The Logistical Process of Exporting Goods - Coursework Example

Logistics Student’s Name Institution Affiliation Logistics Introduction Trade is increasingly becoming a global connecting factor. Logistics and supply chain management systems have emerged as one of the crucial aspects of the trade. These systems ensure that goods and services transcend different borders within maximum ease. This paper looks at the logistical process of exporting goods. It looks at the various decisions taken during the export process as well as outlines the potential risks. Export Process and Considerations The export process begins immediately a supplier concludes a purchase negotiation with an international client. In this case, the process begins when the supplier based in France concludes a purchase deal with his counterpart in Japan. At this point, the export process begins in earnest. The process involves a series of preparations, planning, and verification of documents. Johnson (2010) points out that there are a number of preliminary considerations that need to be taken into account before starting the process. The first is being in relation to the product. It is critical that an exporter finds out how a specific product should be exported. In reference to the question, the product consideration would be whether the product is subject to any special conditions, limitations or procedures. Since the supplier seeks to export grain fed ducks, it is essential to find out any applicable livestock export rules. According to Appleby (2008), transport of live animals ought to be done in an ethical manner that meets the defined specification of the target market. In addition, the supplier has to understand the packaging or marking requirements, as well as the relevant enclosed documents. Ljungberg, Gebresenbet and Ardon (2006) point out that transporting and handling of live animals involves a series of events that could cause stress to the animals. Consequently, the export process should include a series of measures that ensures that the welfare of the animals during transportation is observed and that the quality of the meat is preserved. When embarking on an export process it is important to establish contracts with a number of carriers. These entities represent a critical aspect of a good transport logistics program. The process of vetting a carrier may involve assessing the level of services that they offer. Understanding the different types of services offered by a carrier will enable the supplier in France to establish whether the services meet their requirements with respect to transit times, transit and handling times, shipment processes and impact on quality. Price is a crucial aspect of in any trade process. As an exporter, it is important to find out what different carriers charge for their services, Of particular interest would be the different rate tariffs, total package rates for exporting to Japan, available discounts, and whether there are any additional charges such as brokerage fees, handling fees etc. This consideration enables the exporter to review his budget. Packaging is an important aspect of any export process. Seeing that the supplier wishes to transport live ducks, the logistics team would have to ensure that the poultry is transported according to the outlined live animal packaging and transportation regulations. Service quality is yet another crucial aspect of the export process. Before selecting a carrier, it is important to investigate the quality of services. This information can be gathered from their safety or claims records. Also, when assessing service quality is it good to find out whether the carrier offers any insurance remedies for goods lost or damaged. Once a carrier is selected, it is important for the exporter to review and verify that they have all the relevant documents to facilitate the process. Among those documents is a commercial invoice. This document enables the supplier to receive his payment as well as helps the importer to clear with customs. This document normally contains all relevant information pertaining to a trade transaction. A packaging list is another crucial document. The record states the contents of a shipment and is used for customs inspection. Moreover, it offers information regarding the weights and/or measurements of the exported goods. In this case, the packaging list will state that the export items are ducks. A certificate of origin is another important document. This certificate is a supporting paper that helps exporters to benefit from any trade agreements between countries. Other relevant papers may include, export/ import permits, inspection reports, and insurance certificates. Once all the proper documentation is in place, the next step is to transport the poultry to the chosen agent. The choice of inland transportation depends on the regulations and cost factors. In this case, road transport appears to be the most appropriate. It is an affordable mode of transport, and there are no legal prohibitions against using it for this scenario. Once the goods arrive at the shipping company, the carrier is expected to embark on the clearing process as agreed during the contract negotiations. Assuming that the carrier is responsible for the entire process, it means that the company will be responsible for dealing with customs, clearing and forwarding agents and other bodies as agreed in the contract. Once the ducks have been cleared, they are shipped to the importer in Japan. Once the Japanese agencies clear the goods, they are ready to be for delivery to the client. As an importer, it is important to ensure that the customs offices clear the goods. It is critical that the processes fulfil all standard procedures as well as legal requirements, Justification The export processes can be complex for any person engaging in it for the first time. Therefore, the decision to involve carriers was informed by the need to make the process as efficient as possible. Hiring the services of various agencies allows the supplier to focus on his core business as opposed to struggling with the export processes. Thus, the extent of planning, organizing, and verification processes are not as intense as it would have been if the supplier were handling the entire process by himself. It is important to safeguard the reputation of one’s business especially if they are conducting business for the first time with an international client. For this reason, it is important to clarify the extent to which the exporter will be liable for goods. Taking a Delivery Duty Paid (DDP) ensures that the goods are delivered right to the warehouse of the importer. Additionally, taking marine insurance policy ensures that the goods are protected against any form of loss or damage during the shipment and delivery process. Risks and Challenges When dealing with an international client it is important to disclose how the costs, responsibilities, and risks will be shared between the parties to avoid uncertainties or breach of contractual obligations. Often than not, failure to highlight how risks and responsibilities are shared results in disagreements and financial losses to either party. Therefore, to avert such risks, importers and exporters alike are advised to ensure that their contractual terms explicitly states the duties and responsibilities of each party. The contract should outline who is responsible for activities such as pick up and transportation from the supplier’s premises to the importers, loading, and clearance among others. Karamally (2008) notes that the international term of trade exists in order to assist exporters and importers to understand the extent of their responsibilities. For instance, the supplier may agree to take full responsibility for the goods up to the importers facility in Japan. Such an arrangement would be catered for under Delivery Duty Paid incoterm. Fluctuation in foreign currency is yet another risk experienced by importers and exporters. The level of risk normally depends on its impact on profitability or competitiveness of the market. Consequently, foreign exchange risks directly influence profit margins of both the importers and exporters. In most cases, the transacting parties are advised to put in place measures to control both transactional and economic exposures arising from foreign exchange fluctuations. By doing so, both the supplier and the importer can protect their cash flows in the wake of foreign exchange fluctuations Unfavorable climatic conditions or unforeseen natural events can pose a great logistical risks and challenge. The key to addressing this issue lays in taking the right insurance policy for the goods. An insurance policy protects the supplier from incurring losses due to loss, damage, or theft. The type of insurance may be dependent on the type of Incoterms provided by the appointed carrier. For Instance, under CIF, the supplier pays for the insurance in addition to the shipping costs. Furthermore, a supplier may choose to take out a marine insurance. This type of insurance indemnifies the client against all types of physical losses from the time the goods leaves their warehouse to the time it reaches the importers warehouse. Political factors also affect any logistical processes. Political uncertainties are in different aspects of the logistics systems. For instance, it affects the custom and clearance activities at the docks. It compromises the timely delivery since inland transportation facilities may be scarce or unavailable. Economic factors such as currency strengths, supply and demand systems are also affected the political stability of a country. For this reason, exports and importers need to be constantly aware of how the current political climate within their countries is likely to affect trade and logistics. Conclusion This paper has examined the logistical processes, and requirements for exporting goods from to an international client. It has established that the process needs proper planning, preparations and verification. These activities are conducted in order to ensure that the goods reach the importer when they are in good conditions and quality. While undertaking different logistical activities, it is crucial that one considers the cost, and quality implications of the types of services they seek from a selected carrier. The decisions taken in regard to this activity should promote efficiency and protect the reputation of the exporter especially if it is their first time dealing with an international client. Additionally, it is important to note that the export logistical processes if affected by political, economic and legal challenges. These are mainly witnessed in terms of exchange fluctuations, contractual issues, and political uncertainties among others. Consequently, it is important that both parties prepare for these eventualities. References Appleby, M. C. (2008). Long distance transport and welfare of farm animals. Wallingford, UK: CABI. Johnson, T. E., & Bade, D. L. (2010). Export/import procedures and documentation, revised and updated, fourth edition (4th ed.). New York: AMACOM/American Management Association. Karamally, Z. (2008). Export savvy: From basics to strategy (5th ed.). New York: International Business Press. Ljungberg, D., Gebresenbet, G., & Aradom, S. (2007). Logistics Chain of Animal Transport and Abattoir Operations. Biosystems Engineering, 11(3), 1-11. doi:10.1016/j.biosystemseng.2006.11.003 Read More