Global Transportation Options
• More complex than domestic due to distance and number of parties involved • Major international transportation modes
– Ocean – Air – Motor – Rail

Chapter 5

Management of Business Logistics, 7th Ed.

2

7th Ed. Chapter 5 Management of Business Logistics. 3 . container. no set routes – Private – service firm’s own logistics needs • Include bulk.Global Transportation Ocean • Ocean structure Options: – Liner – scheduled service. RO-RO • Most pervasive and important global mode • Revenues are substantial – see Table 5-3. regular routes – Charter – contract service.

Table 5-3 Top Ten Ocean Carriers Chapter 5 Management of Business Logistics. 4 . 7th Ed.

• New airfreighters can carry up to 13 TEUs (20 foot containers). 7th Ed. • Rates have traditionally restricted cargo to low density. • Volume is approximately 1% of movements. Chapter 5 Management of Business Logistics.Global Transportation Options: Air • Speed allows large compression of transit times. • Linkages with package delivery and courier services provide true point-to-point service. but nearly 20% of the value. high value goods. 5 .

Table 5-4 Major International Cargo Air Carriers Chapter 5 Management of Business Logistics. 6 . 7th Ed.

7th Ed. and 53 foot boxes. • Paperwork can be streamlined by having a bonded warehouse seal the container at point of shipment and not opened until it reaches its destination country. • Container sizes are largely standardized into 20.Global Transportation Motor Options: • Global motor characteristics of speed. 40. 45. 48. Chapter 5 Management of Business Logistics. reliability. safety. and accessibility basically the same as for domestic transportation. 7 .

8 .Global Transportation Options: Rail • International rail movements are problematic. • Containers maybe transloaded from rail to ocean to rail and/or motor if standard international sizes are used. • Rail gauges often vary. Chapter 5 Management of Business Logistics. • Maritime bridge movements gain speed by using an intermodal strategy. 7th Ed.

Strategic Channel Intermediaries • Foreign Freight Forwarders • Non-Vessel-Operating Common Carriers • Export Management Companies • Export Trading Companies • • • • • Customs House Brokers Ship Brokers Ship Agents Export Packers Ports Chapter 5 Management of Business Logistics. 7th Ed. 9 .

• Used by small or inexperienced shippers. • Consolidators and agents regulated by the Federal Maritime Commission. • Fee for service and/or commission from shipping companies. Chapter 5 Management of Business Logistics.Strategic Channel Intermediaries: Foreign Freight Forwarders • Consolidate small shipments into economical container or larger-sized lots. • Use ocean and air modes. 7th Ed. 10 .

• These NVOCCs then collect traffic from inland ports back to the ocean port cities. 7th Ed. Chapter 5 Management of Business Logistics. 11 . • NVOCC service widens markets of the ocean carriers and provides expertise to the smaller inland shippers.Strategic Channel Intermediaries: NonVessel Operating Common Carriers • These carriers are used to disperse traffic moving to and from an inland port. • This service saves the shippers from having to pay to return empty containers to the ocean carriers.

Chapter 5 Management of Business Logistics. • Exclusive arrangements are possible and the EMC may sell with or without taking title to the goods. 12 . promotion. and arranging for distribution. 7th Ed.Strategic Channel Intermediaries: Export Management Companies • Export Management Companies (EMCs) act as a knowledgeable shippers agent in a foreign country. and dealing with the foreign government. • Act as the sellers agent in getting orders.

13 . • Allows small and medium-sized firms the ability to compete globally. the Export Trading Companies (ETCs) export goods and services. Chapter 5 Management of Business Logistics.Strategic Channel Intermediaries: Export Trading Companies • Similar to the EMCs. 7th Ed. and meeting foreign government requirements. arranges for inland and international transportation. • The ETC locates buyers.

• Much of the paperwork is done ahead of the shipment using integrated computer systems. 14 . • Operate under power of attorney from the shipper and can pay any duty on freight.Strategic Channel Intermediaries: Customs House Brokers • Oversee the movement of goods through customs and ensures that paperwork accompanying a shipment is in order. greatly reducing the time it takes to clear customs. 7th Ed. Chapter 5 Management of Business Logistics. thereby reducing transit times.

Chapter 5 Management of Business Logistics. • Ship agents are the local (port) agent of the ship operator when the ship is in port.Strategic Channel Intermediaries: Ship Brokers/Ship Agents/Export Packers • Ship brokers act as agents in securing the charter of a ship. 7th Ed. • Export packers supply a shipper specialized export packing services to help with customs and to protect the goods. 15 .

• Different ports often specialize in different types of shipments. • Overall door-to-door transit time and variability most important factors. 16 . 7th Ed. • Selecting the wrong port can add miles.Strategic Channel Intermediaries: Ports • Port selection is a very important part of the international logistics strategy. and therefore cost to a shipment not appropriately routed. Chapter 5 Management of Business Logistics. time.

Figure 5-4 Port Evaluation Factors Chapter 5 Management of Business Logistics. 7th Ed. 17 .

S. Tons. Oakland New Orleans Baltimore 18 . Ports by Containers. 7th Ed.Table 5-5: Ranking of U. and Cargo Value By Containers Long Beach Los Angeles NY & NJ San Juan Oakland Seattle Charleston By Tons Houston New Orleans South Louisiana NY & NJ Corpus Christi Hampton Roads Beaumont By Cargo Value Long Beach Los Angeles NY & NJ Houston Seattle Charleston Hampton Roads Hampton Roads Tacoma Houston Chapter 5 Long Beach Philadelphia Morgan City Management of Business Logistics.

bulk. or finished goods. • Longer term storage may require a public or bonded warehouse. 19 . • This may require different types of in transit facilities depending upon the method of shipment and cargo type. Chapter 5 Management of Business Logistics.Storage Facilities • Storage may be necessary for containers. 7th Ed.

Packaging • Export shipments generally require a higher level of protection than domestic shipments because of extra handling and the motion of the ocean and its effect on cargo. Chapter 5 Management of Business Logistics. as settling liability claims can be very difficult due to the large number of firms that may be handling the goods. 20 . • Shippers expect to pay more for more protection. 7th Ed.

7th Ed.Figure 5-5 Some Symbols Used for Packing Export Shipments Chapter 5 Management of Business Logistics. 21 .

7th Ed. 22 .Governmental Influences • Customs Regulation • Other Customs Functions • Foreign Trade Zones Chapter 5 Management of Business Logistics.

7th Ed.Figure 5-6 Export-Import Flowchart Chapter 5 Management of Business Logistics. 23 .

a fixed amount. • Duties are expressed either as a percent of value. 7th Ed. 24 . these barriers to trade are handled differently in various countries.Governmental Influences: Customs Regulation • Customs regulations of the importing country have the greatest effect on the international movement of goods. Chapter 5 Management of Business Logistics. • In place to protect domestic industries from unfair or predatory competition. or in combination.

Ensure that the goods are properly marked. 25 . Chapter 5 Management of Business Logistics. 7th Ed. Ensure that the items are permitted for entry. Ensure correct price and quantity. Control quota amounts.Governmental Influences: Other Customs Functions • • • • • Determine that the goods value is as stated.

26 .Governmental Influences: Foreign Trade Zones (FTZs) • Goods enter without customs formalities. repacked. 7th Ed. • Shippers can break bulk before entry. • Goods can be stored indefinitely and/or re-exported without paying duty. • Buyer can test or sample before entry. Chapter 5 Management of Business Logistics. • FTZs can hold excess goods until the next quota window. • Goods can be processed. or remarked to avoid fines before entry. duty or bond.