Topic Covered -

1. Understanding Landed Cost and Shipper
2. Carrier vs. 3PL Provider Roles
3. Logistics Roles and Bill of Lading
4. Incoterms and International Shipping Responsibilities
5. Understanding International Commercial Terms
6. Container Capacity and Types Discussed
7. Transportation Modes and Logistics Systems
8. Exploring Logistics Partner Roles and Mergers

Understanding Landed Cost and Shipper

Rohan led the first session of the SAP Transportation Management course, focusing on the concept of 'landed cost'. The team discussed how landed cost includes transportation, handling, taxes, and duties, and is the total cost incurred to deliver a product to the end user. They also clarified the terms'shipper' and 'consignee', with the shipper being the entity that arranges the shipment and the consignee being the end user. The team also discussed the term 'carrier', which refers to the entity that physically carries the goods. The session was interactive, with participants sharing their understanding and experiences with these concepts.

Carrier vs. 3PL Provider Roles

Rohan led a discussion about the differences between carriers and third-party logistics (3PL) providers. The team agreed that carriers are responsible for transporting goods, while 3PL providers act as facilitators, arranging transportation and providing additional services such as warehousing and insurance. They also discussed the advantages of using 3PL providers, including better planning and cost optimization. The team considered various scenarios, including manufacturers and distributors, and how they might use 3PL providers or manage transportation themselves. The conversation ended with a clarification that 3PL providers can also act as carriers, but their primary role is to facilitate transportation.

Logistics Roles and Bill of Lading

Rohan explained the roles of a shipper, consignor, carrier, and 3PL in logistics. He clarified that a shipper is the one who reaches out to a carrier, such as DHL, to send goods. The carrier then assigns the goods to a third-party logistics provider (3PL) who handles the actual transportation. Rohan also explained the concept of a House Bill of Lading (HBL) and Master Bill of Lading (MBL), which are documents used in the logistics process. He emphasized that these documents are legal and binding, providing information about the goods being transported.

Incoterms and International Shipping Responsibilities

The team takes a 10-minute break after discussing the first half of the presentation. Before the break, Priyank requests examples to be included with the content, and Rohan agrees to share a notepad file with additional notes. After reconvening, Rohan introduces the topic of incoterms, and Shyam explains that incoterms determine responsibility for freight costs and payments in international shipping.

Understanding International Commercial Terms

The team discussed the concept of International Commercial Terms (Incoterms) and their role in determining who pays for various services in the transportation of goods. Rohan explained that Incoterms are defined and designed by the International Chamber of Commerce and are legally binding. They are used to determine who pays for services such as loading, export declaration, import declaration, insurance, and import taxes. The team also discussed how Incoterms are used in different modules such as Sales Order, Purchase Order, and Transport Management. They agreed that the decision on which Incoterm to use is a business-dependent decision and not a system-driven one. The team also discussed how Incoterms are used in different scenarios, such as when importing a Ferrari, and how they affect the final cost of the product.

Container Capacity and Types Discussed

Rohan led a discussion about the concept of a container, specifically in the context of ocean transportation. The team clarified that a container's capacity is measured by its volumetric space, not weight. A full container load (FCL) refers to a container that is completely occupied, while a less than container load (LCL) refers to a container that is only partially occupied. The team also discussed the different types of containers available, such as reefer containers and oil containers. The conversation ended with the understanding that the volume of a container is the primary factor in determining whether it is a full container load or less than container load.

Transportation Modes and Logistics Systems

Rohan discussed various transportation modes and logistics systems. He explained the concept of 'dry age' as a trucking service specific to port locations, and 'ULDs' as lightweight, air cargo containers. He also differentiated between 'trucks' and 'trailers', and discussed the evolution of logistics systems from '1PL' (one party logistics system) to '3PL' (third party logistics system). He used the example of a farmer expanding his business to illustrate the transition from 1PL to 3PL. The team also clarified that 'ULDs' are not on wheels, but are loaded onto planes.

Exploring Logistics Partner Roles and Mergers

In the meeting, Rohan explained the different types of partners in the logistics industry, focusing on the roles of 3PL, 4PL, and 5PL. He clarified that 3PL is an executing partner, responsible for the actual transportation of goods, while 4PL is a non-executing partner that manages the operations and provides feedback for improvement. 5PL, on the other hand, is a managing partner that oversees the operations and ensures alignment with projections. Rohan also used examples from companies like Google, Alphabet, and BCG to illustrate these roles. The team also discussed the potential for mergers and acquisitions in the industry, with Rohan emphasizing that the actual operation will be taken care of by a 3PL or 4PL. The next session was planned for the following weekend to further discuss the topic.