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I SPECIALIZED ASPECTS IN INTERNATIONAL LOGISTICS CHINA GROUP MEMBERS ROHIT KRISHNA SANDHYA.N T.M.VIJAYARAGHAVAN NAGALAKSHMI.G JOBIN MATHEW MAHESH.M 1. What are the rough dimensions of the countries? (in miles) 3,705,410 sq mi of land and China's coastline along the Pacific Ocean is 9,000 mi.From that 6835 mi coastline has been used extensively for export-oriented trade. 2. What is the population? What percentage lives in the 3 largest cities? Population - 1,376,049,000 (As per 2013 census), 3 Largest cities with population a) Shanghai -34.0 million b) Guangzhou -25.0 Million c) Beijing -24.9 million Percentage – 6.09% 3. What is the predominant language? How widely used English in business? Predominant Language used in china is Standard Mandarian. As of 2010,In china. English is probably the third largest language by number of native speakers, after Mandarin and Spanish. 4 China: Political stability index (-2.5 weak; 2.5 strong) For that indicator, The World Bank ( provides data for China from 1996 to 2014. The average value for China during that period was -0.46 points with aminumum of -0.66 points in 2010 and a maximum of -0.17 points in 1996. 5 Currency, Exchange Rate Renminbi International symbol is CNY Abbreviated RMB, with the symbol ¥ Chinese Yuan = 0.15 US Dollar 1 US Dollar = 6.67 Chinese Yuan 2009-2016 Highest: 7.2841 CNY on 21 Feb 2010. Average: 6.3875 CNY Lowest: 6.0413 CNY on 14 Jan 2014. 6) Time Zones UTC+08:00 Noon in Cambridge, US = 12am (Midnight) in Beijing 7) Packaging and labeling regulation in China Packaging It must be in conformity with medical and safety regulations. Packaging materials must not be poisonous or dangerous and must be easily degradable and recyclable. All wood packages should carry an IPPC mark, or they will be subject to further requirements. Languages Permitted on Packaging and Labeling All products sold in China must have their labels or notes in Chinese. Unit of Measurement The metric system is used in China, but Chinese measuring units are also used. Mark of Origin "Made In" Information on the country of origin of the product must clearly be indicated. Labeling Requirements Name and address of the distributor registered in the country. Specific Regulations Labels for food products must contain the net weight, the list of ingredients, the address of the Chinese distributer, the date of production and the expiry date. The General Administration of the RPC Condition for the Supervision of Quality, the Inspection and the Quarantine (AQSIQ) must be competently handled by the labeling management. All wood packages should carry an IPPC mark, or it will be subject to further requirements. Products requiring the China Compulsory Certification CCC mark, in addition to undergoing an application and testing process, must have the mark physically applied on products before entering or being sold in China. Standards Used In china There are four levels of Chinese standards. The most widely implemented are the : National Standards (GB) Local Standards (DB + *) Enterprise Standards (Q + *) Professional Standards : FZ - Textiles QC - Automobiles SJ - Electronics JB - Machinery YY - Medicine 8) Freight regulations Effective from Feb 15, 2014 Regulations: A Carrier can only sign contracts with actual Beneficiary Cargo Owners (BCO) and MoT certified NVOCC. All Service contracts/rates should be filed with the SSE prior to their use by CMA CGM customers. All Contract price/rates will only be valid after 24 hours of filing with the SSE. The list of NVOCCs can be found on MOT’s website List of approved NVOCCs on MOTs website If you are an NVOCC who accepts liability as a carrier. A business engagement with CMA CGM is possible only when you are registered with the MoT with your name listed in the MoT certified NVOCC list on MoT official website. A contract can only be used by the contractual customer and its associates “who are a part of the contract”. Only contractual customer name or that of its associated entities for a service contract can appear on B/L. 9) Major saltwater Ports           Anhui Fujian Guangdong Jiangsu Liaoning Macau Shandong Shanghai Tianjin Zhejiang Most of these ports are located near the metropolitan areas along the east coast where 39.8% of total population reside. 10. What business terms / financial instruments used for import commercial transactions Introduction about the trade in China The European Union and China are two of the biggest traders in the world. China is now the EU's 2nd trading partner behind the United States and the EU is China's biggest trading partner. As with most countries, regulations governing the import of goods and their subsequent sale on China's domestic market are complex The overview of import regulations aims to provide some insight into the complexities of exporting to China ‘Guanxi’ or ‘relationships’, are of particular importance in China; relationships with government bodies, investors, partners, and even with staff ‘Guanxi’ is often an important factor in the vendor selection process as well as when a companyis engaging with agents, consultants and business partners. The importance of the establishment and maintenance of ‘guanxi’ in China increases the opportunity that corrupt practices will arise in the course of regular business affairs Imports As a result of major changes during the last two decades in the structure of the global economy, the US has largely recognized that liberal trade policies are on balance good for domestic consumers, workers, and businesses alike. The encouragement of imports has generally led to the vitalization of economies in other countries and, in return, greater de- mand for US products. In addition, imported products offer US consumers a wide range of choices of products to buy, while the competition between foreign and US products helps keep domestic prices down. Because US imports have outpaced exports during the last two decades, the current US focus is on increasing exports and opening new markets abroad for US products. Nevertheless, the US remains the world's top import market. Settlement of Import Trade Transactions The most common terms of purchase are as follows:       Consignment Purchase Cash-in-Advance (Pre-Payment) Down Payment Open Account Documentary Collections Letters of Credit 1. Consignment Purchase In a consignment purchase arrangement, the importer/distributor makes payment to the overseas supplier only after sales to end user is made and payment received. Consignment purchase terms can be the most advantageous to an importer/distributor. It is also considered the most risky term for the overseas supplier. 2. Cash-in-Advance (Pre-Payment) Under these terms of purchase, the importer must send payment to the supplier prior to shipment of goods. The importer must trust that the supplier will ship the product on time and that the goods will be as advertised. Basically, Cash-in- advance terms place all of the risk with the importer/buyer. An Importer may find his seller requiring prepayment in the following circumstances: (1) The Importer has not been long established. (2) The Importer's credit status is doubtful, unsatisfactory and/or the country political and economic risks are very high. (3) The product is in heavy demand and the seller does not have to accommodate an Importer's financing request in order to sell the merchandise. 3. Down Payment The Buyer pays the Seller a portion of the cost of the goods "in advance" when the contract is signed or shortly thereafter. There are advantages and disadvantages of down payment terms. The down payment method induces the Seller to begin performance without the Buyer paying the full agreed price in advance. The disadvantage is that there is a possibility the Seller may never deliver the goods even though it has the Buyer's down payment. This option must be combined with one of the other options to cover the full cost of goods. 4. Open Account Unsecured Open Account terms allows the importer to make payments at some specific date in the future and without the buyer issuing any negotiable instrument evidencing his legal commitment to pay at the appointed time. These terms are most common when the importer/buyer has a strong credit history and is well-known to the seller. The buyer may also be able to demand open account sales when there are several sources from which to obtain the seller's product or when open account is the norm in the buyer's market. This mechanism offers the seller no protection in case of non-payment. However, an exporter can structure his open account sale transaction to minimize the risk of nonpayment. For example, the exporter can reduce the repayment period and retain title to the goods until payment is made. Even then, it is difficult to enforce this especially if the goods have been either resold by the buyer or consumed in some other processing activity. Despite the dangers, open account terms with extended dating are becoming more common in international trade. Exporters that offer open account terms are increasingly obtaining credit insurance to mitigate the potential open account credit risks. 5. Documentary Collections A Documentary collection is a process, in which the seller instructs his bank to forward documents related to the export of goods to the buyer's bank with a request to present these documents to the buyer for payment, indicating when and on what conditions these documents can be released to the buyer. Merits of documentary collection 1. Low cost. Low banking fees, help reduce financial expenses and control the costs. 2. Easy to use. Simple procedures, easy to use as compared with L/Cs. 3. Lower risk. The importer can only take delivery of the goods after acceptance or payment, which helps reduce the risks for the exporter as compared with open account sales. Required Documents 1. The following documents are required when applying for export collection: the power of attorney for collection and the complete set of documents for documentary collection. 2. The following documents are required for first-time applications: business license (original and duplicate copies), permit for operating import and export trade, authorization letter of legal representative When to use Documentary Collections? Since Documentary Collections transactions entail some measure of trust, it advisable to use the mechanism when the following conditions apply: When the exporter and importer have a well established relationship When there is little or no threat of a total loss resulting from the buyer's inability or refusal to pay When the foreign political and economic situation is stable When a letter of credit is too expensive or not allowed 6. Letter of Credit A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller , will be received on time and for the correct amount There are various types of letters of credits like Revocable, Irrevocable, Confirmed, Unconfirmed, Clean & Documentary, Fixed, Revolving, Transferable, Back to Back etc. Most common and safe LC is Irrevocable Letter of Credit. 11. How large is the typical supermarket The Supermarket industry in China is a part of China's retail trade sector. Supermarkets retail a broad range of food and daily goods. Most of the goods carried by supermarkets are purchased from domestic manufacturers. Operators, generally known as supermarkets or hypermarkets, then retail these goods to the general public Industry Products Food Beverage, wine and tobacco products Apparel and clothing Kitchen products Cosmetics and jewelry Fruit and vegetables Stationery products Other products Industry Activities Grocery retailing Supermarket operations Hypermarket operations 12. Do any of the large U.S discount retailers have store in this country Name of the company Sales Number of stores McDonald's Corporation 11500 2100 Wal-Mart (China) Investment Co., Ltd 72376 411 Yum! Brands Inc 50700 6600 13. Decribe the highways and rail infrastructure Roads Sector in CHINA China’s expressway network of 65,000 kilometers (40,389 miles) is the second largest in the world, next only to the U.S. By 2020 the government plans to reach three million kilometers (1.86 million miles) of expressways and highways, up from two million kilometers (1.24 million miles) in 2008. China houses more toll roads than any other country, with Chinese toll roads representing more than 70% of the world’s total toll roads. The government finances the majority of the road projects through its own budget and debt, while the private sector plays a limited role. The toll road sector was one of the three most profitable businesses in China for 2009, along with real estate and finance. The network will have a total length of about 85,000 km (53,000 mi), including seven originating in Beijing; the Beijing-Shanghai, Beijing-Taipei, Beijing-Hong Kong-Macau, Beijing-Kunming, Beijing-Lhasa, Beijing-Ürümqi, and Beijing-Harbin expressways. Half of the projects are already completed New numbering system New system, which dates from 2004 and began use on a nationwide level beginning late 2009 and early 2010, integrates itself into the present-day G-series number system. The present-day network, termed the 7918 Network (also known as the National Trunk Highway System (NTHS)), uses one, two or four digits in the G-series numbering system, leaving three-figured G roads as the China National Highways. The new 7918 Network is composed of 7 radial expressways leaving Beijing (G1-G7) 9 vertical expressways going north to south (double digit G roads with numbers ending in an odd numeral) 18 horizontal expressways head west to east (double digit G roads with numbers ending in an even numeral) The network is additionally composed of connection expressways as well as regional and metropolitan ring expressways. Numbering rules All expressways in this network begin with the letter G. (For regional expressways, the letter S is used instead.) All expressways have a thin band on top of the sign. For national expressways, this will be red; for regional expressways, it will be orange-yellow. For radial expressways leaving from or ending in Beijing, use a single digit from 1 to 9 (e.g. G1, G2). For north-south expressways, use an odd number from 11-89 (e.g. G13, G35). For west-east expressways, use an even number from 10-90 (e.g. G30, G46). For regional expressways in the 7918 network, use numbers from 91-99 (e.g. G91, G93) For the parallel expressways running alongside primary expressways, add the direction signal "W", "E", "N", "S" after the primary expressway number (e.g. G4W). For connection expressways, use "1" plus an order number after the main line (e.g. G1511). For city ring expressways, use "0" plus an order number after the main line number, starting from the smallest possible number. 14. How bad is the traffic in China? INTRODUCTION Traffic congestion is a condition on transport networks that occurs as use increases, and is characterized by slower speeds, longer trip times, and increased vehicular queueing. The most common example is the physical use of roads by vehicles. When traffic demand is great enough that the interaction between vehicles slows the speed of the traffic stream, this results in some congestion. As demand approaches the capacity of a road (or of the intersections along the road), extreme traffic congestion sets in. When vehicles are fully stopped for periods of time, this is colloquially known as a traffic jam or traffic snarl-up. Traffic congestion can lead to drivers becoming frustrated and engaging in road rage. Causes Traffic congestion on Marginal Pinheiros, near downtown São Paulo. According to Time magazine, São Paulo has the world's worst traffic jams. Drivers are informed through variable message signs the prevailing queue length. Traffic congestion occurs when a volume of traffic or modal split generates demand for space greater than the available road capacity; this point is commonly termed saturation. There are a number of specific circumstances which cause or aggravate congestion; most of them reduce the capacity of a road at a given point or over a certain length, or increase the number of vehicles required for a given volume of people or goods. About half of U.S. traffic congestion is recurring, and is attributed to sheer weight of traffic; most of the rest is attributed to traffic incidents, road work and weather events. Traffic research still cannot fully predict under which conditions a "traffic jam" (as opposed to heavy, but smoothly flowing traffic) may suddenly occur. It has been found that individual incidents (such as accidents or even a single car braking heavily in a previously smooth flow) may cause ripple effects (a cascading failure) which then spread out and create a sustained traffic jam when, otherwise, normal flow might have continued for some time longer. Negative impacts A frustrated driver in traffic jam. Traffic congestion has a number of negative effects: Wasting time of motorists and passengers ("opportunity cost"). As a non-productive activity for most people, congestion reduces regional economic health. Delays, which may result in late arrival for employment, meetings, and education, resulting in lost business, disciplinary action or other personal losses. Inability to forecast travel time accurately, leading to drivers allocating more time to travel "just in case", and less time on productive activities. Wasted fuel increasing air pollution and carbon dioxide emissions owing to increased idling, acceleration and braking. Wear and tear on vehicles as a result of idling in traffic and frequent acceleration and braking, leading to more frequent repairs and replacements. Stressed and frustrated motorists, encouraging road rage and reduced health of motorists Emergencies: blocked traffic may interfere with the passage of emergency vehicles traveling to their destinations where they are urgently needed. Spillover effect from congested main arteries to secondary roads and side streets as alternative routes are attempted ('rat running'), which may affect neighborhood amenity and real estate prices. Higher chance of collisions due to tight spacing and constant stopping-and-going. Countermeasures It has been suggested by some commentators that the level of congestion that society tolerates is a rational (though not necessarily conscious) [citation needed] choice between the costs of improving the transportation system (in infrastructure or management) and the benefits of quicker travel. Others [who?] link it largely to subjective lifestyle choices, differentiating between car-owning and car-free households. Road infrastructure Metered ramp on I-894 in Milwaukee, Wisconsin U.S. The queue of cars waiting at the red light can be seen on the upper portion of the picture. Junction improvements Grade separation, using bridges (or, less often, tunnels) freeing movements from having to stop for other crossing movements Ramp signaling, 'drip-feeding' merging traffic via traffic signals onto a congested motorway-type roadway Reducing junctions Local-express lanes, providing through lanes that bypass junction on-ramp and off-ramp zones Limited-access road, roads that limit the type and amounts of driveways along their lengths Reversible lanes, where certain sections of highway operate in the opposite direction on different times of the day/ days of the week, to match asymmetric demand. These pose a potential for collisions, if drivers do not notice the change in direction indicators. This may be controlled by variable-message signs or by movable physical separation Separate lanes for specific user groups (usually with the goal of higher people throughput with fewer vehicles) The HOV lanes in Highway 404 in Southern Ontario are separated by a stripped buffer zone that breaks occasionally to allow vehicles to enter and exit the HOV lane. Bus lanes as part of a busway system Express Toll Lanes HOV lanes, for vehicles with at least three (sometimes at least two) riders, intended to encourage carpooling Slugging, impromptu carpooling at HOV access points, on a hitchhiking or payment basis Market-based carpooling with pre-negotiated financial incentives for the driver Urban planning and design City planning and urban design practices can have a huge impact on levels of future traffic congestion, though they are of limited relevance for short-term change. Grid plans including fused grid road network geometry, rather than tree-like network topology which branches into cul-de-sacs (which reduce local traffic, but increase total distances driven and discourage walking by reducing connectivity). This avoids concentration of traffic on a small number of arterial roads and allows more trips to be made without a car. Zoning laws that encourage mixed-use development, which reduces distances between residential, commercial, retail, and recreational destinations (and encourage cycling and walking) Carfree cities, car-light cities, and eco-cities designed to eliminate the need to travel by car for most inhabitants. Transit-oriented development are residential and commercial areas designed to maximize access to public transport by providing a transit station or stop (train station, metro station, tram stop, or bus stop). During rush hour, right turns onto the side street shown here are prohibited in order to prevent rat running Congestion can be reduced by either increasing road capacity (supply), or by reducing traffic (demand). Capacity can be increased in a number of ways, but needs to take account of latent demand otherwise it may be used more strongly than anticipated. Critics of the approach of adding capacity have compared it to "fighting obesity by letting out your belt" (inducing demand that did not exist before). For example, when new lanes are created, households with a second car that used to be parked most of the time may begin to use this second car for commuting. Reducing road capacity has in turn been attacked as removing free choice as well as increasing travel costs and times, placing an especially high burden on the low income residents who must commute to work. Increased supply can include: Adding more capacity at bottlenecks (such as by adding more lanes at the expense of hard shoulders or safety zones, or by removing local obstacles like bridge supports and widening tunnels) Adding more capacity over the whole of a route (generally by adding more lanes) Creating new routes Traffic management improvements (see separate section below) Reduction of demand can include: Parking restrictions, making motor vehicle use less attractive by increasing the monetary and nonmonetary costs of parking, introducing greater competition for limited city or road space. Most transport planning experts agree that free parking distorts the market in favour of car travel, exacerbating congestion. Park and ride facilities allowing parking at a distance and allowing continuation by public transport or ride sharing. Park-and-ride car parks are commonly found at metro stations, freeway entrances in suburban areas, and at the edge of smaller cities. Reduction of road capacity to force traffic onto other travel modes. Methods include traffic calming and the shared space concept. Road pricing, charging money for access onto a road/specific area at certain times, congestion levels or for certain road users "Cap and trade", in which only licensed cars are allowed on the roads. A limited quota of car licences are issued each year and traded in a free market fashion. This guarantees that the number of cars does not exceed road capacity while avoiding the negative effects of shortages normally associated with quotas. However, since demand for cars tends to be inelastic, the result are exorbitant purchase prices for the licenses, pricing out the lower levels of society, as seen Singapore's Certificate of Entitlement scheme. Congestion pricing, where a certain area, such as the inner part of a congested city, is surrounded with a cordon into which entry with a car requires payment. The cordon may be a physical boundary (i.e., surrounded by toll stations) or it may be virtual, with enforcement being via spot checks or cameras on the entry routes. Major examples are Singapore's electronic road pricing, the London congestion charge system, Stockholm congestion tax and the use of High-occupancy toll lanes, predominately in North America. Road space rationing, where regulatory restrictions prevent certain types of vehicles from driving under certain circumstances or in certain areas. Number plate restrictions based on days of the week, as practiced in several large cities in the world, such as Athens, Mexico City, Manila and São Paulo. In effect, such cities are banning a different part of the automobile fleet from roads each day of the week. Mainly introduced to combat smog, these measures also reduce congestion. A weakness of this method is that richer drivers can purchase a second or third car to circumvent the ban.[citation needed] Permits, where only certain types of vehicles (such as residents) are permitted to enter a certain area, and other types (such as through-traffic) are banned. For example, Bertrand Delanoë, the mayor of Paris, has proposed to impose a complete ban on motor vehicles in the city's inner districts, with exemptions only for residents, businesses, and the disabled. Bike lane constructed in congested areas to encourage use of the alternative transportation. Policy approaches, which usually attempt to provide either strategic alternatives or which encourage greater usage of existing alternatives through promotion, subsidies or restrictions. Incentives to use public transport, increasing modal shares. This can be achieved through infrastructure investment, subsidies, transport integration, pricing strategies that decrease the marginal cost/fixed cost ratios, improved timetabling and greater priority for buses to reduce journey time e.g. [Bus Lanes], [BTR] . Cycling promotion through legislation, cycle facilities, subsidies, and awareness campaigns. The Netherlands has been pursuing cycle friendly policies for decades, and around a quarter of their commuting is done by bicycle. Promotion of more flexible work place practices. For example, a flexible workplaces pilot was undertaken in Brisbane, Australia during 2009 to test the applicability of a voluntary travel behaviour change program to achieve transport system outcomes, particularly as they related to managing congestion, either through mode shift or peak spreading. During the one-month Pilot, amongst almost 900 Brisbane CBD workers across 20 private and public sector organisations, shifts of more than 30% out of the morning and afternoon peak travel was recorded. Telecommuting encouraged through legislation and subsidies. Online shopping promotion, potentially with automated delivery booths helping to solve the last mile problem and reduce shopping trips made by car. Traffic management Traffic congestion detector in Germany. Use of so-called Intelligent transportation system, which guide traffic: Traffic reporting, via radio, GPS and mobile apps, to advise road users Variable message signs installed along the roadway, to advise road users Navigation systems, possibly linked up to automatic traffic reporting Traffic counters permanently installed, to provide real-time traffic counts Convergence indexing road traffic monitoring, to provide information on the use of highway onramps Automated highway systems, a future idea which could reduce the safe interval between cars (required for braking in emergencies) and increase highway capacity by as much as 100% while increasing travel speeds[citation needed] Parking guidance and information systems providing dynamic advice to motorists about free parking Active Traffic Management system opens up UK motorway hard shoulder as an extra traffic lane, it uses CCTV and VMS to control and monitor the traffic's use of the extra lane Other associated School opening times arranged to avoid rush hour traffic (in some countries, private car school pickup and drop-off traffic are substantial percentages of peak hour traffic).[citation needed] Considerate driving behaviour promotion and enforcement. Driving practices such as tailgating and frequent lane changes can reduce a road's capacity and exacerbate jams. In some countries signs are placed on highways to raise awareness, while others have introduced legislation against inconsiderate driving. Visual barriers to prevent drivers from slowing down out of curiosity (often called "rubbernecking" in the United States). This often includes accidents, with traffic slowing down even on roadsides physically separated from the crash location. This also tends to occur at construction sites, which is why some countries have introduced rules that motorway construction has to occur behind visual barrier Speed limit reductions, as practiced on the M25 motorway in London. With lower speeds allowing cars to drive closer together, this increases the capacity of a road. Note that this measure is only effective if the interval between cars is reduced, not the distance itself. Low intervals are generally only safe at low speeds. Lane splitting/filtering, in which some jurisdictions allow motorcycles, scooters and bicycles to travel in the space between cars, buses, and trucks. 16. Is security an issue in logistic? Yes, it is an issue in logistics. 1. Organised Crime Organised crime is increasingly found in industries where there is traditionally little awareness of, or exposure, to their activities, where gaps in regulations can be exploited and/or where the penalties for crime are not sufficient to deter criminal behaviour. The Transport Industry presents opportunities for this exploitation by organised crime. (Australian Crime Commission, 2007.) From Ray Mancini’s own experiences through the role as the security contractor for transport companies, organised crime members were able to infiltrate other companies by being an owner operator contractor or as a contract truck driver. One transport company employed a contract truck company to transport their freight locally; however, this company’s owner had strong links to an organised crime syndicate and in fact employed members from his group. More importantly the fact that there is no dedicated national law enforcement unit targeting/combating organised theft of freight within Australia, especially involving organised crime gangs, has permitted these crime syndicates to flourish. Previously a joint venture by Australian Federal Police (AFP), Customs and various state law enforcement agencies created the RAFT project (Reduce Aviation Freight Theft), which introduced a multiagency approach to investigating the theft of aviation theft. However, after a period of time in many states this project was abandoned and the intelligence was handled by AFP in Canberra. (To the author’s knowledge, Queensland is the only state that still maintains the RAFT Project that involves security employees from transport companies). I acknowledge that many states law enforcement services do have a ‘gang crime squad’ to investigate organised crime gangs’ activities, however many crimes perpetrated within the transport/logistic industries is more than often not reported or over looked by the police due to the crimes themselves being a lower priority or there were no avenues of inquiry. The RAFT Project was conceptually a positive move by the law enforcement agencies, however it was hamstrung as it targeted aviation freight not necessarily road freight. The Transported Asset Protection Association (TAPA) is a unique forum that unites global manufacturers, logistics providers, freight carriers, law enforcement agencies and other stakeholders with the common aim of reducing losses from international supply chains. (TAPA, n.d.) According to the European Union, the theft of high value, high risk products moving in supply chains in Europe costs business in excess of 8.2 billion Euro dollars a year. The threat from organized criminals is increasing and becoming more violent. (TAPA, n.d.) Recommendation: The RAFT project including the Joint Aviation Investigation Team (JAIT) should be re-created and implemented on both a national and state level, involving both road and aviation transport companies and the respective security companies (involved in the protection services for the various transport companies). Continual security awareness training for employees and security personnel to reduce apathy displayed by employees and managers in the respective transport companies. The provision of TAPA training to staff and the adoption of TAPA’s minimum security standards. Regular auditing of security by a qualified TAPA auditor or security personnel trained in TAPA certification standards. 2. Terrorism Transport companies have, today, transformed into transnational companies, providing international freight services across the globe. As such, dramatic increases have occurred in the demand of express service delivery of international freight utilising aviation services, including both freighter and passenger aircraft. However, the increase demand of international freight services increases the risks of terrorist activities within this area. For example, in 2010, two separate items of freight (printer cartridges) were detected to contain Improvised Explosive Devices (IEDs). These items had already been loaded onto two separate freighter aircraft in the United Kingdom for flights into the United States. Imagine the carnage if these two IEDs exploded over heavily populated areas. This could have replicated the disaster over Lockerbie Scotland in 1988. Note: Pan Am flight 103 (Boeing 747) exploded over Lockerbie, Scotland, after a bomb hidden in luggage exploded causing debris to crash into the Scottish village of Lockerbie below. 270 people were killed, including 11 people who were on the ground. Whilst the transport industry already has measures in place such as screening and security checks to reduce the risks of IEDs and other explosives or chemicals being loaded onto aircraft, the devious minds of criminals/terrorists continue to improvise methods to circumvent detection strategies. These incidences have caused a growing awareness in the industry for improved security. Many governments have made it mandatory for improved freight screening and security procedures to prevent breaches. According to the Australian Government (n.d.), transport systems continue to be attractive targets for terrorists seeking to inflict mass casualties, economic damage, instill fear and create spectacular media imagery. Transport security encompasses aviation, air cargo supply chains, maritime and mass passenger transport systems such as road and rail. The Office of Transport Security (OTS) is responsible for regulating and monitoring transport and air cargo security on behalf of the Australian Government. OTS is responsible for administering an intelligence-led, risk-based preventative security regime. OTS works with the aviation and maritime industry to achieve sustainable and proportional preventative security measures that are commensurate with the nature and level of the terrorist threat. Supply chain security for air cargo is regulated in Australia under the Aviation Transport Security Act 2004 and Aviation Transport Security Regulations 2005. It is administered under the Regulated Air Cargo Agent (RACA) and Accredited Air Cargo Agent (AACA) schemes. The RACA scheme regulates air cargo security for a range of industry participants through the preparation, implementation and compliance of a Transport Security Program compiled by the respective transport companies and the regulated shipper scheme that includes: Cargo terminal operators at airports Express post services Freight forwarders (including express freight companies) Regular international postal services All freight for international destinations via the aviation industry is processed according to the ‘Unknown Shipper Process.’ However, due to time constraints’ lack of knowledge or lack of communication this process is often neglected increasing the odds and risks that an unlawful item or substance could be loaded onto an aircraft. It is interesting to note that, in Australia, surface (road) transport security arrangements are under state and territory jurisdiction with OTS working to coordinate the dissemination on best practice information on security measures. Implementation of preventative security measures is the responsibility of owners and operators of the individual transport companies. Recommendations: Training/information is required for transport operators and employees in relation to RACA and security awareness for the security of their freight. Updated and continual training required for security and transport employees (company or contract) in the areas of transport/logistics and aviation security requirements, including RACA and other regulatory or convention requirements, including the ‘Unknown Shipper Process’. Provision of suitably trained and qualified security guards to provide professional and quality guarding services within the transport/logistics industry. 3. Theft of freight Criminals utilise employees to gain intelligence or provide information as to which transport company is transporting the various brands or products of high value electronic freight (for example Apple, Panasonic and JVC electronic items). Criminals will target transport company employees to provide information as to the specific company’s weaknesses and areas of opportunity in order to target the company in their plans to commit offences. These plans could culminate in offences being committed across various states (causing various jurisdictional issues with law enforcement agencies) and whilst the freight is in transit (difficult to track and delays the discovery of the crime). For example high value freight is often targeted on the Sydney to Perth tour as it is a three day transit tour, thus delaying the discovery of the crime and reducing the possibility of apprehending the perpetrators. Many employees in the transport industry are low income earners, which increases the risks of these employees to provide information, steal freight or provide accessibility for criminals to access freight, in order for the employee to supplement their low wages through bribes or ‘pay offs’. On the sociological side, we need focus only upon the broad reality of contemporary economic life. It is a fact of life that the majority of the work force will struggle to survive with the wages that they earn. In more cases today many people live in excess of their earnings, which is powered by the yearnings to have more. This desire to live at a level excessive to their earnings causes frustrations with their working life and conditions which can be reflected onto their attitude towards their employer. (Mann & Al-Khadha, n.d.) Mann and Al-Khadha (n.d.), suggests that many employees do not enjoy their jobs, or do not enjoy much of what they do at work. They work in order to get money to live. While they work they follow orders from others, with which they do not necessarily agree. Often they have no knowledge of the decisions underlying such orders, who made them or why. The employee’s desire to have a better life and possess more expensive items is created as by what Mann and Al-Khadha (n.d.) suggest as marketing efforts to stimulate ever more wants for ever more consumer goods. New products can be presented as compensations for the general powerlessness, frustration, insecurity, domination and struggle of the majority of the population. Here is another major source of duress for many people – the duress of thwarted desires, along with envy and resentment of those who apparently have everything while doing nothing to deserve it. This stress is then reflected by the employee’s attitude towards their employer or business. One of these attitudes is called rationalised actions. Rationalised action can be described with the example that an employee looking to steal an item and rationalises their actions with the fact that the company is making millions but not looking after their workers. Many workers are transient temporary labour hire employees who have no allegiances to the respective hiring transport company and are hired as no one else has a desire to complete a four hour split shift ranging from 0200 to 1000 hours and 1500 to 2100 hours. As such the risks of theft and damage due to poor handling skills and lack of training is increase ten fold, especially since the turn over of staff is significant and the continual training of these personnel is a large cost burden to the parent company. Whilst many large transport/express companies are implementing ‘up to date’ technology to allow customers to track their consignment over the internet and also to provide internal ‘visibility’ of a specific consignment or item, many companies have not. However, the transport companies that have implemented the track and trace scanning recognize that many employees do not scan the freight for a variety of reasons, including laziness, lack of time or so that the item itself can be stolen. Transport companies that conform to the TAPA convention security standards, still suffer the indignity of losses through theft or compliance failures as employees have failed to comply with policies or procedures. Many incidents lack the appropriate security investigation to uncover the root cause so that procedures or strategies can be implemented to reduce the incident or risk of the specific failure occurring in the future. Recommendations: Training is provided on a continual basis for all employees and contractors to maintain their knowledge of scanners, scanning disciplines and scanning compliance requirements. Adequate and frequent training of freight handlers to handle the freight in a correct manner to reduce the risks of damage or injury to the freight handler. Security personnel are involved in the handling, securing, sorting, scanning and loading of high risk freight. Therefore the security personnel must also be adequately trained in the handling and sorting requirements of high risk freight or freight classed under an ‘Enhanced Security Program’ requirement. Provision of the appropriate training to security personnel / transport staff to enable the thorough conduct of factual investigations and subsequent root cause analysis. Security personnel / transport employees must have the knowledge to conduct security audits and risk analyses so as to reduce the risks of theft or shrinkage. 4. Transport Companies Transport companies operate under increasing financial challenges caused by the world’s markets, including fuel. Various natural disasters, such as the Iceland Volcano Eruptions can bring air traffic to a stand still, costing companies millions of dollars. Transport companies profit margins are not as large compared to other industries such as the mining/resource sector. Therefore freight is moved as rapidly as possible and as per the contractual agreement with the customer, to ensure the highest level of profit and more importantly return business of a satisfied customer. However, it is this rapid handling of freight that causes process failures to occur. Efficiency versus expedience is always an issue with the movement of freight and a headache to security personnel tasked to investigate missing freight, as expedience will always be put first. Further, the lack of customer service units and/or appropriate security personnel coupled with the lack of appropriate training can delay the early detection of lost or stolen freight, which, in turns increases in attempting to locate the freight. Recommendations: The appropriate training is provided to employees to equip them with the knowledge and tools so they are capable of conducting inquiries to locate freight or to report freight missing as soon as possible. The provision of easily accessible training tools and workshops, which are cost effective, and do not waste employee’s and employer’s time. 5. Security Companies With the various security issues experienced across the world and with new challenges being faced with every new day, numerous security firms have been formed to meet the growing demand for private security as law enforcement agencies are battling to cope with increases in demands for their services. Many security companies offer security guarding services within Australia and are competing against each other to obtain business. Many companies attempt to under quote their competitors to dangle the ‘cheaper cost’ carrot in front of transport company managers/directors in their attempts to win the contract. As such these security companies have to reduce their costs in the only areas where possible, including staff wages/conditions and training. This results in the supply of under trained and unwilling security guards. The supply of a security guard, who is tasked to watch a CCTV system and sit at a guard hut to provide access control to a depot, is no longer acceptable or viable. Security personnel now and in the future need to be fully trained on a variety of subjects (i.e. investigate losses, understand and use complex electronic surveillance equipment, knowledge of the transport/logistics industry), be able to multi task and have that willingness to conduct other transport related duties such as pallet counts, refuelling vehicles, audits etcetera to assist in providing the cost effectiveness to the transport industry. In the author’s experience a cheaper service doesn’t always equate to a cost effective solution. Unfortunately and it is still happening with security companies attempting to run with small margins and thus supply a blanket of security guards at a cheaper rate. Many of these security employees are not paid according to the specific awards and are not trained to an appropriate level. However, I also note that there are also competent security companies in the market who are passionate about the security industry and maintain their longevity within the security industry through the provision of a quality security service, which is reflected by their employees. Recommendations: That security companies who provide the appropriate level of security services associated or aligned with a registered training organisation and who have transport industry trained / experienced guards should be sourced to provide the requisite guarding requirements for the various transport companies. In any hire or tender process, transport companies are encouraged to request references from other transport companies and investigate the incumbent security company to ascertain other evidence of what specialist transport/logistics security services they have provided in the past. Conclusion The transport/logistics industry is rapidly evolving and transforming due to many factors that are being faced today and in the future that include costs, increasing demand for movement of high value freight and global security risks. However, with these changes the industry must embrace the appropriate high level of security to ensure that their assets, employees and customer’s freight are protected to minimise risks from theft and losses. The old cliché that security is a cost that cannot be retrieved is a thing of the past. The more savvy transport companies are now utilising security services and protection of freight as a selling tool to customers in order to win their business or to increase their bottom line of their profit and loss statement. 17. Phone systems Telecom operators Main article: Mobile phone industry in China As of 2009, the telecom operators in China are exclusively Chinese: two fixed-line operators with nationwide licenses - China Telecom and China Unicom - three mobile carriers - China Telecom (CDMA and CDMA2000), China Mobile (GSM and TD-SCDMA) and China Unicom (GSM and WCDMA). The State has control and majority ownership of all of them. Most of them are financed in Hong Kong. China Telecom is one of the largest telecommunication SOE in China, including 31 semiautonomous provincial enterprises in mainland China. It runs land-line and mobile phone networks, operates PAS system and provides telecom network-based voice, data, multimedia and information services. In 2008, the company acquired CDMA network from China Unicom. A second focus point is broadband based on Ethernet and ADSL. In Jan 2009, China Telcom was one of the three companies having 3G license, CDMA2000. China Mobile operates basic GSM services and value-added services such as General Packet Radio Service (GPRS) data transfer, a TD-SCDMA 3G network, IP telephony and multimedia. It ranks the first in the world in terms of network scale and customer base. China Unicom merged with China Netcom in October 2008 and obtained WCDMA license in Jan 2009. The company offers mobile phone services, operates domestic and international landline network, and provides broadband multimedia services and IP telephony and value-added services. China Netcom was acquired by China Unicom in October 2008. China Satcom was licensed to engage in all kind of satellite related services such as transponder lease, domestic television broadcasting, public Very Small Antenna Aperture(VSAT) communications, video conferencing, data broadcasting, IP telephony and satellite based high-speed Internet access. In March 2009, the company announced its basic telephone services (excluding satellite transponder lease and sales) were merged with China Telecom. The other part, satellite related services will be merged with China DBSAT China TieTong, formerly affiliated with the national rail network, is a smaller operator that merged with China Mobile in May 2008. China Voice Holdings Corp is also licensed to engage in video conferencing, data broadcasting, IP telephony and satellite based high-speed Internet access and is the largest corporation in conjunction with foreign owned corporations which hold many of the state run contracts for the Chinese government. Main Telephone Providers in mobile phone network China Telecom - landline, Internet and mobile At: Main office 31 Jinrong Street, Xicheng District, Beijing 100033 Tel: 10000 - 24-hour customer helpline China Unicom - landline, Internet and mobile At: Main office 21 Financial Street, Xicheng District, Beijing 100140 Tel: 10010 - 24-hour customer helpline China Mobile - mobile telephone operator At: Main office 60/F, The Center, 99 Queen's Road Central, Hong Kong Tel: 10086 - 24-hour customer helpline - See more at: Main Telephone Providers in landlines China Telecom - landline, Internet and mobile At: Main office 31 Jinrong Street, Xicheng District, Beijing 100033 Tel: 10000 - 24-hour customer helpline China Unicom - landline, Internet and mobile At: Main office 21 Financial Street, Xicheng District, Beijing 100140 Tel: 10010 - 24-hour customer helpline 18 Internet access China has now surpassed 649 million users, outnumbering the entire U.S. population. The growth of mobile internet is largely credited for the increase, with 80% of users -- 557 million -- using smartphones and tablets to connect. Despite the huge number and rapid growth of connectivity, the overall population size means that still a majority (52.1%) of Chinese have no access to the internet. China Internet Users 721,434,547 Internet Users in China (2016*) Share of China Population: 52.2 % (penetration) Total Population : 1,382,323,332 Share of World Internet Users: 21.1 % Internet Users in the World: 3,424,971,237 Chinas internet usage Year Internet Users** Penetration Total (% of Pop) Population 2016* 721,434,547 52.2 % 1,382,323,332 2015* 705,914,032 51.3 % 1,376,048,943 2014 675,131,785 49.3 % 1,369,435,670 2013 624,031,531 45.8 % 1,362,514,260 2012 573,330,272 42.3 % 1,355,386,952 World internet usage Internet users Rank Percentage[9] China 721,434,547 1 52.2% India 462,124,989 2 34.8% United States 286,942,362 3 88.22% Brazil 120,111,118 4 60.1% Japan 115,111,595 5 89.8% Country or area 19 China Gasoline prices, liter Gasoline prices: We show prices for China from 06-Jun-2016 to 12-Sep-2016. The average value for China during that period was 0.95 U.S. Dollar with a minimum of 0.92 U.S. Dollar on 08-Aug-2016 and a maximum of 0.97 U.S. Dollar on 27-Jun-2016. For comparison, the average price of gasoline in the world for this period is 1.14 U.S. Dollar. That is 3.88 $ per gallon CHINA 0.98 0.97 0.96 0.95 0.94 0.93 0.92 China 0.91 0.9 0.89 20) TRADE REGULATIONS China became a WTO Member on 11 December 2001. China has gradually liberalized its foreign trading system and has continued to reduce administrative barriers to trade. According to China’s amended Foreign Trade Law which went into effect from July 2004, all types of enterprises, including private enterprises, can register for the trading right. According to WTO, China's average applied MFN tariff rate was 9.4% in 2013, progressively down from 15.3% in 2001. The average tariff was higher for agricultural products at 14.8% while the average tariff for non-agricultural products was 8.6%. Starting from 1 June 2015, the import tariff rate on daily consumer products including certain garments, footwear, skincare products, and paper diapers are slashed, at a rate averaging 50%. In this round of adjustment, the import tariff on suits and furskin apparels is lowered from 14-23% to 7-10%; import tariff on short boots and sports shoes goes down from 22-24% to 12%; import tariff on paper diapers will drop from 7.5% to 2%; while that on skincare products from 5% to 2%. VAT on imported goods at basic rate of 17% for general goods and at a lower rate of 13% for some foodstuffs, grains and edible vegetable oils, gas and other energy products for domestic use, books and newspapers, magazines, feedstuffs and fertilizers, etc. Customs and quarantine system China adopted the practice of “quarantine inspection before customs declaration” in customs clearance. Import Goods Clearance Slips and Export Goods Clearance Slips stamped with the special seal of inspection and quarantine authorities are issued to goods subject to entry-exit inspection and quarantine. The Customs will examine and release the goods against the Import Goods Clearance Slip or Export Goods Clearance Slip issued by the entry-exit inspection and quarantine authorities at the place of customs declaration. China practises a system of pre-shipment inspection for wastes imported as raw materials. Wastes to be imported must measure up to China’s environmental protection standards and must be inspected and approved by inspection organisations recognised by the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) before shipment. Product standards Import commodity inspection is required for all goods in the published Inspection List, or subject to inspection pursuant to other laws and regulations. Safety licence and other regulatory requirements apply to imports of medicines, foodstuffs, animal and plant products, and mechanical and electronic products. China implemented its new system of compulsory product certification on 1 May 2002. Under the new system, a unified catalogue, standard, mark and fee schedule are in place and the CCC (China Compulsory Certification) mark has replaced the Great Wall CCEE and CCIB marks used in the old system. The CCC mark is the certification mark for products which are allowed to be imported, sold or used in China. Catalogues of products requiring CCC mark have been drawn up and promulgated through public notice. The CCC catalogues cover the major product categories of electrical wires and cables, circuit switches and electric devices for protection or connection, low voltage electrical apparatus, small power motors, electric tools, welding machines, household appliances and appliances for similar uses, audio and video apparatus, information technology equipment, lighting apparatus, motor vehicles and safety parts, motor vehicle tyres, safety glass, agricultural machinery, firefighting equipment, preventive safety technology products, telecommunications terminal equipment and wireless LAN products. Details can be found in the CNCA website’s dedicated webpage on CCC (Chinese). Free trade agreements with China Currently, China has 13 free trade agreements (FTAs) signed and implemented, and 6 FTAs under negotiation. Besides the Closer Economic and Partnership Agreements with Hong Kong and Macau, China has FTAs in force with ASEAN, Pakistan, Chile, New Zealand, Singapore, Peru, Costa Rica, Iceland, Switzerland, Korea and Australia. It is currently negotiating FTAs with the Gulf Cooperation Council (GCC) countries, Norway, Japan-Korea, Sri Lanka, Regional Comprehensive Economic Partnership (RCEP) and ASEAN FTA upgrade negotiation. Reduced import tariff rates may be applied to certain commodities imported from FTA countries into China. 21) EXPORT IMPORT DOCUMENT IN CHINA Documentation is one of the difficult parts of international trade, even for veteran importers and exporters. We often received emails from China Import Magazine readers, seeking help for documentation preparation, application and issuing. It takes a while to compile the complete list of documents formats related with China import and export. If there is anything that I missed out, please do let me know by leave a message. Documentation Samples List Shipping documents bill of lading commercial invoice packing list air waybill consular invoice customs invoice weight memo Documents related with China Customs customs declaration form (in Chinese) Documents issued by Entry-exit Inspection And Quarantine Of The People’s Republic Of China inspection certificate (in Chinese) certificate for raw silk classification and conditioned weight certificate of analysis fumigation/disinfection certificate phytosanitary certificate animal health certificate veterinary (health) certificate health certificate sanitary certificate inspection certificate of quantity and weight quality certificate Certificate of Origin certificate of origin for imports of agricultural products into the european economic community certircate of authenticity fresh’emperor’table grapes certircate of authenticity tobacco certificate of origin(textile products) certificate of origin form f for china- chile fta (Form F) certificate of hong kong origin china-singappre free trade area preferential tariff certificate of origin form for the Free Trade Agreement between the Government of the People’S Republic of China and the Government of New Zealand certificate of origin china-pakistan fta (Form P) certificate of origin asia-pacific trade agreement (Form B) asean-china free trade area preferential tariff certificate of origin (Form E) form a certificate of origin Export Permit, Quote or License export licence for dual-use items and technologies of PRC permit/certificate for import/export & re-export (convention on international trade in endangered species of wild fauna and flora) clearance notification for environmental management on import/export of toxic chemicals temporary textiles export licence of the people’s republic of china Insurance Documents Insurance Policy Insurance Policy Application Form 22. How common is bribery in trade transactions and what are the legal ramification Form of representation        Registrations, certifications and licencing requirements Business scope Intellectual property protection Foreign exchange regulations Local tax and import duties Dispute resolutions labor law compliances 23. How strong are the Unions? In the last decades, China's booming economy has greatly benefited from globalization and trade liberalization. China has found a niche as the world's manufacturing centre and it is playing a crucial role in a growing number of global supply chains. This research focuses on the performance of international and domestic transport and logistics systems as perceived by Chinese importers and exporters. A broad literature review of Chinese meteoric logistics industry development is provided. Results and analysis of in-depth interviews with Chinese importers and exporters are presented. These interviews provide significant information regarding international freight transport chains, the impact of delays on supply chain operations and the subsequent costs, companies' delay and disruption planning, and managers' perspectives on future transport and logistics developments. 24. Software system used in logistics industries The following are some of the software commonly used in the logistics and supply chain side       Transwide - cloud-based transport management software V-work - Mobile Workforce Management Omadi - Dispatching, management & CRM for the towing industry My Yard Ship wire- Enterprise logistics for everyone Real time vale network - Demand Driven Supply Chain Management in the Cloud 25. What are the reputed institutions and knowledge resources providing logistics and supply chain certificate? FUDAN UNIVERSITY- Master in Logistics and Operations Management TONGJI UNIVERSITY - Master programe for Supply Chain and Logistics BEIJING JIAO TONG UNIVERSITY - Master in logistics management and engineering ZHEJIANG UNIVERSITY - Master of Engineering in Logistics Management