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Logistics is the management of the flow of goods, information and other resources,
including energy and people, between the point of origin and the point of consumption in order
to meet the requirements of consumers (frequently, and originally, military organizations).
Logistics involves the integration of information, transportation, inventory, warehousing,
material-handling, and packaging, and occasionally security. Logistics is a channel of the supply
chain which adds the value of time and place utility. Today the complexity of production
logistics can be modeled, analyzed, visualized and optimized by plant simulation software.
Military logistics
ILS Integrated Logistics Support is a discipline used in military industries to ensure an
easy supportable system with a robust customer service (logistic) concept at the lowest cost and
in line with (often high) reliability, availability, maintainability and other requirements as
defined for the project.
In military logistics, logistics officers manage how and when to move resources to the places
they are needed. In military science, maintaining one's supply lines while disrupting those of the
enemy is a crucial—some would say the most crucial—element of military strategy, since an
armed force without resources and transportation is defenseless.
The defeat of the British in the American War of Independence, and the defeat of Erwin Rommel
in World War II, have been largely attributed to logistical failure.[citation needed] The historical leaders
Hannibal Barca, Alexander the Great, and the Duke of Wellington are considered to have been
logistical geniuses.
Another field within logistics is called Medical logistics.
Logistics management
Logistics management is that part of the supply chain which plans, implements and
controls the efficient, effective forward and reverse flow and storage of goods, services and
related information between the point of origin and the point of consumption in order to meet
customer & legal requirements. A professional working in the field of logistics management is
called a logistician.
The Chartered Institute of Logistics & Transport (CILT) was established in the United
Kingdom in 1919 and was granted the Royal Charter in 1926. The Chartered Institute is one of
professional bodies or institutions for the logistics & transport sectors, that offers such
professional qualification or degree in logistics management.
Third-party logistics(3PL)
Third-party logistics involves the utilization of external organizations to execute logistics
activities that have traditionally been performed within an organization itself. According to this
definition, third party logistics includes any form of outsourcing of logistics activities previously
performed in-house. If, for example, a company with its own transport facilities decides to
employ external warehouse specialist, this would be an example of third party logistics.
Business logistics
Logistics as a business concept evolved only in the 1950s. This was mainly due to the
increasing complexity of supplying one's business with materials and shipping out products in an
increasingly globalized supply chain, calling for experts in the field who are called Supply Chain
Logisticians. This can be defined as having the right item in the right quantity at the right time at
the right place for the right price in the right condition to the right customer and is the science of
process and incorporates all industry sectors. The goal of logistics work is to manage the fruition
of project life cycles, supply chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound logistics), or external focus
(outbound logistics) covering the flow and storage of materials from point of origin to point of
consumption (see supply chain management). The main functions of a qualified logistician
include inventory management, purchasing, transportation, warehousing, consultation and the
organizing and planning of these activities. Logisticians combine a professional knowledge of
each of these functions so that there is a coordination of resources in an organization. There are
two fundamentally different forms of logistics. One optimizes a steady flow of material through
a network of transport links and storage nodes. The other coordinates a sequence of resources to
carry out some project.
Production logistics
The term is used for describing logistic processes within an industry. The purpose of
production logistics is to ensure that each machine and workstation is being fed with the right
product in the right quantity and quality at the right point in time.
The issue is not the transportation itself, but to streamline and control the flow through the value
adding processes and eliminate non-value adding ones. Production logistics can be applied in
existing as well as new plants. Manufacturing in an existing plant is a constantly changing
process. Machines are exchanged and new ones added, which gives the opportunity to improve
the production logistics system accordingly. Production logistics provides the means to achieve
customer response and capital efficiency.
Production logistics is getting more and more important with the decreasing batch sizes. In many
industries (e.g. mobile phone) batch size one is the short term aim. By this way even a single
customer demand can be fulfilled in an efficient way. Track and tracing, which is an essential
part of production logistics - due to product safety and product reliability issues - is also gaining
importance especially in the automotive and the medical industry.
Professional Logistician
A logistician is a professional logistics practitioner. Professional logisticians are often
certified by professional associations. Some universities and academic institutions train students
as logisticians, by offering undergraduate and postgraduate programs.
International trade
Country B
Country A
Transfer of Buyer
funds
Seller/Shipp
Debtor
er
Outward remittance in
home currency of
Creditor
county B
Banker of Settlement of
A country currency Banker of
Between country A B country
&B
(advising bank, authorized dealers, (Issuing bank, Importer’s bank)
Issuing bank
Agreement/contract
Open letter of credit
Authorized
dealer
Sent to exporter
(negotiating Issue of an L/C
bank)
International Logistics
The mechanism of getting inputs from their sources to the manufacturing centre and
taking the finished products from the manufacturing centre to the customers is called logistics
network or system. The logistics system can be simple or complex.
International business firms have to manage the flow of all inputs from their sources to
the manufacturing centers, materials, spare parts and other resources among and between units &
finished products and services from manufacturing centers o the customers. The physical
distribution that takes place in the course of International business is called as International
logistics.
When shipping a product overseas, the exporter must be aware of packing, labeling,
documentation, and insurance requirements.
Most exporters rely on an international freight forwarder to perform these services because of the
multitude of considerations involved in physically exporting goods.
• Advising on exporting costs including freight costs, port charges, consular fees,
costs of special documentation, insurance costs and freight handling fees;
• Preparing and filing required export documentation such as the bill of lading and
routing appropriate documents to the seller, the buyer or a paying bank;
• Advising on the most appropriate mode of cargo transport and making
arrangements to pack and load the cargo;
• Reserving the necessary cargo space on a vessel, aircraft, train, or truck.
• Making arrangements with overseas customs brokers to ensure that the goods and
documents comply with customs regulations.
Export freight forwarders are licensed by the International Air Transport Association (IATA) to
handle airfreight and the Federal Maritime Commission to handle ocean freight.
What is a tariff?
A tariff (or duty, the words are used interchangeably) is a tax levied by governments on
the value of imported products. Sales and state taxes, and in some instances customs fees, will
often be levied as well. The tariff is assessed at the time of importation along with any other
applicable taxes/fees. Tariffs raise the prices of imported goods, thus making them less
competitive within the market of the importing country. Before you export to any country, you
need to determine what the tariff rate is on your product(s) as well as any import fees for that
country. The following information will help you make this determination.
The Section covers to documents that are commonly used in exporting, but specific
requirements vary by destination and product. It is divided in the following sections: common
export-related documents, certificates of origin, other certificates for shipments of specific
goods, Export licenses and Temporary shipment documents.
• Certificates of Origin
• Other Certificates for Shipments of Specific Goods
• Export Licenses
• Other Export Related Documents
• Temporary Shipments
CERTIFICATES OF ORGIN
Certificate of Analysis:
A certificate of analysis is required for seeds, grain, health foods, dietary supplements,
fruits and vegetables, and pharmaceutical products.
Fisheries Certificate
The National Marine Fisheries Service conducts inspections and analyses of fishery
commodities for export.
Fumigation Certificate
The Fumigation Certificate provides evidence of the fumigation of exported goods (esp.
agricultural products, used clothing, etc). This form assists in quarantine clearance of any goods
of plant or animal origin. The seller to fumigate commodity at their expense a maximum of
fifteen (15) days prior to loading.
Halal Certificate
Required by most countries in the Middle East, this certificate states that the fresh or
frozen meat or poultry products were slaughtered in accordance with Islamic law. Certification
by an appropriate chamber and legalization by the consulate of the destination country is usually
required.
Health Certificate
For shipment of live animals and animal products (processed foodstuffs, poultry, meat,
fish seafood, dairy products, and eggs and egg products). Note: Some countries require that
health certificates be notarized or certified by a chamber and legalized by a consulate. Health
certificates are issued by the U.S. Department of Agriculture’s Animal and Plant Health
Inspection Service (APHIS).
Ingredients Certificate
A certificate of ingredients may be requested for food products with labels that are
inadequate or incomplete. The certificate may be issued by the manufacturer and must give a
description of the product, contents and percentage of each ingredient, chemical data,
microbiological standards, storage instructions, shelf life, and date of manufacture. If animal fats
are used, the certificate must state the type of fat used and that the product contains no pork,
artificial pork flavor, or pork fat. All foodstuffs are subject to analysis by Ministry of Health
laboratories to establish their fitness for use.
Inspection Certificate
Weight and Quality certificates should be provided in accordance with governing
USDA/GIPSA regulations for loading at port and loading at source/mill site as appropriate. A
certificate of origin certified by local chamber of commerce at load port and a Phytosanitary
certificate issued by APHIS/USDA and Fumigation certificate are to be provided to buyer. Costs
of all inspection, certificates/ documents at the load port are usually the responsibility of the
seller.
Insurance Certificate
Used to assure the consignee that insurance will cover the loss of or damage to the cargo
during transit (Sample). These can be obtained from your freight forwarder or publishing house.
Note: an airway bill can serve as an insurance certificate for a shipment by air. Some countries
may require certification or notification.
Phytosanitary Certificate
All shipments of fresh fruits and vegetables, seeds, nuts, flour, rice, grains, lumber,
plants, and plant materials require a federal phytosanitary certificate. The certificate must verify
that the product is free from specified epidemics and/or agricultural diseases. Additional
information and forms are available from Animal and Plant Health Inspection Service (APHIS).
Radiation Certificate
Some counties including Saudi Arabia may require this certificate for some plant and
animal imports. The certificate is statement that the products are not contaminated by
radioactivity.
Steamship or Airline Company Certificate
A declaration attached to a bill of lading or airway bill stating that the shipper will not
stop at an unscheduled port, attesting to the accuracy of the shipping route and providing other
shipping information such as name of vessel/plane, nationality of vessel/plane, owner of
vessel/plane, names of ports of call including port of leading and discharge.
Weight certificate
Certificate of weight is a document issued by customs, certifying gross weight of the
exported goods.
EXPORT LICENSES:
Export license is a government document that authorizes the export of specific goods in
specific quantities to a particular destination. This document may be required for most or all
exports to some countries or for other countries only under special circumstances. Examples of
export license certificates include those issued by the Department of Commerce’s Bureau of
Industry and Security (dual use articles), the State Department’s Directorate of Defense Trade
Controls (defense articles), the Nuclear Regulatory Commission (nuclear materials), and the US
Drug Enforcement Administration (controlled substances and precursor chemicals).
Consular Invoice
Required in some countries, it describes the shipment of goods and shows information
such as the consignor, consignee, and value of the shipment. If required, copies are available
from the destination country's Embassy or Consulate in the U.S.
Import License
Import licenses are the responsibility of the importer and vary depending upon
destination and product. However, including a copy of an import license with the rest of your
documentation may in some cases help avoid problems with customs in the destination country.
Pre-shipment Inspections
The governments of a number of countries have contracted with international inspection
companies to verify the quantity, quality, and price of shipments imported into their countries.
The purpose of such inspections is to ensure that the price charged by the exporter reflects the
true value of the goods, to prevent substandard goods from entering the country, and to deflect
attempts to avoid payment of customs duties. Requirements for pre-shipment inspection are
normally spelled out in letter-of-credit or other documentary requirements. Inspections
companies include Bureau Veritas, SGS and Intertek. Some countries require pre-shipment
inspection certificates for shipments of used merchandise.
TEMPORARY SHIPMENTS
Airway Bill
Air freight shipments require Airway bills, which can never be made in negotiable form
(see sample). Airway bills are shipper-specific (i.e. USPS, Fed-Ex,UPS, DHL, etc).
Bill of Lading
Is a contract between the owner of the goods and the carrier (as with domestic
shipments).
Commercial Invoice
It is a bill for the goods from the seller to the buyer. These invoices are often used by
governments to determine the true value of goods when assessing customs duties. Governments
that use the commercial invoice to control imports will often specify its form, content, number of
copies, language to be used, and other characteristics (see Sample).
TM International Logistics
Areas of business
• Port-based services: Stevedoring, shore handling, warehousing / stockyard management
and transportation.
• Ship agency: Taking care of entry and exit of vessels, working at the ports in India,
paying attention to the requirements of the officers and crew of ships.
• Shipping and clearing: Taking care of customs, port and other statutory requirements
for the clearance of import cargo and export shipments.
• Chartering: Chartering vessels for the carriage of goods, both bulk and breakbulk.
• Freight forwarding: With a network of offices in India and overseas, the company offers
services for carriage of goods by multi-modal transport.
Location
The company's principal centres of operations are at Kolkata, Haldia and Paradip in India.
TMILL has sales offices in the main cities of India and regional offices in North and South
America, Europe, Australia, Africa and Asia.