INTERNATIONAL TRADE TRANSPORT & LOGISTICS: MODULE 1
1. Trade fundamentals
Logistics and the 7 R’s
- Right product
- Right quantity
- Right condition
- Right time
- Right customer
- Right price
Logistics is the process of planning, implementing and controlling procedures for the efficient
and effective transportation and storage of goods including services and related information
from the point of origin to the point of consumption for the purpose of conforming to
customer requirements.
SCM is the management of a
network of relationships within
a firm and between
interdependent organizations
and business units consisting
of material suppliers,
purchasing, production
facilities, logistics, marketing
and related systems that
facilitate the forward and
reverse flow of materials,
services, finances and information from the original producer to final consumer with the
benefits of adding value, maximizing profitability through efficiencies and achieving customer
satisfaction.
Transport
- Does not directly adds value to the raw material, assembly part or finished product,
but makes it available where the customer wants to have it
- It is a derived demand, demand for transport is dependent upon other needs
consumption or production needs), dependent upon someone wishing to move
freight from one point to another
2. Trading blocks
There are two basic types of trade between countries
- The first in which the receiving country itself cannot produce the goods or provide the
services in question, or where they do not have enough
- The second in which they have the capability of producing the goods or supplying the
services, but still import them
1
,The comparative advantage (David Ricardo)
- There is an economic benefit for the global economy for a nation, to specialize in
producing those goods for which it had a relative advantage, and exchanging them
for the products of the nations which had advantages in other kinds of product
The evolution of world trade
Historical wealth, the new world, wars, capitalism, social
& demographic changes and derived demand go hand
in hand with transport
Oil crisis 1976
Bank crisis 2008
Covid 2019
Gaza 2023
Protectionism
- Protecting jobs (and particular during periods of crisis)
- Tariffs (like a tax or import duties) and non-tariff barriers (quotas on import, export
restraints, domestic subsidising, import deposits, particular health and safety
standards or technical specifications)
3. Organizations in world trade
Post WWII & trading blocks
- United Nations
- International Monetary Fund
- The World Bank
…
The 5 major regional trading blocks in the world economy
- The European Economic Area (EEA)
- The North American Free Trade Agreement (NAFTA)
- The Mercado Comun del Cono Sur (MERCOSUR)
- The Asean Economic Community (AEC)
- The Common Market of Eastern and Southern Africa (COMESA)
4. Measuring trade
2
,What makes something valuable?
- It’s rare or unique
- A lot of people want it
- It has taken a lot of time, money and resources to make
- It means something special to you personally
The past, present and future of money
- The value of the coin
- Fiat money
- The Gold Standard
- Inflation
Trade & international marketing
5. Trade & distribution
The 4 P’s
- Product
- Price
- Promotion
- Place (or distribution)
Distribution channels
- Direct
- Commission agent
- Distributor
- Retailer
- Local company
- License or franchise
3
, 6. Trade & law
The basics of a contract, an agreement between two or more parties
- Term
- Responsibilities
- Court (disputes)
- Force majeure
- Products and services (SoW statement of work)
- Pricelists
- SLA (service level agreement)
- Termination
7. Introduction to procurement
Who decides the price?
To fulfill a customer’s need (it’s a process)
The ABC analysis
A: 20% of the suppliers add 80% of the
purchase volume
B: Additional 30% of suppliers add
additional 15% of the purchase volume
C: 50% of the suppliers are
representing only 5% of the purchase
volume
How to use?
- In the X axis you can have: number of suppliers, customers, products, …
- In the Y axis you can have: purchase volume, product volume, revenue, …
4
1. Trade fundamentals
Logistics and the 7 R’s
- Right product
- Right quantity
- Right condition
- Right time
- Right customer
- Right price
Logistics is the process of planning, implementing and controlling procedures for the efficient
and effective transportation and storage of goods including services and related information
from the point of origin to the point of consumption for the purpose of conforming to
customer requirements.
SCM is the management of a
network of relationships within
a firm and between
interdependent organizations
and business units consisting
of material suppliers,
purchasing, production
facilities, logistics, marketing
and related systems that
facilitate the forward and
reverse flow of materials,
services, finances and information from the original producer to final consumer with the
benefits of adding value, maximizing profitability through efficiencies and achieving customer
satisfaction.
Transport
- Does not directly adds value to the raw material, assembly part or finished product,
but makes it available where the customer wants to have it
- It is a derived demand, demand for transport is dependent upon other needs
consumption or production needs), dependent upon someone wishing to move
freight from one point to another
2. Trading blocks
There are two basic types of trade between countries
- The first in which the receiving country itself cannot produce the goods or provide the
services in question, or where they do not have enough
- The second in which they have the capability of producing the goods or supplying the
services, but still import them
1
,The comparative advantage (David Ricardo)
- There is an economic benefit for the global economy for a nation, to specialize in
producing those goods for which it had a relative advantage, and exchanging them
for the products of the nations which had advantages in other kinds of product
The evolution of world trade
Historical wealth, the new world, wars, capitalism, social
& demographic changes and derived demand go hand
in hand with transport
Oil crisis 1976
Bank crisis 2008
Covid 2019
Gaza 2023
Protectionism
- Protecting jobs (and particular during periods of crisis)
- Tariffs (like a tax or import duties) and non-tariff barriers (quotas on import, export
restraints, domestic subsidising, import deposits, particular health and safety
standards or technical specifications)
3. Organizations in world trade
Post WWII & trading blocks
- United Nations
- International Monetary Fund
- The World Bank
…
The 5 major regional trading blocks in the world economy
- The European Economic Area (EEA)
- The North American Free Trade Agreement (NAFTA)
- The Mercado Comun del Cono Sur (MERCOSUR)
- The Asean Economic Community (AEC)
- The Common Market of Eastern and Southern Africa (COMESA)
4. Measuring trade
2
,What makes something valuable?
- It’s rare or unique
- A lot of people want it
- It has taken a lot of time, money and resources to make
- It means something special to you personally
The past, present and future of money
- The value of the coin
- Fiat money
- The Gold Standard
- Inflation
Trade & international marketing
5. Trade & distribution
The 4 P’s
- Product
- Price
- Promotion
- Place (or distribution)
Distribution channels
- Direct
- Commission agent
- Distributor
- Retailer
- Local company
- License or franchise
3
, 6. Trade & law
The basics of a contract, an agreement between two or more parties
- Term
- Responsibilities
- Court (disputes)
- Force majeure
- Products and services (SoW statement of work)
- Pricelists
- SLA (service level agreement)
- Termination
7. Introduction to procurement
Who decides the price?
To fulfill a customer’s need (it’s a process)
The ABC analysis
A: 20% of the suppliers add 80% of the
purchase volume
B: Additional 30% of suppliers add
additional 15% of the purchase volume
C: 50% of the suppliers are
representing only 5% of the purchase
volume
How to use?
- In the X axis you can have: number of suppliers, customers, products, …
- In the Y axis you can have: purchase volume, product volume, revenue, …
4
