ demands, it does present some challenges and opportunities. This article explores the challenges and opportunities businesses can anticipate, equipping them with the knowledge to navigate the market effectively and stay informed for improved throughputs.
Cross-border operations come with their fair share of complexities. Beyond maintaining the flow of goods, the businesses involved in the operation still have to deal with the regulatory complexities of shipping across international borders and manage the growing customer demands for global products.
Cross-border CPG logistics allows businesses to manage all nuances involved in international shipping, including transportation, warehousing, inventory management, and customs clearance, no matter how complex. Then, ensure the goods in question are delivered to the customers on time and in the right condition.
When done right, cross-border CPG logistics also enables businesses to expand their product offerings, allowing them to meet diverse customer needs by tapping into growing demand for international CPG products.
Any average logistics operation comes with its fair share of challenges. Still, cross-border CPG logistics adds another layer of complexity because of the nature of the product and the nuances of international shipping.
Because of their health-related nature, some CPG products typically require extensive documentation and stricter regulations. This can be challenging for international shipping, but these products also draw more attention from officials, potentially leading to delays or increased operational costs.
Transporting goods across borders means dealing with varying costs. These entail fuel, labor, and warehousing. Considering these costs or factors often fluctuate, the bill can easily skyrocket if resources are not deployed to extensively manage them.
Although international shipping is more important than ever before, the current state of the process leaves much to be desired by supply chains. Whether it is security challenges or weather disruptions, logistics operations can be easily delayed, potentially leading to downtime in the supply chain.
Regulatory standards are increasingly complex and with good reason. And navigating these standards can be complex for the CPG businesses involved as well. For instance, poor compliance or failure to comply in certain areas can introduce the business involved to a world of trouble, including fines, shutdowns (temporary and permanent), and sometimes poor customer satisfaction.
Navigating the complexities of cross-border CPG logistics can be challenging, but the potential rewards make it a valuable pursuit for businesses.
The Canadian e-commerce market is expected to grow at a CAGR of 9.76% between 2024 and 2029, with a projected market volume of $104.4 billion by 2029. This e-commerce growth continues to benefit several industries, including CPG logistics.
As Canadians continue to purchase from international retailers and brands, there is an increased need for the cross-border logistics infrastructure to provide faster and more efficient shipping solutions. More companies can latch onto the e-commerce boom while leveraging CPG logistics providers like Zengistics to cater to more customers.
With growing pressure from customers, governments, and businesses to adopt sustainable practices, the CPG logistics industry is being driven toward reducing greenhouse gas emissions and increasing operational efficiency. Companies prioritizing sustainability gain a competitive edge, enabling them to differentiate themselves in the market and seize new growth opportunities with less competition.
Technology solutions are transforming how businesses can manage their logistics operations. Today, foundational needs like transparency and risk mitigation have become more achievable through technologies around real-time tracking and predictive analytics.
Businesses can now easily streamline and optimize their logistics operations. This makes investing in tech solutions a no-brainer and allows for much more efficiency when transporting across borders.
Collaboration among manufacturers, logistics providers, and retailers can lead to more efficient cross-border logistics. However, the glue is communication. It enhances the ability of the stakeholders to work together. This way, they all have an easier time sharing resources, reducing the cost of the operations, mitigating risks, and improving the overall efficiency of supply chain management.
Zengistics was founded on the belief that our collaborative technology platform can bring large-scale efficiency through collaboration and tech enablement for the CPG logistics industry. In Canada, we are streamlining shipping solutions for businesses involved in the industry by providing end-to-end solutions, complete transparency throughout the entire supply chain, and enhancing connectivity via our established network or partners. We can do the same for you. Contact us today.
Operating on the world’s first collaborative logistics platform, Zengistics is a technology company that executes freight.
