Logistics Service Providers PDF

Logistics Service Providers Capt. Dr. Ahmed Gheith Omar Khaled Ahmed  Content of Chapter One Introduction Definition of Logistics Management & SCM Mission of Logistics and Supply Chain Key and Support Activities of Logistics Physical and Distribution Channel Jebel A...

Logistics Service Providers Capt. Dr. Ahmed Gheith Omar Khaled Ahmed  Content of Chapter One Introduction Definition of Logistics Management & SCM Mission of Logistics and Supply Chain Key and Support Activities of Logistics Physical and Distribution Channel Jebel Ali Example  Logistics Definition Logistics Management is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption to meet customers requirements.  Supply Chain Definition SCM is the integration of all activities associated with the flow and transformation of goods from raw materials through to end user, as well as information flows, through improved supply chain relationships, to achieve a sustainable competitive advantage.  Logistics / Supply Chain Mission (7Rs) Right Product / Service Right Customer Right Time Right Place Right Condition Right Quantity Right Cost  Key Activities Customer Service Key & Transportation Inventory Management Support EMS Logistics Support Activities Warehousing Activities Materials Handling Acquisition (Purchasing) Packaging Information Maintenance Scope of the Supply Chain for Most Firms Business logistics Physical supply Physical distribution (Materials management) Sources of Plants/ Customers supply operations Transportation Transportation Inventory maintenance Inventory maintenance Order processing Order processing Acquisition Product scheduling Protective packaging Protective packaging Warehousing Warehousing Materials handling Materials handling Information maintenance Information maintenance Focus firm’s internal supply chain  Physical Supply & Distribution channel Physical Supply Channel: refers to the time & space gap between a firm’s immediate material sources and its processing points. Physical Distribution Channel: refers to the time & space gap between the firm’s processing points and its customers.  Relationship between Logistics and Maritime Transport Transportation is a key logistics activity which is about 60%. Maritime Transport moves about 90% of the international trade so Maritime Transport represents about 50% of the global logistics.  Processing point &Warehousing Supply channel Distribution channel Transportation About 10 About 40 days days Customers London Supplier/ china about 10 days Libya / Tunisia Total = 40+10+10 = 60 days (Capital cycle) Invested Amount = 100 000$ Profit = 30 000$ Profit per year = 30 000 $ × 6 = 180 000$  Jebel Ali - Processing & Dubai Warehousing Supply channel Distribution channel Transportation About 10 About 15 days days Supplier London Customers /china About 10 days Libya / Tunisia About 25 days Total = 25+10+10 = 45 days (Capital cycle) Invested Amount = 100 000$ Profit = 27 000$ Profit per year = 27 000 $ × 8 = 216 000$  Processing & Suez Canal Warehousing Supply channel Distribution channel Transportation About 10 About 30 days days Supplier London Customers / china About 10 days Libya / Tunisia About 10 days Total = 10+10+10 = 30 days (Capital cycle) Invested Amount = 100 000$ Profit = 24 000$ Profit per year = 24 000 $ × 12 = 288 000$ Transport Fundamentals  Mean Mode Carrier Transport Shipping Freight Consignee Fundamentals Company Forwarder Vendor Shipper (Supplier)  Means of Transport These are the means which are used either for carrying people or carrying the goods from one place to another: ✓ Trains ✓ Cars/Trucks ✓ Aircrafts ✓ Vessels ✓ Pipelines  Modes of Transport Mode of transportation refers to different ways by which goods or people are transported from one place to the other through land, air or sea. ✓ Railways ✓ Roadways ✓ Airways ✓ Waterways ✓ Pipelines  Factors affecting Transport Decision COST TRANSIT TIME TYPE OF CARGO (ACCORDING TO SAFETY)  A company or an individual that supplies Vendor goods or services. This term is also referred to as the supplier.  Person or company who is usually the supplier Shipper or owner of commodities shipped. Also called Consignor  A company or a person that is legally entitled to transport goods by air, water, and land. Usually, the Carrier carrier works with shippers to ship goods from one place to the other. Some popular examples of carriers are airline, shipping line, trucking company, parcel/express company, and railroads.  Person or entity is the shipment receiver and Consignee generally the owner of the shipped goods.  An agency that receives freight from the shipper and then arranges for transportation with one or more carriers for transport to the consignee. Typically, it Freight consolidates freight from many shippers to obtain Forwarder better rates. Also, often provide pickup and delivery services, as well as other shipping services: packaging, temporary storage, customs clearing. Steps of International Trade  Steps of International Trade Search for a vendor through Internet, yellow Send an Inquiry to the Receive Quotation from pages, commercial Vendor the Vendor departments in embassies Vendor sends a firm offer Negotiations occur to (final agreement) including reach an agreement all agreements during the negotiations phase  Letter of A document issued by a bank to guarantee a Guarantee company in a business (Usually 5% of the (L/G) agreement). Letter of A document issued by a bank to confirm payment Credit after the order is done (L/C) Documents used in International Trade Documents used in International Trade Commercial Invoice Packing List Certificate of Origin B/L, AWB Special Cargo ✓ Medicines (Health Authority Approval )  Commercial Invoice One of the most important documents in international trade and ocean freight shipping. It is a legal document issued by the seller (exporter) to the buyer (importer) in an international transaction and serves as a contract and a proof of sale between the buyer and seller.  Information included in Commercial Invoice Invoice number Invoice date Order number Total sale amount Currency Exporter/seller Exporter/seller’s tax Importer/buyer Importer/buyer’s Payment information (name, identification information (name, tax identification instructions address, phone number (eg. VAT, address, phone number (eg. VAT, number, etc.) etc.) number, etc.) etc.) Clear description of Notify party’s Bill of Lading goods (no. of Forwarding agent HS code information number packages, units, weight, etc.) Incoterm under Date of exportation, which the Origin of Insurance means of transport, Shipper’s signature merchandise has merchandise and final destination been sold Packing List A document used in international trade. It provides the exporter, international freight forwarder, and ultimate consignee with information about the shipment, including how it's packed, the dimensions and weight of each package, and the marks and numbers that are noted on the outside of the boxes.  Information included in Packing List Date Shipper and exporter contact information Consignee contact information Origin address of cargo Destination address of cargo Total number of packages within this shipment Detailed description of each package Volume and weight of each package Volume and weight of the entire shipment Commercial invoice number for this shipment Certificate of Origin An important international trade document that certifies that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country. They declare the ‘nationality’ of the product and also serve as a declaration by the exporter to satisfy customs or trade requirements.  Certificate of Origin (EUR1) Enables importers in certain countries to import goods at a reduced rate of import duty under trade agreements.  Bill of Lading (B/L) The bill of lading is a legally binding document that provides the carrier and the shipper with all of the necessary details to accurately process a shipment. It has three main functions: Document of title to the goods described in the bill of lading. A receipt for the shipped products. Represents the agreed terms and conditions for the transportation of the goods.  Airway Bill (AWB) A document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked. Types of Bill of Ladings  Types of Bill of Ladings Master House Through B/L B/L B/L Charter Liner B/L B/L  A Master Bill of Lading is issued by the carrier (ship owner or operator) and represents the contract of carriage Master B/L between the shipper and the carrier. It’s important to note that the cargo shipper will only receive a Master Bill of Lading if they are working directly with a mainline carrier or a freight forwarder.  A House Bill of Lading is created by an Ocean Transport House B/L Intermediary (OTI) such as a freight forwarder or non- vessel operating company (NVOCC) and is issued to the (Partial supplier once the cargo has been received. The HBL is an Shipment) essential document in shipping as it's the formal acknowledgment of the receipt of goods being shipped.  This is issued for the entire voyage covering both domestic and international transport of export goods Through B/L between specified points for specified charges, is called Through BL. This is used generally when the goods have to take more than one mode of transport. Since it does not specify that the goods are on-board the ship, it resembles a Received for shipment BL.  This is issued by the shipping companies who are Liner B/L members of conference lines having a scheduled and strictly-timed run.  Charter party bill of lading is another type of bill of lading used under sea mode of transport. If one shipper or a group of shippers arrange to charter Charter B/L their goods to final destination, a vessel is chartered. This chartered vessel is meant to move the goods exclusively for such shipper or shippers. In such cases, as a proof of receipt of goods, the charterer who charters the ship issues a document of title which is called Charter party bill of lading Legalization of Documents  Legalization of Documents Documents should be legalized according to the forum (COMESA, PAFTA, etc.): 1. Getting Stamps from ministry of foreign affairs. 2. Getting Stamps from commercial department in the embassies. Trade Agreements  COMESA Egypt has signed the Common Market Agreement for Eastern and Southern Africa (COMESA), which exempts products from all customs duties, fees and other taxes. Egypt became a COMESA member in July 1998. The vision of the COMESA is to have a fully integrated economic community for prosperity, internationally competitive and able to merge into the African Union.  COMESA (19 Members) Burundi Comoros D.R. Congo Djibouti Egypt Eritrea Ethiopia Kenya Libya Madagascar Malawi Mauritius Rwanda Seychelles Sudan Swaziland Uganda Zambia Zimbabwe  GAFTA (Greater Arab Free Trade Agreement) 18 members of the Arab League signed the Arab Free Trade Agreement in 1981 and agreed on its terms in 1997 with the aim of facilitating and developing trade between Arab countries. The agreement has reached full trade liberalization of goods through the full exemption of customs duties and charges.  GAFTA (18 Members) Bahrain Yemen Sudan Oman Iraq Kuwait United Arab Lebanon Algeria Syria Palestine Egypt Emirates Tunisia Qatar Libya Jordan Saudi Arabia Morocco  Egyptian – European Partnership Agreement Egypt and the European Union (15 countries) signed on June 25, 2001, in Brussels an agreement to establish a free trade zone between the two parties within a maximum period of 12 years from the entry into force of the agreement (gradual liberalization), while the liberalization of Egyptian imports of industrial goods that are of European origin extends to 16 years.  EU Countries Republic of Czech Austria Belgium Bulgaria Croatia Denmark Cyprus Republic Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden.  European Free Trade Association (EFTA) The European Free Trade Association (EFTA) is an intergovernmental organization set up for the promotion of free trade and economic integration to the benefit of its four Member States – Iceland, Liechtenstein, Norway and Switzerland – and the benefit of their trading partners around the globe. The four EFTA States are all open, competitive economies committed to the progressive liberalization of trade in the multinational arena as well as in free trade agreements.  EFTA Countries Iceland Liechtenstein Norway Switzerland  Egypt-Mercosur Free Trade Agreement In 2010, Egypt signed a preferential free trade agreement with the Southern Common Market (Mercosur), which provides preferential concessions for Egyptian exports to enter the Latin American markets and reduces the cost of Egyptian imports from some Latin American countries such as sugar, meat and soy oil. The free trade agreement aims at reducing custom duties by more than 90% between Egypt and the MERCOSUR countries and completely abolish custom duties on agricultural commodities, in addition to finding solutions to regulate “rules of origin” matters, providing preferential treatment guarantees and enhancing cooperation in the fields of investment, services, and others.  Egypt-Mercosur Free Trade Agreement Argentina Brazil Bolivia Chile Colombia Ecuador Paraguay Peru Uruguay Venezuela  AGADIR Agreement The Agadir Agreement is a free trade agreement between four Arab countries; Egypt, Jordan, Morocco and Tunisia. It was signed in Rabat in February 2004 and came into force in July 2006 and the implementation is ensured by the Agadir Technical Unit in Amman.  AGADIR Agreement Egypt Jordan Morocco Tunisia  Egypt- Turkey FTA In January 2007, Egypt and Turkey ratified a bilateral free trade agreement (FTA) that was signed in 2005. Under the agreement, Egyptian industrial exports to Turkey are immediately exempted from customs duties. The objective of this agreement is to create free trade area between the two countries over a period of no more than 12 years from the date of entry into force. The agreement mainly aims at removing restrictions on trading in goods including agricultural products, creating favorable conditions for more investment, and providing fair competition in trade between the two countries. Introduction to Maritime Transport  Dry Cargo Ships Bulk Carriers (about 220,000 Tons) General Cargo Vessels (about 32,000 Tons) Container Vessels (about 24,000 TEU) Types Reefer Vessels Ro-Ro Vessels Liquid Cargo Ships of Crude Carriers (about 500,000 tons) Petroleum Product Carriers (about 100,000 tons) Chemical Carriers Liquefied Gas Carriers ✓LPG (about 82,000 cubic meters) Vessels ✓LNG (about 266,000 cubic meters) Specialized Cargo Ships Passenger Vessels Livestock Carriers Heavy-lift/Project Cargo Vessels Tugs Dry Cargo Vessels Bulk Carriers General Cargo Vessels Container Vessels Reefer Vessels RoRo Vessels Liquid Cargo Vessels Crude Carriers Product Carriers Chemical Carriers Liquefied Gas Carriers Specialized Cargo Ships Passenger Vessels Livestock Carriers Heavy-lift/Project Cargo Vessels Tugs Containers  Sizes of Containers  Types of Containers Dry Container Reefer Container Open Top Container Flat Rack Container ISO Tank Container Dimensions of Containers Type of Length Width Height Container 20 TEU 20 8 8.6 (Outside) 40 TEU 40 8 8.6 (Outside) 40 High Cube (40 X 8 X 9.6)  Why are the containers considered as a revolution in the maritime transport? Main element in Door to Door JIT Concept multimodal Service (90%) transport  Each container Protect the cargo from has its own theft, weather unique conditions number Advantages Easy to trace using the ISO of shipment number Standard Containers Easy to store Easy to handle Easy to load Incoterms 2000  Main Incoterms are divided into the following groups: Group E (Departure). Group C (All transportation expenses are on seller's account) Group D (Arrival). Group F (Domestic transportation is paid by the seller) Group E (Departure) : EXW (Ex- Works) : Delivered at place of seller. Group F ( inner transport paid by Seller) : FCA (Free Carrier ): The goods shall be received from the place of delivery, net of transportation costs. FAS (Free beside the ship) : The seller delivers the shipment beside the vessel at the port of export. FOB (Free On Board) : The seller delivers the shipment on board. Group C ( Inner& freight paid by Seller) : CFR (C&F) : COST AND FREIGHT CIF : (COST , INSURANCE & FREIGHT) CPT : (pay the freight to.......) CIP : (Freight and insurance are paid to........) Group D (Arrival): DAF ( Delivery at Frontier ) DES (Delivered Ex Ship): Delivery outside the ship at the port of arrival. DEQ (Delivered ex- Quay ….named port of destination): Delivery is far from the wharf, and the name of the port is mentioned. DDU (Delivered Duty Unpaid …… named place of destination): Delivery unpaid customs for the shipment at the port of destination. DDP (Delivered Duty Paid …… named place of destination): Delivery paid customs for the shipment at the port of destination.  INCOTERMS 2010 (DAF – DDU- DES- DEQ)was canceled. DAF : Delivered at frontier(Border). DDU : Delivery without paying customs. DES : Delivery EX-ship. DEQ: Delivery Ex the quay. Added: DAT : Delivery at the freight station. DAP: Delivery at Port.  INCOTERMS 2020 (DAT/ delivered at terminal) was deleted (DPU/ delivered at place unloaded) has been added. Logistics Service Providers  Maritime Shipping Companies Company owns a fleet of certain type of ships such as: crude oil carriers, containers, bulk carriers, etc. Classified as 3PL. Maritime Shipping Companies  Maritime Shipping Agent Company located in several counties representing the maritime Shipping owner to provide all necessary services for a Ship when calling a port. Arranging with port authority for the berthing of the ship. Arranging with stevedoring companies for cargo operations. Arranging any requirements for the ship such as: Provisions, repairs, medical services, etc. Represents the owner/company in all aspects. Maritime Shipping Agent  Freight Forwarding Companies Customs Clearance. Domestic transportation for shipments. Warehousing (if needed). Freight Forwarding Companies  Stevedoring Companies Company owns equipment's and manpower for cargo operations according to the agents' requirements. Stevedoring Companies  Ship Chandlers A company that supplies required commodities for shipping vessels and its crew according to agents' requirements.  Bunkering Companies Provides the bunker (like Fuel Oil, Diesel Oil, etc.) Bunkering Companies  Shipyards & Repairing Companies Provides the repairs, paints, etc.  Shipyards & Repairing Companies  Mechanical, Electric, & Electronic Repairing Companies Provides repairs either mechanic, electric or electronic for equipment's on the vessels (such as: GPS, Radars, electronic equipment's, etc.)  Sources of Energy RENEWABLE ENERGY NON- RENEWABLE ENERGY Solar Coal Wind Crude Oil Hydroelectric Natural Gas Nuclear  Coal Crude Oil Hydroelectric Energy Solar Energy Natural Gas Nuclear Energy Wind Energy  GLOBAL WARMING Global warming is the increase of Earth's average surface temperature due to greenhouse gases, such as carbon dioxide emissions from burning fossil fuels or from deforestation, which trap heat that would otherwise escape from Earth. Greenhouse gases keep heat close to the earth’s surface making it livable for humans and animals. However, global warming is happening largely to an over emittance of these gases and fossil fuels (natural oil, gasoline, coal). COMPONENTS OF AIR 21% Nitrogen Oxygen 79%  AIMS OF ENVIRONMENTAL CONVENTIONS Ozone Climate Air Layer Change Quality Protection  KYOTO CONVENTION Adopted in Kyoto, Japan 11 December 1997 Entered into force on 16 February 2005 Aim: To save the world from climate changes that caused by the industrial emissions  UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE (UNFCCC) Adopted on 9 May 1992 Signature at the Earth Summit in Rio de Janeiro from 3 to 14 June 1992 Entered into force on 21 March 1994 Combat climate change and its impacts on humanity and ecosystems Stabilize greenhouse gas concentrations in the atmosphere  GLASGOW CONVENTION ON CLIMATE CHANGE UK hosted the 26th UN Climate Change Conference of the Parties Glasgow on 31 October – 13 November Brought parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Supply chain of Gas & Petroleum Exploration Drilling Upstream Production Distribution Mid-Stream Down Stream  Crude Oil Refinery Export Petroleum Crude Oil Products Terminal  PETROLEUM PRODUCTS Gasoline Diesel Fuel Heating Oil Jet Fuel Petrochemical Feed stocks Waxes Lubricating Oils Asphalt Petroleum Gas  COMPONENTS OF CRUDE OIL TERMINAL Berth  COMPONENTS OF CRUDE OIL TERMINAL Tanks  COMPONENTS OF CRUDE OIL TERMINAL Piping System COMPONENTS OF CRUDE OIL TERMINAL Pump Room COMPONENTS OF CRUDE OIL TERMINAL Control Room  TYPES OF CRUDE OIL CARRIERS Coastal: about 80,000 Tons Aframax: about 130,000 Tons Suezmax: about 160,000 Tons VLCC: about 300,000 Tons ULCC: about 500,000 Tons SBM (SINGLE BUOY MOORING) CRUDE OIL CARRIER  COMPONENTS OF PETROLEUM PRODUCT CARRIER Tanks Piping System Pump Room Engine Room Control Room SUMED 320 KM  COMPONENTS OF EXHAUST Carbon Dioxide Nitrogen FIRE TRIANGLE Substance