Saga Africa study case

Transportation and international logistics

MSc supply chain management and purchasing

Muvva venkata harinath, Mariano Monroy

Question 1: - transit time by mode of transport

By air
Pre-transportation 1 day
Airport 1 day
Custom clearance 5 days
Post transportation 2 days
Total days 9 days
By sea
Pre-transportation 2 days
Operations 5 days
Sea crossing 15 days
Lagos port 60 days
Post transportation 8 days
Total days 90 days

Question 2: - no. of batches of parts depending on the mode of

transportation
Good dimensions: - outer dimensions: 1200 x1000 x 847mm
Inner dimensions: 1120 x 920 x 654mm
Gross weight: - 180 kg

1) by air

main dimensions
Dimension: 317x244x260 (in CM)
Maximum gross weight: 6804 kg

Configuration 1 Configuration 2 Configuration 3 Configuration 4

3170/1200=2,64 3170/1000=3,17 3170/847=3,74 3170/1000=3,17
2440/1000=2,44 2440/847=2,88 2440/1200=2,03 2440/1200=2,03
2600/847=3,06 2600/1200=2,16 2600/1000=2,6 2600/847=3,06
12 batches 12 batches 12 batches 18 batches

As per main deck pallet dimensions we can put 18 boxes in one pellet. The main deck pallet capacity
is 34 containers. So, the final invoice is

34 containers: - 18x34=612 boxes

Weight: - 612x180=110.6 tonnes
In lower deck we have 8 containers capacity
8 containers: - 18x8=144 boxes
Weight: - 25,920kg
So total weight is 25,920+110,160=136,080kg
But the flight capacity is only up to 137 metric tonnes, so we will put only 7 containers instead of 8
containers then the total weight is 132,840kg, is less than pay load volume
Total weight we can load on flight is 132,840kg
132.8<137 metric tonnes

2) by sea

20’ST container
Dimension: 6020x2450x2380 (in MM)
Max payload weight: 22t

Configuration 1 Configuration 2 Configuration 3 Configuration 4

6020/1200=5,01 6020/1000=6,02 6020/847=7,10 6020/1000=6,02
2450/1000=2,45 2450/847=2,89 2450/1200=2,04 2450/1200=2,04
2310/847=2,72 2310/1200=1,92 2310/1000=2,31 2310/847=2,72
20 batches 12 batches 28 batches 24batches

We can fit 24 boxes of parts into a 20’ dry van container and not 28 because of the way it’s packed.
We must stack them. 24*180=4320 kg < 22t

Question 3 – Cost of the lot

1) by air

Real weight: 3240 kg

Volumetric weight:
317x244x260 (in CM): -317x244x260 ÷ 6000 = 3352kg
125x96x96(in inch): -3148kg
3148<3240kg < 3352kg

Volumetric weight > real weight, so the chargeable weight is the volumetric one which is in CM.

Therefore, chargeable weight is: 3352kg

the total load we can load in plane is 132,840kg

For 41 containers (18 boxes inside each container):

Flight can carry one-week production raw material as mention in case the company rate of
production is 80 cars per day then the company can produce 560 cars per week
Here we are using 1.3 box material to produce one car
The cost of spare parts for each car is 4600 euros without vat then the total cost of raw material is
25,76000
EXW value Sochaux loaded in manufacturer's container included
 Amount in Amount
Calculations
EURO in USD
Cost of raw material (80*7) *4600 25,76000
Pre-transportation
41*125 5,125
Sochaux to St Exupéry
Handling (0,10*3240) *41 13,284
A/F 1 EURO <=> 1,30 USD 115384,62 150000
Total CPT Kano airport 2,709,793.62

Insurance 0.40% all risk insurance %DAP value 10,841

Post transportation Kano

10*310 3177.5
to Kaduna
DAP Kaduna 2,724,271.12

2) by sea

Let,
24 boxes fit into one 20’ST container;
1 air shipment covers 1-week production;
720 boxes are used to make 560 cars
So,
720/560=1,29 boxes to produce 1 car;
2400*1.3= 3,120 boxes to produce 2400 car
3120/24=130 containers
Therefore, we need 130 20’ dry van containers.
Calculations Amount in EURO
Raw material 2400*4600 11,040,000
Pre-transportation Sochaux to
65*1070 69550
Marseille

Conditioning and stuffing container 40*(130*33) 171600

Port's transit and customs clearance 335*130 43,550

O/F 1645*130 213,850

Total CPT Lagos 11,538,550
Insurance 11,503,040/0.70% 80,769.85
Total CIP Lagos 11,619,319.85

Congestion and port handling 360*24 8,640

Post transportation Lagos to Kaduna 65*483 31,395

DAP Kaduna 11,659,354.85

Question 4 – Cost of capital assets for transportation

a) by air

Logistics cost= total cost – raw material cost

2,724,271.12 - 25,76000
148271.12 per week
The total logistics cost by air is 148271.12 per week
And per month the cost is 635447.64per month
b) by sea

the total cost of logistics by sea is

Logistics cost =11,659,354.85 - 11,040,000=619,354.85
The total logistics cost by sea is 619,354.85 per month

Question 5 – Cost of capital assets stock

a) Air solution

Let the assets stock be for 1 week,

And we need 41 containers to be shipped (41*18=738 boxes per shipment) for 1-week production:
So, 738*4600=2576000€

Cost of capital assets stock: 3394800€ and 14549142 € for one month.

b) For maritime solution

Let the assets stock be for 1month,

And we need 129 containers to be shipped (24 boxes per container) for 1-month production:
So, 2,400*4600= 11,040,000 €

Cost of capital assets stock: 11,040,000€ for one month.

Question 6 – Choice of main transport mode

When we see security side we have problems with sea way like climate changes and pirates risk and
it take huge time to transfer but in air transportation we don’t have such type of risks. As when it
comes to cost air transportation is more expensive and we can carry low volume of material, only
per one-week production but by sea we can transfer one-month production raw material
But when we compare both charges sea charges are more expansive and not flexible

So, in this case air transportation is best way to transport the material
Question 7

1. After negotiation, we can repatriate 7 boxes at the price of 60euro means 8.57euros per
each box
So, the total amount is 738*8.57=6324.66euros
Finally, the monthly cost is 25 298.64euros

2. By the sea before transit time is 90 days

After new change the transit time by sea is 62 days

Air Sea (before) Sea (present)

Pre-transportation 1 Pre-transportation 2 Pre-transportation 2
Airport 1 Operations 5 Operations 2
Customs Clearance 5 Sea 15 Sea 12
Post transportation 2 Unloading and customs 60 Unloading, customs 38
clearance clearance
Post transportation 8 Post transportation 8
ETA (days) 9 ETA (days) 90 ETA (days) 62

the new maritime container of 45 'high cube entering the market (24 cu t, 86
m3, 13.6 m long and 2.70 m high, 2.45 m wide,

45’HC container
Dimension: 13 582x2450x2690 (in MM)
Max payload weight: 28t

Configuration 1 Configuration 2 Configuration 3 Configuration 4

13582/1200=11,31 13582/1000=13,58 13582/847=16,03 13582/1000=13,58
2450/1000=2,45 2450/847=2,89 2450/1200=2,04 2450/1200=2,04
2690/847=3,18 2690/1200=2,24 2690/1000=2,24 2690/847=3,17
66 batches 52 batches 64 batches 78 batches

We can fit 78 boxes of parts into a 45’ high cube container. 78*180=14 040 kg < 28t
We need 720 boxes for 1-week production, so 2880 boxes for 1-month production.
So 2880/78=36,92 containers, therefore we need 37 45’HC containers to be shipped for 1-month
production
 Calculations Amount in EURO
EXW Sochaux (37*78)*4600 13275600
Pre-transportation
37*1070 39590
Sochaux to Marseille
THC Marseille 280
O/F 37*1905 70485
Total CPT Lagos 13385955
Insurance 13317375*0,70% 93701,685
Total CIP Lagos 13479656,69
THC Lagos 24272 24272
Post transportation Lagos
19*483 9177
to Kaduna
DAP Kaduna 13513105,69
Return 500,00
DAP Kaduna (container
13513605,69
return included)

Logistics cost: 238 005,69 € per month

Annual cost: 2 856 068,22 €

Carbon footprint calculation:

a) By air

From To Mode Distance in km CO2 in kg

Lyon, St
Sochaux Exupéry Truck 320 3876418,432
Lyon, St Exupéry Kano Air 3772 1886000
Kano Kaduna Truck 237 2870972,402
Total 8 633 390,83
Total per month 34 533 563,34

b) By sea

Solution 1 (20’ST containers)

130*20’ST containers so 130 TEUs

Solution 2 (45’ HC containers)

37*45’HC containers so 19 TEUs

Nota Bene
Maritime carbon footprint calculated through Hapag Lloyd’s carbon footprint calculator.

Chosen solution:

The ETA falls to 50 days instead of 90 days and the maritime solution is way cheaper 2 856 068,22 €)
than the air solution (6 580 580,83€ per year).
Therefore, we should go with the maritime solution and in emergency case we should send goods by
air freight.