The Importance Of International Logistics In Exports

An exporter of livestock products sells an average of 500,000 tons a year. His buyers (about 100 in number) are primarily located in four countries – A, B, C and D. The exporter's ranch is inland about 1000km from his country's main seaport. His products may be moved by road to alongside ship in the port of loading, passing through 2 major towns. The exporter's country has domestic ships that are suited to carry the products to the four countries, and it is in need of foreign currency. 

The political situation is stable, and tonnage is easily available. The buyers' factories are located at inland points some 700 to 800km from the respective ports of discharge. Temperature in country D can hit up to 43C in some months of the year. Country D has an extremely strict livestock policy where any animals going in will need to be certified and quarantine. Please see the diagram in below 

As the exporter, you are required to export to all four countries, given the different conditions in the countries. You are supposed to list down things to look out for and the best option possible when exporting to each individual country. Make sure you justify your decisions or method use. Due to the special circumstances in Countries A, B and C, write down a detailed Plan B.

Abstract

This report aims at explaining the international logistics and its importance in exports. In this report, we need to put ourselves in the role of a livestock exporter who is exporting live cattle to four different countries with different situations. By analyzing some key logistics issues such as Incoterms, terms of payment, documentation, Insurance and customs clearance, an attempt is made to find out ways to handle the special situations in different countries.

In the first part of the report, in the light of past literature, a focus has been put on how the meaning and purpose of logistics has changed over a period. In the second part, attention is paid to livestock export in Australia. Various concepts associated with the international logistics and their importance in exports have been discussed.

An Introduction

There has been at makeover in logistics as for the globalization and alterations in technology. Due to the change in the setting and outlooks of customers, we have observed makeover in the nature of all markets, which has led to the rerouting of movement of products.

The council of logistics and management has defined logistics as 'the procedure of preparation, executing and monitoring the proficient, effective flow and storage of properties, services, and related info from a point of the source to the point of consumption for the purpose of approving to customer necessity. Delivery of freight from source to destination is the basic of logistics  (Lanvegin, 1996). The global company pursues to attain a competitive gain of recognizing the world market for its goods. A successful company in the worldwide marketplace will disperse the manufacturing and assembly facilities across several regions to meet the requirements of foreign markets using international logistics channels to supply these facilities (Cooper, 1993).

The cost-efficient planning of carriage and storage is the main issue when preparing a logistics strategy. Before the first half of 1990's, the purpose of logistics was to curtail the total delivery costs and maximizing returns (Lambert, 1993). Today's purpose emphasizes on maximizing, trade flexibility both inside and outside —- near customization at the least cost. (Bowersox, 1995) This implies that logistics is now oriented towards supply chain issues. Moreover, the objective of a firm's logistics strategy is to exploit the firm's exclusive goods, assemblage and distribution feature to maximizing income and service, therefore leading to economic performance (Bowersox, 1995).

Livestock export industry in Australia- An overview

The livestock export industry is a significant contributor to Australia's Vivacious livestock trade. In the recent years, export of livestock has earned millions of dollars and this sector has been providing employment to thousands of people in certain parts Australia.

Australia is the world's most prominent supplier of good quality livestock across various countries around the world predominantly to the Middle East and South East Asian countries.

Most of the countries in these two regions lack the means to effectively produce live cattle to meet the requirements of their population. Australia has been meeting the demand for exporting live cattle in order to meet the requirement of food making across various countries. 

Transporting Livestock: – Livestock is exported by Australia through the main two routes, sea, and air. The Australian industry has been recognized as having the highest welfare standards for exporting of livestock. Live export in Australia is operated under rigid rules and regulations so that the world known reputation of Australia is maintained. As per regulations, live exports must get a license by the Australian government. As a result of these preventive measures, it has been observed that about 99% of Australian livestock reach fit and healthy to their destination.

The industry of livestock export in Australia is not only catering to the protein needs across various countries but also it helps thousands of families to earn their livelihood across the globe. 

In 2014 around half a million cattle were exported from Australia and their destination was mainly Indonesia. 

An important factor that plays a role in the maintenance of the high-quality standard in the livestock export is the proper logistics management. The high performance in the logistics operation can ensure that the product is delivered to their destinations maintaining high customer satisfaction.