Unit 6: Logistics & Transportation Flashcards
What is logistics?
Logistics can be defined as the management of the flow of goods, information and other resources, energy and people between the point of origin and the point of consumption in order to meet the requirements of consumers.
What does Logistics involve?
Logistics involves the integration of information, transportation, inventory, warehousing, material handling, packaging and security.
What is a logistician?
A professional working in the field of logistics management.
What are main functions of qualified logistician?
- inventory management
- purchasing
- transportation
- warehousing
- consultation
- organizing
- planning of logistics activities
be responsible for the life cycle and supply chain operations of a variety or products as well as customs documentation
What are major benefits of efficient logistics operations?
- cost savings by centralizing inventory management
- faster order fulfilment by relying on a global transportation network
- improved cash flow
- flexibility to change distribution patterns for new products based on ever-changing customer demands
What are main customer groups served by the logistics industry?
- parcel and documents express delivery services
- freight by air, ocean, road or rail
- warehousing and distribution
- supply chain solutions
What are types of logistics?
- Inbound logistics
- Outbound logistics
What is inbound logistics?
Inbound Logistics involves the activities of receiving, storing, and distributing raw materials for use in production.
What are inbound logistics services?
Inbound logistics services cover all activities required to bring goods from a sourcing location to a warehouse or production plant, such as transportation, inventory, warehousing and materials handling.
What is outbound logistics?
Outbound Logistics is the process related to the storage and movement of the final product and the related information flows from the end of the production line to the end user.
What are key functions of outbound logistics?
Outbound logistics focuses on distribution. Shipping, freight and warehousing are all key functions that fall under this category.
Outbound logistics also includes communication with recipients and carriers.
What do cargo handliing services include?
- cargo collection and consolidation
- cargo forwarding
- transit warehousing
- product completion and inspection
- cargo tracing
- documentation and import handling
- customs clearance
What is logistics management?
Logistics management: part of supply chain management which plans, implements, and controls the efficient flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.
What are types of sea transport?
- freighter
- ships
- canoes
- submarines
What is shipping documentation?
Shipping Documents: Transport Document, Insurance Certificate, Official or Legal Documents
What does shipping documentation include?
- transport documents: bill of lading (ocean or multi-modal), Official or Legal documents
- insurance documents: insurance policy or certificate
- official documents: license, Embassy legalization, origin certificate, inspection cert, phyto-sanitary certificate
- a freight account: an invoice sent by the shipping company to the exporter stating their charges
- a shipping note: advises the Superintendent that the goods are to be shipped
- a dock receipt will be returned to the consignor confirming that the goods are stored and awaiting
- a mate’s receipt: may be sent acknowledging that the goods have been loaded
- ETA - Estimated Time of Arrival
- NOR - Notice of Readiness
What is marine bill of lading?
A shipping company document that includes a contract for delivery of the merchandise, convey title to the goods, and is a receipt for the merchandise. It indicates details of weight, freight costs, and size of cargo.
What are characteristics of marine bill of lading?
The most important document in shipping as it is a document of title
- “full set” – 3 originals
- “to order” are written – a negotiable document
- “endorse in blank” or “blank endorsement” – no restriction on ownership
- A shipped b/l or shipped on board – goods have been loaded on to the ship
- “clean” – goods were taken on board in good condition
- “dirty/claused” – found something wrong with the consignment
- “freight prepaid”
- “freight collected”
Feature of marine insurance?
- It is based on “Utmost good faith”
- everything which is in their knowledge
- can affect the contract of insurance
- It is a contract of indemnity
Types of insurance policy
- floating policy
- open policy/open cover
- tailor made policy
- valued policy
- unvalued policy
- time policy
- voyage policy
- time and voyage policy
What is cargo insurance?
Cargo insurance is underwritten on the Institute Cargo Clauses, with coverage on an A, B, or C basis, A having the widest cover and C the most restricted. Valuable cargo is known as specie
What are shipping liabilities?
(1) Hague Rules
The Hague Rules govern liability for loss and damage to cargo carried by sea under a b/l and state that the carrier will not responsible under the following conditions:
- Acts of war, riots, Civil disturbance
- Force majeure
- Negligence
- Inherence vice
(2) Hamburg Rules
extend the shipping companies liability for damage or delay to “goods in their charge” unless they can proof they took all measures to avoid the problem
(3) To be safe, co.insures the consignment under all risk cover and war
What are goods transported by sea?
- Bulk goods
- Scral metal
What are advantages of sea transportation?
- very high capacity of load
- low freight rates
- world-wide transport operations
- continuous operations on 24-hour basis
What are disadvantages of sea transportation?
- heavier packaging
- slow speeds
- transhipment to other forms of transport essential
- inflexible timetabling
- high capacity means disproportionate increase in transit time
What are types of air transport?
- passenger jets
- airships
- helicopters
- hot-balloons
When using air transportation?
- necessary for goods lose value overtime and deteriorate
- use for speed, particularly over long distances
- insurance tends to be cheaper as consignments spend less time in transit
- with bulk consignments, air is much more expensive
- the main document - AirWaybill, which consists of 12 copies distributed to the airline, exporter, importer, and custom
- AWB is only a receipt and cannot be transferred to another person
Documentation of Air transportation
- AWB is not documents of title, and not negtiable
- Air waybills is obtained by the consignor filling out an instruction for dispatch form and paying the freight charges.
The charges are calculated in size, weight or value and risk
What are advantages of air transportation?
- high speed delivery
- cheap insurance because goods are at risk for shorter periods
- world-wide transport operations
What are disadvantages of air transportation?
- high freight rates
- restrictions on weight and size
- delays due to bad weather
- transhipment to other forms of transport essential
What are disadvantages of air transportation?
- high freight rates
- restrictions on weight and size
- delays due to bad weather
- transhipment to other forms of transport essential
What are factors to consider when choosing modes of transport?
(1) nature of the goods
- dimensions
- weight
- value
- fragility
- perishability
(2) the time factor: fast transport
- reduce distribution cost
- reduce cost of finance tied up in transit
- require less insurance cover
- means earlier use/resale of goods
(3) Freight rates
- sea freight rates
- air freight rates
Incoterms: EXW?
- EXW - Ex Works (named place): the seller makes the goods available in his premises
- the buyer is responsible for all charges
Incoterms Group F: Main carriage unpaid
- FCA - Free Carrier (named place)
- FAS - Free Alongside Ship (named loading port)
- FOB - Free On Board (named loading port)
Incoterms Group C: Main carriage paid
- CFR - Cost and Freight (named destination port)
- CIF - Cost, Insurance and Freight (named destination port)
- CPT - Carriage Paid To (named place of destination
- CIP - Carriage and Insurance Paid to (named place of destination
Incoterms Group D - Arrival
- DAF - Delivered At Frontier (named place)
- DES - Delivered Ex Ship (named port)
- DEQ - Delivered Ex Quay (named port)
- DDU - Delivered Duty Unpaid (named destination place)
- DDP - Delivered Duty Paid (named destination place)
