Transportation and Distribution Management Report for Apple Company

This report provides an in-depth analysis of Apple's transportation and distribution management. It begins with an introduction to transportation and its significance, followed by an examination of Incoterms selection considerations, including EXW, CIF, DAT, DAP, and FOB, and their implications for Apple's international trade. The report then delves into carrier selection criteria, emphasizing the importance of consistency, secrecy, and security in Apple's transportation operations, along with the role of transportation managers. Furthermore, it explores carrier relationship management, highlighting the significance of Apple Authorized Service Providers (ASP) and the use of third-party logistics (3PL). The report recommends specific Incoterms and strategies to enhance efficiency, mitigate risks, and maintain strong carrier relationships, ensuring timely and secure delivery of Apple products. Finally, the report discusses the importance of maintaining the secrecy of Apple's contracts with other companies and the significance of non-disclosure agreements.

Running head: TRANSPORTATION AND DISTRIBUTION
Transportation and
Distribution

TRANSPORTATION AND DISTRIBUTION 1
Table of Contents
Introduction.................................................................................................................................................2
Incoterms selection consideration............................................................................................................2
Carrier selection criteria..........................................................................................................................4
Carrier relationship management.............................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................9

TRANSPORTATION AND DISTRIBUTION 2
Introduction
Transportation is considered as the important part of every organization. The movement of
goods, animals, and people from one place to another is known as Transportation. Road, cable,
rail, and air are the modes of transport (Robinson, 2013). The report is about transportation
management of Apple. The key agenda of this report is to analyze the efficiency of three features
of transportation management namely incoterms selection consideration, carrier selection
criteria, and carrier relationship management.
Apple is situated in America, it is a technological multinational company. In Cupertino of
California headquarter of Apple is established and its central aim is to grow and provide
computer software, consumer electronics, and online services. It is known that Apple Company
is the world largest information technology in terms of income and it has the position of world’s
second largest company in terms of mobile phone manufacturer after Samsung. The objective of
Apple is to provide new and innovative products to their customers that enhances the customer
satisfaction. Apple has brand loyalty and apple customers’ have earned a status of loyalty. It has
been recognized that in the world there are two sets of people, one set of people say that Apple is
not just a company it is a cause and another set of people say that Apple is not the cause it is just
a company (Koegler, et. al., 2013). In many countries, Apple operates its retail stores, online
stores, and iTunes store. Apple sells its product to small and mid-size businesses, government
customers, consumers. iPhone is the product line of the Apple smartphone with IOS operating
system. Apple pay and Siri are the services provided by iPhone to their customers. The
competitors of Apple are Lenovo, Dell, and HP. The vision of Apple is to provide the computing
understanding to its buyers and inspire professionalism all around the world by inventing
software, hardware and online assistance and the mission of Apple is to confirm the highest
standards of social responsibility.
Incoterms selection consideration
International Chamber of Commerce (ICC) is the one who published the trade term i.e.
Incoterms, they are used commonly in the trade contracts of national and international.
International trade becomes easier by using Incoterms as it helps traders present in different
countries to understand each other. It is very important for all the traders to choose incoterms for
the transactions in which he/she wants to involve. Incoterms are known internationally and cease

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the confusion in contracts of foreign trade by guiding buyers and seller understand their duties in
transactions. There are 11 common terms. It includes information about the place and time of
delivery, payment risk due to missed shifts from seller to buyer and it also maintain the
information of those who pay the amount of insurance and transport. Transportation facility of
Apple is very effective. The first category is EXW, the Incoterms in which Apple (seller) is
liable only for placing the goods available at the chosen location by Apple for the buyer to pick
the good from selected transportation carrier (Miller & Saldanha, 2016). After placing the goods
at the chosen location Apple does not have any responsibility, all risk and cost of transportation
are shifted to the buyer.
CIF stands for carriage, insurance, and freight, in this term duty of Apple (seller) is to assemble
and pay the transportation of goods and insurance of shipping through the named ocean. In the
term CIF, terminal handling charges of apple that are involved in the merchandise tariffs by the
transporter. The purchaser of the Apple product must inquire about whether THS is involved in
CIF or not.
DAT stands for Delivered at terminal that means delivery of Apple products once delivered
through the transportation mode, is sited at the buyer’s name at a nominated terminal. Terminal
denotes a place like container yard, road, warehouse, air cargo terminal, and rail.
DAP stands for Delivered at place which means that Apple is responsible for delivering the
product to the location decided from where the buyer can receive the products.
FOB stands for Free on board in which Apple (seller) is liable to organize the conveyance for
goods to a vessel chosen by the buyer at the nominated port of shipment that reflects that the
Apple product has been forwarded. The risk of the Apple’s product is transferred to the
purchaser if good is not founded in the vessel and buyer will be liable to bear all the cost (ACT
Logistics. 2017).
In the commercial transaction of Apple when anything goes wrong then incoterms help and
identify the responsible person between exporter and importer. The issues between two parties
are resolved by incoterms that disturb the transaction. The transaction of buying and selling that
takes place in Apple Company is considered as a contract. The contract involves all the
information of the parties and their accountability towards its risk, cost with their duties that can

TRANSPORTATION AND DISTRIBUTION 4
make the situation difficult while taking the decision about the accountability of the goods. It is
not important but it is common as it explains the standards and the terms used by both the
parties. Documentary procedures, distribution costs, and transmission risk are included in this
(Graham, 2013).
The chosen term of Incoterm, seller and buyer do not pay attention that there is a requirement of
the content in the contract of sales and condition of the terms must be similar (Malfliet, 2011).
Apple Company will receive help from the recommendations provided by these Incoterms for
decreasing the potential risk. In Apple, Company incoterms perform an important role in
confirming whether the international trade is completed in a standardized way or not. FOB is the
term recommended to Apple Company as it allows high control on the cost of freight and freight
itself. CIF is the term of incoterm in which risk is shifted to the buyer, therefore, it is
recommended to Apple Company. DAT and DAP both are different from each other, DAT has
been recommended to Apple Company as at the time when a product is delivered by Apple and
dropped from the arriving mode of transport, is protected with the buyer’s name. It helps the
company in reducing the risk and enhancing the competitive advantages. DAP and CIF are
different from each other but both help Apple Company in shifting the risk to the buyer at the
place where goods are delivered. In the term of DAP responsibility of buyer is to pay the
clearance cost and custom of import.
Carrier selection criteria
The process of explaining policies of future, goals, and investments to get ready for additional
needs to move product and people to endpoints is known as Transportation planning.
Transportation project viability is discussed as progress planning and local engineering. Apple is
a program which is scheduled to inform local authorities about the process of project
development and for helping them in decision making. The manufacturer who has shown
effective shipment growth is Apple; international shipments from ASUS, Lenovo, Acer down
and HP. Apple has made its place on the list of PC vendors worldwide.
In the below image it can be seen that in the 2015 year during the fourth quarter, 5.7 million PCs
were shipped by Apple for the market share of 7.5. One year ago Apple global shipment is 5.5
million PCs and with the market share of 6.7 percent. Overall year growth of Apple is 2.8
percent.

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Shipment of Apple products
Source [Clover, 2016]
Transportation of Apple Company is perfect. They deliver their products timely. It is important
for Apple to keep secrecy as their products are very advanced. Apple’s transportation goal is to
build consistency ability. Consistency ability describes that Apple has dependable products and it
has been checked by the manager of transportation due to his/her duty. The goal of transportation
manager is to be careful about the goals of the company. Apple is the company who show the
demo prior and launches its product in advance. Transportation manager should emphasis on all
the related points regarding the privacy of the product (Choudhary & Shankar, 2014). Further,
transportation manager of Apple Company should take care of the privacy of delivery point and
should not be exposed. For every company contract security is important. The information of
contracts of Apple Company with other company should be kept secret and its secrecy should be
ensured by the transportation manager. Quality of Apple product is very high with the high cost
so that is why transportation manager should keep the high security of the products while
exporting. Courier team, packaging teams, and verification team is maintained by Apple
Company so that products could not be damaged. Apple Company should ask their employees to
sign the agreement of non-disclosure so that private facts could not be revealed (Ennio, 2013).
Apple believes in the modification, change and when it makes a innovative change in its designs
and products, for the security of the process engineers inspects the process, environmental and
health risks. Risk mitigation plan is designed at the time when risk is identified by partnering
with the engineering team (Gustin, 2013). One of the features of Apple Company is to conduct
the online verifications, safety tests, and technical training after producing new products, to

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confirm whether the new products can be produced safely or not. To protect importers and
exporters of the Apple product from uncertainties and disturbances a backup plan and emergency
plan is formed (Rushton, et. al., 2014). The Apple Company is focused on definite measures of
legal and dues that have risen in the regular passage of business and it has not been completely
judged (Farahani, et. al., 2014).
It can be recommended that the Apple program should be framed effectively to provide clear
information to the local authorities and can help them in decision making. The goal of the
organization should be the goal of their transportation manager and to achieve these goals
manager should be very efficient and skilled. The secrecy of the Apple’s contract should be
ensured by the transportation manager.
Carrier relationship management
Balance should be maintained by the team of effective carrier relationship by encouraging on
behalf of transporters while filtering the conclusions of business for carrier partners. Without the
support of carriers, Apple will not be able to provide services to their customers. A business that
can offer facilities legally with the Apple products is known as Apple Authorized Service
provider (Apple ASP) although the Apple products warranties are held by different entities. If
the customer will avail the services other than authorized service provider than that provider will
not provide warranty feature. The providers of Apple services have full status of ASP, which
allows authorities to operate all the Apple products (Clover, 2016). For the Apple’s ASP
program, business should be entitled to this program with a recognized reseller, service provider
or educational institute in the area where there is the presence of Apple as well as their direct
service provider. In that program of apple, an individual is not allowed to apply. Service
providers should follow certain rules to generate audited financial records and have a credit line
in according to the Apple local financial representatives. Apple Certified Macintosh Technicians
should accomplish services for Apple products (Wuerthele, 2016).
It can be recommended that Apple Company should retain and manage their carriers as without
their support Apple will not be able to entertain their customers. All the service providers of
Apple should follow the program of ASP so that secrecy of the product innovation can be
maintained.
Two primary avenues

TRANSPORTATION AND DISTRIBUTION 7
Source [Wuerthele, 2016]
3PL known as third-party logistics in supply chain and logistics management in that company
uses third-party business for outsourcing company's element for achieving the service
accomplishment (Aguezzoul, 2014).
Companies like Deloitte and Apple have worked before. The practice of an Apple-centric is
being increased by Deloitte that will have more than 5,000 strategic advisors. These advisors are
known as the advisor who focuses on serving modifications in the business workflow in overall
business, research and development, inventory management, back-end systems and customer-
facing functions (Zhang & Fong, 2014). “Enterprise Next” is the program generated by Deloitte
and Apple, to improve the process of issues resolution by fast technology. Deloitte is a company
working with Apple and is known as the ideal partner as it provides advice to the Apple team to
implement committed strategies. Partnership with Deloitte is helping Apple to increase their
business and increase their capabilities (Morris, 2016).
Conclusion
In the conclusion, it can be said that transportation and distribution are very important for all
business or organization. In this report Apple Company is chosen, it is the leading company in all
over the world. The merchandises offered by Apple are the high range which increases the
responsibilities of transportation manager. In this report, three sections are discussed Incoterms
selection consideration, carrier selection criteria, and carrier relationship management. Incoterms

TRANSPORTATION AND DISTRIBUTION 8
are the terms of trade used in the contracts of business. Incoterms are used by Apple in its
contract. Carrier selection criteria involve carrier selection, transportation planning such as
consistency, product protection, availability of equipment and carrier freight of damaged
products. For Apple Company carrier relationship management is very important.

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References
ACT Logistics. (2017). Incoterms. Retrieved from: http://actlogisticsinc.com/incoterms/
Aguezzoul, A. (2014). Third-party logistics selection problem: A literature review on criteria
and methods. Retrieved from:
https://econpapers.repec.org/article/eeejomega/v_3a49_3ay_3a2014_3ai_3ac_3ap_3a69-
78.htm
Choudhary, D., & Shankar, R. (2014). A goal programming model for joint decision making of
inventory lot-size, supplier selection and carrier selection. Computers & Industrial
Engineering, 71, 1-9.
Clover, J. (2016). Apple Maintains Mac Sales Momentum Amid Overall Worldwide PC Market
Decline. Retrieved from: https://www.macrumors.com/2016/01/12/4q15-pc-sales/.
Ennio, C. (2013). Transportation Systems Engineering: Theory and Methods. Retrieved from:
http://www.springer.com/cn/book/9781475768732
Farahani, R.Z., Rezapour, S., Drezner, T., & Fallah, S. (2014). Competitive supply chain network
design: An overview of classifications, models, solution techniques and applications.
Omega, 45, 92-118.
Graham, A. (2013). Understanding the low cost carrier and airport relationship: A critical
analysis of the salient issues. Tourism Management, 36, 66-76.
Gustin, C. M. (2013). Trends in computer applications in transportation and distribution
management. International Journal of Physical Distribution & Logistics Management,
25(4), 73-79.

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Koegler, A., Moghaddam, H., Haas, C., Wocher, B., Hartig, S., Rajamohan, D., & Ronnewinkel,
C. (2013). U.S. Patent No. 8,396,749. Washington, DC: U.S. Patent and Trademark
Office.
Malfliet, J. (2011). Incoterms 2010 and the mode of transport: how to choose the right term. In
Management Challenges in the 21st Century: Transport and Logistics: Opportunity for
Slovakia in the Era of Knowledge Economy (pp. 163-179). City University of Seattle
Bratislava.
Miller, J. W., & Saldanha, J. P. (2016). A new look at the longitudinal relationship between
motor carrier financial performance and safety. Journal of Business Logistics, 37(3), 284-
306.
Morris, R. (2016). The fundamentals of product design. Bloomsbury Publishing.
Robinson, A. (2013). What is Transportation and Logistics Management and Are They the Same
Thing? Retrieved from: http://cerasis.com/2013/08/13/transportation-and-logistics-
management/
Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Wuerthele, M. (2016). Apple partners with leading business service provider Deloitte for
enterprise IT. Retrieved from: http://appleinsider.com/articles/16/09/28/apple-partners-
with-leading-business-service-provider-deloitte-for-enterprise-it
Zhang, H., & Fong, M. H. (2014). U.S. Patent No. 8,737,421. Washington, DC: U.S. Patent and
Trademark Office.