Optimal Mode of Transporting Clothes —— Intermodal Transportation

Only available on StudyMode
  • Topic: Mode of transport, Intermodal transport, Transportation
  • Pages : 12 (3244 words )
  • Download(s) : 171
  • Published : April 4, 2011
Open Document
Text Preview
Optimal Mode of Transporting Clothes
—— Intermodal Transportation

Abstract
Transportation plays a determining role in international trade and selecting a optimal mode of transportation will reduce the cost and achieve the organisational objectives.

In this report, we will deal with a case that a clothing manufacturer in Guizhou Province, China is planning to export a 20FT container with clothes to its main customer in Melbourne, Australia using the service of a 3PL company and FOB incoterm is used in this case. The purpose of this report is to discuss how to transport these T-shirts to the customer in Melbourne in a optimal route.

FOB is an initialism which pertains to the shipping of goods. Depending on specific usage, it may stand for Free On Board or Freight On Board, with similar but distinct implications. FOB specifies which party (buyer or seller) pays for which shipment and loading costs, and/or where responsibility for the goods is transferred. The last distinction is important for determining liability for goods lost or damaged in transit from the seller to the buyer.

At first, we will discuss the responsibilities of seller, buyer and carrier and describe the documents that should be prepared by each of the three parties. Next we will discuss the characteristics of each transport mode and select the port according to the location and price to determine which mode of transport that should be used for this particular export and estimate the lead time for the whole operation. Moreover, international trade is faced with a number of risks and we will identify the critical issues that should be considered during this operation. Finally, we will give the final recommendations to complete this export successfully. We suggest seller use intermodal transportation of motor and sea transportation. Seller and buyer deal with motor transportation at the beginning and ending of the whole process, by using private vehicles.

Introduction
A clothing manufacturer in Guizhou Province, China is planning to export a 20FT container to its main customer in Melbourne, Australia using the service of a 3PL company. The product are all 100% cotton T-shirts. FOB incoterm is used and the contract is monthly basis.

This international trade involves global transportation. The global transportation decision includes the selection of carriers to perform the transportation within the seller’s country, within the buyer’s country, and between the two countries. In this business report, we will discuss how to transport these T-shirts to the customer in Melbourne in a optimal route. In the first section, we will determine the responsibilities of each of the three parties involved in the operation and describe the documents that should be prepared by each of the three parties. Next we will establish the mode of transport that should be used for this particular export and estimate the lead time for the whole operation. Finally we will identify the critical issues that should be considered during this operation and give the final recommendations to complete this export successfully.

Responsibilities
Since taking INCOTERM FOB, the clothing manufacturer is the seller and the main customer in Australia acts as the buyer while 3PL plays the role of carrier.

FOB is an initialism which pertains to the shipping of goods. FOB is Free On Board. A shipping term which indicates that the supplier pays the shipping costs (and usually also the insurance costs) from the point of manufacture to a specified destination, at which point the buyer takes responsibility. (http://www.investorwords.com/2032/FOB.html#ixzz18q1Ipm2b)

Free on board means that the seller delivers when the goods pass the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. Buyer is responsible for all the...
tracking img