International logistics – Final Workshop

1. Product identification
1.1. Product name: Cotton USA, The cotton the world trust
1.2. 5201.00.20.00
1.3. Thinking about the effects generated in the Colombian textile sector because of the pandemic to the
labor sector of many small and medium entrepreneurs, it has been thought to implement a clothing
brand initiative that can compete with the best quality of the market both nationally and
internationally, for this it has been thought to import raw material that suits the needs required by
the company. This sector is projected with a great success, since during the pandemic according to
the results of studies like the one of the Raddar firm, carried out together with Inexmoda and
Sectorial. The report points out that, in July, Colombian households spent $2 billion in the fashion
basket, which represented 2.8 percent of total expenses, becoming the penultimate line of
consumption. For this reason we can generate impact in the economic sector by projecting this
business idea that promotes employment and improves the economic situation of many unemployed
people due to the economic crisis the country is currently going through.
1.4. Nature of the load is non-perishable, because we are importing cotton
1.5. Packaging (boxes, plastic): The packaging of the rolls consists first of a plastic cover to protect the
roll of fabric, then it is put in a box according to the measures of this.

2. Stock management
2.1. Annual demand 30.000
2.2. Daily demand 82,3
2.3. EOQ
Demand (annually): 30.000
Cost of Holding (per unit/year): USD
1,4
Cost of Order: USD
650
Lead Time: (days) 14
Service level: 93%

EOQ 5299,06 5300

Re-order point (SS)

ROP= 1.382
3. Incoterms
3.1. Incoterm CIF will be chosen: In this case the seller will pay all costs and freight necessary to bring
all the goods to the port of destination, then the risk of damage or loss will be transferred to the
seller when the goods pass the port of shipment. Since I guarantee as a buyer that in the course of
international shipping my product arrives without any damage, from the arrival in Colombia we
NoCAPS will take over the damage to losses that may happen to the order.
3.2. International freight. Search an estimate on Searates.com or freightos.com

Value container LCL: US$ 910 (This value is estimated, since in the information pages there is no
approximate price because there are no LCL deliveries to the destination country)

Total international freight: US$ 4.292

4. Geography
4.1. United States
4.2. Washington, DC
4.3. Port of Miami
4.4. Port of Buenaventura, Colombia
4.5. Cali, Valle del Cauca
4.6 The United States was chosen for the import of fabric mainly for two reasons; the first one because
throughout the time the United States has had a good credential with the making of many uniforms in the
military zone guaranteeing its quality and durability, and the second one because the quality of the shirts
made by the USA has a quality and durability longer than the ones offered by other type of textile
companies
4.7 Map: selected route

NoCAPS is a company located in Cali dedicated to the manufacture of clothing. Annually it buys
30,000 meters of cotton fabric to make high quality shirts. These supplies are brought from
Washington. DC, from the Cotton USA company.
Cotton USA establishes as the main price 18 dollars per meter of fabric and commits to pack the
shipment and make it available for export, at a cost of 30 dollars for every 25 meters that come in
roll. In addition, the company loads the merchandise, which costs $35 for every 25 meters. The
value of the domestic shipment is $90/TEU with 1% EXW insurance.
The Port of Miami charges some costs for the handling of the containers and the location on board
of the US $15 / TEU. In addition, there is a charge for customs clearance at origin of $400.
The HCLU shipping company offers a freight charge for Miami - Buenaventura of $4292 and 0.5%
CFR insurance. The Buenaventura customs broker charges a $400 commission for the customs
clearance process. On the other hand, the handling and location of the container in the port of
Buenaventura is US $15 / TEU,
By having to nationalize in Buenaventura, NoCAPS has to assume the expenses of one month of
storage which costs $830,000. Once the merchandise is nationalized in Buenaventura, it is
transported to Cali, the freight is $350,000 and the insurance is $85,000. The cost of unloading at
the buyer's warehouse is 165,000 pesos.
5. Strategy
5.1. To insert myself in the first Colombian textile market during the pandemic, implemented a product
made in Colombia, but with some American characteristics, in order to get the attention of a good
quality product with the ability to compete in a large market.
5.2. We managed to contact a textile factory Cotton USA with the ability to provide a type of fabric that
meets the expectations of a premium product for the development of a competitive brand in
Colombia. Import of raw material from the United States to Colombia and manufacturing and final
product in Colombia.
5.3. Cotton USA (Washington, DC) HCLU Transport Company Port of MiamiPort of
Buenaventura, Valle del CaucaNoCAPS, (Cali)
5.4. We have a vision of being able to boost the Colombian economy after the crisis of the pandemic,
strengthening the Colombian textile sector with the arrival of this new brand of imported type
clothing and thus be able to reach each of the Colombian families achieving maximum recognition
nationally.
5.5. For this we have people from the department of Valle del Cauca who over the years have generated
experience and competitiveness in the textile sector. This will generate a great experience in the
elaboration of our products taking into account even the smallest details and a very good labor force
in them.
5.6. In this last one we will use advertising to promote this new initiative, samples and elaborated
designs will be collected for the execution of our final products and we will begin to create the
digital platforms where the sale of our final product will take place.