FCA
...
International Logistics
Logistics activities associated with goods that are sold across national boundaries.
Inter. Log. Occurs when
-Firm exports
-Firm imports
-Goods are partially assembled in on country
-Geography
Exporter
Shipper and seller of the cargo
Importer
Exporter's customer, who buys the cargo
Domestic Carrier
Train, truck, or air carrier that takes the cargo to the outgoing port
Overseas Carrier
Ship operator or air carrier that takes the cargo from domestic port to the foreign port
international freight forwarder
relied on by exporters to perform an export services because of the multitude of considerations involved in physically exporting goods
NVOCC
A non-vessel operating common carrier that arranges transport of cargo from port to importer and contracts for or purchases space on inland carriers for resale or its own use
Consolidators
Combines small shipments into large ones to qualify for full vehicle discounts. Consolidators are different then NVOCC, but they may work for them.
Difference between a NVOCC and forwarder
-NVOCC actually buy and resell space on carriers, while forwarders do not
-NVOCC perform the physical work of consolidating, loading, and unloading cargo, while forwarders do not provide labor
Parties involved in International Logistics
-Customs house broker
-Export Management Companies (EMCs)
-Export Trading Companies (ETCs)
-Export Packing Companies
NVOCC (DEF)
Non-vessel-operating-common-carrier
Picture in file service provider
...
Perks of Freight Forwarder
-Lower freight rate for companies that cannot afford direct shipment
-Consolidate small shipments from various customers into bulk shipment
-Splits the consolidated shipments into original smaller shipment
Downside of Freight Forwarder
-Preparing and presenting documents
-Obtaining insurance, Handling payments
-Tracking and expediting shipments
-Local delivery (inland transportation) may or may not be arranged by the forwarder
Pre-Carriage
Any inland movement that takes place prior to the container being delivered to the port/terminal
On-Carriage:
Any inland movement that takes place after the container is picked up from the port/terminal.
Transportation Specialists
-Transportation Based
-Warehouse/Distribution Based
-Forwarder Based
-Finance Based
-Information Based
Transportation Based
Provide inbound, outbound transportation services for ship, truck, rail, and air transportation modes using leveraged or non-leveraged assets
Warehouse/Distribution Based
Provide storage, facilities management services
Forwarder Based
Non-asset owners that provide a wide range of logistics services
Finance Based
Provide freight payment and auditing, cost accounting and control, and tools for monitoring, booking tracking, tracing, and managing inventory
Information Based
Provide internet based, B2B, electronic markets with transportation and logistics services
3rd Party Logistic (3PL)
Outsourcing all or much of a companies logistics operations to a specialized company
3rd Party Logistics Provider
A firm which provides multiple logistics services
4th Party Logistic (4PL)
A comprehensive supply chain solution which combines the capabilities of management consulting, IT technology and TPL-providers.
4th Party Logistics Provider
A supply chain integrator who assembles and manages the resources, capabilities, and technology of its organization with those of complementary service providers to deliver a comprehensive supply chain solution
Party Pyramid (PIC)
...
Transportation Specialists- Advantages
-Cost Reduction
-Improve efficiency, service and flexibility
-Focus on core competency
-Freeing up resources
-Elimination of infrastructure
-Risk sharing
-Better cash flow
-Access to resources not available at one's own organization
Transportation Specialists- Dis-advantages
-Loss of control
-Impact on in-house workforce
-More distance from clients-loss of personal touch
-Discontinuity of services of a 3PL or 4PL provider
-Differences of opinions or perception of the service level of the 3PL or 4 PL provider
Logistics Service Providers - Carrier Types
-Common Carriers
-Contract Carriers
-Exempt Carriers
-Private Carriers
Common Carriers
-Serves the general public
-Service to designated points or in designated areas
Contract Carriers
-Offer specialized service to customers on a contractual basis
-No obligation to serve the general public or to treat customers on an equal basis
Exempt Carriers
Exempted from economic regulation due to legislation
Private Carriers
-Companies whose primary business is other than transportation and provide their own transportation service
-Also exempt from economic regulation
Factors that influence International logistics
-Economic Integration
-Currency fluctuations
-Marketing strategies
-Logistics infrastructure
Economic Integration
-BRICS
-NAFTA
-TPP
Currency fluctuations
Import export imbalance (e.g. Balance of Payments), use of a common currency for trade
Marketing Strategy
Smaller single use packets called sachets due to Market size & GDP
Logistics Infrastructure
-Removal of customs control through single administrative document (e.g. C-TPAT)
-Costs associated with different modes of transportation and Port fees, and handling charges
Factors that influence International logistics
-Political Restrictions of Trade (Tariffs, import quota, embargoes)
-International Transport (cargo preference)
Laws, Regulations, and Legal systems
-Development in the approximation of indirect taxations and Tariffs
-Limits the amount of product (either in units or value) that may be imported from any one country during a period of time
-Prohibition of trade between particular countries
Cultural Considerations
-Language
-National Holidays
-Time Orientation
-Work Ethic
Export Requirement
-Packaging
-Labeling
-Documentation
-Payment Terms
-Terms of Trade
Packaging
Guidelines
-Pack in strong containers, adequately sealed and filled when possible.
-Make sure the weight is evenly distributed.
-Goods should be palletized and when possible containerized.
-Packages and packing filler should be made of moisture-resistant material.
Labeling Common Guidelines
-Shipper's mark, Country of origin
-Weight marking
-Number of packages and size of cases
-Handling marks
Documentation Requirement
-ProForma Invoice
-Commercial Invoice
-Consular Invoice
-Bill of lading / Sea or Airway Bill
-Packing List
-Carrier Freight Bill
-Declaration of Dangerous Goods
-Shippers Export Declaration
-Export and Import License
-Certificate of Origin/manufacturing/
Types of payments
-Open Account
-Bill of exchange
-Letter of credit
-Cash Advance or Forwarding
Slide 22
...
Forfaiting / Letter of Credit (LOC)
Document issued by the bank which guarantees payment to the seller provided the seller has compiled with the applicable terms and conditions of a transaction
Forfeiter
a specialized finance firm or a department in banks that offers non-recourse export financing through the purchase of medium-term trade receivables
-eliminates the risk of nonpayment
-offer periods of credit from 180 days to up to seven years.
-requires a
Financing deliveries of Goods
-Overdraft facilities
-Supplier's credits
-Consumer credits
Term of Trade- Incoterms
determining when and where to transfer the following between buyer and seller
The following transport by: Truck, Train, Plane, or boat
...
EXW
Ex Works
-Seller is responsible for making goods available at the sellers premises
-Risk and ownership of goods passes to buyer as soon as goods are made available to the buyer
-Buyer bears all costs from sellers premises to destination, including transpo
FCA
Free Carrier
-Seller clears the goods for export and hands them over to the carrier and place named by buyer
-Risk and ownership of goods passes to buyer as soon as goods are handed to the carrier
-Buyer bears all costs from the time the goods are handed
CPT
Carriage Paid To
-Seller clears the goods for export and pays all charges, including loading and freight costs (carriage), up to the place of destination
-Risk and ownership of goods passes to buyer as soon as goods are handed over to the carrier at the p
CIP
Carriage and Insurance Paid To
-Seller clears the goods for export and pays all charges, including loading and freight costs, up to the place of destination.
-The seller buys insurance
Risk and ownership of goods passes to buyer as soon as goods are hande
DAT
Delivered at Terminal
DAP
Delivered at Place
DDP
Delivered Duty Paid
The following ship only by Boat
...
FAS-Shipping
Free Alongside Ship
-Seller clears the goods for export and places them alongside the ship at the named port
-Risk and ownership of goods passes to buyer as soon as goods are placed alongside the ship at the named port
-Buyer bears all costs from the time
FOB-Shipping
Free on Board
-Seller clears the goods for export and places them on board the ship at the named port
-Risk and ownership of goods passes to buyer as soon as goods are placed on board the ship
-Buyer bears all costs from the time the goods are placed on b
CFR-Shipping
Cost and Freight
-Seller clears the goods for export and pays all charges, including loading and freight up to the destination port
-Risk and ownership of goods passes to buyer as soon as goods are placed on board the ship at the origin port
-Buyer bears
CIF-Shipping
Cost Insurance and Freight
-Seller clears the goods for export and pays all charges, including loading and freight up to the destination port. The seller buys insurance on behalf of the buyer
-Risk and ownership of goods passes to buyer as soon as goods a
EXW
Ex Works
FCA
Free Carrier
CPT
Carriage Paid To
CIP
Carriage and Insurance Paid To
DAT
Delivered at Terminal
-Seller bears all the costs until the goods are ready to be unloaded at the buyer's terminal of choice, except for import clearance cost
-Risk and ownership of goods passes to buyer as soon as goods are unloaded at the place of desti
DAP
Delivered at Place
-Seller bears all the costs until the goods are ready to be unloaded at the buyer's terminal of choice, except for import clearance cost
-Risk and ownership of goods passes to buyer as soon as goods reach the place of destination
-Buyer
DDP
Delivered Duty Paid
FAS
Free alongside shipping
-Seller bears all the costs until the goods are ready to be unloaded at the buyer's place of destination. All export and import customs clearance is the sellers responsibility.
-Risk and ownership of goods passes to buyer as soon a
FOB
Free on board
CFR
Cost and freight
CIF
Cost Insurance and Freight
Flags
Every carrier must be registered in a country and must fly the "flag" of that specific country
Flag of Convenience
Carrier registers in country with most relaxed regulations. Used to avoid taxes.
Cabotage
You have the right to sail along coastline of a country. Allows for navigation in inland waters.
A random fact
60% of cross border shipments move by water transportation
International Airfreight operation (3 types)
-chartered aircraft
-integrated air carriers
-scheduled air carriers
Chartered Aircraft
Transport livestock and pedigreed animals
Integrated air carriers
provide land pickup and delivery services for documents and small parcels
Scheduled air carriers
freight is the secondary consideration. carried in the belly of passenger aircrafts. based on negotiations between nations to operate freighters.
Types of warehouses
-Import/export
-crossdock
-Dockside transit warehouses are cross-docking facilities that manage and physically handle imported freight for redistribution to end customer
Warehouse considerations
-Facilitate in the physical inspection of inbound and outbound freight
Storage of goods due to documentation inconsistencies, sensitivity of cargo etc.
-Storage of goods for governing bodies (e.g. FDA) to conduct inspection of random samples
-Facilitate 3
Logistics Performance Index(LPI)
Measures a countrys performance across six logistical dimensions.
Efficiency,Quality,Ease, Competence, Ability to track and trace, Timeliness
FCA
...
International Logistics
Logistics activities associated with goods that are sold across national boundaries.
Inter. Log. Occurs when
#NAME?
Exporter
Shipper and seller of the cargo
Importer
Exporter's customer, who buys the cargo
Domestic Carrier
Train, truck, or air carrier that takes the cargo to the outgoing port
Overseas Carrier
Ship operator or air carrier that takes the cargo from domestic port to the foreign port
international freight forwarder
relied on by exporters to perform an export services because of the multitude of considerations involved in physically exporting goods
NVOCC
A non-vessel operating common carrier that arranges transport of cargo from port to importer and contracts for or purchases space on inland carriers for resale or its own use
Consolidators
Combines small shipments into large ones to qualify for full vehicle discounts. Consolidators are different then NVOCC, but they may work for them.
Difference between a NVOCC and forwarder
#NAME?
Parties involved in International Logistics
#NAME?
NVOCC (DEF)
Non-vessel-operating-common-carrier
Picture in file service provider
...
Perks of Freight Forwarder
#NAME?
Downside of Freight Forwarder
#NAME?
Pre-Carriage
Any inland movement that takes place prior to the container being delivered to the port/terminal
On-Carriage:
Any inland movement that takes place after the container is picked up from the port/terminal.
Transportation Specialists
#NAME?
Transportation Based
Provide inbound, outbound transportation services for ship, truck, rail, and air transportation modes using leveraged or non-leveraged assets
Warehouse/Distribution Based
Provide storage, facilities management services
Forwarder Based
Non-asset owners that provide a wide range of logistics services
Finance Based
Provide freight payment and auditing, cost accounting and control, and tools for monitoring, booking tracking, tracing, and managing inventory
Information Based
Provide internet based, B2B, electronic markets with transportation and logistics services
3rd Party Logistic (3PL)
Outsourcing all or much of a companies logistics operations to a specialized company
3rd Party Logistics Provider
A firm which provides multiple logistics services
4th Party Logistic (4PL)
A comprehensive supply chain solution which combines the capabilities of management consulting, IT technology and TPL-providers.
4th Party Logistics Provider
A supply chain integrator who assembles and manages the resources, capabilities, and technology of its organization with those of complementary service providers to deliver a comprehensive supply chain solution
Party Pyramid (PIC)
...
Transportation Specialists- Advantages
-Cost Reduction
-Improve efficiency, service and flexibility
-Focus on core competency
-Freeing up resources
-Elimination of infrastructure
-Risk sharing
-Better cash flow
-Access to resources not available at one's own organization
Transportation Specialists- Dis-advantages
-Loss of control
-Impact on in-house workforce
-More distance from clients-loss of personal touch
-Discontinuity of services of a 3PL or 4PL provider
-Differences of opinions or perception of the service level of the 3PL or 4 PL provider
Logistics Service Providers - Carrier Types
#NAME?
Common Carriers
#NAME?
Contract Carriers
#NAME?
Exempt Carriers
Exempted from economic regulation due to legislation
Private Carriers
#NAME?
Factors that influence International logistics
#NAME?
Economic Integration
#NAME?
Currency fluctuations
Import export imbalance (e.g. Balance of Payments), use of a common currency for trade
Marketing Strategy
Smaller single use packets called sachets due to Market size & GDP
Logistics Infrastructure
-Removal of customs control through single administrative document (e.g. C-TPAT)
-Costs associated with different modes of transportation and Port fees, and handling charges
Factors that influence International logistics
#NAME?
Laws, Regulations, and Legal systems
#NAME?
Cultural Considerations
#NAME?
Export Requirement
#NAME?
Packaging
Guidelines
#NAME?
Labeling Common Guidelines
-Shipper's mark, Country of origin
-Weight marking
-Number of packages and size of cases
-Handling marks
Documentation Requirement
-ProForma Invoice
-Commercial Invoice
-Consular Invoice
-Bill of lading / Sea or Airway Bill
-Packing List
-Carrier Freight Bill
-Declaration of Dangerous Goods
-Shippers Export Declaration
-Export and Import License
-Certificate of Origin/manufacturing/
Types of payments
#NAME?
Slide 22
...
Forfaiting / Letter of Credit (LOC)
Document issued by the bank which guarantees payment to the seller provided the seller has compiled with the applicable terms and conditions of a transaction
Forfeiter
a specialized finance firm or a department in banks that offers non-recourse export financing through the purchase of medium-term trade receivables
-eliminates the risk of nonpayment
-offer periods of credit from 180 days to up to seven years.
-requires a
Financing deliveries of Goods
-Overdraft facilities
-Supplier's credits
-Consumer credits
Term of Trade- Incoterms
determining when and where to transfer the following between buyer and seller
The following transport by: Truck, Train, Plane, or boat
...
EXW
Ex Works
-Seller is responsible for making goods available at the sellers premises
-Risk and ownership of goods passes to buyer as soon as goods are made available to the buyer
-Buyer bears all costs from sellers premises to destination, including transpo
FCA
Free Carrier
-Seller clears the goods for export and hands them over to the carrier and place named by buyer
-Risk and ownership of goods passes to buyer as soon as goods are handed to the carrier
-Buyer bears all costs from the time the goods are handed
CPT
Carriage Paid To
-Seller clears the goods for export and pays all charges, including loading and freight costs (carriage), up to the place of destination
-Risk and ownership of goods passes to buyer as soon as goods are handed over to the carrier at the p
CIP
Carriage and Insurance Paid To
-Seller clears the goods for export and pays all charges, including loading and freight costs, up to the place of destination.
-The seller buys insurance
Risk and ownership of goods passes to buyer as soon as goods are hande
DAT
Delivered at Terminal
DAP
Delivered at Place
DDP
Delivered Duty Paid
The following ship only by Boat
...
FAS-Shipping
Free Alongside Ship
-Seller clears the goods for export and places them alongside the ship at the named port
-Risk and ownership of goods passes to buyer as soon as goods are placed alongside the ship at the named port
-Buyer bears all costs from the time
FOB-Shipping
Free on Board
-Seller clears the goods for export and places them on board the ship at the named port
-Risk and ownership of goods passes to buyer as soon as goods are placed on board the ship
-Buyer bears all costs from the time the goods are placed on b
CFR-Shipping
Cost and Freight
-Seller clears the goods for export and pays all charges, including loading and freight up to the destination port
-Risk and ownership of goods passes to buyer as soon as goods are placed on board the ship at the origin port
-Buyer bears
CIF-Shipping
Cost Insurance and Freight
-Seller clears the goods for export and pays all charges, including loading and freight up to the destination port. The seller buys insurance on behalf of the buyer
-Risk and ownership of goods passes to buyer as soon as goods a
EXW
Ex Works
FCA
Free Carrier
CPT
Carriage Paid To
CIP
Carriage and Insurance Paid To
DAT
Delivered at Terminal
-Seller bears all the costs until the goods are ready to be unloaded at the buyer's terminal of choice, except for import clearance cost
-Risk and ownership of goods passes to buyer as soon as goods are unloaded at the place of desti
DAP
Delivered at Place
-Seller bears all the costs until the goods are ready to be unloaded at the buyer's terminal of choice, except for import clearance cost
-Risk and ownership of goods passes to buyer as soon as goods reach the place of destination
-Buyer
DDP
Delivered Duty Paid
FAS
Free alongside shipping
-Seller bears all the costs until the goods are ready to be unloaded at the buyer's place of destination. All export and import customs clearance is the sellers responsibility.
-Risk and ownership of goods passes to buyer as soon a
FOB
Free on board
CFR
Cost and freight
CIF
Cost Insurance and Freight
Flags
Every carrier must be registered in a country and must fly the "flag" of that specific country
Flag of Convenience
Carrier registers in country with most relaxed regulations. Used to avoid taxes.
Cabotage
You have the right to sail along coastline of a country. Allows for navigation in inland waters.
A random fact
60% of cross border shipments move by water transportation
International Airfreight operation (3 types)
#NAME?
Chartered Aircraft
Transport livestock and pedigreed animals
Integrated air carriers
provide land pickup and delivery services for documents and small parcels
Scheduled air carriers
freight is the secondary consideration. carried in the belly of passenger aircrafts. based on negotiations between nations to operate freighters.
Types of warehouses
#NAME?
Warehouse considerations
-Facilitate in the physical inspection of inbound and outbound freight
Storage of goods due to documentation inconsistencies, sensitivity of cargo etc.
-Storage of goods for governing bodies (e.g. FDA) to conduct inspection of random samples
-Facilitate 3
Logistics Performance Index(LPI)
Measures a countrys performance across six logistical dimensions.
Efficiency,Quality,Ease, Competence, Ability to track and trace, Timeliness