Export-Import Management (520135)

Chapter 08: Logistics & Modes of Transportation

Lecture: 15

Conducted By :
Lata Akter
Lecturer
Department Of Business Administration
Dhaka City College
Elements of Marketing Logistics System
 Nature of Product
 Location of Manufacturing Unit
 Government Policy
 Storage, warehousing and materials handling
 Packaging and unitization
 Inventory
 Transport
 Infrastructure
International Transport System / Modes of Transport

 Air Transport
 Ocean Transport
 Rail Transport
 Road Transport
 Inland Waterways
 Freight Forwarding

 Freight forwarding is the planning and coordinating of the movement of

commodities across international borders, on behalf of shippers. Other
tasks involved include, but are not limited to: warehouse planning,
supplying cargo insurance, and customs brokerage.

 Freight forwarding is the coordination and shipment of goods from one

place to another via a single or multiple carriers
via air, marine, rail or highway.
 Freight Forwarder
 A freight forwarder or forwarding agent is a person or company that organizes
shipments for individuals or corporations to get goods from the manufacturer
customer or final point of distribution. Forwarders contract with a carrier or often
multiple carriers to move the goods.
 A forwarder does not move the goods but acts as an expert in the logistics network.
The carriers can use a variety of shipping modes, including ships, airplanes, trucks,
and railroads.
 International freight forwarders typically handle international shipments and have
additional expertise in preparing and processing customs documentation and
performing activities pertaining to international shipments.
 Roles/ Functions of Freight Forwarder
1) Offering advice to the shipper
The forwarding agent advises and helps clients in transporting goods more efficiently from the
buyer to the seller. They inform the client in advance about the possible challenges of freight
transportation. They negotiate with transport agents to reduce the cost of shipping the carriage.
2) Booking freight space on the modes of transportation
Among the fundamental roles of a freight forwarder is to book cargo space on airplanes, trains,
ships or other means of transportation. Many freight forwarders have particular expertise and
extensive networks to enable their clients import of export from individual countries.
3) Packaging, warehousing, and distribution
Before shipment or after the arrival of the goods, the freight forwarder can organize for packaging,
warehousing, and distribution. The forwarder can store the goods before export or import while
awaiting transportation or distribution. Sometimes a contract of transportation can include storage
services before and after delivery of the cargo while waiting for customs clearance.
 Roles/ Functions of Freight Forwarder
4) Providing insurance services
Unlike cargo underwriters, forwarders arrange cargo insurance for a service fee as agents for
their clientele. Some of the best freight forwarders suggest to their clients to purchase
insurance cover for their cargo on a gratis basis. However, in some countries like EU member
states, it is illegal to sell insurance. According to the EU Insurance Mediation Directive (IMD),
all sellers of insurance are required to register with the Financial Services Authority (FSA),
banning UK forward agents from selling cargo insurance.
5) Performing documentation and custom clearance
The role of the forwarding agent is to export documentation and shipping requirements. The
freight forwarder prepares and submits documentation for the export and import of goods,
complying with the legal and customs requirements and the sales agreement.
.
 Packaging

 Packaging is the science, art, and technology of enclosing or

protecting products for distribution, storage, sale, and use. Packaging
also refers to the process of design, evaluation, and production of
packages.
 In short, Packaging can be described as a coordinated system of
preparing goods for transport, warehousing, logistics, sale, and end
use.
 Objectives of Packaging
1. To Provide Physical Protection:
Packaging of objects insures that they are protected against vibration, temperature,
shock, compression, deterioration in quality etc. Packing and packaging also protect
the products against theft, leakage, pilferage, breakage, dust, moisture, bright light
etc.
2. To Enable Marketing:
Packing and packaging play an important role in marketing. Good packing and
packaging along with attractive labelling are used by sellers to promote the
products to potential buyers. The shape, size, color, appearance etc. are designed to
attract the attention of potential buyers.
 Objectives of Packaging: Cont’d
3. To Convey Message:
There is so much of information about the product that a manufacturer would like to
convey to the users of the product. Information relating to the raw materials used, the type
of manufacturing process, usage instructions, use by date etc. are all very important and
should be conveyed to the users. Manufacturers print such information on the packages.
4. To Provide Convenience:
Packing and packaging also add to the convenience in handling, display, opening,
distribution, transportation, storage, sale, use, reuse and disposal. Packages with easy to
carry handles, soft squeezed tubes, metallic containers, conveniently placed nozzles etc.
are all examples of this.
 Objectives of Packaging: Cont’d
5. To Provide Containment or Agglomeration:
Small objects are typically put together in one package for reasons of efficiency and economy.
For example, a single bag of 1000 marbles requires less physical handling than 1000 single
marbles. Liquids, powders, granular materials etc. need containment.
6. To Provide Portion Control:
In the medicinal and pharmaceutical field, the precise amount of contents is needed to control
usage. Medicine tablets are divided into packages that are of a more suitable size for individual
use. It also helps in the control of inventory.
7. To Enable Product Identification:
Packing and packaging enable a product to have its own identity. This is done by designing a
unique and distinct package through the effective use of colours, shapes, graphics etc. Such
identification and distinction are very essential in the present situation of intense competition
and product clutter.
 Objectives of Packaging: Cont’d
8. To Enhance Profits:
Since consumers are willing to pay a higher price for packaged goods, there will be
higher profit realization. Moreover packaged goods reduce the cost of handling,
transportation, distribution etc. and also cut down wastage and thereby increase
profits.
9. To Enable Self-Service Sales:
The present trend in retailing is effective display and self-service sales. Products
require effective packing for self-service sales.
10. To Enhance Brand Image:
Attractive packing and packaging in a consistent manner over a long time enhances
the brand image of the product.
Labelling ?
 Labeling

Labeling is a part of branding and enables product

identification. It is a printed information that is bonded to
the product for recognition and provides detailed
information about the product. Customers make the decision
easily at the point of purchase seeing the labelling of the
product.
Types of Labeling
 Types of Labeling
1. Brand Label: It plays an important role in labelling as it gives
information about the brand. It can be removable or non-
removable.

2. Descriptive Label: It specifies product usage.

3. Grade Label: It describes the aspect and features of the product.

 Functions of Labeling
 Defining the product and its contents: A label is informative about the product’s usage and caution
to be taken while using the product. Example, Red Label Natural Care tea mentions five ingredients
in its label that provide immunity.
 Recognition of product: Labeling assists in the identification of the product. Example, the brand
name of a chocolate will help one choose from the rest of the confectionery items available.
 Assorting of products: It means classification or grading of products according to different
categories in the market. Example, shampoos are categorized as dry hair, normal hair and oily hair
types and cater to consumers in the market with the dry, normal and oily scalp, respectively.
 Helping promotion of products: It gives the customer the reason to purchase the
product. Example, it attracts the attention of the consumer by displaying messages such as ‘20%
free’ or ‘save Taka 15’ message in potato chips packet.
 In compliance with the law: Labels should strictly abide by the law. Example, for tobacco, the
label should mention ‘Tobacco is injurious to health’. Cigarettes also should have ‘Smoking is
injurious to health’ as the statutory warning on its package.