Logistics, Trade Administration and Supply Chain

Water transportation service is limited in scope for several reasons. Domestic water service is confined to the inland waterway system, which requires shippers to be located on the waterways or to use another transportation mode in combination with the water. In addition, water service on the average is slower than rail. Availability or dependability of water service are greatly influenced by the weather. Movement on the waterways during the winter is impossible and floods and droughts may also interrupt service at other times as well. There is tremendous capacity available in water carriers with barge tows up to 40,000 tons and there are individual barges with standardized dimensions of 26 by 175 feet and 35 by 195 feet. Capability and handling are being increased as barged carrying ships are being developed and such improvements as satellite navigation with radar, refined depth finders and auto piloting mean  around the clock service. Water services are provided in all leg...

Air transportation is being considered by increasing numbers of shippers for regular service, even though air freight rates exceed those of trucking by more than two times and those of rail by more than 16 times. The appeal for air transportation is its unmatched origin to destination speed, especially over long distances. Air service dependability and availability can be rated as good under normal operating conditions. Delivery time variability is low in absolute magnitude, even though air service is quite sensitive to mechanical breakdown, whether conditions and traffic congestions. Variability when compare with average delivery times, can rank air as one of the least reliable modes. The capability of air has been greatly constrained by the physical dimensions of the cargo space in the aircraft and the aircraft's lifting capacity. This is becoming less of a constraint, however, as larger aircraft are put into service. For example, jumbo airplanes such as Boeing 747 and L...

Trucking moves freight with smaller average shipment size than rail. More than half of the shipments by truck are less than 10,000 pounds or LTL volume. The inherent advantages of trucking are its door-to-door [DTD] service, involving no loading or unloading between origin and destination as is often true of rail and air modes; its frequency and availability of service and its DTD speed and convenience. Truck and rail services show some distinct differences, even though they compete for many of the same product shipments. First, in addition to the common and private legal classification of carriers, trucking offers services as contract carrier as well. Contract carriers do not hire themselves out to service all shippers as do common carriers. Shippers enter into a contractual agreement to obtain service that better meets their particular needs and requirements without incurring the capital expense and administrative problems associated with private ownership of a trucking fleet. ...

The railroad is a long hauler and slow mover of raw materials [coal,lumber and chemicals] and of low-valued  manufactured products [food, paper and wood products] and prefers to move shipment sizes of at least a full carload. This relatively slow speed and short car distance travelled in a day reflect the fact that the majority of freight car time is spent on loading and unloading operations, moving from one place to another within terminals, classifying and assembling cars into trains or standing idle during seasonal slump in car demand. Rail service exist in two legal forms, common carrier or privately owned. A common carrier sells its transportation service to all shippers and it is guided by the economic and safety regulations of the appropriate government agencies. In contrast, private carriers are shipper owned with the usual intent of serving only the owner. Because of the limited scope of the private carrier's operations, no economic regulations are needed. Nearly all ...

Transportation usually represents the most important single element in logistics cost for most firms. Freight movement has been observed to absorb between one-third and two-thirds of total logistics costs. Thus, the logistician needs a good understanding of transportation matters. Although a comprehensive discussion of transportation is not possible within the scope of this text, this subject highlights what is essential to the logistician for his or her managerial purpose. The focus is on the facilities and services that make up the transportation system and on the rates [costs] and performance of various transport service that a manager might select. Spefcifically, we wish to examine the characteristics of the transportation service alternatives that lead to optimal performance. It is performance that the user buys from the transportation service. Importance of an Effective Transportation System One needs only to contrast the economies of  developed nation with those of a...

A multimodal transport document is a bill of lading covering two or more modes of transport, such as shipping by rail and sea. A complete multimodal transport document should contain the following elements: Name of the carrier or multimodal transport operator with a signature identified as that of carrier, transport operator or ship's master or agent for or on behalf of either the carrier, transport operator or ship's master, An indication that the shipment has been dispatched, taken in charge or loaded on board along with a date, Indication of the place of receipt of the shipment that may be different from the place of actual loading on board and the place of delivery of the shipment which may be different from the place of discharge, A sole original or if issued in multiple originals, the full set of originals, The terms and conditions of carriage or a reference to the terms and conditions of carriage in another source or document other than the multimodal transpor...

A non-negotiable sea waybill is a transport document covering port-to-port shipments. It is not a title document, is not negotiable and cannot be endorsed. A complete non-negotiable sea waybill contains the following elements: Name of the carrier with a signature identified as that of carrier, or ship's master, or agent or on behalf of either the carrier or the ship's master An indication or notation that the goods have been loaded on board or shipped on a named vessel. also, the date of issuance or date of loading An indication of the port of loading and the port of discharge as specified in the original sales contract or documentary credit A sole original or if issued in multiple originals, the full set of originals The terms and conditions of carriage or a reference to the terms and conditions of carriage in another source or document In a documentary letter of credit, no indication that the document is subject to a charter party and/or an indication that the nam...

A bill of lading is a document issued by a carrier to a shipper, signed by the captain, agent or owner of a vessel, furnishing written evidence regarding receipt of the cargo, the conditions on which transportation is made (contract of carriage) and the engagement to deliver goods as the prescribed port of destination to the lawful holder of the bill of lading. A bill of lading is, therefore both a receipt for the merchandise and a contract to deliver it as freight. There are a number of different types of bill of lading a number of issues that relate to them as a group of documents. Straight Bill of Lading (Non-Negotiable) A straight bill of lading indicates that the shipper will deliver the goods to the consignee. The document itself does not give title to the goods (making it non-negotiable). The consignee need only to identify himself to claim the goods. A straight bill of lading is often used when payment for the goods has already been made in advance or in cases where ...

Documents play a key role in international transactions. Both buyers and sellers need documents for bookkeeping, accounting, taxation, export and import formalities, as well as making payments using letters of credit and other documentary payment methods. This segment will give some examples of the most commonly used documents in the international trade. It is not an exhaustive listing. Specialized trades, special circumstances and different countries of origin and destination may require additional documentation. Transaction Documents The key transaction document is the invoice or commercial invoice. This document is used by all parties to the transaction for accounting and bookkeeping purposes. It is also required for export and import formalities as well as most banking and payment procedures. Export Documents These are documents required by the customs or national export authority of the country of export and vary greatly from country to country. Included are licenses,...

C-TPAT qualifications for air carriers: Active air carrier transporting cargo shipments to the US; Have an active Airline Code registered with CBP; Possess a valid continuous international carrier bond registered with the CBP; Have designated company official that will be the primary cargo security officer responsible for the C-TPAT program; Commit to maintaining C-TPAT security guidelines for air carriers; Create and provide CBP with a C-TPAT supply chain security profile, which identifies how the air carrier will meet, maintain and enhance internal policy to meet the C-TPAT security guidelines for air carriers. Security Guidelines for Air Carriers Air Carriers must conduct a comprehensive assessment of their international supply chain based on the C-TPAT security guidelines. Where an air cargo outsource or contracts elements of their supply chain such as conveyance, foreign facility, domestic warehouses or any other elements, the air carrier must work with these busi...

Rail carrier must have written and verifiable processes for the screening of new business partners, including the carrier's agents, sub-contracted rail carriers, service providers as well as screening procedures for new customers, beyond financial soundness issues to include security indicators. These processes apply to business partners and service providers not eligible for C-TPAT membership. Security Procedures Written procedures must be in place to address specific factors or practices, the presence of which would trigger additional scrutiny by the rail carrier. The US CBP will work in partnership with the rail carriers to identify specific information regarding what factors, practices, circumstances or risks are relevant. For business partners eligible for C-TPAT endorsement (importers, ports, terminals, brokers, consolidators, etc), the rail carrier must have documentations like C-TPAT certificate, SVI number, etc indicating whether these business partners are or are...

Rail carriers must carry out a comprehensive assessment of their security practices based on the C-TPAT minimum security criteria. Recognizing that rail carriers do not control their shippers and have a common carrier obligation to transport goods tendered to them, rail carriers shall work with their shippers on their security practices as set forth in these criteria. These minimum security criteria are fundamentally designed to be the building blocks for rail carriers to institute effective security practices designed to optimize supply chain performance to mitigate the risk of loss, theft and contraband smuggling that could potentially introduce terrorists and implements of terrorism into the global supply chain sector. Rail carriers should periodically assess their degree of vulnerability to risk and should prescribe security measures to strength or adjust their security posture to prevent security breaches and internal conspiracies. The determination and scope of criminal el...

Sea carriers must conduct a comprehensive assessment of their security practices based on the C-TPAT minimum security criteria. Where a sea carrier does not control a specific element of the cargo transportation service it has contracted to provide, such as a marine terminal operator or a time chatered vessel with whom it has contracted, the sea carrier must work with these business partners to seek to ensure that pertinent security measures are in place and adhered to. The sea carrier is responsible for exercising prudent oversight for all cargo loaded on board its vessel, pursuant to the applicable laws and regulations and terms of this program. C-TPAT recognizes the complexity of the international supply chains and security practices and endorses the application and implementation of security measures based upon risk. Therefore, the program also allows for flexibility and the customization of security plans based on the member's business model or requirements. Security me...

Order Fulfillment: Another activity area that logistics may control is order fulfillment, which generally consist of activities involved with receiving and completing customer orders. Initially, one might question why the logistics area would concern itself directly with order fulfillment. However, one important physical distribution factor is the time elapsing from the time when a customer decides to place an order for a product until the time those goods are actually delivered in a satisfactory condition, i.e. the lead time. Forecasting: Another activity essential to the logistics area is inventory forecasting. Accurate forecasting of inventory requirements and materials and parts is essential to effective inventory control. This is particularly true in companies using a just-in-time (JIT) or materials requirement planning (MRP) approach to control their inventory. Logistics personnel should develop forecasts in those situation to ensure accuracy and effective control. Too fre...

Transportation: Transportation is a very essential part of the logistics system. A major focus in logistics is upon the physical movement or flow of goods or upon the network that moves the product. This network is composed of transportation agencies that provide the service for the firm. The logistics manager is responsible for selecting the mode or modes of transportation used in moving the raw materials and finished goods or for developing private transportation as an alternative. Storage: A second area, which has a trade-off relationship with transportation, is storage or in some circumstances called warehousing. It involves two separate but closely related activities i.e. inventory management and warehousing. A direct relationship exist between transportation and the level of inventory and the number of warehouses required. For instance, if firms use a relatively slow means of transport, they usually have to keep higher inventory levels and usually have more warehousing spa...