Trade

The World Trade Organization (WTO) is an international body whose purpose is to promote free trade by persuading countries to abolish import tariffs and other barriers (“Profile: World”, 2005). The organization is also based on a multilateral system where trade is conducted without discrimination throughout the world trade system, and countries enjoined in the system cannot normally discriminate between products and services of their own and their trading partners.

The principle of the Most Favored Nation (MFN) treatment observed by WTO characterizes it as a multilateral organization. Thus, WTO has become the embodiment of globalization and multilateralism. The organization basically deals with the rules of trade between nations at a global or near-global level but it also has other important functions and purposes such as to facilitate trade negotiations and forums; to provide a venue for settling disputes between governments and to police free trade agreements (“What is”,).

The Organization also interprets trade agreements when conflict and dispute arise between countries over trading issues, and upholds the rules of international trade by empowering member countries to impose trade sanctions against countries that fail to abide by the rules and trade agreements. The organization originated from the General Agreement on Tariffs and Trade (GATT) but it has a broader scope such that GATT is just a series of multilateral trade negotiations whose goal is to stimulate trade by lowering trade barriers whereas the WTO has stronger dispute settlement procedures (Mingst 2004).

The highest decision making body of the WTO is the Ministerial Conference which has to meet at least every two years to bring together all WTO members and is a venue for taking decisions on all matters under any of the multilateral trade agreements (“Ministerial Conferences”). The conference is also a venue for negotiating global trade deals otherwise referred to as “trade rounds”. “International Trade” “page_#2” One of the widely talked and debated of these trade rounds is the Doha Development Round which commenced during the fourth WTO Ministerial Conference in Doha, Qatar in November 2001.

The objective of the Doha development agenda, according to optimists, is to make trade fairer for the poor and developing countries (“ Make trade”) while opponents claim that the Doha agenda will overlap with the nations’ domestic laws and trading policies and will be detrimental especially to the poor countries. During the Doha negotiations, proponents of several issues and agenda “promised to ensure that the Trade Related-Aspects of Intellectual Property Rights (TRIPS) agreement would give developing countries enough flexibility to cope with public health crises” (Clare 2003).

Proponents also promised real progress on agricultural market access and action on export subsidies; promised service negotiations which offer benefits for developing countries; promised to tackle tariff peaks and escalation as well as non-tariff barriers and promised a review of special and differential treatment across all WTO business areas to make them more effective (Clare 2003). While these objectives and goals look very promising and enticing, the negotiations have been very slow. WTO members cannot arrive at an agreement that can be acceptable for all members.

The Doha trade rounds provoked much protest and criticism in that, protesters claim, the declarations gives the developed nations more control over world trade policies and thus worsen inequality in the rules of trade. From the standpoint of politicians and businessmen from the developed nations, the Doha round would enhance and increase international trade which would be beneficial to the economy and help in the alleviation of poverty; and enhance international cooperation by proving opportunity to have dialogue with the developing countries.

Protesters inclusive of developing nations and labor groups however claim that these facts are already acknowledged and that the real concerns from the protest groups and developing countries “is not whether there “International Trade” “page_#3” should be trade or not, but what the current form of international trade is and what its impacts are; what the rules of the trade agreements are; who benefits; who doesn’t; is the WTO an appropriate body accomplishing these objectives to enhance fair and just global trade, and so on” (Shah 2002).

As for intellectual property rights for example, the Trade Related Aspects of Intellectual Property Rights or TRIPS agreement that defines how products can be protected from piracy has been an object of much controversy because of the manner on how patent processes work and what can or cannot get patented (Shah 2002).

Opponents to the regime consider TRIPS as a way of stripping opportunity and denying technology to the poor nations and protecting the investments and profits of the richer nations. For example, in genetically engineered food section, the indigenous knowledge that has been existent for many years in some developing nations has been patented by large companies of developed nations without consent from the indigenous communities (Shah 2002).

The TRIPS agreement would result to the developing nations to “buy back” the knowledge with originated from them from the developed countries that have patented the rights to use such knowledge. In addition to this, patent related issues result to difficulty among countries to produce more affordable medicines which consequently contributed to the death of many of the poor nations’ people.

Finding overseas markets or suppliers and dealing with shipping complexities are only two of the challenges facing small firms seeking to participate in international trade (IT). Entrepreneurs should be cautioned that international trade involves many complexities above and beyond the basic disciplines necessary for operating a domestic business. International trade (IT) can be defined as either the buying (importing) or selling (exporting) of goods or services on a global basis. (My Own Business, 2006).

This essay ill explore the important aspects of international trade operations its complexities include issues of documentation, shipping, financial, legal, communications, origins of order, insurance, custom, freight charges, insurance and licensing. Success in international trade will require that the start-up entrepreneur dedicate time, study and investment in order to gain appropriate knowledge and experience on these issues. India has a diverse and rich textile tradition. The origin of Indian textiles can be traced to the Indus valley civilization.

The people of this civilization used homespun cotton for weaving their garments. Excavations at Harappa and Mohen -Jo-Daro, have unearthed household items like needles made of bone and spindles made of wood, amply suggesting that homespun cotton was used to make garments. Fragments of woven cotton have also been found from these sites. (Crafts in India, 2006) As a manager of export shipping in India, I have the knowledge on all the documentations and the safety of the products from the place of origin to the destination of clients. The following should be taken into considerations:

Registration

Be sure that the company is registered with Reserve Bank of India: No longer required. Prior to 1. 1. 1997 it was compulsory for every exporter to obtain an exporters’ code number from the Reserve Bank of India before engaging in export. This has since been dispensed with and registration with the licensing authorities is sufficient before commencing export or import.

Registration with Regional Licensing:

Authorities (obtaining IEC Code Number) The Customs Authorities will not allow you to import or export goods into or from India unless you hold a valid IEC number.

For obtaining IEC number you should apply to Regional Licensing Authority (list given in Appendix 2) in duplicate in the prescribed form given in Appendix 1. Before applying for IEC number it is necessary to open a bank account in the name of your company / firm with any commercial bank authorized to deal in foreign exchange. The duly signed application form should be supported by the following documents: Bank Receipt (in duplicates)/Demand Draft for payment of the fee of Rs. 1,000/-.

Two copies of Passport size photographs of the applicant duly attested by the banker to the applicants. There must be a copy of Permanent Account Number issued by Income Tax Authorities. (Income Tax Department, 1999). If PAN has not been allotted, a copy of application of PAN submitted to Income Tax Authorities. In case the application is signed by an authorized signatory, a copy of the letter of legal authority may be furnished.

(Gohil, 2006) Declaration by the applicant that the proprietors/partners/directors of the applicant firm/company, as the case may be, are not associated as proprietor/partners/directors with any other firm/company which has been caution-listed by the RBI. Where the applicant is so associated with a caution-listed firm/company the IEC No. is allotted with a condition that he can export only with the prior approval of the RBI. Register With Export Promotion Council

Be sure that the company is registered and have a self certified copy of the Importer-Exporter code number issued by the Regional Licensing Authority concerned and bank certificate in support of the applicant’s financial soundness. (Geneva, 1999). The company also has copy of registration with SSI/any other sponsoring authority in addition to the application in the prescribed form for the Import Export Code Number. In addition, the EPC or FIEO shall issue the RCMC indicating the status of the applicant as merchant exporter or manufacturer exporter.

The role of international financial system is always considered very crucial in the scenario of global finance markets (Jean Tirole, p128, 2002). There have always been different opinions of the economic experts about strengthening the role of the international financial system aligned with the emerging trends of global market and to provide balance of adjustments and finance to different developed and developing countries of the world so that the financial integration could contribute towards the economic stability of the countries.

The financial crisis wave in 1990s further added to the appetite of reforming the international monitory system as its role remained very controversial during different financial crisis. The financial crisis faced by Mexico, Thailand, Korea, Indonesia, Russia and Brazil during the time period of 1994 to 1999 gave birth to many questions and concerns regarding the role of international monitory system and debates over the need of the policies of international financial system were also accelerated when the world witnesses the setbacks of these financial crisis (Stanley Fischer, p1, 2002).

There are many reforms and supportive programs and policies formulated and enacted by IMF and these policies and programs also draw different impacts of the economies of the different countries. These reforms are an important topic of discussion for the experts all over the world and the financial experts use to give different arguments in the favor and against of the reforms of the international financial system. This paper is aimed at discussing the opinions and arguments held by different experts in the perspective of reforms of international financial system.

In this regard the paper describes the context that gave birth to the need of the reforms in the international financial system and then discusses some arguments in the favor and against these reforms. The Context of Reforms in International Financial System The financial crisis raised during the 1990s draw some major impacts on the world economy. Though Asian countries were the main receivers of these impacts however the economic experts believe that the entire global witnessed the impact of these financial crises (Jean Tirole, p128, 2002).

These crises started a long debate over the role of International Monitory fund and experts started arguing that there is great need of improving the IMF programs through the reforms in its policies. The trend of capital flow to the emerging markets created the situation of global capitalism crisis and the need of reforming the International financial was realized with more intensity after the crisis that began with ERM – European Rate Mechanism crisis of 1992-93 and the tequila crisis of 1994-95.

In the same decade the world economy witnessed some more financial crisis in forms of Asian, Russian, Brazilian crises and LTCM. (Stanley Fischer, p1, 2002) After facing the set backs of these financial crisis the economies all over the world realized that there is an essential requirement of strengthen the architecture of the international financial system (Jean Tirole, p128, 2002).

The world community raised many questions regarding the role of international financial system that if the intention of the international monitory system is to foster the trade of gods and assets in order to promote prosperity and growth and to achieve an equitable income and wealth distribution then what policies will work best for balanced share of burden of adjustment and what speed of the adjustments would be suitable for the world economy so that an appropriate scale of financing could come in front of the world.

(Ricardo, p31, 2003) The rapid advancements in the technologies also give momentum to the people’s desire of making some fundamental reforms in the policies of international finance system because the recent advancements in information and communication technology not only draw significant impact on the international trade patterns but also facilitated the integration of the financial markets that is well supported by the trade liberalization policies also (Michel, p2, 1999).

The trade liberalization policies and agreements have made the international markets more unified and the advanced economies of the world are witnessing the dominant role of the private capital flow due to which there is an imbalance created in many of the developing countries (Stanley Fischer, p1, 2002). Thus all of the issue built a pressure on the International Monitory fund to take some actions in order to make the situation better, balanced and acceptable for most of the economies of the world.

The international Monitory Fund also noticed the demand of the situation and the Research department of IMF arranged a conference to examine the institutional and policy requirements of the new situation and to discuss the key issues that were needed to be addressed in the reforms of international finance system (Sebastian et al, p817, 2003). The conference held on 28-29th May 1999 at the head quarter of IMF made two major contributions in this regard.

First of all the emerging situation of the global financial markets was discussed in the perspective of increasing financial integrity, its effects on the economies of different countries and the role of IMF in maintaining balances between adjustments and financing. Secondary the economic experts belonging to different academia and private sectors also participated in the debate and commented on the key issues. In this way the experts view were collected from the people outside the usual policy forums.

It was agreed in the conference that the new situation demands the changed role of the developing countries and it is very necessary that these countries must strengthen their economies by improving the prudential regulations of their financial institutions. Moreover the role of the IMF in the financial crises occurred during 1990s in different economies of the world was also discussed and there were many policies of IMF that were favored as well as criticized by the participants (Michel, p2, 1999).

Thus it is found that there are some reforms also made in the international financial system with the objective of preventing more financial crisis and also to minimize the set backs of the crises faced by different economies of the world. At the same time it is also found that there are different types of opinions regarding the reforms in the international financial system and the economic experts widely favor as well as criticize these reforms at different platforms. The following discussion describes the arguments of the economic and financial experts regarding the reforms of the international financial system.

Arguments against Reforms of International Financial System The reforms in the international financial system were widely apsaised as well as criticized by the economic experts from all over the world. Jean Tirole (2002) while analyzing the role of international financial system in the global financial crises wrote in his book that most of the reforms of the international financial system are meant to prevent the European countries’ economies and to make the role of the international financial institution supportive for the development and stability of the European economy.

He further argues that most of the reforms in the international monitory system are targeted to treat the symptoms and not the fundamentals due to which these reforms have often failed to reconcile the financial conditions of the economies of different developing countries. In this regard it is very important that the regulators of the international financial system must identify the main factors behind the market failures and then design their policies giving priority to the principles of corporate governance, liquidity provision, and risk management of corporations (Jean Tirole, p128, 2002)

Dr. Eisuke Sakakibara (1999) revealed that the critics of the reforms in the international financial system argue that the packages introduced by the international monitory system are important contribution to the moral hazards and these packages have worked for the encouragement of the expectations of the governments of the emerging markets that even if they will follow some faulty polices they can still survive and operate successfully in the market.

On the other hand the private investors have given the impression through these reforms that that they will indirectly receive the benefits from the large scale official financing so they can invest in the emerging markets to take the advantage of the situation. Some of the critics of the IMF reforms also believe that there is frequent provision of large scale financing in the merging markets of the world due to which the experts are identifying lack of credibility in the official warnings that call for the private sector contribution in the finance crises resolution process.

(Peter and Alexander, p2, 2000) Along with the above criticism the experts against the reforms in the international monitory system also argue that there are so many polices attached with the reform of international financial system and the countries struggling with the set backs of financial crises have to fulfill many of the policy conditions of IMF to get its financial assistance. As a result these countries face even more challenging situation because to get the assistance of IMF they are overburdened with the conditions and policies implemented by IMF (Peter and Alexander, p2, 2000).

In the same way Dr. Eisuke Sakakibara (1999) pointed out that the critics of the reforms in the international monitory system also believe that the governments of the countries facing the financial crises are given wrong conditions by IMF and they are informed that in order to attain the financial assistance from IMF they have to tight their fiscal policies as well as monitory policies.

These are the conditions that draw negative impacts on the economic conditions of these countries because they are already facing the crises due to which there is sharp reduction in their output and at the same time there is also rise in the unemployment in these countries. So in this critical condition the policies and conditions of IMP work for more instability of the economies of these countries because the governments of these countries have to accept the given conditions if they want to secure the financial assistance from international financial system.

In this way the counties have to pay high cost to IMF. Richard C. Cook (2007) pointed out some of the major flaws in the reforms of the international financial system and identified that at present there is large amounts of credit taken by the governments of the countries that they sue for speculations and do not make any positive use of this money to the producing economies. As a result the security is minimized and when there are large funds borrowed by the countries, the credits providers get high margin of profits on their investments regardless of the fact that the value of the investment goes down.

Thus the present reforms of the international financial system are not beneficial for the developing economies as well as for those countries that have faced financial crises during the last decade. But there is essential need that the regulators of international finance system must decide that what goods and services are desired by the consumers and then only these should be produced in order to prove the international financial institution a public good for the economies of the world.

In this regard the market forces, government and their representative must jointly decide the main features of their market because this is the only way that can led to the successful survival of these forces in the market place. Yung and Wang (2001) pointed out that there are many economic experts especially those belonging to the East Asia that share the view that the financial crisis of the 1990s were also contributed by the structural deficiencies of the international financial system.

Moreover the reforms in the international monitory system have further created the imbalance as these reforms not exactly addressed the main reasons and problems behind the financial crisis. Due to this reason the critics argued that despite the fact that the reforms in the international financial system are meant to reduce the degree of instability and to improve the crisis management capacity of the institution but still the governments and economies of the Easy Asian countries have seen little benefits resulting from the reforms in the international financial system.

Thus there is still need of formulating the policies and reforms that can effectively work for the improvement in the situation for all of the economies as right now the Asian economies are not witnessing the positive effects of the reforms of the international financial system.

What Lay Behind The Horrors Of The Slave Trade? In this essay I would be examining what lay behind the horrors of the slave trade. This essay will include the countries that were involved in the slave trade, how they benefited from it and the power they had over the enslaved Africans. The slave trade worked in a triangle, between four continents: Europe, Africa, South America and North America.

Slave ships leave ports like London, Bristol and Liverpool for West Africa carrying manufactured goods like guns, alcohol, iron bars, which are traded for African men, women and children who had been captured by slave traders or bought from African chiefs on the West African coast. From Africa a ship full of slaves leaves to America and the West Indies, where they are sold to the highest bidder and that’s where families are separated. Once they have been bought, after that they belonged to the plantation owner.

Some refused to be enslaved and took their live, others run away and pregnant woman preferred to have an abortion than to raise their children into slavery. With the money made from the sale of enslaved Africans, goods such as sugar, coffee and tobacco were bought and taken back to Britain for sale. The ships were loaded with produce from the plantations for the voyage back home. For over 300 years, European countries forced Africans onto slave ships and transported them over the Atlantic Ocean but how did the people back in Britain get involved in the slave trade?

As the slave trade grew, numerous of people began to get involved or simply benefited from it. Banks and finance houses in Britain began to grow from the fees and the interest they earned from merchants who borrowed money for their voyages. Bristol and Liverpool became major ports for slave ships, handling cargoes they brought back and between 1700 and 1800, Liverpool’s population dramatically rose from 5,000 to 78,000. Others worked in factories that had been set up with the money from the slave trade.

The slave trade also provided various jobs back in Britain, many worked in factories which sold their goods to West Africa, and these goods will then be traded for slaves. Birmingham also included itself by having 4,000 gun makers with 100,000 guns a year People in Britain weren’t the only one who benefited from the slave trade, West African leaders involved in the trade also benefited by capturing and trading Africans to the Europeans because they are the one who got all the manufactured goods that were traded for slaves. The African chiefs were also benefited themselves with all the money that they got from trading Africans.

My view is that because of the benefits they had, it means that they were also involved and I think without them the trade wouldn’t of happened because they are the one who captured slave for the Europeans, therefore they made a path for the slave trade to happen. Lastly, the West Indies and the Americans were obviously involved because they are the ones who bought and owned the slaves for their plantations. Plantation owners who used slave labour to grow their crops and the fact that they didn’t have to pay the slave made them vast profits.

Often planters retired to Britain with the profits they made and had grand country houses already built for them. Some planter used their money wisely, to become MPs and others invested their profits in new factories and inventions wish helped to finance the Industrial Revolution. I would like to conclude that for me the biggest horrors that lay behind the slave trade is how other African traded their own kind for manufactured goods, how cruelly the Africans were treated on the slave ships and plantations and the power that the Europeans , the Americans, and some other Africans had over the slaves.

I also think that the slave trade was unnecessary, but all those four continents that were involved benefited from it one way or another as they all played important roles because without one, let say the West Indies and Americans, who would of bought all those slave? Or which plantations would the slaves have worked on? And the slave trade wouldn’t have been so successful or benefiting without one side of the triangle. Or without the slave we wouldn’t have what we have today but I still think the way they treated black people was out of order and shouldn’t had to happen in order for the countries to have wealth.

CIF is an acronym for Cost, Insurance and Trade, and refers to a trade term that requires the seller to make arrangements for shipment of goods by sea to a destination port, providing the buyer with all the necessary documents to get these goods from the shipper. However, any extra costs and the risk of damage remain with the buyer rather than the seller. An Irrevocable Letter of Credit; usually abbreviated as L/C, is a method of payment for international business transactions that adequately protects both the seller and the buyer.

It is simply a letter that the importer’s bank writes to the exporter, verifying that payment will be made once the bank is furnished with the necessary documents of the transaction such as freight documents and bill of lading. Once these letters have been sent by the importer, they can not be revoked (HMRC, 2009). They usually include the documents needed by the importer; which are the insurance certificate, packing list, commercial invoice and bill of lading.

They also contain the terms agreed upon by the importer and exporter, the L/C’s validity date, shipment date, destination port, loading port, amount of money, quantity and specification of goods, the negotiating bank, the opening bank, the beneficiary and the applicant, who is the importer. The importer, Panama Canal Authority, applies to open the Letter of Credit account to the seller, who is JCB, through a bank capable of opening such an account in the importer’s country. The opening bank then informs the relevant bank in Panama that the account has been opened.

The bank then informs the Panama Canal Authority, PCA, about the establishment of the Letter of Credit account. JCB will then go ahead and check the conditions and terms in the L/C to see whether they can be accepted. If these conditions and terms are accepted by JCB, they then arrange for shipment of the goods within the timeframe that the L/C specifies. After loading the ship with these goods without any damage, the ship’s captain issues the clean bill of lading to JCB. JCB then submits this bill of lading together with any other vital documents to their bank to start processing payment.

It is only with a clean bill of lading that JCB can claim to own the goods being exported (ICS, 2009). JCB’s bank then sends the clean bill of lading and all the other documents to PCA’s bank, which is the opening bank. The opening bank will then notify PCA of having received these documents once they receive them. PCA then goes to the bank and makes the necessary payments in order to receive the bill of lading as well as the other relevant documents. Armed with all these documents, PCA clears the import customs and collects the goods after arriving on the destination port.

Sales invoice A sales invoice refers to a document issued to the buyer (PCA) by the seller (JCB), and indicates the agreed prices, quantities and products of the goods supplied to the buyer. The sales invoice states that PCA must pay for these goods as per the agreed terms and conditions of payment (HKTDC, 2007). Certificate of Origin A certificate of origin refers to a document in international trade, stating the country where the goods under shipment were made, and not merely where they originate from.

In cases where not all the raw materials and processes are from one country, the country that contributes over fifty per cent of these materials or processes is accepted as the country of origin of the goods. In some cases, some countries may unite and trade as a bloc and allow certificate of origin to state the block as the origin rather than the specific countries. This certificate may either be informal; issued by the seller or official; where an official authority in the exporting country confirms it.

More often than not, the latter is preferred by many importing countries. The certificate of origin is mainly used to classify the goods in the importing country’s customs regulation, and therefore defines the amount of duty to be paid. Moreover, it is also important for statistical and import quota purposes, and may indeed be a used for health regulation where food related imports are concerned. The importer and the exporter usually clarify whether or not a Certificate of Origin is needed and agree on its content.

The certificate of origin in our case would read the United Kingdom since this is where the articulated dump truck will be exported from. Certificate of shipment A Certificate of Shipment is a document, usually issued by a carrier or forwarder, showing that a particular shipment has been sent from a particular country; this certificate only serves as evidence. For instance, the carrier may issue a certificate of shipment to show that certain goods have been sent from the UK to exclude them from VAT if they are being to countries outside the EU.

Standard Shipping Note This refers to a document enabling the shipper to complete a single benchmark document for all the shipment, irrespective of the inland depot or port. This helps in providing the receiving authority with timely, accurate and complete information. Moreover it also provides sufficient information, at each shipping stage till final loading into the vessel, to all who may have an interest in the shipment. The receiving authorities benefit from this document by receiving precise and clear information about how the consignment should be handled.

The use of the Standard Shipping Note has been very successful especially in the UK, leading to its improvement in order to incorporate the changing cargo handling practices and transport techniques, hence the introduction of NES. The general practice is for the Standard Shipping Note to accompany the deliveries; usually containerised, unit loads or general cargo, from warehouses or factories to airports, ports, or clearance depots. However, for dangerous or hazardous goods, the Standard Shipping Note is not used, and a Dangerous Goods Note is used instead (SITPRO, 2008).

Export Cargo Shipping Instruction This refers to a document an exporter issues to carrier or freight forwarder informing them what the products are, the conditions and terms of moving them and the cost of allocation. In this case, this document will be issued by JCB in the United Kingdom since that is the exporting company. Sea Waybill A Sea Waybill is a document covering the transportation of goods by sea; which only serves as evidence that the shipper has taken over the products to be transported, but is not a title document as is the case with a Bill of Lading.

It therefore serves as a receipt for the shipment and shows the details of the shipping arrangements agreed upon such as description of the goods, vessel and route. This document will be issued by JCB in our case since the goods originate from them. Export and import procedures and documents required Many countries world over have their own importing and exporting procedures, many of which are specific to them. The general ones involve the exporter offering to sell goods, stating the price, details, quantity, quality, payment terms and delivery terms, usually contained in a Quotation.

Then the exporter and the importer agree on various details concerning the transaction as stipulated in the Sales Contract (Nelson, 2000). The exporter then issues a Pro Forma Invoice before the shipment of the goods in order to inform the buyer the qualities and quantities of the goods. A packing list usually accompanies the goods to the buyer together with Inspection Certificate and Health Certificate. This is followed by a Commercial Invoice issued by the exporter to demand for payment for the goods supplied.

The payments are then made by the buyer through the concerned bank after verification of the goods supplied. Risks involved in import/export business and how to reduce them The risks involved in international trade are numerous and have been classified into various categories that include customer risks, country risks, credit risks, and foreign exchange among others. Customer risks mainly involve the creditworthiness of the customer and his or her ability to pay the bill. Country risks are further classified into five categories namely sovereign, private, natural, fashion and finance and others.

Sovereign risks are those to do with the ability or willingness of the concerned governments to pay debts, mainly affected by country’s political climate, internal and external threats, and international trade performance; such as balance of payments and amount of foreign exchange reserves (Business Link, 2009). The private sector’s ability to pay for its imports also poses a risk to international trade, a situation usually affected by the state of the country’s economy as well as the commercial institutions in that country. Natural risks mainly include climatic conditions such as earthquakes, floods, and droughts.

International trade patterns can often establish fashionable countries or regions as preferred export markets. However, these fashions could change, leading to a country losing the favour of both export and import trade. Other country risks include transfer risks like the local currency being inconvertible and non-payment or late payments. Credit risks are mainly due to extending credit facilities to customers, where the exporter must find out the creditworthiness of their customers and the amount he or she is willing to advance.

Foreign exchange risks are very common since this kind of business deals with more than one currency. This exposes the exporters and importers to foreign exchange market fluctuations. Also, a business may manufacture products to export to a particular customer, who then refuses to accept them. The businessman must therefore have a contingency plan in case such a thing happens, which could include reselling of these products or seeking a salvage value for them.

To manage these risks, the businessman must gather trade and credit information about his or her current and future customers. He or she should also research the country thoroughly and its associated risks. Moreover, the businessman should also investigate the need to take credit insurance and identify the best policy to that effect. The businessman also needs to manage credit insurance policies in order to maximise benefits. Anyone planning to engage in international business must put into consideration the financial implications as well as other implications to the business.

They include credit management strategy and senior management ownership, as well as the allocation of adequate time and resources to do the identified job (UKTI, 2009). From the Wallenius Wilhelmsen website The ship closest to the sailing date is FEDORA (Voyage ED905-FED), which departs from the Southampton Port on January 31, 2009 and arrives at the Manzanillo Port on February 14, 2009 (WW Logistics, 2009) References Business Link (2009)

Practical advice for business, retrieved from www. businesslink. gov. uk, on January 23, 2009 HKTDC (2007) Common Import/Export Documents, retrieved from www.sme. hktdc. com, on January 23, 2009 HMRC (2009) Revenue and Customs, retrieved from www. hmrc. gov. uk, on January 23, 2009 ICS (2009) Shipping, retrieved from www. wccwbo. org, on January 23, 2009 Nelson, C (2000) Import/export-How to Get Started in International Trade, McGraw-Hill Professional SITPRO (2008) Trading advice, retrieved from www. sitpro. org. uk, on January 23, 2009 UKTI (2009) UK trade information, retrieved from www. uktradeinfo. com, on January 23, 2009 WW Logistics (2009) Track and Trace, retrieved from www. 2wglobal. com, on January 23, 2009

Supply chain management has a significant role in international logistics and has changed the way manufacturing companies operate and do business. The purpose of this paper is to demonstrate that international logistics affects the operations of manufacturing companies. In particular, the factors contributing to the rise of international logistics will be discussed, and also the changes in manufacturing operations that utilize the benefits that supply chain management provide.

Finally, some limitations of supply chain management and the challenges it faces to meet the demanding needs of business will be presented. Supply chain management is defined as an integrated system for transporting goods efficiently and inexpensively using at least two different modes of transport, such as air and truck, under a single bill of lading. The means of transportation are “transparent” to the shipper meaning that the shipper does not have to worry about organizing each mode, rather that he needs to be aware that different modes may be used so cargo should be packed accordingly.

Overall transportation and logistics costs are lowered by selecting the mode of transport that is most suited entermodal transportation systems into a seamless and integrated transportation network that utilizes the for a particular segment of the trip. Economic benefits are realized through consolidating that differ comparative advantages of different modes of transport. Significance of International Logistics in Business Setting

International logistics is loosely associated with Supply chain management and it is a relatively new concept, with the first forays into this system beginning in the 1950’s with experiments using standard sized containers to hold cargo. Before the 1960’s, when container use was less common, ocean cargo transportation cost approximately 10 to 15 percent of the retail value of the goods carried. Cargo arrived at the ports in boxes, barrels and bags and was manually lifted piece by piece onto cargo ships.

This caused a long delay of ships in ports as cargo stowage was time consuming and labor intensive and as a result, port costs accounted for approximately half the total operating cost of a voyage. The growth of international logistics as a means of freight transportation can be contributed to increasing deregulation of the transport industry, and the integration of various modal logistics companies utilizing containers for general cargo transport. Containers are a revolutionary technology that has led to the significant rise of international logistics management in the last five decades.

As David (p. 209) discusses, supply chain management and containerization are not tied, as it is possible to use supply chain management strategy for goods that are not packaged in a container and a container can be shipped using only one mode of transport. However, the two concepts are closely related. The impact of containerization in international freight transportation has been significant. Typically, a standard seagoing container is 20, 30 or 40 foot long, and fully enclosed in steel.

They are 8 feet tall by 8 feet wide and have a double door at one end (David p. 214). They can be stacked on ships and rail cars and transported on trucks. Container cargo has high accessibility characteristics because the containers can be delivered anywhere they can be trucked. Containerization has cut port costs significantly, as loading and unloading the containers are fully mechanized, which dramatically reduces labor costs, time in port, total transit time and losses due to breakages and theft.

In addition, containers are being increasingly adapted to hold special types of cargo such as oil, grains, perishable goods and oversized machinery components. Container use has changed the way goods are produced, distributed and sold worldwide and has gained recognition as a cost and service efficient means of transportation. “Today the cost of shipping goods in containers is between one and two percent of retail value, 90 percent less than before containerization. “

* Introduction of the Bill of Lading “Lading” is another word for cargo. Lading refers to the material goods that are transported by the carrier from one location to another on behalf of a sender and a receiver. Such transportation may be carried out by way of ground transport, by aircraft or by cargo ships. Carriers use the bill of lading associated with a given shipment to ensure that goods are delivered safely to the sender as the shipper had named. “Bill of lading” is a legal document which is using by the shipping companies and freight companies.

The purpose of the bill of lading is to acknowledge that the carrier has received the goods. The bill of lading transfers the title, or legal ownership, of the goods to the carrier; therefore. If there anything happens to the goods in transit (at the en route), the carrier is responsible for paying for the damages. The bill of lading is a receipt given to the person who shipping the products. Delivery time and method of delivery are also outlined within the bill of lading.

This is a standardized form which is provided by licensed carriers to be filled out by the party sending a shipment. The most prominent feature of the B/L is the list of all items contained in the shipment, with spaces for individual quantities and their condition at the time of shipment. And also the B/L must state the value of all items and include the names and signatures of both the consigner and the consignee. The ports of consigner and the port of the consignee are also very essential.

There is a description about how shipping materials are packaged in the shipment. Also it was noted, total weight of items and the total cost charged by the carrier for the service. Legally, Bill of lading is representing goods of value and their ownership. It should be written as a negotiable document or non-negotiable document. In any case, the producer is shipping an order of goods to a paying recipient, so that a transaction will be completed at delivery, then the Bill of lading must be non-negotiable.

But if the ownership and delivery of goods associated with a negotiable B/L may be transferred from one party to another. For this reason, negotiable B/Ls may be used in as collateral for securing a loan. The transport of goods from one destination to another bears the risk that the goods may be lost or sustain damage en route. Though professional carriers go to great lengths to ensure the safety and proper care of their cargo, loss and damage can occur. For the receiver, a shipment’s B/L is a ynamic snapshot of the shipment prior to its voyage. If the receiver finds fault with the goods in terms of content, quantity or condition by virtue of any discrepancy between the shipment and the B/L’s contents, she may pursue legal action against the carrier using the B/L as evidence for her case. * Functions of the Bill of Lading 2. 1. As a receipt of cargo Bills of lading often are prepared by shippers and carriers, if they prepare bills of lading, must rely principally on information supplied by shippers.

Carriers often will have little opportunity, in the course of loading, independently to confirm all that is said by shippers as to the nature, condition and quantity of their cargoes, e. g. because cargo is concealed within packaging. Nonetheless, because the bill of lading is a receipt issued by the carrier, it is the carrier and not the shipper that will be liable to the receiver for any discrepancies between the quantity and apparent order and condition of the cargo on shipment, as acknowledged in the bill of lading, and of the cargo as delivered to the receiver.

The bill of lading can be treated as conclusive evidence as between the carrier and a receiver and as at least prima facie evidence as between the carrier and the shipper, as to the number, weight or quantity and apparent order and condition of the cargo on loading. Two types of bill of ladings can be issue in within this scenario, * Clean Bill of lading – Carrier is declaring that the goods have been received in an appropriate condition, without the presence of defects. The product carrier will issue a clean bill after thoroughly inspecting the packages for any damage, missing quantities or deviations in quality. Clause Bill of Lading – This shows a shortfall or damage in the delivered goods to the consignee. Typically, if the shipped products deviate from the delivery specifications or expected quality, the receiver may declare a clause bill of lading. That means, if there any differences between the B/L and the physical shipment, it has checking by the carrier and enter some clauses regarding that differences before he start the voyage. 2. 2. Evidence of a contract In practice, because bills of lading often are transferred, by endorsement and delivery or mere delivery, not only from shippers to consignees (i. . the persons to whom the cargo is consigned or sent and, thus, the intended receivers of the cargo) but also by shippers or consignees to banks or onward to subsequent purchasers, a bill of lading will be the only evidence of the terms of the contract for carriage of the cargo that it covers that is available to a consignee or other transferee of the bill of lading. Thus, bills of lading in the hands of consignees or other, intermediate or subsequent, transferees often have to be assumed to contain all of the terms of the contract of carriage. . 3. Document of Title to Cargo Cargo often is intended to be sold, or sold on, after it has been consigned to a carrier and the consignee thus either might not be identified when a bill of lading is issued or might thereafter alter. The shipper or consignee of a cargo sold, or sold on, after consignment to the carrier but not immediately paid for will require some assurance that the cargo will not be delivered to the purchaser or end purchaser before the price has been paid.

Conversely, if the cargo is sold or sold on and paid for immediately after consignment to the carrier, the purchaser or end purchaser will require some assurance that the cargo will be delivered to it, and not to the order of either the shipper or the original consignee. Similarly, a bank might have advanced funds for the purchase of the cargo either to the original shipper, or to the consignee, or to a subsequent purchaser and will require some assurance that the cargo cannot be disposed of before the bank is reimbursed.

It is not feasible for intermediate or subsequent transferees, or transferees for limited purposes, of a cargo that is dealt with afloat each to take physical possession of that cargo for the duration of their interest. However, it is both feasible and desirable for each of those transferees to control disposition of the cargo for a period of time, or to an appropriate degree, through control of a document representing an entitlement to the cargo. Thus, by mercantile custom, both “received for shipment” and “shipped on board” bills of lading have come to be treated as documents of title to cargo. The Process of issuing the Bill of Lading The bill of lading might be prepared by the shipper and presented to the carrier for signature, in which case it must be presented to the carrier within a reasonable time after completion of loading of the material cargo and signed by the carrier within a reasonable time of its presentation. Otherwise, and increasingly often in practice, the bill of lading will be prepared by the carrier, principally from information supplied by the shipper, in which event it should be prepared, signed and delivered to the shipper within a reasonable time after completion of loading of its cargo Types of Bill of Ladings with different Labels 4. 1. Straight B/L A bill of lading that is not transferable by either delivery or endorsement and delivery, e. g. because it is marked “not negotiable” or is not made out to “bearer”, to “order” or to “assigns”. Straight bills of lading are used, for example, for “in house” shipments between divisions of large multinationals or when it is known for certain, prior to shipment of the cargo that the intended consignee will not sell the cargo on. . 2. Switch B/L A replacement bill of lading issued at the request of a consignee seller to replace the original bill of lading issued to that seller’s supplier as shipper, so as to show the consignee seller as shipper and its own sub-purchaser as consignee. Such bills of lading are intended to keep the identity of the supplier from the sub-purchaser and thus to prevent future direct dealings between the supplier and the sub-purchaser. 4. 3. Sea way bill

It is a receipt for cargo that contains or evidences a contract for the carriage of goods by sea and which identifies the person to whom the carrier is to deliver that cargo. Sea waybill differs from a bill of lading in that it lacks transferability and in that the designated consignee thus is not required to produce the waybill in order to obtain delivery of the cargo. 4. 4. Clean bill A bill of lading that contains no positive notation of a defective condition or shortage either of the cargo covered or, where material, of its packaging. 4. 5. Claused bill

A bill of lading that contains a positive notation of a defective condition or shortage either of the cargo covered or, where material, of its packaging. 4. 6. Combined Transport/Multimodal Transport/House to House bill A bill of lading that covers not only carriage of cargo on an ocean going vessel but all or other stages and/or forms of carriage, e. g. carriage of the cargo by rail, road or barge from the shipper’s premises to an ocean port of shipment, from that port to an ocean port of discharge and from that port of discharge by rail, road or barge to the consignee’s premises. What contains in the Bill of Lading A bill of lading will contain the following information as a minimum requirement (see the Business-in-a-Box sample on the left to see the real template): – Shipper’s name and address – Receiver’s name and address – Carrier Name – Description of the items that are being transported – Gross weight and dimensions of the shipment – Classification of the commodity being shipped – Nomination and identification of the party who is paying for the transportation.