International Logistics

1
What is Logistics?
 Definition of logistics management

 Part of the supply chain management

 plans, implements, and controls the efficient, effective
forward and reverse 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
International Logistics

International logistics involves the

management of these resources in a
company’s supply chain across at
least one international border

3
The Importance of International
Logistics Company
An international logistics company plays a vital role
in transportation. This type of company is
responsible for planning, implementing, and
controlling both information and physical materials
and goods going from one point to another. The
company’s supply chain crosses, at a minimum, one
international border.
The Role of Logistics in
International Business
A logistics company makes sure your goods
get to their designated location in another
country. To accomplish that, it all starts with
giving the potential customer a quote, followed
by multiple decisions and actions.
Brief History of Logistics and
Transportation
 Logistics was originally a military term
 Before 1950s, no logistics. Reasons:
• Computers were not seen in integrating functions
• Volatile economic condition led management to
concentrate on cost containment
• Difficulty in quantifying the returns that could be
gained
What is the Goal of Logistics?

 Logistics is about getting things to where

they need to be, but is much broader than
transportation
 The overall goal of logistics
 To achieve a targeted level of customer service
at the lowest possible cost
What is the Goal of Logistics?
 Logistics Activities
 Network design
 Information
 Transportation
 Inventory
 Warehousing, material handling and
packaging
FREE TRADE ZONES
is a class of special economic zone. It is a geographic
area where goods may be imported, stored, handled,
manufactured, or reconfigured and re-exported under
specific customs regulation and generally not subject
to customs duty. Free trade zones are generally
organized around major seaports, international airports
, and national frontiers—areas with many geographic
advantages for trade.
Import procedures in the
Philippines
For importers
To register as an importer, businesses first need an
Import Clearance Certificate from the Bureau of
Internal Revenue. Importers then register with the
Bureau of Customs (BOC) and set up an account with
the Client Profile Registration System (CPRS). The
Import Clearance Certificate is valid for three years
while the Customs Client Profile Accreditation must be
updated annually. The CPRS accreditation costs
P1000 (US$20) and typically takes 15 working days to
process.
RELATED SERVICES
•
     

For exporters
First time exporters need to register with the CPRS through the
Philippine Exporters Confederation. As with importers, the CPRS
accreditation must be renewed annually, costs P1000 and takes
approximately 15 business days. For certain types of exporters, the
Philippines requires additional registration. For instance, coffee
exporters must register with the Export Marketing Bureau.
Exporters operating out of a special economic zone (SEZ) must
register with the Philippine Economic Zone Authority (PEZA) while
companies exporting out of free port zones must register with the
specific free port.  Once registered, exporters will receive a Unique
Registration Number, necessary for all export activity.
 Export procedures
Just as for imports, a company planning to engage in
export activities is required to obtain an IEC number
from the regional joint DGFT. After obtaining the IEC,
the exporter needs to ensure that all the legal
compliances are met under different trade laws.
Further, the exporter must check if an export license
is required, and accordingly apply for the license to
the DGFT.
Required documents
For importers

Businesses importing into the Philippines must provide the following

documents when their goods arrive:
•Packing list;
•Invoice;
•Bill of lading;
•Import Permit;
•Customs Import Declaration; and
•Certificate of Origin.

Additional documents for certain imports

Importers bringing in animals, plants, foodstuff, medicine or chemicals

must additionally obtain a Certificate of Product Registration from the
Philippines’ Food and Drug Administration.
For exporters

Businesses exporting out of the Philippines must provide the following documents before
their goods depart:
•Packing List;
•Invoice;
•Bill of Lading;
•Export License;
•Customs Export Declaration; and
•Certificate of Origin.

Additional documents for certain exports

Certain products require government permission to be exported. Below is a detailed list of

products requiring additional permission as well as the concerned government authority: 

•Endangered species of flora and fauna (Bureau of Biodiversity Management);

•Animals and animal products (Bureau of Animal Industry);
•Fish and fish products (Bureau of Fisheries and Aquatic Resources);
•Plants (Bureau of Plant Industry);
•Rice (National Food Authority);
•Radioactive materials (Philippine Nuclear Research Institute) and;
•Sugar and molasses (Sugar Regulatory Administration).
 Tariffs and Taxes
For importers

The Philippines follows the United Nation’s Standard International Trade

Classification (SITC). Import tariffs can range from 0 to 65 percent.
Imported goods in sectors which have high domestic production typically
incur higher tariffs. For non-agricultural goods, tariffs average at 6.7
percent. 
The Philippines Tariff Commission has launched a ‘tariff finder’ web portal
to help importers, which can be accessed here.
The Philippines Customs apply a value added tax (VAT) for imported
goods at 12 percent. The Philippines’ customs levy no tariff or tax for
goods worth less than P10,000 (US$200).

For exporters

The only exported good which incur a tariff are logs at 20 percent.
Special Economic Zone (SEZ)
A special economic zone (SEZ) is an area in a country that
is subject to different economic regulations than
other regions within the same country. The SEZ economic
regulations tend to be conducive to—and attract—
foreign direct investment (FDI). FDI refers to any
investment made by a firm or individual in one country into
business interests located in another country.
Special Economic Zones

Businesses operating in Special Economic Zones (SEZs) or free port zones are
exempted from paying taxes and tariffs on imported raw material and
manufacturing equipment. As stipulated in the Customs Modernization and Tariff
Act, 2015, the main SEZs in the Philippines include:
•Clark Freeport Zone;
•Poro Point Freeport Zone;
•John Hay Special Economic Zone;
•Subic Bay Freeport Zone;
•Cagayan Special Economic Zone;
•Zamboanga City Special Economic Zone and;
•Freeport Area of Bataan.
As mentioned earlier, exporters and importers operating in SEZs or free port
zones must register with either PEZA or the specific free port regulator.
 Free trade agreements
The Philippines is a member of six regional free trade agreements
(FTAs) as well as one bilateral FTA with Japan. As a member of the
Association of Southeast Asian Nations (ASEAN), the Philippines is
naturally a participant in the ASEAN Trade in Goods Agreement
(ATIGA). The country enjoys significantly reduced tariff rates within
ASEAN though some tariff lines on sensitive food products still
remain. The Philippines, by virtue of its membership in ASEAN, is
also a party to the five FTAs that ASEAN has signed with the
following countries or group of countries:

•Australia and New Zealand;

•China;
•India;
•Japan; and
•Korea