INTL233 Global Freight Management Assignment: Freight Forwarding

This project outlines a freight consulting company's approach to managing the transportation of valuable art pieces from Toronto to Bilbao, Spain. It includes an introductory letter and marketing document detailing the company's background and credentials. The project calculates shipping costs via air and water, considering both direct costs and opportunity costs. It further addresses criteria for ensuring safe arrival, such as packaging, insurance, and government requirements. The document also proposes optimal transportation routes and modes, justifying the decision based on cost and time efficiency, and recommends Incoterms and payment terms, accompanied by an ICC Model Contract. The assignment emphasizes the importance of safety, compliance, and cost-effectiveness in global freight management.

Running Head: GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 1
INTL -233 Fundamentals of Freight Forwarding
Global Freight Management Assignment
Sakshi Suri (300991057)
Jashandeep Singh (300987789)
Edwin Sam Bejoy (300932788)
Jaskaran Kaur (300990479)
Navdeep Singh (300967206)
Professor: - Peter Jackson
Date: - April 7, 2019

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 2
1. Introduce the project by creating a Freight Consulting Company, writing an
introductory letter and a MARKETING document that fully outlines the company
background and credentials that qualify you for the role of freight consultant to
assist you.
Many companies require logistics service providers while exporting goods from one country to
the other or even within the country. Logistics service providers though tend to face a couple of
problems during their course of business. Some of the challenges that these companies face
include; environmental issues, government regulations in different countries, technology
implementation and strategy, the requirement for improved customer service and fuel costs
among theirs.
Companies tend to choose the best and the most suitable logistics services provider for exporting
their goods. They tend to check for some requirements which determine which logistics company
they will choose. Some of the requirements include; adherence to international standards,
experience in terms of customs procedures, clear records on undamaged goods and delivery of
goods in time. Companies requiring logistics services will have to check all the above
requirements before contracting a logistics services provider for business.
Competition in the industry has risen to a greater extent. This is due to evolution in the industry
whereby many companies have invested in the idea of providing logistics services. Competition
has increased the quality of services that the customers are getting nowadays. Companies have to
prove they can provide the best services to win the contract (Canadian International Freight
Forwarders Association Inc., 2015). They are therefore employing technologies such as
traceability, they guarantee the customers of the safety of their goods while in transit and they

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 3
have increased the speed at which the goods reach the customers. Among other factors that have
caused an increase in competition is the price and the quality of service.
Marketing Document
Background and Credentials
Triple M freight forwarding was founded in 1995 by its current director Mr. Myles. Its major
operations include transportation of goods across various countries by air and through the water.
The company was founded in Toronto where they have their headquarters. We have branches in
the United States of America, South America, parts of Europe, Asia, and parts of Africa.
The employees have comprehensive experience in aspects concerning international freight
forwarding. This has enabled triple M company to offer the highest level of quality survives to
its customers. Their professionalism has also ensured that they have a competitive advantage
over other freight forwarding companies. The staff are also courteous and dedicated to helping
their clients save on money, time and the needless hassles in handling their shipments from and
to their final destinations.
The company provides a wide range of services to its customers. The services are offered
worldwide in importation and exportation of goods through air and water. Other services include;
chartering and projects, air and marine cargo insurance, letter of credit / consulting, truck
transportation, packaging, warehousing, crating, logistics and customs clearance.
Our mission as a freight forwarder company is to provide professional and quality services to our
customers. Quality and professionalism equal a happy customer. When customers are satisfied,
the image of the company changes to the better. At triple M, we ensure that deliveries are made

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 4
in time, there are no damages and that all customer needs are met. This increases the quality of
services as well as professionalism.
Our vision is to become the largest freight forwarder company in Toronto. We do this by
ensuring that we meet our mission. Therefore customers will refer to each other making triple M
the company of choice. It will also guarantee a competitive advantage over other firms.
Our values include; honesty, commitment, collaboration and excellence in the provision of
services to the clients.
Triple M freight forwards is a member of the Canadian international freight forwarders as well as
the security cargo network. They are also agents of the international air transport association.
Their certificates include;
 Free and secure trade
 ISO 9001
 Carrier initiative program
 Air cargo security program
Introductory letter
April 7, 2019
Nicholas Jamal
Materials and distribution manager
Heffel Fine Art Auction
647 Relic Avenue

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 5
Toronto, Canada
Dear sir/ madam,
Triple M has been in operation for more than 20 years. We offer quality services which are
provided by our experienced staff members. Our team uses the most recent technology to
optimize transportation and logistics at both the international and national level. The transport
sector at triple M offers a wide range of services that meet all your needs for transportation of
goods either by air, water or land. We have a wide network of service providers in Asia,
America, Europe, and Africa who are willing and able to handle the required need at a
personalized level.
At Triple M freight forwarding we guarantee all our customers the highest level of quality,
maximum profits and provision of personalized services to all our clients. We are also committed
to ensuring that the shipments arrive at their destination in time and in the best condition. With
the latest technology, we ensure that the goods are handled and stored with the right equipment's
to ensure there are no damages caused. We have many warehouses around the world which
facilitate the storage and handling of goods.
I have attached all the required documents from the contract in moving the required goods to the
destination as we had discussed earlier. I am available at your disposal for any comment or
questions you may have.
Yours sincerely
Name
Freight consulting agent

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 6
Triple M freight Forwarding Company
2. Calculate are the total costs of each method of shipping?
a. Without the holding costs (opportunity cost of capital)
i. Air
$154855+$275+$250+$120= $155500
ii. Water
$18250+$180+$770+$675= $19875
b. Including the opportunity cost of capital?
The holding cost of capita is 12 % of 74,820,000 which adds up to $24598 per day
Air
$155500 + ($24598*4) = $860942
Water
$19875+ ($24598*35) = $253893
3. Fully outline the other criteria that you would consider to ensure the product’s safe
arrival (packaging, insurance & governments requirements and security, etc.? What
other government departments are involved?

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 7
Safety of goods in transit is among the major concerns for freight forwarding companies. There
are various factors that ensure that the goods arrive safely at the destination. Freight forwarding
companies have to put into consideration these factors to ensure that their clients' goods arrive
safely. Among the things to consider is the goods' final destination. The paintings to be
transported are of high quality, the company needs to assess the safety of the destination area.
Also, some of the paintings require great handling to ensure they are not damaged or destroyed
in any way, therefore the company must ensure availability of the right equipment for the
handling of the cargo (Hesse, 2016).
Shipping of expensive goods requires insurance. The art pieces are very valuable to the clients,
therefore, the freight forwarding company has to insure the cargo against loss and damage
among other risks. Class A insurance covers the goods against all risks excluding the voluntary
intervention of the insured in either delay, own defects, inadequate packaging, damages, wars,
and trikes. This would be the best insurance to cover the art pieces despite the mode of
transportation used.

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 8
The shipment includes 45 pieces total and is comprised of 30 very large oil paintings by Claude
Riopel (up to 3 meters by 4 meters each) and 15 sculptures by Henry Moore varying in weight
from 200 kg – 1000 kg. The packaging to be used for these goods is supposed to ensure that they
arrive in their destination in a good condition as well as at the lowest cost. The freight forwarders
have to ensure that the goods are not damaged in any way while on transit. The packaging has
also to comply with the regulations in the countries involved. However, the mode of shipping
will determine the choice of packaging. That is whether the goods are transported via air or
through the water. Since the art pieces are not perishable, the most favorable mode of transport is
water provided that the shipment arrives at the final destination in time. The packaging should
also ensure that the goods are not destroyed by changes in weather conditions. His will require
the pieces to be surrounded by soft storage with ventilation and does not allow water to drip in.
Another very important aspect of packaging the art pieces is labeling them. The pieces require
labels in terms of the size, the weight, and the handling procedures among others. All the labels
must be followed according to the standards and instructions in transport and handling of fragile
goods. The freight forwarders need to ensure that the packaging and labeling meets the quality
control customs from the government of Spain.
4. Research the most appropriate routes and all modes that will be used in each case
and outline them on a map. Select your mode/route and fully justify your decision
on mode(s)

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 9
Considering the cost of transportation of goods by air and water including the opportunity cost,
shipping by air would be the most efficient means in terms of price. It also makes more sense to
transport via air because it takes a shorter time, 4 days compared to water which takes up to 35
days. This saves time and avoids any possible delays. For the package to arrive safe, without
damages and at a low cost, air would be the most appropriate mode of transport (Ph.D., and
Ph.D.2016). The route would require the truck to transport the cargo to and from the airports.
Route by air
i. Truck: the company in Toronto to Pearson International Airport
ii. Air: Pearson international airport to Adolfo Suarez Madrid–Barajas Airport, Spain
iii. Truck: Adolfo Suarez Madrid–Barajas Airport, Spain to Guggenheim in Bilbao, Spain
(Google Maps, 2019).
Route by water
i. Truck: from the company in Toronto to the port of newyork
ii. Water: from the port of network to port of Bilbao

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 10
iii. Truck; from the port of Bilbao to Guggenheim in Bilbao, Spain
(Google Maps, 2019)
(Google Maps, 2019)

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 11
5. Explain the recommended Incoterm and transportation payment terms would you
recommend for Global. Justify your answer. Complete the accompanied ICC Model
Contract for the transaction and explain your decisions in it. Append the completed
contract to your paper.
The most appropriate INCO term is the EXW because it’s appropriate for both exporter and the
importer. EXW means that the seller is required to provide the goods at his remise and the buyer
takes over in terms of clearance and delivery is fully in the hands of the buyer. The seller has to
make the goods available at his place or the agreed premises for the buyer to take over. The term
represents the minimum obligation to the seller while all the obligation is left on the buyer
(Know Your Incoterm, 2018). This term is most recommended because the buyer would ensure
that the goods reach his final destination at the best condition since they are highly valuable. The
buyer has full control of the shipment. The buyer, therefore, will have to ensure that the goods
reach the destination safely. The buyer can carry out the export formalities, directly and
indirectly, therefore, there is no hindrance for using this term (World Class Shipping (2017).
The most appropriate method of payment would be open account whereby payment should take
place on or before 30 days from the invoice date. The open account will be backed up by the
letter of credit. The letter guarantees payment for the goods to the seller. It is used typically in
different countries which applies to the two companies involved. There are no chances that the
seller would lose his money and the buyer is obligated to pay the failure to which the bank stated
will have to pay the seller the amount mentioned (Loewen, and Fitzgerald, 2005).

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 12
1. Outline all documentation would be needed to support the transaction. Complete
full price pro-forma invoice and complete a full set of relevant documents and place
these in a separate appendix to the report.
The documentation required includes:
 ICC contract
 Letter of credit
 Packaging list
 Pro forma invoice
 Commercial invoice
Recommendations and conclusions
It is recommended that the buyer learns the customs and regulations regarding the exportation of
goods from Canada. This is because the buyer is fully responsible for the export because the
goods transit is under the EXW.
It is also recommended that the freight forwarder packs and maintains the goods in the best
condition since they are highly valuable commodities. This will facilitate the safe arrival of the
goods at the final destination.
References
Canadian International Freight Forwarders Association Inc. (2015). Essentials of Freight
Forwarding Program. Sixth Edition. Toronto, Ontario.
Fahimnia, B., Bell GH, M., Hensher A, D., & Sarkis, J. (2015). Green Logistics &
Transportation: A Sustainable Supply Chain Perspective.

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 13
Google Maps. (n.d.). Retrieved from https://www.google.com/maps/@4.3250167,-
127.0029255,2z
Hesse, M. (2016). The city as a terminal: The urban context of logistics and freight transport.
Routledge.
Know Your Incoterms: An Overview. (2018). Retrieved from https://www.export.gov/article?
id=Incoterms-Overview
Ph.D., S. S., & Ph.D., J. W. (2016). Minicars, Maglevs, and Mopeds: Modern Modes of
Transportation Around the World: Modern Modes of Transportation around the World.
Santa Barbara, CA: ABC-CLIO.
World Class Shipping (2017). Incoterms: EXW. Retrieved from:
http://www.worldclassshipping.com/incoterm_exw.html
Appendix :other relevant documents
Proforma invoice
Proforma Invoice
Date: 07.04.2019
Proforma invoice #: 19889

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 14
Sender
Company Name: Heffel Fine Art Auction
Department: transport and logistics
Address: 123, Toronto, Canada
Country: Canada
Tel./Fax No.:[phone]
Receiver Airway bill no. 567
Company’s Name: Guggenheim
Department: transport and logistics
Address: 345, Bilbao, Spain
Country: Spain
Phone No.:[phone]
Number of pieces: 45
Total Gross Weight: 35,000kgs
Carrier: Triple M freight forwarders
Description of goods Country
of origin
Quantity Unit Value, Currency
45 pieces total and is
comprised of 30 very large
oil paintings by Claude
Riopel (up to 3 meters by
4 meters each) and 15
sculptures by Henry
Moore varying in weight
from 200 kg – 1000 kg.
Canada 45 $74,820,000
Total value, currency $74,820,000
Letter of credit
To: Eddie Kim
Procurement Manager Guggenheim Company
Bilbao Spain
From: Royal Bank of Canada

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 15
Toronto, Canada
Dated: 12/04/2019
Re: payment agreement
Dear Mr. Eddie
Dear Sir, we would like to inform you on your transaction for the purchase of 45 pieces total and
is comprised of 30 very large oil paintings by Claude Riopel (up to 3 meters by 4 meters each)
and 15 sculptures by Henry Moore varying in weight from 200 kg – 1000 kg. From Heffel fine
art auction in Toronto Canada which was $74,820,000 on 7th April 2019. You further agreed to
make the payment via open account to Santander bank in Spain. We would like to reiterate to
you for the total amount of the goods purchased.
Sincerely,
Olivia kimaya
Bank manager
Royal Bank of Canada
Packaging list
shipper
Triple M Freight Forwarding Company Invoice no: 67
Invoice date: 7/04/2019
Consignee: Sent to:
Guggenheim Guggenheim
Shipment information
Customer PO no: 679 Numer of packages: 45 Letter of credit no: 45
Ref no:45 Currency: $ Payment terms: open account
Airway bill no:67 Incoterm: EXW Transportation terms: air

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 16
PO date:5/4/2019 Gross weight : 34500kgs Mode of transportation: air
Items
Drescription Quantity
large oil paintings by Claude Riopel (up to 3
metres by 4 metres each)
30
sculptures by Henry Moore varying in weight from
200 kg – 1000 kg.
15
Total 45
Commercial invoice
COMMERCIAL INVOICE
Invoice date: 7/04/2019 Invoice no: 67
consignment no: 675 No of pieces: 45
FROM
Name: HEFFEL FINE ART AUCTION

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 17
Address: 45, Toronto Canada
City: Toronto Postal zip: 67-89002
Country: Canada
VAT no: 453/566
Phone: [phone]
Contact: Nicholas Jamal
TO
Name: Guggenheim
Address: 567, Bilbao Spain
City: Bilbao Postal zip: 66757
Country: Spain
VAT no: 675,009
Phone: [phone]
Contact: Eddie jones
Contents Units Weight Value Currency Country of
origin

GLOBAL FREIGHT MANAGEMENT ASSIGNMENT 18
The shipment includes
45 pieces total and is
comprised of 30 very
large oil paintings by
Claude Riopel (up to
3 metres by 4 metres
each) and 15
sculptures by Henry
Moore varying in
weight from 200 kg –
1000 kg.
45 34500kg
s
$74,820,000 American
dollars
canada
Total: 45 34500 74,820,000
Incoterms: EXW
Sender name* Signature Date
Nicholas Jamal 7/4/2019