Research Paper on Global Transportation Planning

Introduction

Global transportation Is one of the most important factors to consider in a global supply chain of physical distribution because it determines when and how goods will be received.One of the defining characteristics of our era is trade and globalization production.Global transportation, however, involves the effective flow of information, physical flow of goods, between the importer and exporter and payment flow which is very critical in transaction completion.

Importance o Global Transportation

(Als.zim.pcz.pl, 2018) Global transportation Provides distribution for production and personal mobility that interconnects businesses to global markets.Global transportation help to enhance economic progress.However, a global transportation system that is efficient plays an important role in economic development and in enhancing global trade.Global transportation can also help enhance globalization where the business and individual opportunities benefit from increased cost-effective transport network and efficiency.There is a need for a competitive, well organized responsive transport sector that facilitates trade.Lastly, global transportation plays a significant role in a company's success in delivering the product on the accurate and timely basis in a focused economy and current cost control.

Importance Of Transportation Planning In Global Freight Movement And What Types Of Planning Must Be Done

Planning in Transportation in global freight movement is important because the transportation of freight involves long distance and involves a lot of challenges that include, more time, high service cost, damages of goods or loss and greater inventory carrying costs.Planning in global freight movement may involve arrangements with an aim of considering freight mobility or movement in a long-range planning effort (Systematics, 2009) A system of National freight transportation is an important aspect of the global economy because it provides international trade gateways and corridors that connects domestic markets and activities that serve our industrial centers and population.Transportation planning in global freight movement will help: In developing a resource guide which helps industries and agencies representatives work together in order to improve and invest in Freight transportation. and describes a promising and successful institutional arrangement that seeks to improve Freight movement. It also helps define an implementation plan that facilitates the use of resource guide.Planning may also help to facilitate freight projects, improving the operation efficiency of freight movement and helps to leverage public-private fund opportunities.

The type of planning that should be done includes, payment terms, proper documents, transport decision that may involve the transportation routes, or carrier, order fulfillment that may involve packing, Preparing exports through the terms of trade and Preparation of orders,

The Three Channels Involved in Global Transportation.

One of the most challenging factors in global transportation is control of freight and maintaining visibility as they come across borders and as they are handed off between intermediaries and carriers.Therefore the three channels involved in global transportation include The communication channel that involves timely sharing of information which is a key factor to consider in global transportation. (Coyle et al., 2015) The other channel is distribution channel which involves Receiving and delivering or sending the product to the customer.The other channel is the transaction channel that involves activities that includes goods purchasing, payment, and movement preparation activities.

Types of Transportation Challenges That Organizations Should Consider In Global Sourcing

Global sourcing is a strategy that involves assessment, identifying and negotiating of supplies across various countries with the aim of performance improvement, minimize the cost, reduce related risks.Challenges to consider in global sourcing:

(Zanjirani Farahani, Asgari, and Davarzani, 2009). states that low visibility is a challenge to consider in global sourcing.Global sourcing process introduces language, distance, cultural barrier and time zone.However, without up to date complete access to information, supply chain executive struggles to access decision-making costs.This challenge includes the ability to virtually see all aspect that affects global transportation.Difficult communication: There are cross-border customs and practices that often creates communication environment challenges.This challenge may outweigh the benefit of employing low prices, international suppliers.Security issues: Logistics and sourcing companies are concerned with global sourcing security issues.

Role Of Trade Terms In Global Transportation. Four Groups Of Incoterms.

Trade term indicates whether there should be decision making and when to acquire ownership.Trade terms determine the exporter or importer that will be responsible for goods transportation organization, payment, clearance goods, tax, and insurance.

(Chikwaya, 2010) There are four groups of incoterm that include group E, C, F, and D.Group E: This E stands for 'Ex' Starting from sellers obligation and minimum responsibility and buyers obligation and maximum responsibility.In this group, the seller only is responsible to make goods available to the buyer at the agreed place that is, the seller's place.Group C: The C stands for carriage or cost.Here the seller is responsible for paying the carriage and contracting without assuming damage or loss of goods or even the additional cost.Group F: The F stands for free.This refers to the freedom of responsibility from the seller point.The seller delivers goods to the carrier and is not responsible for the carriage but for some charges of pre-shipment.Group D:This group means rallies and delivery arrival. The Seller has a responsibility to deliver goods to the destination country, bearing all risks and cost that are required for goods delivery.

Risks And Perils That Are Present In Global Transportation.How Exporters And Importers Manage these Risks

(Coyle et al., 2015) Product damage, which would include equipment accidents, poor handling of freight, improper loading of equipment.The other risk is product contamination that may be as a result of the failure of climate control, contamination exposure and product tampering.The other risk is a delivery delay that may be caused by poor weather, congestion, and equipment malfunction.The other risk fire within the mechanical breakdown that may lead to cargo stranding.There are other risks that may include government delays, labor issues, collisions and hijacking by pirates.

Managing this risks may take a mixed approach, risk transfer or risk retention in order to manage this risks.

Payment Options Available For International Transaction.How Each Option Protects Exporters and Importers Interest

The payment options include Open account, Its qualified by a set of 30 days from lading date of the international bill.This payment option helps protect exporters and importers interest through low-cost benefit for the seller and buyer.Time draft.It contains a date that indicates when the seller will be paid.This will help protect importers and exporters interest where the buyer promises the bank to honor their commitment in making payments before receiving the document this allows them to claim goods from an international carrier.The cost is generally low.Sight draft It contains at sight statement.It helps buyers to pay them before they receive documentation which allows them to claim their goods.Documentary Credit letter.This payment option helps the exporters and importers through mitigating the most risk that is made through the bank' payment promise under the written terms and conditions.Cash in advance payment optionThis payment method is beneficial as the cash is paid for the shipment.It also incurs a low cost.

Importance of Documentation to Global Transportation.Primary Documents Used To Facilitate Global Cargo Flows.

Global transportation documentation plays an important role in preventing additional costs and delays.The Primary documents used facilitates Global cargo flows includes Invoices.This document describes quantities, country of origin, values, terms, of a cargo.Export document.They are documents required by the national export or customs of a given country of export.They include permits, licenses, export declarations, commercial invoice, permits, inspection certificate and sometimes transport document.Import document: Minimum requirement of this document is a commercial invoice and entry form.Transportation document: They are issued by air cargo, shipping line, freight forwarder or a trucking company.Bill of landing is the key transport document.

How Government Use the Information Contained In Global Freight Documents

Invoice information helps the government determine a value for duty tax assessment or in making a financial arrangement.The export document is required by a given import country's custom and it helps to ensure that international delivery and shipping is met.In regards to the type of goods being transported.Factors That Impact Mode Of Selection For Global Transportation

The factors include Safety, where goods should arrive the destination in the condition they were before shipment.There is a need for precaution in choosing a mode of transport with ability to ensure no freight damages. Transportation cost is a significant consideration in selecting the best mode of transport.There is the importance of ensuring that the product value is factored in the cost analysis.Nature of the product that includes durability, size, and value may be a factor to consider as some may eliminate some modes of transport as they cannot handle the goods.Shipment characteristics they include route, size, and speed.

How Global Carrier Selection Differ From Mode Selection

For global Carrier selection, the main deciding factor is service.However, many shippers limit carrier pool which they can choose based on the services.In Mode selection, Service does not have a major role to play.The decision heavily outweighed towards capacity and cost if the characteristic of a product allows modal choice.However, companies that are involved in carrier selection are concerned about future capacity.Therefore contracting capacity is a major factor in carrier selection future.

Consideration That Should Influence Decision Maker When Developing Transportation Route For Global Freight

There is an impact performance of supply chain, organization growth, and customer satisfaction.There is a need for Freight owners to sequence stops that help in improving transit time and choose the most efficient routes.Decision makers and planners in freight avoid routes which come across unstable countries.Cost may be reduced through the use of routes of the high volume where there is competition on carriers.

References

Als.zim.pcz.pl. (2018). [online] Available at: http://www.als.zim.pcz.pl/files/transport-importance-in-global-trade.pdf [Accessed 20 Mar. 2018].

Systematics, C. (2009). Institutional Arrangements for Freight Transportation Systems. Washington Dc: Transport research board.

Coyle, J., Novack, R., Gibson, B., and Bardi, E. (2015). Transportation. Boston, USA: Cengage learning Publisher.

Zanjirani Farahani, R., Asgari, N., and Davarzani, H. (2009). Supply chain and logistics in the national, international and governmental environment. Heidelberg: Physica, p.52.

Chikwaya, K. (2010). Sustaining Contractual Business: an Exploration of the New Revised. South Africa: Xlibris publishers.