UNIT 6

LOGISTICS - TRANSPORTATION
 LOGISTICS
❑Logistics can be defined as the management of the flow of
goods, information and other resources, energy and
people between the point of origin and the point of
consumption in order to meet the requirements of
consumers.
❑Logistics involves the integration of information,
transportation, inventory, warehousing, material handling,
packaging and security.
LOGISTICIAN
A logistician: A professional working in the field of logistics
management.
The main functions of a qualified logistician include, among other
things, inventory management, purchasing, transportation,
warehousing, consultation and organizing and planning of these
activities.
Logisticians are responsible for the life cycle and supply chain
operations of a variety of products as well as customs
documentation.
They regularly work with other departments to ensure that the
customers’ needs and requirements are met.
 MAJOR BENEFITS OF EFFICIENT LOGISTICS OPERATIONS

✓Cost savings by centralizing inventory management.

✓Faster order fulfilment by relying on a global
transportation network.
✓Improved cash flow.
✓Flexibility to change distribution patterns for new
products based on ever-changing customer demands.
MAIN CUSTOMER GROUPS (MARKET
SEGMENTS) SERVED BY THE LOGISTICS
INDUSTRY
✓Parcel and documents express delivery services.
✓Freight by air, ocean, road or rail.
✓Warehousing and distribution.
✓Supply chain solutions.
 TYPES OF LOGISTICS

✓Internal focus (Inbound logistics)

✓External focus (Outbound logistics)
 INBOUND LOGISTICS
Inbound Logistics involves the activities of receiving,
storing, and distributing raw materials for use in
production.
It is an integral element of business operations for a
manufacturing firm.
Inbound logistics services cover all activities required to
bring goods from a sourcing location to a warehouse or
production plant, such as transportation, inventory,
warehousing and materials handling.
 OUTBOUND LOGISTICS
Outbound Logistics is the process related to the storage
and movement of the final product and the related
information flows from the end of the production line to
the end user.
Outbound logistics focuses on distribution. Shipping, freight
and warehousing are all key functions that fall under this
category.
Outbound logistics also includes communication with
recipients and carriers.
 OUTBOUND LOGISTICS
Outbound systems have some activities that are unique in nature.
The cargo handling services may include:
✓ Cargo collection and consolidation.
✓ Cargo forwarding.
✓ Transit warehousing.
✓ Product completion and inspection.
✓ Cargo tracing.
✓ Documentation and import handling.
✓ Customs clearance, etc.
LOGISTICS MANAGEMENT
Logistics management: part of supply chain
management which plans, implements, and controls the
efficient 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.
TRANSPORT
 SEA TRANSPORT
• Types of sea transport
-Freighter
-Ships
-Canoes
-Submarines
NOTE

• SS – Steam Ship

• MV – Motor Vessel

• MS – Motor Ship
SHIPPING DOCUMENTATION

Shipping Documents: Transport Document, Insurance

Certificate, Official or Legal Documents
• Transport Documents: Bill of Lading (ocean or multi-
modal) or Charter party
• Insurance documents: Insurance policy or Certificate
• Official Documents: License, Embassy legalization,
Origin Certificate, Inspection Cert , Phyto-sanitary
Certificate
SHIPPING DOCUMENTATION

• A freight account is an invoice sent by the shipping

company to the exporter stating their charges.
• A shipping note advises the Superintendent that the
goods are to be shipped.
• A dock receipt will be returned to the consignor
confirming that the goods are stored and awaiting
shipment.
• A mate’s receipt may be sent acknowledging that
the goods have been loaded.
• ETA – Estimated Time of Arrival
• NOR – Notice of Readiness
MARINE BILL OF LADING

A shipping company document that includes a contract

for delivery of the merchandise, convey title to the
goods, and is a receipt for the merchandise. It
indicates details of weight, freight costs, and size of cargo.
MARINE BILL OF LADDING

• The most important document in shipping as it is a

document of title
• “full set” – 3 originals
• “to order” are written – a negotiable document
• “endorse in blank” or “blank endorsement” – no restriction on
ownership
• A shipped b/l or shipped on board – goods have been loaded
on to the ship
• “clean” – goods were taken on board in good condition
• “dirty/claused” – found something wrong with the
consignment
• “freight prepaid”
• “freight collected”
18 MARINE BILL OF LADING: TO ORDER VS STRAIGHT
19
SHIPPED ON BOARD
20
CLEAN BILL OF LADING
AVERAGE

In marine insurance, in the case of a partial loss, or

emergency repairs to the vessel, average may be
declared. This covers situations, where, for example,
a ship in a storm might have to jettison certain
cargo to protect the ship and the remaining cargo.
“General average” requires all parties concerned in
the venture (Hull/Cargo/Freight/Bunkers) to
contribute to compensate the losses caused to
those whose cargo has been lost or damaged.
'Particular Average' is levied on a group of cargo
owners and not all of the cargo owners.
FEATURE OF MARINE INSURANCE

• It is based on “Utmost good faith”

I.e: both the insured and the insurer’s must disclosed:
- Everything which is in their knowledge and
- Can affect the contract of insurance
• It is a contract of indemnity
INSURANCE POLICY

- Floating policy
- Open policy/ open cover
- Tailor made policy
- Valued policy
- Unvalued policy
- Time policy
- Voyage policy
MARINE STANDARD POLICY FORM
THE FORM CONTAINS THE FOLLOWING
PARTICULARS:

• NAME OF INSURED: -POLICY NO.:

• SUM INSURED: -PREMIUM:
• STAMP DUTY: -CONVEYANCE/STEAMER:
• VOYAGE OR JOURNEY: -B/L; LR/GR, RR, AWB NO.:
• TYPE OF COVER: AND DATE:
• CLAUSES ATTACHED
• INTEREST/PROPERTY : DESCRIPTION OF THE ITEM WITH
PACKING DETAILS :

• NAME AND ADDRESS OF SURVEYOR AT DESTINATION

• CLAIM SETTLING AGENT:
• PLACE WHERE CLAIM SHALL BE SETTLED:
CARGO INSURANCE

• Cargo insurance is underwritten on the Institute Cargo Clauses, with

coverage on an A, B, or C basis, A having the widest cover and C the
most [Link] cargo is known as specie
 SHIPPING LIABILITIES

• The Hague Rules govern liability for loss and damage to cargo
carried by sea under a b/l and state that the carrier will not
responsible under the following conditions:
- Acts of war, riots, Civil disturbance
- Force majeure
- Negligence
- Inherence vice
• The Hamburg Rules have extended the shipping companies’
liability for damage or delay to ‘ goods in their charge’ unless
they can proof they took all measures to avoid the problem
• To be safe, co. insures the consignment under all risk cover and
war
 SEA TRANSPORTATION

• Goods transported by sea

-Bulk goods
-Scrap metal
 SEA TRANSPORTATION

• Advantages of sea transportation

-Very high capacity of load
-Low freight rates
-World-wide transport operations
-Continuous operations on 24-hour basis
 SEA TRANSPORTATION
• Disadvantages of sea transportation
-Heavier packaging
-Slow speeds
- Transshipment to other forms of transport essential
-Inflexible timetabling
-High capacity means disproportionate increase in transit time
• Ưu điểm: chi phí vận chuyển rẻ
• Nhược điểm:
• + Hàng hoá phải được gói trong bao bì xịn chịu được lực
• + Thời gian vận chuyển lâu
32

Goods are to be packed in new, strong, wooden cases suitable for

long distance-ocean transport and are to be well
protected against dampness, shock, rust or rough
handling.
The Seller shall be liable for any damage to or loss of the goods
attributable to improper or defective packaging.”
AIR TRANSPORT
AIR TRANSPORT

• Types of air transport

-Passenger jets
-Airships
- Helicopters
- Hot-balloons
AIR TRANSPORTATION

• Necessary for goods lose value overtime and

deteriorate
• Use for speed, particularly over long distances
• Insurance tends to be cheaper as consignments
spend less time in transit
• With bulk consignments, air is much more
expensive
• The main document – Air Waybill, which consists
of 12 copies distributed to the airline, exporter,
importer, and custom
• AWB is only a receipt and cannot be transferred
to another person
DOCUMENTATION

• AWB is not documents of title, and not

negotiable
• Air waybills is obtained by the consignor filling
out an instruction for dispatch form and paying
the freight charges. The charges are calculated in
size, weight or value and risk
AIR TRANSPORT

• Advantages of air transportation

-High speed delivery
-Cheap insurance because goods are at risk for
shorter periods
-World-wide transport operations
AIR TRANSPORT

• Disadvantages of air transportation

-High freight rates
-Restrictions on weight and size
-Delays due to bad weather
- Transhipment to other forms of transport
essential
FACTORS TO CONSIDER WHEN
CHOOSING MODES OF TRANSPORT

• Nature of the goods

-Dimensions
-Weight
-Value
-Fragility
-Perishability
FACTORS TO CONSIDER WHEN
CHOOSING MODES OF TRANSPORT

• The time factor: Fast transport

-Reduce distribution cost
-Reduce cost of finance tied up in transit
-Require less insurance cover
-Means earlier use/ resale of goods
FACTORS TO CONSIDER WHEN
CHOOSING MODES OF TRANSPORT

• Freight rates
-Sea freight rates
-Air freight rates
GROUP E – DEPARTURE

• EXW – Ex Works (named place): the seller makes the

goods available at his premises.
• the buyer is responsible for all charges
GROUP F – MAIN CARRIAGE
UNPAID
• FCA – Free Carrier (named place)
• FAS – Free Alongside Ship (named loading port)
• FOB – Free On Board (named loading port)
GROUP C – MAIN CARRIAGE PAID

• CFR – Cost and Freight (named destination port)

• CIF – Cost, Insurance and Freight (named
destination port)
• CPT – Carriage Paid To (named place of
destination)
• CIP – Carriage and Insurance Paid to (named place
of destination)
GROUP D – ARRIVAL

• DAF – Delivered At Frontier (named place)

• DES – Delivered Ex Ship (named port)
• DEQ – Delivered Ex Quay (named port)
• DDU – Delivered Duty Unpaid (named destination
place)
• DDP – Delivered Duty Paid (named destination
place)
. TERMS OF TRADE (CONT.)

• Group E – Departure
• EXW – Ex Works (named place)

• Group F – Main carriage unpaid

• FCA – Free Carrier (named place)
• FAS – Free Alongside Ship (named loading port)
• FOB – Free On Board (named loading port)

• Group C – Main carriage paid

• CFR – Cost and Freight (named destination port)
• CIF – Cost, Insurance and Freight (named destination port)
• CPT – Carriage Paid To (named place of destination)
• CIP – Carriage and Insurance Paid to (named place of destination)
47 1.2.5. TERMS OF TRADE (CONT.)

• Group D – Arrival
• DAF – Delivered At Frontier (named place)
• DES – Delivered Ex Ship (named port)
• DEQ – Delivered Ex Quay (named port)
• DDU – Delivered Duty Unpaid (named destination place)
• DDP – Delivered Duty Paid (named destination place)
• DAT – Delivered at Terminal (named terminal at port or place of
destination)
• DAP - Delivered At Place (named place of destination)
48 1.2.5. TERMS OF TRADE (CONT.)

• EXW – Ex Works (2000 and 2010)

• This term represents the seller's minimum obligation, since he
only has to place the goods at the disposal of the buyer. The
buyer must carry out all tasks of export & import clearance.
Carriage & insurance is to be arranged by the buyer.

• FCA - Free Carrier (2000 and 2010)

• This term means that the seller delivers the goods, cleared for
export, to the carrier nominated by the buyer at the named
place. Seller pays for carriage to the named place.
49 1.2.5. TERMS OF TRADE (CONT.)

• FAS - Free Alongside Ship (2000 and 2010)

• This term means that the seller delivers when the goods are placed alongside the
vessel at the named port of shipment. The seller is required to clear the goods for
export. The buyer has to bear all costs & risks of loss or damage to the goods from
that moment. This term can be used for ocean transport only.

• FOB - Free On Board (2000 and 2010)

• This term means that the seller delivers when the goods pass the ship's rail at the
named port of shipment. This means the buyer has to bear all costs & risks to the
goods from that point. The seller must clear the goods for export. This term can only
be used for ocean transport. If the parties do not intend to deliver the goods across
the ship's rail, the FCA term should be used.
50 1.2.5. TERMS OF TRADE (CONT.)

• CFR - Cost and Freight (2000 and 2010)

• This term means the seller delivers when the goods pass the ship's rail in the port of
shipment. Seller must pay the costs & freight necessary to bring the goods to the
named port of destination, BUT the risk of loss or damage, as well as any additional
costs due to events occurring after the time of delivery are transferred from seller to
buyer. Seller must clear goods for export. This term can only be used for ocean
transport.
• CIF - Cost, Insurance, Freight (2000 and 2010)
• The seller delivers when the goods pass the ship's rail in the port of shipment. Seller
must pay the cost & freight necessary to bring goods to named port of destination.
Risk of loss & damage same as CFR. Seller also has to procure marine insurance
against buyer's risk of loss/damage during the carriage. Seller must clear the goods
for export. This term can only be used for ocean transport.
51 1.2.5. TERMS OF TRADE (CONT.)

• CIP - Carriage and Insurance Paid (2000 and 2010)

• This term is the same as CPT with the exception that the seller also has
to procure insurance against the buyer's risk of loss or damage to the
goods during the carriage. This term may be used for any mode of
transportation.
• CPT - Carriage Paid To (2000 and 2010)
• This term means that the seller delivers the goods to the carrier
nominated by him but the seller must in addition pay the cost of carriage
necessary to bring the goods to the named destination. The buyer bears all
costs occurring after the goods have been so delivered. The seller must
clear the goods for export. This term may be used irrespective of the
mode of transport (including multimodal).
 52
1.2.5. TERMS OF TRADE (CONT.)
• DAF - Delivered At Frontier (2000)
• This term means that the seller delivers when the goods are placed at the
disposal of the buyer on the arriving means of transport not unloaded,
cleared for export but not cleared for import, at the named point & place
at the frontier - but before the customs border of the adjoining country.
To be used when delivering to a land frontier.
• DES - Delivered Ex Ship (2000)
• Seller delivers when goods are placed at the disposal of the buyer on
board the ship, not cleared for import at the named port of destination.
The seller bears all costs & risks in bringing the goods to the named port
before discharging. This term can only be used when the goods are to be
delivered by ocean.
53 1.2.5. TERMS OF TRADE (CONT.)

• DEQ - Delivered Ex Quay (2000)

• This terms is the same as DES with the exception that the seller is responsible to
place the goods at the disposal of the buyer, not cleared for import, on the quay
(wharf) at the named port of destination. Seller bears all costs & risks as in DES plus
discharging the goods on the quay. This term can only be used in ocean transport.
• DDU - Delivered Duty Unpaid (2000)
• This term means the seller delivers the goods to the buyer, not cleared for import,
and not unloaded from arriving means of transport at the named place of destination.
The seller bears all costs & risks involved in bringing the goods to the named place
other than "duty" (which includes the responsibility for customs formalities &
payment of those formalities, duties & taxes) for import into the country of
destination. Buyer is responsible for payment of all customs & duties & taxes.
54 1.2.5. TERMS OF TRADE (CONT.)

• DDP - Delivered Duty Paid (2000 and 2010)

• This term represents maximum obligation to the seller. This term should not be used if the
seller is unable to directly or indirectly to obtain the import license. The terms means the
same as the DDU term with the exception that the seller also will bear all costs & risks of
carrying out customs formalities including the payment of duties, taxes & customs fees.
• DAT – Delivered at Terminal (named terminal at port or place of destination)
(2010)
• Seller pays for carriage to the terminal, except for costs related to import clearance, and
assumes all risks up to the point that the goods are unloaded at the terminal.
• DAP - Delivered At Place (named place of destination) (2010)
• Seller pays for carriage to the named place, except for costs related to import clearance,
and assumes all risks prior to the point that the goods are ready for unloading by the buyer.
56
TRANSFER OF RISK,INCOTERM
2010
58
MARKING
3. COMMON SYMBOLS IN TRANSPORT

• Fragile
 3. COMMON SYMBOLS IN
TRANSPORT

• This Side Up
3. COMMON SYMBOLS IN
TRANSPORT

• Keep Dry
 3. COMMON SYMBOLS IN
TRANSPORT

• Heavy
 3. COMMON SYMBOLS IN
TRANSPORT

• Do Not Freeze
 3. COMMON SYMBOLS IN
TRANSPORT

• Do Not Stack
 3. COMMON SYMBOLS IN
TRANSPORT

• Explosives

• Symbol (exploding bomb): black on orange bottom, the

number "1" in the bottom corner.
 3. COMMON SYMBOLS IN
TRANSPORT

• Flammable liquids
• Symbol (Flames: black or white on red) the number "3" in the bottom
corner.
 3. COMMON SYMBOLS IN
TRANSPORT

• Flammable solids

• Symbol (flames): black on white background with seven

vertical red stripes, the number "4" in the bottom corner.
 3. COMMON SYMBOLS IN
TRANSPORT

• Substances liable to spontaneous combustion

• Symbol (flames): black on white and red background, the
number "4" in the bottom corner.
 3. COMMON SYMBOLS IN
TRANSPORT

• Oxidizing substances
• Symbol (flames above a circle): black on yellow
background, the number"5.1" in the bottom corner.
• Toxic substances

• Symbol (skull with crossing bones): black on white background, the number "6" in the bottom corner.