International Cosmopolitan is a company that sells an enormous amount of fine jewelry worldwide from its headquarters in Paris, France. Presently 10% of their revenues come from sales in the United States. International Cosmopolitan would like to grow the business by about 200% over the next three years. Presently, a majority of their product is kept in a private warehouse in France. While the
shipments to United States will always be relatively small in size due to the cost and nature of the product, International Cosmopolitan would still like to take advantage of any possible distribution efficiencies by sending their shipments to a distribution center in United States that can then package their small shipments with other jewelry shipments headed towards common retailers and/or wholesalers. In order to do so they'll need to make accommodations for shipment, find retail and wholesale companies willing to distribute their product, find intermediaries to both help export the product out of France and help import the product into the United States. Based on the above information and your knowledge of international transportation, answer the questions below in the hopes of providing International Cosmopolitan with some preliminary information that will aid them in creating a successful logistical itinerary:
a. Which modes of transportation should be utilized in getting the product from International Cosmopolitan's warehouse in France to a distribution center in United States? Why?
b. Which intermediaries should International Cosmopolitan consider in finding customers in United States and exporting the product out of a France? Why?
c. Which intermediary should International Cosmopolitan consider in helping them import the product into United States? Why?
d. Briefly discuss their warehousing plan. Does it make sense? Why?
a . Which modes of transportation should be utilized in getting the product from International Cosmopolitan's warehouse in France to distribution Center in United States? Why?
The most likely mode of transportation to get product with such a high cost to weight ratio out of France and into the United States would be air.
The student should probably also include information on how the product will get to the airplane from the private warehouse and from the airplane to the final distribution Center. For this portion of the shipment a motor carrier would most likely be used. Motor transportation is both versatile in terms of the products that it can carry and agile in terms of the locations it can reach.
b. Which intermediaries should International Cosmopolitan consider in finding customers in United States and exporting the product out of a France? Why?
A trading company most likely would be the best answer for this particular question. Trading companies aid foreign sellers in finding foreign buyers. In addition, they can handle the export arrangements, documentation, and transportation of the goods in question.
While the student may also cite foreign freight forwarders, this answer is not as desirable. While a foreign freight forwarder can handle the export arrangements, documentation, and transportation of goods, they typically do not aid foreign sellers in finding foreign buyers. Nonetheless, partial credit may be deserved.
c. Which intermediary should International Cosmopolitan consider in helping them import the product into United States? Why?
Customs brokers aid in moving international shipments through customs. They are knowledgeable on documentation and other customs related areas, thus they make the importation of product easier and they help in answering any questions Customs Officials may have.
Some students may cite that trading company's help make import arrangements also. This would also be an acceptable answer according to the language in the textbook.
d. Briefly discuss their warehousing plan. Does it make sense? Why?
This question is fairly open-ended. The student may comment on the positive and negative aspects of International Cosmopolitan utilizing a private warehouse in France. They may then discuss the benefits of taking their moderate sized shipments that were imported into United States and then consolidating those shipments at consolidation warehouses with other small shipments headed towards common customers.
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