Logistics

Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers (frequently, and originally, military organizations). Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, and packaging, and occasionally security. Logistics is a channel of the supply chain which adds the value of time and place utility. Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software.
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1 Origins and definition 2 Military logistics 3 Logistics management 4 Third-party logistics 5 Warehouse management system and warehouse control system 6 Business logistics 7 Production logistics 8 Professional Logistician

Origins and definition The term "logistics" originates from the ancient Greek "λόγος" ("logos"—"ratio, word, calculation, reason, speech, oration"). Logistics is considered to have originated in the military's need to supply themselves with arms, ammunition and rations as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistikas’ who were responsible for financial and supply distribution matters. The Oxford English dictionary defines logistics as: “The branch of military science having to do with procuring, maintaining and transporting material, personnel and facilities.” Another dictionary definition is: "The time-related positioning of resources." As such, logistics is commonly seen as a branch of engineering which creates "people systems" rather than "machine systems." Military logistics ILS Integrated Logistics Support is a discipline used in military industries to ensure an easy supportable system with a robust customer service (logistic) concept at the lowest cost and in line with (often high) reliability, availability, maintainability and other requirements as defined for the project. In military logistics, logistics officers manage how and when to move resources to the places they are needed. In military science, maintaining one's supply lines while disrupting those of the enemy is a crucial—some would say the most crucial—element of military strategy, since an armed force without resources and transportation is defenseless. The defeat of the British in the American War of Independence, and the defeat of Erwin Rommel in World War II, have been largely attributed to logistical failure.[citation needed] The historical leaders

In business. effective forward and reverse flow and storage of goods. warehousing. The main functions of a qualified logistician include inventory management. Logisticians combine a professional knowledge of each of these functions so that there is a coordination of resources in an organization. implements and controls the efficient. services and related information between the point of origin and the point of consumption in order to meet customer & legal requirements. This was mainly due to the increasing complexity of supplying one's business with materials and shipping out products in an increasingly globalized supply chain. and the Duke of Wellington are considered to have been logistical geniuses. According to this definition. logistics may have either internal focus (inbound logistics). . The Chartered Institute is one of professional bodies or institutions for the logistics & transport sectors. calling for experts in the field who are called Supply Chain Logisticians. The goal of logistics work is to manage the fruition of project life cycles. or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption (see supply chain management). Alexander the Great. There are two fundamentally different forms of logistics. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time. If. purchasing. Business logistics Logistics as a business concept evolved only in the 1950s. Production logistics The term is used for describing logistic processes within an industry. consultation and the organizing and planning of these activities. Third-party logistics(3PL) Third-party logistics involves the utilization of external organizations to execute logistics activities that have traditionally been performed within an organization itself. that offers such professional qualification or degree in logistics management. third party logistics includes any form of outsourcing of logistics activities previously performed in-house. transportation. for example. One optimizes a steady flow of material through a network of transport links and storage nodes. A professional working in the field of logistics management is called a logistician. This can be defined as having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer and is the science of process and incorporates all industry sectors.Hannibal Barca. Another field within logistics is called Medical logistics. The other coordinates a sequence of resources to carry out some project. Logistics management Logistics management is that part of the supply chain which plans. this would be an example of third party logistics. supply chains and resultant efficiencies. a company with its own transport facilities decides to employ external warehouse specialist. The Chartered Institute of Logistics & Transport (CILT) was established in the United Kingdom in 1919 and was granted the Royal Charter in 1926.

which is an essential part of production logistics . In many industries (e.g. mobile phone) batch size one is the short term aim. Outward remittance in home currency of county B Settlement of currency Between country A &B Banker of B country (Issuing bank. Manufacturing in an existing plant is a constantly changing process. by offering undergraduate and postgraduate programs. International trade Proforma invoice Exporter Movement s of goods letter of credit Importer Country B Country A Buyer Transfer of funds Seller/Shipp er Debtor Creditor Banker of A country (advising bank. Production logistics can be applied in existing as well as new plants. but to streamline and control the flow through the value adding processes and eliminate non-value adding ones. authorized dealers. Professional logisticians are often certified by professional associations. exporter’s/shipper’s Bank) . Production logistics provides the means to achieve customer response and capital efficiency. Importer’s bank) Negotiating bank.The issue is not the transportation itself. By this way even a single customer demand can be fulfilled in an efficient way. which gives the opportunity to improve the production logistics system accordingly. Production logistics is getting more and more important with the decreasing batch sizes.due to product safety and product reliability issues . Track and tracing.is also gaining importance especially in the automotive and the medical industry. Machines are exchanged and new ones added. Professional Logistician A logistician is a professional logistics practitioner. Some universities and academic institutions train students as logisticians.

the exporter must be aware of packing. making the entire number 10 digits. International business firms have to manage the flow of all inputs from their sources to the manufacturing centers. Find a Freight Forwarder: An international freight forwarder is an agent for the exporter in moving cargo to an overseas destination. The United States does this with its Schedule B system. Whether an exporter is large or small. Most exporters rely on an international freight forwarder to perform these services because of the multitude of considerations involved in physically exporting goods. The physical distribution that takes place in the course of International business is called as International logistics.Parities to documentary credit transactions: Exporter country A Seller/Shipper Goods are sent Documents are sent Payment made through issuing bank to advising Importer country A Foreign bank Order to open L/c Issuing bank Agreement/contract Authorized dealer (negotiating bank) Open letter of credit Sent to exporter Issue of an L/C International Logistics The mechanism of getting inputs from their sources to the manufacturing centre and taking the finished products from the manufacturing centre to the customers is called logistics network or system. a freight forwarder can take care of cargo from “dock to door. Schedule B and HS Numbers The Harmonized Tariff System (HTS) assigns a number to each product that is traded internationally. .” thus freeing the exporter from dealing with many logistics-related details. and insurance requirements. When shipping a product overseas. The logistics system can be simple or complex. labeling. the weight of the cargo light or heavy. documentation. spare parts and other resources among and between units & finished products and services from manufacturing centers o the customers. materials. Each country can assign on its own four additional numbers.

also known as Schedule B numbers.” providing several significant services such as: Advising on exporting costs including freight costs. port charges. certificates of origin and the list goes on.S.. defines products using 10-digit HTS codes. This 6-digit code is known as the Harmonized System number. Import codes are administered by the U. or truck. Local business telephone listings often feature a freight forwarder or transportation heading.S. detailed database of Agricultural Freight Forwarders. What is a Freight Forwarder? An international freight forwarder is an agent for the exporter and can move cargo from “dock-to-door. invoices. Export codes. • Advising on the most appropriate mode of cargo transport and making arrangements to pack and load the cargo. train. Common Export Documents There are many common export documents that have to accompany export shipments including the Shipper’s Export Declaration. • Reserving the necessary cargo space on a vessel. • Preparing and filing required export documentation such as the bill of lading and routing appropriate documents to the seller.S. Census Bureau. The Harmonized Tariff System All import and export codes used by the United States are based on the Harmonized Tariff System (HTS). International Trade Commission (USITC). The U. the buyer or a paying bank. are administered by the U. aircraft. Countries that use the HTS are allowed to define commodities at a more detailed level than 6digits. including their experience shipping agricultural products.Tariffs and Import Fees Tariffs or duties are a tax levied by governments on the value of products imported from one country into another. insurance costs and freight handling fees. for example. The HTS assigns 6-digit codes for general categories. however all definitions must be within that 6-digit framework. • How to find a freight forwarder? Freight forwarders are located in most metropolitan areas. • Making arrangements with overseas customs brokers to ensure that the goods and documents comply with customs regulations. consular fees. you need to determine what the tariff rate is on your product(s) as well as any import fees for that country. packing lists. . costs of special documentation. Before you export to any country. Export freight forwarders are licensed by the International Air Transport Association (IATA) to handle airfreight and the Federal Maritime Commission to handle ocean freight. Agricultural Freight Forwarders Is an extensive.

computer. The following information will help you make this determination. will often be levied as well. HTS numbers and Schedule B numbers will be the same up to the first 6 digits as the importing country's classification code. The Schedule B number is needed to complete the Shipper’s Export Declaration.Harmonized System (HS) and Schedule B numbers Harmonized System (HS) numbers are used to classify products for customs purposes. you need to determine what the tariff rate is on your product(s) as well as any import fees for that country. To determine applicable import tariff rates and whether a product qualifies for a preferential tariff under a Free Trade Agreement. Tariffs raise the prices of imported goods. Why you need to know your product’s Schedule B and HS numbers Exporters need to know their product’s Schedule B and HS numbers for the following reasons: 1.S. you can obtain further assistance on Schedule B numbers from a commodity specialist at the U. Sales and state taxes. electronic and other miscellaneous goods) • Non-durable goods (food. To get a duty rate. chemical and textile goods) Tariffs and Import Fees: What is a tariff? A tariff (or duty. and in some instances customs fees. By international agreement. after which. such as certificates of origin After consulting the Search Engine. one needs to have the complete product number used by the importing country. Step 1: Determine your HS or Schedule B Number The first step in determining duty and tax information is to identify the Harmonized System or Schedule B number for your product(s). . the words are used interchangeably) is a tax levied by governments on the value of imported products. The duty amount will also depend on the trade terms you have negotiated with your buyer. The tariff is assessed at the time of importation along with any other applicable taxes/fees. and 3. Schedule B Numbers are used to classify exported products in the United States and are based on the international HS system. Since this is sometimes difficult. mineral. wood. animal. thus making them less competitive within the market of the importing country. machinery. The Census Bureau sponsors a free online tool called the Schedule B Search Engine that can be used to classify your products. most countries recognize the same first 6 "harmonized" digits. Census Bureau Foreign Trade Division: • Durable goods (metals. they will likely be very close or the same. paper. companies can use the Schedule B number to approximate. Before you export to any country. 2. Certificates of Origin and other shipping documents. The HS Number may be needed on shipping documents.

Government Tariff Resources for Agricultural Exports • Online Tariff Database provided by Customs Info LLC (please note that this service is provided for your convenience and we suggest that you review Export.) COMMON EXPORT DOCUMENTS The Section covers to documents that are commonly used in exporting. The following links can help you locate specific tariff and tax rates for your product.gov’s disclaimer statement.S. It is divided in the following sections: common export-related documents. but specific requirements vary by destination and product. certified by local chamber of commerce and legalized by the commercial section of the consulate of the destination country. • Country Specific Tariff and Tax Information: Tariff and tax information for exporting overseas. you will be able to determine the applicable tariff and tax rates in a particular foreign country.) • Tariff and Tax Information for U. a statement of origin printed on company letterhead will suffice (download generic certificate or see sample with explanation). other certificates for shipments of specific goods. Middle East) require that certificate of origin be notarized. The number of required copies and language may vary from country to country. • U. Territories • Sending Gifts • Additional Tariff Resources (including information for importing into the U. Export licenses and Temporary shipment documents. . The exporter should verify whether a CO is required with the buyer and/or an experienced shipper/freight forwarder or the Trade Information center.S. For textile products. an importing country may require a certificate of origin issued by the manufacturer.e. Common Export Documents: • • • • • Certificates of Origin Other Certificates for Shipments of Specific Goods Export Licenses Other Export Related Documents Temporary Shipments CERTIFICATES OF ORGIN Generic Certificate of Origin The Certificate of Origin (CO) is required by some countries for all or only certain products. Note: Some countries (i. In many cases.Step 2: Determine Tariff Rates Once you know your product’s Schedule B or HS number.S. certificates of origin.

the importer is required to produce the necessary permits together with an invoice. El Salvador. and the FTA’s with Israel and Jordan. Some certificate of origin including those required by the North American Free Trade Agreement (NAFTA). a. of Bahrain on format/information) CAFTA (Costa Rica. health foods. Click on a specific country below to learn details on how to document origin. CAFTA countries. Guatemala. are prepared by the exporter. medical devices and veterinary medicine. Honduras CO sample) • Chile (CO sample) • Israel (sample Note: Green form needs to be purchased from Vendor or US-Israel Chamber of Commerce or a publishing house ) • Jordan (notarized generic certificate of origin required) • Morocco (importer makes a claim on the basis of supporting evidence) • NAFTA (Mexican. are importer’s responsibility). Certificate of Free Sale Certificate of free sale may be issued for biologics. More information is available from the Food and Drug Administration. "Merchandise Passport" is a document that facilitates the temporary importation of products into foreign countries by eliminating tariffs and value-added taxes (VAT) or the posting of a security deposit normally required at the time of importation. drugs. Apply for an ATA Carnet. Health authorities in some states as well as some trade associations also issue Certificates of Free Sale. food.Certificate of Origin for claiming benefits under Free Trade Agreements Special certificates may be required for countries with which the United States has free trade agreements (FTAs). Others including those required by the FTA’s with Australia. and pharmaceutical products. Dominican Republic. However. Canada. Certificate of Analysis: A certificate of analysis is required for seeds. dietary supplements. sample) • Singapore (no certificate of origin is required. grain. k. fruits and vegetables. Australia (CO samples) Bahrain (importer to check with Govt.) • • • OTHER CERTIFICATES FOR SHIPMENTS OF SPECIFIC GOODS ATA CARNET/Temporary shipment certificate An ATA Carnet a. Dangerous Goods Certificate . Chile and Morocco. at the time of cargo clearance.

Fisheries Certificate The National Marine Fisheries Service conducts inspections and analyses of fishery commodities for export. Note: Some countries require that health certificates be notarized or certified by a chamber and legalized by a consulate. artificial pork flavor. fish seafood. The exporter is responsible for accuracy of the form and ensuring that requirements related to packaging. Health Certificate For shipment of live animals and animal products (processed foodstuffs. poultry. The certificate may be issued by the manufacturer and must give a description of the product. Halal Certificate Required by most countries in the Middle East. meat. chemical data. shelf life. contents and percentage of each ingredient. storage instructions. Inspection Certificate Weight and Quality certificates should be provided in accordance with governing USDA/GIPSA regulations for loading at port and loading at source/mill site as appropriate. the certificate must state the type of fat used and that the product contains no pork. and other required information by IATA have been met. This form assists in quarantine clearance of any goods of plant or animal origin. Certification by an appropriate chamber and legalization by the consulate of the destination country is usually required. More information on labeling/regulations is available from the International Air Transportation Association or Department of Transportation . Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS). and date of manufacture. All foodstuffs are subject to analysis by Ministry of Health laboratories to establish their fitness for use. this certificate states that the fresh or frozen meat or poultry products were slaughtered in accordance with Islamic law. marking. microbiological standards.HAZMAT websites. Ingredients Certificate A certificate of ingredients may be requested for food products with labels that are inadequate or incomplete. comply with packaging and labeling requirements (they vary depending upon type of product shipper and country shipped to). A certificate of origin certified by local chamber of commerce at load port and a Phytosanitary . or pork fat. etc). dairy products. For shipment of dangerous goods it is critical to identify goods by proper name. Fumigation Certificate The Fumigation Certificate provides evidence of the fumigation of exported goods (esp. The seller to fumigate commodity at their expense a maximum of fifteen (15) days prior to loading. Health certificates are issued by the U. used clothing. If animal fats are used. agricultural products.Exports submitted for handling by air carriers and air freight forwarders classified as dangerous goods need to be accompanied by the Shipper’s Declaration for Dangerous Goods (sample) required by the International Air Transport Association (IATA).S. and eggs and egg products).

The certificate must verify that the product is free from specified epidemics and/or agricultural diseases. Other (product-specific) certificates Shaving brushes and articles made of raw hair must be accompanied by a recognized official certificate showing the consignment to be free from anthrax germs. owner of vessel/plane. Grain requires a fumigation certificate. Many countries in the Middle East require special certificates for imports of animal fodder additives. Weight certificate Certificate of weight is a document issued by customs. Examples of export license certificates include those issued by the Department of Commerce’s Bureau of Industry and Security (dual use articles). pets. Note: an airway bill can serve as an insurance certificate for a shipment by air. certifying gross weight of the exported goods. nuts. flour. rice. Phytosanitary Certificate All shipments of fresh fruits and vegetables. This document may be required for most or all exports to some countries or for other countries only under special circumstances. names of ports of call including port of leading and discharge. Radiation Certificate Some counties including Saudi Arabia may require this certificate for some plant and animal imports. lumber. The certificate is statement that the products are not contaminated by radioactivity. Some countries may require certification or notification. Used clothing requires a disinfection certificate. Costs of all inspection. Additional information and forms are available from Animal and Plant Health Inspection Service (APHIS). and grain and seeds require a certificate of weight. livestock. EXPORT LICENSES: Export license is a government document that authorizes the export of specific goods in specific quantities to a particular destination. seeds. nationality of vessel/plane. Steamship or Airline Company Certificate A declaration attached to a bill of lading or airway bill stating that the shipper will not stop at an unscheduled port. and horses. These can be obtained from your freight forwarder or publishing house. certificates/ documents at the load port are usually the responsibility of the seller. attesting to the accuracy of the shipping route and providing other shipping information such as name of vessel/plane.certificate issued by APHIS/USDA and Fumigation certificate are to be provided to buyer. the State Department’s Directorate of Defense Trade . Insurance Certificate Used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit (Sample). grains. and plant materials require a federal phytosanitary certificate. plants.

and the US Drug Enforcement Administration (controlled substances and precursor chemicals). APHIS will issue a phytosanitary certificate for wood package materials only if the WPM is the cargo. OTHER EXPORT RELATED DOCUMENTS Consular Invoice Required in some countries. ocean bill of lading or Airway bill to notify the carrier and all foreign parties that the item can be exported only to certain destinations. and to promote appropriate measures for their control. consignee. If required. . However. The IPPC is an international treaty to secure action to prevent the spread and introduction of pests of plants and plant products. the Nuclear Regulatory Commission (nuclear materials). quality. Canadian Customs Invoice This customs invoice (Sample) is issued in Canadian dollars for dutiable and taxable exports exceeding $1600 Canadian dollars. and price of shipments imported into their countries. copies are available from the destination country's Embassy or Consulate in the U. it describes the shipment of goods and shows information such as the consignor. Import License Import licenses are the responsibility of the importer and vary depending upon destination and product.S. ISPM 15 (Wood Packaging) Marking The International Standards for Phytosanitary Measures Guidelines for Regulating Wood Packaging Material in International Trade (ISPM15) is one of several International Standards for Phytosanitary Measures adopted by the International Plant Protection Convention (IPPC). Detailed invoice requirements can be obtained at the Canadian Customs website Dock Receipt and Warehouse Receipt It is used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the ship line for export. A DCS appears on the commercial invoice. Destination Control Statement Destination Control Statement (DCS) is required for exports from United States for items on the Commerce Control List that are outside of EAR99 (products for which no license is required).Controls (defense articles). and value of the shipment. Pre-shipment Inspections The governments of a number of countries have contracted with international inspection companies to verify the quantity. The American Lumber Standard Committee (ALSC) and the National Wooden Pallet and Container Association (NWPCA) provide phytosanitary certification for wood packaging materials (WPM). including a copy of an import license with the rest of your documentation may in some cases help avoid problems with customs in the destination country.

repair.e. Transporting goods by truck to Canada Application to transact bonded carrier and forwarding operation—Form E370 is required to bring goods over the border to Canada. Commercial Invoice . COMMON EXPORT DOCUMENTS Airway Bill Air freight shipments require Airway bills.UPS. k. SGS and Intertek. USPS. or traded while the goods are in transit. Customs Certificate of Registration Customs Form 4455 may be used (often in conjunction with temporary import bond or ATA Carnet for goods that are leaving the United States on temporary basis for alteration. Airway bills are shipper-specific (i. and to deflect attempts to avoid payment of customs duties. For vessels. there are two types: a straight bill of lading. Fed-Ex. "Merchandise Passport" is a document that facilitates the temporary importation of products into foreign countries by eliminating tariffs and value-added taxes (VAT) or the posting of a security deposit normally required at the time of importation. a.The purpose of such inspections is to ensure that the price charged by the exporter reflects the true value of the goods. Some countries require pre-shipment inspection certificates for shipments of used merchandise. DHL. Bill of Lading Is a contract between the owner of the goods and the carrier (as with domestic shipments). sold. and a negotiable or shipper's order bill of lading. Shippers Letter of Instruction Issued by the carrier or the forwarder includes shipping instructions for air or ocean shipment TEMPORARY SHIPMENTS ATA CARNET/Temporary shipment certificate An ATA Carnet a. etc). The customer usually needs an original as proof of ownership to take possession of the goods. which is non-negotiable. Inspections companies include Bureau Veritas. Apply for an ATA Carnet. to prevent substandard goods from entering the country. which can never be made in negotiable form (see sample). replacement. Requirements for pre-shipment inspection are normally spelled out in letter-of-credit or other documentary requirements. The latter can be bought. and processing.

associates • International Shipping and Logistics. content. . Established in 2002. *Note: EEI is required for shipments to Puerto Rico. language to be used. date of shipment. • Chartering: Chartering vessels for the carriage of goods. Areas of business • Port-based services: Stevedoring. Export Packing List Considerably more detailed and informative than a standard domestic packing list. and other characteristics (see Sample). Shipments to Canada do not require an SED except in cases where an export license is required. working at the ports in India. the company offers a 'single window' to clients for the carriage of international trade on a door-to-door basis. paying attention to the requirements of the officers and crew of ships.500).500* and for shipments of any value requiring an export license. A packing list may serve as conforming document. both bulk and breakbulk. Joint ventures. shore handling.S. • Freight forwarding: With a network of offices in India and overseas. Governments that use the commercial invoice to control imports will often specify its form. warehousing / stockyard management and transportation. if appropriate. • Shipping and clearing: Taking care of customs. It is not a substitute for a commercial invoice. the company offers services for carriage of goods by multi-modal transport. and dimensions. subsidiaries. is an international logistics support service provider. SED has to be electronically filed via AES Direct (free service from Census and Customs) online system. description. such as a box.) Indian example of International logistics service provider: TM International Logistics TM International Logistics (TMILL). Required for shipments above $2. a subsidiary of Tata Steel. Jebel Ali FZE. shipper. package marks. buyer. the type of package. crate.It is a bill for the goods from the seller to the buyer. Both commercial stationers and freight forwarders carry packing list forms. total net and gross weight (in kilograms). Electronic Export Information Form (Shippers Export Declaration) The EEI is the most common of all export documents. carrier. number of copies. the U. and itemizes quantity. These invoices are often used by governments to determine the true value of goods when assessing customs duties. invoice number. mode of transport. • Ship agency: Taking care of entry and exit of vessels. drum. it lists seller. UAE: Looks after charters of vessels on 'voyage' or 'time charter'. the quantity of packages. (Shipments to third countries passing through Canada do need an SED. or carton. port and other statutory requirements for the clearance of import cargo and export shipments. Virgin Islands and the former Pacific Trust Territories even though they are not considered exports (unless each “Schedule B” item in the shipment is under $2.

• • TKM Overseas Transport (Europe) GmbH. the UK. Haldia and Paradip in India. Europe. Africa and Asia. Location The company's principal centres of operations are at Kolkata. Hamburg. TMILL has sales offices in the main cities of India and regional offices in North and South America. . Germany: Organises carriage of cargo moving out of Europe. the US and other overseas sources of origin into India or other nations. TKM Transport Management Services: Undertakes operational activities of the freight forwarding business unit of TMILL’s community initiatives. Australia.

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