International Trade Policy

Plan for International Trade

Task 1. Knowledge Questions

1.1

The main purpose of the International Free Trade Policy is to encourage free trade in all economies globally. Furthermore, the rules and policies in place allows for procedures, complaints or establishments fall in line for importation and exportation all over the world. During the course of importation and exportation, all care must be taken that due diligence is observed. This policy ensures that all operations from a particular country are uniform and should align with requirements and laws of the locals as well as internal controls and ethical conduct. In order for these regulations to take place, there have been managers and directors appointed to this effect. In every case, no lawful citizen shall engage in unlawful activities violating Australian laws or regulation.

1.2

The internet (Websites)

1.3 (a)

1.3 (b)

Dear Customers,

The different modes of transport offer and demand the use of dynamic pricing and strategies. The different courier adjusts pricing rates in response to different conditions in the market. The companies carrying different results will effectively have a comparative advantage over the competitors.

The various forms of transport consider several factors including perishability of goods, weight, and volume, time, economic conditions and operating expenses. The factors are important in decision making on best and cost effective mode of transport. I recommend that you take time in considering these factors to reduce the cost of operation.

Yours Sincerely

Advisor

1.4

1. It is important to consult the consulate found in Japan to determine the restrictions affecting the shipment. Consultations should be done in advance before making an order. The buyer has the knowledge about the exporting country (Japan) regulatory requirements as well as Australian regulation.

2. It is important to assess the best means of transport to ship the motor vehicle from Japan to the Australian region. The transportation analysis examines the accessibility and mobility including the benefits to the user. The importer can choose between air and sea transport.

3. Transport cost analysis is important. The benefits accrued from the mode of transport selected can be measured through reduced cost of transport. The cost of transport analysis should factor in insurance cost and other costs associated with shipping the motor vehicle to the port of importation.

4. It is crucial to analyses the cost of insurance while transporting the goods from Japan into Australia. There are many factors to consider while deciding on whether to insure the freight. The factors include destination, value of the goods, mode of transport and shipping origin.

5. It is essential to prepare the correct international documentation to facilitate the exportation of the vehicle from shipping origin to the destination.

6. The Australian government prohibits the importation of vehicles (in a single batch) except in specific circumstances. The large manufacturers investing a significantly large amount of capital are responsible for the transportation and importation of vehicles in Australia. The government I this policy ensures that imported motor vehicles meet the minimum safety standards, help in conserving the environment through reduced carbon emissions. The importing manufacturers must obtain licenses and approvals from the government.

1.5

Types of goods

Insurance

Volume

Perishability

Weight

1.6

1. The risk of damage to the packaged bottles

2. The package may not reach the destination on time due to several factors. Breakdown of the vessel or delays in the air transport may cause late arrival of the package.

3. The goods may best lost while in transit via the sea

4. When aircraft accidents occur, it causes damage to the goods thus fail to get to the destination

1.7

1.8

Petroleum Transport PTC

The Pasha International Service

1.9

Airlines

Qantas

Qantas Freight

Regional Express Airlines

SEAIR Pacific

Air cargo

Cargo Masters

Qantas Freight

Virgin Australia Cargo

1.10

Full Container Load

Less than a Container Load

1.11

Tramp Service

The ships work on-demand or on call basis. The services are available to the customers requiring shipment of goods such as crude oil, food grains and chemical. The capacity of the cargo ranges between 500 and 500000 metric tons. It is possible to charter the ship as time, consecutive or single voyage.

The shipping service includes:

1. Identification of means to transport the cargo

2. Loading cargo at the sellers’ port and discharging of goods at the destination port.

3. The service determines whether the cargo shipment will be delivered domestically or internationally

4. Cargo insurance

1.12

Bulk Carrier

Refrigerated Cargo

Ships Dry carriers

Livestock carriers

LNG carrier

Oil tanker

1.13

1.14

Pallet Material

The pallet material aid in faster loading and off/loading of cartons and other small items from a container. The pallet becomes part of the cargo and secures the cartons using shining foils. The pallet material fills up the spaces or gaps between cartons.

Strong planks and Square timber

The strong planks and square timber are essential in consignments that have higher weights or small support areas. The bending of the timber depends on the container design. The timber holds the goods together and protects them from damage while in transit.

Steel Girders

The bulk and heavy cargo utilize the steel girders. There are anti-slip materials that ensure that the steel rests comfortably on the surface of the container. The anti-slip material significantly increases friction between steel items.

1.15

Double wall boxes

These containers are useful where the transport needs to be added side wall for greater stacking strength or protection of goods.

Kraft shipping

The containers comprise of C-flute wall corrugated in shipping cartons. The heavy material protects the goods in transit from damage.

Heavy Weight Boxes

The boxes are constructed using the C-flute corrugated board and can hold boxes weighing up to 95 lbs. The boxes are strong and protect goods from accidental bursting.

1.16

1.17

Assessment task 2

Part A

2.1

Air Cargo Services

CargoMaster

Pack and Send

Express Cargo Services

Shipping Service

China

CargoMaster

Pack and Send

2.2

Aircraft

1. The Embracer 120 Brasilia is a type of aircraft that can carry up to 3.5 metric tons of goods.
2. The HS748 is a type of aircraft that can carry up to 6 metric tons of goods.

Vessels

Traditional Freighter

The traditional ships comprise several deck-mounted cranes uses in transferring cargo from a wharf to the vessel. The size of the vessel ranges between 250 and 600 ft. long. For instance, the Liberty Ship used during the Second World War was estimated between 441 and 561 ft. long. The ship carries all types of break bulk.

The container vessel

The container vessels vary in sizes and capacity. The small-size container vessels can carry (a maximum of 20 twenty-foot equivalent units (TEUs). The larger container vessel has a capacity of 1,000 TEUs.

2.3

CargoMasters

The CargoMaster is the most famous and trusted cargo service in both domestic and international freight services. The company helps the cargo around the globe.

Air Shipping Routes: the goods leave different manufacturing companies and arrive at Sydney, Adelaide, Darwin, Melbourne and Brisbane airports. The goods are loaded on the cargo airplanes before shipment into Japan at Tokyo’s Airport.

In sea shipping, the goods leave the producing companies by truck to the Melbourne and Brisbane Port.

The Express Cargo Service

The company uses experience and knowledge in the industry to offer a different range of services and logistics including sea freights and air cargo services.

Transportation route: In aviation, the Express Cargo allow goods leave the producing companies into the airports such as North WA, Copper Basin, Bowen and Surat Basins. The goods are loaded on the cargo airplanes before shipment into Japan at Tokyo’s Airport.

Pack and Send Services

In sea shipping, the goods leave the producing companies by truck to the Melbourne or Brisbane Port before shipment to the different part of the world.

The air freight comprises of cargo weighing between 7, 7000kg. The pelletized cargo can weigh up to 1000kgs

2.4

1. The Tim Tams are perishable goods and are at risk of expiry

2. The packaging can be at risk of damage through jar breakages or crushing of the chocolate bars.

3. The good may be damaged by the time the ship docks at the destined port. The bad weather or increased temperature contributes to the spoiling of the goods.

4. The happening of airplane accidents causes loss and damage to the goods before they reach the destination

5. In the case of ship accidents, the goods are thrown into the sea.

2.5

The companies evaluated and considered indicate that The Express cargo is the best in shipping goods by air. The company seems to guarantee immediate road transport options. The firm uses the dual driver non-stop services and use of several vehicles to carry goods to the airport.

The CargoMaster is best suited to ship the goods through the sea. The company operates several international Sea Freights every week and takes goods from across all Australian cities.

2.5

1. Letter of credit
2. Bill of lading
3. Supplier invoice
4. Packing list
5. Delivery list

2.6

1. Some of the products are fragile hence; they can be damaged if not handled with a lot of care.

2. Goods can be misplaced if not labelled accordingly therefore it is important to have all the products marked before they are transported.

3. Some of the products are highly explosive for instance the petroleum ones

4. When goods are not close or packaged properly, this occurs when the valves are not properly closed as describe.

5. There is a big risk when the containers run loose due to improper connection at the port.

2.7

The standard width of the containers set by the International Standardization Organization (ISO) for the foot length is 8’ while the height is 8’6’. This is important when one needs to transport cargo without incurring loses when for instance containers used are not standardized.

2.8

1. The marking should be durable in order to avoid confusion during the transportation.
2. Fragile goods should be enclosed in the same package as wearing appeal.

Part C Calculating International freight and other costs

The Sea Freight Volume Calculation

1m3=1000kg

Lx W x H x number of package= volume

Volume= 0.3x 0.45x 250= 10, 125kg

The cost will be 10125 x the rate of the freight

Volume = 0.3x 0.45x 100= 4.05m3

The cost will be 4.05 x the rate of freight

2.10 The TACT has detailed information in regards to the laws, regulations, and charges. The TACT implements the import, regulations of import and export of goods

2.11

Australia Post

Parcel weight > 12.0 kg-12.5kg

Express Courier international= AUD205.50

Air mail =165.40

Express post =AUD 172

FedEx

The rates at zone B Japan = AUD181.00

10kg plus rates charged on freight per kg on material of up to 20kg= 15.60+ 181.00= AUD196.0

2.12

It is convenient to send the airmail under the services of Australia Post.

2.13

The cost of air ticket from Brisban to Tokyo costs an estimated AUD 4,700. The total cost for the whole group will be AUD 28200 that includes fees and taxation. (Cost per person x number of people= AUD 4700X6=AUD 28200)

Saturday. Sept. 30 Brisbane, QLD to Tokyo, Japan - Brisbane (BNE) to Denpasar (DPS)

Garuda 721 - Business Class ( C), Boeing 737-800 when it leaves 9:45am it will arrive 2:10pm, thus the total time taken is 5 hours and 35 minutes.

Layover: Denpasar (DPS) 1h 25m - Denpasar (DPS) to Tokyo (HND)

Garuda 886 - Business Class ( C), AIRBUS INDUSTRIE A330-200 Depart at 3:35pm Arrive 8:30pm making them spent 5 hours and 55 minutes.

2.14

It is important to consider the components of the Full Container Load. They include terminal handling costs, loading and offloading charges post service costs and port charge costs

2.15

The cost of sending the 500 and 1000 kg Tim Tams from Australia to Japan will cost the seller a varying rate depending on the means of transport. The Pack and Send Company will charge an estimated AUD821; Cargo Express services will charge an estimated AUD723. The CargoMaster is likely to charge AUD 758. It is clear that the Express cargo is the cheapest of the three major air and cargo airlines.

2.16

It is important to consider the cost of transport from the producing country or company. Shipping, insurance, labor (good handling), buyer cost of transport

Part 3 communication and presentation

3.1

Dear Customer,

RE: IMPORTANCE OF PAYING INSURANCE

It has come to my attention that you do not want to pay your insurance cover on the shipment. Insuring the cargo is important in safeguarding the client in case of loss or damage. There are several insurance policies available and including single transit, open policy, and annual policy. The policies offer different coverage of goods loss on transit.

The transporting company deals with the perishable commodity. The Restricted cover is the best insurance cover. The cover is appropriate to the individual shipping directly by the owner. The insurance will assist in covering goods from loss or damage (fire, explosion, crashing or sinking of a vessel) to the insured goods.

It is important to insure the goods as the insurance company will reinstate the company back almost to the financial position it was before the occurrence of the accident. I look forward to your favorable consideration and early insurance before a serious loss occurs.

Yours Sincerely,

Insurance Adviser

3.2

Reply to the customer

Dear Customer,

RE: RECOMMENDED INSURANCE COVER

I received the letter indicating your acceptance and agreement of the benefits of insurance. I thank you for your candid consideration and expression of the need to insure your package in transit.

As your transporting company deals with perishable commodity, it necessitates insurance cover. The Restricted cover is the best insurance cover. The cover is appropriate to the individual shipping directly by the owner. The insurance will assist in covering goods from loss or damage (fire, explosion, crashing or sinking of a vessel) to the insured goods.

When the damage occurs, the insurers lodge several documents with the underwriters, forwarders, carriers and customs department. The documents needed for international shipping include supplier invoice, packing list, and delivery receipts. It is important to take photos before offloading the package. Also, remember to keep the bill of landing or the airway bill as it is used in tracking down the carriage. Additionally, it is essential to add the original certificate of insurance and another document that can help in the recovery from the loss.

Yours Sincerely,

Insurance Adviser

Works Cited

Baysura, Kelly. Cargo Planes. Vero Beach, Fla: Rourke, 2001. Print.

Clarke, Malcolm A, and George Leloudas. Air Cargo Insurance. , 2016. Print.

Cooper, Jason. Cargo Ships. Vero Beach, Fla: Rourke Corp, 1999. Print.

Dunt, John. International Cargo Insurance. Hoboken: Taylor and Francis, 2013. Internet resource.

Dunt, John. Marine Cargo Insurance. Abingdon, Oxon: Informa Law from Routledge, 2016. Print.

Richardson, Adele. Cargo Ships. Mankato, Minn: Bridgestone Books, 2001. Print