International Trade: Import and Export

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Table of Contents

Introduction
Selection of Export Country and Product
Selection of Import Country and Product
Dubai, U.A.E. – Infrastructure and Transport System
Assessment of Transport Methods
References

Introduction

International trade heavily depends upon the logistics of cargo between countries. It is crucial for a business to select the most appropriate form of transport to ensure product safety and timely delivery of goods. However, there are many considerations that must be taken into account before deciding the transport route and method to use. The current report evaluates the possibilities of transporting the selected product from one country to another. The assessment of transport facilities and logistics infrastructure of both countries is based on the information available from different sources. Furthermore, the current paper also includes three export documents and one import document that must be prepared for meeting the requirements of international trade. For this purpose, different templates are selected from the internet, and they are completed on the basis of the product and countries selected in this paper.

Selection of Export Country and Product

The selected country in this report is India, which is a developing country and presently experiencing high economic growth because of the increase in the demand for its products and services. The chosen industry is the textile industry, and the company fictitiously considered in the report is ABC Textile Limited, which manufactures bedsheets and towels. Therefore, it could be stated that the product selected in this report is a dry product. The company packs its products using packaging material that meets the international standards of energy consumption and reusability (United Arab Emirates – labeling/marking requirements, 2016). The packaging includes plastic bags and also cardboard boxes. Such packaging ensures that the company’s products are delivered to customers in the best condition. Moreover, the use of cardboard boxes allows stacking, which is suitable for transporting large orders of bedsheets and towels.

Selection of Import Country and Product

The selected import country in this report is Dubai, U.A.E. Dubai is a growing economy, which has a trade surplus. However, the country’s textile output does not meet its requirements. The demand for textile products is expected to grow as the country prepares for hosting Expo 2020. Therefore, companies import textile products from other countries to meet the market demand. The country introduced a value-added tax of 5% on logistics and textiles in 2016 (Tsui, 2016). The implication of this additional tax was the increase in the cost of transport and also textile imports from other countries.

Dubai, U.A.E. – Infrastructure and Transport System

The country has a strong logistics industry, and it has remained one of the major factors of economic growth. The country is expanding its transport network by focusing on air and rail logistics (ReportBuyer, 2016). The logistics industry contributes almost $29 billion to the country’s economy (ReportBuyer, 2016), which is almost 7% of its total GDP. Furthermore, the country has been ranked 1^st in the region and 11^th in the world for its effective and efficient transport infrastructure (sectorial overview transportation & logistics, 2013). It is expected to grow because of trade-related agreements between GCC member countries and also, the removal of sanctions against Iran.

Furthermore, the report highlights that Dubai, U.A.E. will host Expo 2020, which is expected to bring more business. It could be stated that the increased economic activity would contribute positively to the growth of the logistics industry (ReportBuyer, 2016). The country’s logistics industry is regulated by the Department of Municipal and Transport Affairs. A report indicates various projects that the U.A.E. government has launched in recent years. It could be noted that the expansion of the country’s transport network is focused on all transport modes. The main factors leading to this expansion are the growth in population and an increase in the number of businesses listed in the free zones of the country. The country is an excellent hub for companies to set up their businesses and take advantage of the growth in the Middle Eastern countries. The country’s transport infrastructure also faces certain challenges, which include oil price fluctuation. The industry depends heavily on oil and any drastic changes in the oil price can affect all businesses.

The country has an extensive road infrastructure, which connects different member states of the U.A.E. The strong infrastructure allows businesses in different locations to acquire or sell products. There are many logistics companies that provide services to individuals and businesses. There are no major hurdles related to the transport of goods in the country. However, the government requires transport companies to follow policies and regulations set out by its Department of Municipal and Transport Affairs. The main focus of the current government is on expanding air and rail networks.

The government aims to reduce the population burden on Dubai and Sharjah. Moreover, it has established free economic zones in different states of the U.A.E., and it aims to connect these zones with the country’s major seaport in Jebel Ali, Dubai. The U.A.E. government has ordered the expansion of the seaport, which will increase its capacity and the number of vessels that it manages every day. It has been reported that the country’s growth in the coming years will depend upon its transport industry (Sectorial overview transportation & logistics, 2013). Therefore, it could be noted that the government’s strategy is clear and focused on supporting this industry. Furthermore, there is a new airport under construction, which will ease off the pressure on the current airport. The country has a huge trade volume that needs to be managed by improving all forms of transport.

Assessment of Transport Methods

ABC Textile Limited is located in Gujrat. The nearest port that the company can use is Mundra Port, Gujrat (Adani Ports and Special Economic Zone, 2017). The company uses local transport companies for transporting its cargo from the factory site to the seaport. It has been indicated that the company uses cardboard boxes for packaging its products. These boxes are then placed in telescopic cargo boxes for efficient use of space. These cargo boxes are loaded on the 40ft container for shipping to the destination. The company will use heavy-duty commercial vehicles for transports its shipment from the factory to the seaport. The selected destination in this report is Jebel Ali, which is one of the largest ports that handle the huge volume of cargo and vessels every year. After unloading cargo containers and clearance from the customs authority, it will be transported to the importer’s warehouse, which is located in the free zone of Jebel Ali. The importer sells these products to different customers in Dubai and Abu Dhabi. The goods will be transported to different customers by using light-weight commercial vehicles. The entire transport process is depicted in the following figure.

The transport process illustrated in Figure 1 indicates that there could be delays at different stages of this process. The company can ensure the timely delivery of its products to its customers by planning for its transport needs. The company can make an arrangement with multiple companies to achieve the best transport charges and also ensure that there is no disruption in its supply chain (Coyle, Novack, & ‎Gibson, 2010). The company should also take out insurance for its shipments and the price charged to the client is CIF, which is inclusive of cost, insurance, and freight. The customer can be protected against any damages if the shipment is lost.

References

Adani Ports and Special Economic Zone. (2017). Web.

Coyle, ‎J. J., Novack, R. A., & ‎Gibson, B. (2010). Transportation: A supply chain perspective. Mason, OH: Cengage Learning.

ReportBuyer. (2016). Outlook and growth opportunities in the UAE logistics industry.Web.

Sectorial overview transportation & logistics. (2013). Web.

Tsui, W. (2016). United Arab Emirates: Market profile. Web.

United Arab Emirates – Labeling/marking requirements. (2016). Web.

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