Introduction into Logistics
PhD Natasha Lutovinova
Logistics Lecturer
E-mail: [email protected]
Room: G1.006
Handbook: Paul R. Murphy & Donald F. Wood,
Contemporary logistics (New Jersey 2011), 10th edition
3
Introduction into Logistics Course Outline
12.05 Introduction
13.05 SCM Concept, Inventory
14.05 Demand Management, Warehousing Management
15.05 Transportation Management, International Logistics
16.05 Poster Session
Learning Objectives
To identify the reasons for governmental
intervention in the area of international trade
To examine international documentation as
well as terms of sale and payment
To examine transportation and inventory
considerations in international distribution
5-7
Macroenvironmental Influence on the International
Logistics
1. Political factors: Changes to political landscape
affect logistics
The end of Soviet rule in Eastern Europe
EU economic integration/Customs Alliance RBK
NAFTA North American Free Trade Agreement (USA,
Canada, Mexico, 01.01.1994)
Tariff barriers
Nontariff barriers- temporary limits for export-import of
some goods:
1. Measures of direct limitations (licensing, quota)
2. Special protection measures (import quota, special
duties)
3. Administrative and customs formalities (boarder tax,
documents fee, anti-dumping measures)
Restrictions on truck traffic, forcing freight onto rail and
water
Embargoes
6-7
Macroenvironmental Influence on the International
Logistics
Changes to political landscape affect logistics
Customs Alliance RKB
Free Trade Zone: Russia, Belorussia,
Ukraine, Kazakhstan, Kirgizia, Armenia,
Moldavia, Tadzhikistan: 18.10.2011
Customs Alliance vs Free trade Zone
7-7
Macroenvironmental Influence on the International
Logistics
Changes to political landscape affect logistics
Sea-port Klaipeda (Lithuania) KlaipėdosSmelt
terminal and RO-RO Klasko, “Mercury”
container train
Draugystė station of departure -MoscowSilikatnaya (Russia), Ekodor container
terminal
114 TEU,
weekly on Friday, 48 hours,
signed: 02.04.2012, AAAIntermodal Ltd.,
Lithuania
Sea-port Rotterdam (The Netherlands)Smolensk (Russia)
8-7
Macroenvironmental Influence on the International
Logistics
Changes to political landscape affect logistics
Container Trains:
- “Mercury” (Klaipeda (Lithuania) – Moscow
(Russia)
- “Viking” (Odessa/Ilichevsk (Ukraine)-Minsk
(Belorussia)-Klaipeda (Lithuania)
- «ZUBR» (Tallinn (Estonia) — Riga (Latvia) —
Minsk (Belorussia) — Odessa/Ilichevsk
(Ukraine)
- “Mongolsky vector” (Mongolian vector) (Brest
(Belorussia) — Iletzk (Russian-Kazakh
border) — Ulan-Bator (Mongolia)
9-7
Macroenvironmental Influence on the International Logistics
Government Influences on Foreign Trade
Government’s Role in International Transport
Cargo preference
Government support their own carrier
International carriage is an export to the nation
operating the carrier - affects balance of payments
International fleets, railroads and airlines may be
subsidized
Balance of payments – system of accounts that
records country’s international financial transactions
10 - 7
Macroenvironmental Influence on the
International Logistics
2. Economic Factors:
Currency fluctuation
Market size
Income
Economic integration
Logistics Infrastructure
11 - 7
Macroenvironmental Influence on the
International Logistics
3. Cultural factors:
- Language
- National holidays
- Time orientation
- Values
- Religion
12 - 7
Figure 12-1: Some of the symbols used for
packing export shipments
13 - 7
Figure 12-2: A Package Marked for Export
14 - 7
The export procedure
1
Exporter
Importer
4
2
Bank in
exporter’s
country
5
Importer’s
bank
3
Import
warehouse
8
Manufacturing
Customs
Secure transport
and documentation
6
Source: Albaum et al., 1994, p. 419.
15 - 7
7
Ship
9
Documentation
Certificate of origin
Commercial invoice
Packing list
Bill of Lading, Air waybill, Rail waybill, CMR
Shipper’s export declaration (SED)
Shipper’s letter of instruction (SLI)
Correction telegram
16 - 7
Terms of Sale and Payment
Terms of sale:
Determining when and where to transfer between
buyer and seller:
The physical goods
Payment for the goods, freight, insurance
Legal title
Required documents
Responsibility and risk
Incoterms 2010: by International Chamber of
Commerce in 2010, in force: 01.01.2011
17 - 7
Terms of Sale — Incoterms 2010
Sea & Inland Waterway:
FAS (Free Alongside
Ship)
FOB (Free on Board)
CFR (Cost and Freight)
CIF (Cost, Insurance,
and Freight)
Any mode(s) of transport:
ExW (Ex Works)
FCA (Free Carrier)
CPT (Carriage Paid To)
CIP (Carriage & Insurance
Paid to)
DAT (Delivered at
Terminal)
DAP (Delivered at Place)
DDP (Delivered Duty
Paid)
http://www.kalgin.com.au/incoterms.html
18 - 7
19 - 7
20 - 7
Methods of Payment
- Cash in advance
- Letter of credit
- Bills of exchange
- Open account
Documents involved in L/C requirements:
- Commercial invoice
- Packing list (2 copies)
- Certificate of origin ( 2 copies)
- Bill of lading (original)
Influences the selling price
21 - 7
Letter of Credit:
- irrevocable
- revocable
- sight
- time
- date
Documents:
- Commercial invoice
- Bill of lading (original)
- Insurance
22 - 7
Most common export documents
Transportation
• Bill of lading
(SmartBOL Classic bill of
lading software)
• Dock receipt
• Insurance
certificate
Banking
• Letter of credit
Commercial
• Commercial invoice
• Packing List
Government
• Export declaration
• Consular invoice
• Certificate of origin
• Quality Certificate
• Phytosanitary
(Fumigation)Certificate
Most common export documents
Government
• Phytosanitary (Fumigation)Certificate
International Standards For Phytosanitary Measures No. 15 (ISPM 15)
IPPC – International Plant Protection Convention
25 - 7
International Trade and Supply Chain
Specialists
International Freight Forwarders
International Freight Forwarders
Advising on acceptance of letters of credit
Booking space on carriers
Preparing an export declaration
Preparing an air waybill or bill of lading
Obtaining consular documents
Arranging for insurance
Preparing and sending shipping notices and
documents
Serving as general consultants on exportimports matters
26 - 7
International Trade and Supply Chain
Specialists
International Freight Forwarders
Nonvessel-Operating Common Carriers
(NVOCC), difference:
1. Can issue their own Bills of lading
2. Can set their own rates for ocean and
intermodal shipments
3. Can enter into service contracts with
ocean carriers
27 - 7
A Forwarder’s Export Quotation
Sheet Showing Factors to
Include When Determining a
Price Quote
International Trade and Supply Chain
Specialists
Customs Brokers
Export Management Companies (export
sales department)
Export packers
29 - 7
International Trade and Supply Chain
Specialists
Transportation Considerations in
International Distribution:
- Ocean shipping
- Shipping Conferences and alliances
- International airfreight
- Surface transport considerations
30 - 7
International Trade and Supply Chain
Specialists
Ocean Shipping
Shipping conferences (Before 90’s )
Ocean carrier alliances
The grand alliance(OOCL,HL,MISC,NYK,MSC)
The New World Alliance(APL, HYUNDAI, Mitsui
O.S.K. lines (MOL))
CYKH Alliance - (China Ocean shipping company
(COSCO), K-LINE, YANG MING,HANJIN)
Benefits:
Sharing space
Broader service network
31 - 7
World Seaborne trade 1969-2010
Foto Google door
student
32 - 7
International Seaborne Trade and Exports of Goods, 19552005
11
Seaborne Trade (billions of tons of goods
loaded)
Exports of Goods (trillions of $US)
10
9
8
7
6
5
4
3
2
1
33 - 7
05
20
01
03
20
20
97
95
93
91
99
19
19
19
19
19
87
85
83
81
89
19
19
19
19
19
77
79
19
19
73
71
75
19
19
19
67
69
19
19
63
61
65
19
19
19
57
59
19
19
19
55
0
International Trade and Supply Chain
Specialists
Ocean Shipping
Load centers
34 - 7
Top-10 Shipping lines,
October 2011
Rank
Operator
TEU
Owned
Ships
TEU
Chatered
Ships
TEU
Ships
% Chart
2,477,244
650 1,169,985
216 1,307,259
434
52.8%
2
APM-Maersk
MSC
(Mediterranean
Shipping
Company)
2,035,863
473
985,687
206 1,050,176
267
51.6%
3
CMA CGM Group
1,348,292
403
506,14
94
842,152
309
62.5%
4
COSCO Container
Lines
642,467
146
348,427
96
294,04
50
45.8%
5
Hapag-Lloyd
621,889
143
283,786
61
338,103
82
54.4%
6
Evergreen Line
609,178
167
330,167
88
279,011
79
45.8%
7
APL
590,972
144
169,547
45
421,425
99
71.3%
8
CSCL
509,2
145
315,864
76
193,336
69
38.0%
9
Hanjin Shipping
489,381
103
220,895
37
268,486
66
54.9%
435,565
103
215,352
36
220,213
67
50.6%
1
10 MOL
35 - 7
Total
Source: www.alphaliner.com
Maritime Routes and Strategic Locations
Gibraltar
Bosporus
Suez
Hormuz
Bab el-Mandab
Panama
Malacca
Good Hope
Magellan
Copyright © 1998-2007, Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part,
in ANY form (printed or electronic) and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
36 - 7
Capacity of Key Strategic Passages
Panama
Suez
Malacca
Minimum depth
12 meters (40 feet)
16 meters (58 feet)
21 meters (68 feet)
Length
64 km
190 km
800 km
Standard
Panamax
Suez-max
Malacca-max
Capacity
65,000 dwt
210,000 dwt
300,000 dwt
TEU
4,800
12,000
18,000
Transit time
16.5 hours
10 to 12 hours
20 hours
© 1998-2007, Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part,
37Copyright
-7
in ANY form (printed or electronic) and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Pirates
http://www.iccccs.org/index.php?option=com_fabrik&view=visualization&controller=visuali
zation.googlemap&Itemid=219
2010: $ 210 mln. Payouts To Somali pirates
38 - 7
The Northern East-West Freight Corridor
Ru
s
Haparanda/Tornio
Narvik
si
5,600 km
a
Halifax 8 Days
1 Day
600 km
0.3 Day
Narvik 0.6 Day Tornio
970 km
1 Day
9,870 km
1 Day Vainikkala
8.2 Days
Vostochny
Vostochny
Freight Transport Sequence
Finland
Oulu
Sweden
Vainikkala
St. Petersburg
Harbin
Lianyungang
Beijing
Scandinavian Segment
Zabaykalsk
Lanzhou
Canada
Ulaanbaatar
Arctic Bridge
Irkutsk
China
Mongolia
Northern Sea Route
Northwest Passage
Russia
Urumqi
Novosibirsk
Druzhba
Lokot
Astana
New York
Boston
Yekaterinburg
Presnogorkovka
Kazakhstan
Perm'
Archangel'sk
Haparanda/Tornio
Halifax
Oulu
Vologda
Vainikkala
St. Petersburg
Moscow
Transatlantic Segment
Rail Main Trunk (Broad Gauge)
Port
Rail Main Trunk (Standard Gauge)
Rotterdam
Gauge Change
Rail Terminal
Azimuthal Equidistant Polar Projection
Brest
Rail Connector (Broad Gauge)
Rail Connector (Standard Gauge)
© 1998-2007, Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain
39Copyright
-7
and cannot be published, in whole or in part, in ANY form (printed or electronic) and on any media without consent. This includes conference presentations. Permission MUST be requested prior to
International Trade and Supply Chain
Specialists
Surface Transport in Other Countries
- Country’s infrastructure
- Sources of delay
- Service performance
Alternative:
Short sea shipping (SSS)
40 - 7
International Trade and Supply Chain
Specialists
International Airfreight
International Air Transport Association (IATA)
Chartered aircraft
Integrated air carrier (UPS, FedEx, DHL)
Scheduled air carrier
Bilateral agreements
Open skies agreements
41 - 7
Scheduled international freight tonnekilometres flown
Rank
1
2009
2008
2007
2006
(millions)
(millions)
(millions)
(millions)
(millions)
Airline
Cathay Pacific
9,587
7,722
8,245
8,225
6,914
Korean Air Cargo
9,487
8,225
8,822
9,498
8,680
Emirates SkyCargo
7,913
6,369
6,013
5,497
5,027
4
Lufthansa Cargo
7,422
6,660
8,194
8,336
8,077
5
7,421
5,808
6,582
6,47
6,136
6
FedEx Express
Singapore Airlines
Cargo
7,001
6,455
7,486
7,945
7,991
7
China Airlines
6,410
4,903
5,261
6,301
6,099
8
UPS Airlines
5,215
4,495
5,289
5,077
9
Eva Air
5,166
-
-
-
-
10
Cargolux
4,901
4,652
5,334
5,482
5,237
2
3
42 - 7
2010
Largest Airline Companies by Revenue, 2010
(in $ millions)
Group
Lufthansa Group
Revenue ($B)
operating result ($B)
net result ($B)
36.1
1.76
1.49
United Continental Holdings 34.0
1.82
0.85
Delta Air Lines
31.8
2.22
0.59
Air France-KLM Group
31.3
0.16
0.81
FedEx Express
24.6
1.23
AMR Corporation
22.2
0.31
-0.41
International Airlines Group
(British Airways/Iberia)
19.5
0.30
0.13
Japan Airlines Corporation 16.0
2.22
All Nippon Airways Group
0.80
16.0
0.27
The
Emirates
Group
14.8
source
: Airline
Business August
2011, Flightglobal
1.48 Data Research
1.46
43 - 7
International Trade Inventories
Uncertainty- high safety stock
Return items are impossible to accommodate
Inventory valuation – exchange rate changes
Warehousing facility and management
44 - 7
Logistics Performance Index
2007, updated 2010:
Efficiency of the clearance process by border
control agencies including customs
Quality of trade- and transport-related
infrastructures
Ease of arranging competitively priced shipments
Competence and quality of logistics services
Ability to track and trace a shipment
Timeliness of shipments in reaching the
destination within the scheduled or expected
delivery time (ETA)
45 - 7
.
LPI
Ran
k
Country
LPI
Customs
Infrastructur International Logistics
Tracking &
e
shipments competence
tracing
1
Germany
4.11
4.00
4.34
3.66
4.14
4.18
4.48
2
Singapore
4.09
4.02
4.22
3.86
4.12
4.15
4.23
3
Sweden
4.08
3.88
4.03
3.83
4.22
4.22
4.32
4
Netherlands
4.07
3.98
4.25
3.61
4.15
4.12
4.41
5
Luxembourg
3.98
4.04
4.06
3.67
3.67
3.92
4.58
6
Switzerland
3.97
3.73
4.17
3.32
4.32
4.27
4.20
7
Japan
3.97
3.79
4.19
3.55
4.00
4.13
4.26
8
United Kingdom
3.95
3.74
3.95
3.66
3.92
4.13
4.37
9
Belgium
3.94
3.83
4.01
3.31
4.13
4.22
4.29
10
Norway
3.93
3.86
4.22
3.35
3.85
4.10
4.35
Logistics Performance Index
1 = lowest possible score, 5 = highest possible score
46 - 7
Timeliness
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