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Logistics OverviewLogistics OverviewBy Ray BowmanBy Ray Bowman
Director, Ventura and Santa Barbara County SBDCDirector, Ventura and Santa Barbara County SBDC
Hosted by Hosted by The Economic Development Collaborative of Ventura CountyThe Economic Development Collaborative of Ventura County
Ray
Bow
man
Ray
Bow
man
Ray Bowman, M.S., is a business
veteran with more than 27 years of
international business' experience.
He started three businesses and has
a broad background in business
consulting, serving as the principal
of his own international trade
consulting firm and working
previously as a consultant, trainer
and manager for several SBDC
offices. As an expert on international
trade, Ray has consulted and
worked with
multinational
corporations, banks, developed
programs and course curriculum,
taught classes in international
logistics, finance and import export
at several colleges and universities,
been a featured speaker and written
several books and journal articles on
the subject of international
business.
2
Com
mon Inte
rnati
onal
Com
mon Inte
rnati
onal
Docu
ment
Data
Fie
lds
Docu
ment
Data
Fie
lds
ShipperShipper
ConsigneeConsignee
Net Weight Net Weight
Gross Weight Gross Weight
CubeCube
Cubic Meter Cubic Meter
Harmonized Code (HTS)Harmonized Code (HTS)
Country of OriginCountry of Origin
CarrierCarrier
Notify Party Notify Party
IncotermIncoterm
CurrencyCurrency
Forwarding agentForwarding agent
Quantity(QTY)Quantity(QTY)
6
Com
mon Inte
rnati
onal
Com
mon Inte
rnati
onal
Docu
ment
Data
Fie
lds
Docu
ment
Data
Fie
lds
Unit Price Unit Price
Port of EmbarkationPort of Embarkation
Purchase Order Number Purchase Order Number
DimensionsDimensions
Initial Carriage (Mode)Initial Carriage (Mode)
Port of DischargePort of Discharge
Place of ReceiptPlace of Receipt
Marks and NumbersMarks and Numbers
7
Minimum Required Documents for Export Minimum Required Documents for Export aka Commercial Setaka Commercial Set
Bill of LadingBill of Lading
Commercial Invoice Commercial Invoice
Packing Packing ListList
8
Other Important DocumentsOther Important Documents9
Insurance Certificate
Certificate of Origin
Wood Packaging Certification
Other Important DocumentsOther Important Documents10
Inspection Certificate
Export License
NAFTA Certificate
Other Important DocumentsOther Important Documents
Entry Declaration (3461)Entry Declaration (3461)
Entry SummaryEntry Summary
Certificate of Free Certificate of Free SaleSale
11
1.1. Request for QuoteRequest for Quote
2.2. QuoteQuote
3.3. Pro FormaPro Forma
4.4. Purchase OrderPurchase Order
5.5. Commercial InvoiceCommercial Invoice
6.6. Packing ListPacking List
7.7. Other Required DocumentsOther Required Documents
8.8. Bill of LadingBill of Lading
9.9. Entry Documents Entry Documents
10.10.Delivery Order Delivery Order
14
Ord
er
of
Docu
ments
Ord
er
of
Docu
ments
Tips
for
Org
aniz
ing y
our
Tips
for
Org
aniz
ing y
our
Trade D
ocu
ments
Trade D
ocu
ments
All documents must agree with the terms of the proforma invoice and/or purchase order. All documents must agree with the terms of the proforma invoice and/or purchase order.
All transactional documents should be filed together in order to show the flow of the entire All transactional documents should be filed together in order to show the flow of the entire transaction.transaction.
Use technology when ever possible to generate and check the accuracy of your documents. Use technology when ever possible to generate and check the accuracy of your documents.
Develop a numbering system for all quotes and reference them on all related documents and Develop a numbering system for all quotes and reference them on all related documents and paperwork.paperwork.
15
Reso
urc
es
for
Reso
urc
es
for
Docu
menta
tion
Docu
menta
tion
US Department of Commerce Help Line: 1-800-usatradeUS Department of Commerce Help Line: 1-800-usatrade
UN Documentation Tool Kit: UN Documentation Tool Kit:
http://unece.unog.ch/etrade/fill_doc_tk.aspxhttp://unece.unog.ch/etrade/fill_doc_tk.aspx
UNZ&Co: http://unzco.comUNZ&Co: http://unzco.com
Shipping Solutions: http://www.shipsolutions.com/ Shipping Solutions: http://www.shipsolutions.com/
SAP Global Trade Management: www.sap.comSAP Global Trade Management: www.sap.com
BNA Export Document Library: BNA Export Document Library:
http://www.bna.com/products/corplaw/exgw.htmhttp://www.bna.com/products/corplaw/exgw.htm
Exporters Encyclopedia:Exporters Encyclopedia:
http://www.loc.gov/rr/business/duns/duns1.html#db1chttp://www.loc.gov/rr/business/duns/duns1.html#db1c
16
What is Schedule B & When Is it What is Schedule B & When Is it Required?Required?
Schedule B: Statistical classification of domestic and foreign commodities exported from the United States.
Automated Export System (AES): The Electronic Export Information (EEI) contained in the AES is confidential and is to be used solely for official purposes authorized by the Secretary of Commerce under Title 13 United States Code, Section 301 and Title 15, Code of Federal Regulations, Part 30.91.
The items being shipped requires Schedule B numbers when the items are valued over $2,500.00 per Schedule B (includes EAR99 items i.e.. pallet of cotton mittens/gloves), or when a license is required.
***Please familiarize yourself with Title 15, Part 30 of the US Census Bureau for full requirements and exceptions: http://www.access.gpo.gov/nara/cfr/waisidx_02/15cfr30_02.html
Part 16: My HS, Schedule B, or Part 16: My HS, Schedule B, or HTS NumberHTS Number
Check the census bureau to find out your Check the census bureau to find out your product’s numberproduct’s number
Example:Example:
8541.40.6020 : Solar Cells Assembled Into 8541.40.6020 : Solar Cells Assembled Into Modules Or Panels Modules Or Panels
3CE: Census Schedule B/HS 3CE: Census Schedule B/HS Classification engineClassification engine
http://uscensus.prod.3ceonline.com/#/p=0
20
Product
Pr
oduct
C
lass
ifica
tion
Cla
ssifi
cati
on
(cont.
)(c
ont.
)
Schedule B
Schedule B - Codes are for EXPORT
- Codes are for EXPORT
and are administered
and are administered
by the U.S. Census
by the U.S. Census BureauBureau
HTSHTS- Codes used to classify
- Codes used to classify
IMPORTS and are
IMPORTS and are administered by the
administered by the U.S.I.T.C.U.S.I.T.C.
21Sch
edule
B
Sch
edule
B
Reso
urc
es
Reso
urc
es
ww
w.c
ensu
s.gov/
fore
ww
w.c
ensu
s.gov/
fore
ign-t
rade
ign-t
rade
22Fi
nd y
our
HTS u
sing
Find y
our
HTS u
sing
the C
.R.O
.S.S
the C
.R.O
.S.S
sy
stem
.sy
stem
.
http://rulings.cbp.gov/
EX WORKS (EXW) EX WORKS (EXW) (named place)(named place) Named place is where the
Named place is where the
shipment originates –
shipment originates –
usually the seller’s
usually the seller’s premisespremises Seller
Seller must have goods
must have goods
available and packaged
available and packaged
when promised
when promised Buyer
Buyer must arrange pre-
must arrange pre-
carriage, export clearance,
carriage, export clearance,
main carriage, import
main carriage, import
clearance and on carriage
clearance and on carriage
Neither party
Neither party is required to
is required to
insureinsure Transport Mode: All
Transport Mode: All
Free C
arr
ier
(FC
A)
Free C
arr
ier
(FC
A)
(nam
ed p
lace
)
(nam
ed p
lace
)
Named place is either the
Named place is either the
place where the shipment
place where the shipment
originates such as the seller’s
originates such as the seller’s
premises or another place
premises or another place
agreed within the seller’s
agreed within the seller’s
countrycountry Seller
Seller is to have goods
is to have goods
available and packaged when
available and packaged when
promised, load collecting
promised, load collecting
vehicle, pre-carriage and
vehicle, pre-carriage and
export clearance
export clearance Buyer
Buyer must unload delivering
must unload delivering
vehicle, main carriage, import
vehicle, main carriage, import
clearance and on carriage
clearance and on carriage
Neither party
Neither party is required to
is required to
insureinsure Transport mode: All modes
Transport mode: All modes
Free A
longsi
de S
hip
Free A
longsi
de S
hip
(F
AS)
(FA
S)
(nam
ed p
ort
)
(nam
ed p
ort
)
Named port is alongside a
Named port is alongside a
vessel at port on the seller’s
vessel at port on the seller’s
sideside SellerSeller is to deliver goods,
is to deliver goods,
export packed alongside the
export packed alongside the
buyer-designated vessel at
buyer-designated vessel at
the port on the seller’s side
the port on the seller’s side
along with export clearance
along with export clearance
BuyerBuyer loads vessel,
loads vessel,
arranges main carriage,
arranges main carriage,
import clearance and on
import clearance and on
carriagecarriage Neither party
Neither party is required to
is required to
insureinsure Transport Mode: Vessel
Transport Mode: Vessel
OnlyOnly
Free o
n B
oard
(FO
B)
Free o
n B
oard
(FO
B)
(nam
ed p
ort
)
(nam
ed p
ort
)
Named port is loaded on a
Named port is loaded on a
vessel at a port on the
vessel at a port on the
seller’s sideseller’s side Seller
Seller delivers the goods
delivers the goods
on board the buyer-
on board the buyer-
designated vessel at the
designated vessel at the
port on the seller’s side
port on the seller’s side
along with export
along with export clearanceclearance Buyer
Buyer arranges main
arranges main
carriage, import clearance
carriage, import clearance
and on carriage
and on carriage Neither party
Neither party is required to
is required to
insureinsure Transport mode: Vessel
Transport mode: Vessel
OnlyOnly
Cost
& F
reig
ht
(CFR
)
Cost
& F
reig
ht
(CFR
)(n
am
ed p
ort
)
(nam
ed p
ort
)
Named port is on the buyer’s
Named port is on the buyer’s
sideside SellerSeller delivers goods export
delivers goods export
packed on board the seller’s
packed on board the seller’s
designated vessel at the port
designated vessel at the port
on the seller’s side, pays
on the seller’s side, pays
transportation costs to the
transportation costs to the
agreed port on buyer’s side,
agreed port on buyer’s side,
and arranges export
and arranges export
clearanceclearance Buyer
Buyer arranges vessel
arranges vessel
unloading, import clearance
unloading, import clearance
and on carriage
and on carriage Neither party
Neither party is required to
is required to
insureinsure Transport Mode: Vessel Only
Transport Mode: Vessel Only
Carr
iage P
aid
To (
CPT)
Carr
iage P
aid
To (
CPT)
(nam
ed p
lace
)
(nam
ed p
lace
)
Named place on buyer’s
Named place on buyer’s
sideside SellerSeller delivers goods export
delivers goods export
packed to the carrier for
packed to the carrier for
transportation to the named
transportation to the named
place of destination and will
place of destination and will
pay all transportation costs
pay all transportation costs
thereto along with
thereto along with arranging export clearance
arranging export clearance
BuyerBuyer arranges import
arranges import
clearance and on carriage
clearance and on carriage
Neither party
Neither party is required to
is required to
insureinsure Transport mode: All modes
Transport mode: All modes
Cost
, In
sura
nce
and
Cost
, In
sura
nce
and
Freig
ht
(CIF
)
Freig
ht
(CIF
)(n
am
ed p
ort
)
(nam
ed p
ort
)
Named port is on buyer’s
Named port is on buyer’s
sideside SellerSeller delivers goods
delivers goods
export packed on board
export packed on board
the seller’s-designated
the seller’s-designated
vessel at port on seller’s
vessel at port on seller’s
side, pays all
side, pays all transportation costs to
transportation costs to
agreed port on the buyer’s
agreed port on the buyer’s
side and arranges export
side and arranges export
clearanceclearance Buyer
Buyer arranges import
arranges import
clearance and on carriage
clearance and on carriage
SellerSeller must provide at
must provide at
least minimum coverage
least minimum coverage
Transport Mode: Vessel
Transport Mode: Vessel
OnlyOnly
Cost
, In
sura
nce
Paid
Cost
, In
sura
nce
Paid
(C
IP)
(CIP
)(n
am
ed p
lace
)
(nam
ed p
lace
) Named place on buyer’s sideNamed place on buyer’s side SellerSeller delivers goods export delivers goods export
packed to the carrier for packed to the carrier for transportation to the named transportation to the named place of destination and pays place of destination and pays all transport costs thereto all transport costs thereto along with arranging export along with arranging export clearanceclearance
BuyerBuyer arranges import arranges import clearance and on carriageclearance and on carriage
SellerSeller must provide at least must provide at least minimum insurance coverageminimum insurance coverage
Transport Mode: All ModesTransport Mode: All Modes
Deliv
ere
d a
t Te
rmin
al
Deliv
ere
d a
t Te
rmin
al
(DAT)
(DAT)
(nam
ed p
lace
)
(nam
ed p
lace
)
Named place at terminal
Named place at terminal
on buyer’s side (a terminal
on buyer’s side (a terminal
at the destination port or a
at the destination port or a
terminal not far beyond the
terminal not far beyond the
destination port where it’s
destination port where it’s
yet to be cleared by
yet to be cleared by
Customs)Customs) Seller
Seller arranges export
arranges export
clearance and delivers
clearance and delivers
goods export packed to the
goods export packed to the
named destination
named destination
terminal, pays all transport
terminal, pays all transport
costs thereto and unloads
costs thereto and unloads
BuyerBuyer arranges import
arranges import
clearance clearance Neither party
Neither party is is
required to insure
required to insure Transport Mode: All Modes
Transport Mode: All Modes
Deliv
ere
d a
t Pla
ce (
DA
P)
Deliv
ere
d a
t Pla
ce (
DA
P)
(nam
ed p
lace
)
(nam
ed p
lace
)
Named place on buyer’s
Named place on buyer’s
sideside SellerSeller arranges export
arranges export
clearance, delivers export
clearance, delivers export
packed goods to the
packed goods to the
named place of destination
named place of destination
and pays all transportation
and pays all transportation
costs thereto
costs thereto BuyerBuyer arranges import
arranges import
clearance and on carriage
clearance and on carriage
Neither party
Neither party is required to
is required to
insureinsure Transport mode: All Modes
Transport mode: All Modes
Deliv
ere
d D
uty
Paid
Deliv
ere
d D
uty
Paid
(D
DP)
(DD
P)
(nam
ed p
lace
)
(nam
ed p
lace
)
Named place is on buyer’s
Named place is on buyer’s
sideside SellerSeller arranges export
arranges export
clearance, delivers export
clearance, delivers export
packed goods cleared for
packed goods cleared for
import at the named
import at the named
destination and pays all
destination and pays all
transportation costs
transportation costs
theretothereto Buyer
Buyer possibly responsible
possibly responsible
for unloading, on carriage
for unloading, on carriage
Neither party
Neither party is required to
is required to
insureinsure Transport Mode: All Modes
Transport Mode: All Modes
Logistics Pricing
Logistics Pricing
Introduction to
Introduction to
“Weight or Measure”
“Weight or Measure”
Calculations for freight
Calculations for freight
Freig
ht
Pric
ing
Freig
ht
Pric
ing
Fact
ors
Fact
ors
Factors that influence the Factors that influence the rate chargedrate chargedfor any particular type of for any particular type of cargo.cargo.1.1. The weight of the goods The weight of the goods being shippedbeing shipped2.2. The dimensions of the The dimensions of the goods being shippedgoods being shipped3.3. The shape of the goods The shape of the goods4. 4. Ease of damageEase of damage
Weig
ht
and
Weig
ht
and
Measu
re
Measu
re
1 cubic meter — 1000 liters — of water weighs 1 cubic meter — 1000 liters — of water weighs 1000 kilograms or 1 metric ton.1000 kilograms or 1 metric ton.
Air
Fre
ight
Air
Fre
ight
Dim
ensi
onal F
act
or
Dim
ensi
onal F
act
or
DIMENSIONAL WEIGHT = DIMENSIONAL WEIGHT = Length x Width x Height = Cubic Inches Length x Width x Height = Cubic Inches 166 (International) 166 (International)
Air
and O
cean
Air
and O
cean
Pri
ce
Pri
ce
Com
pari
son
Com
pari
son
Airfreight U.S Inches Dim Weight ConversionAirfreight U.S Inches Dim Weight Conversion125" x 96" x 96“ / 166 = 6939lbs125" x 96" x 96“ / 166 = 6939lbs6939lbs / 2.2046 = 6939lbs / 2.2046 = 3,147 Kilos x $3.25 per kilo3,147 Kilos x $3.25 per kiloTotal Airfreight Charge= $10,227.75Total Airfreight Charge= $10,227.75$542.00 per cubic meter $542.00 per cubic meter
Ocean Freight Weight and Ocean Freight Weight and Measure(metric)Measure(metric)317cm x 244cm x 244cm 317cm x 244cm x 244cm
Convert to Cubic metersConvert to Cubic meters3.17M x 2.44M x 2.44 M= 3.17M x 2.44M x 2.44 M= 18.87 18.87 cubic Meterscubic Meters
18.87 Cubic Meters x 18.87 Cubic Meters x $95 per $95 per cubic metercubic meterTotal Ocean LCL(Less Than Total Ocean LCL(Less Than Container Load) = $1,792.65Container Load) = $1,792.65
Consi
dera
tions
Consi
dera
tions
when c
hoosi
ng
when c
hoosi
ng
modes
of
modes
of
Transp
ort
ati
on
Transp
ort
ati
on
55
• Cost• Timing• Cargo
considerations• Customer
needs • Distribution
considerations
Consi
dera
tions
Consi
dera
tions
when c
hoosi
ng
when c
hoosi
ng
modes
of
modes
of
Transp
ort
ati
on
Transp
ort
ati
on
56
Air Freight
Ocean Freight
Surface Transport
Inte
rnati
onal
Inte
rnati
onal
logis
tics
serv
ice
logis
tics
serv
ice
pro
viders
pro
viders
57
• Freight forwarders• Customs brokers• 3PL’s• Carriers• Trade Attorneys • Banks • Load Brokers
Who Is Responsible?_________ What Does Who Is Responsible?_________ What Does
Customs Do?Customs Do?Owner; agent; purchaserOwner; agent; purchaser
StepStep
A.A. ISF Importer Security FilingISF Importer Security Filing
1.1.Entry: Shipment arrives within portEntry: Shipment arrives within port
a.a. Decide consumption or bonded Decide consumption or bonded warehouse/FTZwarehouse/FTZ
b.b. If consumption, file entry documentsIf consumption, file entry documents
c.c. Documents required:Documents required:
1.1. Entry manifestEntry manifest
2.2. Right to make entryRight to make entry
3.3. InvoicesInvoices
4.4. Packing listsPacking lists
5.5. Entry summaryEntry summary
6.6. Evidence of bondEvidence of bond
2. Valuation2. Valuation
3. Classify/appraise3. Classify/appraise
4. Estimate and pay tariff (check or cash)4. Estimate and pay tariff (check or cash)
StepA. Your U.S. Customs Broker 1.Check and verify. Store in general warehouse?
Check
Verify
2. Examine3. Validate a. Classification b. Appraisement4. Authorize entry5. Liquidate transaction
Typic
al E
ntr
y
Typic
al E
ntr
y Fe
es
Fees
60
• Duty Fees: Based on transaction value in most cases.
• Merchandise Processing: .21 % of the value ( over $2,000 value) $25-$485
• Harbor
maintenance: .000125 of the value
• Customs Broker Fees: $100-150 per entry….plus other charges..
Reaso
ns
for
Reaso
ns
for
Cust
om
s H
old
s
Cust
om
s H
old
s
61
• Inconsistent information with the 42 plus data elements of an entry
• Targeted commodities
• New Importer
• Marking issues
• Country of origin
• Valuation
• Missing documents or requirements
• Average inspection can cost over $1,500 and 5 days of delay
Inte
rnati
onal
Inte
rnati
onal
Trade R
eso
urc
es
Trade R
eso
urc
es
62SBA.gov
Export.gov
Centers for International Trade Development (CITD)www.citd.org
ELAN (Export Legal Assistance network)www.exportlegal.org
US DOC Trade Information Center http://export.gov/exportbasics/eg_main_017483.asp
U.S. Customs www.cbp.gov
USDAhttp://www.fas.usda.gov/
Trade Information Center Hotline 800-USA-TRADE
Inbound Logistics Magazine and resourcehttp://www.inboundlogistics.com/cms/
Export911.com
American Association of Exporters and Importers (AAEI)http://www.aaei.org/
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