Logistics Report: Analysis of EGMF Energy Pty Ltd's Supply Chain

This report analyzes the logistics management of EGMF Energy Pty Ltd, a power supplier, following a critical equipment breakdown in Santos Basin. Faced with a 36-hour deadline to restore power and avoid legal repercussions from a client, the report evaluates the optimal transportation methods for a backup loadbank and generator from various global locations, including Malaga, Marawi, and McMurdo. It explores the use of flights, considering custom clearance procedures and the potential for flight delays, and proposes ships as a backup plan. The report emphasizes the importance of insurance, specifically Goods in Transit insurance, to mitigate risks associated with theft, loss, and damage. It also discusses the application of CIF incoterms, payment methods, and legal requirements, including consumer protection in Brazil and the necessary procedures to avoid legal issues. Key challenges, such as the tight timeframe and equipment sourcing, are identified, along with strategies to overcome them. The report provides recommendations for EGMF Energy to ensure efficient and compliant logistics operations, ultimately contributing to a successful resolution of the power failure.

Running head: LOGISTICS
Logistics
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
This report deals with the logistics management of EGMF Energy Pty Ltd that is power supplier.
In Santos Basin their power supply has been cut due to the breakdown of the equipments. Hence,
the client is unhappy during this situation. This organization has only 36 hours to complete such
operation otherwise the client may take legal step against their company. It has been received
that flight is the best way of quick transportation of the goods. During the flight transportation,
custom clearance is necessary for this organization. Flight delay is a very common incident that
often occurs. Hence, for this reason an alternative way should be devised by this organization. In
case of flight delay this organization needs to transport their equipments via ships. On the other
hand, insurance plan needs to make to reduce the theft, loss and damage of the equipments.
Goods in transit insurance will be a helpful approach for such organization. Apart from this
collaborative work, proper communication, and fulfillment of the legal norm will be beneficial
for EGMF Energy Pty Ltd to carry out their logistic operation process in Santos Basin.

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Table of Contents
Introduction......................................................................................................................................4
Movement of the equipments in Santos basin.................................................................................5
Figure 1: Distance from Santos Basin To Malaga, Spain................................................................6
Transportation of the generator from Marawi city, Philippines to Santos Basin Brazil..................6
Transportation of the generator from McMurdo, station, Antarctica to Santos Basin Brazil.........7
Description of the incoterm.............................................................................................................7
Type of payment..............................................................................................................................8
Custom clearance.............................................................................................................................8
Discussion of the legal procedures due to the breakdown of the equipments.................................9
Consumer protection in Brazil.......................................................................................................10
Procedures that is taken by EGMF Energy Pty Ltd to avoid the legal issues...............................11
Key challenges that occurs during the installation of the equipments in Santos Basin Brazil
within 36 hours..............................................................................................................................12
Process to overcome the key challenges........................................................................................15
Discussion of Plan B if the original plan fails...............................................................................17
Recommendations..........................................................................................................................20
Conclusion.....................................................................................................................................21
References......................................................................................................................................23

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Introduction
Logistics involves in the implementation of a complex process to move a product from
one place to another. However, logistics also refers the flow of the goods from its origin to the
consumption areas (Christopher, 2016). In order to meet the demand of the customer logistics
should be done in a proper manner, as it is associated with the customer satisfaction. The
resources in a logistic include food, equipments, animals, abstract items and liquids. In order to
carry the physical items via logistics needs the integration of the information flow. Apart from
this material handling, inventory, production warehousing and security maintenance are also
included in the logistics management of the goods. Logistics management is considered as the
part of the supply chain management. Simulation software is used to manage the complexity in
the logistics management. This study deals with the logistics management in the context of
EGMF Energy Pty Ltd during the movement of o a loadbank.
According to the scenario, EGMF Energy Pty Ltd has made a contract with Mitsubishi
Heavy Industries to supply power generator. Santos basin is one of their drilling platforms.
However, a major powerful failure is occurred in this organization that affects the business of
EGMF Energy Pty Ltd with Mitsubishi Heavy Industries. However, to control such situation
they need a backup loadbank and a 240ft container within 36 hours. This is a big challenge for
such organization. On the other hand, there is no option of the requirement despite of
replacement of the equipments. Based on the enterprise resource planning system or ERP the
power supplier is able to manage their inventory that indicates that a similar loadbank can be
managed from Malaga head quarter. ERP is good process to manage the resources during the
crisis (Wang et al., 2016). Therefore, out of the two generators, one is present Marawi and other

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is present McMurdo. Apart from this during this situation, the technical staff is needed, which
can be found in Mongolia. Hence, it has been found that EGMF Energy Pty Ltd has been facing
issue to move these equipments and the workforce to Santos Basin as they have to finish this
shipping process within 36 hours. These major challenges may affect the business of such
organization with their client. Hence, it is necessary for this organization. The entire logistic
process that means, the cost, transportation and legal requirements will be discussed in this
study.
Movement of the equipments in Santos basin
Use of flight is one of the easy and quick way, to transport the good from one place to
another place. However, according to the case scenario, the EGMF Energy Pty Ltd needs to
transport two generators, technique and one load bank from different countries to Santos Basin,
Barzil in order to resolve the power failure. However, during the electronic dispute quick access
is required (Grant, Wong & Trautrims, 2016). For this reason, they need to use flight for the
transportation of the power bank within 36 hours. From Malaga to Brazil, flight takes 30 minutes
while from Marawi city to Brazil flight takes 24 hours. Therefore, from McMurdo to Rio de
Janeiro no flights are available for the transportation of heavy equipments. There is only one
option via shipping and it takes too much time.
Flight takes 18 hours from Mongola to reach Brazil. Hence, by using the flight the
transportation of this heavy equipment can be done. For this purpose, use of grader will be
helpful for such organization. However, transportation of the loadbank within a few hours is a
challenging work for a power supplier as many barriers may come in the transportation way

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(Entfernungsrechner.net, 2017). Thus, it is important for EGMF Energy Pty Ltd to choose the
area from which they are able to quick transport the generator.
Figure 1: Distance from Santos Basin To Malaga, Spain
(Source: Entfernungsrechner.net, 2017)
Transportation of the generator from Marawi city, Philippines to Santos Basin Brazil
Transportation of the equipment needs to done in a quick and legal process (Yilmaz &
Flouris, 2017). However, in the context of EGMF Energy Pty Ltd they need to identify the
location from which the generator of the loadbank will be transported within 36 hours. Hence,
from Marawi city, Philippines to Brazil the flight take 24 hours. Hence, this is the easiest way to
move the generator to the specific sector. However, by using the ships this process may be too
time consuming as a result EGMF Energy Pty Ltd will not able to complete their operation
within 36 hours. It has been found that through flight the transportation of the generator takes 24
hours, which is not a short time. On the other hand, if the organization selects transportation via

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ship then it may reduce the cost but it will take more time, which hamper the limited timing of
this operation.
Transportation of the generator from McMurdo, station, Antarctica to Santos Basin Brazil
Transportation via ship is a cost effective process but takes more time (Knabe & Schultz,
2016). However, in the context of EGMF Energy Pty Ltd they need a loadbank and a generator
to replace the power system. However, from Mcmurdo, Antarctica to Brazil there is no suitable
way for transportation via flight. On the other hand, EGMF Energy Pty Ltd is going to carry
heavy equiepments thus, proper transportation is needed. Hence, from Antarctica to Brazil there
is only ship for the transportation of heavy equipments. Hence, based on the comparison of
distance and shipping process Marawi city is suitable for EGMF Energy Pty Ltd rather than
McMurdo station for arranging the generator for load bank.
Description of the incoterm
Cost, Insurance and Freight or CIF is a vital type of incoterm that is applied by the buyer
during the transportation of the goods (phoenixfreight.com.au, 2017). Risks occur during the
passing of goods via ship, rail and air. However, in this incoterm the seller makes a contract with
the buyer regarding the insurance of the goods. This will minimize the risk of buyer regarding
the transportation of the goods. In the context of EGMF Energy Pty Ltd they chose the
transportation via air thus it is very common for them to face risk during the transportation of
such heavy equipments. CIF incotem during the use of air way will be helpful for such
organization to avoid the risk regarding the damage of equipments. In this incoterm the seller
takes responsibility during the transportation in terms of the damage of good. For the better
insurance planning and more security of the goods, further insurance by the buyer is needed

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(Kadłubska, 2016). In the context of EGMF Energy Pty Ltdthe they need a proper freight logistic
for the movement of the goods from different countries. However, this organization is going to
accumulate different equipments from different countries to replace their power failure system.
For this reason, CIF incoterm will be appropriate for this particular freight logistics.
Type of payment
Air transportation requires airway bills to clear the payment (Magnus & Piltz, 2016).
Transportation cost of goods by air is non-negotiable. However, it is important to handover the
airway bill while the cargo reaches to the destination in order to clear the custom. The payment
needs to be done before the shipment. However, the waybill is considered as the cargo receipt
along with delivery instruction. A letter of credit is used during the good transportation via
airway. On the other hand, the shipper uses their bank in order to collect the payment hence, the
airway bill needs to consigned by a bank. The consignee pays the bank for the transportation of
the good before its shipping (flexport.com, 2017). After that the bank provides this payment to
the airline along with instruction of release the goods. The goods remain in the warehouse of
airline till the clearance of the payment from the consignee and finally form the bank. During
this time storage, charge may be applicable for EGMF Energy Pty Ltd. The entire payment for
the transportation of the goods by airline is done through bank. In the context of EGMF Energy
Pty Ltd the goods are released after finishing the entire payment process of the shipping via
bank.
Custom clearance
Custom clearance is crucial for the air transportation of the products. In the context of
EGMF Energy Pty Ltd for the custom clearance during the transportation of the goods via airline

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handover of the air waybill is necessary. This bill serves as the cargo receipt and a contract of
carriage. Cargo letter is important for the custom clearance. For this reason, EGMF Energy Pty
Ltd needs to use original cargo letter for shipment of the goods. Therefore, for the export of the
goods an invoice is required for buyer during the shipping. The invoice should be generated in
the English language (mainfreight.nl, 2017). The invoice includes name, address of the company,
VAT no, cost of freight, weight of goods, packaging type delivery address and time of the
dispatch. The equipments should be safe while transporting it via air thus insurance record is
needed sometimes. Proper documentation is required for the custom clearance through air
transportation. Master airway bill, commercial invoice, house airway bill and packing list are the
mandatory things for the custom clearance in context of air transportation. Hence, EGMF Energy
Pty Ltd needs to follow such rules strictly to bring load banks from another country. Based on
the weight that is per kilogram the rate is charged by air cargo (Sundari & Supardi, 2016). In the
case of quick transportation, immediate transportation entry number is required. This should be
applicable for EGMF Energy Pty Ltd as they need quick transportation of the goods to replace
their equipments.
Discussion of the legal procedures due to the breakdown of the equipments
Consumer right is a big part of the legal requirements while offering any goods or service
to the clients. However, in the context of EGMF Energy Pty Ltd their power supply has been
interrupted due to the failure of the machine as well as the load bank. In this, certain situation the
organization has 36 hours to replace their instruments, as there is no scope for repairing.
However, the client that is Mitsubishi heavy industry is not happy with this sudden breakdown of
the equipments and they may take legal action against EGMF Energy Pty Ltd. This will affect
the business of such organization. On the other hand, the reputation of such organization can be

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affected by this certain incident. However, the client may claim penalty for hampering their
service against the organization (Ramos & do Amaral Ferreira, 2017). On the other for EGMF
Energy Pty Ltd it is important to protect their consumer right to make them calm in this certain
situation. The breakdown of the equipment is occurred in the Santos Basin in Brazil hence,
EGMF Energy Pty Ltd needs to follow the consumer law of such country. Consumer Law in
Brazil includes the code 8.078/90. This focuses on protecting the market of the consumers. In
Brazil the consumer law is a bipolar law that is created between the supplier and the consumer.
However, the consumer may charge penalty against an organization for the breakdown of service
(Doneda & Mendes, 2014). Import, export, transformation and replacement of goods are
categorized under this law to satisfy the consumers (Johnson et al., 2014).
In order to establish a business in Brazil any organization should focus on the consumer
protection law in Brazil. In the context of EGMF Energy Pty Ltd they need to comply with the
Consumer Protection Code to give proper service to their clients. However, the Federal Supreme
Court is associated with this Consumer Protection Code under the Acts 452 and 430. An
organization should comply with the Consumer Protection Code that are operating their business
in Brazil (Ramos & do Amaral Ferreira, 2017).
Consumer protection in Brazil
Brazil is one of the popular countries for consumer protection. The consumer defense
system is too strong in this country (Knabe & Schultz, 2016). Consumer right is visibly
implemented in Brazil after the year 1998. Consumer defense code 1991 Act will be helpful for
the client of EGMF Energy Pty Ltd to take legal action against them due to the breakdown of the
equipment. During any business, a contract has been made between the clients and the

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organization regarding the service. However, breach of such contract law may enable the client
to take legal step against the organization (swisscam.com.br, 2017). However, in the case of
EGMF Energy Pty Ltd they have got only 36 hours to replace the load bank to increase the
availability of the service. There is a contract between the EGMF Energy Pty Ltd and their client
to give proper power supply to their client. Hence, breakdown of such contract law will create
legal abstraction against this organization.
Procedures that is taken by EGMF Energy Pty Ltd to avoid the legal issues
The major initiative of an organization is to take necessary step to avoid the legal
obstacle against their organization (Lenort et al., 2014). One of the most important step is to
comply with Brazil’s Consumer protection Code. For this reason, EGMF Energy Pty Ltd needs
to comply with this law as they are operating their business in Brazil. In order to make their
client calm they needs to fulfill all the requirements of Consumer protection code and needs to
reserve their right regarding the services. However, EGMF Energy Pty Ltd can make a contract
with their client to replace the equipments within 36 hours, which will give assurance to their
clients about the recovery of their service as well as the breakdown of the equipments. A legal
contract with the clients will create safety for the EGMF Energy Pty Ltd and lead them to get a
scope to improve their service.
Proper communication will be helpful for an organization to calm their client during any
dispute of their service (Abbey & Guide, 2017). EGMF Energy Pty Ltd needs to establish a
proper communication with their client Mitsubishi heavy industry, which will prevent them from
taking any legal action regarding their service and company. However, a proper communication
reduces the misunderstanding between the organization and the clients. The management of

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EGMF Energy Pty Ltd needs to make a clear communication with their clients that will provide
assurance to the clients. On the other hand, a clear communication maintains the transparency
between the clients and the organization. EGMF Energy Pty Ltd has only 36 hours to replace
their machine any failure in that case may hamper their brand image. Hence, effective
communication will help this organization to provide each and every information about their
logistic operation during the replacement to their clients.
Previous examples of the work of an organization are another vital aspect to motivate the
clients during any major issue in service (Nicholson, 2016). However, it is important for an
organization to carry on a brand image about their previous work that are involved to satisfy their
clients. However, previous delivery of the service in context of EGMF Energy Pty Ltd will make
a good image for their clients. EGMF Energy Pty Ltd can give their previous examples of their
service delivery to Mitsubishi heavy industry in order to enhance their belief regarding their
service. This will make calm to their clients and increases their belief towards such organization.
The past work experience enables an organization to overcome any issue that may arise
in their service (Martí Espinosa, 2016). The previous image of an organization will act as the
support materials for them to retain the new clients. Giving commitment to the clients will enable
EGMF Energy Pty Ltd to resist their clients from taking any legal action due to the dispute in
service. However, commitment to replace the equipments within 36 hours may be helpful for
such organization to remove the legal obstacle that can be arisen by Mitsubishi heavy industry
due to the breakdown of equipments. On the other hand, it is necessary to fulfill the commitment
for EGMF Energy Pty Ltd to increase the confidence of their clients.