Chapter 4 transport strategies

HO CHI MINH CITY UNIVERSITY OF TRANSPORT Chapter 4: Transport strategies PRESENTED BY: BICH HOAI, MSc Content • Transport planning • Transport criteria • Mode selection • Carrier selection • Transport strategy: • Purchase and sale of freight (Carrier strategy and Shipper strategy) • Freight documents (including Fiata from) • Freight claim Transport planning Transport criteria • Transit time • Reliability • Accessibility • Capability • Security • Transport cost Transport planning • Selection decision (two-part decision) • Mode selection • Carrier selection • Route selection • Area of selection decision Transportation Planning Mode Selection • Decision must achieve best fit and balance between: • Modal service capabilities (Accessibility, capacity, transit time, reliability, safety) • Product characteristics – size, durability, value • Supply chain requirements for speed, service, cost • Decision must also align with corporate strategy, control risk and provide required level of customer service => Selected mode is one has minimum logistics cost (both on route and at stations) Table 3-4 Transportation Planning Carrier Selection • Decision based on best fit and balance between: • Geographic coverage • Average transit time and reliability • Reliability of on-time pickup and delivery • Technical capabilities, ability to share information • Equipment availability and capacity • Product protection/carrier’s freight damage experience • Carrier’s financial stability and freight rates • Service factors tend to outweigh cost Transportation Planning Carrier Selection • Carrier selection strategy • Leverage transportation dollars by using a limited number of carriers • Build relationships with service providers • Monitor carrier performance, rates, and financial stability • Have contingency plan with back-up carriers • Differs from mode selection decision • Many more options to choose from • Decision made more frequently but not for each move Transportation Planning Route Planning • Carriers primarily responsible for routing • However, shippers should have input to ensure proper consideration given to: • Customer satisfaction and supply chain performance • Efficiency and product safety during transit • Routing decisions should be • Coordinated with mode and carrier selection • Aligned with global sourcing, inventory, demand fulfillment strategies Area of selection decision • Must connect all defined points • Transportation costs must associated with other service fees: inventory, handling • Count the costs arising related to the mode of transportation (eg.TG transport: safety stock) => The cheapest mode of transportation does not often make the lowest logistics cost 10 FIATA’S DOCUMENT FCR - FORWARDERS CERTIFICATE OF RECEIPT • FCR is a standard form of a trade document, which was prepared by FIATA for general use in international shipments • Mainly used in international transactions where Ex Works (EXW) trade term is selected by the parties • FCR document is not negotiable 42 FIATA’S DOCUMENT FIATA FCT FORWARDERS CERTIFICATE OF TRANSPORT • Issued by Forwarder to consignor 43 FIATA’S DOCUMENT FBL – NEGOTIABLE FIATA COMBINED TRANSPORT BILL OF LADING is a carrier-type transport document set up by FIATA for the use by freight forwarders acting as multimodal transport operators (MTO) 44 FIATA’S DOCUMENT FWR FIATA WAREHOUSE RECEIPT • FWR is a Warehouse Receipt for use in freight forwarders’ warehousing operations • It is a standard document mainly used at national level • The FWR is not negotiable, unless it is marked “negotiable” • It must be decided individually in each country which standard trading conditions are to be applied to the FIATA warehouse receipt 45 FIATA’S DOCUMENT FIATA SDT SHIPPERS DECLARATION FOR THE TRANSPORT OF DANGEROUS GOODS 46 FIATA’S DOCUMENT • FFI – FIATA FORWARDING INSTRUCTIONS 47 DOCUMENTS FCR - FORWARDERS CERTIFICATE OF RECEIPT HBL – HOUSE BILL OF LADING AWB – AIRWAY BILL HAWB – HOUSE AIRWAY BILL 48 Freight Claim • Freight claim: • Delay, loss or damage claims: • The carrier is not liable for loss or damage under "reasonable" conditions => liability is limited to the bill of lading • But, responsible for unreasonable delays, devaluation due to delays • Freight overcharge claim due to: • • • • • • • • Applying rate of the wrong items Apply wrong rates Wrong distance Wrong calculation Apply wrong point of receipt Double charging Wrong weight Difference in laws and tariffs understanding 49 Freight claim: • Present to the carrier to claim for loss, delay or freight over charged • Claim in writing within 12 months ( for loss)- (Article 97 of the 2005 Maritime Code)./ article 169 of the VN maritime code 2015) • Damage can be seen or invisible • Any claim must pay claim fee => only claim when compensation > fees 50 Claim process 120 days Pay Claim accept Claim 60 days 30 days Refuse Reason 51 Freight Documentation, International • Export documents • Import documents 52 Export documents •B/L- Bill of lading •Hướng dẫn gửi hàng- delivery instructions /Shipping instructions •Khai báo XK- export declaration •L/C- letter of credit •Hóa đơn lãnh sự- consular invoice (if any) •Hóa đơn thương mại (C/I)- commercial invoice •Chứng nhận xuất xứ (C/O)- certificate of origin •Chứng nhận bảo hiểm- insurance policy 53 Consular Invoice • Is a confirmation of the importing country Consulate in the export country • Purpose: To impose import tax • Certify that exporters not dumping (Chứng nhận nhà xuất khơng bán phá giá hàng hóa) • Provide information about the taxable goods group (Cung cấp thơng tin nhóm hàng phải chịu thuế nào) • Can be used as a replacement of C / O (Có tác dụng thay cho giấy chứng nhận xuất xứ) 54 Import documents • Thơng báo hàng đến – Arrival notice • Thơng quan NK – customs entries • Lệnh giao hàng (D/O)- Delivery order • Chứng nhận tốn cước – Freight release • Hóa đơn HQ đặc biệt- Special customs invoice ( America customs) 55 Customs Invoice • Another extended form of a commercial contract • Special format required by customs • In which, exporters need to declare: • • • • Description of goods, quantity, weight, size Selling price, freight, insurance Packaging costs Conditions of delivery, payment • Purpose: To declare import value at destination 56 ... (including Fiata from) • Freight claim Transport planning Transport criteria • Transit time • Reliability • Accessibility • Capability • Security • Transport cost Transport planning • Selection decision... arising related to the mode of transportation (eg.TG transport: safety stock) => The cheapest mode of transportation does not often make the lowest logistics cost 10 Transport strategy • Purchase... Professional transportation OUR SERVICE, YOUR PROFIT 24 Transport document issues • Bill of lading (B/L): • Freight bill • FIATA documents 25 Freight Documentation • The most important transport