DEFINITION

International logistics is the design and

management of a system that controls the forward
and reverse flow of materials, services, and
information into, through, and out of the
internationalcorporation.
●The negotiating, ●It includes planning and
planning, and actions related to the
implementation of utilization logistic
supporting logistic policies, systems, and/or
arrangements between procedures to meet
nations, their forces, and requirements of one or
agencies. more foreign
governments, international
organizations, or forces.
●Through the implementation of international logistics,
the firm can implement cost-saving programs such as
just-in-time (JIT), electronic data interchange (EDI)
etc.

● The twophases of the movement of materials include:

➢Timely movement of materials, parts, and supplies.

➢Timely movement of the firm’s physical product to its

customers.
 TRANSPORTATION INFRASTRUCTURE

➢A firm’s logistics platform is determined by a location’s ease

and convenience of market reach under favorable cost
circumstances.

➢The public sector’s investment priorities, safety regulations,

tax incentives, and transport policies can have major effects on
the international logistics decisions of firms.

➢The logistics manager must learn about existing and

planned infrastructures abroad and at home and factor them
into the firm’s strategy.
VESSELS USED IN OCEAN SHIPPING

Liner Service

Bulk Service Tramp Service

Liner Service – is a service that operates within a schedule and has a fixed port
rotation with published dates of calls at the advertised ports

A Tramp Service or tramper on the other hand is a ship that has no fixed
routing or itinerary or schedule and is available at short notice (or fixture) to
load any cargo from any port to any port..

Bulk Service: It is engaged in the transfer of dry bulk commodities from rail
and truck to dock.
 AIRFRIEGHT

➢Airfreight is available to and from most countries,

including the developing world.
➢Forty percent of the world’s manufactured travel
by air.
➢Items that are high-value or high in size tend to
travel by air.
CONSIDERATIONS FOR SELECTING
A MODE OF TRANSPORT

Transit Time Predictability

Cost Non-economic
Factors
 INTERNATIONAL
INVENTORY ISSUES
➢Inventories tie up a major portion of corporate funds,
therefore proper inventory policies should be a
major concern to the international logistician.

➢Just-in-time inventory policies minimize the volume

of inventory by making it available only when needed

➢The purpose of establishing inventory systems are:

➢to maintain product movement in the delivery

pipeline

➢to have a cushion to absorb demand fluctuations

 INTERNATIONAL PACKAGING ISSUES
➢ Packaging is instrumental in getting the merchandise to the
destination in a safe, presentable condition.

➢ Because of the added stress of international shipping, packaging

that is adequate for domestic shipping may be inadequate
for international shipping.

➢ Packaging considerations that should be taken into account are

environmental conditions and weight.

➢ One solution to the packaging problem has been the development

of inter-modal containers.

➢ Cost attention must be paid to international packaging.

 STORAGE FACILITIES
➢ A stationary period is involved when merchandise
becomes inventory stored in warehouses.

➢ The location decision addresses how many distribution

centers to have and where to locate them.

➢ Storage facilities abroad can differ in availability and

quality.

➢ The logistician should analyze international product

sales and then rank order products according to
warehousing needs.
 SPECIAL TRADE ZONES
➢Foreign trade zones are areas where foreign goods
may be held or processed and then re-exported without
incurring duties.

➢Trade zones can be useful as transshipment points to

reduce logistics cost and redesign marketing approaches.

➢Governments and firms benefit from foreign trade

zones.
 EXPORT PROCESSING ZONES AND
ECONOMIC ZONES

➢In export processing zones , special rules

apply that are different in other regions of the
country.These zones usually provide tax-free and
duty-free treatment for production facilities whose
output is destined abroad.

➢Through the creation of special economic zones

, the Chinese government has attracted many
foreign investors bringing in millions of dollars.
CENTRALIZED LOGISTICS
MANAGEMENT
➢ In international logistics, the existence of a
headquarters staff that retains decision- making
power over logistics is important.

➢ To avoid internal problems, both headquarters staff and

local management should report to one person.

➢ This individual can contribute an objective view when

inevitable conflicts arise in international logistics
coordination.
 DECENTRALIZED LOGISTICS
MANAGEMENT

➢ When a firm serves many diverse international

markets, total centralization might leave the firm
unresponsive to local adaptation needs.

➢ If each subsidiary is made a profit center in itself,

each one carries the full responsibility for its
performance.

➢ Once products are within a specific market, increased

input from local logistics operations should be expected
and encouraged.
 OUTSOURCING LOGISTICS
SERVICES
➢The systematic outsourcing of logistics
capabilities is a third option.

➢By collaborating with transportation firms,

private warehouses, or other specialists,
corporate resources can be concentrated on the
firm’s core product.
THE SUPPLY CHAIN AND THE
INTERNET
➢Because of the internet, firms are able to conduct many
more global comparisons among suppliers and select
from a wider variety of choices.

➢When customers have the ability to access a company

through the internet, the company must be prepared for
24-hour order-taking and customer service.

➢For all countries, but particularly in developing nations,

the issue of universal access to the internet is crucial.
 LOGISTICS AND SECURITY

➢Logistics systems and modern transportation

systems are often the targets of attacks.

➢The need to institute new safeguards for international

shipments will affect the ability of firms to efficiently
plan their international shipments.
LOGISTICS AND THE ENVIRONMENT
➢Since environmental laws and regulations differ
across the globe, the firm’s efforts need to be
responsive to a wide variety of requirements.

➢Reverse distribution systems are instrumental in

ensuring that the firm not only delivers the product to
the market, but also can retrieve it from the market for
subsequent use, recycling, or disposal.

➢Companies need to learn how to simultaneously

achieve environmental and economic goals.
GOVERNMENT INFLUENCES
● Political Restrictions of Trade
◦ Tariffs
◦ Nontariff barriers
 Import
◦ quota
Embargoes
 As of October, 2007, the
United States has
sanctions against: China,
Ivory Coast, Cuba,
Democratic Republic of
the Congo , Iran,
Myanmar, Sudan,Syria,
Venezuela, and
Zimbabwe
● International Transport
◦ Cargo preference rules
 CHALLENGES

● Economic Conditions
● Currency Changes
●Laws, Regulations, and
Legal systems
● Cultural
Considerations
● Language
● National Holidays
EXPORTING REQUIREMENTS
➢Shipping a product overseas
● Packing
● Labeling
● Documentation
● Insurance requirements
Note: Most exporters rely on an international freight forwarder to perform
these services because of the multitude of considerations involved in
physically exporting goods
 Used Guidelines
Reasons
➢ Pack in strong containers,
➢Move goods adequately sealed and filled when
easily through possible.
➢ Make sure the weight is evenly
customs
distributed.
➢Protect Products ➢ Goods should be palletized and
when possible containerized.
➢ Packages and packing filler should
be made of moisture-resistant
material.
➢ To avoid pilferage, avoid writing
contents or brand names on
packages. Other safeguards include
using straps, seals, and shrink
wrapping.
➢ Observe any product-specific
hazardous materials packing
Packin requirements.

g
 Markingson cartons to
Reasons be shipped
➢ Meet shipping regulations ➢ Shipper's mark

➢ Ensure proper handling ➢ Country of origin

➢ Weight marking
➢ Conceal the identity of the
➢ Number of packages and size
contents of cases
➢ Help receivers identify ➢ Handling marks
shipments ➢ Cautionary markings, such as
➢ Insure compliance with "This Side Up" or "Use No
environmental and safety Hooks"
➢ Port of entry
standards
➢ Labels for hazardous
materials

Labeling
Documentation
➢Air waybills ➢Dock receipt and a
➢Bill of lading warehouse receipt
➢Commercial invoice ➢Destination control
➢Consular invoice statement
➢Certificate of origin ➢Shipper's Export
Declaration(SED)
➢NAFTA certificate of
➢Export license
origin
➢Export packing
➢Inspection
certification list
➢Insurance
certificate
Insuranc
e
Reasons
➢Damaging weather
conditions
➢Rough handling by
carriers,
➢Other common hazards to
cargo
Type of covers
➢Marine cargo insurance
➢Cargo insurance
TARIFFS AND IMPORTS FEES
➢Tariff is a tax set by governments on the value of
products imported from one country into another.

➢ Tariffs are assesses before importing the product.

➢Types of Tariffs:
● Salesand state taxes,
● Customs fees
COMMON EXPORT
DOCUMENTS
➢There are commonly Export Documents used in
exporting, but specific requirements vary by
destination and product.

● Airway Bill
● Bill of Lading
● Commercial Invoice
● Export Packing List
● Electronic Export Information Form
CERTIFICATE OF ORIGIN
➢The Certificate of Origin (CO) is required by some
countries for all or only certain products.

➢The exporter should verify whether a CO is required

with the buyer and/or an experienced
shipper/freight forwarder or the Trade Information
center.

➢Most common are Certificate of Origin for claiming

benefits under Free Trade Agreements
OTHER CERTIFICATES
➢Certificate of Analysis
➢Certificate of Free Sale
➢Dangerous Goods Certificate
➢Fumigation Certificate
➢Health Certificate
➢Ingredients Certificate
 INTERNATIONAL TRADE
➢Defined as economic
transactions that are made
between countries.

➢International trade
transactions are facilitated by
international financial
payments, in which the private
banking system and the
Central Banks of the trading
nations play important roles.
 TRADE AGREEMENTS
➢The purpose of US Trade Agreements is to create
opportunities for Americans and help to grow
the
U.S. economy.

➢Administering trade agreements involves:

▪ Monitoring the trading partners’ implementation.
▪ Negotiating and signing trade agreements that advance
the President's trade policy

➢An important type of trade agreement is the Trade

and Investment Framework Agreement (TIFAs)
 CHARACTERISTICS OF
INTERNATIONAL LOGISTICS
● Optimization of Inventory
● Flexibility
● FastFulfillment
● Customization
● Sustainability
 IMPORTANCE OF
INTERNATIONAL LOGISTICS

➢Production Inputs
➢Transportation Logistics
➢Customs Clearance
➢Supply Chain