International Shipping Case Study

This case study explores the international shipping operations of DB Schenker, a company that deals in delivering goods and services across different countries. It discusses the different types of trade laws, the importance of key documents, and various shipping options available. Recommendations are provided for effective international trade.

INTERNATIONAL
SHIPPING CASE STUDY
1

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
1 Different types of Trade Law...................................................................................................3
2 Export and import of DB Schenker..........................................................................................4
3 Importance of key document, laws and regulation for DB Schenker.......................................5
4 International trading Option.....................................................................................................6
6 Shipping options.......................................................................................................................6
7 Recommendation......................................................................................................................8
CONCLUSION................................................................................................................................9
2

INTRODUCTION
International business is exchange of products, services, capital, knowledge or
technology between various countries. It helps in growth and development of both countries and
effective utilisation of resource available through exporting surplus products and services in
different countries. This report is about DB Schenker that deals in international shipping in order
to deliver goods and service in different countries. It explains about trade laws, various document
that are need and shipping option available for DB Schenker.
1 Different types of Trade Law
International Trade laws included restriction and regulation, customs that are used to
govern trade between various countries. Government has made such rules for effective
international trade between countries through importing and exporting products and services
(Brooks, 2019). Therefore various laws that needs to be considered by DB Schenker while
operation its function is as follows:
Various laws while dealing with ship
International Convention for safety of life at Sea, 1974: This act illustrates that minimum
standard need to be followed for construction of safety ships and various safety equipments
needs to be present in the ship. It also illustrated that ship need to be continuously survey by
inspectors and certificate can be issued for effective operation of ship. Therefore DB Schenker
has to follow such law while operating its business.
Cross boundary finance: It state various financial arrangement that are made across national
boundaries such as letter of credit, depository receipts, banker acceptance are some of the
formality that need to be fulfilled by DB Schenker. These laws are implemented by government
so that finance can be easily available and effective trade between various countries as both have
difference exchange rates.
Dispute settlement: Various provisions are made by WTO and GATT for effective operation of
internal trade or shipping by settling dispute between two parties. There are various legal
document, legal instruction that need to be considered by DB Schenker while shipping
international (Hofmann, 2018). Such as Negotiate trade agreement of accession of WTO and
general trade agreement with compliance of laws such as tariff, quotas, customs duty that need to
be paid while trading international.
3

International Safety management code, 1993: This law stated that companies that trade
through international shipping need to have license to operate its function. Regular audit is
required in order to ensure effective and procedure, safety management system within shipping.
ILO Merchant shipping convention, 1976: This law explain that various legislations need to be
made by national administration related to labour issues. Such as medical fitness and working
condition of seafarers, number of working hours worker need to perform its function.
Carriage of goods laws: It describes goods and services that can be shipped through carriage in
international trade through air and sea (Femandez, 2019). Therefore various laws related to
safety, dispute, finance need to be followed by DB Schenker in international shipping for growth
and expansion of business.
2 Export and import of DB Schenker
Maritime London mainly operates its business in Germany, United Kingdom and import
and export products and service across different nation. The company is well known for
providing best shipping services to customers that want to provide their products and services
across worldwide to enhance their market share and profitability. It have high standard and
qualitative products that helps in meet needs of transportation or export of products and services
across various countries such as Australia, America, Bangladesh, Nepal, China, Demark, Greece
and Italy. DB Schenker mainly imports and exports its products and services with United
Kingdom and Australia offering essential products such as home care and personal care. There in
order to export products from United Kingdom to other countries it needs to follow specific
procedure and laws for effective operation of shipping business (Xhelilaj and Sakaj, 2018). DB
Schenker has office across 2000 location in the world and offers transport services through land,
air and shipping. The company offers fast delivery services within limited time period at low cost
thus it helps firm in gaining competitive advantages. Special in trade products and service
through shipping so that products can be delivered within limited time and cost. It has taken
loans from bank and financial institute for establishment and smooth operation of business.
Financial credit provided by banks such as letter of credit support DB Schenker in international
trade and business. Company have strong brand image that helps in getting quick and
appropriate finance for proper operation of business and achievement of objectives. Specific
portfolio of customised solution helps in meeting special needs and requirement of each
4

individual. Therefore company has followed rules and regulation of both countries while
operating its activities and function (Xu and et.al., 2020).
3 Importance of key document, laws and regulation for DB Schenker
Key document, law and regulation that need to be considered by DB Schenker are
Performa Invoice, Commerce invoice, packaging list, certificate of origin, shipper letter of
Instruction, bill of lading and bank Drafts. It may also include custom forms and license to
import products and services within country. In order to trade international shipper company has
to make Performa invoice that state to arrange sufficient finance for trade, appropriate import
license and an open letter of credit (Coşar and Demir, 2018). Performa invoice helps in
identifying buyer and seller of products, detailed description about good that are in transit, its
price and term of agreement to pay amount of sales. It also offers useful information such as date
at which products will be delivered to customers and quoted currency in order to avoid conflict
in future. Commerce invoice is another document that describes detail of entire export
transportation such as purchase order number, order number and reference number of other
customers, additional bank details and information related to mode of payment. Therefore
commercial invoice are important for DB Schenker so that it can of certain issue such document
can be used to resolve problem. Packaging list is another document that needs to be completed
by DB Schenker in international shipping to estimated number of products that are shipped
through company to various countries. Bank of company also required all such information of
packaging in order to grant letter of credit. Packaging document are also used by custom officers
to know about destination from which the package has come thus provide comfort and easy to
them. Certificate of origin is documents that are required by some of the countries to know about
detail of manufacturing of products (Gani, 2017). DB Schenker has get signed certificate of
origin by paying additional charge to enhance validity of documents and increase its brand
image. Bill of lading is also essential for effective international transport between countries as it
is contract between shipper of good such as DB Schenker and exporter that want to send
products to other countries. It is a type of receipt that shows good have been picked up and
destination at which they will deliver. One of the most important documents that are filled by
company is dangerous goods forms when it knows that good in which it deals are hazardous for
people and environment. Therefore, DB Schenker while exporting hazardous good required to
fill such document and assign highly skilled, knowledgeable employees to take care of such
5

products while they are in transit or at time of packaging, labelling and proper documentation.
DB Schenker has also prepared bank draft in order to transfer ownership of products and service
from seller to buyer in exchange of funds. It is also known as documentation collection as
different crucial document is attached to bank draft and cover letter (Papapostolou and et.al.,
2016). Thus, it can be stated that various document and rules and regulation need to be followed
by company in international shipping to avoid penalty and uncertain situation that may impact on
profitability of firm.
4 International trading Option
From the above analysis it can be illustrated that various rules and laws are made by
government for continuous and effective operation of trade overseas. DB Schenker should follow
all laws related to safety and security of ship and the way product and service need to be
transmitted in ship. It also has to follow ethical trade practice for long term trade relationship
with more countries and expand its business worldwide. DB Schenker by offering qualitative
services at reasonable rates is able to attract large number of clients to uses services of particular
company. Insurance policy can also be taken company in order to minimise risk of products that
are exchange through transit. It should also need to be completed by company various document
to transit good across worldwide and expand its trade across different countries. DB Schenker
can also expand its international shipping business in order countries through building strong and
effective relationship with other countries (Narula, 2019). Financial arrangement need to be done
in advance so that it can easily trade product from one country to another. Liberalisation of trade
policy and globalisation will provide opportunity to DB Schenker to expand its trade worldwide
with minimum restriction in term of tariff, quotas. Thereby it helps in saving time, money and
effort of company while trading products and services in different countries.
6 Shipping options
There are various shipping options i.e. ocean freight shipping which is highly famous
shipping option because it is used by various marines to import and exports products from one
country to other country. For example, Db Schenker offers their shipping services worldwide
and meets their customer objectives by offering high quality products on time. Let’s talk about
ocean freight which is described below:
Air freight
It is highly famous transport mode which is used by Db Schenker to import and export
6

good and services from one country to another country. By the method offers worldwide services
to different type of customers.
Ocean Freight
It is most common mode of transport which is used for importer and exporter. Goods are
shipped by ocean freight and sea freight. There are other international transport modes such as
courier, standard air freight, express air freight and others etc. all faster but these are more costly
as compared ocean freight (Lombardi, Maffia and Tricase, 2019). Larger volume products can be
shipped by this transport mode without investing high cost for shipping. It is too slow transport
as compared air freight because it operates by streamline ocean freight process. There are many
types of sea transport option such as:
Bulk carriers
It is best method of transportation which is used to transport grain, ore, wood ships and
others products. By the method can transport large quantity of products in other countries
without paying high cost. There is various sea shipping companies which exports and imports
it’s product to other country. They are around 800 feet long to carry bulk products.
General cargos ships
It is similar as bulk carrier but keeps different to each other based on four to five hold.
These type ships have refrigerator to keep perishable items. They are around 500 feet long but
carry large number of products.
Container ships
It is a standard in freight types which is used to ship primary but now it is used rarely.
The ships are designed to carry wide steel containers which are normally around 20 to 40 feet
long.
Tankers
It is also considered as most common ships which haul oil. there is various type of tankers which
carry different type of liquids and gases. The main disadvantage of tanker ship is that it captures
larger surface area but it can come in many different sizes along with wide spotting length.
Db Schenker is world’s famous ship which offers products services across the world and mainly
headquartered in Germany. It uses ocean freight and air freight transport mode for importing and
exporting goods and services (Chang and et.al., 2016). The reason behind is that these are cost
effective shipping mode and does not have to face uncertainty while transporting goods and
7

services to other countries. Cargo ships specially use by organization which keeps refrigerator
facility for carrying perishable items and it is around 500 feet long. While SMT shipping which
also offer global services like Db Schenker and headquartered in Germany. Bulk Cargo shipping
method is used by SMT shipping which is less expensive then air shipping. Norbulk Shipping is
other shipping company which is located in London but offers its services overall the world and
used air freight to export and import goods from one country and to other. Still Maritime comes
in second position as good shipping company base on the revenue.
There are several international laws which have to follow by organization such as good safe
shipping method and contract laws as well. There is an example to understand contract law such
as whenever organization offers logistic and transportation services to one to other country then
they have to follow overall rule of contract law. It is a type of agreement which tie trade
relationship between country and company (Ronsse and Rayp, 2016). Various countries i.e. UK,
US, Poland, America and other countries deals with shipping or transport companies based on
the Letter of Credit. In other word, Letter of Credit and insurance is the law which express that if
any shipping company imports and exports products to other country and conventional material
is destroyed due to ocean streamline and air crafting then gets guaranteed source of funds. Db
Schenker have to comply with this contract while offering shipping services in the global
countries.
Db Schenker provides international shipping on the basis of trade-offs laws in other countries.
For example, Letter of Credit and insurance is provided for countries and in return they also have
to give financial supports to the shipping company for recovery of loss (Michaelides and et.al.,
2019). So, it can be interpreted that trade-off is involved while delivering and receiving shipping
services.
7 Recommendation
The primary rule of shipping is that shipping company must provide good quality of
packaging so that easy to convey for everyone but De Schenker Ltd. Don’t follow this rule. Due
to ocean streamline damages various products. So, organizations have to face various hardships
while operating its services (Hildebrand, Brigham and Johansson, 2018). Avoidance of laws
have resulted in spoil of brand image and penalty thus increase cost of company and reduces its
profit margin. Safety law was avoided by company that was against protection and safety of
environment and health of people. So it need to take corrective steps for growth and expansion of
8

firm.
CONCLUSION
From the above report it can be concluded that various trade laws need to be followed by
Maritime London for smooth operation of international shipping. Maritime export and import
products and services in various countries in order to earn large number of profitability and
enhance its market share. It can also be concluded that key document and laws are important in
international shipping for carriage of goods and services for one place to another.
REFERENCES
Books and Journals
Brooks, M. R., 2019. National Shipping Policies and International Ocean Governance. In The
Future of Ocean Governance and Capacity Development (pp. 450-455). Brill Nijhoff.
Chang, Y.T and et.al., 2016. Economic impact of cruise industry using regional input–output
analysis: a case study of Incheon. Maritime Policy & Management. 43(1). pp.1-18.
Coşar, A.K. and Demir, B., 2018. Shipping inside the box: Containerization and trade. Journal of
International Economics, 114. pp.331-345.
Femandez, J. E., 2019. Paramount Clause and Codification of International Shipping
Law. Journal of Maritime Law & Commerce, 50(1).
Gani, A., 2017. The logistics performance effect in international trade. The Asian Journal of
Shipping and Logistics, 33(4). pp.279-288.
Hildebrand, L. P., Brigham, L. W. and Johansson, T. M. eds., 2018. Sustainable shipping in a
changing Arctic (Vol. 7). Springer.
Hofmann, B., 2018. Technological Arguing: How New Business Practices Shape the
International Environmental Regulation of Maritime Shipping.
Lombardi, M., Maffia, G. and Tricase, C., 2019. Sustainable Bulk-Packaging System for Sugar
Shipping: Case Study of the Enterprise Leader in Europe. Administrative Sciences. 9(4).
p.91.
Michaelides, M.P and et.al., 2019. Port-2-port communication enhancing short sea shipping
performance: The case study of Cyprus and the Eastern
Mediterranean. Sustainability. 11(7). p.1912.
Narula, K., 2019. Lowering emissions from the shipping sector. In The Maritime Dimension of
Sustainable Energy Security (pp. 187-209). Springer, Singapore.
Papapostolou, N.C and et.al., 2016. Shipping investor sentiment and international stock return
predictability. Transportation Research Part E: Logistics and Transportation
9

Review, 96. pp.81-94.
Ronsse, S. and Rayp, G., 2016. International shipping traffic as a determinant of the growing use
of advertisements by local shopkeepers: a case study of eighteenth century
Ghent. Business History, 58(4), pp.479-500.
Xhelilaj, E. and Sakaj, B., 2018. A review of leadership behaviour of maritime officers in
international shipping. Pomorstvo, 32(1). pp.76-79.
Xu, M and et.al., 2020. Estimating international trade status of countries from global liner
shipping networks. arXiv preprint arXiv:2001.07688.
10