Download International Logistics

CHAPTER 1
Introduction to
International Logistics
Logistics: What It Is
 Council of Logistics Management definition:
“Logistics is that part of the supply chain process that
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.”
Source: clm1.org
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The Goal of Logistics
 Rapid Response
 Minimum Variance
 Minimum Inventory
 Movement Consolidation
 Quality
 Life Cycle Support
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The Overall Goal of Logistics
 to achieve a targeted level of customer
service at the lowest possible cost.
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Other Terms (1)
 Materials Management
 Physical Distribution
 Business Logistics
 inbound logistics
 operations logistics
 outbound logistics
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Control Over the Flow of Inbound
and Outbound Movements
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Other Terms (2)
Integrated Logistics
 + Suppliers and Customers
 Figure: p.9
International Logistics
 Special for reasons of
 Business Environment
 Cultures
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The Cost of the Business Logistics System
In Relation to Gross Domestic Product (GDP)
In $ Billion
Year
Inventory
Carrying
Costs
Transportation
Costs
Administrative
Costs
Total U.S.
Logistics
Cost
Logistics As a
Percentage of
GDP
1960
31
44
3
78
14.7
1965
38
64
4
106
14.7
1970
56
91
6
153
14.7
1975
97
116
9
222
13.5
1980
220
214
17
451
16.1
1985
227
274
20
521
12.4
1990
283
351
25
659
11.4
1995
302
441
30
773
10.4
2000
377
590
39
1,006
10.1
Source: R. Wilson and R. Delaney, Twelfth Annual State of Logistics Report, 2001
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Three Factors for Spending
on Logistics
 Level of Economic Activity
 Efficiency
 From goods and Toward Services
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Regional Logistics
Assessment
 Geography
 Physical Infrastructure
 Legal/Business Infrastructure
 Two Countries Compared -P.15
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The Three Logistics
Environments
military
Business
civil
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Three Channels for
Performance Cycle
 Transaction
 Distribution
 Documentation / communication
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Transportation
 The Role of Transportation
 Three Perspectives to Transportation
 Shippers
 Carriers
 consignees
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Brief History of Logistics and
Transportation
 Military term
 Why logistics is now a well-recognized
Profession?
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Regional Trading Agreements I
 The European Union (EU)
 A unified economic and trade entity
 Belgium, Denmark, France, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, the United
Kingdom, Germany, Austria, Finland, and Sweden
 Economic and monetary union (Euro)
 North American Free Trade Agreement (NAFTA)
 Eliminated barriers to free trade (tariffs, import licensing
requirements, and customs user fees)
 United States, Canada, and Mexico
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European Union Countries
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Regional Trading Agreements II
 Free Trade Area of the Americas
 Southern Cone Common Market (Mercosur)
 Association of Southeast Asian Nations
(ASEAN)
 Trading alliance of 10 Southeast Asian nations
 African Union
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ASEAN Members
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The World Trade Organization
(WTO)
 Evolved from the General Agreement on
Tariffs and Trade (GATT) in 1995.
 Functions as the only global organization
dealing with the rules of trade among nations.
 Has 145 member nations.
 Monitors and promotes world trade.
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Incoterms 2000 –p31
 E:
 EX-Works (EXW)
F
 FCA (Free Carrier)
 FAS (Free Alongside Ship)
 FOB (Free on Board)
C




CFR (Cost and Freight)
CIF (Cost, Insurance, and Freight)
CPT (Carriage Paid To)
CIP (Carriage and Insurance Paid To)
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Incoterms 2000 –p31
D





DAF (Delivered at Frontier)
DES (Delivered Ex Ship)
DEQ (Delivered Ex Quay)
DDU (Delivered Duty Unpaid)
DDP (Delivered Duty Paid)
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