Professional Documents
Culture Documents
Learning Objectives
To discuss macro-environmental influences on
international logistics
To explain documentation as well as terms of
sale and methods of payment for international
shipments
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Balance of payments
Cargo preference
Certificate of origin
Commercial invoice
Embargoes
Export management
company
Export packers
Gross world product
Import quota
Incoterms
International freight
forwarders
International logistics
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Nontariff barriers
Nonvessel-operating
common carrier
(NVOCC)
Ocean carrier
alliances
Open account
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International Logistics
International logistics
logistics activities associated with goods that are
sold across national boundaries.
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International Logistics
International logistics occurs when:
A firm exports a portion of a product made or
grown
A firm imports raw materials
Goods are partially assembled in one country and
then shipped to another, where they are further
assembled or processed
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International Logistics
International logistics occurs when:
The firm is global in outlook and sees almost all
nations as being markets, sources of supply, or
sites for markets or for assembly operations
Because of geography, a nations domestic
commerce crosses foreign borders, often in bond
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Macroenvironmental Influences on
International Logistics
Macroenvironmental influences
refer to the uncontrollable forces and conditions
facing an organization and include cultural,
demographic, economic, natural, political, and
technological factors.
Source: http://www.marketingpower.com/_layouts/Dictionary.aspx?dLetter=M.
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Macroenvironmental Influences on
International Logistics
Factors for macroenvironmental influences
Cultural
Demographic
Economic
Natural
Political
Technological
Source: http://www.marketingpower.com/_layouts/Dictionary.aspx?dLetter=M.
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Macroenvironmental Influences on
International Logistics
Political factors
Embargoes
the prohibition of trade between particular
countries
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Macroenvironmental Influences on
International Logistics
Political factors
Degree of federal government in cross-border
trade
Balance of payments
system of accounts that records a countrys international
financial transactions1
Subsidies
Cargo preference rules
1Ibid
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Macroenvironmental Influences on
International Logistics
Economic factors
Currency fluctuations
Market size
Income
Infrastructure
Economic integration
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Macroenvironmental Influences on
International Logistics
Cultural factors
Religion
Values
Rituals
Beliefs
Languages
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Macroenvironmental Influences on
International Logistics
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Macroenvironmental Influences on
International Logistics
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Macroenvironmental Influences on
International Logistics
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International Documentation1
Flow of documentation is as much a part of the
main logistical flow as the flow of product
Domestic shipments typically only require several
pieces of documentation
Export shipments typically require approximately
10 pieces of documentation
Cross-border trades can require more than 100
separate documents
1This
material in this section is drawn from Donald F. Wood, Anthony Barone, Paul R. Murphy, and Daniel L.
Wardlow, International Logistics, 2nd ed. (New York: Amacom, 2002), Chapter 12.
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International Documentation
Necessary documents are required at the point of
importation
Commonly used documents include:
Certificate of origin
Commercial invoice
Shippers export declaration (SED)
Shippers letter of instruction (SLI)
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International Documentation
Terms of sale involves:
Parties working within the negotiations channel
Looking at the possible logistics channels
Determining when and where to transfer the
following between buyer and seller:
Physical goods
Payment for the goods, freight charges, and insurance
for the in-transit goods
Legal title to the goods
Required documentation
Responsibility for controlling or caring for the goods in
transit, i.e. livestock
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International Documentation
Terms of sale for international shipments are
commonly referred to as Incoterms.
Developed in the 1930s and is periodically revised
Current version Incoterms 2010 reflects rapid
expansion of global trade with focus on improved
cargo security and new trends in cross-border
transportation1
1Export.govIncoterms
2010.
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International Documentation
Incoterms 2010 involve two key changes
Organizing the terms by modes of transport
Characterized as Group 1
Applies to any mode of transport
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International Documentation
Incoterms 2010
Group 1 Terms
EXW (ExWorks)
FCA (Free Carrier)
CPT (Carriage Paid To)
CIP (Carriage and Insurance Paid To)
DAT (Delivered at Terminal)
DAP (Delivered at Place)
DDP (Delivered Duty Paid)
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International Documentation
Incoterms 2010
Group 2 Terms
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Methods of Payment1
Methods of payment refer to the manner by
which a seller will be paid by a buyer.
Much more challenging in international logistics
vs. domestic logistics
Four methods of payment include:
Cash in advance
Letters of credit
Bills of exchange
Open account
1The
material in this section is largely drawn from Jim Sherlock and Jonathan Reuvid, eds., The Handbook of
International Trade (Edinburgh, UK: GMB Publishing, 2005), Part 8.
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Methods of Payment1
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Methods of Payment
Payment method
Should be established at the time that a shipment
price is decided upon
Can be influenced by key factors such as
the country the product is to be sold in
the sellers assessment of buyer risk
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Transportation Considerations in
International Logistics
Ocean shipping
International airfreight
Surface transportation
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Transportation Considerations in
International Logistics
Ocean Shipping
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Transportation Considerations in
International Logistics
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Transportation Considerations in
International Logistics
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Transportation Considerations in
International Logistics
International Airfreight
Three types of international airfreight operations
include:
Charted aircraft
Integrated air carriers
Scheduled air carriers
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Transportation Considerations in
International Logistics
Surface Transport Considerations
Transit times can be significantly impacted by a
countrys infrastructure and modal operating
characteristics.
Short-sea shipping (SSS) is an alternative to
surface transporting
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Transportation Considerations in
International Logistics
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