Logistics and Supply Chain Management for Live Oyster Transportation from Australia to China

This report discusses the challenges and steps involved in transporting live oysters from Australia to China, including the use of piggyback transportation, CIF and DAT incoterms, and proper packaging. It also covers important considerations for importers and risks for exporters, as well as the necessary documentation for customs clearance.

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics and Supply Chain Management
Name of the Student
Name of the University
Author Note

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Table of Contents
1.0 Introduction......................................................................................................................................3
2.0 Discussion........................................................................................................................................3
2.1 Challenges to the shipment..........................................................................................................3
2.2 Steps in transportation process....................................................................................................4
2.2.1 Export haulage......................................................................................................................4
2.2.2 Export clearance...................................................................................................................4
2.2.3 Storing the goods in the origin port......................................................................................5
2.2.4 Freight process......................................................................................................................5
2.2.5 Import haulage......................................................................................................................5
2.3 Risks for the exporter...................................................................................................................6
2.4 Important considerations for the importers..................................................................................6
2.5 Route of shipment........................................................................................................................6
2.6 Payment process..........................................................................................................................8
2.7 Incoterm.......................................................................................................................................8
2.8 Contract........................................................................................................................................9
2.9 Packaging.....................................................................................................................................9
2.10 FCL/LCL.................................................................................................................................10
2.11 Customs clearance...................................................................................................................10
2.12 Documents required picking up the shipment from the Chinese ports....................................11

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3.0 Conclusion.....................................................................................................................................11
4.0 Reference List................................................................................................................................13

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1.0 Introduction
The current trend in the international business is much more competitive than it was a
few years ago. This is mainly due to the reason that in the current time, goods are being exported
and imported throughout the world. In addition, all types of goods including both perishable and
non-perishable goods are also being exported. Thus, these factors are leading to the gain in
importance for the transporters and the shippers (Yang & Wei, 2013). This is due to the reason
that, efficiency and effectiveness of the shipping lines and the transporters determines the safe,
secure and swift transportation process of the consignments.
This report will discuss about the entire transportation process along with the process of
documentation that will be required in transporting the live oysters from Australia to China. It is
told that 10000 ton of live oysters will be imported from Australia to China.
2.0 Discussion
2.1 Challenges to the shipment
One of the major challenges that are being anticipated in transporting the live oysters is
the perishable nature of the items. This is due to the fact that oysters are perishable in nature and
it should be transported in minimum time possible (Mason & Nair, 2013). The less time will be
incurred in the transportation process, the more will be the time for processing the products in
the further stage. However, the major challenge is to have fast, safe and cost effective way of
transporting the live oysters.
Another major challenge is to maintain proper infrastructure in transporting the oysters.
This is due to the reason that oysters cannot be transported in any containers. They should be

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transported in controlled temperature and facilities in order to make them stay alive throughout
the process.
Another challenge is the cost of the transportation process. This is due to the fact that
having fast shipping options such as airways will incur huge cost. On the other hand, slow
process of transportation such as waterways will cost less but it will take more time.
The last challenge will be in relation to the rules and regulations in terms of importing
food items in China. They are having different rules and regulations regarding the importing of
seafood from other countries. Thus, it will be difficult to comply with all these regulations and
transport the items in minimal time.
2.2 Steps in transportation process
2.2.1 Export haulage
The first step involved is transporting the goods from the exporter’s place to the
forwarder’s place. This process will ensure that all the goods are accumulated in one place and
they are ready for final process of transportation. In this case, piggyback process of
transportation will be initiated. This is due to the reason that transportation of oysters should be
made in less time. Initiation of the piggyback will ensure that railways and the roadways will be
used and lees time will be incurred in transporting the goods to the forwarder’s place (yang et al.,
2014). Using of railroad will also ensure those roads disturbances will not get emerge.
2.2.2 Export clearance
The next step is clearing the documentation process in export customs. This is important
due to the reason that without having cleared certification, the goods cannot be decked with the
shipping lines. In this case, the licensed custom house brokers will be used. They will help in

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clearing the documentation process at earliest and it will take less time in decking the final
consignments with the shipping stream.
2.2.3 Storing the goods in the origin port
In this step, the final consignments will be forwarded to the origin port where the final
inspection and certification will be initiated. In this case, dry port can be used if the origin port is
not having the facilities to store perishable items. However, it is to be noted that dry port should
be nearer to the origin sea port in order to incur less time in transporting the goods from dry port
to sea port. It is also to be ensured that all the inspections and certifications should be done itself
in the dry port. This will prevent the loss of time in final loading of the goods with the shipping
stream.
2.2.4 Freight process
It is the most core step of the entire process of transportation. In this step, ocean freight
will be used in transporting the good from Australia to China. The sea distance between
Australia and China is 7,448 kilometers. Moreover, the sea route is chosen due to the reason that
the route will be direct involving only the Pacific Ocean. Moreover, seaways will also ensure
that the cost of transportation will be lower (Visser, Nemoto & Browne, 2014).
2.2.5 Import haulage
The last step will be the import haulage. This step will involve unloading the goods from
the freight and transporting them to the destination port. This step will also involve checking of
the goods according to the papers and documents. In this step also, piggyback transportation will
also be initiated in order to cut the cost along with incurring less time. The responsibility of

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shipping line will get stop from this place when the importer will take the charge of the
consignments.
2.3 Risks for the exporter
One of the major risks for the exporter will be the physical risk. This is due to the reason
that accidents can happen in any point of time in the sea freight. This will cause physical as well
as financial loss (Coleman, 2013). Another risk that will be faced by the exporter will be the risk
associated with the payment. This is due to the reason that, in case of using of letter of credit, the
exporter will always be at risk regarding receiving the payment from the importer’s bank.
Exporter will also face the risk of financial loss in relation to the change in the exchange rate.
This is due to the reason that if the valuation of Chinese yeans against Australian Dollar gets
changed, and then it may have negative impact on the exporters.
2.4 Important considerations for the importers
It is important for the importers to have proper letter of credit from the Chinese bank with
having SWIFT code. Agricultural bank of China with having SWIFT code of ABOCAU2S will
be selected. This is due to the reason that this bank is having their branch in Australia and thus it
will enable the exporter to have the access to the finance. It is also important for the importers to
have the bill of lading from the shipper and the shipping line is nominated by the importer. It is
important for the importers to check the consignments in the destination port according to their
required standards.
2.5 Route of shipment
Fremantle harbor port will be used to export the goods due to the reason that it is the largest
most accessible port in the Western Australia. Thus, being the shipper is from the Western

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Consignor’s place
Forwarder’s origin place
Fremantle harbor
Tianjin port
Forwarder’s destination
place
Consignor’s place
Australia, it will be beneficial to use this port in order to have less time incurred in
transportation. On the other hand, Tianjin port will be used as the import destination due to the
reason that it is the only port which is nearest to the Forbidden City of China that is the location
of the importer. Thus, the route of shipping is being designed by considering the less time
incurred in the process. The major objective of this shipping route is to have less time incurred in
the transportation process.

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2.6 Payment process
Letter of credit will be used as the payment option. This will have safe options for both
the importers and exporters. This is due to the reason that initiation of the letter of credit will
ensure that importers will only pay the money by receiving the right goods (Schmidt-Eisenlohr,
2013). On the other hand, exporters will also have the safer options in terms of payment due to
the presence of banks in the transaction process. The shipping line will be paid by the exporters
upon receiving the bill of lading.
2.7 Incoterm
One of the major incoterms that will be used is CIF. This incoterm will e used in order to
cover all the cost including the cost of insurance. According to CIF (Cost, Freight and
Insurance), it is the responsibility for the exporter to cover all the cost up to the shipment to the
destination port. Moreover, in the case of CIF, it is also important for the exporter to insure the
value of the goods up to the 110 percent of their value. Thus, from the perspective of the
shipping line, CIF is a safer option due to the cost of insurance covered by the exporter and the
payment of the shipping cost at the very first stage by the exporter.
Another incoterm to be used is DAT. This refers to Delivered At Terminal. According to
this incoterm, it is the responsibility of the exporter to cover all the cost including the charges of
exports, shipping charge and unloading charge. Thus, in this case also, the risk of the shipping
line will be less compared to other incoterms (Bergami, 2013). In this case also, carriers will get
their payment from the exporters from the very first stage of the transportation process.

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2.8 Contract
Choudhri and Hakura (2015) stated that in global marketplace, the shipping agents plays
an important role in taking the products from the exporters and make timely delivery to the
importer. The contract for the shipment includes the details of the offer, the acceptance
statement, consideration and intention to create legal relations. The acceptance statement must
be in identical terms with that of the offer which will be beneficial for the shipping agent in
terms of maintaining transparency and loyalty. Moreover, the consideration statement comprise
of the ‘price’ of the two sides of the bargain. Lastly, the intention to create legal relations
document comprised of statement related to the agreed on treatment of the agreed on the legal
consequence of the agreement. Moreover, the contract should also highlight the safeguarding
clause, loading /discharging survey, vessel´s lay/can and nomination, vessel´s suitability, vessel
´s notice of readiness, demurrage/ detention, transshipment, bills of lading, vessel´s
classification and age, loading and stowage on vessel, taxes and dues and deviation en route
All these elements provides small details to the exporter company through which they can easily
reply on the shipping agents and the shipping agents can also perform their operation based on
the contracts. The contract should also contain the details of the compensation amount if any
oyster will found dead.
2.9 Packaging
Das et al. (2013) stated that oysters should not be packed in standing water. Hence wet-
lock boxes with liners and gel ice will be used. The box will be made more protected by using
insulated Styrofoam boxes. The boxes are designed with ventilation so that air can be passed
through the boxes as absence of air makes the oyster dead. Each of the container is then boxed in
a wooden case and the outside of the box comprised of the details like name and address

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expediteur, name and adress costumer, salubrity number, weight, calibre, name of oyster,
number of oysters, packaging date, expiry date and batch number.
2.10 FCL/LCL
The term FCL is termed as “Full Container Load” and is used in this case for shipping
live Oyster from Australia to China. Less than Container Load (LCL) is not required as this
shipment need full containers. All the containers are of height 20 feet which have the payload
capacity of 25,000 kg which is equal to 25 tons. Thus, 10,000 tons of oysters need 400 containers
to be filled. Thus, only FCL will be considered and not the concept of LCL.
2.11 Customs clearance
The export country is Australia and the export documents for customs clearance should
include commercial invoice, packing list, bill of lading, certificate of inspection, certification of
Insurance, certificate of origin, bill of exchange and shipment advice. The Australian
government also takes 10% of the total goods charge as GST but in this case, Seatrade
Fowarding Worldwide is already registered for GST and hence all the GST tax are free for the
company. The cost for 20 feet container for Dry Non-Hazardous products is AUD435 and thus
the total tax payable to the government is AUD174000.
The forwarder need to get the customer clearance documents from China that comprised
of bill of lading, invoice, shipping lists, insurance policy, customs declaration, sales contract,
Hygiene / Health certificate, Sanitary Certificate, Tariff rate quotas (TRQs), Certificate of free
sale, Sample of original label, Sample of Chinese label along with inspection certification
issued from General Administration of Quality Supervision, Inspection, and Quarantine
(AQSIQ). The invoice should present with the number and date of issue, name and address of
shipper and receiver, description of goods, VAT numbers for shipper and receiver, harmonized

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system code, customs registration codes, value of goods, country of origin, payment terms,
delivery terms.
2.12 Documents required picking up the shipment from the Chinese ports
The importer from China needs to show some documents in order to prove their
genuineness. These documents used in port clearing contained Air waybill (AWB) which shows
the details of the sample of original label and the charge of shipments. The other documents are
Bank Bill (BB), Bank Guarantee (BG), Bill of lading, Certification of origin, details about the
insurance policy, invoice details, packing list and the amount of the received objects, pro
forma invoice and registration document (RD).
3.0 Conclusion
This report highlights the export procedure of live oyster from Australia to China,
Forbidden city. This report discussed the detailed information of the challenges to this shipment,
packaging of the oyster shipment along with route of the shipment, payment, insurance,
INCOTERM, contract, packaging, FCL and customs clearance. This report shows that in order to
transport 10,000 tons of Oysters, the exporter need 400 containers which are shipped through
Ship. Moreover, details of amount of the Government Tax needed are also presented along with
the food certificates that should be shown for both the exporter and importer’s side. Thus, it can
be concluded that there will be different challenges to be faced in transporting the oysters from
Australia to China. This report discussed about these challenges and in accordance to that, an
effective and ideal process of transportation is being discussed. This report also discussed about
the shipment route to be used along with the payment options. Two most effective incoterms are
identified in this report, which will ensure the security of the shipping carriages. In addition, this

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report also discussed about the documents that are important in the import and export process
between China and Australia. The custom clearance certificates mainly includes commercial
invoice, packing list, bill of lading, certificate of inspection, certification of Insurance, certificate
of origin, bill of exchange and shipment advice that is required for bit the parties. However when
the shipment is received in China, the importer needs to show the port clearing documents,
which comprised of Air waybill (AWB), Bank Bill (BB), Bank Guarantee (BG), Bill of lading,
Certification of origin, details about the insurance policy, invoice details, packing list and the
amount of the received objects, pro forma invoice and registration document (RD).

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4.0 Reference List
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https://www.ato.gov.au/Business/International-tax-for-business/Australians-doing-
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Austrade.gov.au. (2018). About Exporting - A step-by-step guide to exporting - Austrade.
[online] Available at: https://www.austrade.gov.au/Australian/Export/guide-to-exporting
[Accessed 20 Apr. 2018].
Australia.gov.au. (2018). Importing and exporting | australia.gov.au. [online] Available at:
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20 Apr. 2018].
Bergami, R. (2013). Managing Incoterms 2010 risks: tension with trade and banking
practices. International Journal of Economics and Business Research, 6(3), 324-338.
Choudhri, E.U. and Hakura, D.S., 2015. The exchange rate pass-through to import and export
prices: The role of nominal rigidities and currency choice. Journal of International
Money and Finance, 51, pp.1-25.
Coleman, J. (2013). Why Exporters Need Export Credit. Global Policy, 4(1), 110-111.
Das, P.K., Hassan, M.K. and Akhther, N., 2013. Efficacy of Washing and Postharvest
Treatments on Shelf Life and Quality of Oyster Mushroom. Progressive
Agriculture, 21(1-2), pp.21-29.
Mason, R., & Nair, R. (2013). Strategic flexibility capabilities in the container liner shipping
sector. Production Planning & Control, 24(7), 640-651.
Schmidt-Eisenlohr, T. (2013). Towards a theory of trade finance. Journal of International
Economics, 91(1), 96-112.

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Statista.com. (2018). Imports to China. [online] Available at:
https://www.statista.com/topics/1471/imports-to-china/ [Accessed 20 Apr. 2018].
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Visser, J., Nemoto, T., & Browne, M. (2014). Home delivery and the impacts on urban freight
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Yang, C. C., & Wei, H. H. (2013). The effect of supply chain security management on security
performance in container shipping operations. Supply Chain Management: An
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