International Marketing

Assignment

INTERNATIONAL LOGISTIC PRACTICES

INTERNATIONAL LOGISTIC PRACTICES

The word logistics has its origin from Greek “logistike” which means the art of calculating. The
term logistics has evolved into the art and science of determining eminently concrete aspects of
business management, from transportation and packaging to warehousing and inventory
management. The term is much broader and includes not only all the activities related to the
physical movements of the goods, both upstream (procurement activities) and down stream
(sales) activities but also the management of relationships with suppliers and customers. Earlier
in this century, functions now grouped under the term logistics were part of marketing

International logistics is the process of planning, implementing and controlling the flow and
storage of goods, services and related information from a point of origin to a point of
consumption located in a different country. In ordinary language the same can be defined as right
product, at right place, in right time, and in right condition.

Activity centers in logistics

1. Transportation (inbound, /out bound)
2. Warehousing
3. Inventory
4. Unitization (packing and packaging)
5. Material handling
6. Communications.

Role of logistics aims at competency as a strategic measure. It is fundamentally important to

view logistics as to how it can be exploited as a core competency. For logistical competency to
develop, it is important to develop an integrated frame work that defines and relates key
concepts. This integration should be in such a way that competitively superior logistical
performance contributes to overall enterprise strategy.

Logistical service is measured in terms of

1. Availability (inventory according to customer requirement)
2. Operational capability and performance (order delivery speed, consistency accommodating
unusual and unexpected customer requests)
3. Service reliability. (Continuous improvement in service for customer delight)

Logistical performance
The business marketer has a substantial role to play in optimizing logistics performance by
interacting with distribution channel intermediaries, customers, manufacturers and other areas of
the firm to facilitate tradeoffs that will bring cost and efficiency benefits to the firm.
Order conditions
By smoothening order patterns and preventing congestion in the logistics system customer
service can be maintained at a high level more economically.
1. Institution of minimum order sizes helps to ensure that the costs of small orders are avoided.
2. Using minimum reorder periods is another way of reducing small orders.
3. When technological or style obsolescence and perishability is avoided maximum reorder
quantities may be instituted.
4. Delivery to individual customers on designated specific dates, and days can improve
transportation efficiency
5. Customer cooperation can be won by agreeing on minimum lead times for ordering.
6. Incentive price discounts can encourage customers to order truck load and full container load
quantities.
7. By consolidating cargo small customers can be satisfied

Product adjustments
The physical characteristics of industrial marketers products have considerable impact on the
firms logistics.
1. High volume, low weight products fully utilize the space parameters of the logistics system
before the weight parameters.
2. Low volume and high weight products use up the logistics systems weight parameters first,
leaving excess volume available and unused.
3. For lowest cost and highest efficiency, the business marketers objective is to maximize
utilization of both capacity parameters,
4. Such logistics thinking has led to the wide spread change in packaging from glass to plastic
containers to reduce weight. This is an example of product adjustment, where a change is made
to the product to improve its logistical characteristics.
5. Many products are shipped and stored in knocked down condition to make a compact package
that is reassembled at the point of usage.
6. Product redesign for nesting or stacking is another product adjustment that can also achieve

Customer Service and Order Processing

Customer service refers to a group of utilities or benefits the customer expects from the supplier.
In logistics terminology it is termed as right product at the right place and in right time and also
in right shape. Level of customer service is measured in terms of his ‘batting average’ that is
number of times or occasions the customer service target is met. Similarly in evaluating the
existing system, the logistics audit should begin with re evaluation of customer service
objectives. The desired level of customer service then becomes the objective that all logistics
activities as an integrated system attempt to achieve. The level of customer service also acts as a
quality control standard against which the performance of the distribution system may be
evaluated.
Elements of customer service
Customer service means different things to each customer. From research it was found that most
buyers identify the following parameters as being important while dealing with suppliers.
1. Order cycle time
The time taken between placing the order and receipt of delivery
2. Order cycle consistency
The extent to which order cycle time varies.
3. Order accuracy
The degree to which items shipped meet order specifications.
4. Order completeness
The extent the items ordered are totally filled when the order is assembled for shipment.
5. Order condition
Damage level at the time of receipt
INTERNATIONAL LOGISTICS
Order Processing
The order that a customer sends to his supplier may be only a piece of paper with a name,
address anda series of digits written on it. For management of logistics activities however it is
the most importantdocument in information system. Where it came from, what it contains, and
when it demandsservicing are important. The information structures set in motion the entire
logistics system. When thecustomer order is properly anticipated and his demands are met ,the
logistics system will likelyfunction properly and when it is not anticipated customer service
performance may fail and when it isover anticipated logistics costs may become excessive .For
this reason the place of the order and itsprocessing must be considered in relation to the overall
system information flow which exists formally and informally in any firm.

Various steps are involved in execution of customer order efficiently. It starts with
1. Order collection.
2. Status reporting
3. Internal order communication
4. Credit checking
5. Order processing
INTERNATIONAL LOGISTICS
Inventory Planning And Management
Inventories include all tangible items held for sale or consumption in the normal course of
businessfor which the company holds title where they may be located. In other words Inventory
is the stock of items held to meet future demand. A company needs to maintain a level of
inventory whereinvestment is minimum but at the same time chances of stock out is also
minimum. When a companyachieves this objective, it is called Inventory Management.
Inventory costs are a constant concern of most business marketers for two reasons.
1. They are the second largest cost in distribution
2. They can add as much as 40% in extra cost per year to the value of goods being stored.
A business house can have various types of Inventories. In general any company does have five
types of Inventories.
1. Cycle stock
2. In transit stock
3. Safety Stock
4. Speculative Stock
5. Dead Stock
Cycle stock:
Cycle stock is Inventory required to meet basic demand under conditions of certainty. It is also
known as Transition Inventory. This is the Inventory currently under going transformation and
functions as a vehicle for profit generation. It can either be in the form of work in progress or in
the form finished goods. The finished goods transition Inventory can either be under going
quality check or could be in the process of being transported from the point of origin to the point
of consumption.
INTERNATIONAL LOGISTICS
In Transit Stock:
Refers to goods undergoing movement between fixed stock points such as warehouses.
The concept of in transit stock is important because of funds can be tide up while goods are
being transported.

Safety Stock:
Safety stock also known as buffer Inventory. This inventory is held over and above cycle stock
level to cushion against and anticipated shortages of supply or uncertainties of demands. Safety
stock levels are calculated on the basis of equating marginal savings of preventing stock outs to
marginal carrying cost of additional inventory.

Speculative Stock:
Speculative Stock is inventory in excess of normal requirements that is held in anticipation of
price increase. The objective of holding Speculative Stock is to increase profitability on the basis
of the change of value of the goods while they being stored.

Dead Stock:
Dead stock is inventory for which no demand has been registered for a specified period of time.
Inventory management is the sum total of those activities necessary for a acquisition, storage,
sale,disposal or use of material.
Inventory management is the practice of planning, directing and controlling inventory so that it
contributes to the business profitability. Inventory turnover is the measure of how well is the
business is managing its inventory. It shows how many times a year the inventory is turning
through the organization. Higher the turnover better for the organization.
Reasons for holding inventory
1. Catering to the needs of customer during sales fluctuations and other related problems.
2. To provide assurance on availability
3. To store in advance expecting movement in sales.
4. Flexible raw material scheduling.
5. To suit variations in production scheduling
6. To take advantage of favourable raw material price.
7. To manufacture material in economic run sizes.

Adverse effects of inventories

1. Over depending on inventory can prohibit meaningful feed back on the quality of the product
service bundle. With large inventories, there is usually a long delay between the creation if an
item and its use.
2. Large inventories hide operational problems that might be solved if they were discovered.
When a worker finds a non confirming item and inventory provides an immediate replacement,
the worker has very little interest to communicate the fact that a defective item was created .
3. There is a financial cost to carrying excessive inventory. It includes the lost opportunity to
invest the money tied up in the inventory, as well as the rental cost for the space used to house
the inventory.
4. There is risk of damage of goods held in inventory. Larger the inventory ,the more likely items
are to be handled before shipment. Often warehouse workers have to move larger inventory just
to find a specific item. Each time an item is handled it undergoes the risk of damage.
5. Large inventories are associated with a risk of product obsolescence and losses due to
depreciation.
6. Technological advances and product innovations cannot be adopted while pre existing
inventories appear on the balance sheet..
It is imperative to the planning department of inventory to take all advantages and disadvantages
of carrying inventories along with the element of cost. All types of inventories are accompanied
by certain costs. The costs associated with inventory were broadly classified into four categories.
INTERNATIONAL LOGISTICS
Ware House
A planned space for the efficient accommodation and handling of goods and materials is known
as a warehouse. The word warehouse commonly denotes physical processes of material
handling, stocking, as well as underlying methodologies.It is also a segment of an enterprise’s
logistics function that is responsible for storage and handling of inventories.

Need for a warehouse

1. To provide an adequate buffer storage against inequalities caused by unpredictable variations
in supply and demand.
2. This helps a company to guard against loss of production .
3. To ensure production in economic batch sizes.
4. To provide marketing backup by maintaining the availability of spares and adequate service
levels ,and at times
5. To provide a speculative hedge against anticipated inflation.
6. To safe guard stock from damage, deterioration and unauthorized removal by providing an
environment which is appropriate to the material being stored.
7. To record accurately receipts, stock holding, and dispatches and
8. To provide an efficient communicational inter face with all appropriate parts of the system that
are being served.
9. To enhance company’s goodwill with efficient warehouse handling systems.

Turn around time (TAT)

The efficiency of a ware house also depends on how quickly it deals with delivery vehicles. One
of the methods of measuring TAT is the time taken between a vehicle arriving either to deliver
the materials or to collect them and departing. This is more important because in order to make
transport operators to utilise their vehicles efficiently and for the ware house people to avoid
congestion. rollers, automated loading and unloading equipment and conveyors reduces TAT and
hence enhances the efficiency of all concerned.

Warehousing costs
The ware housing costs are primarily associated with
1. Land in the form of rental costs
2. Buildings in the form of rentals and rates
3. Storage and material handling equipment in the form of maintenance
4. Services in the form of electricity and rent
5. Labors in the form of pickers and packers
6. Supervisors in the form of warehouse management
7. Consumables in the form of various materials. Cost generally depends on volume and nature
of the material together with storage and handling methods employed.
In addition to the above factors, warehouse location, numbers of ware houses in the same area
also play in determining the costs.

Economic Order Quantity

At any given point of time inventory control tries finding answers to the following questions.
1. Should this item be stocked at all?
2. If so,when to order it?
3. How much to order?
The first question expects answer in the form of sales forecasting in the target market. second
question expects answer as a function of the costs of ordering versus the costs of not ordering.
The third question expects answer often as a function of the relative importance of an item as
well as other factors. no item, not even the cheapest item should be stocked without careful
review. This should be a continuous process as supply of inventory and demand of environment
keep changing continuously. so in order to avoid undue stocking or to avoid stock out positions
quantitative tools must be used to exercise inventory control.

Fixed Re- order point

In conditions of certainty ,the time to place an order is when inventory has been reduced to the
point at which it is sufficient to cover only the demand during lead time.re order point is simply
the product of the demand per day and the lead time in days.to use such a model ,a manager must
have a perpetual record of on hand inventory ,such that he or she is aware when the reorder point
has been reached.
Mathematically under conditions of certainity
Reorder point = rate of usage *lead time
For example the average rate of usage is 10 units per day for a component.
Assume that the time required to place and receive the order is 10 days.
Then the reorder point would be 10 *10 =100 units .thus an order to be placed when inventory
drops to 100 units.
In order to tackle a wide range of inventory problems a concept was developed in last century
which is known popularly as economic order quantity or eoq. It is flexible and easy to use.
There are two important parameters that influence a decision regarding the quantity to be placed
in an order.
1. The cost of placing an order
2. The cost of carrying the total inventory.
The relative cost of ordering and carrying inventory, per unit vary inversely. The point at which
the inventory carrying cost curve and inventory ordering cost curve intersect, is the point at
which inventory carrying cost per unit equals order cost per unit. This point gives the optimum re
order quantity or economic order quantity. (Graph of EOQ should be plotted).
A standard analysis shows that the economic order quantity is found from the following
equation.
EOQ = square root of 2RD
-----
H
WHERE
D = demand
R = reorder cost
H = holding cost
EOQ calculations are most helpful in establishing optimum inventory levels and effectively
conserving the working capital invested in investments.

IWorld Class Transportation

In order to manage international logistics ,it is fundamental to have a good understanding of the
transportation alternatives open to an international shipper. Customers are now geographically
dispersed.Emerging and established global markets now demand higher quality products at lower
cost in shorterperiod and also in right form. So transportation plays a very vital role and it can be
described as a circulatory system of entire trade across the globe.
1. Transportation provides an opportunity for growth under competitive circumstances.
2. Efficient transport system facilitates companies to exploit economies of scale.
3. Facilitates deeper penetration into various markets which are far away from the point of
production.
4. More efficient and lower the transportation cost ,the lower is the selling price.

Principles of transportation function

1. Continuous flow
2. Optimize unit of cargo
3. Maximum vehicle unit
4. Adaptation of vehicle unit to volume and nature of traffic
5. Standardization
6. Compatibility of unit load equipment
7. Minimum of dead weight to total weight
8. Maximum utilization of capital, equipment and personnel.

1. Continuous flow
One of the prime objectives of transportation is to provide for the uninterrupted flow of products
from the producer through each node in the distribution network to the consumer. Transportation
in order to fulfill this objective ,must pursue ways and technologies to increase efficiency while
reducing cost of service.
INTERNATIONAL LOGISTICS
2. Optimize unit of cargo
Proper use of transportation requires that the cargo being transported effectively optimizes
transportation vehicle capacities. This principle seeks to ensure that transporters are utilizing the
best choice of vehicles ,material handling equipment and manpower that provide the best service
for the price.

3. Maximum vehicle unit.

As the size of shipping load grows larger ,the capacity of transporting vehicle should grow
accordingly. but in actuality it may not happen so because of vehicle capacity limitation. So
larger shipment should be split into smaller multiple shipments. It results in increased cost
.
4.Adaptation of vehicle unit to volume and nature of traffic.
This principle requires that transportation vehicle size ,weight, storage capacity, and speed be
optimized to permit as free as possible, a flow through traffic medium.
5.Standardization
If standard is fixed the existence of standardized vehicles provide an economical method of
transportation. standardization provides low cost because of their general availability, capacity to
handle a wide variety of products.
6 Compatibility of unit load equipment
This principle states that material handling equipment should be placed in transport vehicles and
further more the containers to be readily fit and maximize cube space. The equipment should be
placed so as to minimize damage to the cargo and reduce load shift during transport.
7.Minimum of dead weight to total weight.
This principle states that the ratio of deadweight to total weight to be minimum. Here the
components like cost of fuel, products being transported are referred to as pay load while weight
of vehicle ,containers and material handling equipment is referred to as dead weight. Normally as
the vehicle becomes larger the ratio of pay load to total weight becomes more favourable. The
dead weight can be decreased by using light weight materials and vehicles design.
INTERNATIONAL LOGISTICS
Maximum unitization of capital, equipment and personnel
Factors like transport vehicles design, routing and scheduling and operational practices can
significantly impact the effective utilization of transport resources. The main objective of
transport management is to reduce inefficiencies in these above stated practices.

Transportation objectives
1. Manufacturer should decide the service level that the company can offer based on the
expectations of the customer.
2. Costs incurred at which these services can be provided.
3. Level of flexibility and control over transportation activities
4. Trade off between customer service levels and costs.

Selecting mode of transportation

1. Identify various modes of transportation available in the market.
2. Decide on single mode of transportation or inter modal transportation.

.
The efficiency of the transport system can be measured by using the following tools
1. Customer perception measurement
This can be measured by a simple survey on efficiency in terms of order cycle time, information,
availability, quality and order fulfillment.
2. Best practice bench marking.
Companies use this measure so as to evaluate their efficiency with that of market leader and its
competitors. In this technique various transportation policies, processes and practices are
reviewedwith those of a comparable organization.
3. Custmer satisfaction measurement.
It measures the company’s ability to provide perfect order., that is ability to fulfill an order by
therequested rate ,with actual rate documentation and in perfect condition.
If a company finds variance in bench mark and actual performance then it takes corrective
measure to reduce these variations.

Transportation documents
Bill of Lading
A bill of lading is a fundamental international shipping document used in ocean transportation. t
is also referred as ocean bill of lading. it is a contract of carriage used for the shipment of
containers, automobiles, crates and any form of cargo that does not require the capacity of entire
ship .BOL is very important because it fulfills three roles in an international transaction.
1.it is a contract. the shipping company agrees with the shipper either the exporter /importer
depending on the terms of trade to transport merchandise from one port to another for a given
amount of money. it is a contract of carriage.
2.it is a receipt for the goods. when the shipping company signs BOL ,it is acknowledging that it
has received goods in good condition and everything seems in proper order. the shipping
company accepts the responsibility of goods till it reaches port of destination.
some times when the shipping company at the time of receiving goods it observes some thing
wrong in the package either in the form of rust or wet or some such problem it does not assume.
Responsibility, in such cases it issues BOL by mentioning clearly in writing what it has
observed. The BOL then becomes a soiled BOL or caused BOL. When BOL is given without
any comments and when the goods were received in good condition then such BOL is known as
clean BOL.
3.it is a certificate of title .the document that the shipping company will need to see to authorize
the release of the goods in the port of destination will also be BOL. the company which has the
original of BOL is considered to be the one to which goods belongs to. so it is a certificate of
title. There are two types of BOL in this respect.1.straight BOL where in the name is the
consignee is specified clearly.
4. to order bill of lading is the one in which the name if the consignee is left blank or the term to
order is written. that means the BOL is negotiable. in other words ,it allows the sale of the cargo
while it is at sea. This is a common occurrence notably in oil business.

Uniform BOL
The uniform BOL is a document which fulfills the same functions as an ocean BOL ,but it is
used either for inland transportation between the exporters place of business and the port of
departure or for land transportation between the exporter and a foreign customer. it is also a
straight BOL.

Intermodal BOL
This document is of a very recent origin because of the substantial increase in the number of
international shipments in which the exporter delivers the goods to a carrier who will arrange for
the transportation and delivery of the shipment until its final destination. since the shipment takes
more than one mode of transportation it is known as intermodeal shipment. this is also a straight
bol in most cases.

Air way bill

An air way bill is a document that fulfills the same function as an ocean bill of lading and
applicable to air freight. it is a straight bill and non negotiable.

Charter parties
Whenever an exporter ships bulk quantities like oil, ore, grains, polymers, cement, sand, sugar
and so on an entire ships often necessary to accommodate the goods. In those cases the contract
between carrier and the shipper is called a charter party.

Packing list
A packing list always accompanies the shipment. it is a detailed document provided by the
exporter that spells out how many containers there are in the shipment and which merchandise is
contained in each container etcetera.
Shipper’s letter of instruction
A shipper’s letter of instruction is delivered to the shipping company if the shipper wants
specific steps taken during the transport of the merchandise.
Shipment of dangerous goods
There are such an extensive number of regulations that can affect a shipment of hazardous goods
so it is always best to entrust a specialized shipper to handle the paper work associated with such
a shipment .it is a complex process it understand various procedures, rules and regulations.
Manifest
Manifest is a document created by the shipping company, which lists the exact makeup of the
cargo.Its ownership, its port of origin and its port of destination. specific handling instructions
and so on.
IN

Modes Of Transportation

International ocean transportation

According to one classification there are two types of ships.
1. Liner ships and
2. Tramp ships.
1. Liner ships
a. Liner ships undertake regular voyages.
b. They follow a pre established schedule.
c. They call on pre- determined ports.
d. The scheduled trip could be between point to point or RTW (round the world)
e. They are either east bond or west bound passing through panama canal or Suez canal.
f. Depending upon the route they undertake there are many types of liner ships
g. Size and equipment depend upon the type of port they visit.
h. Type of vessel also depending upon the specific cargo it carries in a particular route.
i. Ships are also classified by their size which is expressed in tons.
2. Tramp ships
a. Tramp ship operates depending on the requirement and dynamics of the market.
b. They do not operate on a regular schedule.
c. It moves wherever the company using the vessel wants the cargo delivered.
d. Because of the way they operate, tramp ships usually carry only one type of cargo at a time,
for one exporter or importer.For our understanding a tramp ship can be called as a taxi service
and liner ship can be termed as public bus service.
INTERNATIONAL LOGISTICS
Another distinction between ships can be made based on the size. Ships that can travel through
thelocks of panama canal and the ones that cannot. A ship that can possibly fit through the locks
of thecanal is called a Panamax ship. Such a ship can have up to 75000 tons of dead weight
tonnage and itsoutside dimensions allow just to fit into the locks of the canal. The largest ship to
cross panama canalis 730 feet long and 100 feet wide. All the ships that are built larger than this
size are called post-Panamax ships.

Dead weight tonnage or DWT

1. Dead weight tonnage is the total capacity of the ship that means the maximum weight of the
cargo that a vessel can carry.
2. It can be expressed in long tons(2.240 lbs)or metric tons(2240.6lbs)
3. It is the measurement used by the companies in shipping the cargo and often referred as
tonnage.
4. It is measured using the weight of the difference in water displacement when the ship is empty
and when it is fully loaded to its maximum.
5. The dead weight tonnage includes the bunker and stores.
a. Bunker means the fuel that needs for the ship to travel
b. And stores means the supplies that it needs to function.
Registered tonnage
The gross registered tonnage is the total volume capacity of the ship expressed in hundreds of
cubic feet. It only measures the capacity of the ship below the deck and does not include the
cargo carried on above the deck. This measurement is used generally to determine how much tax
a ship owner willhave to pay to the country in which the ship is registered or to the authorities of
the ports it visits or to the authorities of the canals it uses.
Net registered tonnage means one has to delete the volume occupied by engine room, the crew,
andother space necessary for the goods operation.
Displacement tonnage
Displacement tonnage is the total weight of the ship ,when fully loaded ,measured by the weight
ofthe volume of water it displaces.
Light tonnage
It is the weight of the ship measured ,measured as above when the vessel is empty. Both are
measuredgenerally in long tons,The above measurements are used for naval architectural
purposes in order to determine the vesselsstability ,the stress it endures and other engineering
issues.
INTERNATIONAL LOGISTICS
International Air Transportation

Diversity in air transportation is much smaller when compared to sea transportation. First
classification speaks on the passenger planes that carry cargo and exclusive cargo planes. second
classification speaks about regular cargo planes versus chartered cargo planes.
Passenger planes
Every passenger plane transports cargo in addition to the passengers carried on the main deck.
They carry the cargo generally under the belly and hence known as belly cargo. Most of this
cargo is loose that means it is not palletized. International cargo on passenger flights are
somewhat unreliable. This cargo is usually extremely urgent .it generally consists of machines or
computer parts ,necessary for the repair of a critical piece of equipment ,or small shipments of
fresh produce. The biggest hurdle is the maximum size the shipment could be. The main reason
is the size of the hold varies depending upon the plane used.
The second constraint is that there are many items that are not allowed in passenger planes. ,even
if they are acceptable for air transport. Another alternative of using passenger plane is boarding
the plane as on board courier. An employee of an organization can fly and can take courier as his
luggage. This is the fastest way of carrying cargo to get anywhere and is a service used for
carrying sensitive parts and critical documents. OBC business is substantial and it is the order of
movement of cargo in air industry.
Combis
Combis are passenger planes that are designed in such a way that freight is carried on the main
deck as well as in the belly hold. The main deck is split at some point in the middle of the air
craft with the front portion of the plane is reserved for passengers and aft portion is reserved for
freight. Some air crafts are designed in such a way that this partition is mobile depending upon
seasonal fluctuations.Most of the combis are large planes which are necessary for non stop
passenger travel to remote areas of the world. For shippers combis present an advantage in that
size limitations faced in passenger crafts will not be there. The main deck has a greater weight
capacity. It can accommodate palletized and containerized cargo. More over the cargo can be
secured on to the plane with slings to prevent damage caused by movement within the plane.
INTERNATIONAL LOGISTICS
Air freighters
Most air freighters are liners that means they operate on a regular schedule. The freighter is
equipped with a roller deck. A roller deck is a main deck equipped with rollers which allows the
palletized or container cargo to be pushed in to the craft., either through the oversize side door or
through the nose of the air plane. The cargo once inside can be secured through hooks and slings.
Charters
The goods that are very urgent and the parts that are essential for assembly line and that are to be
there just in time required to be transported by small air crafts When goods cannot be transported
by available cargo planes because of non fitment and if they are too heavy or too large the
shipper will charter a heavy lift cargo plane to accommodate the shipment when goods need to
be delivered to a location where regular air service is not available charters can be utilized.

International land transportation

Trucking is a vital way of shipping goods internationally. There are varieties of trucks operating
internationally. Some of the standard trucks include
1. 9 Tonners
2. 6.5 Tonners
3. Single axle trailers
4. Double axle trailers
5. Flat track trailer
6. Semi bed trailer
7. Containerized trailer
Worldwide ,trucking is dominated by domestic rules and regulations, Which greatly influence
the way the industry is organized. There are limitations on the number of axles they have ,the
weight it can carry per axle, On its length and width, requirements regarding its mandatory
equipments, The number of consecutive hours a driver can drive etc. The complexity of these
rules and regulationsshould not be under estimated.
INTERNATIONAL LOGISTICS
There are different bans in different countries which can create a havoc in company’s ability to
shipgoods just in time or for a shipper to reach port before sailing. Enforcement of rules create
giantparking lot of trucks at the entry point into a country and at highway exits.
Another challenge the truckers face is the infrastructure bottle necks like load limits, height
limits,speed limits, road conditions which hinder the smooth transportation of goods and have an
impact on packing. The high tolls collected on some high ways lure truckers to drive on
secondary by lanes. Another problem faced by truckers all over the world is sudden and
unexpected eruption of socialunrest.
Major advantage of road transportation is its flexibility., fast turn around ,less risk with more
penetrative power into the market
.
Rail transportation
Rail transportation traditionally had three business activities.
1. Carrying bulk freight including, coal, ore, iron, grains, oils etc.
2. Break bulk freight placed in boxes, palletized or in simple package.
3. Automobiles, placed on flat track racks.
Right now containerized cargo also is being transported through railways.
The main advantage of this transportation is carrying large quantities, over long distances very
economically. Rail road documents are honored by banks and are negotiable instruments. sizable
insurance costs can be saved as railways claim settlement machinery is efficient.

BEST PRACTICES IN INTERNATIONAL LOGISTICS

INTERNATIONAL LOGISTICSTERNATIONAL LOGISTICSNTERNATIONAL LO
Business success is increasingly linked to effectively managing international logistics.Growing
low –cost country sourcing and rising sales to international customers are triggering companies
to seek new ways to manage costs,complexities and uncertainties of moving goods across
borders.

In 2005,Aberdeen researched companies that are transforming their international logistics

operations to find out how they are achieving improvements.Eight companies were selected as
winners,two in each logistics management category:global inventory control,transportation spend
management,import/export process management, and international logistics outsourcing.These
companies are able to invest less capital in international logistics yet provide better service to
customers.Following are the best practices followed by the winners in International Logistics-

1.Envision the future,Act on the foundation

The strategy for international logistics has to be set in the context of how a company competes as
a business.’’We have a highly leveraged business model based on product leadership,’’ says the
senior vice president of operations for a mid size high tech winner.’’We need a logistics strategy
that supported our corporate strategy. For us,this meant outsourcing logistics to a domain expert
and creating an international distribution network that was simple ,visible,accountable.’’The
logistics strategy must envision the future but action needs to be taken on the
discreet,foundational components.These elements include such areas as ocean contract
management,trade compliance and visibility.For instance,automating the trade compliance
process lays the groundwork for better total landed landed costing and margin
management,smarter sourcing and inventory management decisions,and fewer supply chain
delays.The other aspect of a sound international logistics strategy is that it needs to be built for
flexibility.’’Expect and prepare a foundation for change,’’says the vice president of global
logistics for an apparel company.The next core competency is focusing on the speed and velocity
with which the results of new logistics strategies can be executed.

Key areas to address in building an international logistics

Strategy can be shown as-
2.Partner for success

Unlike domestic logistics, it’s impossible to “go it alone”in the international arena.Best practice
winners are figuring out new ways to synchronize activities and increase visibility and control of
processes with custom brokers,freight forwarders,ocean carriers,logistics service providers, and
others.These companies are leveraging the skills and technology of partners to achieve cost and
lead time benefits.”Rather than displace our brokers we want to automate our interactions,’’says a
logistics manager.
Two of the best practice winners embraced total logistics outsourcing.’’don’t do outsourcing for
the sake of outsourcing,’’says an executive of one of the winners.’The strategy needs to take into
account the complexity of the products and business model or it will fail.’’In case of
outsourcing ,instead of going with the lowest contract cost,best value proposition should be
preferred.

3.Automate with internet-based technology

Without exception,best practice winners’ logistics strategies revolve around decreasing manual
processes and increasing automation.Automation translates into speed while manual processes
translate into delays and errors.’’Internet based technology is enabling a new level of transaction
automation and partner synchronization previously not practical or possible.On-demand global
trade management platforms and gateways are driving more electronic collaboration for
significantly reduced IT costs.Best practice winners report very little internal resistance to using
on-demand technology,also known as “software as a service” or hosted,web-based” systems.

4.Lay the foundation for visibility and control

International logistics is all about managing a network of third party providers.The foundation
for controlling this process is visibility.Some of the best practice winners have integrated their
enterprise customer service and logistics systems with the visibility systems of their logistics
providers to obtain automatic status and alert information.
Companies that still rely on phone calls ,emails ,or manual web lookups to track down shipments
are at acompetitive disadvantage.Real-time knowledge of the location of goods throughout the
supply chain makes for faster-moving inventory speeds,cash flows and receivables,all while
reducing inventory carrying costs.For a number of best practice winners ,visibility doesnot stop
at identifying a shipment delay or inventory issue.Rather an alert is the first step in a structured
notification,resolution,and root cause analysis process.

5.Use inventory more effectively

Best practice winners also focus on extracting more value from their inventory.In some cases,this
means creating better in-transit visibility so they can redirect inventory around port congestion or
other bottlenecks or to higher points of demand.In other instances the focus is on optimizing
where and how much to hold inventory in the first place.Research shows that traditional
inventory target setting practices are insufficient for situations where there is varying demand
and supply uncertainty,often resulting in a company holding 20-30% too much inventory across
its supply chain.

6.Implement Transportation Spend Management

A missing discipline in many companies is transportation spend management.Although
companies have focused on spend management in areas like office suppliers,travel expenses and
telecom costs,they have mostly ignored ocean and air freight costs.Yet international
transportation costs can be two or three times higher than domestic costs and much more
variable.Two of the best practice winners focused specifically on aspects of freight spend
management to jump-start their improvement initiatives.Electronic contract management is the
foundation to improve product costing and margin management,automate freight audit processes
and take preemptive action on cost and allocation issues.

7.Streamline Customs Processes and Maximize Trade Agreements

Another foundational focus for best practice winners is trade compliance and
documentation,which drives streamlined ,cost-efficient and low-risk international logistics
processes.Best practice companies that focus on trade compliance excellence are realizing
improvements in a number of areas:
a.Automating import /export compliance and documentation processes
b.Maximizing free trade agreement program benefits and automating certificate of origin
management with suppliers
8.Obsess about Organizational Buy-In
Universally ,the best practice winners are intensely focused on gaining and maintaining
organizational buy-in for their logistics transformation initiatives.’’Communicate and educate
everyone on the costs,risks and benefits involved-make them aware of how it personally affects
them,’’advises a global logistics manager.

GISTICS