Global Transportation Options

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

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Global Transportation Ocean

Ocean structure

Options:

Liner scheduled service; regular routes Charter contract service; no set routes Private service firms own logistics needs

Include bulk, container, RO-RO Most pervasive and important global mode Revenues are substantial see Table 5-3.

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Table 5-3 Top Ten Ocean Carriers

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Global Transportation

Options: Air

Speed allows large compression of transit times. Linkages with package delivery and courier services provide true point-to-point service. Rates have traditionally restricted cargo to low density, high value goods. Volume is approximately 1% of movements, but nearly 20% of the value. New airfreighters can carry up to 13 TEUs (20 foot containers).

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Table 5-4 Major International Cargo Air Carriers

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Global Transportation Motor

Options:

Global motor characteristics of speed, safety, reliability, and accessibility basically the same as for domestic transportation. Container sizes are largely standardized into 20, 40, 45, 48, 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.
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Global Transportation

Options: Rail

International rail movements are problematic. Rail gauges often vary. Containers maybe transloaded from rail to ocean to rail and/or motor if standard international sizes are used. Maritime bridge movements gain speed by using an intermodal strategy.

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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

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Strategic Channel Intermediaries: Foreign Freight Forwarders

Consolidate small shipments into economical container or larger-sized lots. Used by small or inexperienced shippers. Consolidators and agents regulated by the Federal Maritime Commission. Fee for service and/or commission from shipping companies. Use ocean and air modes.
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Strategic Channel Intermediaries: NonVessel Operating Common Carriers

These carriers are used to disperse traffic moving to and from an inland port. These NVOCCs then collect traffic from inland ports back to the ocean port cities. This service saves the shippers from having to pay to return empty containers to the ocean carriers. NVOCC service widens markets of the ocean carriers and provides expertise to the smaller inland shippers.

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Strategic Channel Intermediaries: Export Management Companies

Export Management Companies (EMCs) act as a knowledgeable shippers agent in a foreign country. Act as the sellers agent in getting orders, and arranging for distribution, promotion, and dealing with the foreign government. Exclusive arrangements are possible and the EMC may sell with or without taking title to the goods.
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Strategic Channel Intermediaries: Export Trading Companies

Similar to the EMCs, the Export Trading Companies (ETCs) export goods and services. The ETC locates buyers, arranges for inland and international transportation, and meeting foreign government requirements. Allows small and medium-sized firms the ability to compete globally.

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Strategic Channel Intermediaries: Customs House Brokers

Oversee the movement of goods through customs and ensures that paperwork accompanying a shipment is in order. Operate under power of attorney from the shipper and can pay any duty on freight. Much of the paperwork is done ahead of the shipment using integrated computer systems, greatly reducing the time it takes to clear customs, thereby reducing transit times.
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Strategic Channel Intermediaries: Ship Brokers/Ship Agents/Export Packers

Ship brokers act as agents in securing the charter of a ship. Ship agents are the local (port) agent of the ship operator when the ship is in port. Export packers supply a shipper specialized export packing services to help with customs and to protect the goods.

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Strategic Channel Intermediaries: Ports

Port selection is a very important part of the international logistics strategy. Different ports often specialize in different types of shipments. Selecting the wrong port can add miles, time, and therefore cost to a shipment not appropriately routed. Overall door-to-door transit time and variability most important factors.

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Figure 5-4 Port Evaluation Factors

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Table 5-5: Ranking of U.S. Ports by Containers, Tons, 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
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Long Beach
Philadelphia Morgan City
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Oakland
New Orleans Baltimore
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Storage Facilities
Storage may be necessary for containers, bulk, or finished goods. This may require different types of in transit facilities depending upon the method of shipment and cargo type. Longer term storage may require a public or bonded warehouse.

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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. Shippers expect to pay more for more protection, as settling liability claims can be very difficult due to the large number of firms that may be handling the goods.
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Figure 5-5 Some Symbols Used for Packing Export Shipments

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Governmental Influences
Customs Regulation Other Customs Functions Foreign Trade Zones

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Figure 5-6 Export-Import Flowchart

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Governmental Influences: Customs Regulation

Customs regulations of the importing country have the greatest effect on the international movement of goods. In place to protect domestic industries from unfair or predatory competition, these barriers to trade are handled differently in various countries. Duties are expressed either as a percent of value, a fixed amount, or in combination.
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Governmental Influences: Other Customs Functions

Determine that the goods value is as stated. Ensure that the goods are properly marked. Ensure that the items are permitted for entry. Ensure correct price and quantity. Control quota amounts.

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Governmental Influences: Foreign Trade Zones (FTZs)

Goods enter without customs formalities, duty or bond. Shippers can break bulk before entry. Goods can be processed, repacked, or remarked to avoid fines before entry. FTZs can hold excess goods until the next quota window. Buyer can test or sample before entry. Goods can be stored indefinitely and/or re-exported without paying duty.

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