Trade-Logistics interfaces and related challenges

1. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Presentation Title
Trade-Logistics
interfaces and related
challenges
Presented by:
Krishnan Subramaniam FICS
Head of Projects – Fusion group of companies
President – ICS Middle East branch

2. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org

3. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Interfaces in International Trade
Merchant - Carrier
Seller - Buyer
Insurer - Assured
Contract of
Sale
Contract
of
Insurance
Contract
of
Carriage
Customs
Clearance
Export-Import

4. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Contracts - Considerations
Physical nature of the goods
Movement of the goods
Division of costs
Transfer of risk
Responsibility for task

5. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
SELLER BUYER
SHIPPER CONSIGNEE
BANKS
CARRIER
FORWARDER
AGENTS PACKAGING
INSPECTION
PORT CUSTOMS
WAREHOUSE CHAMBER

6. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Costs and Risk
How do you handle them?
TERMINATE TAKE
TREAT TRANSFER

7. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Why? Assist trading
What?
Responsibility of Carriage
Exp-Imp clearance
Costs & Risks
Title
Payment
Where? Sales Contracts
When? from 1936
Who?
Potential issues?

8. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Real incident ..
Before After

9. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
EXW
Transport by?
From where?
Loading by?

10. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
• Removal – EXW, FAS, DDP
• Unfold FCA in two Incoterms – Terrestrial and Maritime
• FOB and CIF for container shipping
• Creation of a new Incoterm: CNI
• Two Incoterms based in DDP – DTP, DPP

11. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org

12. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Main Parameters
Documentation
 Document of Title
 Transport document
 Quality / Quantity reports
 Financial / Commercial
 Insurance
Goods
 Specific / Unascertained goods
 Quantity –
Unit/Range/Tolerance
 Quality / Specification
 Inspections
Payment terms
 Price
 Currency
 Mode of Payment
 Credit days
Time Limits
 Credit validity
 Shipment / Delivery
 Document submission

13. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Common modes of transaction
• Open Account
• Bills for Collection
– Documents against Acceptance
– Documents against Payment
• Letters of Credit
– Documentary Credits
– Standby L/C
• Advance Payment
Balanced security for
Seller and Buyer.
RISKS managed
Buyer
Seller
Country
Exchange control

14. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
Is L/C Risk-free?
1999
2003
400 3000
19
Metals Trading Company, Sharjah

15. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org
BLOCK CHAIN IN TRADE FINANCE
TRACEABILITY TRANSPARENCY
EFFICIENCY
AUDITABILITYCOLLABORATION
SECURITY

16. 28 Nov 2018 11th Global Supply Chain and Logistics Summit www.sclgsummit.org