Plan for International Trade
Task 1. Knowledge Questions
1.1 The international trade policy primary role is to promote free trade on a global basis. Also, the policies, rules, and procedures at the company establish consistently, and complaint approaches towards the managing of imports, exports and related activities around the world. The exporters and imports must take the obligation to exercise due diligence. The policy stipulates that it shall apply uniform operations in a single nation thus comply with Ethical Conduct, internal controls and local requirements and laws. The managers including directors and branch managers at the company oversee compliance with international trade laws and regulations. In all cases, no lawful citizen shall engage in unlawful activities violating Australian laws or regulation.
1.2 Dear Customers,
The different modes of transport offer and demand the use of dynamic pricing and strategies. The different courier adjusts pricing rates in response to different conditions in the market. The companies carrying different results will effectively have a comparative advantage over the competitors.
The various forms of transport consider several factors including perishability of goods, weight, and volume, time, economic conditions and operating expenses. The factors are important in decision making on best and cost effective mode of transport. I recommend that you take time in considering these factors to reduce the cost of operation.
Yours Sincerely
Advisor
1.3
- It is important to consult the consulate found in Japan to determine the restrictions affecting the shipment. Consultations should be done in advance before making an order. The buyer has the knowledge about the exporting country (Japan) regulatory requirements as well as Australian regulation.
- It is important to assess the best means of transport to ship the motor vehicle from Japan to the Australian region. The transportation analysis examines the accessibility and mobility including the benefits to the user. The importer can choose between air and sea transport.
- Transport cost analysis is important. The benefits accrued from the mode of transport selected can be measured through reduced cost of transport. The cost of transport analysis should factor in insurance cost and other costs associated with shipping the motor vehicle to the port of importation.
- It is crucial to analyses the cost of insurance while transporting the goods from Japan into Australia. There are many factors to consider while deciding on whether to insure the freight. The factors include destination, value of the goods, mode of transport and shipping origin.
- It is essential to prepare the correct international documentation to facilitate the exportation of the vehicle from shipping origin to the destination.
- The Australian government prohibits the importation of vehicles (in a single batch) except in specific circumstances. The large manufacturers investing a significantly large amount of capital are responsible for the transportation and importation of vehicles in Australia. The government I this policy ensures that imported motor vehicles meet the minimum safety standards, help in conserving the environment through reduced carbon emissions. The importing manufacturers must obtain licenses and approvals from the government.
1.4
Types of goods
Insurance
Volume
Perishability
Weight
1.5
- The risk of damage to the packaged bottles
- The package may not reach the destination on time due to several factors. Breakdown of the vessel or delays in the air transport may cause late arrival of the package.
- The goods may best lost while in transit via the sea
- When aircraft accidents occur, it causes damage to the goods thus fail to get to the destination
1.7
Accepted method of transport Risk factors related to packing and storing
Livestock The recommended transport method in transporting animals include air, ship, rail and motor vehicle The developing countries have many animals, and they are moved from one destination to the other by trekking on the hooves, via rail and road transport. Throughout history, the animals moved from place-to-place on foot. However, increased urbanization and animal commercialization led to the increased production and transportation. The railways and roads are essential in transporting the animals from the farms to the market. It is a daunting task to transport animals. Animals in transit get injuries between the farm and the market. As a result, it leads to poor animal welfare, decreased production and earnings.
Vegetables Refrigerated containers are the best suit for transporting vegetables whether destined to for transportation via air or sea.
The fresh vegetables and fruits require safe preservation. The goods are perishable and depend on environmental status afforded during transportation and storage. The fruits and vegetables require optimum temperatures at all times to maintain their condition and quality. Precooling is the best method of safe preservation of these delicate commodities. The system of refrigeration during transportation only has the capacity to adjust to minimal reduction and maintenance of products temperature during their transit.
Petroleum The pipelines, railway roads, trucks are best suited in transporting petroleum The transportation of petroleum and petroleum products involves high risks whether using pipeline, truck or train methods of transport. The railway transport poses the greatest risk and may cause serious human suffering and death when accidents occur. The transportation via truck is not safe either but is widely used in delivering gallons of petroleum to consumers. The trucks record the highest number of incidents compared to the rail transport. Therefore, transporting petroleum is a dangerous commodity to transport.
Motor vehicle In the domestic freights, the trucks suitable for transporting motor vehicles. Conversely, cargo vessels are crucial in transporting motor vehicle during international freights. The Australian government prohibits the importation of vehicles (in a single batch) except in specific circumstances. The large manufacturers investing a significantly large amount of capital are responsible for the transportation and importation of vehicles in Australia. The government I this policy ensures that imported motor vehicles meet the minimum safety standards, help in conserving the environment through reduced carbon emissions. The importing manufacturers must obtain licenses and approvals from the government.
The electronic and electronic gadgets such as TVs, Radios, Video Cameras, and computers have delicate internal components. The commodity conditions necessitate special packaging techniques to this equipment prior transportation. The airplanes and special vehicles are equipped with tailgate lifts and air-ride suspension to protect the fragile technological equipment. The cost of transiting such gadgets is always heavy to the exporters and importers.
Computers Air transport is best
Grain The sea or cargo vessels is the best method to transport grains The shipping of grain via the sea requires the seller of the buyer to rent a vessel caring the commodity from the loading port to the distinction port. The leased or ‘chartered vessels’ perform consecutively or a single voyage for a specified period such as one month or three months or one year. The risk involved in sea transport is damaging of goods due to poor storage or the ship capsizing.
1.8
Petroleum Transport PTC
The Pasha International Service
1.9
Airlines
Qantas
Qantas Freight
Regional Express Airlines
SEAIR Pacific
Air cargo
Cargo Masters
Qantas Freight
Virgin Australia Cargo
1.10
Full Container Load
Less than a Container Load
1.11
Tramp Service
The ships work on-demand or on-call basis. The services are available to the customers requiring shipment of goods such as crude oil, food grains and chemical. The capacity of the cargo ranges between 500 and 500, 000 metric tons. It is possible to charter the ship as time, consecutive or single voyage.
The shipping service includes;
- Identification of means to transport the cargo
- Loading cargo at the sellers’ port and discharging of goods at the destination port.
- The service determines whether the cargo shipment will be delivered domestically or internationally
- Cargo insurance
1.12
Bulk Carrier
Refrigerated Cargo
Ships Dry carriers
Livestock carriers
LNG carrier
Oil tanker
1.13
Pros Cons
Parcel post It is convenient and cheap to send and deliver domestically
It is unsafe at they are sent via email.
Have high risk of loss
Charter services The charter services through air offer safe delivery
The delivery is speedy and reach destination on time The transportation means is very expensive
Conference lines
The conference line through the sea allows the use of modern equipment. Therefore, the goods are stored safely and delivered on time due to efficient equipment. Conference lines are costly
1.14
Pallet Material
The pallet material aid in faster loading and off/loading of cartons and other small items from a container. The pallet becomes part of the cargo and secures the cartons using shining foils. The pallet material fills up the spaces or gaps between cartons.
Strong planks and Square timber
The strong planks and square timber are essential in consignments that have higher weights or small support areas. The bending of the timber depends on the container design. The timber holds the goods together and protects them damage while in transit.
Steel Girders
The bulk and heavy cargo utilize the steel girders. There are anti-slip materials that ensure that the steel rests comfortably on the surface of the container. The anti-slip material significantly increases friction between steel items.
1.15
Double wall boxes
These containers are useful where the transport needs to be added side wall for greater stacking strength or protection of goods.
Kraft shipping
The containers comprise of C-flute wall corrugated in shipping cartons. The heavy material protects the goods in transit from damage.
Heavy Weight Boxes
The boxes are constructed using the C-flute corrugated board and can hold boxes weighing up to 95 lbs. The boxes are strong and protect goods from accidental bursting.
1.16
Requirements Reason for
Destination details Easy retrieval in case of loss
Label on hazardous cargo Inform handlers about the danger posed by the goods
Handling Instructions FRAGILE-possible breakage if not well-handled
Details about the type of goods Protect from water, heat and radio activity.
1.17
Legislation Customs Act
Code of practice INCOTERMS
Standards ISO:2009
International conventions General agreement on trade and tariffs (GATT)
Assessment task 2
Part A
2.1
Air Cargo Services
CargoMaster
Pack and Send
Express Cargo Services
Shipping Service
China
CargoMaster
Pack and Send
2.2
Aircraft
1. The Embracer 120 Brasilia is a type of aircraft that can carry up to 3.5 metric tons of goods.
2. The HS748 is a type of aircraft that can carry up to 6 metric tons of goods.
Vessels
Traditional Freighter
The traditional ships comprise several deck-mounted cranes uses in transferring cargo from a wharf to the vessel. The size of the vessel ranges between 250 and 600 ft. long. For instance, the Liberty Ship used during the Second World War was estimated between 441 and 561 ft. long. The ship carries all types of break bulk.
The container vessel
The container vessel varies in sizes in size and capacity. The small-size container vessels can carry (a maximum of 20 twenty-foot equivalent units (TEUs). The larger container vessel has a capacity of 1,000 TEUs.
2.3
CargoMasters
The CargoMaster is the most famous and trusted cargo service in both domestic and international freight services. The company helps the cargo around the globe.
Air Shipping Routes: The goods leave different manufacturing companies and arrive at the Sydney, Adelaide, Darwin, Melbourne and Brisbane airport. The goods are loaded on the cargo airplanes before shipment into Japan at Tokio’s Airport.
In sea Shipping, the goods leave the producing companies by truck to the Melbourne and Brisbane Port.
The Express Cargo Service
The company uses the experience and knowledge in the industry to offer a different range of services and logistics including sea freights and air cargo services.
Transportation route: In aviation, the Express Cargo allow goods leave the producing companies into the airports such as North WA, Copper Basin, Bowen and Surat Basins. The goods are loaded on the cargo airplanes before shipment into Japan at Tokyo’s Airport.
Pack and Send Services
In sea shipping, the goods leave the producing companies by truck to the Melbourne or Brisbane Port before shipment to the different part of the world.
The air freight comprises of cargo weighing between 7, 7000kg. The pelletized cargo can weigh up to 1000kgs
Air Shipping Routes: The goods leave different manufacturing companies and arrive at the Sydney, Adelaide, Darwin, Melbourne and Brisbane airport. The goods are loaded on the cargo airplanes before shipment into Japan at Tokyo’s Airport.
In sea shipping, the goods leave the producing companies by truck to the Melbourne or Brisbane Port before shipment to the different part of the world.
2.4
- The Tim Tams are perishable goods and are at risk of expiry
- The packaging can be at risk of damage through jar breakages or crushing of the chocolate bars.
- The good may be damaged by the time the ship docks at the destined port. The bad weather or increased temperature contributes to the spoiling of the goods.
- The happening of airplane accidents causes loss and damage to the goods before they reach their destination
- In the case of ship accidents, the goods are thrown into the sea.
2.5
The companies evaluated and considered indicate that The Express cargo is the best in shipping goods by air. The company seems to guarantee immediate road transport options. The firm uses the dual driver non-stop services and use of several vehicles to carry goods to the airport.
The CargoMaster is best suited to ship the goods through the sea. The company operates several international Sea Freights every week and takes goods from across all Australian cities.
2.5
1. Letter of credit
2. Bill of lading
3. Supplier invoice
4. Packing list
5. Delivery list
Part C Calculating International freight and other costs
The Sea Freight Volume Calculation
1m3=1000kg
Lx W x H x number of package= volume
Volume= 0.3x 0.45x 250= 10, 125kg
The cost will be 10125 x the rate of the freight
Volume = 0.3x 0.45x 100= 4.05m3
The cost will be 4.05 x the rate of freight
2.10 The TACT has detailed information in regards to the laws, regulations, and charges. The TACT implements the import, regulations of import and export of goods
2.11
Australia Post
Parcel weight > 12.0 kg-12.5kg
Express Courier international= AUD205.50
Air mail =165.40
Express post =AUD 172
FedEx
The rates at zone B Japan = AUD181.00
10kg plus rates charged on freight per kg on material of up to 20kg= 15.60+ 181.00= AUD196.0
2.12 It is convenient to send the airmail under the services of Australia Post.
2.13 The cost of air ticket from Brisban to Tokyo costs an estimated AUD 4,700. The total cost for the whole group will be AUD 28200 that includes fees and taxation.
2.14 It is important to consider the components of the Full Container Load. They include terminal handling costs, loading and offloading charges post service costs and port charge costs
2.15
The cost of sending the 500 and 1000 kg Tim Tams from Australia to Japan will cost the seller a varying rate depending on the mode of transport. The Pack and Send Company will charge an estimated AUD821; Cargo Express services will charge an estimated AUD723. The CargoMaster is likely to charge AUD 758. The Express cargo is the cheapest of the three major air and cargo airline.
2.16 It is important to consider the cost of transport from the producing country or company. Shipping, insurance, labor (good handling), buyer cost of transport
Part 3 communication and presentation
3.1
Dear Customer,
RE: IMPORTANCE OF PAYING INSURANCE
It has come to my attention that you do not want to pay your insurance cover on the shipment. Insuring the cargo is important in safeguarding the client in case of loss or damage. There are several insurance policies available and include single transit, open policy, and annual policy. The policies offer different coverage on goods on transit.
The transporting company deals with the perishable commodity. The Restricted cover is the best insurance cover. The cover is appropriate to the individual shipping directly by the owner. The insurance will assist in covering goods from loss or damage (fire, explosion, crashing or sinking of a vessel) to the insured goods.
It is important to insure the goods as the insurance company will reinstate the company back almost to the financial position it was before the occurrence of the accident. I look forward to your favorable consideration and early insurance before a serious loss occurs.
Yours Sincerely,
Insurance Adviser
3.2 Reply to the customer
Dear Customer,
RE: RECOMMENDED INSURANCE COVER
I received the letter indicating your acceptance and agreement of the benefits of insurance. I thank you for your candid consideration and expression of the need to insure your package in transit.
As your transporting company deals with perishable commodity, it necessitates insurance cover. The Restricted cover is the best insurance cover. The cover is appropriate to the individual shipping directly by the owner. The insurance will assist in covering goods from loss or damage (fire, explosion, crashing or sinking of a vessel) to the insured goods.
When the damage occurs, the insurers lodge several documents with the underwriters, forwarders, carriers and customs department. The documents needed for international shipping include supplier invoice, packing list, and delivery receipts. It is important to take photos before offloading the package. Also, remember to keep the bill of landing or the airway bill as it is used in tracking down the carriage. Additionally, it is essential to add the original certificate of insurance and another document that can help in the recovery from the loss.
Yours Sincerely,
Insurance Adviser
Work Cited
Baysura, Kelly. Cargo Planes. Vero Beach, Fla: Rourke, 2001. Print.
Clarke, Malcolm A, and George Leloudas. Air Cargo Insurance. , 2016. Print.
Cooper, Jason. Cargo Ships. Vero Beach, Fla: Rourke Corp, 1999. Print.
Dunt, John. International Cargo Insurance. Hoboken: Taylor and Francis, 2013. Internet resource.
Dunt, John. Marine Cargo Insurance. Abingdon, Oxon: Informa Law from Routledge, 2016. Print.
Richardson, Adele. Cargo Ships. Mankato, Minn: Bridgestone Books, 2001. Print