International Ocean Shipping

EXECUTIVE SUMMARY

The purpose of this report is to understand and provide resolutions to make transportation – the crucial element in a supply chain operation an efficient function to help reduce both time and cost, while at the same time maintaining a higher service and product quality. The following details in the report entails how international trade is implemented successfully with proper coordination of several functionalities – Contract negotiations, finalising price and fee information, import and export documentation, freight forwarding and customs, ensuring safe delivery of goods without damage or loss. A freight forwarder has the experience to plan the logistics, shipping routes, transit times, accurate custom duties/rates and other services required for the transaction. In order to provide the best customer service, the buyer should be willing to accommodate and fulfill their requirements to avoid future losses. The case study states a shipment to be delivered within 10 days. The utilization of logistic gateways enables change in the routing plan from Ocean to Air cargo. The customer receives shipment earlier than expected and the reputation of the company increases, creating the prospects of other customers. It takes more than a month’s time for a shipment from Tianjin Port (Beijing’s nearest ocean port) to reach the Port of Toronto via the Panama Canal and St Lawrence river. Based on timing requirements, routes can be made shorter using gateways, in this case the west coast – Prince Rupert or Vancouver Port. To make an immediate deliver, using Air cargo from Beijing to Toronto would complete the transit within a day. Using the right incoterm helps with the cost and risk sharing strategies. When importing goods from China, it is advised to have either full or half control over the operations. As the active incoterm in this case being DDP – Delivery duty paid hands over complete control to the seller. In order to monitor cost and manage the risk – Ex-works, CIP, CIF or CPT would be the best options for future negotiations. Therefore, it is recommended to make a contract that focusses on payment terms, incoterms, information exchange platform that provides a smooth trading process with minimised cost and transit time.

TABLE OF CONTENTS

EXECUTIVE SUMMARY

INTRODUCTION……………………………………………………………………………………………….. 3

BACKGROUND…………………………………………………………………………………………………. 3

ANALYSIS AND RECOMMENDATIONS……………………………………………………………………… 3