New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

LOGT 4232 Week 3 (Aug 30 - Sept 1) Class Notes

by: Tavish Smith

LOGT 4232 Week 3 (Aug 30 - Sept 1) Class Notes LOGT 4232

Marketplace > Georgia Southern University > Logistics > LOGT 4232 > LOGT 4232 Week 3 Aug 30 Sept 1 Class Notes
Tavish Smith
GPA 3.93

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These are the class notes from week 3 (August 30th through September 1st) with textbook supplements.
International Logistics
Heidi Celebi
Class Notes
Logistics, International, Packaging
25 ?




Popular in International Logistics

Popular in Logistics

This 10 page Class Notes was uploaded by Tavish Smith on Tuesday September 6, 2016. The Class Notes belongs to LOGT 4232 at Georgia Southern University taught by Heidi Celebi in Fall 2016. Since its upload, it has received 5 views. For similar materials see International Logistics in Logistics at Georgia Southern University.


Reviews for LOGT 4232 Week 3 (Aug 30 - Sept 1) Class Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/06/16
Week 3 – August 30, 2016 – September 1, 2016 Chapter 4 – Methods of Entry in Foreign Markets Market Factors  4 market factors: o Size o Growth o Market share o Characteristics  Cultural tastes and preferences  Customers  2 firm factors: o Strategy o Involved  2 product factors: o Type o Life cycle Entering a New Market  Indirect exporting o Exporter does not seek export sales o Allows manufacturer to concentrate on domestic market and leave exporting to the experts o Least involved in other countries  Active exporting o Exporter actively participates in finding potential markets abroad o Best option for large firms or firms with international experience Indirect Exporting  Export trading companies (ETC) o A firm with offices in multiple countries that purchases goods in one country and resells them in another o For the “exporter” selling to the ETC and “importer” buying from the ETC, the transactions are domestic o Core competency = networking o Middle man  Export management companies (EMC) o Normally located in the exporting company o Acts as a representative for the exporter abroad, but never takes title to the goods o Facilitator helping the exporter find buyers, and earns a commission on the sale o Requires more involvement by the exporter  Ship the goods  Invoice the importer  Carry the risk of non-payment  Manage parts of the transaction  Specific to one company or product  Piggy backing o The possibility of a small firm piggy-backing on another firm’s efforts to enter a foreign market o A firm uses another company’s distribution channels and experience to sell its products abroad o A firm’s customer opens a manufacturing facility abroad and request the firms sell to that new facility Active Exporting  Agent o Small firm or individual located in the importing country o Acts as a representative of the exporter o He or she will not take title of the goods and will earn a commission from the exporter o Represents multiple companies manufacturing products that complement the exporter’s products  Distributor o Located in the importing country o Purchases the goods from the exporter and therefore take title of them o Resells the goods for a profit o Two sets of invoices  Between exporter and importer = international  Between distributor and customer = domestic o Parallel imports possible from this point onward until subsidiary  Marketing Subsidiary o Foreign office of a parent organization o Separate entity incorporated in the foreign country o Wholly owned by the parent company o Parent company sells products to the subsidiary in an international transaction and sell these products to customers in the foreign country Production – Manufacturing Abroad  Contract manufacturing o A company enters into an agreement with a foreign company to manufacture its goods abroad o A way for a firm to get its products in a foreign country, either when there are barriers to entry or when transportation costs are high o Not REALLY a method of entry, still need a marketing subsidiary or distributor  Licensing o A company (the licensor) allows another firm (the licensee) to use its intellectual property in exchange for a fee o Allows the use of a patented technology, trademark, brand name, or trade secret o Licensor retain ownership of the intellectual property and the licensee must pay the licensor a fee every time it is used All intellectual property is at risk of being copi Trade-offs  Trade-off: giving up something to gain something else  Features o Improve reliability o Improve in-stock levels o Cost reduction  Know what features is dear/important to customers Trade-offs  Trade-off: giving up something to gain something else  Features o Improve reliability o Improve in-stock levels o Cost reduction  Know what features is dear/important to customers o ed or “stolen” in countries where intellectual property is not well protected  Franchising o Similar to licensing but involves a “bundles” of intellectual property items o A firm (franchisor) will allow an entire business model to be used by another firm (franchisee) in exchange for royalties o Works best for retail establishment requiring a uniform appearance for consumers  Joint Venture o A firm created and jointly owned by two or three companies o Reasons:  Investment costs  Complete product line  Local ways  Legally required  Subsidiary o Wholly owned foreign enterprise (WOFE) o Independent company established in a foreign country but owned entirely by the exporting company o Allows a foreign firm to retain complete control of its foreign investment Chapter 3 – International Logistics Infrastructure Three flows is a supply chain: 1. Physical 2. Information 3. Money Infrastructure  All of the elements in place to facilitate transportation, communication, and business exchanges  Anything that is already in place that helps business flow  It does NOT have to be tangible  Infrastructure affects the 3 flows in a supply chain Infrastructure Types  Communication: allows businesses to communicate clearly and quickly o Mail  Speed: differs between countries  Reliability: differs between countries  Delays: differs between countries  Competition: firms such as FedEx, UPS, and DHL are very reliable, but they are generally much more expensive than the public postal services o Telephone  Landlines  Cellular phones  Internet o Internet  Legal o Standard infrastructure: allows businesses to determine the requirements that their products and operations must meet  Includes safety, design, & performance standards o Court: allows businesses to settle disputes quickly and fairly  Efficient court systems  Network of mediators and arbitrators o Intellectual Property infrastructure  Protection & International agreements  Services o Banking infrastructure: allows businesses to move funds and documents quickly and reliably, both within a country and between countries  Requires a network of bank branches and well- trained back employees  Foreign currency payments, methods of payment, & document exchanges o Logistics (service) infrastructure: allows businesses to find additional competent logistics help quickly  Freight forwarders, customs brokers, packing services, etc.  Utilities: allows business to sustain their daily operations o Electric o Water: access to clean water (and sewer) is fundamentally important for many manufacturing processes o Pipelines  The MOST political  Reliable pipelines have to be available to deliver natural gas or oil products to the locations where they can be used (energy) o Theft  Transportation infrastructure: allows goods to move efficiently within a country and between countries o Ports  Water draft: the depth of water determines the size of ships that can call  Air draft: bridge clearances also determine which ships can call  Cranes: post-panamax ships need wider/taller cranes than Panamax ships  Port operation: many ports have strong unions which limit operations  Space limitations: the location of most ports limit their ability to expand  Warehouse space: availability of reliable storage space for goods in transit  Connection to land-based transportation: ports need to have reliable access to roads and/or rail lines to keep cargo moving o Railroad infrastructure  Gauge:  When railroads were first built, countries installed unique railroad track gauges to prevent rival armies from using them.  Today, these gauge differences prevent trains from traveling quickly between multiple countries  Multi-modal: multi-modal cars, carrying either containers or truck trailers  Land bridges: containers are shipped from Asia to Europe through the U.S. railroad network; they arrive in a port on the west coast, and are transported to an east-coast port by rail o Airport infrastructure  Runways: length determines size of plane, # of runways determines capacity  Space: most airports are landlocked and cannot expand  Hours of operation: airports need to be located away from major cities if they are going to operate at night, many airports do not meet this requirement  Warehouse space: storage facilities protect cargo from the elements o Road infrastructure  Quality: quality roadways = the continuous flow of goods  Congestion: in many countries traffic congestion is stifling and prevents goods from moving quickly  Civil engineering structures: ex = bridges o Canals and waterways  Maritime transportation is dependent on reliable canals  Important canals = Suez Canal is North Africa & the Panama Canal is Central America  Key waterways = Bosporus strait in Turkey & the Saint Lawrence Seaway in North America o Warehouse Packaging functions  Protection o Transit o Handling  Image (seller’s) o Want the buyer to have a positive image Chapter 14: Packaging for Export Packaging Functions  Three functions o It protects the goods during transport o It allows the handling of goods without damage o It is part of the customer service strategy of the firm: good packaging reflects positively on the exporter’s firm  Insurers will deny damage claims if they observe improper packaging  Packaging is always the responsibility of the exporter, regardless of the Incoterms rule used in the transaction Packaging Terminology  Primary packaging: what the final customer sees  Secondary packaging: what the retailer/wholesaler handles  Tertiary packaging: what is used for transportation Packaging Objectives  Three objectives o Protect the goods in transit from mechanical damage: breakage, crushed, nicks, and dents (43% of claims) o Protect the goods from water damage (15% of claims) o Protect the goods from theft pilferage (21% of claims) Ocean Cargo Packaging  Shipments that are small in size and weight can either be full- container-load (FCL) or less-than-container-load (LCE) o An FCL shipment utilizes the entire capacity of a container, whether it is by weight or by volume o An LCL shipment utilizes less than entire capacity, and its mixed with other goods, so that an entire container can be utilized  Shipments of packaged goods that are not placed in a container are called “break-bulk” shipments FCL Ocean Cargo  FLC cargo should be loaded according to the following rules: o The center of gravity should be at the center of the container, front-to-back, and side-to-side o The heavier items should be at the bottom o The goods should be braced with blocking or dunnage o The goods should be placed on pallets or dunnage to raise them above the floor of the container (to protect them from water damage) o A desiccant should be used to protect from ambient humidity LCL Ocean Cargo  Should be even better protected than FLC, goods are likely to be handled more frequently & be placed near goods that may not have be well packaged  Should be boxed or crated with strong corners (in case something is placed on top), protected from humidity w/ shrink/stretch wrap, & well marked with handling instructions Break-bulk Ocean Cargo  Break-bulk cargo (general cargo): placed directly into the hold of a ship, not containers (b/c it is too large or too heavy)  Must be packaged so that it can be handled at all steps (crates or boxes)  Sometimes placed on flat-top containers if it is small enough  Packaging alternative include utilized packages that can be handled by human labor (bags, bales, or drums) & those that can be only handled with mechanized equipment  Some is not packaged at all & the goods are placed directly in the ship’s hold Break-bulk Cargo Markings  The International Plant Protection Convention (IPPC): mandates that wood used for packaging or dunnage be treated with chemicals to prevent insect infestations  Marking international shipments with international handling pictorials help protect them from poor handling (not language specifics), as well as from theft & pilferage Bulk Cargo  Bulk cargo (dry or wet): cargo that is placed directly in the holds of the ship, without packaging of any kind  Containerized cargoes and break-bulk cargoes are loaded & unloaded using cranes, one unit at a time  Bulk cargo is loaded & unloaded w/ cont. methods (conveyor belts, etc.) Air Transport  Less hazardous than ocean but should be well protected for air transport  Secondary packaging is not appropriate for air shipment because it does not sufficiently protect goods  Air cargo containers are designed to facilitate the loading & unloading of aircraft, & not to act as intermodal Road and Rail Transport  Goods will generally travel by road for a portion of their voyage, but the main international carriage can be by ocean, air, or rail.  Packaging needs are directed by the main mode of transportation  Rail transportation requires the same level of packaging as ocean transportation  Rail companies provide packaging guidelines for shippers Security  Packaging security issues center around pilferage and theft  Good packaging security practices include: o Tamper-proof seals on all FCL shipments o Measures designed to hide the nature of the goods being shipped (making secondary packaging “anonymous”) o Measures designed to keep shipment information confidential Dangerous Goods  Hazardous cargo can be shipped by ocean and by air, but most dangerous goods (flammable, explosive, or toxic goods) are shipped by ocean  If containerized, they are shipped “above deck” rather than “under deck”  Shipment by sea regulated by the International Maritime Organization  Shipment by air is regulated by the International Air Transport Association (IATA) Refrigerated Goods  Usually require very specific handling, & therefore, most refrigerated goods travel “alone,” & are not mixed with other refrigerated goods  Placed in refrigerated containers that are self-powered, or powered through the ship’s electrical system  Can also be placed in refrigerated holds in the ship Retail Packaging Issues  Consumer packages (primary packaging): may need to be different from country to country to accommodate consumer preferences o Packaging size: consumer preferences dictate packaging sizes o Packaging design: the customary design for the package for a type of product may be different o Legal requirements: influence the sizes of packages o Storage and transportation environment: influence the design and materials used in primary packaging (heat, humidity, etc.)  Secondary packaging: may need to be different from country to country to accommodate trade requirements o Legal requirements: laws may restrict the size of secondary packaging o Storage and transportation requirements: there may be a standard pallet size that dictates how large secondary packaging must be Packaging as a Marketing Tool  Good packaging o Generates goodwill with the importer o Marketing benefits that can be derived from it o Enhances the relationship b/w exporter & importer & builds trust o Importers don’t want to challenge invoices or ask for the replacement for damaged goods


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Amaris Trozzo George Washington University

"I made $350 in just two days after posting my first study guide."

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.