Ch 9 Flashcards - SCM Final

Define the primary roles of global logistics in supply chains

Global logistics coordinates the movement and storage of goods across borders to meet service, cost, and compliance objectives. It integrates transportation, warehousing, customs, and documentation to ensure timely, lawful, and economical flows.

Explain how facility type selection affects global logistics performance

Choosing between distribution centers, cross-docks, bonded warehouses, and fulfillment centers shapes lead time, inventory levels, and duty exposure. For example, cross-docks minimize storage time to accelerate flow, while bonded warehouses defer duties until goods enter domestic commerce.

Descrie a Bonded House vs a Free Trade Zone (FTZ)

Both defer duties, but a bonded warehouse holds imported goods under customs control until entry, export, or destruction. An FTZ allows processing, mixing, or assembly with potential duty inversion and re-export without incurring domestic duties.

List the Key global factors for Warehouse Placement

Mark Access, Labor costs, transportation infrastructure, Trade Agreements, Tariff/Duty Structures, Political Stability, and risk. Firms also weigh total landing costs , taxes, and proximity to suppliers

Total Landing Costs

Includes transportation, duties, taxes, compliance, handling, risk, and inventory carry. Optimizing landing cost prevent false economies from low unit prices that creat higher system costs.

Piece prices

Reflect the unit purchase costs

How trade agreements influence sourcing and disyribution

Agreements reduce tariffs, harmonize standards, and define rules of origin that determine eligibility for preferential rates. This can shift optimal sourcing, routing, and facility locations to capture duty savings and improve responsiveness.

Role of the WTO

The WTO administers global trade rules, provides a dispute settlement mechanism, and promotes tariff reduction and transparency. Its agreements set baseline disciplines for goods, services, and intellectual property among member nations.

Rules of Origin and Operational Impact of origin

Specify how goods qualify as originating to receive preferential tariff treatment. They drive BOM design, supplier selection, and production routing to meet value content or tariff shift thresholds.

Essential documents in international shipments

Core documents include commercial invoice, packing list, bill of lading/air waybill, certificate of origin, and any licenses or permits.

Accurate, consistent data across documents prevents customs delays, penalties, and holds.

The import entry process at destination customs

A customs declaration is filed with tariff classification, valuation, origin, and required documentation. Customs may assess duties and taxes, perform exams, and then release the shipment or issue requests for information.

What is tariff clarification and why does it matter

Tariff classification assigns the correct HS/HTS code that determines duty rates, controls, and eligibility for preferences.

Misclassification can cause overpayment, underpayment, seizures, or penalties, and it affects admissibility and PGA

define customs valuation and why it matters

Valuation determines the dutiable value, typically using the transaction value plus assists, packing, and certain royalties. If unavailable, fallback methods apply; incorrect valuation risks penalties and duty shortfalls.

Compare incoterms roles in cost and risk allocation

Incoterms allocate transportation costs, risk of loss, and responsibility for export/import formalities between seller and buyer. Choosing the right term aligns logistics capabilities and visibility with financial and compliance responsibilities.

Export controls and screening requirements

exporters must screen parties and end uses against restricted lists and embargoes, and may need licenses for controlled items. Robust denied-party screening and red-flag checks reduce diversion and enforcement risk.

Benefits of an FTZ

Benefits include duty deferral, inversion, weekly entry savings, and re-export without duties.

Risks of FTZ

Risks involve compliance complexity, inventory control requirements, and potential penalties for zone recordkeeping failures.

Common Trade compliance penalties

Penalties arise from misclassification, undervaluation, false origin, sanctions violations, and record keeping failures. Triggers include inconsistent documents, related-party pricing without support, and ignored customs inquiries.

The role of customs brokers

Customs brokers file entries, classify goods, and advise on

The role of Freight forwarders

Arrange transport, booking, and documentation

Trust trader programs (CPAT, AEO)

Validate supply chain security and compliance, offering reduced inspections, faster clearances, priority treatment.

Practical import compliance program

classification/valuation procedures, origin management, broker management, screening, record retention, and post-entry audits. Training, KPls, and corrective action processes sustain continuous compliance.

Post entry corrections and Audit

Importers can file prior disclosures or post-summary corrections to rectify errors and mitigate penalties. Customs agencies may conduct audits; proactive internal reviews and documentation support demonstrate due diligence.