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Logistics Assignment

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Question

An exporter (based in Perth, Western Australia) of live-stock products (beef) sells an average of 500,000 tons a year. His buyers (about 100 in number) are primarily located in four countries – A, B, C and D. The exporter's ranch is inland about 1800km from his country's main seaport (Fremantle, Perth). His products may be moved by road to alongside ship in the port of loading (Fremantle, Perth), passing through 3 major towns. 

The political situation is stable, and tonnage is easily available. The buyers' factories are located at inland points some 700 to 800km from the respective ports of discharge. Temperature in country B can hit up to 43C in some months of the year. Country D has an extremely strict live-stock policy which is similar to that of Australia, where any animals going in will need to be certified and quarantine. As you are exporting into country D, you are required to list down all the documentations required. Please see the diagram in below 

As the exporter, you are required to export to all four countries, given the different conditions in the countries. You are supposed to list down things to look out for and the best option possible when exporting to each individual country. Make sure you justify your decisions or method use. Due to the special circumstances in Countries A, B and C, write down a detailed Plan B

Describe the key challenges you would anticipate. How would you overcome these?

Solution

Ideally, any export-import transaction should be preceded by a sound export-import plan (The Canadian Trade Commissioner Service, 2011). It should start with assessing the target market for exporting and the exporter's own readiness to export (ExportHelp, 2014). This should be followed with preparing a robust export plan, which includes the medium of transport (land, air, water), the costs of export, preparing to handle and mitigate risks and mishaps and allocating contingencies to absorb the various overheads and excesses that might arise from time to time. At this stage, it really helps if the exporter makes himself acquainted and knowledgeable about the various intricacies of export management, ranging from how each target foreign market operates, the various documentation specific to a market, legal issue and even how to manage forex (Australian Trade and Investment Commission, 2016). Predefining and formalizing the export plan helps in not only establishing an effective supply chain but also in sustaining it over the long run (The National Trade Promotion Agency of Malaysia, 2016).

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Historically, livestock export in Australia dates back to 1829 (Australian Livestock Exporter’s Council, 2013) and to date remains one of the most exported products from Australia, contributing around $1.8 billion in export earnings annually (Meat and Livestock Australia, 2015) . As of the current day, the beef exporting industry in Australia is primarily driven by a gradual increase in global demand for red meat and a lack of refrigeration infrastructure in certain countries. This is further supported by the fact that Australia has largely been free from livestock diseases and is closer to the major export markets of Hong Kong, Philippines, and Middle East Asia. The process of livestock export in Australia is regulated by the Australian Government under ASEL (Australian Standards for the Export of Livestock) and the ESCAS (Exporter Supply Chain Assurance Scheme) regulatory frameworks. Among the various requirements laid down by these, are that the livestock exporter must have a valid license from the Australian Government and that the livestock export vessel must be certified for the purpose by the AMSA (Australian Maritime Safety Authority) (LiveCorp, 2015)

        This case study takes the case of four fictitious countries with varying challenges to exporting livestock products. An attempt has been made to probe into the problems imposed and further delve into them to find out risk mitigation strategies and discuss the export plan, documentation required, etc. in detail.

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