Suez Canal; Its Impact on Global Logistics

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SUEZ CANAL:
It’s Impact on Global Logistics

Date: 20th February 2011
Family Name: Ali
Forename: Anwar Mohammad
ID Number:EAC0111076
Lecturer:Nigel Woodhead
Module Code & Title: KM307 Global Logistics
TABLE OF CONTENTS

1. Introduction………………………………………………………………..……………………….Pg 3 2.1. Utilizing Suez Canal, Benefits to Suppliers……………………………………………..Pg 3 2.2. Utilizing Suez Canal, Benefits to Shipping Lines……………………………………..Pg 4 2.3. Utilizing Suez Canal, Benefits to Distributors………………………………………..Pg 5 2.4. Utilizing Suez Canal, Benefits to Consumers………………………………………….Pg 5 2. Selecting Third Party Logistics Provider…………………………………………………Pg 6 3.5. Arranging customs clearance when the spare parts arrive in Jebel Ali ……..……………………………………………………………………………Pg 6 3.6. Transporting the goods to a Regional Distribution Centre in Jebel Ali…………….…………………………………………………………………………….…Pg 8 3.7. Storing the goods in a Distribution Centre large enough to accommodate 2,000 pallets…………………………………………………..………….Pg 8 3.8. Receiving orders from the distributors and assembling the required goods………………………………………………………………………………..Pg 9 3.9. Delivering the assembled orders to the various GCC distributors by road transport………………………………………………………..……Pg 10 3. The Blockage of Suez Canal………………………………………………………………….Pg 11 4. References………………………………………………………………………………………..…Pg 13 1. INTRODUCTION

There is a huge significance of Suez Canal with regards to world trade; where by the daily routine products to nature in massive quantity gets supplied to the world beyond Europe and Americas or Middle East and Far East in the most convenient & quickest way. A channel linked to ease the connection between East and West. A link that made century old brand trade monopoly weak, whilst helped small and medium various unmarketable businesses to cultivate and made the market compete at its utmost. Due to the fact, large traders kept the brand & some ideal products for its wealthiest to international level as its cycle of feedback and order remained on time. Whereas, the small and intermediate kept its products prone to local markets due to lengthy periods of shipping cycle, which lead to escalate the shipping charges. As a result, it only excelled the opportunity for rich to become richer. The world trade was eased, for it had a marvel named Suez Canal. Its importance in the world trading goes beyond the statement of short cut and fast. As stated by Wall Street Journal “The Egyptian economy is relatively small, with total output of just about $217 billion. But the nation carries outsize importance as home to the Suez Canal, a key shipping route for oil and other products between the Red Sea and Mediterranean.” [1] The less expenditure on shipping accelerates competition among traders, which helps in reduction of costs. Thus, a consumer avails more options, competitive prices and choice to choose.

1.1. UTILIZING SUEZ CANAL; BENEFITS TO SUPPLIERS
Suez Canal; a channel that provides Suppliers the “shortest link between the east and the west due to its unique geographic location; it is an important international navigation canal linking between the Mediterranean sea at Port said and the red sea at Suez .The unique geographical position of the Suez Canal makes it of special importance to the world & Egypt” acknowledged by Suez Canal Authority [2]. Often to USA, majority of the mass consumable items such as electronics, foot wear, clothing’s etc are widely imported from China. As published in geoarticles “United States is China's largest trading country exports of home appliances.” [3]. The manufacturers tend to overfill the market with demandable and newest items when in production mode as to save the back log that can create a shortage in the market, if it turns out to be a high demand material . Consequently, the product needs to be...
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