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05_24 - LCL vs Air Freight(TBD)
05_24 - LCL vs Air Freight(TBD)Business Management and Finance Courses » Udemy - International Logistics & Transportation in Supply Chain. 2023-5 |
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| 05 - Ocean Shipping Udemy - International Logistics & Transportation in Supply Chain. 2023-5 0 00:00,120 --> 00:02,130 Costing LCL and air freight. 1 00:02,130 --> 00:08,670 So in this chapter we will learn the total costing for movement of cargo by LCL and air freight. 2 00:08,880 --> 00:10,710 And the cargo will remain the same. 3 00:10,710 --> 00:17,370 And we will make sure to calculate both the LCL rate and the air freight along with other transportation 4 00:17,370 --> 00:19,500 costs and compare both the rate. 5 00:19,500 --> 00:25,040 So this will help you for better decision making when you are working with a exporter or an importer 6 00:25,050 --> 00:27,390 on any agents like freight forwarder. 7 00:27,420 --> 00:28,540 So let's get started. 8 00:28,560 --> 00:33,260 So the exporter is AMU Metal India which is located in Mumbai. 9 00:33,390 --> 00:38,820 The nearest airport is Mumbai Airport which is 12 kilometers away from the shippers factory. 10 00:38,820 --> 00:44,640 Now why I am mentioning the distance is very important to understand and you will get to know why I have 11 00:44,640 --> 00:49,590 mentioned this distance as we need to calculate the trucking cost too in our final costing. 12 00:49,600 --> 00:53,550 So the airport is 12 kilometers away from the shippers factory. 13 00:53,580 --> 00:57,130 But when we move by LCL we need to consider the sea port. So 14 00:57,180 --> 01:04,080 Nhava Sheva is the port which is nearest to Mumbai city which is 80 kilometers away from the shippers factory. 15 01:04,080 --> 01:08,780 So if you go by air mode of transport you have to move your cargo by Mumbai airport. 16 01:08,790 --> 01:15,090 But if you move your cargo by LCL you need to move it from Nhava Sheva that is sea port and our final 17 01:15,090 --> 01:16,590 destination is Dubai. 18 01:16,620 --> 01:22,230 So the nearest airport in Dubai is the Dubai airport and the nearest port is Jebel Ali. 19 01:22,230 --> 01:27,450 So depending on the mode of transport if it is by air mode of transport the airport of discharge 20 01:27,450 --> 01:28,470 will be Dubai airport. 21 01:28,680 --> 01:32,430 And if it is by sea mode of transport it is the Jebel Ali port. So the 22 01:32,430 --> 01:36,410 weight of the cargo is 12 kgs which is 1,2 tons. 23 01:36,450 --> 01:43,740 And the dimensions are 0,6 meters in length, 0,6 meters in breadth and 0,4 meters in height. 24 01:43,740 --> 01:49,050 So as we have the dimensions in meter let's calculate the LCL freight first. 25 01:49,050 --> 01:55,020 So multiplying all the dimensions we get 0,4 CBM as the volumetric weight of the cargo. 26 01:55,020 --> 01:59,520 Now comparing the volumetric weight with the gross weight, the gross weight is higher. 27 01:59,520 --> 02:06,330 So our consolidator has quoted the ocean freight as $10 weight per measurement whichever is higher. 28 02:06,330 --> 02:07,950 So here weight is higher. 29 02:07,950 --> 02:14,170 So we will multiply $10 with 1,2 tons which will give us the LCL rate as 12 $. 30 02:14,220 --> 02:20,130 Now along with ocean freight there are other charges which a exporter has to bear right that is 31 02:20,130 --> 02:21,390 customs clearance charges. 32 02:21,390 --> 02:24,390 So the sea customs clearance charge is $70. 33 02:24,420 --> 02:33,750 Now the transportation from the factory of the exporter to the port is $170 as the port is 80 kilometers 34 02:33,750 --> 02:34,670 away from the shippers 35 02:34,680 --> 02:37,620 factory also is handling at the port 36 02:37,620 --> 02:41,820 So the port charge terminal handling charges in local currency. 37 02:41,820 --> 02:46,980 So as it is now, as you are the terminal handling charges will be charged in rupees. 38 02:46,980 --> 02:51,120 But for easy calculation, I have converted the rupees in $2. 39 02:51,330 --> 02:54,030 So the terminal and to this is one $20. 40 02:54,060 --> 02:56,340 Now summing up all the cost. 41 02:56,640 --> 03:03,540 So the total cost will be $12 off ocean freight, $70 for customs clearance, one $70 for transportation 42 03:03,540 --> 03:10,800 from the factory to the seaport, and one $20 off terminal handling charges, which is three $72 in 43 03:10,800 --> 03:11,310 total. 44 03:11,340 --> 03:14,100 Also, there will be taxes on the local charges. 45 03:14,100 --> 03:20,430 That is the transportation from the factory to receive the customs clearance and terminal handling charges. 46 03:20,430 --> 03:22,370 Ocean freight are usually not back. 47 03:22,380 --> 03:28,050 But now, as for the current practice, some governments are taxing the ocean freight, so the total 48 03:28,050 --> 03:35,370 costing for the movement of cargo of 1,2 tons by LCL is three $72 plus taxes. 49 03:35,370 --> 03:41,370 Now, when comparing the LCL moment with airfreight, it is very important to consider transit time 50 03:41,370 --> 03:46,170 as our mode of transport is very fast compared to C mode of transport. 51 03:46,170 --> 03:52,200 So the transit time from the factory of the exposure to the mode of discharge that is Jebel Ali will 52 03:52,200 --> 03:53,190 be ten days. 53 03:53,250 --> 04:00,300 So the total costing is three $72 plus taxes and the transit time will be ten days for LCL moment from 54 04:00,300 --> 04:02,790 the factory of the exporter to the port of discharge. 55 04:02,790 --> 04:04,230 That is Jebel Ali. 56 04:04,440 --> 04:11,190 Now let's do the total costing of the same godbole off wake will and read gauge and dimensions as mentioned. 57 04:11,220 --> 04:16,380 So the dimensions yaw are given in meters to when we calculate the air freight, we need to convert 58 04:16,380 --> 04:19,050 the dimensions to centimeters nowadays. 59 04:19,050 --> 04:24,660 Add a mode of transport to the destination will be the way airport and the airport offloading will be. 60 04:24,690 --> 04:26,040 Well may add the cargo. 61 04:26,040 --> 04:26,970 It remains the same. 62 04:26,970 --> 04:32,370 That is 1,2 tonnes, which is equal to the will and read cages and the dimensions have to be converted 63 04:32,370 --> 04:35,970 from meters to centimeters by multiplying them by hundred. 64 04:36,000 --> 04:40,370 So 0,6 will be converted when multiplied by 100 to 60 centimetres. 65 04:40,380 --> 04:42,090 Same level as what but and height. 66 04:42,120 --> 04:48,720 Now to calculate the volumetric weight, we need to divide the dimensions in centimeters by 6000, which 67 04:48,720 --> 04:50,610 turns out to be 24 cages. 68 04:50,610 --> 04:53,940 So they could also weight is higher than the volumetric rate. 69 04:54,060 --> 04:56,500 So rechargeable weight will be well indicated. 70 04:56,700 --> 04:59,310 Now the air freight quoted by the airline. 71 04:59,550 --> 05:03,570 $0,5 for candy of the chargeable weight. 72 05:03,570 --> 05:07,710 So when we multiply 0,5 it well and rate it will be $600. 73 05:07,710 --> 05:09,810 So our air freight is $600. 74 05:09,820 --> 05:16,260 Now again in at the moment there is custom clearance done, which is $50 at Mumbai Airport. 75 05:16,260 --> 05:20,580 And if transportation from the factory to the airport is $60. 76 05:20,610 --> 05:26,430 Now, you may be wondering, the transportation from the factory to the airport is $60, which is less 77 05:26,430 --> 05:29,790 compared to the moment from the factory to the people. 78 05:30,120 --> 05:36,530 See, they don't matter a lot like tracking as a movement from the factory to DC port. 79 05:36,540 --> 05:44,100 It was 80 kilometers, so the transportation cost was one $70, whereas it is just 12 kilometres from 80 05:44,100 --> 05:45,660 the factory to the airport. 81 05:45,720 --> 05:48,140 So the transportation cost is $60. 82 05:48,150 --> 05:51,780 So I hope I heard mentioned the distance is clear. 83 05:52,020 --> 05:56,040 Now, when it comes to add moment, the cargo again needs to be handled. 84 05:56,040 --> 06:01,170 So the airline calls the terminal handling as $0,15 booking. 85 06:01,440 --> 06:09,840 So when we multiply 0,15 with 1200, we get terminal handling charges at Mumbai Airport as one $80. 86 06:10,080 --> 06:13,920 So now let's do the total cost, import and movement of cargo. 87 06:13,950 --> 06:15,610 We do well and read cages. 88 06:15,630 --> 06:17,820 So $600 is the airfreight. 89 06:17,850 --> 06:24,780 $50 is the customs clearance charges at Mumbai Airport, $60 transportation cost from the factory of 90 06:24,780 --> 06:30,050 exporter to the airport in Mumbai and 1 to $2 is the terminal handling. 91 06:30,060 --> 06:36,800 So the total cost for moving the cargo from the export US factory to the airport of this day, that 92 06:36,810 --> 06:42,690 is Dubai Airport is eight $90 plus taxes, excluding the airfield and the transit. 93 06:42,690 --> 06:44,100 Time is just one day. 94 06:44,130 --> 06:48,470 Now you have to decide which mode is suitable for your cargo wing. 95 06:48,600 --> 06:56,670 Well, and is it LCL more suitable where you have to pay three $72 or transit time of ten days or eight 96 06:56,670 --> 06:59,680 $9, and the transit time is just one day. 97 06:59,710 --> 07:06,390 See, I won't suggest anything in this case, as it depends on you and the exporter or the import, 98 07:06,630 --> 07:08,510 as they are your claim today. 99 07:08,520 --> 07:15,780 And at times that is an emergency as the importer wants the cargo on urgent basis to start his manufacturing 100 07:15,780 --> 07:16,230 process. 101 07:16,260 --> 07:21,510 So you can go for it and mode of transport and ask your exporter to pay the ad free. 102 07:21,540 --> 07:26,960 But if money is more important than time, then as the mode of transport is suggested and you can see 103 07:27,010 --> 07:27,420 freight. 104 07:27,510 --> 07:29,550 So I hope this concept is clear. | ||||
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