Carrier Selection and Logistics Optimization

The assignment focuses on the crucial aspect of carrier selection within logistics and supply chain management. It delves into various criteria used to evaluate potential carriers, including cost-effectiveness, delivery reliability, and environmental sustainability. Furthermore, it examines the impact of carrier selection decisions on overall supply chain performance and highlights best practices for making informed choices.

Running head: TRANSPORTATION & DISTRIBUTION MANAGEMENT
TRANSPORTATION & DISTRIBUTION MANAGEMENT
Name of Student:
Name of University:
Author Note:

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EXECUTIVE SUMMARY:
The report draws attention to the operation of one of the important market leader in
retail industry of Singapore, The C.K. Tang Limited. In transportation management and
development, system important components considered while making decisions are
incoterms selection considerations, carrier selection criteria. Both of these consolidate
the carrier relations management of the firm. The report takes us through the important
shipment method followed by the firm and what are the important criteria that the firm
rely upon while making selection of the carrier with maintaining a rank. The firm as its
expansion and repositioning strategy strengthening brand image and value has taken
up the importance of carrier relationship manager lies in the building two-way
relationship between retailer and carrier unit and that strategy very seriously.

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TABLE OF CONTENT
INTRODUCTION..............................................................................................................2
INCOTERM SELCETION CONSIDERATION:.................................................................3
CARRIER SELECTION CRITERIA:.................................................................................4
CARRIER RELATIONSHIP MANAGEMENT:..................................................................6
CONCLUSION:................................................................................................................ 7
REFERENCE:..................................................................................................................8

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INTRODUCTION
The service sector contributes 73% to the GDP of Singapore with retail services
capturing large proportion. C.K. Tang Limited is one of the important and biggest player
in the retail industry. The firm came into operation 1932 as provisional store founded by
C.K Tang an immigrant from China. In 1950s he expanded and shifted the location of
store to capture consumers travelling downtown in the Orchard street (Aguezzoul,
2014). In 1982 on the face of changing landscape in retail, Tang began its repositioning
making inclusion of array of international brand that made the firm transform into
superstore. The firm further transformed its outlook toward building family-friendly retail
store making it an iconic shopping destination of world class.
The tagline "All The Best Under One Roof" launched in 1980 clearly indicated the
huge diversification of the firm. The firm undergone changes in market strategies like
operating the store even on Sundays in order to attract more consumer base. The firm
underwent transformation in large scale at Tang Plaza in order to make a repositioning of its
retail existence as family- friendly store. The retail organization holds collection of huge
product mix of different international brand. The range of products and services includes
beauty, fashion, home, foods & beverages and kids (Aguezzoul, 2014). The product line
attracts the shoppers with mindset to blend with local as well as international quality,
heritage and modernity. In Singapore and Malaysia, the firm has six stores operating
throughout.
The firm not only plays pivotal role in internal market but also makes huge trade
transaction with nations like USA, China, and Malaysia. With increased globalization
over time, the volume of trade has increased and has evoked the importance of supply
chain management and it subsequent distribution and transportation management. This
requires proper incoterm selection at first place in order to come up with proper shipping
strategies. Based on the mode of shipment through rail, sea or water, carrier selection is
done based on the criteria. This also considers various other factors like geographical
span, type of goods being carried, and time taken and so on. The paper makes an

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overall analysis of all these including the carrier relationship management of retailer firm
Tang.
INCOTERM SELCETION CONSIDERATION:
The International chamber of Commerce publishes commercial laws that sets
pre-defined rules known as international commercial terms applicable in commercial
procurement and transaction in international sales.\the incoterms underwent revisions
1953, 1967, 1980, 1990 an 2000. The Incoterms of 2010 specifies eleven rules of
shipment making provision of clear guidelines for the exporters or importers involved in
the entire process of international trade and goods movement (Johnson, 2014). This
includes how the transfer of responsibilities taking place for example whether at the
place of loading and unloading the goods take place at factory of exporter or in the
warehouse of importers. The incoterm rule also specifies and assigns task between
importers and exporters.
Choice of proper incoterm depends on several factors:
First important factor is choosing the method of shipment. Based on the mode of
transportation used in the trade the shipment method is selected. Their ability and
willingness of the importers and exporters shape up the knowledge of possible
international transportation that further determines the quality of incoterms. Greater the
experience and trust between importers and exporters higher is capability of the parties
t perform task enhancing the incoterm methods.
The Incoterm 2011 outlines 11 modes of shipment covered broadly within four
groups E, F , C and D. E is used when the responsibility of shipment is taken up by
importers form departure point allowing the importer to have more powers in operations
of all tasks and conferring least control to the exporter. D is the term indicating least
control of importers and more control of exporters in all the task performance and C are
the terms referring to carriage being paid by importer and exporters respectively.

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Different mode of transportation proposes different rules to be followed in incoterm
consideration. Following shipments are eligible for any kind of transportation
Different Shipment Methods;
EXW: Ex-Works confers importer all responsibilities for the shipment and exporter just
arranges for the availability and pick up by importer.
FCA: Free Carrier suggests that exporter pays for the cost of delivery of the shipment
paid. The export is cleared to the pre-designated carrier of the importer from where it is
takeun up by importer who then pays for the main transportation, insurance and
customer clearance(Aguezzoul, 2014)
FAS: Free Alongside Ship is rule for shipment in sea and inland water ways. Exorters
delivers goods to named port of shipment mentioned by the importer from where
theimporter receives the responsibility o fall risk and damages caused to the goods
(Johnson, 2014). The exporter plays for the delivery of shipment only and main
transportation risk is borne by importers.
CPT: (Carriage paid To) Here the exporter pays for the goods in carriage when it
reaches the place of destination named earlier.
CIP: (Carriage and Insurance Paid To): Along with CPT the exporter needs to acquire
insurance of te goods while making the transition and transportation.
For the retail firm C.K. Tang best two method of shipments would be Ex-works and CIP
due to the huge amount of consumer goods being transported through land as well as
waterways.
CARRIER SELECTION CRITERIA:
After selecting the shipment method the next important task facing Tang is to
choose for proper carrier so as to ascertain safe and damage free transporation and
transition of goods from one place to another. The decision of carrier selection is based

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upon few factors like the geographical coverage of the goods movement. Greater
distance requires more solid carrier. Average time required in transition and how reliable
the mode of transportation is determines the mode of carrier. Delivery of the shipment
and pick-up on time shapes the kind of carrier to be selected. Availability of equipment,
capacity and capabilities in technical grounds are also important factors
(Robinson,Thomas & Manrodt, 2013). The major component in selecting carrier is the
financial stability and rate of the freight. How secure the carrier is from damage
determines the level of safety and protection to the products being shipped.
In decision, making process identifying the criteria and ranking them accordingly
the goals and purpose of the business operation of any firm is important part of carrier
selection in transportation management. A proper carrier selection strategy can provide
immense benefit to the business of Tang (Graham, 2013). This allows the firm to be
associated with lots of service providers making the shipments delivery and gain better
idea regarding free flow of freight. This also allows Tang to monitor the performance of
the carrier base the firm has. Proper carrier selection evokes the leverage for the
company to purchase dollars at all rates available. Carrier selection should always have
a back up procedure in order to face contingency period that would provide protection
both the exporter as well as importer from damage of goods.
Now if we look at the goods being sold in Tang, it can be found that both
perishable and non-perishable goods are offered by the firm. In food category many
items like vegetable, fruits are perishable whereas as wheat based, dry and packaged
item are protected from being perished. Based on the damage options the carriers
selection criteria are ranked prior to selecting for the mode of carriage (Brands, 2013).
For perishable good transition time taken and reliability of delivery are important criteria
owing to the top of the list. If the good s are not delivered and picked-up time then it
might lead to disruption and loss for the firm. In such case, the shorter the transit time,
higher is the chance the goods are safely transported. The diversification strategy and
cross border market expansion strategy of the firm, it had to make greater geographical
coverage that requires the firm to come up with increased availability of equipments and
technological innovation applied within logistic. The lower ranks are possessed by the

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components like financial stability and damage lost. Even if financial stability of the
carrier selection are maintained the firm can still face problem because of not
considering the importrant criteria exposing the firm to greater risk (Choudhary &
Shankar, 2013). The ranking of the criteria would allow the firm locate the important
mode of transportation as well as selecting option for carriage.
CARRIER RELATIONSHIP MANAGEMENT:
It is found from the analysis that carrier selection and incoterms considerations
are related with each other. Mode of shipment primarily determines the carriers type. If
the shipment takes place through train or land then trucks then the carriage selection
will be different than ocean or sea mode of transport. What carriers to be selected
based on the criteria, shipment methods and further types of the goods being moved,
the transportation system management determine that as a whole (Shang & Lu, 2012).
This as subset of supply chain management is more concerned about the transportation
ad movement of goods. The firm Tang being a biggest market player in Singapore retail
industry is responsible to make huge amount of goods transition both locally within
nation across nations as well. This requires proper planning of the entire logistics while
managing the transportation system smoothly, which further depends on proper
resource planning of the firm.
The transportation of goods in any commercial transaction or trade involves
export and import, which requires goods to be delivered and shipped from place of
production to final destination. This involves numerous carriers, suppliers and other
parties within the process. The role of carrier relationship management is to ascertain
the balance through advocating in lieu of the shippers. This ascertains the business
operations for both the firms and its carrier partners providing support to the firm.
To consolidate the transportation goals of Tang, the firm needs to identify and
strengthen the important roles played by transportation management unit of the
company. Proper execution of the management helps in planning and optimization of
terrestrial rounds of transport. It provides ease in selection of inbound and outbound
mode of transportation (Shang & Lu, 2012). All the elements used in the process like

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motor carriers, air modes, rail and all kind of transportation used are well managed and
supervised by the team. The management also allows the firm to optimization of route
and load of the vehicles, tracking of transportation, service quality control, cost control,
freight audit and shipment batching of orders.
The crucial transportation goal facing the retail leader Tang is the development of
cost-effective transportation that would increase efficiency. The efficiency is further
ascertained by the reduction of total inventory overhead and per order processing cost.
In order to improve the warehouse operation of the firm, Tang has decided to work way
that is more integrated with the provider of transportation. The establishment of two-way
relationship with carriers of the firm would allow it to address issues quite easily while
enhancing the opportunities of the firms (Robinson,Thomas & Manrodt, 2013). Greater
the transportation quality higher will be the quality of service provided to the customers
that further marks growth for the business of the firm in terms of increased sales.
The important transportation goal of Tang is to build a two way relationship
between retailer and carrier which is identified as the key to the logistic success
(Johnson, 2014). Carriers should be provided with more information of the business of
Tangs. The role of carrier relation manager Is to consolidate it through staying involved
in the process, verifying reports and results, bill audits making cost considerations and
carrying a dynamic and flexible approach to make as many contacts and relations as
possible.
CONCLUSION:
Pertaining to the fact that Tang plays pivotal role in the national economy of
Singapore the huge operation of the firms involves transition of goods locally and
internationally. A good transportation management involving incoterms consideration,
carrier selection and maintaining the relationship between retailer and carrier have been
pivotal for the firm’s growing popularity and business expansion. The firm faces huge
export to the countries like China, Malaysia, US and so on that allows is to choose an
universal incoterms in form of CPT and Ex-works. The firm focused on consolidating the
carrier relation to stimulate its market expansion and business growth.

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