Sply Chain ModLogistics
Sply Chain ModLogistics ISYE 3103
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This 0 page Class Notes was uploaded by Maryse Thiel on Monday November 2, 2015. The Class Notes belongs to ISYE 3103 at Georgia Institute of Technology - Main Campus taught by Staff in Fall. Since its upload, it has received 10 views. For similar materials see /class/234207/isye-3103-georgia-institute-of-technology-main-campus in Industrial Engineering at Georgia Institute of Technology - Main Campus.
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Date Created: 11/02/15
Intemational Transportation SyE3103 Introduction to Supply Chain Models Transportation and Logistics Objectives I To understand the factors that add complexity to international transportation I To discuss the roles of international transportation providers I To outline the steps in the imporUexport process I To highlight current trends in international transportation What Makes International SCM Dif cult I Distance and time in transit I Need for multiple service providers I Customs and border procedures I Cultural differences can inhibit collaboration I Exchange rate fluctuations I Product design and packaging issues I Customer reaction to pricing and marketing efforts J i Internationally I Desire for market expansion a Local markets may be sat ra te u Increased information availability makes expansion easier I Cost advantages u Cheaper raw materials and labor a Economies of scale in production marketing and administrative activities a Production facilities in international markets to increase speed and exibility to that market Important Issues in International SCM I Product customization a Regional products designed for a speci c market Hench Acc rd D s a Global products essentially the same regardless of the country in which they are sold EXCoca Cola Levi s McDonald s I Management of international facilities a Centralized control hierarchical structure where all major decisions go through headquarters a Local autonomy aowing local managers to make International Transportation I Provided by all modes of transportation I Most nonNorth American shipments move via air orwater I North American operations a NAFTA North American Free Trade Agreement a Maguiladoras I Principles 1 Unimpeded ow of goods 1 Mostfavorednation MFN status 1 Commitment to enhance crossborder movement of goods and services Free carrier operation speci ed by the year 2000 a US and Canadian truckers can operate in the 0 her country when shipments are incidental to return to the home country 1 Challenges between US and Mexican integra ion I Limitations oftraiier Size for operations in Mexico 8 carriers must apply torsoeoayi singie trip perrnit to operate more tnan 12 5 miles beyond Mexican border Maquiladoras I US manufacturing and assembly operation located in Mexico close to the U border a US raw materials and components sent to facility a Most or all of the output from the facility returns to the US I Benefits for manufacturing company a Low labor rates in Mexico a No Mexican import duties charged on goods I Struggling recently as companies have set up operations in even lowerwage countries Ocean Transportation I Types of carriers 1 Liners operate xed routes on published schedules I Containerservice I Breal bulk 5 Nice 7 cargo is not containenzed Lighterraboard snip LAsny barges loaded at inland port and towed to tne ocean port I RoiironroiirofNRORO snip rtrucks trailers and construction equipment driven o o snip decks u Tramps hired on a voyage or time basis Onevvay moves ortirne cnarters cnarters could Specify crew to be provided by owner a Private vessels owned or leased on a longtterm basis I Ex Oil automobile and lumbervessels Transportation Land bridge a Moving shipments between Asia and Europe via ship and rail u By passes congested Panama Canal u Reduction of ship fuel and capital costs Minibridge a Moving shipments between Asia and an east coast port city using ship and rail Microbridge a Moving shipments between Asia and inland city using ship and rail I InterrnOdal Operations in International Transportation Cont From Japan To Antwerp orfolk Land Bridge From Thailand Charleston MiniBridge International Transportation Intermediaries International freight fonvarders u Agents for shippers who apply expertise to facilitate export transportation u Arrange inland transportation packaging documentation booking and legal fees NonvesseIoperating common carriers NVOCC u Assemble LCL shipments and ship them as full container shipments u Similar to domestic freight forwarders Cont I Customs brokers u Import equivalent ofinternational freight forwarders u Facilitate movement of goods and documentation roug cus oms I Export packers u Custompack shipments for shippers who do not have this expertise u Allows goods to move through customs more quickly a Utilize lightweight packaging materials to avoid excess duties u Extra protection for long dif cult international journey I International Terms of Sale INCOTERMS I Published by International Chamber of Commerce I De ne buyer and seller responsibility for 1 Export packag39n cost a Inland transportation to export port 1 Export clearance Vessel or plane loading Main transportation cost Car oinsurance gang in Assumption of risk of loss or damage in transit I Main questions answered Who pays for service and Where does risk or to buyer Categories of INCOTERMS I E terms buyer assumes total responsibility for shipment 1 Ex Works E I F terms seller s responsibility to get goods to buyerspeci ed carrier 1 Free Carrier FCA risk 0 damage passes to buyer when ds are delivered to carrier 1 Free ongside Ship FAS risk of damage passes to buyer when goods are delivered alongside ship only used en goods cross the ship s rail only used in water trans I C terms seller obtains and pays for main carriage andor cargo insurance 1 Cost and Freight CFR seller obtains and pays for ocean carri Carriage Paid To CPT seller obtains and pays for main carriage any me e u 0 Insurance and Freight CIF seller pays for ocean carriage and insurance a Carriage and Insurance Paid To CIP seller pays for main carriage any mode and insurance a Risk of damage passes to buyer when goods pass ship s rail in CFR and CIF and when goods are delivered to main carrier in CPT and CIP n Categories of INCOTERMS Cont I D terms seller incurs all costs for delivery of shipment to the forei n country a Delivered at Frontier DAF seller is responsible for getting goods to a speci ed on Ier of a dealnahon country w ere transfer of risk occurs a Delivered Ex Ship DES risk of thmage is transferred when oods are made avallabe to buyer onboard shIp WI hout clearing customs u Delivered Ex Qua DEQ risk of damage is transferred when goods clearim o customs and are unloaded onto wharf at port of destlna Ion u Delivered Duty Unpaid DDU risk of dama e is transferred when goods are made avalla le duty unpal at named goods for im ort paying duties and possibly delivery a uyer s loca Ion Ina Ion u Delivered Duty Paid DDP seller is responsible for clearing 39 t International Payment Options I Trade credit o Traditional AIR as in domestic transactions o Seller bears risk of payment default I Cash payment before delivery o Seller must receive payment in full before shipment is made o Buyer bears all risk of supplier default I Letter of credit I Issued by buyer s bank I Bank guarantees to seller that payment will be made if certain conditions are met I Controlsshipment s movement ames vessels and shipment schedule n Dictates packaging and labeling requirements I Amendments must be ratified by both the buyer and seller I Errorfree documentation is necessary for bank to approve payment Other International Documentation I Export license issued by Dept of Commerce 1 Validated rquired for commodi ies and des inalions deemed important to national security foreign policy amp items in short supply a General not actually issued because there is a blanket au horization for goods not requiring a validated license I Proforma invoice issued by seller to acquaint import govt with the shipment I Commercial invoice bill of sale for goods sold to the buyer I Consular invoice same as commercial invoice but it must be written in importing country s language Other International Documentation Cont I Shipper s export declaration n Controls export of restricted goods weapons highlevel technology etc n Used to compile export statistics n Utilizes Harmonized System an international system of classifying commodities I Certificate of origin n Certi es country of origin ofthe commodities n Especially important for trade between countries that have special import treaties NAFTA
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