1 / 20

Risk Management in the Global Supply Chain

Risk Management in the Global Supply Chain. “ The New Landscape” RIMS New Jersey 2010. Is Your Supply Chain Ready ?. Agenda. Who is Expeditors International of Washington Inc.? Supply chain overview – How freight moves Introduction to Supply Chain Risks Terms of Sale – INCOTERMS

onawa
Download Presentation

Risk Management in the Global Supply Chain

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Risk Management in the Global Supply Chain “The New Landscape” RIMS New Jersey 2010

  2. Is Your Supply Chain Ready ?

  3. Agenda • Who is Expeditors International of Washington Inc.? • Supply chain overview – How freight moves • Introduction to Supply Chain Risks • Terms of Sale – INCOTERMS • Shipping patterns - Concentration of value • High Risk Countries - Where are you sourcing / shipping • Piracy • Freight Carrier Liability – When will you get nothing when cargo is lost or stolen? • Regulation/Compliance/Security • Know your Freight Carriers standards of care • Cargo Insurance, do you have it? Do you need it?

  4. Who is Expeditors? • Non Asset based Logistics provider • Publicly traded on NASDAQ – EXPD • 13,000 employees • Global Headquarters – Seattle WA. • 253 offices around the world. • Offering service in • Ocean freight • Air Freight • Customs Clearance • Warehousing • Order Management • Time definite freight services • Cargo Insurance Services – Claims Management

  5. Definition of Logistics • Council of Logistics Management defines logistics as that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers' requirements.

  6. Visibility of Logistics • 20 to 25% of total business costs • Not as well known as marketing, sales, finance or accounting • Logistics activities are not apparent to the casual observer or the typical consumer

  7. So if this happens….

  8. Factory Port & Customs handling agents Trucker Trucker Drayman Drayman International Transit Consolidator De consolidator Port & Customs handling agents *The process of getting goods from Origin to Destination Involves many parties.

  9. Terms of Sale / Purchase - INCOTERMS INCOTERMS are the official rules for the worldwide interpretation of trade terms developed through the International Chamber of Commerce in Paris, France Help define the rights and obligations of buyers and sellers engaged in international trade by identifying the point where carriage, costs, and risks are transferred from seller to buyer

  10. The 13 INCOTERMS at a glance • EXWEX WORKS (…named place) FCA FREE CARRIER (... named place) FAS FREE ALONGSIDE SHIP (... named port of shipment) FOBFREE ON BOARD (... named port of shipment) CFR COST AND FREIGHT (... named port of destination) CIF COST, INSURANCE AND FREIGHT (... named port of dest) CPT CARRIAGE PAID TO (... named place of destination) CIP CARRIAGE AND INSURANCE PAID TO (... named place of dest) DAF DELIVERED AT FRONTIER (... named place) DES DELIVERED EX SHIP (... named port of destination) DEQ DELIVERED EX QUAY (... named port of destination) DDU DELIVERED DUTY UNPAID (... named place of destination)DDP DELIVERED DUTY PAID (... named place of destination) • Understanding how your organization buys and sells will be critical to understanding your financial exposure

  11. 13 INCOTERMS For more details:www.iccwbo.org/incoterms

  12. Terms of Sale…were you at Risk?

  13. Shipping Patterns - Concentration of Value • Simple concept, • The larger the concentration of value, the larger the potential loss • When shipping there are many shipping models with many factors to consider. • One of which is to consolidate multiple shipments and send them with one steamship line.

  14. Concentration of Value

  15. Hyundai Fortune

  16. General Average, where did it come from? • Old maritime concept. • It is declared by the “master of a vessel” the owner or vessel operator. • It is the method by which owners recover extraordinary costs incurred in protecting cargo and vessel as a result of a marine casualty. • In the event of General Average being declared, owner of goods must post a surety bond to recover freight. All risk insurance provides this surety bond on your behalf.

  17. High Risk Countries • All Countries are not created equal, • When making sourcing decisions what do you consider? • Political Risk / Currency Risk / Terrorism? • Kidnapping? • Cargo Theft? • Former Soviet Bloc / Mexico / Brazil / Miami / Los Angeles…not a complete list • Logistics vs Risk Management – ins restrictions

  18. High Risk Countries – Former USSR & Soviet Bloc Afghanistan Georgia Russia Albania Kaliningrad Serbia Armenia Kazakhstan Tajikistan Azerbaijan Kyrgyzstan Turkmenistan Belarus Macedonia Ukraine Bosnia Herzegovina Moldova Uzbekistan Croatia Montenegro Yugoslavia

More Related