International Logistics and Transportation Assignment

International
logistics and
transportation

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Q1. Recognizing today's endless globalization and internalization, companies are required to
improve their logistic capacity. How this statement supports the views that logistics plays an
important role in one nation’s development? Support the answer with relevant example.........1
Q2. From your point of view, what are land transport infrastructures can support a seaport
operation to gain competitive advantage? Support your answer with relevant examples..........3
PART B............................................................................................................................................5
Q1. “Production Abroad” is an alternative to direct exporting. Do you think that Malaysia is
ready for this concept? How would the “One-Belt-One-Route” (OBOR) influence
“Production Abroad”?.................................................................................................................5
Question 2 Importance of documenting relating to import and export.......................................7
CONCLUSION................................................................................................................................9
References......................................................................................................................................10

INTRODUCTION
Globalization has played an incessant role in the growth and development of any
country. It has positively impacted the political, economic, social, technological, legal and
environmental factors. Globalization has also been responsible for improving the standard of
living of people. It is directly related to the transportation and logistics as they bridges the gap
between two countries and help in movement of goods and services from one place to another.
Over the years with the increasing trade and internationalization, it has become essential for the
multi national companies to improve their logistic services because logistics play a major role in
the growth of a nation's economy. The following report will be emphasise on the importance of
logistics, concept of internationalization and the documents required in the process of import
and export.
PART A
Q1. Recognizing today's endless globalization and internalization, companies are required to
improve their logistic capacity. How this statement supports the views that logistics plays
an important role in one nation’s development? Support the answer with relevant example
Globalization is concerned with movement of good across international borders with the
motive of promoting international trade and to earn profit. Globalization has multiple benefits as
it gives competitive advantage to companies by purchasing raw materials at cheaper rate or by
manufacturing abroad. This also leads to employment generation in other nation. Hence, it is
beneficial for both the parties and is said to be a win-win situation. (Beck, 2018.)
Internationalization is concerned with the strategy or the process of making products
easily available internationally or globally. In order to implement this concept successfully, it
often requires guidance of industry experts, technical experts or people with international
experience.
In the view point of Christopher (2016) Logistic management is a part of supply chain
management that is used to meet consumer needs and expectations through effective planning,
controlling and by movement of goods from one place to another. Logistics play an important
role in the success of any organizational not even locally but also internationally. It is imperative
for every business to adapt adequate logistic s and supply chain services that facilitates easy
movement of goods and services to their customers globally.
Axiata group is a Malaysian telecommunication company that operates globally in
countries like India, Pakistan, Nepal, Bangladesh, Sri Lanka and Indonesia. Headquartered in
Kuala Lumpur, the organization employs around 12000 people from all around the world.
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The telecommunication group has always given importance to its logistic service not only
in their home country but also in different parts of the world. The group followed adequate
supply chain procedures that gave them the benefit of tariffs, rules and standards in
international trade zones. The importance of logistics in boosting up the global economy cannot
be ignored. The major contribution of logistic industry is that it promotes balanced regional
development throughout the country.
In today's era it is impossible to imagine a world without import and export. Both
are equally important for the development of a country. The logistics industry has also promoted
the transportation and warehousing facility, hence increasing the employment.
Logistics industry provides employment to millions of people in Malaysia and is said to
be among the top industries in the world. Generation of employment increases the purchasing
power of the people thus it increases the GDP of the country.
The Axiata group through its effective logistic services creates value for its customers
globally. The company provides innovative services to their subscribers even in the most
underdeveloped and rural parts of the world. This leads to balanced development and also
boosts nation's economy.
The telecommunication conglomerate has been successful enough in generating foreign
direct investment which has been useful for their growth and development. The company also
exports its services to several countries through adequate supply chain process which has
helped them in generating foreign income. This has led to economic growth and development of
Malaysia.
Effective logistics management involves integration of various services like packaging,
inventory storage, warehousing and transportation. Effective and efficient execution of these
services reduces the overall cost for the company and increases their profit.
Consumer is the king of the market and it is imperative for every business to satisfy
consumer needs and wants. Axiata company provides quality services to their subscribers by
using effective logistic and transportation facilities. This also increases the brand image of the
company. The role of logistics is not only important for local economy but also for the
international economy. Poor logistic services can hamper the global economy as well. Logistics
are an essential part of supply chain services that facilitates easy movement of goods and
services.
With the increasing use of technology in the entire supply chain and logistics sector, it
has become much easier for companies to to track their products and services incessantly.
Also, these companies can reduce time wastage and even optimise their flow of services.
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They also promote optimum utilization of resources by systematically analysing the
demand and the indulging in movement of goods and services. The additional goods and
services are stored in the warehouse and they are moved as per the demand occurs.
Q2. From your point of view, what are land transport infrastructures can support a seaport
operation to gain competitive advantage? Support your answer with relevant examples.
Transportation is basically concerned with movement of people, goods and services
from one place to another. There are various source of transportation like land, water air and
rail.
In order to ensure smooth transportation there requires an adequate infrastructure to
support them. Therefore, land transport infrastructure include all the roads, terminals and
tunnels to facilitate easy movement.
On the other hand, Christopher.M states that a seaport is a land facility located inside the
harbour that is used for the purpose of loading and unloading cargo. Every seaport has its own
capacity that states the amount of cargo or goods that can be handled by it. Both land transport
and seaport infrastructures are extremely important for the movement of logistical goods and
services. They bridge the gap between the producer and the consumer.
Malaysia is a developing economy and with adequate transportation facilities the country
holds the potential to boost its economy. They needs to up its game in the transportation
sector.
China is all set to invest in Malaysia's east cost rail line project. The railway line will
connect various cities of Malaysia and is estimated to cost over 55 billion. Apart from the rail line
construction, the country is all set to build a double lane highway connecting the town of Bandar
Sungai Long to Ukay Perdana. With an estimated length of 36.16 kilometres the highway is
named as East King Valley Express. Another triple lane highway called Sungai Besi-Ulu Kelang
Express way will connect direct cities of Kojang to Segam within a distance of 31.8 kilometres.
These are some of the big budget infrastructure projects that will play an important role
not only in the growth and development of Malaysia but also in facilitating easy exports and
imports.
In the view point of Murugan. N, Land and sea transport are both inter connected in one
way or the another. Certain land transport infrastructure like harbours, warehouses, refuelling
depots and sea ports are major sources that connect land to water and help in easy movement
of goods and services.
Air Asia is a Malaysian airline that fly to more than 165 destinations in 25 countries. It is
headquartered in Kuala Lumpur, Malaysia and employs around 17000 people. The company
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was founded 25 years ago and is a continuous importer of airline engines and other parts from
different countries. Intermodal freight transport requires more than one mode to transport goods
and service from one country to another. This is an excellent and fast method of transportation
as it reduces the cost of cargo handling and also improves the level of security.
Support of land infrastructure to seaport operations also provide various other cost
benefits because of fuel efficiency in sea. This also leads to economic growth the country
especially the particular state or town where the sea port is located.
It is imperative for a developing country like Malaysia to develop major parts in and
around the country that connects them to other nations. This will further promote trade and as a
result the GDP of that company will improve. An improvement in the port infrastructure will also
improve their capacity to manage logistics. The country is a leading exporter for electrical
products, palm oil, petroleum and liquefied natural gas. On the other side, the country leads in
importing machinery parts, broadcasting equipments and crude petroleum.
If a developing economy like Malaysia needs to achieve competitive advantage over
other nations then it is compulsory for them to improve their land transport and sea
infrastructure. The country must also link land and sea infrastructure if they wish to achieve this
advantage.
 Cost reduction: Movements of goods and services through intermodal freight transport
will help the country to achieve cost benefits because a two way transportation system
is better than single channel. Transportation through road and air requires huge fuel
whereas transportation through sea is comparatively cheaper. This can help the
country in minimizing costs and maximizing profits. (Ramstetter, E.D., 2019).
 Improved security: The EXIM (export-import) goods are subject to theft and robbery.
Using a dual mode for supply chain services can reduce the chances of theft and would
be beneficial for the country.
 Faster transportation: Interlinking road and sea is indeed a good sign as it can help in
faster movement of goods and services from the place of producer to the place of
consumer. This is beneficial as it will lead to improvement in brand image and goodwill.
 Environment friendly: Linking road infrastructure to sea port definitely reduces the
carbon footprints and is beneficial for the country in the long run. Trucks and buses
emit around 20 pounds of carbon dioxide whereas pollution caused by cargo ships is
much less. Hence, this is another potential benefit of supporting land transport
infrastructure to seaport operations.
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The importance of following a systematic supply chain service by Malaysia cannot be
ignored. Also, this will definitely benefit them in the long run and whether it is companies or
countries, everyone can achieve competitive advantage by adapting this factor.
PART B
Q1. “Production Abroad” is an alternative to direct exporting. Do you think that Malaysia is ready
for this concept? How would the “One-Belt-One-Route” (OBOR) influence “Production
Abroad”?
Production abroad or manufacturing offshore refers to a concept wherein the company
relocates its production and operation of goods and services into another country. In
accordance with Hernandez and Boero, (2018), the concept of production abroad is increasing
because of the reason that in other countries there might be low labour cost and also it can help
the companies in tapping new and developed market. On the other hand, Golovatenko,
Umansky and Dorofeev, (2016), argues that this can also be disadvantageous because of the
reason that this can be an expensive and time consuming method.
Direct exporting on the other hand is defined as the producer of the goods directly sell
the goods and services within the international and globalised market to the end user. In the
words of Bai, Krishna and Ma, (2017), direct exporting refers to as selling directly to the
customers who are interested in the products of the company rather then going for third party
distributors. It is helpful for the exporting companies because here the profits of the company
are higher because there is no involvement of the intermediaries between the trade (Direct
Exporting Advantages and Disadvantages, 2019). But Estapa, Feen and Breves, (2019), argues
that direct exporting is much time consuming and requires a lot of money.
For a developing economy like Malaysia it is not advisable to manufacture in foreign
countries on their own because it is a risky idea. The biggest Malaysian multi national
companies like Genting group, Petronas Gas Berhad and CIMB group are located overseas as
well.
For other Malaysian medium scale and small scale companies, it is advisable that they
do not indulge in production abroad or they must form a merger, joint venture while entering into
a new country and manufacturing there.
The One belt one route (OBOR) is a strategy adopted by China's President Xi Jinping
and its main objective is to improve the trade connectivity and cooperation between various
continents like Asia, Europe, North America and Africa. The President aims to partner up with
more than 28 countries world wide. OBOR strategy will facilitate to improve infrastructure
facilities, roadways, railways, maritime ports, oil and gas pipelines, and associated projects. It is
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expected that China would invest $100 billion to fund and boost up their OBOR strategy. The
associated partners in OBOR are Pakistan, Malaysia, Indonesia, Kyrgyzstan and Tajikistan.
(Aoyama, 2016.)
The OBOR strategy can prove to be beneficial for the Malaysia as the strategy focuses
on cross country development where China will indulge in developing infrastructural or
transportation facilities in developing countries of Asia, Africa and Europe. In return, Malaysians
can also indulge in foreign production and they would be offered attractive subsidies on setting
up a factory or a plant overseas. The strategy will promote trade between different nations for
the purpose of mutual economic benefits. Also, Malaysia can be a suitable hub for China for
executing their made in china policy by setting up new factories and headquarters of MNC's.
Malaysia will have significant benefits from the OBOR strategy because this will help the
country in various ways as
 Kuala Lumpur, Malaysia is very close to Malacca waterways which is the second busiest
waterway in the world. Thus, these waterways will encourage easy trade through Cargo
Ships between Malaysia and China.
 Also, Malaysia is the largest trading partner of China in the ASEAN group (Association of
south east Asian nations) which gives them an upper hand as compared to other
countries when it comes to trade. (Tilman, 2019.)
Although in the view point of Pu (2016) OBOR strategy is a smart move by Chinese which can
help them in becoming a super power and future regional leader. The country wishes to take
every country under its confidence which will further help them to increase their currency 'Yuan'
value.
Malaysia has multiple advantages in directly exporting their goods and services like the
country can easily expand its markets and areas without any additional cost. Increasing exports
will ultimately lead to increase in production, hence the country can achieve economies of scale
which will be beneficial for them in the long run. Moreover, the Malaysian companies can invest
in research and development and develop a new product accordingly.
On the other hand, production abroad has its own set of advantages like reduced fixed
costs which means that in countries like India and China, the labour cost is extremely low
therefore manufacturing there will reduce the overall cost.
Also, producing in a foreign land would help the companies to develop better quality
products by analysing the needs and wants of target customers.
Tapping useful resources from abroad can turn out to be beneficial as this might reduce
their overall cost and would help them to become future market leaders in the industry.
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Production abroad for Malaysian companies can be successful if they adopt merger,
acquisition or Joint Venture growth strategies for entering into new market.
Question 2 Importance of documenting relating to import and export
Document is a written piece of paper either manually written or printed in electronic form
which provides relevant data and information to the reader. There is a great need of
documenting because they can be kept as record and proof which can be used in future if there
is any problem. When an individual starts a new business or comes in partnership then there
are many documents which it needs to file for the registration of the business. Similarly if any
one wants to do import or export then also they have to comply with many different types of
documents.
Import refers to as a type of business where in a domestic company purchases goods
from the foreign countries and sell them in the domestic country. On the other hand. Export
refers to as a business system wherein the company of the domestic country sells goods and
services in the foreign country and bring the money within the domestic country. In the views of
Fan, Li and Yeaple, (2015), both the type of business are necessary because it is beneficial for
the country. Since the business is between two different countries so there are many documents
required which the company has to fulfil for successful running of the business. Therefore, the
documentation is a necessity if it comes to import and export.
The first and foremost importance of documents in import and export is that since all the
countries have different set of business and different criteria and requirements of running the
business are different from country to country. Therefore, Niepmann and Schmidt – Eisenlohr,
(2017), articulates that there is a necessity for the company to know about the different papers
and documents needed to do trade between two different countries.
Importance of Export documents
In export there are many different types of documents required if a domestic company
wants to sell its goods and services within foreign country. According to the thoughts of Balsvik,
Jensen and Salvanes, (2015), the documents for the export plays an important role within
international marketing as it promotes easy and on time flow of goods and services to the
foreign countries and in exchange of that payment to the domestic country across the national
frontiers.
Another reason underlying the importance of documenting is that inter country trade
requires many different work to be performed so documents help in recording all the
requirements of the process of exporting. So this documents help in reviewing that all the rules
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and regulation of the foreign countries are being followed or not and to take some corrective
actions.
Another important of export documents is that it is an evidence that the exporting
company have been complied with all the requirements of trading within the foreign market.
According to Dauth, Findeisen and Suedekum, (2017), it can also be treated as an evidence if
the domestic country does not follow any of the guidelines or the rules and regulations then
corrective measures can be taken against the exporting company.
For example, the bill of lading is very important transportation document for exporter
which is important because of the reason that lading is a contract between the company
exporting goods and the shipment of carrier which is transporting the goods to the foreign
countries. The importance is that if the shipment does not reaches on time then the exporter
have the evidence in for of bill of lading.
Importance of import document
Import documents are type of written documents which are to be filed and maintained at
time of importing the products that is buying the product from the foreign countries. It is
necessary because of the reason that the documents helps in keeping a record that all the
requirements of purchasing goods from other countries are met or not.
Also, documentation helps in keeping a proof of the transaction being processed. For
example, document like sales contract is an important document. It is so because of the reason
that all the terms and conditions relating to the import between the two countries is mentioned
within the sales contract. Also, if these condition are not complied then what measures can be
taken are also mentioned in it.
Also, for importing the good the company needs to take many permissions and licenses
and certificate from government of the company and other legal authorities. So these permits
and certificates authenticates the company and its working. Therefore, Manova, Wei and Zhang,
(2015), says that other companies after seeing the licenses and permits gets satisfaction that
the company with whom the import business is carried on is safe and secure.
Another importance of the documentation for the importing company is that it helps in
protecting and safeguarding the integrity of the importing company as it is treated safe if proper
documentation are prepared. In the views of Ahmed, Appendino and Ruta, (2015), all the
regulatory bodies all over the world feels safe and secure while trading with them. At
international level it is very necessary for the companies to maintain quality and integrity of the
working and operations of the business.
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But Beņkovskis, Bērziņa and Zorgenfreija, (2016), argues that the documentation can
also help in increasing the goodwill of the company. Chen, Zhang and Zheng, (2017), articulates
that if the company complies with all the rules and regulations and guidance of authorities of
import then it increases the reputation of the company that it follows all the guidance which in
turn increases the market share of the company within the international market.
Like for example, the company must have good rating from any credit rating agency. So
if it will have a good rating then more companies will like to do trade with them.
In accordance with the opinion of Feng, Li and Swenson, (2016), with help of
documenting all the necessary things to be done for importing is noted down and time- to- time
reviewed. This is done with the intention of keeping a check on the whole process of importing.
And if there is any loop hole or missing then corrective measures are taken.
CONCLUSION
In the end it can be concluded that for delivering the goods and services logistics and
transportation plays an important and crucial role within the business world. Logistics is defined
as managing the goods and services since the raw materials come to the place and till the final
product is delivered to the consumer. In case of international business, the logistics and
transportation plays an important role because if the goods and services will not be delivered in
foreign countries on time then the company can suffer losses. Therefore, because of increase in
internationalization and globalization there is requirement of improving the logistics system.
Therefore, the present report started by discussing the importance and ways to improve the
logistics system and logistic capacity for the development of nation.
Further the assignment focussed on the land transport infrastructure and it also outlined
the fact that how these land transport supports the seaport operations in gaining competitive
advantage for the companies. Further in second part of the assignment the concept of
production abroad was highlighted and also it was discussed that how it is an alternative to
direct exporting. Next it demonstrated some facts that whether Malaysia is ready for production
abroad and how One- Belt- One- Route influences the Production Abroad. At last the
assignment helped in analysing the importance of documents relating to import and export.
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References
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Online
Direct Exporting Advantages and Disadvantages. 2019. [Online]. Available through:
<https://www.thebalancesmb.com/direct-exporting-advantages-and-disadvantages-
1953310>
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