What is Logistics?

1. What is Logistics? What’s kind of relationship between it and Circulation?

A: Logistics is an additional production process to connect production and consumption;it is an economic activity based on non-physical forms of services in time and space etc. to create benefits and effectiveness. The traditional concept of logistics refers to material entity physically movement in space and time, and it refers to the goods movements during activities of transport, handling, storage and so on. Based on the traditional logistics, Modern logistics introduces high-tech means, manages to make logistics information management scientifically, aiming to speed up the logistics speed, improve accuracy, reduce inventory, expand capabilities and finally to reduce costs. Logistics is included in the circulation, embodied in the effective transfer of goods.


2. Logistics functions and their relationship with transportation

A: The logistics functions include packaging, storage and preservation, handling, distribution processing, picking, shipping, distribution, recycling and disposal of waste materials, and related intelligence information etc. Transport is mainly to achieve materials spatial migration, including the very five means of transportation of waterways, roads, railways, aviation, pipeline etc. during the supply and distribution logistics.


3. What is the supply chain? What does it have to do with the logistics?

A: Supply chain refers to the network of supply and demand of raw materials suppliers, manufacturers, wholesalers, retailers and end-consumers involved in the production and circulation of products. Being the logistics channel of supply chain as well as an important part of supply chain management, logistics system generally refers to a series of activities related to raw materials and purchased parts from purchasing system, storage, feeding, manufacturing, assembly, packaging, transportation, distribution, retail etc. . Supply chain is an extended enterprise model, which includes not only the logistics system, but also the information, the organization, the value stream and the corresponding service system. In the supply chain management and construction, creativity and holistic thinking is extremely important, which needs a parallel design as well as a parallel mode of operation between enterprises.


4. What is the difference between the first, second and third profit source?

A: To lower wages (or increase labor intensity) and reducing consumption of raw materials being a means to increase profits, that practice is known as the first profit source. When labor and material costs to a certain limit, to expand sales of products by means of marketing practices for further profits increase, is called the second profit source. In the circumstances of increasingly fierce market competition and market share limited, the practice to reduce logistics costs and gain more profit by means of the modern logistics management, is known as the third profit source, and modern logistics has sometimes been called the third profit source. As the current financial accounting system and accounting methods cannot grasp the actual situation of logistics costs, so it’s a piece of blank and even false of people’s learning about the logistics costs, and the very situation was likened to "logistics iceberg". Therefore,“Being the dark economic continent”, logistics is the third profit source.


5. What is the first, second, third, fourth, and Fifth Party Logistics ?

A: The first party logistics refers to the demand side makes logistics to meet its needs of purchasing certain goods (e.g. procurement at place of origin, goods shipped back by itself ). The second party logistics refers to the supply side carries logistics in order to provide certain goods (e.g. supplier delivery). The third party logistics simply refers to a third-party, with the exception of the demand side and the supply side, undertakes logistics. Being a bit more complex, the third-party logistics refers to specialized logistics intermediaries (or called logistics agents) to provide all or part of contracted logistics for their clients. The fourth party logistics is to provide information consulting services. The fifth party logistics is to provide talents training services.


6. What are the Six Flows of the modern logistics?

Answer: Six flows in modern logistics refer to the information flow, business flow, capital flow, logistics flow, talent flow, and technology flow. Information flow mainly refers to the information communication of commodity price, promotion, marketing, credit, freight tracking, storage, distribution processing, sorting, distribution, taking delivery of goods, technical support, after-sales service and so on. Business flow refers to the activity in which the goods are transacted between buyer and seller, including the process of the transference of real right. The capital flow mainly refers to the capital transfer, including the process of payment, payment of interest, transfer of account, financing money and other activities. Talent flow means that it is necessary to have some people who are outstanding, experienced, and familiar with enterprise management in the development of modern logistics business. Technical flow is a general terms of all professional and technical activities related to logistics activities.


7. What are the differences between modern logistics enterprises and international freight forwarders? 

Answer: (1) In general, forwarders only provide primary services for the owners of the cargo like warehousing, quotation, customs clearance, transportation, allocation and so on; while modern logistics enterprises can not only provide these primary services, but also involve in customer's order processing, procurement and production planning, as well help the owner of the cargo to realize their production control, quality control, information telecommunication, and the service of goods distribution and so on. (2)The freight forwarders cooperate with the cargo owner mostly in a short-term way, mainly including one-time commission conduct; while most modern logistics enterprises have established long-term partnership with the cargo owner, providing more extensive and higher level of services than that of the forwarders, in addition, they can adjust the logistics plan and participate in the owner’s business decisions as required by the owner’s needs. (3) Any enterprise can be a freight forwarding enterprise, but only a small number of them can truly become a modern logistics enterprise.


8. What are the differences between commodity bar code and logistics bar code? What is RFID technology?

Answer: Commodity bar code is used for single commodity, such as EAN-13, comprised of varying thickness, black and white bars and 13 Arabic numerals. The first three digits stand for the production origin or the country of goods, the next four digits indicate the manufacturer, and then the after five digits represent commodity categories, and the last number stands for the check code. Logistics bar code is used for freight unit or the outer packing, such as UCC / EAN-128 which is continuous, unfixed length, meaningful of high density bar code with variable length and a large amount of information. Apart from the commodity information, it also includes packaging, product batch number, quantity, specifications, production date, valid period, place of delivery and other information. A plurality of one-dimensional codes can be stacked together in a longitudinal direction to form a two-dimensional code. RFID, the radio frequency technology with a huge capacity, is different from the bar code technology and does not need to be visible. RFID tags with chip can continuously active or passive radiate radio waves. Based on its own different output power and frequency of use, the RFID reader can be identified within the scope of a few centimeters to tens of meters. This technology has great potential application in the field of container logistics in the future.


9. What are container multimodal transport and its general procedure?

Answer: Container multimodal transport refers to the whole logistics process that the multimodal transport operators ship the containers the in at least two different transport modes from takeover place(within one country) to designated place of delivery in accordance with the agreement of the contract, among which includes a responsible operator, a contract, a document and more than two transport modes, such as multimodal transport of ship and railway, multimodal transport of river and ship and so on. The general procedures of the container multimodal transport mainly include the conclusion of the contract, the organization of transport plan, the notification of agents in each procedure, the shipment of the delivery, the issue of the multimodal documents, the managemnt of the transport insurance, the conduct of the procedure of the customs transfer, the transport of different transport modes, the transmit of documents in different distract, the tracking of goods and the delivery of goods and so on.


10. What are the main shipping routes of China’s foreign trade?

Answer: Traditionally, shipping route is divided into the near routes and ocean routes according to voyage distance. Near-sea shipping line refers to foreign trade shipping routes from China’s coastal area to parts of waters of Pacific Ocean and Indian Ocean. These waters are generally regarded as the east of the Suez Canal, including Oceania, including the near-sea shipping line area which mainly comprised of the following 15 routes from China to North Korea, South Korea, Japan, Vietnam, Russian Far East, Hong Kong, Philippines, Malaysia, Kalimantan Utara, Thailand, Indonesia, the Bay of Bengal, Sri Lanka, the Persian Gulf, Australia and other new routes. Ocean routes refer to these routes from China to worldwide route ports except these near routes. They mainly include the following 8 routes from China to the Red Sea, East Africa, West Africa, the Mediterranean, Western Europe, the Nordic Baltic, North America, Central and South America routes and so on.


11. What are the steps included in general cargo import and export clearance procedures?

A: The general import and export clearance procedures include the following nine steps. (1) electronic declaration, i.e. in line with the customs, taxation, statistics etc. requirements to make electronic data record and online reporting; (2) focus on a single examination, including computer electronics documents examination, the professional examination by directly under the Customs examination center and on-site orders audit by the subordinate Customs; (3) site clearance orders reviewing declaration on paper documents; (4) site clearance for actually inspection of goods; (5) the collection of taxes including customs clearance, customs duties, import tax, value-added tax and consumption tax; (6) Customs clearance release on site, to review the electronic customs data, written documents and annotations, to make documents for clearance procedures; (7) The customs releases goods delivery. The consignor and consignee make a delivery with the electronic customs clearance delivery notice; (8) issuance of import and export declarations, including payment certificate, customs processing trade union verification, export tax refund declaration; (9) the import and export vouchers to pick up the shipment.


12. Port Logistics and its relations with the third generation port?

A: Port Logistics refers to the port city, taking its own port advantages, relying on advanced hardware and software environment to strengthen its ability to radiate logistics activities surrounding the port and to highlight the port set of goods, inventory, distribution expertise, based on the surrounding ports industry, with information technology support, adhering to the goal of optimizing and integrating port resources, develop port comprehensive service system covering all aspects of the characteristics of the logistics chain.

Development of ports in the world has undergone three generations. The first generation of the port function as a purely "transportation hub", mainly provides of ship docked, seaborne cargo handling, transport and warehousing; the second generation port function positioned as a "transportation hub + service center", in addition to providing cargo handling and warehousing etc., but also increased the industrial and commercial activities, so that the port has the added features of the goods; the third generation port function as a "international logistics center", in addition to features of being a necessary channel to maintain tangible goods distribution in international trade and further improve the efficiency of tangible goods distribution, it also has the logistics function of integrating distribution of tangible goods, technology, capital as well as information. Currently, the second generation of the world's major ports is still the mainstream of port development, but with the economic globalization, market internationalization and information network, some large ports have begun the transition to the third generation port.


13. The relationship of Logistics Park, logistics center and distribution center?

A: The logistics park is the central location layout in space where one or more logistics (distribution) business get together, and is logistics points which provides a certain type, a certain size as well as a higher level of integrated logistics services. It is a space concept, with the same nature of the concept of industrial parks, technology parks, etc., having industrial relevance or consistency, and focusing on contiguous land for logistics space.

Existing links between the logistics park and logistics center, but there are also differences. Generally speaking, the logistics park is deemed as spatial carrier of logistics center, which may contain several logistics centers and several distribution centers, as well as ancillary services, dining, entertainment, medical and other services, finance, insurance, foreign exchange, agents, CPAs, law firms, telecommunications, transportation, training centers, information centers and other service agencies.

Distribution Center is a kind of logistics distribution centers, specializing in the distribution of goods, and the main function is to setting, storage, sorting and delivery. It is the smallest category as a logistics center generally includes several or dozens of distribution centers.


14. The relationship of Zero inventory and on-time delivery?

A: The pursuit of zero inventory goal in modern logistics is to reduce and eliminate all waste on circulation, and thus to realize value-added of goods in logistics management. On-time delivery system (JIT) is the theoretical basis of Zero inventory. The very system can reduce and eliminate all waste, the root of waste as well as no products value-added activities in manufacturing and circulation to adapt to production requirements of being more variety, low-volume, hybrid, flexible, high quality with low cost.


15. Trade-off of the logistics and illustration?

Trade-off is a very common phenomenon in the field of logistics, which reflects the very field internal contradictions. Trade-off means that there is a contradiction of profit and loss in a number of functional elements of logistics, that is to say, when optimization and interest happened in a certain element, the loss occurred inevitably in a certain or several other functional elements and vice versa. The very contrary phenomenon of rise and loss exists in various industries, but the problem seems particularly serious in the field of logistics. Such as packaging, given that assumption, prices in product sales market and sales are the same, assuming that other cost factors unchanged, then if spending less packaging per cent, the income will inevitably go up, namely the less packaging cost, the higher profits gain. But once the goods are into circulation, if the packaging simplified reduces the protective effect of the product, it will cause the storage, handling and transportation not functioned and effectiveness reduction greatly. Apparently packaging benefits is at the expense of losses in other process. Loss of billions of dollars appears yearly in China circulation due to improper goods packing, which is the illustration of the very trade-off.