Creating a Logistics Plan for International Transport and Warehousing of Goods
Creating a Logistics Plan for International Transport and Warehousing of Goods
Strategic Logistics Management, Inc. (SLM) is a U.S.-based third party company whose primary business is to deliver logistics services. Currently, SLM manages several warehouses in Los Angeles and the New York/New Jersey area. SLM provides expertise in air and ocean shipping, customs clearance, forwarding, warehousing, and ground transportation. Over the past five years, SLM has built a successful logistics information system (LIS) that includes personnel, equipment, and technology. The decision-support systems included in the LIS are a transportation management system (TMS) and a warehouse management system (WMS).
SLM employs experienced personnel in the United States to handle a wide range of logistics activities and provide customized logistics solutions and services. The company is considering expanding their global operations to provide the same range of services in Australia, including:
Imports: A network of offices and trade connections to support import consolidation, provide warehousing of goods prior to customs clearance, and manage import documentation for customs formalities.
Door-to-door services: Cargo pickup from supplier locations and transportation of goods directly to the customer, as well as freight bookings with airlines and ocean lines to handle cargo exports from both the United States and Australia.
Exports: Handling of various types of cargo exports by ocean and by air, ensuring the timely movement of goods at the most competitive rates. Complete export documentation is provided.
SLM is working to secure two contracts in Australia that will go into effect next year. The first contract is with Greer Wire Company in Melbourne, Australia, to transport two million pounds of stainless steel brushfire mesh used in protecting homes in brushfire prone areas. This cargo will be shipped to Los Angeles, California. The stainless steel wire mesh is supplied in five-meter rolls with an outside diameter of 500 mm, and each roll weighs 50 kg.
The second contract is with Brooks Brothers, a clothing company located in New York City, for warehousing and transportation of clothing in various sizes of cardboard boxes that easily assemble in one unit load on a 48-inch by 40-inch pallet. The goods will be shipped from New York, New York, to Sydney, Australia. For the purpose of this assignment you can make reasonable assumptions about the weight of the boxes.
SLM will manage a rapid flow of goods to and from Australia. The proposed warehouses in Australia will be located in proximity to two large metropolitan areas, Sydney and Melbourne. In the first year of its operations in Australia, SLM plans to handle an average of 200 20-foot equivalent units (TEUs) of imports and exports between the United States and Australia every month.
You are a Logistics Manager at SLM. As part of the company’s goal to strengthen its competitiveness in the global marketplace, the CEO has asked you to design a logistics plan for the proposed warehouse operations in Australia and transportation of goods between Australia and the United States.
In your report (allowing for reasonable assumptions when necessary),
Select one of the two SLM contracts described above.
Analyze the product’s physical properties, volume, and quantities to determine if the product’s shipment size is small (150 to 500 pounds) or a larger (consolidated) shipment (at least one TEU).
Evaluate at least two modes of transportation that best support the organization’s supply chain for shipping the product from one country to another, door-to-door, in a multimodal shipment. Explain your reasoning.
Identify the type of warehouses that SLM should employ in Australia to ensure a rapid movement of goods. Recommend either public, private, or contract warehousing and explain how your recommendation supports SLM’s supply chain management.
List and describe the necessary commercial, banking, and shipping documents that comply with export and import procedures in the United States. These may include a commercial invoice, certificate of origin, shipper’s export declaration, shipper’s letter of instruction, bill of lading, freight bill, and letter of credit.
Determine the appropriate Incoterms® 2010 rule, depending on the shipment mode and buyers’ and sellers’ responsibilities.
Select a process (Lean, Six Sigma, Just-in-Time, or Kanban) and explain how the process can be implemented to ensure effective and efficient warehouse operations techniques are in place that support the company’s supply chain design.
List a minimum of four additional budget line items in the table below with a rationale to ensure smooth warehouse operations in Australia. Support your rationale by including various logistics activity measures, cost drivers, profit models, and the role of inventory and how they influence SLM’s financial outcomes.
Budget line item
Rationale
Shipment consolidation
Cost savings management
Warehouse safety and security
Efficient and safe warehouse operations
Software implementation
Order management, customer relationship management, and load-planning for a truck trailer.
The Final Paper
Must be 2,400 to 3,000 words (not including title and references pages), double-spaced, and formatted according to APA style as outlined in the Ashford Writing Center (Links to an external site.)Links to an external site.. Contextual (Level One) headings must be used to organize your paper and your thoughts.
Must include a title page with the following:
Title of paper
Student’s name
Course name and number
Instructor’s name
Date submitted
Must address the topic of the paper with critical thought.
Must include and integrate supporting information and reasoning from at least five scholarly, peer-reviewed, or other credible business sources in addition to the course text (see Ashford Writing Center’s Integrating Research (Links to an external site.)Links to an external site. for assistance).
The Scholarly, Peer Reviewed, and Other Credible Sources (Links to an external site.)Links to an external site. table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.
Must document all sources in APA style as outlined in the Ashford Writing Center (Links to an external site.)Links to an external site..
Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center. (Links to an external site.)Links to an external site.
Creating a Logistics Plan for International Transport and Warehousing of Goods
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Creating a Logistics Plan for International Transport and Warehousing of Goods
Strategic Logistics Management Inc. (SLM) is a US based company that provides logistics services. SLM manages a sizeable number of warehouses in New York and Los Angeles regions and has currently received a contract with Brook Brothers. Brook Brothers is located in New York and provides transportation and warehousing services of clothing in different sizes of cardboard boxes. The cardboard boxes can be assembled in a unit load on a 48 inch by 40 inch pallet. The contract requires SLM to ship Brook Brothers’ boxes from New York City to Sydney town in Australia. SLM will rapidly move the products to and from Australia and approximates to transport a total of 200 20-foot equivalent units (TEU) of exports and imports between the two nations. Therefore, the assignment focuses on a possible logistics plan that SLM should use to strengthen its competitiveness in the international market place.
The boxes are brought together and packed in a unit load of 48 inch (4 foot) by 40 inch (3.33 foot). The actual length of the load is 4 foot which when divided by 20 will be 0.2 TEU. However, the total amount to be transported will be 200 foot which is equivalent to 20 TEU. The boxes are made of wood and they will be placed in a single load container of 4 foot in length, 3.33 foot in width, and 3.45 foot in height which gives a volume of 46 square foot. The quantity of a single shipment of the load is less than 1 TEU which renders them small consignment. A small consignment weighs less and can easily be transported from one point to another without requiring heavy means of transportation.
Planning the mode of transportation for shipping the products is crucial for the process. The factors to consider when choosing the mode of transport include the cost of the shipment, value of the products, the weight and sizes of the goods, and the urgency of the shipment (Bektas, 2017). The boxes are put under one load before they are transported to their intended destination. Nevertheless, the load is a small shipment which can be transported easily. Moreover, the products are more durable and do not create much urgency in delivering them to their destination. The low weight of the shipment together with its durable nature as well as the reduced value of a single shipment makes the choice of transportation to be decided by the management. The management will make their decisions after considering all the prevailing factors such as the cost of each possible mode of transportation and the urgency of the shipment.
The four possible modes of transportation for the commodities include multimodal, air, water, rail, and road. Therefore, considering the distance between the two nations, the time taken to make the shipment, and the cost of transporting the products, the best modes of transportation for the products are air and water. Australia and the US are in two different continents that are separated by water, thereby, making the transportation of the products through rail or road is impossible as the two infrastructures have not been developed over the waters between the two countries. Therefore, the goods can only be transported between the two countries by air or water. The two methods are equally convenient because the commodities are non-durable and can take a lot of time to be moved within the two nations if necessary. Despite the possible use of the two modes of transportation, air shipment will be less costly as the products have low weight which allows them to be easily moved by an airplane instead of big ships which are more preferable for large loads.
Apart from applying the two modes of transportation to move the products from one country to another, the commodities will also need door-to-door and multimodal shipment. For door-to-door shipment, the firm may use the services of delivery persons who will move to customers’ residence using the company’s cars or taxi. The taxi may be used by brokers after identifying a customer’s location and deliver the products (Bektas, 2017). Similarly, the company may employ delivery persons to use its vehicles to ship the products. Finally, SLM may use multimodal transport that involves shipment of goods by two or more sub-carriers under one carrier. The company may use trucks and ships at the same time in transporting the boxes. After the boxes reach Australia by ferry, they can be transported to the final destination using large trucks where the boxes will be separated from the single load which they were put in before their arrival. The use of two modes of transport by one carrier is effective in terms of cost saving and maximizing profitability.
SLM should employ a contract warehousing in Australia because it is cheaper than public and private stores. The two companies signed a temporary contract to ship the products after which the agreement will be terminated on completion. Hence, owing a private store in Australia will be expensive as it will remain useless after the completion of the agreement. Similarly, a public warehouse will be costly considering the time factor. Governments put several procedures to be followed in using public properties (Bernard, 2015). Therefore, the time that will be wasted in passing through all the procedures put in place will slow the operations of the company. Therefore, the best store for SLM in Australia will be a contract store that will be left without any further costs after the expiry of the agreement with the contractor. The company will only incur the cost of leasing the store from the contractor and leave it after the completion of the contact.
The shipment of goods from the US requires the carrier to keep certain documents that proves the legitimacy of the transported commodities. The first document is commercial invoice that describes the quantity, details, and the prices of the products to be shipped. The details will enable authorities to identify if there are goods which are about to be shipped illegally into or from the nation. Another document that will be needed is the certificate of origin that shows the sources of the commodities. There are several rules of origin for goods to be shipped. For instance, a larger portion of the products must have been manufactured in the US or substantial amount of raw materials used in the manufacture must have come from the US. The certificate of origin helps in controlling dumping of products into a nation. Also, the shipment will require shipper’s export declaration. The person transporting the products must obtain the authority to ship the products. Similarly, there must be a bill of lading to prove the agreement between the carrier and the shipper of the commodities (Özkan & Özçelik, 2016). Bill of lading is non-negotiable and it gives the owner all the right to trade the products while they are still in transit. Further, freight bill will be needed to prove that the transport charges were paid and also letter of credit will be required in case the payment of the products have not been completed. Finally, shipper’s letter of instruction will be required to instruct the carrier on how to handle the commodities including where to leave them.
Additionally, the shipment will be required to be accompanied by shipping orders. Shipping order is a document that contains cargo details and the requirements for the transportation. The certificate is important because it is used to prepare other shipment documents such as airway bill and bill of lading (Cheng & Wang, 2016). Further, the shipment may require sea waybill which is a receipt for cargo that incorporates the agreement of shipment between the buyer and seller. The document is negotiable and does not give the owner the right over the commodities. The same applies to air waybill which is a receipt for products that are transported by air. Finally, a collection instruction document will be needed for the shipment of the consignments. The document is an instruction that is giv...