Transport and Distribution of SAIC

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Added on  2020-04-21

Transport and Distribution of SAIC

   Added on 2020-04-21

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Running head: TRANSPORT AND DISTRIBUTION OF SAICTransport and Distribution of SaicName of the StudentName of the UniversityAuthor’s Note
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1TRANSPORT AND DISTRIBUTION OF SAICIntroductionThe selected company for the fulfillment of this assignment is Saic. This is China’snumber one car manufacturing company headquartered in Shanghai. The company has a totalequity of 11.683 billion shares in the Chinese automotive industry. The company was originallyfounded in 1955 with the name Shanghai International Combustion Engine ComponentsCompany. The company became Saic motor Corporation Limited in the year 2011. The companynow manufactures complete range of vehicle products and services. Their products are availablein the international market with at least one facility in every continent. They have successfullyentered in the U.S., UK, Europe, South Asia and Australian market collaborating with some ofthe international motor companies. They have affiliation with Morris Garages, Maxus,Volkswagen, GM, SGMW, NAVECO, IVECO Hongyan and Shanghai Sunwin Bus Corp foroperating in both domestic and international market. The goal of the company is to build aninternational reputation for their innovative approach in automotive industry and introduce futurevehicles. They also focus on value creation for their stakeholders implementing market drivenstrategy. These strategic goals and values of the company have enabled them to climb 5 places inthe Fortune Global 500 list and now rank 41th (Saicmotor.com., 2017). This report will identify the incoterm used by the company for transporting anddistributing their products in the international market. It further indentifies the best incotermselection process that will help the company to attain a safe and cost effective distributionnetwork. The paper will also discuss about the selection process that should be considered duringselecting a carrier or shipping line for safe distribution. It is because; the distribution is directlyaffected by the proper selection of the carrier. Moreover, the relation between the carrier and
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2TRANSPORT AND DISTRIBUTION OF SAICshipper also has significant impact on the cost effective safe delivery process. Hence, both thefactors are discussed in the report to increase the profitability of the company. Incoterms Selection ConsiderationInternational Chambers of Commerce introduced the incoterm or InternationalCommercial Terms in the year 2010. They have dictated a number of terms under this (Stapleton,Pande & O'Brien, 2014). Various importers and exporters around the world use these terms inthe process of their selection of their mode of transport. Being an international automotiveorganization Saic requires an efficient incoterm in their sustainable international operation. Thecompany has two separate divisions. One is involved in the manufacturing automobiles and partsthat is the selected organization for the paper. The other division of the organization is involvedin the logistics. Having their own logistics division, the car manufacturing division of Saicutilizes its own logistics. However, their logistics division provides services to otherorganizations. Hence, it can be said that the Saic Motor utilizes Saic logistics for distributingtheir products within the Chinese market with their latest supply chain software. It helped themto internally manage the purchase orders, shipping product invoices. It also helps them inreducing the cost incurred for the transportation (Saic.com, 2017). The third party logistics alsohelps them in reaching their international market as Saic logistics and supply chain is present indiversified geographical zone. However, they can increase the efficiency in the distributionprocess by including the under mentioned incoterms.Incoterms Recommended for Saic MotorDAT
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3TRANSPORT AND DISTRIBUTION OF SAICDAT or delivered at terminal asks the shipper to deliver the goods and unload it at thedecided terminal. According to this incoterm, the manufacturer is responsible for the safety ofthe products until the products reaches to the final destination. Moreover, they are also liable tocover all the costs of transportation starting from export fee, carriage and unloading the productsat the final destination port. These final destinations mentioned are the ports or terminals of agiven city where the products will be delivered. Buyers are chargeable only after the goods areunloaded at the final destination. Anything out of schedule will be charged from themanufacturer. This increase the risk for the manufacturer as they will be chargeable for thedamage or delay occurs in the transit period (Bergami, 2013). However, it increases the controlover the product delivery as they will monitor the transportation process. Hence, Saic can utilizethis incoterm to maintain control over the products and transportation. Figure 1Delivered at TerminalFCAThe shipper or manufacturer according to this incoterm is responsible for delivering theproducts to the nominated place to the nominated carrier selected by the buyer. The cost for
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