The Management of Global Trade Distribution - Assignment Example

The Management of Global Trade Distribution Question three In the import and export industry, payment is done either done before, on or after delivery of goods and services. As a result, a company might offer services before payment in order to attract more clients due to competition. Competition is part and parcel of business. In fact, it is of an advantage as it ensures that the consumer is supplied with quality goods and services at a reasonable price. Due to this, the company will always find itself being asked for their goods and services by new companies who are not yet loyal and trusted customers. However, if a business organization is not careful, competition might lead it into bad debts. This is because a company might sell its products to new customers, who might not be able to pay for the commodities thus leading to bad debts. However, this can be avoided by doing a customer value analysis and payment history analysis, Peppers and Rodgers, (2010). Customer value analysis is comparing what a customer is willing and able to part with in monetary terms and what satisfaction the customer gets from the good or service provided. Payment history analysis is reviewing past payment details of the company in question. A payment analysis allows the company to go through a customer’s financial statements in order to determine if the customer in question will pay for the goods provided in time hence avoiding the occurrence of bad debts. For example, if a customer’s financial records indicate that they owe other suppliers money then the company should only do with that customer on cash before delivery basis. If a customer’s financial statements indicate that the customer is not indebted to other suppliers and pays for goods in time then the company can supply goods to such customers on cash on delivery basis or cash after delivery. Question four When transporting goods and services various factors are considered when choosing the mode and means of transport. This in turn affects the charges incurred when transporting goods and services. According to Barnes, (2009), the type of goods being transported greatly affects the cost of transportation. For example, toxic materials require specialized containers when transporting them. Acquisition of these special containers might be expensive hence charges for transporting toxic material are high. Another factor that is considered when determining freight charges is the destination distance. Choice of mode and means of transport is also greatly affected by distance. If goods are being transported over long distances, then the cost of transportation will be high thus resulting in high freight charges.at the same time if the distance is short cheaper means of transport such as road is used hence resulting in lower freight charges. The time within which goods are to be transported also affects the cost of transportation. For example, if perishable goods such as fruits and flowers are being transported; a very fast means of transport is required. For such goods air transport is necessary which is very costly thus resulting in high freight charges. Another factor that determines the freight charges is the general nature of the goods being transported. The nature of goods determines how the goods are to be packed. For example some goods are bulky in nature hence take up a lot of space. Transportation of such goods is more expensive since the more space goods take the more they are charged. Question five Exportation of goods is not an easy task. It is a long process depending on laws put in place in both the country of origin and the country of destination. However, if the correct process is followed it can exportation can be simple and very effective. There are certain procedures set, to be followed when exporting anything. First of all one the exportation should prepare for the exportation of the commodity in question. One should make sure that they are conversant with the environments involved in international trade and the obstacles that they may encounter. One should also consider if the business entity will be able to survive in case a loss arises from the exportation. It is also important to come up with an export plan, (Johnson and Bade, 2010). Here, the exporter does a situational analysis. This is where the export marketing strategies and the export objectives are prepared. After doing this the exporter should implement the exportation plan. Before embarking in exportation the business entity should make sure they have the following documents as required by law. They should get a business identification number (BIN). This is gotten from the Directorate General of Foreign Trade (DGFT). The business institution should also open a current account with certain banks. This is to ensure claims arising from customs are paid. Finally the business organization intending to export should ensure they have advance license, register licenses and a Duty Entitlement Pass Book (DTPB), (Johnson and Bade, 2010). There is a process followed by the party in charge of transporting the commodities. Firstly they should be registered in the systems of the customs in order for them to be process for example shipping bills. The vessel transporting the commodities should be issued with an “Entry Outward” document. It is only after being issued with this document by customs, that loading cab start. Another document that is necessary before goods can be loaded is the shipping bill also referred to as a bill of export. According to Johnson and Bad (2010), an export manifest also known as an export report should be handed to the customs official before departure of the goods. Question six According to Treitel and Baillie (2012), a bill of lading (BOL or B/L) is one of the documents required during the transportation of goods internationally. It is a legally recognized document that is prepared for both the transporter and carrier of certain commodities. It is usually used in the shipping means of transport industry. It is viewed as a shipment receipt when commodities are received by the intended carrier. Irrespective of how the goods are transported, they must be accompanied by the bill of lading. This document should contain authorized signatures of the receiver, carrier and shipper. One of the functions of the bill of lading is that it is used as a tittle deed of the goods on board. It is also used to confirm the transportation contract of the goods. Another important function of the bill of lading is that it is used as proof that the goods have been received by the transporter. A contract of carriage is a legal document between the carrier of passengers or goods and the passengers, consignor or the consignee, (Hoeks, 2010). However, although both the bill of lading and the contract of carriage are both important in the transport industry, they are very different. First of all the bill of lading is mostly used where water is the mode of transport while the contract of carriage is used in the three modes of transport which comprise of land, air and water. Another characteristics of the bill of lading that differentiates it from a contract of carriage, is the fact that it can be used as security for a debt. Finally, a contact of carriage defines the duties, liabilities and rights of the parties involved while a bill of lading does not stipulate that. Work Cited Johnson. E.T & Bade L., 2010, Export/Import Procedures and Documentation, Amacom, New York. Barnes. H, C., 2009, Freight Rates and Charges. General books, Tennessee. Peppers D. & Rogers M. 2010. Managing Customer Relationships: A Strategic Framework. John Wiley & sons, New York. Treitel G. H & Baillie F. M., 2012, Carver on Bills of Lading, British shipping laws. Sweet & Maxwell, London. Hoeks, M., 2010, Multimodal Transport Law: Law Applicable to Multimodal Contract. Kluwer law international, London. Read More