1 Logistics Overview By Ray Bowman Director, Ventura and Santa Barbara County SBDC Hosted by The Economic Development Collaborative of Ventura County.

1

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

The Inte

rnati

onal

The Inte

rnati

onal

Supply

Chain

Supply

Chain

3

4

5

International DocumentationInternational Documentation

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

12Other Important Documents

Health Certificate

Letter of Credit

Draft

13 Other Important Documents

Request for Quote

Proforma Invoice

Purchase Order

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/

Inco

term

s 2010

Inco

term

s 2010

23

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


Neither party

Neither party is required to

is required to

insureinsure Transport Mode: All

Transport Mode: All

25

EXWTruck Bill of Lading

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



Neither party


is required to

insureinsure Transport mode: All modes

Transport mode: All modes

27

FCA (Warehouse or Carrier Terminal)

Truck Bill of Lading

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


is required to

insureinsure Transport Mode: Vessel

Transport Mode: Vessel

OnlyOnly

29

FAS (Sea or Waterway)

Carrier’s Receipt

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


is required to

insureinsure Transport mode: Vessel

Transport mode: Vessel

OnlyOnly

31

FOB (Ocean Only)

Ocean Bill of Lading

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


is required to

insureinsure Transport Mode: Vessel Only

Transport Mode: Vessel Only

33

CFR

Ocean Bill of Lading

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


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



Neither party


is required to

insureinsure Transport mode: All modes

Transport mode: All modes

35

CPT

- Carrier Receipt Included- Export Clearance

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



SellerSeller must provide at

must provide at

least minimum coverage

least minimum coverage



OnlyOnly

37

CIF

- Ocean Bill of Lading

- Insurance Certificate

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

39

CIP

- Bill of Lading- Insurance

Certificate

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

41

DAT

Bill of Lading

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

)



sideside SellerSeller arranges export

arranges 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



Neither party


is required to

insureinsure Transport mode: All Modes

Transport mode: All Modes

43

DAP

Truck Bill of Lading

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



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


is required to

insureinsure Transport Mode: All Modes

Transport Mode: All Modes

45

DDP Truck Bill of Lading

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

The C

ubic

Mete

r

The C

ubic

Mete

r

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.

Cubic

Foot

Cubic

Foot

Form

ula

Form

ula

Then divided by 35.314 to convert to cubic meters

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

““Odd s

ized”

Odd s

ized”

Freig

ht

Freig

ht

Transp

ort

ati

on

Transp

ort

ati

on

meth

ods

meth

ods

54

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

Calc

ula

ting

Calc

ula

ting

Duti

es

and T

axe

s

Duti

es

and T

axe

s

58

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/

Q&

AQ

&A

63

1 Logistics Overview By Ray Bowman Director, Ventura and Santa Barbara County SBDC Hosted by The Economic Development Collaborative of Ventura County.

Documents

order of documents

entry documents

trade documents

related documents

transactional documents

minimum required documents

international logistics

delivery order