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Chapter 7
International Logistics
教学目的和要求：
1、Gain an understanding of the characteristics of international logistics2、Get an overview of components of international logistics management3、Get the basic knowledge of trade terms and international insurance4、Be familiar with various international logistics intermediaries
教学重点：
1、The characteristics of international logistics2、Components of international logistics management3、Trade terms and international insurance4、Various international logistics intermediaries
教学过程：
1.New Words and Expreions
2.International Trade and International Logistics
The movement of goods acro national boundaries
1)Historical Development of International Logistics
International logistics evolved into the art and science of determining eminently concrete aspects of busine arrangement, from transportation and packaging, to warehousing and inventory management.2)Definition of International Logistics
International logistics is the proce of planning, implementing and controlling the flow and storage of goods, services and information from the point of origin to a point of consumption(revised to between, since there is reverse logistics)located in a different country.International logistics is actually about moving and exchanging goods acro borders to promote world economic development and optimal allocation of world resources by utilizing international logistics network, facilities and technology based on the principle of international division of labors and collaboration and international practices.The ultimate objective is to get the right goods or services to the right place located in a different country, at the right time, lowest cost, minimum risk, and in the desired condition, by selecting the best way and method, while making the greatest contribution to the firm and the world as a whole.3)Features of International Logistics
a)Difference in environment, higher risks
b)Complex ways of transport
c)Advanced information system
d)Standardization requirement
4)Government’s Interest in International Logistics
a)Economic importance
Cost of insurance and transport always accompany import and export, and they are service imported or exported.b)National defense concerns
Transportation gave countries ability to project power domestically, regionally, and globally.It strengthened the economy by promoting trade that further improved the military powers.c)Government support for its international carriers
Developing countries use their own carriers as a rate equalizer to avoid being exploited by the more developed countries and keep abreast of transport technology.Cabotage technically does not involve international trade but it should be mentioned.It is a worldwide practice and it means the each nation reserves for its own carriers the exclusive rights to carry domestic traffic.3.Components of International Logistics Management
1)International Transportation
International transportation is eminently more complicated, involving different modes of transportation, different carriers, different transportation documents, and much greater transit times.Its inherent risks and hazards are also much more significant. Transport regulation
The purpose of regulation is to ensure that transportation services are provided adequately and that users of these services are protected from exceive prices or unfair practices. Cargo preference
Preference cargos are the single most important incentive for U.S.-flag operators in the international trade to remain under U.S.registry.The cargo preference laws provide a vital base of cargo to help offset foreign-flag advantages. Nondiscrimination
Nondiscrimination is a legal concept designed to protect competition and fair busine practice.In terms of international transportation, it means two things.A carrier cannot charge different prices for similarly situated shippers, and they cannot refuse service to any shipper. Cabotage
Shipping cargo between two points in the same country is known as cabotage. Equipment balance
When there is the same amount of cargo going in both direction of a trade lane(trade balance), there will be the same amount of equipment going in both directions of that trade lane, this is called equipment balance.2)International Insurance
a)The principal perils
Free From Particular Average(F.P.A.) With Average(W.A.) All Risks
b)Exclusions
Lo or damage caused by the intentional act or fault of the Insured Lo or damage falling under the liability of the consignor Lo or damage arising from the inferior quality or shortage of the insured goods prior to the attachment of this insurance Lo or damage arising from normal lo, inherent vice or nature of the insured goods, lo of market and/or delay in transit and any expenses arising therefrom Risks and liability covered and excluded by the Ocean Marine Cargo War Risks Clauses and Strike, Riot and Civil Commotion Clauses of this Company
c)Commencement and termination of cover
This insurance attaches from the time the goods hereby insured leave the warehouse or place of storage named in the Policy for the commencement of the transit and continues in force in the ordinary course of transit including sea, land and inland waterway transits and transit in lighter until the insured goods are delivered to the consignee’s final warehouse or place of storage at the destination named in the Policy or to any other place used by the Insured for allocation or distribution of the goods or for storage other than in the ordinary course of transit.d)Duty of the insured
It is the duty of the Insured to attend to all matters as specified hereunder, failing which the Company reserves the right to reject his claim for any lo if and when such failure prejudice the rights of the Company. The Insured shall take delivery of the insured goods in good time upon their arrival at the port of destination named in the Policy.In the event of any damage to the goods, the Insured shall immediately apply for survey to the survey and/or settling agent stipulated in the Policy.If the insured goods are found short in entire package or packages or to show apparent traces of damage, the Insured shall obtain from the carrier, bailee or other relevant authorities certificate of lo or damage and/or shorthanded memo.Should the carrier, bailee or the other relevant authorities be responsible for such shortage or damage, the Insured shall lodge a claim with them in writing and, if neceary, obtain their confirmation of an extension of the time limit of validity of such claim. The Insured shall, and the Company may also, take reasonable measures immediately in salvaging the goods or prevention or minimizing a lo or damage thereto.The measures so taken by the Insured or by the Company shall not the considered respectively, as a waiver of abandonment hereunder, or as an acceptance thereof.In case of a change of voyage or any omiion or error in the description of the interest, the name of the veel or voyage, this insurance shall remain in force only upon prompt notice to this company when the Insured becomes aware of the same and payment of an additional premium if required The following documents should accompany any claim hereunder made against this Company: Original Policy, Bill of Lading, Invoice, Packing List, Tally Sheet, Weigh Memo, Certificate of Lo or Damage and/or Shortland Memo, Survey Report, Statement of Claim If any third party is involved, documents relative to pursuing of recovery from such party should also be included.Immediate notice should be given to the Company when the Cargo Owner’s actual responsibility under the contract of affreightment “Both to Blame Collision” clause becomes known.
e)The time of validity of a claim
The time of validity of a claim under this insurance shall not exceed a period of two years counting from the time of completion of discharge of the insured goods from the seagoing veel at the final port of discharge.3)Packaging
4)Terms of Payment
International means of payment are more involved, with the risks of nonpayment and currency fluctuation calling for specific strategies that are never used in domestic transactions.Non-payment risk is higher in international transactions for: le credit information is available lack of personal contact: no way to evaluate the character of the importer collections are difficult and expensive no easy legal recourse: there is no court with jurisdiction over international disputes mistrust
a)Cash in Advance
In a Cash in Advance transaction, the exporter requests that the customer provide payment in advance, before the shipment of the goods can take place.Payment is usually made with an electronic SWIFT fund transfer from the customer’s bank to the exporter’s bank. Buyers in an area of instability Buyer has bad credit Exchange rate control Goods are made to order Buyer’s market
b)Open account
The exporter just sends an invoice to the importer along with the shipment and trusts the customer to pay within a reasonable amount of time.Just opposite to Cash in Advance.c)Documentary collection
It is a proce by which an exporter asks a bank to “safeguard” its interests in the foreign country by not releasing the documents(B/L)until the importer satisfies certain requirements, most often paying the exporter(D/P)or signing a financial document(a draft)promising that it will pay the exporter within a given amount of time(acceptance)(D/A).d)Letters of credit
A L/C is a conditional payment commitment of the bank in addition to commercial credit that it will pay the “beneficiary” upon the presentation of certain documents.The exporter and the importer agree on a sale under “Letter of Credit” terms. The importer/buyer applies for an LC from bank. The importer’s bank(iuing bank)iues a LC and sends it to the exporter’s bank(notification bank) The Notification bank notifies the exporter that an L/C was iued, and it is OK to ship the goods to the importer.The notification bank should check a number of things: L/C is drawn on a legitimate bank, content meets requirement, irrevocable L/C. The exporter ships the goods and gives documents to Notification bank. The Notification bank checks that the documents match the requirements of the LC, and sends them to the Iuing bank.Iuing bank verifies that the documents match the requirements of the LC and notifies the importer that everything is in order. The iuing bank pays seller and buyer pays iuing bank.5)Trade Terms
EXW FCA FAS FOB CFR CIF CPT CIP DES DEQ DAF DDU DDP
6)Customs and Customs Clearance
a)What does Customs do
National security is a broad area that refers mostly to military threats. Revenue collection by customs is the source of funds for the country.
Managed trade and competitivene refer to policies to promote the nation’s economy. Gray making importing, also known as parallel importing, refers to the practice of importing a product contrary to the wishes of the producer, who normally has their official distributor. Protecting national interests is the catchall for any goal the nation wishes to pursue.b)How does Customs operate
Entry restriction-certain products may be completely restricted from entry, or only under certain conditions.Rates-duties vary dramatically.Most are simply a nominal tax, while other are intended to discourage imports of a certain product.Information-Customs requires that certain information be provided on imports and exports.Government data on economic trends is collected this way.Another reason for submitting information is to control the import/export of some products.7)Inventory Management
Major international inventory iues are longer performance cycle, more in-transit inventory, border croings, more complex location decisions, more shrinkage and more safety stock.4.International Logistics Infrastructure
1)Free Trade Zone
A Free Trade Zone is, for Customs purposes, still “outside” of the country;goods can be shipped to the FTZ without being subject to duty and quotations.Once in the FTZ, the goods can be transformed, aembled, repackaged, and so on.If the goods are re-exported, they never pay duty in the host country in which the FTZ is located;if they are sold in the host country, it is only after leaving the FTZ that they have to pay duty.The main reasons for using FTZ
Delay tariff Avoid tariffs before shipment Proceing Correct mistakes Sell
Merchandise in a FTZ may be stored, repackaged, repaired, tested, relabeled, displayed as well as manufactured, aembled, salvaged and destroyed.2)Ports
A port is the intersection of different modes of transport.Factors that influence the competitivene of ports:
Location in relation to markets Location in relation to its competitors Inland connections Infrastructure and technology Acceibility to the trade lane Management
Most ports are run by a commiion aigned by a local or regional government, called port authority.Types of port authorities:
Landlord port: the landlord port is one in which the port owns and manages infrastructure, and private parties mange everything else. Tool port: the port also owns the superstructures, but private parties rent aets through conceions or licenses. Service port: the service port is where the port has completed ownership and management. Privately owned port
5.International Logistics Intermediaries and Logistics Alliances
Intermediaries refer to many companies or individuals that facilitate trade.Some of them work for shippers, some for carriers, and some for consignees.Sometimes these arrangements become more elaborate, such as alliances.1)Main International Logistics Intermediaries/Facilitators
International Logistics Intermediaries function as third-party logistics providers, firms that provide outsourced or “third party” logistics services to companies for part, or sometimes all of their supply chain management functions.Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.Types of International Logistics Intermediaries or facilitators:
International freight forwarder is an individual or a company that books or otherwise arranges space for shipments between countries via common carriers. Customs brokers are private individuals, partnerships, aociations or corporations licensed, regulated and empowered by Customs to aist importers and exporters in meeting national requirements governing imports and exports. Non-veel Operating Common Carriers(NVOCC)buy space from carriers and resell them.NVOCCs eentially act as if they were a carrier, but they do not own or control any of the ships, planes, etc. Export Trading Company(ETC)and Export Management Company(EMC)aist companies in marketing their product in other countries.2)International Logistics Alliances
In logistics, at least as much as any other industry, there has been a strong trend toward alliances in order to promote efficiency.Criteria of a good match:
Individual excellence Importance Interdependence Investment Information Integration Institutionalization Integrity 11
