11 th Global Supply Chain and Logistics Summit 28 Nov 2018 - PowerPoint PPT Presentation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Understand the 3 flows Align the various contracts Assess risks and mitigation measures Quantify residual risks 11 th Global Supply Chain and Logistics Summit 28 Nov 2018 www.sclgsummit.org