International Logistics-CII

8/7/2019 International Logistics-CII

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International Logistics

Presentation by

Dr R RavichandranMFT,MIAM, MICS(UK),Ph.D


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Important in International Logistics

Mode of shipment and transport

Transit time.

Cost of transportation. Nature of cargo.


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Mode of shipment

Sea

Air

Air and Sea. Sea and Air.

Multimodal transportation.


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Types of cargo

General Cargo packed and in loose form

Perishable Cargo.

Dangerous Cargo.

Over dimensional machines. Cars.

Live Animals.

Granites.

Wind Mill Blades. Scraps, Liquids, Oils, Gas, Bulk materials.

Valuable cargo.

Dirty cargo.


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Movement of cargo

Containers Ships Liner or Tramp.

Liner is regular vessel with schedules, routing, port of calls.

Tramp operates depending on the requirement and dynamics of the markets and donot operate on a regular schedule. It takes a type of cargo for few alike shippers.

Bulk Carriers Dry (coal, ore, scrap), agri products, Liquid, Crude, Edible oil, LNG

Panamax, Suezmax, VLCC, ULCC.

Break Bulk Hatches ; Lighter abroad ship (LASH ship) barges

RoRo Cars and other automobiles.

Combi vessel multipurpose ships to handle varieties of cargo of different loads in asingle voyage. It can carry containers, grains, machineries, vehicles. It has severalholds.


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Types of containers

20 ft, 40ft, 40ft HC containers.

Insulated stainless steel containers.

Refrigerated containers. Open top containers.

Flat Rack containers.

Collapsable flat rack containers.

Hanger containers.

Collapsable flat rack.


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Types of Movements

FCL/FCL - CY/CY House to House.

FCL/LCL CY/CFS House to Pier.

LCL/FCL CFS/CY Pier to House. LCL/LCL CFS/CFS Pier to Pier.


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Cargo stuffing and Consol

Consolidation of cargo.

Co-loading.

Re-work at transhipment port. Feeder Vessel

Main Line vessel or mother vessel.


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Shipping Intermediaries.

Custom House Agents.

Trucks operators.

Trailer operators.

CFS/ICD private or government.

Streamer Agents.

Ship Master/Captain and Crew.

Vessel Owners, Charterers.

Freight Forwarders.

Dock Labour. Stevodors.

NVOCC

IATA Agents.


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Freight and other charges

Freight collect or prepaid.

Port dues.

Stevedoring charges.

Customs EDI charges.

Trailer Charges.

Terminal Handling charges (THC)

Lift on and Lift off ( LOLO).

Pre shipment Inspection agencies.

Fumigation and phyto-sanitory inspection.

Laboratories testing charges.

Inland haulage charges. General Rate Increase.

Revenue Restoration Initiative.


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Other charges

BAF Bunker Adjustment Factor.

CAF Currency Adjustment Factor.

PSSC Peak Season Sur-Charge. WRIC War Risk Insurance Charge.

PCC Port Congestion charges.

DDC Destination Delivery Charges.

SDDC Store Door Delivery Charges.

DO Delivery order fee.


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Freight

CBR Commodity Box Rate : Freight is for the 20 feet or 40 feetcontainer. Freight is based on the volume, weight and the itemcarried.

FCL equivalent of one TEU ( Twenty Feet equivalent Unit).

FAK Freight All Kinds : Irrespective of the commodities, within thepermissible weight, one rate for 20feet and 40 feet are fixed for aparticular destination. The concept is the total operation cost dividedby the number of containers.

LCL Less than container load : Freight is charged per tonne orcbm.


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Freight Multimodal Transportation

Terms used are Micro Bridge, Mini Bridge andLand Bridge rate.

Micro Bridge : Movement of cargo between theport in one country to port in another country.Then by land to a land port. Example, Chennaito Houston, USA by Sea and from Houston to

Dallas by Road.

Single Bill of Lading is issued.


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Mini Bridge

Movement of containers under a single through B/L.Multimodal transport document issued by the oceancarrier.

Vessel from a port in one country to a port in anothercountry, then by Rail to a second port city in the latercountry.

Termination a the Rail carriers terminal in the second

port city.

Example, Chennai to Los Angeles by Sea and to by Railto Charleston.


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Land Bridge

Freight rate embracing two maritime tariffand a surface rate by Rail or Road. Theshipping line will offer single rate, and they

pay for the surface transportation.

For example, shipment from Europe to

Japan. Rotterdam to New York by Sea,then by surface to Los Angeles, then bysea to Tokyo.


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Factors influencing the freight

Concept should be what the traffic can bear.

Demand maximum revenues.

Value of commodity freight will be more.

Competition- from shipping companies.

Cost of ship operations.


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Transportation characteristics

Density of the commodity/cargo.

weight or volume.

Dangerous, hazardous, perishable, susceptibleto damage, pilferage.

Handling of the cargo.

Any supervision during transit.


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Dangerous Cargo

Class.1 Explosives - Fireworks

Calss.2 - Gases- flammable gas butane

Class.3 Flammable Liquid - Petrol,diesel

Class.4 Flammable solids - camphor

Class.5 Oxidising substance - peroxide Class.6 Toxic and infectious substances-alkaloid salts,

liquid.

Class.7 Radio active material-iridium, uranium,titanium.

Class.8 Corrosive Ammonia solution, batteries,hydrochloric acid.

Class.9 Misc. Dangerous goods Ammonium nitratefertilizer, battery powered vehicle.


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Dangerous goods

UN #

IMCO Inter Governmental Maritime Consulative Organisation.

IMDG Inter Governmental Maritime Dangerous Goods classification page

no.

PG packing group.

Shippers Dangerous Goods Declaration.

Material safety data sheet MSDS.

Indian institute of Packing Certificate.

Fire department certificate.


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Incoterms

Incoterms most commonly used trade terms in foreign trade.

Uncertainties of different interpretations of such terms in differentcountries can be avoided or at least reduced.

Unawareness of the different trading practices in respectivecountries can give rise to misunderstandings, disputes and litigationleading to waste of time and money.

As a remedy , International Chamber of Commerce (ICC) firstpublished in 1936 a set of international rules for the interpretation of

trade terms, called Incoterms 1936.

Amendments were passed subsequently


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Incoterms - contd

The terms have been grouped in four categories.

1. Terms whereby the seller makes the goods available to the buyerat the sellers own premises the E term Ex-Works.

2. Terms whereby the seller is called upon to deliver the goods to acarrier appointed by the buyer the F terms FCA, FAS and FOB.

3. Terms where the seller has to contract to carriage but withoutassuming the risk of loss of or damage to the goods or additionalcosts due to the events occuring after shipment the C terms

CFR, CIF, CPT, and CIP.

4. Terms whereby the seller has to bear all costs and risk needed tobring the goods to the country of destination the D terms DAF,DES, DEQ, DDU and DDP.


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Incoterms - contd

Most Commonly used Incoterms.

Group E

EXW Ex-Works delivery at sellers warehouse/factory/godown. Buyer bears all the cost and riskin taking the goods from sellers premises. Even customs clearance has to be taken care by

buyers or their reps. Necessary help will be extended by seller.

Group F

FCA - Free Carrier Sellers responsibility to deliver the goods cleared for export to the carrierappointed by the buyer at the named place.

FAS Free Alongside Ship seller to deliver the goods placed alongside the ship at the named

port of shipment.

FOB Free on Board Seller to deliver the goods on board the vessel.


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Incoterms - contd

Group C

CFR Cost and Freight Seller must pay the cost and freight necessary forthe goods to reach the destination. Seller to deliver the goods at the port ofshipment.

CIF Cost, Insurance and Freight Seller to pay the freight and insurancealso and to deliver the goods at the port of shipment.

CPT Carriage Paid to :Seller deliver the goods to the nominated carrierand in addition need to pay the cost of carriage to the named destination.

CIP Carriage and Insurance Paid to : Seller delivers the goods to the

carried nominated and pay the carriage to the destination and also theinsurance. This means the seller has to procure the insurance against thebuyers risk of loss or damage to the goods during carriage.


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Incoterms - contd

Group D

DAF Delivered at Frontier : Seller delivers the goods at land frontierdestination and not unloaded.

DES - Delivered Ex Ship : Seller delivers the goods on board the ship at thenamed port of destination and not discharged.

DEQ - Delivered Ex Quay : Seller delivers the goods at the wharf of thenamed port of destination.

DDU - Delivered Duty Unpaid : Seller delivers the goods to the buyer notcleared for import and not unloaded from any arriving means of transport at

the named place of destination.

DDP - Delivered Duty Paid : Seller deliver the goods, cleared for the import,duty paid and not unloaded from the arriving means of transport.


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Bills of Lading

What is Bills of Lading?

1. Prima-facie evidence of contract of the receipt of goods by the carrier.

2. Documents of title to goods.

3. Sets out the terms and conditions of the contract of carriage. That isevidencing the terms and conditions of the carriage.

Bills of Lading is signed by the Master of the ship or duly authorised personon behalf of the ship owner or his agents becomes documents of title togoods. It is not a document of contract of carriage as the contract is madebefore the B/L is issued.

B/L gives the rights, exceptions and liabilities for the ship owners.


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Carriage of goods

What is carriage of goods?

Loading, handling, storage, carriage,custody, care and discharge of goods.


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Contract of affreightment

Ship owner advertise his vessel for a voyage to carry the cargo.

Shipper signifies his offer requesting the owner to reserve the space in thevessel.

When the ship owner accepts the cargo on board, the contract ofaffreightment is concluded contract of carriage.

Contract of carriage is merely an unqualified offer and acceptance with outany special terms and conditions of the contract. The ship owner is aCommon Carrier.

When the B/L is issued , he render himself liable for the carriage.

B/L says shippers load, count and account. Said to Contain/contents notknown.


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Bills of Lading Act, 1855 based on

Carriage of Goods by Sea Act,1971 Prescribed standard form of B/L which has the

force of Law.

It removes the difficulties and uncertaintieswhich were associated with various protectiveclauses which ship owners insert in Bills ofLading.

Now the mercantile community, Banks,insurance companies know exactly the shipowners liabilities.


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Bills of Lading

Shipper has to complete the B/L and give to the shipping company because as perthe shipping law, the B/L should be demanded.

To facilitate shipper, the shipping co. or the CHAs makes the B/L as per the detailsprovided by the shipper.

B/L is made in sets usually 3 originals. Required copies are made additionallycalled Non-Negotiable.

One original for shipper record, and other two are to be sent to consignee or to thebank in different mode of despatch, because in case one original is lost in transit theother one will be used.

Bill of Lading may be certified as received for shipment, stuffed, on board as the case

may be . B/L should be a clean BL and without any remarks on it when issued.

Bill of Lading should be always consigned to order or to a bank to secure thedocuments of title to goods until the payment is secured.


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Transportation of Cargo by Air

Least transit time.

Funds not blocked.

only mode of shipment for perishables, liveanimals, life saving drugs, human remains.

Urgent spares, accessories, season cargo.

News papers and periodicals.

Gem and Jewellery exports.

Diplomatic pouches.


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Constraints in air transportation

Highly expensive freights.

Non availability of space in seasons.

Shipment of over dimensional cargoes.

Cargo carriers/passenger flights.

Stowage problem due to types of aircrafts.

Fast clearance required.

Freight rates are Minimum, Normal, and furtherbased on quantities like plus 45 kgs, plus

100kgs, plus 250 and plus 500 kgs.


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Air Cargo Industry

Director General of Civil Aviation - Govt.

Airport Authority of India Govt.

International Air Transport Association (IATA),

Montreal and Geneva. Airlines.

IATA Agents.

Customs Authorities.

Freight Forwarders Federation InternationalFederation of Freight Forwarders Associations(FIATA) - Zurich


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Aircrafts and Handling of cargo

Aircrafts Two types namely Conventional Aircraft and Wide BodiedAircraft.

Conventional only loose and bulk loading, like loading in a truck.

Wide body Palletisation and ULD.

Versions

Mixed version Passengers are in upper and main deck and cargo in lowerdeck. The priority is passenger, baggage, cargo and mail bags.

Combi version passengers are carried in the upper deck and lower deck is

for baggage, cargo and mails.

Freighter version only cargo is carried and no pax.


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Unitised consignments

Unit Load Devices (ULD)

1. Container. 2. Pallets.

Container : various units of cargo areassembled in a box and loaded to handleas single unit.

Pallet : Flat rigid platform on which units of

cargo are assembled and restrained with anet and then make it as a single unit forloading it as it is.


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Ready for carriage

When a cargo is set to be ready for

carriage?

Properly packed. Properly marked.

Properly labeled.

Properly documented.


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Ready for carriage -contd

What is proper packing?

No damage to the goods packed.

No damage to the other goods loaded. No damage to the equipment in which it is

carried.

No damage or harm to the people who arecarrying or handling it.


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What is proper marking?

Proper marking should communicate all details

about the goods such as shipper, consignee,

AWB, and handling instructions.

Any person should be able to identify the cargo

with proper marking.

What is labeling? It is visual communication-to avoid language

barrier.


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What is proper documentation?

1. Shipper documents.

Description, weight, content, value in the form of

invoice, packing list, and other statutorydocuments.

2. Airline documents.

Airway Bill, Shippers declaration for Live

Animals, and for Dangerous Goods. 3. Terminal documents.

Applicable to particular country or destination.


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Ship Chartering

Exporter who wants to ship bulk quantities can charter a ship exclusively fortheir use.

Chartering of a ship is done by a Charter ship broker who has good contactswith ship owners.

He is an intermediary between a ship- owner and merchant or the cargoowner.

He must have a sound knowledge on shipping law, geography, port,information, charges throughout the world, facilities in different places,distances between ports etc.

He acts between a ship owner who has tonnage idle, and a cargo owner whohas a cargo which needs to be transported.

He charges a fee called brokerage for his services.


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Charter parties

When a contract is fixed between the merchant and ship owner it is called charter-party.

Charter-party is a contract of affeightment.

Charter party has three types : Voyage charter, time charter and demise charter.

Voyage charter is an agreement for carriage of goods from one port to another for afixed freight is payable.

Time charter is a contract whereby the vessel is actually hired for a specific period oftime and a hire charges is paid.

In demise charter, the ownership to all intents changes hands for the period ofcontract. The payment in this case is an agreed amount per month.

Bare Boat charter is also in practice where the ship owner is leasing the ship for longterm may be for 20 years.; some times whole life time oil companies.


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Ship Tonnage

Registered tonnage

Gross registered tonnage is the total volume of the shipexpressed in hundreds of cubic feet. It only measuresthe capacity of the ship below the deck and does not

include the cargo carried on above the deck. Net registered tonnage is excluding the volume occupiedby engine room, the crew, and other spare necessary forthe goods operation.

Dead weight tonnage is the total capacity of the ship.Means the maximum weight of the cargo that a vesselcan carry. It includes the fuel and other stores required.

Displacement tonnage is the total weight of the shipwhen fully loaded, measured by the weight of the volumeof water it displaces.


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Warehouse Management

Warehouse smoothes out market supply and demand fluctuations.

When demand exceeds supplies, the warehouse can speed product movement to the customerby performing additional services marking prices, packaging product or final sub-assembly.

Warehousing can link the production facility and the consumer, or suppliers and productionfacilities.

Warehousing supports production by consolidating in bound materials and distributing them to theproduction facility at the appropriate time.

Warehousing also helps marketing to serve current customers and expand into new markets.

Outbound warehouses help consumers buy on demand without a nearby production plant.

Warehousing costs are 10 percent or more of total integrated logistics costs for most companies.


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Warehouses versus Distribution

Centers The purpose of warehouse is to store products until customers

require them. The purpose of a distribution center is product throughput and not storage.

Bulk shipments come into a distribution center, are broken down into

smaller shipments, and then are transported further in the supplychain.

Distribution centers normally serve a larger territory than awarehouse.

Distribution centers play a major role in the outbound flow of finishedgoods and are common in large countries with a good transportationinfrastructure like the United States and Europe.


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Rationale for Warehouses

Warehousing is a necessary evil.

Warehousing allows production gain economies of scale from longproduction runs.

Warehousing allow marketing to maintain or increase customer service.

If forecasting was perfect and production was instant, the need for inventoryand warehousing would vanish.

However, in the real world forecasts are wrong and production times vary,so warehousing buffers supply and demand.

Warehousing support changing market conditions, achieve economies intransportation by moving high volumes and support JIT programs.


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The Role of Warehousing

Serve as a transportation consolidation facility.

Warehousing also acts as a reservoir for production overflow orseasonal products.

Warehousing also acts as product mixing sites. The facility canstock a variety of product lines. When a customers orders a range ofproduct line, warehouse picks all the products ordered and supply inone shipment.

Warehouse can also facilitate production. Warehouse can assist

production by receiving a product almost complete, and thenperforming final subassembly based on local customer demand.

Warehouse acts as safety valves in plant strikes, shutdown formaintenance, supplier stock outs or transportation delays.


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Role of warehousing

Warehouses also smooth out production runs. Cost perunit can be increased significantly with long productionruns. Warehouse stores the product that outpaces thecurrent demand.

Primary role of a warehouse is customer service, byfilling a customer order faster.

Effective warehouse system means quicker delivery,fewer stock outs, and better customer service. The resultis higher levels of customer satisfaction and more sales.


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Basic components of a warehouse

Three basic components of a warehouseare space, equipment and people.

Space allows for the storage of goods

when demand and supply are unequal. If demand of warehouse space exceeds

the supply, the price of storage increases,

as the firms compete for the storage space Higher cost of space increases the price of

the product.


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Warehouse equipment includes materialhandling devices, storage racks, dock andconveyer and information processing system.

The equipment helps to product movement,storage, and tracking.

Type of equipment used depends on the type of

product and the interaction between theequipment and the other components of thewarehouse.


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People are the most critical component of a warehouse.

Space and equipment means nothing without competent people.

Primary reason for establishing a warehouse is to increase customer

service levels. This often requires individual attention to specialcustomer requests.

Customer requests can reduce standardisation in the warehouse,making complete automation impossible.

People play the critical role in every part of the supply chain, andwarehousing is no exception.


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Functions of a warehouse

Basic functions of a warehouse include movement, storage andinformation transfer. It takes place in four distinct areas.

1. Receiving inbound goods from transportation carriers andperforming quality and quantity checks.

2. Transferring goods from the receiving docks and moving them tospecific storage locations throughout the warehouse.

3. order selecting the products for filling customer orders includingchecking, packing, and transporting to the outbound dock.

4. Shipping the goods outbound to customers by some form oftransportation.


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Types of warehousing

Private Warehousing : Companies own their warehouse for storing their own goodsuntil they are delivered to a retail outlet or sold.

The firm can maintain lower delivered prices or higher profit margins based on sucheconomies.

Private warehouse has the ability to maintain physical control over the facility, whichallows managers to address loss, damage and theft.

Companies can earn income from renting or leasing excess space whenever isavailable.

Companies can claim depreciation on warehouse assets which reduces income andincome taxes.

To make a private warehouse cost-effective, the facility needs high productthroughput to achieve economies of scale and spread the fixed costs of the facilityover many items.


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Types of warehousing

Public warehousing : Rents space to individuals or firms needing storage space.

Wide array of services including packaging, labeling, testing, inventory maintenance,local delivery, data processing and pricing.

A general merchandise warehouse offer fairly standardised services for variety of

goods.

A refrigerated warehouse provides a temperature controlled environment for frozengoods.

A Bonded warehouse allows goods to be stored without paying duties and taxes untilthey are cleared.

Specialty goods warehouse are normally used to store agricultural products likegrains.

Bulk storage warehouses hold liquids and dry goods like sand, stone and coal.


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Contract warehousing

It is a specialised form of public warehousing, provides a customizedservices.

Provides a combination of integrated logistics services, thusallowing the leasing firm to concentrate on its specialty.

It is a third party integrated logistics organisation that provideshigher quality services than are available from a public warehouse.

A contract warehouse often replaces a private warehouse. Thedecision frequently rests on the results of a lease versus buy

analysis.


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Service Response Logistics

Service is an activity or benefit that

someone offers to another that is

intangible and does not result in the

ownership of anything (unlike a product).

Services are identified by four major

characteristics: intangibility, inseparability,variability and perishability.


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Intangibility

One fundamental difference between goods andservices is intangibility.

It is more difficult and less exact to measure the

effectiveness and efficiency of the services extended.

In services, feed back typically comes in the form ofrepeat business.

This makes problems difficult to detect and to correctbecause unsatisfied customers do not purchase theservice again.


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Inseparability

Services are first sold, produced and consumed.This is not the case of goods, where it isproduced, sold and consumed.

More important for logisticians, producer andseller could be the same entity, unlike theproducts.

This requires direct distribution and warrants anintegrated marketing, production and serviceresponse logistics (SRL) function.


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Variability

The inherent variability of service encounters differs from the fairlystandardized logistics process used to handle the physical flow ofmany goods.

The perceived quality of a service can vary on the basis of factors

such as the time of day and the type of interaction.

The potential for miscommunication between providers andconsumers arises due to the presence of physical, emotional, orpsychological noise.

The inherent variability in providing services makes itheterogeneous and levies added demands on the SRL system.


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Perishability

Perishability means the services cannot be stored orsaved.

Services are performances, they can not be inventories

for later use.

When a direct flight to a destination takes off and hasempty seats, represent lost capacity. They can not be

recovered.

The integrated logistics portion of a service business willoften find it difficult to synchronize supply and demand.


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Service Response Logistics

(SRL)activities SRL has three primary activities: Managing waiting time; managing

service capacity, and providing service delivery.

Managing waiting time refers to the methods used to reduce thewaiting time to consume the services. This is equivalent to reducing

the order cycle time in the flow of goods.

Service capacity is defined as the managing, scheduling and staffingof people and services so that the service response logisticsnetwork can meet customer demands. This is like managinginventory in goods-producing firms.

Service delivery is the ability to manage distribution channels toensure the timely delivery of services to the customers.


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SRL activities

Waiting time

Firms ability to minimise the time a customer must wait before the service isconsumed or rendered.

Reducing waiting time enhances the customer satisfaction.

Capacity often constrains waiting time.

People feel pressed for time and may become agitated when delayedbeyond their expected time.

Long waits can lead to customer dissatisfaction and leave a negative

impression about the service quality.

Service provider should develop a strategy to manage waiting time likeautomated answering, routing systems, streamlined procedures, improvedcommunication and information flows to and from customers.


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Service Capacity

The management of scheduling, staffing and services to meet apredetermined level of customer service.

Level of service should be consistent pre-established cost trade-off.

Scheduling too little capacity may lead to lost sales. Scheduling toomuch capacity adds to cost of operations.

Methods to manage capacity include sharing of resources, proactivemarketing/sales, cross training, better scheduling and reporting

system and pricing strategies.

Hospital training Nurses, engaging part-time doctor specialists.Pricing strategy adopted by hotels in season/off seasons.


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Service Delivery

Choosing the distribution channel to deliver the serviceto the customer.

The key areas associated with this activity are

convenience, flexibility, personal interaction andreliability.

Banks have developed electronic banking, ATMs,computer banking.

Grocery stores deliver at home.

Preventive care for the machinery breakdowns.


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Reverse Logistics

Reverse Logistics refers to logistics activitiesand management skills used to reduce, manageand dispose of waste from packaging andproducts.

Products move from customers backwardthrough supply chain reverse.

Key areas include recycling, customer returns ofnew products, customer returns of usedproducts, and reusable items.


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Reasons for Reverse Logistics

Return of goods for credit or refund DVD players returned.

Short-term rental returns or long-term lease returns equipments.

Returns sent to the manufacturer for repair, remanufacture, or returnof core portion of product used engine for re-bore, tyre-retread.

Warranty returns- Malfunction of TV sets.

Reusable containers Beverage bottles. Consignment agreement returns items not sold.

Unit sent to the organisation for a product upgrade - Computers

Take backs- packaging materials, pallets, cartons-for recycling.

Universal product calls due to reported manufacturing defect.

Units sent to the manufacturer for inspection or recalibration.

Products not meeting the manufacturers guarantee to the customer.

Environmental significance and product life cycles.


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Third Party Logistics (3PL)

3PL is the use of an outside company to execute a part or completematerials management and product distribution functions of a firm.

The advantage is that the company can concentrate on its corestrength and leave the other work to the third party.

Bringing value to the supply chain is one of the objectives of 3PLs.

Four values that customers of 3PL companies look for whenoutsourcing a process to a 3PL. That is Trust, Information, CapitalUtilisation and Expense control.


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What 3PL customers value

Trust : 3 PLs customer desires is to be relieved from managing thesupply chain and the only way to do that is to work with a 3PL thatthe customer trusts.

Information: 3PLs can create value for their customers in theaccuracy, quality, and timeliness of the information on theiroperations they deliver.

Capital Utilisation: The customers desire is to more effectively useassets and obtain a better return on the working capital.

Expense control : Although capital utilisation is important to 3PLcustomers, reduction of supply chain costs is probably the mostvisible (though not the most important) value. Providing cost savingsand sharing those savings with the customer is something that mostcustomers look for in a 3PL.


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General Motors

The partnership between Ryder Dedicated Logistics and General Motors adivision is a good example of 3PL.

The division focuses on auto manufacturing only while Ryder handles all theother logistics.

Ryder prompts the division about the vendor deals, delivers parts to thefactory at Tennessee and delivers the finished vehicles to the dealers.

Ryder uses a special software to plan routes and minimises transportationcosts.

The 3PL company is mainly used for transportation logistics and this hasbeen the greatest cutting edge application of 3PL.

The disadvantage of 3PL include lack of compatibility between the serviceprovider and the company. Hassles of finding specialised personnel.

International Logistics-CII

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