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Mode
Totalmode
Costper
Transit
Advantages
Disadvantages
cost
pallet
time
Sea
620
7days
Cheap
and
Slow
andhigh
largecapacity
risks
Air
1265
253
4hours
Fast
and
Expensive
and
secure
finitecapacity
Rail
1275
51
2days
Fastandlarge
Less
flexible
capacity
and
need
railroad
Directroad
1350
3days
Better
for
Small
capacity
shipped
and
andexpensive
convenient
Multi-mode
1185
7days
Reduce
Cost
of
18
handing
of
investment
is
hours
cargo
and
high
quicker
transittimes
Takeseaasanexample,becausetheshippingrequires25palletsandthetotalcostis620,the
costperpalletis620/25=,otherresultalsocanbecalculated,exceptthe
Multi--mode’costis1185including125,620,295,and145,thusthecostper
palletis1185/25=.
,,it
,andairportisdistantfrom
municipalcenter.
weatherinocean,itisthelowestexpensesoffreightandcarriesthelargestquantities.
.
Railhasthesedisadvantages,itisnotmuchflexibleandcannotworkwithoutrailroad.
2Consignmentdeliveryterm
FCA
FreeCarrier(namedplaceofdelivery)
Atradetermrequiringthesellertodelivergoodsnamedairport,terminal,,cleared
forexport,intothechargeofthecarriernamednamedby
,
word“free”meanssellerhasanobediencetodelivergoods
namedplacefortransfertocarrier(.
FOB
FreeOnBoard
atermininternationalcommerciallawspecifyingatwhat
(namedportof
pointthesellertransfersownershipofthegoodstothe
shipment)
InternationalChamberofCommerce,FOBisonlyusedin
non-containerizedseafreight,andalsodefinesownership
orlossduringtransport,sothepointofownershiptransfer
isimportant(.
CIF
Cost,Insurance
ThistermisbroadlysimilartotheaboveCFRterm,with
&Freight
theexceptionthatthesellerisrequiredtoobtaininsurance
(namedportof
forthe
goodswhileintransittothenamedport
of
destination)
110%oftheirvalueunderatleasttheminimu)mcoverof
theInstituteCargoClausesoftheInstitute
of
London
Underwriters,
oranysimilar
usedby
any
transportbyseaandairnotlimited
to
containerizedornon-containerizedcargoandincludesall
chargesupto
theport/
additionalchargesattheport/terminalofentrance(.
CPT
Carriage
Paid
Thesellerpaysforthecarriageofthegoodsuptothe
to
(named
namedplace
of
,the
goods
are
place
of
consideredto
bedeliveredwhenthegoodshavebeen
destination)
handedovertothefirstormaincarrier,sothattherisk
transferstobuyeruponhandinggoodsovertothatcarrier
attheplaceofshipmentin
selleris
responsiblefororigincostsincluding
export
clearanceandfreightcostsforcarriagetothenamedplace
thebuyerrequiresthesellertoobtain
insurance,theIncotermCIPshouldbeconsideredinstead(.
CIP
Carriage
and
CIPrequiresthesellertoinsurethegoodsfor110%ofthe
InsurancePaid
contractvalueunderatleasttheminimumcoverofthe
to
(named
Institute
Cargo
Clausesof
theInstitute
of
London
place
of
Underwriters
or
anysimilar
destination)
shouldbeinthesamecurrencyasthecontract,andshould
allowthebuyer,theseller,
andanyoneelse
with
an
insurableinterestinthegoodstobeabletomakeaclaim.
CIPcanbeusedforallmodesoftransport,whereasthe
IncotermCIF
shouldonlybeusedfornon-containerised
seafreight(.
DAT
Delivered
At
ThisIncotermrequiresthatthesellerdeliversthegoods,
Terminal
unloaded,
(named
costsoftransport(exportfees,carriage,unloadingfrom
terminalatport
maincarrieratdestinationportanddestinationport
or
place
of
charges)andassumesallriskuntilarrivalatthedestination
destination)
portorterminal.
The
terminal
canbeaPort,Airport,
or
inlandfreight
interchange,butmustbeafacility
with
thecapability
to
receivetheshipment.
All
chargesafter
unloadingaretobebornebybuyer.
However,itisimportanttonotethatanydelayor
demurragechargesattheterminalwillgenerallybeforthe
seller'saccount(.
DAP
DeliveredAt
UnderDAPterms,theriskpassesfromsellertobuyerfrom
Place(named
the
pointof
destinationmentionedin
thecontract
of
placeof
delivery.
destination)
Oncegoodsarereadyforshipment,thenecessarypacking
iscarriedoutbythesellerathisowncost,sothatthegoods
reachtheirfinal
necessarylegal
formalitiesintheexportingcountryarecompletedbythe
sellerathisowncostandrisktoclearthegoodsfor
export(.
DDP
DeliveredDuty
Sellerisresponsiblefordeliveringthegoodstothenamed
Paid
(named
placeinthecountryofthebuyer,andpaysallcostsin
place
of
bringingthegoodstothedestinationincludingimport
destination)
not
responsible
for
in
placeof
the
non-
obligationsonthesellerandminimumobligationsonthe
until
delivery
of
thegoodsat
the
namedplace
of
destination(.
Incot
Export
Carria
Unloa
Loadi
Carriage(
Unloadi
Loadin
Carria
Insura
Import
Import
erm
-
geto
ding
ng
Sea
ng
g
on
geto
nce
custom
taxes
2010
Custo
portof
of
charge
Freight/Ai
charges
truck
place
s
ms
export
truck
s
in
r
Freight)
inport
in
port
of
clearan
declara
inport
portof
to
portof
of
of
destina
ce
tion
of
export
import
import
import
tion
export
EXW
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FCA
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FOB
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
CPT
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
CIF
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
Seller
Buyer
Buyer
CIP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
SellerBuyer
Buyer
DAT
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
DAP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
DDP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Forincoterms’importance,
negotiating,sellersandbuyerscansigncontractcontainingrightanddutyandotherpertinent
,buyers
shouldpaycost,,incotermsis
beneficialforrelevantagenciestocarryoutoperationalactivities
3Consolidationandgroupagearrangement
Groupage
Less-than-containerload(LCL)isashipmentthatisnot
largeenoughto
fill
abbreviationLCLformerlyappliedtolessthancarload
forquantitiesofmaterialfromdifferentshippersorfor
deliverytodifferentdestinationscarriedinasingle
and
redistributed
into
different
railway
cars
at
intermediaterailwayterminalsenroutetothefinal
destination.(Henry,RobertSelph(1942))
LCLis"aquantity
ofcargolessthanthatrequiredfor
than
that
fills
the
visibleor
ratedcapacity
of
an
inter-
can
also
be
defined
as
a
consignmentofcargowhichisinefficient
to
fill
a
shipping
container.
It
is
grouped
with
other
consignmentsforthesamedestinationinacontainerat
acontainerfreightstation.[2]
Consolidation
Peopletakeabove
Groupage’scontainers
to
same
,carryingthemto
differentboataccordingtothesecontainer’sdestination,
forexample,thereare5containersand2
2
containers’,theywill
becarried
,theywillbe
carriedonBboat.
Circumstanceswhenthey
Thegroupageoftenisnormallyusedbythesea,railand
couldbeused
norigoroustimerequirements.
Consolidationis
fit
for
airtransportationandcarries
necessities,thuswhensomeemergencieshappensor
transportationneedlesstime,theconsolidationwillbe
Costeffectivepalletloadlevel
theexceptionalproducts
Bythepart1,thechoiceisdirectroadwhosecostis
1350andtoperpalletis108soresultis1350/108
=.
Bycalculating,,so,,the
,accordingtomethod,theresultshouldberoundedtothe
nearestinteger,thustheresultis13finally.
4Leasttotalcost
RouteA
Mode
Cost
KirriemuirtoCoatbridge
Road
145+28=173pounds
Coatbridge
to
Rail
315+15+12*2++55=
Southampton
Southamptonto
Port
de
Sea
1880++34=
montrealCanada
PortdemontrealCanada
Road
420+2*18+32=
toEcosseHotel
488pounds
Hirecost
32*6=192pounds
Insurance
80*(1+10%)=88pounds
Totalcost
3313pounds
RouteB
Mode
Cost
KirriemuirtoTillbury
Road
505+32+6*15=627pounds
Tillbury
to
Port
de
Sea
2010++34=
montrealCanada
pounds
PortdemontrealCanada
Road
420+2*18+32=488pounds
toEcosseHotel
Hirecost
23*6=138pounds
Insurance
80pounds
Totalcost
Route
Mode
LeasttotalByabove
cost
chart,
A
RoadRailSeaRoad
3313pounds
RouteA--
KirriemuirBottlingPlanttoCoatbridgeRailporttoSouthamptonContainerTerminaltoPortde
RouteB.
5Proceduresanddocumentationtable
Area
Procedure
Documentation
Transportation
Foremost,companyselects
Insurancelist
freightforwarderandsign
Commercial
contractandconveythe
invoice[3]
goodsfromUKtotheport
Goodsclassification
,company
Packinglist
loads
goods
after
checking.
Next,
the
purchaser
lets
bearerto
helpconveythe
goods.
Then,conveyingthemto
Canada.
Next,
the
purchasersemptytheship.
Then,
the
purchaser
conveythegoodstothe
manufacture’s
factory.
Finally,
thegoodsarein
thedestination,
finishing
theprocess.
Commerce
Foremost,
buyer
consult
Proformainvoice[4]
Exportinvoice
answer
thequestionand
CISG
offer
quotation
and
International
pro-,
commercial
buyergoestocustomand
contract
signCISG[5].Thenseller
exportgoods.
Customs
Custom
staff
check
Customsinvoice
whether
there
are
Customs
forbidden
declaration
allareeligible,theywill
Goodclassification
beallowedtoenterinto
Canadaandtaxgoods
Inthetransportation,thisprocedure’sflow
chartperhapsiswarehouse,station,container
freightyard,customsanddestination,whichinvolvesthesedocumentssuchasInsurancelist,
commercialinvoice,goodsclassification,,theflowchart,consulting,contract,
orderformandpreparationgoods,whoserelevantdocumentshaveproformainvoice,export
invoice,CISG,,thepertinentprocedureis
uploading,checking,taxingandpermittingthroughanditsdocumentshavecustomsinvoice,
customsdeclaration,goodclassificationandsoon.