Logistics

The choice of one or more means of transport depends upon the quantity of product to be shipped, the type of product, the distance between the source and the destination, the price, etc. Transportation may take place via air, water, rail, road, pipelines or cables.

Haulage is the business of transporting the goods by road or rail. Road transportation is done through lorries or trucks, and it plays a major role in handling cargo. It is cost effective and ideal for short distances and for transporting perishables. Trucks have different capacities and they can reach small towns which do not have railway stations. On the other hand, through rail freight transport, a larger volume of cargo can be handled in a short period of time. It is energy and cost effective and very reliable. It has the downside of lack of flexibility, being subject to rail freight operators timetable. Moreover, suppliers and customers are not always located near a rail freight depot, which is a limitation in final destinations.

Waterways is the cheapest means of transportation, large volume of world trade is done through ships. It is used by businesses for the delivery of goods from distant suppliers. It is ideal for transporting heavy and bulky goods, suitable for products with long lead time. Unlike the road transport, when you can contact the driver at any time, ships are difficult to monitor, so you do not know the exact location of the goods in transit. Additionally, bad weather can put the cargo at risk. While sea transportation is the cheapest, airways is the most costly, though the fastest. It is normally used for valuable goods having less volume.

Many transport companies provide scheduled delivery days. Goods can be packed or grouped in box vans or in containers which are also used for sea transportation.

Merchandise being transported internationally is usually subject to the Incoterms standards issued by the International Chamber of Commerce.

One of the most important tools of International Trade is language. In any complex business every single word can be very relevant and have big impact on all aspects of the business agreement.

Parties of a contract (the seller and the buyer) from two different countries are not always aware that there are different trading practices in their respective countries and, therefore, essential aspects of a contract can have different interpretations depending on the country. This is especially common in global trade and it could lead to misunderstandings as well as have a direct financial impact on a company’s business.

In order to avoid disagreements resulting from differences in trading practices in different countries, the International Chamber of Commerce (ICC) created incoterms in 1936 describing clearly the duties of the seller and the buyer.

What are incoterms?

The word incoterms is an abbreviation of International Commercial Terms. Incoterms are a set of international rules for the interpretation of the most commonly used terms in international trade and are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices.

Incoterms deal with questions related to the delivery of the products from the seller to the buyer. This includes: the transport of products, export and import clearance responsibilities, who pays for what, and who has risk for the condition of the products at different locations within the transport process. Therefore, they are very helpful to reduce confusion over interpretations of shipping terms.

Incoterms are used quite frequently in international contracts and they have been updated various times since 1936. There are different Incoterms, and the goal of each one is to specify the responsibilities of the seller and the buyer in every agreement for the purchase and shipping of goods internationally.

The terms basically refer to the following details:

Agreement

• Expenses: who is responsible for the expenses involved in a shipment at a given point in the shipment’s journey?
• Control: who owns the goods at a given point in the journey?
• Responsibility: who is responsible for paying damage to goods at a given point in a shipment’s transit?

Incoterms categories

Incoterms are standard trade definitions and grouped in four different categories:

• Terms beginning with E: a seller’s responsibilities are fulfilled when goods are ready to depart from their facilities.
• Terms beginning with F: refer to shipments where the primary cost of shipping is not paid for by the seller.
• Terms beginning with C: deal with shipments where the seller pays for shipping.
• Terms beginning with D: cover shipments where the shipper/seller’s responsibility ends when the goods arrive at some specific point. Because shipments are moving into a country, D-terms usually involve the services of a customs broker and a freight forwarder. In addition, D-terms also deal with the docking charges found at virtually all ports and determining who is responsible for each charge.

The table below displays the detailed description of some of the most common incoterms.

Packaging is a vital component of export success. The basic functions of packaging are the protection and the identification. Products need to be preserved and protected in order to reach their destination in perfect condition. On the other hand, packaging has the functions of promotion of the product, creation of a public image, communication and product differenciation.

Packaging has been classified into primary, secondary and terciary. The primary packaging is the material that first envelops the product and holds it, it is in direct contact with the contents. For food and beverage packaging we may use tin cans, coffee capsules, milk cartons, aluminium foil containers, cardboard pizza boxes, resaleable plastic zipper bags, woven packaging bags, disposable paper cups, flexible or rigid packets, etc.

Secondary packaging is outside the primary packaging, perhaps used to group primary packages together and with information to the consumer about the product. It could be a carton box, a shipping box, a cardboard box for wine, a bubble envelope, etc.

Tertiary packaging is used for bulk handling warehouse storage and transport shipping. It is used to group secondary packaging together and prevent damage to the products. The normal form is a unit load that packs tightly into containers. It carries information about the product, such as the fragility, etc. Examples of this category are pallets, wooden crates, shrink wrap, etc.

Once the products have been properly packaged and sealed, they are ready for transport. The most common system used is the containers. Containerization is a system of intermodal freight transport using standard shipping containers that can be loaded with cargo, sealed and placed onto container ships, railroad cars, and trucks.

Containerization has revolutionized cargo shipping and the role of stevedoring companies. Originally, immediately as the vessel entered a harbour to load or unload the cargo from there, dockers or longshoremen would handle the goods as soon as the vessel was in the dock. Nowadays, stevedoring companies and their skilled personnel operate a selection of expensive and sophisticated cargo handling equipment in ports and terminals around the world. They use huge container cranes and ground handling equipment, such as straddle carriers or low loaders.

G&A

G&A is a logistics company based in Liverpool. They store and ship products from and to any point in the world. Mr Gary Clerk works for G&A. Let’s see what he tells us about his job.

“My name’s Gary Clerk. I’m from Los Angeles, in USA, but I moved to Liverpool two years ago because I got married to my wife, Helen. I work in the company warehouse. Here we select the products that will be shipped according to the orders received. There is a pick line for every product. We use scan guns to scan the products we pick, put them on pallets and then move the pallets back and forth. Then, we take them outside the pick line where the forklift is used to move them to the replenishment area. Once there, we wrap each pallet and make sure that it’s properly secured. There is a separation between each pick line so that we can visually inspect any discrepancies that we may have with the pallets waiting to be picked.

The job is tough, but I still love it. I was doing something similar back in the US, but the relationship with my new colleagues is different. Even though we all speak the same language, there are a lot of cultural differences between America and Britain. My American colleagues were not so formal, but bit by bit I’m trying to cope, and I know I’ll get on well with them.”

In this section we are going to see an example of a business transaction. Read the case study and then see Ms Gracia and Mr Geonhui’s phone conversation, where they discuss the terms of the shipment of some sport items. After the discussion there is the email that summarizes the contents of their conversation.

The expression of time is very often materialized in the expression of dates and clock times. Dates are very often expressed in the written form (mostly in business letters) whereas clock times are more widely used in speaking.

To ask for the date, we can say:

• What’s the date (today)? - It’s 9th June.
• What date is it (today)? - It’s 9th June.

A date can also answer a question with when:

• When did you start in this company? - (I started) on 9th June 2007.

Writing the dates:

The expression of the date typically includes the day, the month and the year. The day is expressed with an ordinal number (1st, 2nd, 3rd, etc.). The date formats are different in British and American English.

Notice the following:

• Format A is very formal and it is mostly used in printed items, such as invitations.
• Formats D, E and F may cause misinterpretations. We can interpret the date 9/6/2007 in two ways: 9th June 2007 (in the British format) or 6th September 2007 (in the American format). In order to interpret the date correctly, it is necessary to know the context.
• Numerical formats may use a slash (/): 9/6/2007, a full stop (.): 9.6.2007 or a hyphen (-): 9-6-2007.
• The names of the months are written with an initial capital letter: June, May, April, etc.

Saying the dates:

The way in which we write and say the dates often differs. All the dates, irrespective of their written form, are pronounced like this:

• the ninth of June two thousand and seven (in British English).
• June the ninth two thousand and seven (in American English).

The years are generally pronounced like this:

• 1900: nineteen hundred
• 1908: nineteen hundred eight
• 1985: nineteen eighty five
• 2000: two thousand
• 2007: two thousand and seven
• 2015: twenty fifteen

We can ask for the time like this:

• What’s the time? - It’s 10 (in the morning).
• What time is it? - It’s 10 (in the morning).

We can also ask about the time something happens:

• What time did you arrive? - At 6:15 (a quarter past six).
• What time does the meeting start? - At 4:30 (half past four).

The following table shows the ways in which we write and say the time in EnglisH..

To indicate the exact time of an action, we must use the preposition at: come at four! (Cat. vine a les quatre!). We can add about if we mean approximately: come at about four! (Cat. vine cap a les quatre!).

In English-speaking countries, the 24-hour clock is not widely used. They prefer adding the labels ‘am’ (ante meridian) and ‘pm’ (post meridian) to indicate the part of the day. Therefore, 11:40 is 11:40 am and 23:40 is 11:40 pm.

To say the part of the day, we can use the following expressions:

• In the morning: it’s ten in the morning (Cat. són les deu del matí); it’s three in the morning (Cat. són les tres de la matinada).
• In the afternoon: it’s four in the afternoon (Cat. Són les quatre de la tarda).
• In the evening: it’s eight in the evening (Cat. Són les vuit del vespre); it’s eleven in the evening (Cat. són les onze de la nit).

The English term morning includes the idea of the Catalan terms matí and matinada (Sp. mañana/madrugada) whereas the term evening includes the idea of both vespre and nit (Sp. tarde/noche). The term night is not generally used to speak about a specific time. It refers to the dark hours of the day and it stands in opposition to the term day.

Other expressions related to time are:

• At night (Cat. durant la nit, de nit)
• During the day (Cat. durant el dia, de dia)
• At midnight (=00:00) (Cat. a mitjanit)
• At midday (=12:00) (Cat. al migdia)
• At dawn (Cat. a la matinada)
• At sunset (Cat. a la posta del sol, al capvespre)

Prepositions are used to introduce adverbials of place and time. For example:

• In the office (adverbial of place): it indicates where the action takes place.
• In 1978 (adverbial of time): it indicates when the action takes place.

The use of English prepositions is sometimes confusing, so it is better to learn the adverbials as a whole rather than the individual meanings of the preposition.

Here are the most common prepositions of time and their use (Catalan translations availble only when there is an equivalent meaning).

• In is used with:

1. Years, centuries and historical periods: in 2010, in the 19th century, in the Middle Ages
2. The names of the months: in April, in September
3. The names of the seasons: in spring, in summer, in autumn, in winter
4. The parts of the day (except ‘night’): in the morning, in the afternoon, in the evening

• On is used with:

1. The days of the week: on Mondays, on Tuesday, on Saturday morning
2. Dates: on 9th June, on 4th February 2009

• At is used with:

1. Clock times and nouns denoting clock times: at 4 o’clock, at 3:30 pm, at midnight, at dawn
2. The names of holidays and festivals: at Christmas, at Easter
3. The words ‘night’ and ‘the weekend’: at night, at the weekend

• For (Cat. durant) (it expresses the duration of an action): for five years, for three hours
• Since (Cat. des de) (it expresses the starting point of an action): since last year, since yesterday, since three, since I work here
• During (Cat. durant) (it expresses a moment within a longer period of time): during the Christmas holidays, during the class, during his convalescence
• Ago (it expresses the moment when an action took place in the past. Unlike the other prepositions, it is placed after the noun): four years ago, three hours ago
• Before (Cat. abans de): before 1997, before three o’clock, before summer, before Christmas, before he came
• After (Cat. després de): after 1997, after three o’clock, after summer, after Christmas, after I met you
• Until (Cat. fins a) (it indicates the end of an action): until midnight, until 2023, until Sunday, until I call
• From … to (Cat. des de…fins) (this double preposition indicates the beginning and the end of an action): from three to four; from April to May, from the 18th to the 20th century

Notes:

1) The prepositions since, before, after and until can also be placed in front of a sentence. For example:

• since I work here
• before he came
• after I met you
• until I call you

2) Do not confuse the meanings of for and during:

• For expresses the whole period of time: I’ll go to London for a week (Cat. aniré a Londres durant tota una setmana)
• During refers to a moment in the period of time: I’ll go to London during this week (Cat. aniré a Londres en algun moment d’aquesta setmana)

The most common prepositions and prepositional phrases of place are:

• In (Cat. a, dintre de): in the garden, in the box, in the street, in England, in the city.
• Into (Cat. cap a dintre de): into the house, into the pocket, into the forest.
• Inside (Cat. dintre de): inside the kitchen, inside the pocket.
• Outside (Cat. fora de): outside the house, outside the country.
• On (Cat. a, a sobre de): on the desk, on the shelf, on the chair, on the wall, on the floor.
• At (Cat. a): at the door, at the table, at the cinema, at the window, at the tree.
• To (Cat. a, cap a): to the cinema, to London, to work, to the street.
• Opposite (Cat. al davant de, enfront): opposite the park, opposite Sandra, opposite the school.
• In front of (Cat. davant de): in front of a man, in front of the house .
• Next to (Cat. al costat de): next to the bank, next to my friend, next to the lamp.
• Behind (Cat. al darrera de): behind the curtains, behind a bus, behind the door, behind the tree.
• Near (Cat. a prop de): near London, near the road, near the window .
• Over (Cat. per damunt de): over the bed, over my head.
• Under (Cat. a sota de): under the table, under a tree, under my jacket.
• Above (Cat. per damunt de): above the vice-president, above the house.
• Below (Cat. per sota de): below the president, below the standards.
• From (Cat. de): I’m from Barcelona, these products are from China.
• On the corner of (Cat. a la cantonada de): on the corner of the street, on the corner of London Rd and High St.

Notes:

1) Some prepositions have similar meanings. For example:

• He is in the cinema (Cat. És a dins del cinema) (meaning that he is inside the cinema, and not in the street).
• He is at the cinema (Cat. És al cinema) (in a general sense, stressing the purpose of going to the cinema rather than the location).
• The lamp is on the table (Cat. La làmpara és al damunt de la taula) (=resting on the table).
• The lamp is over the table (Cat. La làmpara és a sobre de la taula) (=hanging, with no contact with the table).

2) Above and below are used to refer to a higher or lower position in status, whereas over and under are used to refer to a physical place. For example:

• The president is above the vice-president. (Cat. El president està per damunt del vice-president)
• The plane is flying over the Alps. (Cat. L’avió està volant per damunt dels Alps).