Logistic Strategy for Amazon: Enhancing Efficiency in Supply Chain Management
Explore the vital components of logistics, including transportation, handling, warehousing, and information flow. Understand the significance of efficient logistics in enhancing a country's export competitiveness and supporting small businesses. Discover major courier and cargo companies operating in Pakistan, such as Pakistan Post, and their role in facilitating communication and delivery services across the nation.
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Logistic Strategy for Amazon By M. Amir Khan, Services Division, Trade Development Authority of Pakistan
Logistic The management of inventory in motion or at rest. Inventory is in motion during transportation. Inventory is at rest awaiting production of finished goods or distribution at the final point of sale. (UNCTAD) The process of planning, implementing, managing and controlling the flow and storage of goods, services and related information from the point of origin to the point of consumption. (UNCTAD)
What makes up logistics ? Transport It has to move Handling Loading, unloading, sorting , packing Warehousing Holding product after harvest or production Information Give visibility of advanced sales / orders / demand Transactions The better they get, the less storage is needed Reduces the drop (order) size, each time
Core logistics components Transportation Freight forwarding services Inventory management, including returns Customer service Information flow and order processing Warehousing Cross-docking and intermodal exchanges Materials handling Protective packaging and value-added services Support services such as certification, inspection, testing and etc.
Why is Logistics Important? A countries export competitiveness is determined, inter alia, by their productive capacities as well as their ability to bring goods to foreign markets at the lowest possible cost and under conditions required by customers. (UNCTAD) High logistics cost feed through to domestic pricing as well as export Producers and SMEs must be able to get their product to market At a competitive price In good time and good condition A competitive national transport network will Reduce imports of perishable by enabling domestic producers to compete Reduce rural poverty by giving income to remote communities Help small business develop by getting their product out
Short Introduction of some Major Courier and Cargo Companies operating in Pakistan:
Pakistan Post: Pakistan Post Office is one of the oldest Government departments in the Sub-Continent. It has a broad and varied role to play beyond provision of communication link for individuals and businesses. Pakistan Post is providing postal services in every nook and corner of the country through a network of around 13,000 post offices. Pakistan Post is providing delivery services to about 20 million households and businesses as community service without any cost considerations. Pakistan Post is also providing a universal postal service network in harmony with the Universal Postal Union (UPU) strategy to ensure secure and timely delivery of mail, money and material at affordable cost through utilization of people, process and technology and innovative product offerings. Delivering cargo to more than 200 destination globally.
TCS In 1983 TCS was founded in Pakistan with 12 stations and 25 bookings on the first day. TCS expend it services countrywide to over 100 locations to meet Pakistan Banking s council need and established a countrywide dialup IT link. In 1989 TCS established Sentiments Express A unique and personalized gift delivery services and established company in the UK, as well. In 1991 TCS bid for the first private airline license in collaboration with British Airways. In the years of 1997 1998 TCS formed own aviation setup inducted first AN-26 and established own operations in UAE and later in Canada. In the years 2001 2002 Harvard Business School conducted a case study on the Entrepreneurial Spirit and Success of TCS. Re-designed and standardized the courier uniforms. Established a dedicated logistics entity and pursued further expansion in the UK. In the year 2005 & 2006 TCS inducted AN 12 aircrafts into the TCS aviation fleet inducted a Boeing-737 200F. In 2007 implemented ISO 9001:2000 in TCS logistics. In 2016 TCS signed a strategic alliance with UPS the world largest parcel delivery and logistics services company. In 2017 2018 TCS become the first Pakistani company to qualify for the transports Internation aux Routiers (TIR) lenience. In 2019 TCS launched envoi portal for integrated e-Commerce fulfillment services.
Leopard From the time when Leopards Courier Services Pvt. Ltd. started its operations in 1983 in Pakistan with a small business idea that initiated its journey from 5 destinations by delivering letters and documents, is now transformed into a leading Logistics, Courier & Warehousing service provider across Pakistan, with over 700+ Express Centers, handling over 90 million packages a year, 1500+ Service Locations across Pakistan with 4000+ Vehicles fleet & over 2200 Destinations Worldwide, serving Proprietors Entrepreneurs, Small Medium Business Enterprises SME, Students, Individuals, Travelers, FMCGs, Transnational Companies, Large Business Corporations (Textile, Leather, & other sectors), Government Sectors, Non-Government Organizations & Foreign Missions to fulfill their Courier, logistics & Supply Chain needs. Leopards Courier Services Pvt. Ltd. has achieved phenomenal growth since its inception under the leadership of the Chairman & Founder Mian Jehangir Shahid. Today s Leopards Courier Services Pvt. Ltd is the only Courier & Logistics Company in Pakistan having an own branded Boeing 737-300 cargo Aircraft with daily flights for cargo & overnight packages movements, this positioned an enormous value addition in the fleet size of Leopards Courier Services Pvt. Ltd. With the dynamic approach of Leopards Management, towards constant transformation & digitalization of current operations processes at leopards. Enabling technologies such as Sensors, IOT, Data Analytics, Auto Sortation & Sort to light technology and robotics are being deployed into specialized applications. These technological advancements, the introduction of new systems, processes, tech teams, now making Leopards Courier Services Pvt. Ltd. a leading digitalized Logistics & Courier Group.
DHL When Adrian Dalsey, Larry Hillblom and Robert Lynn founded DHL in 1969, they didn t know they would revolutionize the world of logistics. Today, DHL is the world s leading logistics company. Our 380,000 people in over 220 countries and territories work every day to help you cross borders, reach new markets and grow your business. Or simply send a letter to your loved ones. DHL have 380,000 people working globally. DHL cover 220 Countries and Territories and delivered 1,588,000,000 parcels per year.
Agility Agility Pakistan is the largest logistics provider in Pakistan. It is part of the global Agility network of more than 500 offices in 100+ countries. Agility Pakistan offers management, contract logistics and supply chain solutions that connect your business to suppliers and markets around the world. Air, ocean (FCL/LCL), and road freight, and multi-modal solutions to move your goods. World-class warehousing and distribution for your inventory. Customs clearance and brokerage services to make your cargo run smoothly. Specialized logistics solutions in exhibitions and events, chemical logistics and dangerous goods, and heavy-lift and project logistics. Agility s industry-leading technology and tools provide visibility to the SKU level, boost efficiency, reduce costs and de-risk your supply chain. freight forwarding, fleet
FedEx FedEx Express invented express distribution and is the industry s global leader, providing rapid, reliable, time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 90 percent of the world s gross domestic product within one to three business days. Unmatched transportation infrastructure, combined with leading-edge information technologies, make FedEx Express the world s largest express transportation company, providing fast and reliable services for more than 3.6 million shipments each business day. air route authorities and
Muller & Phipps (M&P) Three decades of delivering excellence forms M&P Express Logistics. A humble beginning on the 23rdof May 1986, today employs 2500 (including 1200+ couriers) reaching 1300 locations across Pakistan with 12+ million annual deliveries. 450+ Courier Centers (157 online), 93+ vans and a dedicated chartered Boeing 737 Aircraft also help us serve 12000+ corporate clients. We are also Pakistan's first ever FedEx Authorized Ship Center under the FedEx FASC Program. With a full deck of local and international courier services, our value-added services like cardwala and your personal shopper are live already.
United Parcel Service (UPS) United American multinational shipping & receiving and supply chain management company founded in 1907.[7] Originally known as the American Messenger telegraphs, UPS has grown 500 company[8] and one of the world's largest shipping couriers. UPS today is primarily known for its ground shipping services[9] as well as the UPS Store, a retail chain which both assists UPS shipments as well as provides tools for small businesses. In addition, UPS offers air shipping on an overnight or 2-day basis and delivers to PO Boxes through UPS SurePost, a subsidiary that passes on packages to the United States Postal Service for last mile delivery. Parcel Service (UPS, stylized as ups) is an Company to specializing a in become Fortune
Involvement of Courier and Cargo Companies operating in Pakistan E Commerce is not a new subject to the logistic companies working in Pakistan, DHL & FedEx is working within compliance with the Amazon and affiliated. The other companies have also state-of- the-art facility which can provide complete supply chain solution for their clients. The companies will align according to the Amazon requirements.
Time of delivery By air, the time of delivery is 3 7 days and depend on Flight conditions, custom situation, etc. availability, clearance, weather COVID
Inbound/outbound taxes/duties involved It depends on the destinations and HS Code of the products. Tariff & Taxes applied in USA, If shipment value is under $ 800 then no duty or taxes will be charged. This limit of $ 800 is the deminimus value set by US for inbound shipments and is subject to change depending on prevailing US policy on deminimus.
How to deliver products to Amazon Selecting the right fulfillment option Amazon sellers have two options for getting shoppers their stuff: You can do it yourself, maintaining your own inventory and shipping products to customers (merchant- fulfillment), or have Amazon take responsibility for packaging, labeling, and shipping products through Fulfillment by Amazon (FBA). Each method has its own set of benefits you just have to decide which one is right for your business.
If youre fulfilling your own orders Merchant-fulfilled just means you store and ship products directly to customers yourself. Amazon charges shipping rates based on the product category and shipping service selected by the customer, then passes the amount on to you in the form of a shipping credit. Set shipping rates apply to all products sold with an Individual plan, so it s important to determine if you can still price items profitably. Amazon s Buy Shipping tool can help you get a great deal on shipping labels with Amazon s trusted network of shipping partners, ship and confirm your orders, and track your shipments.
The benefits of Fulfillment by Amazon Around the world, Amazon has more than 175 fulfillment centers which contain more than 150 million square feet of storage space. With FBA, you get to store your stuff on those shelves. You also get Amazon s world-class customer service and returns, along with other automatic Prime eligibility and Free Super Saver Shipping) that help you scale your business fast. advantages (like
How Fulfillment by Amazon works 1. Ship your inventory to Amazon. It will be scanned and made available for sale. 2. With each order, Amazon packages and ships the product directly to the customer. 3. Amazon collects payment from the customer and pays you available funds every two weeks. 4. Amazon s customer service team handles questions, returns, and refunds.
Fees for using Fulfillment by Amazon (FBA) There are two types of FBA fees: fulfillment fees (which are charged per unit sold and include picking and packing your orders, shipping and handling, customer service, and product returns), and inventory storage fees (which are charged monthly, and are based on the volume of inventory being held in an Amazon fulfillment center). For more information, refer https://sellercentral.amazon.com/gp/help/external/help- page.html?itemID=201074400 . Video of Kiva Robots Other Packing and Delivery Video to the
Let's talk numbers The cost to sell on Amazon depends on your selling plan, product category, fulfillment strategy, and other variables. The options are flexible, so you can find the combo that works best for you and your goals. https://sell.amazon.com/pricing.html?ref_=sdus_soa_hp_pr icing#referral-fees Every cost is mentioned in the above page.
Selling plans Our selling plans give you the freedom to pay per sale or stick to a flat monthly fee. You can change or cancel your plan at any time. Some other general information regarding fees. 1. Individual $0.99/ item sold + additional selling fees 2. Professional $39.99/ month + additional selling fees 3. from 8% to 45%) Referral Fees on categories and percentage of the selling price (It may start 4. weight, and units of the products FBA fulfillment fees/basically shipment fees, it depends on the dimension, 5. daily average volume (measured in cubic feet) for the space your inventory occupies in Amazon fulfillment centers. The volume measurement is based on unit size when properly packaged and ready to ship, e.g $0.75 per cubic foot (Jan Sep), $2.40 per cubic foot (Oct Dec) FBA storage fees, Inventory storage fees are charged monthly based on the
Other means of logistics FBM For new startup, it is recommended that the Amazon, FBA centers should be used because it facilitates the entrepreneurs in providing inventory management, selling, storing, returning, and other tools by Amazon which can ease in doing business. Furthermore, there are thousands of warehouses available namely third party logistic (3 PL)
Comparative rate of service providers (Rates are not final and will depend on business Countries Weight in Kgs TCS Pak Post Leopard DHL M&P FedEx UPS Agility 2 5 $26.81 51.17 83.17 143.11 151.43 202.06 6.7 Rs. 5541 10875 19765 $61.45 60.66 105.96 169.57 195 203.8 8.8 $94.57 139.92 210.92 326.63 376.22 431.32 13.45 $35.54 Rs.9,400 68.64 93.52 200.59 212.13 223.41 11.28 Will provide their rates to the customer s according to their volume. Will provide their rates to the customer s accordin g to their volume. USA and Canada 13000 19700 31300 37300 44050 1350 10 20 25 30 Additional 1 Kg 1778 UK 2 5 $26.04 48.78 88.13 178.78 165.79 192.79 5.27 4453 53.82 58.37 81.09 125.69 149.5 155.87 6.82 $77.09 111.35 163.25 241.62 280.85 320.05 9.74 $34.26 46.72 65.01 166.98 232.23 245.37 13.14 10 20 25 30 Additional 1 Kg 1028 EU 2 5 $30.28 54.79 Germany 90.94 145.06 173.72 202.4 5.4 Rs.5754 $55.44 80.14 118.12 174.54 202.75 214.79 12.04 $79.95 114.87 167.87 248.27 288.47 368.27 9.95 $34.64 47.01 65.29 175.35 243.57 257.32 13.75 10 20 25 30 Additional 1 Kg 1334
Comparative rate of service providers Countries Weight in Kgs TCS Pak Post Leopard DHL M&P FedEx UPS 2 5 $24.23 46.34 84.37 124.6 142.77 160.95 3.64 Rs. 7614 $48.24 67.59 106.9 164.88 187.76 193.92 6.16 $71.97 102.47 147.47 209.87 241.07 272.72 9.94 $31.62 49.57 Saudi Arabia 10 20 25 30 69 174.52 199.98 210.61 10.63 Additional 1 Kg 2119 2 5 $11.85 16.17 29.96 60.45 72.69 84.94 3.12 Rs. 2603 $26 45.5 71.5 110.5 123.5 130 6.5 $71.97 102.47 147.47 209.87 241.07 272.72 9.94 $16.55 27.03 46.2 85.11 103.54 109.60 6.06 UAE 10 20 25 30 Additional 1 Kg 685 2 $33.02 Rs. 5629 $58.79 $91.13 $39.52 Australia 5 56 82.41 149.74 214.52 247.38 133.16 198.26 299.86 350.66 401.46 12.28 78.74 128.45 216.18 294.04 10 20 25 30 90.44 159.58 199.14 238.68 Additional 1 Kg 8.2 1786 9.3 17.92
Some Q & A a) Packing of consignments will be on exporter or DHL? Exporter will do the packing. b) Cost of shipment charged by DHL to ship this 20ft container consignment, Cost will be advised after confirm location in USA. c) Customs Clearance in USA, Cost will be advised after confirm location in USA. d) Tariff & Taxes applied in USA, Cost will be advised after confirm location in USA. e) Barcode responsibility on exporter or DHL? For AFR, DHL does it otherwise it s a shipper s responsibility. f) for tariff relief? GSP/Certificate of origin issued from TDAP will be required for exporters No idea about it. g) Time required for this delivery. Depending upon destination, the transit time may 35-40 days
Shipment through Sea POL POD Freight Destination : US$ 4465/20 ( Dest. Delivery & Locals ) Custom Serv. : US$ 350/BL ( Additional Lanes US$ 50/Line ) Customs Duties: ( Attached US outlay will be charged as per actual receipted ) : Karachi : Kansas, Amazon : 12,952/20 ( Including Origin locals & DDC ) Does not include Origin Custom & Delivery 20 ft Container = 1172 Cubic Feet The most common twenty-foot container occupies a space 20 feet (6.1 m) long, 8 feet (2.44 m) wide, and 8 feet 6 inches (2.59 m) high, with an allowance externally for the corner castings; the internal volume is 1,172 cubic feet (33.2 m3). Valid for Non-DG & General Goods. Subject to space & Equipment.
Case study of Pakistan Railways (PR) Azakhel, Nowshera, KP Dry Port is under management/operated by PR, the exporter like to use the PR for cargo to reduce the cost of shipment. A meeting held to discuss the possibilities; PR asked the volume and informed that it will depend on the volume and will not be feasible without a certain volume for cost effective operation. The cost of shipment to Amazon will depend on the volume of business, if there are opportunities, many enterprises will be enter to compete and thus it will reduce the cost.
Suggestions/recommendations A suitable payment gateway like Paypal. A quick clearance process for Amazon shipments. Ease of getting eCommerce related companies registered in WEBOC. The Logistic Strategy will be devised according to the terms and conditions of Amazon. We may adapt the logistic strategy from our neighboring or developing countries and then we may bring innovation according to the need of our stakeholders. E Commerce is not a new subject to the logistic companies working in Pakistan, DHL & FedEx is working with in compliance with the Amazon and affiliated. The other companies have also the state-of-the-art facility which can provide complete supply chain solution for their clients, it is also suggested to begin their inventory/warehouse setup in USA for the facilitation of their clients. The local companies may align themselves according to the Amazon.
Conclusion The reality and presently the Logistic Strategy/solution for the new and small enterprises is DHL, FedEx, UPS, Agility, and Amazon FBA. For future there are lot of possibilities to deliver the consignments by cost effective methods, one of the example an MoU/contract between Pakistan freight forwarders and Amazon Partnered Carrier. Another one is Selection of cost-effective warehouses in the strategic places, etc
Contact Person and details of the courier/cargo companies working in Pakistan S. No. Company Name Focal Person Designation Phone/Cell No. E-mail 1 TCS feroze.ahmed@tcs.com.pk Mr. Ahmed Feroze Director International 021-99242803 021-111210210 Ext: 1001 2 Pakistan Post 0333-4232023 farhanalimirza74@gmail.com Mr. Farhan Ali Mirza Syed Anwer Director International Sr. Relationship and Sales Channel Key Accounts Manager Manager Commercials Only contacted her information, she is not FP. Business Development Manager Business Operation Manager International 3 DHL 0301-8201618 adeel.anwer@dhl.com Adeel Manager Partner 4 UPS Mr. M. Fawad 0302-8231224 mfawad@ups.com 5 Agility 0300-2252310 mnoorani@agility.com Mr. Noorani Ms. Farah M. Akram 6 FedEx 021-111811111 farah@gerrys.com.pk customer.care@gerrys.com.pk for 7 Leopards Mr. Zafar 0311-9945991 cbh.pew@leopardscourier.com muzafer.malik@mulphilog.com 8 M&P Mr. Malik Muzafar & 03333501201 -
