Professional Documents
Culture Documents
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The main purpose of the session is to improve your understanding of:
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Introduction to Logistics
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Logistics consists of the activities relating to the movement and handling of
goods
• Sequence of agents, functions and activities involved in the flow of goods and
Logistics Chain
services and the information related to them between two points
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Logistics includes, not only the transportation of goods, but also the planning
and organisation of the goods throughout the entire value chain
LOGISTICS PROCESS
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The concept of logistics includes the network of services providing for the good
transportation and processing needs ...
Transportation
Logistics Activities Other value added activities
• Interchanges between transport modes • Packaging
• Transportation (full load, groupings, sea, land) • Assembling
• Loading / unloading • Packing
• Charge / discharge • Labelling
• Local distribution • Tailored shipments
• Shipments
• Information flow
• Orders
• Merchandising
• Customs management
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… and has three major business drivers: supply and demand, costs and quality
• Ensures the availability of products in the • Impact on the company’s fixed assets • Plays an important role in the delivery
market policies (storage, fleets, etc.) and time, service distributors, packaging
circulation of goods (stock levels, payment and product quality control
• When there are greater stages of on delivery, etc.)
processing and/or higher levels of product
substitution, logistics plays an even more
important added-value role
• Automated
• Elaborated product
• …
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Current changes in commerce and enterprise dynamics impact significantly on the
logistics function
Personalisation of
Globalization products and client
requirements
Impact on logistics
Development of information
systems
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Logistics infrastructures have become more specialized in order to respond to
the needs of foreign trade and local distribution demand
This specialization will be in line with the needs of the infrastructure users and the requirements of the associated
transportation nodes (ports, airports, rail terminals, borders, etc.)
• Truck centre
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Introduction to Logistics
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Introduction to foreign trade
• Foreign trade is defined as the exchange of goods and services between two blocks or economic regions. For
example the exchange of goods and services between the EU and southeast Asia. The economies that
participate within the trading blocks are referred to as “open”.
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During the last 30 years, maritime transportation has shown strong growth,
more than 3 times higher than GDP’s growth
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Freight maritime transportation reached 7,416 million tonnes in 2006. 36%
were transported by tanker and 25% corresponded to the main 5 products
transported in bulk
8000
7000
6000
5000
Rest of general cargo
4000 General cargo (main 5 bulk products)
Tanker cargo
3000
2000
1000
0
1970 1980 1990 2000 2006
5 main bulk products: Iron ore, coal, bauxite/aluminium ore and phosphates
Source: UNCTAD
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International maritime flows rely on the “round the world” routes,
complemented by North-South feeder routes
• Three main East-West flows represent 1/3 of the world container traffic: Asia ↔ North America; Asia ↔ Europe;
Europe ↔ North America)
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Global context: foreign trade is continually becoming more dynamic
2.500.000
% VAR % VAR
COUNTRY 1990 2000 2012
1980-1990 2000-2012
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Logistics performance by country (2010)
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Terms and conditions of loading and unloading
• Cargo, in times past, was shipped as it was produced by each of its origins, meaning, sacks for grains and coffee, barrels for liquid, wooden
boxes, fabric bags, etc. Today, using new unitising techniques, we can group different types of products in units designed for better handling
and transport. The most recognised are pallets and containers.
• Unitise is to group cargo in units designed for better handling and transport: pallets,
containers.
• The main characteristics of these units are repetitive use, adaptability to different
transport modes, i.e., facilitating multi-modality, use as both cargo packaging and
protection, facilitation of stacking, storage and handling.
• Standard measurements for containers and pallets are governed by international
standard ISO (International Standard Organisation).
• Currently containers are the most commonly used due to their versatility,
volume/weight load capacity, safety, ease of handling and storage.
• Containers are manufactured in steel, aluminium and specialised fibreglass
(refrigeration units).
• They have a useful life of approximately 9 years and can carry any type of cargo:
solid and liquid bulk cargo, general cargo, palletised cargo, hazardous cargo, gas
and fresh or refrigerated cargo.
• The second most widely used unitisation system is the pallet. Standardised
measurements of 1.0 m x 1.0 m x 0.15 m or 1.0 m x 1.20 m x 0.15 m.
• Pallets are manufactured of wood, plastic and aluminium. Additionally, the latest
applicable pallet technology, although not entirely applicable due to cost problems, is
the Sleep pallet, with a high-strength surface thickness no greater than 5 cm
reducing wasted cargo storage space to a minimum; its disadvantage lies in the high
cost of the push & pull machinery required for its use at both points of origin and
destination.
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Consolidation and deconsolidation
• FCL (Full Container Load) or CY (Container Yard) indicates cargo unitisation in a container of a single shipper
(exporter) for a single consignee (importer), or in other words, from a seller to a buyer. It is used basically for
shipping containers.
• LCL (Less Container Load) or CFS (Container Freight Station) indicates cargo unitisation in a container of
several shippers (exporters) to several consignees (importers) or, from several vendors for several buyers. It is
used basically for shipping containers.
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Organisational example of the actors involved in maritime shipping logistics
Exporter
Customs
Port
Shipping
Shipping line Ship Ship owner
agent
Freight agent /
Logistics operator
Customs agent
Customs
Contracting
Importer Administrative
procedure
Freight flow
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Summary of INCOTERMS
• INCOTERMS (International Commercial Terms) are international rules for the interpretation of trade terms set by the
International Chamber of Commerce
• INCOTERMS GOVERN:
•Distribution of documents
•The terms of delivery of the goods
•The distribution of operational costs
•The distribution of risks
FCA
FAS
FOB
Responsibiility for documentation
CFR
Risk responsibility
CIF
Cost responsibility
DES
DEQ
DDU
DDP
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Incoterms
The seller fulfils its delivery obligation when it makes the goods available to the buyer on the seller's premises or other suitable
place (factory, warehouse, etc.) without getting involved with the export or shipping using any means of transport. The buyer
EXW (Ex Works)
bears all costs and risks from the moment of delivery of the goods. The seller is required to deliver the goods for transport
according to the buyer's specifications.
= GOODS
Customs Importer
Exporter
Terminal
EXW
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Incoterms
FAS (Free The seller fulfils its delivery obligation when the goods are placed alongside the vessel at the accorded port. The buyer bears
Alongside Ship) all costs and risks from the delivery of the goods. The term FAS requires the seller to clear the goods for export.
= GOODS
Customs Importer
Exporter
Terminal
FAS
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Incoterms
The seller fulfils its delivery obligation when the goods cleared for export are given to the transport carrier
FCA (Free Carrier) designated by the buyer at the accorded place. If delivery is made on the seller's premises, it is responsible for
loading, however if delivery is made elsewhere, the seller is not responsible.
= GOODS
Customs Importer
Exporter
Terminal
FCA
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Incoterms
The seller fulfils its delivery obligation when the goods cleared for export have passed the ship's rail at the
FOB (Free on accorded port of shipment. From this moment the buyer bears all costs and risks. The seller is required to contract
Board) and pay the main transport, while the risk of loss or damage to the goods and any additional costs incurred after
delivery correspond to the buyer.
= GOODS
Customs Importer
Exporter
Terminal
FBO
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Incoterms
CFR (Cost and The seller fulfils its delivery obligation when the goods have passed the ship's rail at the accorded port of delivery.
Freight) The cost of insurance corresponds to the buyer. The term CFR requires the seller to clear the goods for export.
= GOODS
Customs Importer
Exporter
Terminal
CFR
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Incoterms
CPT (Carriage The seller delivers the goods to the transport carrier designated by the buyer, paying the sea freight to the
accorded destination. The buyer bears all costs and risks from the moment of delivery of the goods to the transport
paid to) carrier. The term CPT requires the seller to clear the goods for export.
= GOODS
Customs Importer
Exporter
Terminal
CPT
$ Depends on place
of destination
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Incoterms
CIP (Carriage and The same obligations as those in the CPT term correspond to the seller, including in this case, insurance and
Insurance paid to) payment of the corresponding premium, during transport of the goods.
= GOODS
Customs Importer
Exporter
Terminal
CIP
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Incoterms
CIF (Cost
Insurance and The obligations mentioned in the CIF term (Cost, Insurance and Freight) correspond to the seller
Freight)
= GOODS
Customs Importer
Exporter
Terminal
CIF
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Incoterms
DES (Delivered ex The seller fulfils its delivery obligation when the goods have passed the ship's rail at the accorded port of shipment
Ship) without have been cleared for import by customs.
= GOODS
Customs Importer
Exporter
Terminal
DES
+ Insurance $
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Incoterms
DEQ (Delivered ex The seller is responsible for costs until the goods leave the port of destination unstowed. The SAD (Single
Quay) Administrative Document) for imports is paid by the buyer.
= GOODS
Customs Importer
Exporter
Terminal
DEQ
+ Insurance $
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Incoterms
DDU (Delivered The seller bears all costs and risks until the goods are delivered to the buyer's establishment, not including customs
Duty Unpaid) fees, taxes or any other charges borne by the buyer.
= GOODS
Customs Importer
Exporter
Terminal
DDU
+ Insurance $
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Incoterms
DDP (Delivered The seller assumes the same obligations as those in DDU plus duties, taxes and charges required to bring the goods
Duty Paid) to the accorded place (including customs fees).
= GOODS
Customs Importer
Exporter
Terminal
DDP
+ Insurance $
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Incoterms
DAF (Delivered at The seller pays all expenses of the main transport until the goods are delivered to an accorded intermediate point
Frontier) as well as the corresponding insurance but prior to border customs in the country of destination.
= GOODS
Exporter Customs Importer
Terminal
Cargo
Border
DAF
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Introduction to Logistics
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Information flow between all the links in the logistics chain is essential for
process integration
TRANSPORT
TRANSPORT
Short haul logistics
Storage of finished
TRANSPORT product
Purpose of logistics platforms
TRANSPORT
Logistics platform Functional integration of long haul and
short haul logistics
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Different segments of the logistics chain
Supply logistics
Manufacturing logistics
Consumer logistics
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Integrated logistics supply chain: Relationship network
ORIGIN DESTINATION
INFRASTRUCTURE REGULATION
SUPPLY SOURCES
PRODUCERS BUYERS
FINAL CONSUMERS
SUPPLIERS DISTRIBUTORS
SERVICES INFORMATION
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The main goal in the logistics process is to optimize the logistics cost – value
added relationship
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... in order that the most competitive companies will tend to capture larger market
shares
Time and
place of
delivery Production, inventories and procedures
LOGISTICS
SUPPLY
CHAIN 2
COST AGGREGATION
Production, Storage, Transport, Inventory Costs, Documentary Procedures
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Companies with an optimized supply chain have a competitive advantage over
other suppliers
VALUE DIFERENTIATION
LOGISTICS CHAIN 1 LOGISTICS CHAIN 2
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Value chain: supply stage (example for automobile industry in Brazil)
• Plates and steel • Supply of steel and plates from Sao Paulo • The main competitive disadvantage in the
and Minas Gerais using land transport RS pole is the lack of steel itself in the
state
Raw material
Triunfo
• Plastic parts • 50% originate from the RS state itself (RM • Plastic parts are growing in importance due
Systemists and Caxias) The remaining 50% is supplied to the fact that finished vehicles have an
from other states in Brazil increasing portion of plastic
Distribution of final • Electronics • 70% imported using maritime and air • Maritime transport using Río Grande,
transport Santos, Paranaguá and Itajaí
product
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Value chain: transformation stages (example for automobile industry in Brazil)
Raw Materials
• Breaks, shafts, plastic • Each company involved in the • Extensive use of land transport for
parts transformation chain has different the supply of these materials
supply and distribution models for
• Production orders accentuating
Auto parts intermediate products
pressure on transport times
• Large assembly plants have auto
part and assembly affiliates in the
Transformation
same area in order to facilitate
Assembly displays internal supply and logistics
• Engines, seats, sub- • There are high flows of parts and
assemblies assemblies among companies within
the same RS automotive pole
Systemists
Distribution of final
product
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Value chain: distribution stage (example for automobile industry in Brazil)
Raw Materials • Agricultural machinery • Primary markets: 10% RS, 40% Brazil, • Shipped as unassembled parts using
(30,000 units/year) 15% Mercosur, 35% exportation to the US RoRo or containers Use of the Río
and EU Grande or Imbituba rivers depending
on shipping routes
Auto parts
• Land transport tools • Primary markets: Mercosur and Brazil • In the future, parts will be shipped as
Distribution
(30,000 units/year) Shipped using land transport Only 5% is unassembled
Assembly displays exported to Africa and the Middle East
using RoRo (Itajaí and Paranaguá)
• Omnibus • Primary markets: 50% internal Brazilian • Shipped using RoRo or containers
Systemists (15,000 market and 50% exportation to Africa, the (with or without chassis) The Río
units/year) Middle East and Latin America Shipped Grande river is habitually used,
using land transport for the internal however it depends on shipping
Brazilian market routes
Assembly plants
• Vehicles (120,000 • 10% RS, 80% Brazil, 10% Mercosur
units) Shipped using flat-bed trucks
Distribution of final
product • Auto parts • Shipped using pallets and boxes for Brazil, • For exportation the containers are
while there is a high level of exportation consolidated and loaded using
using maritime transport FOB logistics operators
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BARCELONA
Tánger 98, 3ª planta
08018 Barcelona (España)
Tel: +34 93 430 4016
Fax: +34 93 363 0623 BEIJING BILBAO BUENOS AIRES CARACAS DUBAI LIMA LISBON LONDON MADRID MILAN PARIS RABAT SAO PAULO