Global Logistics Scenario Your Team Will Play The Roles Of A

Global Logisticsscenarioyour Team Will Play The Roles Of A Freight For

Your team will play the roles of a Freight Forwarder and a materials and distribution manager for Apotex Pharmaceuticals in Montreal. You are responsible for all transportation, distribution, materials, and purchasing decisions to deliver aid to Yemen, supplying emergency pharmaceuticals to Médecins Sans Frontières (MSF). The delivery involves two main transportation options: (1) Montreal – New York – Riyadh via air freight, and (2) Montreal – Paris – Cairo via sea and consolidation with French agents. Your task is to determine the optimal logistics plan, including calculating freight charges, conducting risk analysis, selecting the best route, and recommending Incoterms® for the shipment. You will also describe the role of the freight forwarder and the necessary documentation for the transaction.

Sample Paper For Above instruction

The logistics and transportation of humanitarian aid in conflict zones require meticulous planning to ensure timely delivery while managing risks and costs. In this scenario, the goal is to deliver 4.5 cubic meters of pharmaceuticals weighing 1.2 metric tonnes, valued at $8 million, from Montreal to the conflict zone of Yemen, specifically to the hospital in Amran. The crux of the task lies in choosing the most efficient and reliable route and method for transporting such critical supplies under challenging circumstances.

Calculation of Chargeable Weights and Freight Charges

The first step is to evaluate the freight charges for the two proposed alternatives. Alternative 1 involves air freight from Montreal to Riyadh via New York, while Alternative 2 involves a combination of sea and air freight from Montreal through Paris and Cairo. The chargeable weight is determined by the greater of actual weight and volumetric weight. Given that the volumetric weight is calculated based on the volume of 4.5 m³, converting this into cubic feet yields approximately 158.8 ft³. Using standard volumetric weight conversion factors (e.g., 166 lbs per cubic foot for air transport), the volumetric weight is approximately 26,344 lbs.

For Alternative 1, the actual weight is 1.2 metric tonnes, which converts to approximately 2,646 lbs. The volumetric weight greatly exceeds the actual weight, so the chargeable weight becomes approximately 26,344 lbs. Freight charges are calculated based on this chargeable weight and the rates specified: $15 per 100 lbs in truck transport from Montreal to JFK, plus air freight rates. The truck cost from Montreal to JFK is 2,646 / 100 = 26.46 units, resulting in approximately CAN $397. Based on the air freight rate of US $11.02/kg (approximately US $5 per lb), the air freight cost for 26,344 lbs is roughly US $132,000. Converting to CAD using the exchange rate (US $1.00 = CAN $1.30), it amounts to approximately CAN $171,600.

Alternative 2 involves shipping via sea/air consolidation through Paris and Cairo. The freight costs are CAN $3.36 per 300 kg from Montreal to Paris, and EUR 6.93 per 500 kg from Paris to Cairo. The total weight of 1.2 tonnes (1200 kg) results in charges of (1200 / 300) CAN $3.36 = CAN $13.44 for Montreal to Paris, and (1200 / 500) EUR 6.93 = EUR 16.60 for Paris to Cairo. Converting EUR to CAN dollars at EUR 1 = CAN $1.40 results in approximately CAN $23.24. The total freight cost sums to approximately CAN $36.68, which is significantly lower than Alternative 1. This suggests the sea/air consolidation route could be more economical, but additional considerations such as transit time and risk must be evaluated.

Conducting a CREEEPSS Risk Analysis for Yemen Delivery

The CREEEPSS model assesses critical risks in conflict zone deliveries, considering Causes, Risks, Effects, and Preventions. In Yemen, factors such as ongoing conflict, port blockades, restricted airspace, political instability, and logistical challenges heighten the risk profile. The fragile peace brokered by the UN provides a limited window for relief shipments; however, the risk of being caught in renewed hostilities or security incidents remains high. Transportation by air reduces exposure to port blockades but introduces risks associated with airspace restrictions due to conflict or sanctions.

Risks include potential delays, damage to shipments, or loss due to security threats. Effects include delayed aid reaching MSF, potential wastage of pharmaceuticals, and increased costs. Preventions involve thorough security clearance, choosing reputable carriers, and contingency planning, including alternative routes and insurance. Given the analysis, the route via New York and Riyadh presents lower geopolitical risks, given Riyadh's relative stability, despite higher costs. The sea/air route through Cairo, while economical, carries heightened risks due to the volatile security situation in Egypt and Yemen. Therefore, a balanced approach considering safety and cost suggests opting for the direct air freight via New York to Riyadh.

Final Delivery Mode and Route to Yemen

From Riyadh or Cairo, the final leg involves transferring goods to land transport to reach Amran. The most appropriate mode involves a convoy of secure trucks operating under UN supervision to ensure safety. The route from Riyadh to Amran spans approximately 1,350 km, passing through high-risk areas controlled by local factions. The route mapping involves the following waypoints: Riyadh – Saada – Amran, passing through secure border crossings. Given the urgent need and insecurity, helicopter or airlift operations could be considered if available, but logistical and cost considerations favor land movement with enhanced security measures. Appropriate maps outline the route, emphasizing safe transit corridors and checkpoints.

Recommended Incoterms® and Justification

Given the nature of the shipment and the partnership setup, the appropriate Incoterm® is FOB (Free On Board) Montreal, meaning Apotex will handle all costs and risks until the goods are loaded onto the carrier at Montreal. FOB provides clarity on responsibilities, allowing the freight forwarder to manage cargo loading, documentation, and customs clearance. For humanitarian aid, CIF (Cost, Insurance, and Freight) could also be suitable, covering shipping costs and insurance, but FOB under the supervision of the freight forwarder offers better control and risk mitigation. This approach aligns with the logistics plan, ensuring that Apotex retains responsibility until shipment departure, after which MSF assumes risk at the destination port, handled by their local agents.

Role of the Freight Forwarder and Required Documentation

The freight forwarder acts as an intermediary facilitating transportation, customs clearance, cargo consolidation, insurance, and documentation. The key documents include the Bill of Lading, Commercial Invoice, Packing List, Certificate of Origin, and Insurance Certificate. The forwarder coordinates with airlines, shipping companies, customs authorities, and local agents to ensure compliance with regulations, secure timely transit, and manage risks. In humanitarian shipments, additional documentation might encompass necessary permits, security clearances, and affidavits affirming the aid's purpose.

Conclusion

Effective logistics management is vital in delivering humanitarian aid to conflict zones like Yemen. Analyzing alternative routes, assessing risks, selecting optimal modes, and understanding the roles of stakeholders ensures the aid reaches its destination efficiently and safely. Incorporating microeconomic principles such as cost analysis, risk management, and market considerations enhances decision-making and resource allocation. Forward-thinking and strategic planning, underpinned by comprehensive risk assessments and appropriate contractual arrangements like Incoterms®, facilitate successful humanitarian missions. Moving forward, integrating these principles into business operations will be essential for resilience and responsiveness in complex environments.

References

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• Hill, C. W. L., & Hult, G. T. M. (2019). Supply Chain Management: An International Journal. Wiley.
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• MSF. (2019, June 25). Indirect consequences of war in Yemen | MSF. Médecins Sans Frontières International. https://www.msf.org/yemen
• Mankiw, N. G. (2021). Principles of Microeconomics (9th ed.). Cengage Learning.
• World Bank. (2022). Yemen Economic Overview. World Bank Publications.
• United Nations. (2023). Yemen Humanitarian Response Plan. UN Office for the Coordination of Humanitarian Affairs.
• International Air Transport Association (IATA). (2023). Airfreight Market Analysis. IATA.
• UNCTAD. (2022). Review of Maritime Transport 2022. United Nations Conference on Trade and Development.
• Global Supply Chain Forum. (2020). Risk Management Strategies in Logistics. GSCC Publications.