FREIGHT FORWARDING: Global Freight Management Assignment

Introduce the project by creating Freight Consulting Company and a MARKETING description outlining the company background and credentials that qualify you for the role of freight consultant to assist Alice.

Calculate are the total costs of each method of shipping?

a. Without the holding costs (opportunity cost of capital)?

By water: $2650.00(water freight)) + 385.00(dock in Miami) + $225.00(delivery in Africa) + $185.00(documentation) + $780.00*2(insurance) + $666.00(packing and crating) = $5671.00

By air: $2850.00(air freight) + $260.00(insurance) + $255.00(documentation) + $120.00(packing and crating) = $3485.00

b. Including the opportunity cost of capital?

Value of the goods: $1,700,000 per shipment

Opportunity cost of capital: 14%

$1,700,000 x 14% = $238,000

By water: $238,000 x (38/365) = $24,778.08

Including the opportunity cost of capital: $5671.00 + $24,778.08 = $30449.08

By air: $238,000 x (4/365) = $2608.22

Including the opportunity cost of capital: $3485.00 + $2608.22 = $6093.22

Fully outline the arrangements would you suggest to ensure the product’s safe arrival (packaging, insurance & government partnerships with respect to security, TDG? What other government departments are involved?

To make the cargo safety, we think about three aspects.

Packages

Water Freight: we would like to use crate to place the cargo in the containers with plastic wrapping. So that it could avoid the liquid and moisture.

Air Freight: we try to use the standard LD or M1 containers if it is small supplies but if the equipment is huge we will choose the proper vessel as well. When packing the medical equipment, it will be better to pack it in soft storage to avoid broken.

Insurance

Water Freight: we can choose ALL-RISK cargo insurance because it will cover any physical loss and damaged. And we will add Named Perils insurance. We choose to do this is just because of the complex environment in the destination.

Air Freight: almost the same with the water mode. Considering that some medical equipment and supplies may be expensive and important for the patients, so we should take ALL-RISK cargo insurance. Again we add Named Perils insurance that makes us more insured in the complex environment of South Sudan.

Government partnerships

Transportation of Dangerous Goods gives us the rules and ways to pack and label the cargos. There probably be some dangerous material in the drugs, so we may need to pack it in group 2 or group 3, in which the products are regarded as dangerous in different level. In this process, CBSA is also involved to take the obligation of detect the legal aspect of the exporting and providing some helpful guidelines. Transport Canada may also have some actions in the exporting; such as we may need to firstly transfer our goods to a larger port like Halifax if needed. And also South Sudan Customs will also be involved.

4. Research the most appropriate routes and all modes that will be used in each case and outline them on a map. What criteria other than cost would you recommend she consider to justify your decision on mode(s)?

Except the cost, Alice can consider the time that how long it will take. The products that the company will deliver are medical equipment and supplies. If it is emergency needed, she should choose the air route which go faster and quicker. Consider to the safey of the shipment, the air modal is safer than the water modal. The medical equipment also are important and may be broken. Therefore, in order to arrive on time without any damage. She should choose air route with these criteria.

5. Explain which mode(s), INCOterm and transportation payment terms would you recommend for Global. Justify your answer. Complete the accompanied ICC Model Contract for the transaction and explain your decisions in it. Append the completed contract to your paper.

The incoterm we will choose is EXW, firstly, EXW is suitable for both ocean and air. Secondly, considering that we are not familiar with the route to the destination of south Sudan, there may be potential risks during the procedure. Thirdly, the unstable political and economical envirnment make us choose this one. We want to avoid most of the risks.

The payment we would like to use letter of credit, because this is the only method that could make sure we could get paid. Using this term will be successful in avoiding most of the risks in receiving the payment.

For ICC, see the APPENDIX.

6. All the documentations that needed

Commercial invoice

It is probably the most important document in the transaction. It should include basic information about the transaction, from the description of the goods to the address of the shipper and seller and the delivery and payment terms. Invoice is used to prove ownership of the buyer and to arrange payment. Some governments use the commercial invoice to assess customs duties.

Bill of lading

Bill of lading is contract between the owner of the goods and the carrier. There are two types.

Consular invoice 

Certain nations require a consular invoice, which is used to control and identify goods.

Certificate of origin

A signed statement as to show the origin of the export item. A certificate may be required even though the commercial invoice contains the information.

Inspection certification

Some purchasers and countries may require a certificate of inspection attesting to the specifications of the goods shipped, usually performed by a third party. Inspection certificates are often obtained from independent testing organizations.

Insurance certificate

The insurance certificate states the type and amount of coverage used when the seller provide the insurance.

Export license

As some kinds of medical equipment and supplies may be regard as advanced technologies and control drugs, so depend on the type of the cargo, we may need the export license.

Packing List

More detail information about what content is in the shipment, like the material in each individual package and indicates the type of package. It is used to determine the total shipment weight and volume and whether the correct cargo is being shipped. The custom may also need it as a checklist.

B13A this cargo is not to the US so B-13 is needed.

Quotation

(To get profit from the freight forwarding business, we plan to add 5 percent to the freight, after that the quotation is listed below)

Relevant documents (see appendix)

References

CBSA(2016) retrieved from: http://www.cbsa-asfc.gc.ca/menu-eng.html

Transoirt Canada (2016) Transportation of Dangerous Good. Retrieved from: https://www.tc.gc.ca/eng/tdg/clear-tofc-211.htm

L, Meir. Expot Documentation and Export Shipping. Retrieved from: http://www.bizmove.com/export/m7l.htm

CIFFA. Essentials of Freight Forwarding Program (6th).