Chapter 6b: Global Import Operations Flashcards by Sadie Cope

What is the final phase of global SCMN?

International delivery (must be well coordinated with global sourcing and export preparations)

How well did you know this?

Not at all

Perfectly

International delivery involves what 3 major activities?

International Transit (moving the goods)
Clearance (getting through customs)
Final Delivery (post-clearance)

How well did you know this?

Not at all

Perfectly

What is often the most important and costly logistics function in international trade; complexity is high?

International Transit (transportation)

How well did you know this?

Not at all

Perfectly

What are the 4 decisions of international transportation under import operations?

Decision 1: Type of Service
Decision 2: Choosing a Mode
Decision 3: Carrier Selection
Decision 4: Freight Routing

How well did you know this?

Not at all

Perfectly

Direct service:
- used when international freight moves relatively (long/short) distances between directly accessible origin and destination points.
- (Single/multiple) mode(s) of transportation used to move freight from the seller’s location in one country to the customer’s location in another country with (interim stops/ no interim stop off)

short
single
no interim stop off

How well did you know this?

Not at all

Perfectly

Which type of service of international transportation would be effective for trucks moving across land borders like from Canada to the U.S.?

Direct service

How well did you know this?

Not at all

Perfectly

Indirect service:
- used in situations where the freight is moving (long/short) distances between continents or facilities that are not directly accessible by the mode of choice.
- (Single/multiple) mode(s) of transportation used to move freight from the seller’s location in one country to the customer’s location in another country with (interim stops/ no interim stop off)

long
multiple
interim stops

How well did you know this?

Not at all

Perfectly

What are the 5 major modes of freight transportation?

Airlines
Motor Carriers
Pipelines
Railroads
Water carriers

How well did you know this?

Not at all

Perfectly

Intermodal transportation is an option to address ________ and ________- challenges.

geographic; accessibility

How well did you know this?

Not at all

Perfectly

When choosing a transportation mode, what 4 things should you consider?

Capacity (transportation managers must match the capacity of the load to the size and nature of the product being moved)
Transit time (total elapsed time from loading through delivery)
Safety (fragile products require modes with the best ride quality)
Cost (total cost of transportation varies by mode)

How well did you know this?

Not at all

Perfectly

The transit time of modes affects what 3 things?

Inventory availability
Stockout costs
Customer satisfaction

How well did you know this?

Not at all

Perfectly

T or F: If a company spends too much money on transportation relative to the value of the product, they won’t be able to sell it at a competitive price.

True

How well did you know this?

Not at all

Perfectly

The nature of a _____, _____, ______, and _______ may eliminate some modes which cannot physically, legally, or safely handle the goods.

product
size
durability
value

How well did you know this?

Not at all

Perfectly

T or F: Most situations only require transportation managers to consider two-three modes at most.

True

How well did you know this?

Not at all

Perfectly

Selection of individual carriers to move the freight is based on a variety of shipping criterion and carrier capabilities, such as what 6 things?

Geographic coverage
Transit time
Reliability
Equipment availability
Product protection
Freight rates

How well did you know this?

Not at all

Perfectly

Transportation managers must assess each carrier in what 3 areas?

Service history
Technical capabilities
Information sharing practices

How well did you know this?

Not at all

Perfectly

Once a carrier is hired, the transportation manager’s attention shifts to _______ ________ and __________. Transportation managers must continuously monitor service performance, rates, and financial stability. They must also have backup plans to ensure service continuity in the event of a disruption.

relationship development; communication

How well did you know this?

Not at all

Perfectly

What are 5 complicating factors that transportation managers should consider in relation to freight routing?

Availability of carrier service at logical points of export and import
Port capabilities
Border congestion
Risk of theft
Weather issues along the route

How well did you know this?

Not at all

Perfectly

T or F: The intermodal option can be very effective in a routing strategy.

True (using multiple modes of transportation opens up several possible routes)

How well did you know this?

Not at all

Perfectly

T or F: The shortest route is always the best.

False; not always because of the complicating factors

How well did you know this?

Not at all

Perfectly

A ______ _______ cuts the typical all water transit time in half.

land bridge

How well did you know this?

Not at all

Perfectly

T or F: Collectively, the cost of global transportation services can easily top 1 trillion dollars annually.

True

How well did you know this?

Not at all

Perfectly

For international transportation, you must consider potential disruptions and balance what 3 things?

Service Quality
Speed
Cost Efficiency
Goals

How well did you know this?

Not at all

Perfectly

T or F: Free trade and open borders allows goods to flow freely between countries without government oversight or engagement.

False

How well did you know this?

Not at all

Perfectly

While government tries to make international trade as seamless as possible, they must maintain control over flows for a variety of reasons, including what 3 things?

1. National Security 2. Revenue Collection 3. Data Capture

What is the 6 step entry process for customs clearance of the U.S?

- Step 1: Entry Filing - Step 2: Arrival - Step 3: Examination - Step 4: Classification - Step 5: Taxation - Step 6: Release

T or F: The customs clearance entry process begins when goods arrive at the border.

False; begins BEFORE goods arrive at the border

In Step 1: Entry Filing of the Customs Clearance Process, entering merchandise involves _______ ________ necessary to determine whether the merchandise may be released from Customs and Border Protection custody. It also requires filing documents than contain information for _______ assessment and ________ purposes.

- filing documents - duty - statistical

Which step of the Customs Clearance Process does this pertain to: To streamline the process and to comply with security mandates, many organizations or their customs brokers file the key documents prior to port arrival.

Step 1: Entry Filing

What are 4 key documents included in the Customs Clearance Process under Step 1: Entry Filing?

1. Entry manifest 2. Commercial invoice 3. Packing lists 4. Bond evidence

related document needed to determine merchandise admissibility and value. The entry must be accompanied by evidence that a bond has been posted with CBP to cover any potential duties, taxes, and charges that may occur.

Bond evidence

For Customs Clearance Process-- Step 2: Arrival: - As goods reach the ______ or _______, Customs and Border Protection is notified of arrival and unloading. - Carriers participating in the _______ ________ _______ can receive conditional release authorizations after leaving the foreign country and up to five days before U.S. arrival.

- seaport; airport - automated manifest system

If carriers participate in the automated manifest system... if the application is approved, the shipment will be released ________ upon arrival. This process is useful for _____ _______ products, _______ goods, and ______ ______ merchandise.

- expeditiously - time sensitive; perishable; tariff quota

T or F: Upon arrival of shipments, Customs and Border Protection has the to examine all goods. This has to do with which step in the Customs Clearance Process?

- False; they can choose to examine the goods or waive the inspection. - Step 3: Examination

What are 4 reasons for the Customs and Border Protection to inspect a shipment?

1. Determining the value of the goods for their dutiable status 2. Evaluating a country of origin labeling and other required markings 3. Detecting prohibited articles and illegal contraband 4. Deciding if the goods match the invoice

In the Examination step of the Customs Clearance Process, If no _____ or _______ violations have occurred, the clearance process continues. If problems are found, Customs and Border Protection can order the goods to be ______, ______, or ______ pending correction.

- legal; regulatory - destroyed; exported; held

T or F: All goods imported in the U.S. are subject to duty payments in accordance with their classification under the U.S. Harmonized Tariff Schedule.

True

The U.S. ________ _______ ______ uses a hierarchical structure for describing all goods and trade for duty calculation, quota, and statistical purposes. This has to do with what step of the Customs Clearance Process?

- Harmonized Tariff Schedule - Step 4: Classification

a tax that an importer must pay to bring goods into the country

duty

When goods are dutiable, ad valorem, specific, or compound rates may be assessed. What step of the Customs Clearance Process does this relate to?

Step 5: Taxation

The widely used ____ ______ rate represents a percentage of the value of the merchandise.

ad valorem (ex: a 5% ad valorem duty on a $50,000 shipment is $2,500)

What are 5 things that import duties are based on?

1. The commodity being imported 2. Its declared value 3. Its country of origin (4. Anti-dumping legislation) (5. Quota Controls)

T or F: Import duty rates can be as low as zero.

True

Why would duty rates be as high as 100% or more of the product's declared value? (2)

1. To protect an industry 2. To effectively ban goods from a specific nation

After the clearance requirements are completed and Customs and Border Protection has accepted the established rate and amount of duty, the entry is considered to be _______. The goods can now be released to the importer for onward domestic delivery of the goods. Which step of the Customs Clearance Process does this pertain to?

- liquidated - Step 6: Release

The ease or difficulty of the customs process depends on what 3 things?

1. the product 2. country of origin 3. other relevant issues.

For challenging situations, most companies rely upon the expertise of ________ _______ to sidestep many of the pitfalls of customs clearance.

customs brokers

3rd party logistics professionals hired by importers to interpret complex entry rules.

customs brokers

Customs brokers expertise can help companies clear customs _______, _______, and _______. Their expertise can also help to ensure the legal ______ _______ are paid.

- safely, securely, quickly - minimum duties

What are 2 other 3rd party service providers that can also be engaged in the import process?

1. Customs bonded warehouse 2. Foreign trade zone (FTZ)

Why would an importer use a customs bonded warehouse or foreign trade zone?

If they wish to postpone the release of their goods.

Goods may be placed in a customs bonded warehouse under a _______ ______. These warehouses: 1. hold goods on which the duties are (paid/unpaid) 2. goods are stored under bond for ________, ________ time 3. In joint custody of the importer, or their agent, and the ______ ______.

- warehouse entry 1. unpaid 2. specified, maximum 3. customs officers

another option in the U.S. for postponing the importation of goods; are sites in or near a customs port of entry, where foreign and domestic goods are held until they’re ready for release.

Foreign Trade Zones

T or F: Goods held in a customs bonded warehouse can be remanufactured.

False; CANNOT be remanufactured

While goods are in a customs bonded warehouse, they can be what 4 things?

1. Cleaned 2. Sorted 3. Repacked 4. Manipulated

For customs bonded warehouses: After manipulation, the goods may be exported (with/without) payment of duty or they may be imported for consumption (with/without) payment of duty applicable to the goods in their current condition.

- exported WITHOUT - imported WITH

What are the 3 types of items that may not be placed in a bonded warehouse?

1. Perishable goods 2. explosive substances 3. contraband items

T or F: For foreign trade zones, there is a time limit in goods stored inside.

False; NO time limit

For foreign trade zones, some goods may be exempt from state and local _______ taxes. This allows firms to minimize their costs while their products are waiting to be shipped.

inventory

What are 2 advantages of storing goods in a foreign trade zone?

1. Some quota restrictions don’t apply until the goods enter the U.S. Market from the F.T.Z. 2. Goods can enter the F.T.Z. without formal customs entry or payment of duties.

Goods in the F.T.Z. can be what 4 things?

1. Assembled 2. Repackaged 3. Relabeled 4. Combined with other products

For foreign trade zones: - If the final good is imported, duties are (paid before/not paid until) the goods are released into the U.S. market. - Items that are processed in F.T.Z. 's and then re-exported are charged (a duty/no duty).

- not paid until - no duty

If the customs clearance process is done properly, then your goods will _____ _______ into the country at the minimum ______ ______. Done poorly, it can lead to what 3 things?

- flow smoothly; possible cost - delays, penalties, excess costs

What is the last leg of the global SC journey?

Moving product from port to final destination

primarily moves through major international airports and seaports.

intercontinental trade

T or F: Most international airports are multipurpose; they serve both passenger and cargo traffic.

True

What are the 3 final delivery (port to destination) challenges?

1. No direct move (may not be possible to make a direct move– ex: some ports do not have on-site rail access, thus, it’s necessary to truck the goods to an inland location where the containers are consolidated and transloaded onto rail cars) 2. Limited access (port access is limited. Access to port property is restricted to authorized carriers whose operations and employees have gone through a strict security review) 3. Congestion (port may be forced to regulate freight flows and limit carriers accessibility to the facilities to certain times of the day)

Once freight exits the port, it’s transferred to a ________ carrier for final delivery. This involves ____ or _____ transportation.

- domestic - truck or rail

When choosing between truck or rail transportation for final delivery, this is based on what 3 things?

1. Distance to destination 2. Product value 3. Volume

Truck transportation: - port to customer is (less/more) than 750 miles. Rail transportation: - port to customer is (less/more) than 750 miles.

- less - more

What are the 3 advantages of truck transportation?

1. Accessibility 2. Reliability 3. Product protection

What are the 3 advantages of rail transportation?

1. High efficiency 2. Large capacity 3. Low costs

What are the 2 disadvantages of rail transportation?

1. Accessibility limitations 2. Inconsistent service

What are the 2 disadvantages of truck transportation?

1. Limited capacity (compared to trains) 2. Higher costs

T or F: The challenges of global transportation end when your goods are on domestic soil.

False; they do not end

What are the 5 strategies for success in the last leg (port to destination) of the global supply chain journey?

1. Pre-Clear Imports when possible (enables land-side carriers to immediately pick up the shipment upon port arrival) 2. Choose ports wisely (avoid crowded and hectic ports) 3. Monitor activity at key nodes for potential problems like congestion/weather delays (proactively modify routes to reduce your vulnerability to these problems) 4. Work with high quality domestic carriers (make sure they're financial stable and perform well) 5. Create back-up plans and test them (don’t think of just one port, mode, carrier, and route)

The global SC journey is finished only when the customer has ______, ______, and _______ for the goods.

received; inspected; signed

What is the role of ports in global SC operations?

- facilitate quick transition of freight from international carriers to domestic carriers for customer delivery

Chapter 6b: Global Import Operations Flashcards

(78 cards)