UNIVERSITE HASSAN II CASABLANCA _ FACULTE DES SCIENCES

JURIDIQUES ECONOMIQUES ET SOCIALES AIN SEBAA

English for Logistics

Master spécialisé : MCLT

2018

Support de cours Prof. NADRI Youssef

Contents

- The supply chain management: Introductory exercises

- Job Descriptions: Talking about Job Responsibilities

- Comparing Modes of Transportation

- Inventory Management- Warehousing

- Procuring / Shipping Goods
- Import / export Documents and payment methods
The supply chain management: Introductory exercises

READING: SUPPLY CHAIN

Read the text and identify the main components of a supply chain

Supply Chain is an entire network of entities, directly or indirectly interlinked and interdependent in
serving the same consumer or customer. It comprises vendors that supply raw material, producers who
convert the material into products, warehouses that store, distribution centers that deliver to retailers and
retailers who bring the product to the ultimate user. Without supply chains, no producer has the ability to
give customers what they want, when and where they want, at the price they want.
It is the network created amongst different companies producing, handling and/or distributing a
specific product. Specifically, the supply chain encompasses the steps necessary to get a good or service
from the supplier to the customer. Supply chain management is a crucial process for many companies, and
many companies strive to have the most optimized supply chain because it usually results in lower costs for
the company. Quite often, many people confuse the term logistics with supply chain. In general, logistics
refers to the distribution process within the company whereas the supply chain includes multiple companies
such as suppliers, manufacturers, and retailers.
Supply chains include every company that comes into contact with a particular product. For example,
the supply chain for most products will encompass all the companies manufacturing parts for the product,
assembling it, delivering it and selling it. Some supply chains are simple, while others are rather
complicated. The complexity of the supply chain will vary with the size of the business and a number of
items that are manufactured. A simple supply chain is made up of several elements that are linked by the
movement of products along it. The supply chain starts and ends with the customer.

Elements of the Supply Chain

Customer: The customers start the chain of events when they decide to purchase a product that a company
offers for sale. The customer contacts the sales department of the company, which issues the sales order for
products to be delivered on a specific date. If the product has to be manufactured, the production facility will
be involved.
Planning: The requirement activated by the customer‟s sales order will be combined with other orders. The
planning department will create a production plan to produce the products to fulfill the customer‟s orders. To
manufacture the products the company will then have to purchase the raw materials needed.
Purchasing: The purchasing department receives a list of raw materials and services required by the
production department to complete the customer‟s orders. The purchasing department sends purchase orders
to selected suppliers to deliver the necessary raw materials.
Inventory: The raw materials received from the suppliers are moved into the warehouse. The raw materials
are stored until they are required by the production department.
Production: Based on a production plan, the raw materials are moved to the production area.
The finished products ordered by the customer are manufactured using the raw materials purchased from
suppliers. After the items have been completed and tested, they are stored back in the warehouse.
Transportation: When the finished products arrive in the warehouse, the shipping department determines the
most efficient method to ship the products so that they are delivered on or before the date specified by the
customer. When the goods are received by the customer, the company will send an invoice for the delivered
products.
Ex. 1
a- Match the entities of the supply chain with their activities.

1. Vendors a) convert the material into products.

2. Manufacturers b) bring the product to the ultimate user.
3. Warehouses c) supply raw material.
4. Distribution centers d) store materials or products.
5. Retailers e) arrange transport modes and documents
6. Forwarders f) deliver to the retailers.

b- Complete this logistic supply chain with:

forwarders - retailers – consumers - manufacturer- wholesalers – suppliers – carriers

........ ........ ........ ........ ........ ........ .......

Ex 2: Five people give their definition of logistics. Complete the sentences using the words from
the box

provide storage support distribution delivery maintenance

1 Logistics means that you manage the procurement and movement of goods and the _______________
of inventory.

2 It means the _______________ of the goods the customer needs at the right time, in the right place,
and of the right quality.

3 My definition of logistics is this: it‟s to plan, organize, and manage operations that _______________
services and goods.

4 Logistics – that‟s the purchasing, maintenance, _______________ , and replacement of material and
staff.

5 Logistics is the planning and _______________ of operations such as warehousing, inventory,

transport, procurement, supply, and _______________.
Ex 3: Complete the text about logistics using the words in the box

balancing ensuring forecasting handling trade-offs

linking negotiating selecting warehousing

„Logistics‟ is a term that is used in many different ways. Using a broad definition it can include all of
the following:

- Customer service: 1 _____________ the right product is delivered at the right place at the right time.

- Demand 2 ____________ and planning: Determining the quantity of goods that need to be ordered in
the future.

- Inventory management and material 3 ________________ : Keeping the supply chain flowing,
with no bottlenecks, by 4 ________________ the quantity of items at different locations and different
stages in the process.

- Communication technology : 5 ________________ the organization to its suppliers with IT, for
example to provide information about demand patterns to facilitate Just-in-Time-delivery.

-Transportation: 6 ______________ the best means of transportation ( i.e., air, rail, ship, truck).

- Purchasing: 7 ______________ with suppliers about price, availability, quality, and so on.

- 8 _______________: Locating and designing facilities that allow efficient storage and distribution.

All the above activities must be coordinated properly. Inevitably, there will be 9 ________________ –
less of one thing and more of something else – in order to achieve the best outcome overall.

Ex 4: What do you think of the following statements ? agree ? disagree?

1. Logistics can be defined as the management of the flow of goods between the point of origin and the
point of consumption.

2. Supply Chain can be defined as a network of facilities and distribution options that performs the
function of procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers.

3. Logistics involves the integration of information, transportation, inventory, warehousing, material

handling, packaging and security.

4. Usually, logistics does not involve the management of the flow of energy and people.

5. Logistics management plans, implements, and controls the efficient flow and storage of goods,
services and related information.

6. Logisticians normally work independently from other departments of the company.

7. Small companies usually have separate facilities for storing raw materials.

8. The supply chain starts and ends with the provider.

Ex 5: Fill in the right element of the supply chain into the following sentences. Then put the steps
of the supply chain in the order.

a. customer b. the planning department c. the purchasing department

d. the warehouse e. the production department f. the shipping department

1. The raw materials received from the suppliers are moved into ………………….……….. .
2. The ………………….… start the chain of events when they decide to purchase a product.
3. At ………………………..….… the finished products ordered by the customer are manufactured
using the raw materials purchased from suppliers.
4. When the finished products arrive in the warehouse, ………………….….… determines the most
efficient method to ship the products.
5. ……………………………. sends purchase orders to selected suppliers to deliver the necessary raw
materials.
6. …………………………… will create a production plan to produce the products to fulfill the
customer‟s orders.

Ex 6: Connect the beginnings of the sentences and their endings.

1. The supply chain encompasses the steps … .

2. Logistics refers to the distribution process within the company …
3. The supply chain for most products will encompass all the companies … .
4. The customer contacts the sales department of the company, … .
5. The planning department will create a production plan … .
6. The raw materials are stored … .
7. The finished products ordered by the customer are manufactured … .
8. When the finished products arrive in the warehouse, … .

a. … to produce the products to fulfill the customer‟s orders.

b. … the shipping department determines the most efficient method to ship the products.
c. … necessary to get a good or service from the supplier to the customer.
d. … until they are required by the production department.
e. … whereas the supply chain includes multiple companies.
f. … which issues the sales order for products to be delivered on a specific date.
g. … using the raw materials purchased from suppliers.
h. … manufacturing parts for the product, assembling it, delivering it and selling it.
Supplementary reading: Supply Chain Management

Supply chain management (SCM) is the management of the flow of goods. It includes the movement
and storage of raw materials, work-in-process inventory, and finished goods from point of origin to
point of consumption. Interconnected or interlinked networks, channels and node businesses are
involved in the provision of products and services required by end customers in a supply chain. Supply
chain management has been defined as the "design, planning, execution, control, and monitoring of
supply chain activities with the objective of creating net value, building a competitive infrastructure,
leveraging worldwide logistics, synchronizing supply with demand and measuring performance
globally."
SCM draws heavily from the areas of operations management, logistics, procurement, and information
technology, and strives for an integrated approach. To ensure that the supply chain is operating as
efficient as possible and generating the highest level of customer satisfaction at the lowest cost,
companies have adopted Supply Chain. Management processes and associated technology. Supply
Chain Management has three levels of activities that different parts of the company will focus on:
strategic; tactical; and operational.
Strategic: At this level, company management will be looking to high level strategic decisions
concerning the whole organization, such as the size and location of manufacturing sites, partnerships
with suppliers, products to be manufactured and sales markets.
Tactical: Tactical decisions focus on adopting measures that will produce cost benefits such as
using industry best practices, developing a purchasing strategy with favored suppliers, working with
logistics companies to develop cost effect transportation and developing warehouse strategies to reduce
the cost of storing inventory.
Operational: Decisions at this level are made each day in businesses that affect how the products
move along the supply chain. Operational decisions involve making schedule changes to production,
purchasing agreements with suppliers, taking orders from customers and moving products in the
warehouse.

Supply Chain Management Technology

If a company expects to achieve benefits from their supply chain management process, they will require
some level of investment in technology. The backbone for many large companies has been the vastly
expensive Enterprise Resource Planning (ERP) suites, such as SAP and Oracle.
These enterprise software implementations will encompass a company‟s entire supply chain, from
purchasing of raw materials to warranty service of items sold. The complexity of these applications does
require a significant cost, not only a monetary cost, but the time and resources required to successfully
implement an enterprise wide solution. Buy-in by senior management and adequate training of
personnel is the key to the success of the implementation. There are now many ERP solutions to choose
from and it is important to select one which fits the overall needs of a company‟s supply chain.
Since the wide adoption of Internet technologies, all businesses can take advantage of Web-based
software and Internet communications. Instant communication between vendors and customers allows
for timely updates of information, which is the key in the management of the supply chain.
Job Descriptions : Talking about Job Responsibilities
Ex 1 Match the words with the definitions.
1. carrier
2. freight forwarder
3. supplier
4. haulage contractor/haulier
5. courier
6. consignee

a. company which carries goods by road

b. person or firm named in a freight contract to whom goods have been shipped or turned over for care
c. company that specializes in the speedy and secure delivery of small goods and packages
d. company that transports or conveys goods
e. company which supplies parts or services to another company; also called vendor
f. person or business that arranges documentation and travel facilities for companies dispatching goods to
customers

Ex 2: The phrases below describe responsibilities of two different jobs in logistics: Store Supervisor
(SS) and Distribution Manager (DM). Write (SS) or (DM) next to each phrase.

1-Hire and train staff. __________

2-Be in charge of store and inventory. __________
3-Make purchase requests for all stocked items that are at minimum. __________
4-Have extensive knowledge of current tariffs, rates, and import and export regulations. __________
5-Receive and process incoming orders. __________
6-Monitor shipping operations. __________
7-Ensure materials received are in good condition. __________
8-Develop business plans. __________
9-Assess warehouse operations and provide feedback. __________
10-Inform customers of collection or delivery dates. __________
11-Check invoices against orders. __________
12-Ensure the budget is not overspent. __________

EX3: Complete these descriptions about jobs in logistics with the words given

1) freight forwarder

deal with consolidate organize dealing negotiating arrange

-My job is to _________________the transport of goods either by sea, air, road or rail.
-An important part of the job is _______________________with customers request about the most suitable
mode of transport.
-Another part of the job is to __________________a number of shipments under one bill of lading.
-My responsibilities also include _____________________good shipping rates with shipping lines and
transport companies.
-I have to ____________________ all the necessary documentation, and __________________ customs
clearance on behalf of my clients.
 2) shipping operations manager

costs schedule make sure advise

-I am responsible for getting freight and passengers to their destination safely and on _________________.
-In my job I have to ___________________that the cargo is not damaged onboard the ship or while loading
or unloading.
-I have to keep an eye on the budget and estimate __________________________.
-I _____________________customers on shipping rates and prepare quotations for our sales office.

3) warehouse manager

store liaise take care ensure manage

- I use modern computer systems and sophisticated software and hardware to _____________________stock
in the warehouse.
-Our warehouse management system helps me __________________ and retrieve the goods quickly.
-Another part of my job is to ______________________with departments such as transport and production.
-Apart from that, I _____________________that vehicles, machines, and any other kind of equipment are
maintained to a high level.
-I _________________________that health and safety standards are maintained.

4- Transportation Broker

solutions handling shippers issue carriers loading

-My agency obtains negotiated large-volume transportation rates from__________________, and resells this
capacity to ______________________.
-We offer transport __________________________according to the types of goods.
-Other tasks include planning and arranging transport options, transport and ___________ ____________
equipment, and the actual shipping of goods.
-I give shipping and __________________________ instructions.
-I know what documents are necessary for shipping the goods: I ______________________ advice of
shipment, and I know International Commercial Terms.

Ex 4: Match the verbs (1-8) with the activities (a-h) to make phrases

1. book a. a number of shipments under one bill of lading

2. consolidate b. booking reservations
3. deal c. that health and safety standards are maintained
4. keep d. modern computer systems
5. make e. space on a ship, train, lorry, or plane
6. use f. where to put them in the warehouse
7. check g. an eye on the budget
8. take care h. with all the necessary documentation
Comparing Modes of Transportation

Ex 1: Read the text and choose the best title for each paragraph (A-D).

1. Description of the main activities of a freight village.

2. Introduction to the concept of freight village.
3. Final statement on a freight village.
4. Extra information on freight villages.

Intermodal Freight Transport

A ___
A freight village is a complex set of facilities where all the activities relating to transport, logistics and
distribution of goods are carried out on a commercial basis by various operators, who can either be the
owners or the tenants of the spaces (warehouses, storage areas, offices, car parks etc.). It must be
equipped with public facilities and, if possible, include public services for the staff and users. Other
names for a freight village are: logistics park/center, transport center or logistics hub.
B ___
A freight village enables change from one given transport mode to another (modal shift) through a set of
technologies that facilitate the transfer. It is served by several transport modes (road, rail, deep sea, in-
land waterway, air) to encourage intermodal transport for the handling of goods. The most common
examples of modal shifts are: train (rail) to lorry (road); barge (inland waterway) to train or lorry;
airplane (air) to lorry.
C ___
A freight village requires different activities such as warehousing, economic activities, support
activities, unified management. The warehouse is the infrastructure where the transport operator mostly
performs his business. This activity may include the division of the goods into smaller quantities for a
more functional distribution. Logistics hubs need active distribution centers and several industrial
activities in the neighborhood that can exploit the modal shift facilities within the village. Support
facilities include support services like lorry rest areas, office space, restaurants, banking, shops and
hotels. Unified Management requires that the village is often under the management of a single entity.
D ___
A freight village is the right solution to satisfy the increasing requirements of a complex business based
on transport. In order to work well it is imperative that the village is run by a single body, either public
or private.

Ex. 2: Read the text once again and write T (True), F (False) or DS (Doesn’t say).

1. A freight village is also called a logistics hub. _____

2. A modal shift train to airplane is not possible. _____
3. In the warehouse goods are usually assembled in bigger quantities. _____
4. In a freight village there are never banks or restaurants. _____
5. A freight village is usually run by a single person. _____
 Grammar : Comparative / Superlative adjectives

Ex. 1. Complete the sentences with the correct form of the words in brackets.

1. How long would it take by barge? – Normally about six days, but it often takes
______________________ (long) if the weather‟s bad.
2. It‟s cheap – it‟s actually ______________________ (cheap) of all the transport options.
3. It would only take four days to ship by truck, but the cost would be about 50%
______________________ (high) than by barge.
4. Rail would definitely be ______________________ (fast) than the truck option if we use the express
service that takes three days.
5. But it would also be ______________________ (expensive) than shipping by road – transport costs
are about 40% higher.
6. And then perhaps we‟d have to use the standard train, which is much _________________ (slow).

Ex2: Complete the following sentences using the correct form of the adjectives in brackets.

1. BEE Inc. is (large) ______________________ company in this region.

2. BEE Inc. offers a (broad) ______________________ range of products and services than any other
company in this region.
3. We can offer various services at a (competitive) _________________ price compared to Mono Ltd.
4. This is (big) ______________________ container I have ever seen.
5. Logistician is one of (popular) ______________________ professions today.
6. A train is (fast) ______________________ than a truck.
7. Air is (fast) ______________________ mode of transportation.
8. Fundamentals of Logistics is (interesting) ______________________ subject for me!
9. Their transport services are (expensive) ______________________ compared to their competitors.

10. My colleague‟s handwriting is (bad) ______________________ than mine.

Ex 3: Advantages and Disadvantages of Different Transportation Modes: road, rail and air
Match each characteristic with the modes and say whether it is an Advantage or Disadvantage

1. _ high freight rates 7. _ door-to-door service

2. _ especially suitable for containers 8. _ fastest over long distances

3. _ delayed by traffic congestion in cities 9. _ not tied to any schedule

4. _ weight and size of cargo limited 10. _ no need for trans-shipment

5. _ can reach places inaccessible to other forms
of transport
6. _ reduce insurance costs due to shorter transit
time
11. _ routes limited by lines and stations
12._ good for bulk commodities in large
quantities
13. _ most economical on fuel
Ex 4: Match the adjectives to their the opposites given in the box

limited expensive fast hazardous small tied energy-consuming

environment-friendly inappropriate low

1- large ≠ …………………………… 7- Far ≠ ……………………………

2-cheap ≠ …………………………… 8-suitable ≠ ……………………………
3-high ≠ …………………………… 9-economical ≠ ……………………………
4-safe ≠ …………………………… 10- Flexible ≠ ……………………………
5-polluting ≠ …………………………
6-time-consuming ≠ …………………

Ex 5: The following ideas are about criteria for selecting a suitable mode of transport:
Rail Road Air Sea or Pipeline

Complete the sentences below with the correct form of the adjectives from Ex 4

1 Freight rates / Insurance costs

a. In road haulage, freight rates are _____________________ in transport by rail.
b. Using pipelines to distribute energy offers _____________________ insurance cost.

2 Fuel consumption
c. Transporting commodities by rail is _______________________ on fuel than using sea freight.

3 Carbon dioxide emissions

d. The most polluting _____________________________mode of transport is sea freight.
e. Sea freight isn‟t as _______________________________ conveying fuel by pipeline.

4 Constraints of schedule
f. It is _________________________to use road transport than to transport goods by air.

5 Delivery time
g. Air freight is _____________________mode of transport.

6 Geographical coverage
h. For domestic shipments, we can reach ________________________ areas by using road transport than by
using rail transport.

7 Load capacity
i. _____________________consignments may be hauled by rail freight than by road transport.

8 Damage and loss

j. Air freight is one of _____________________ modes of transport.

9 Type of cargo
k. Rail and road freight are _____________________ modes for transporting bulk commodities.
Inventory Management- Warehousing

Reading

Decisions regarding the amount of inventory that a company should hold and its location within a
company‟s logistics network are crucial in order to meet customer service requirements and expectations.
There are a number of reasons why a company might choose or need to hold stocks of different products.
The most important reason for holding stocks is to provide a buffer between supply and demand. There are
many ways in which the need to hold stocks affects other logistics functions. Inventory costs are one of the
major logistics costs for a large number of manufacturing and retail companies. It is essential for effective
planning that the various costs associated with inventory are minimized.
The aim of an effective inventory replenishment system is to maintain a suitable balance between the
cost of holding stocks and the particular service requirements for customers. The need for this balance can be
illustrated by considering the disadvantages of low stock levels and high stock levels. The disadvantages of
low stock levels are that customers‟ orders cannot be immediately fulfilled, which may lead to the loss of
both existing and future business, and that goods have to be ordered very frequently. High stock levels have
a major disadvantage because capital is tied up that might be better invested elsewhere. Also, there is the risk
of product deterioration (e.g. food and drinks) and of products becoming outdated or obsolete if they are
stored for long periods of time (e.g. computers, mobile phones and fashion goods). A final disadvantage is
the expense of providing additional storage space.
Inventory replenishment systems are designed to minimize the effects of these high/low stock level
disadvantages by identifying the most appropriate amount of inventory that should be held for different
products stocked. There is a variety of systems, but the two most popular ones are the periodic review (or
fixed interval) system and the fixed point (or continuous) reorder systems. In the periodic review system the
stock level of the product is examined at regular intervals and, depending on the quantity in stock, a
replenishment order is placed. Thus, the order size will vary each time a new order is placed. For the fixed
point reorder system, a specific stock level is determined, at which point a replenishment order will be
placed. The same quantity of the product is reordered when that stock level is reached. Thus, for this system
it is the time when the order is placed that varies.
These systems, and variations of them, have been used for many years, and they generally work quite
well. They have one significant drawback, however, which is that they can create unnecessarily high or low
stock levels, especially when demand changes, which can be very difficult to forecast.

Ex 1 : Answer the following questions.

1. What is the most important reason for holding stocks?

2. What is the aim of an effective inventory replenishment system?
3. What are the disadvantages of low stock levels?
4. What disadvantages do high stock levels have?
5. What are the two most popular systems of inventory replenishment?
6. How do these systems differ?
7. Are changes in demand easy to be determined in advance?
Ex 2 Fill in the missing words

a. space b. systems c. costs d. disadvantages e. expense f. reasons

g. quantity h .stocks i. intervals j. orders k. level l. effects m. products

1. There are a number of ………....… why a company might need to hold ………....… of different …….…
2. Inventory ……………....… are important for a large number of companies.
3. The ………....… of low stock levels are that customers‟ ………....… cannot be immediately fulfilled.
4. One of the disadvantages of high stock levels is the ……....… of providing additional storage ………....…
5. Inventory replenishment ………..… should minimize the……....… of high/low stock level disadvantages.
6. The stock level of the product is examined at regular ……………....…
7. The same ……………....… of the product is reordered when a specific stock …………....… is reached.

Ex.3 Complete the sentences from a presentation about ‘Continuous replenishment’ with the words
from the list.

stock lead times replenishment processing generated data interchange point

schedule inventory retailer

1. Today I‟m going to tell you something about CRP, which means continuous _______________.
2. I‟ll also explain how it can be used to lower inventory and operational costs and to shorten product
_____________________.
3. First of all, you decide what products you want to order at what ___________________ level.
4. The system will use this information at the ___________________ of sale in the retail store.
5. The leading Russian clothes ____________________ Young Fashion introduced continuous
replenishment three years ago.
6. With the new system all orders are ____________________ by computers, which process data received
from cash registers.
7. The orders are sent to the warehouse by electronic ______________________, where they are processed.
8. And finally the goods are delivered to the different outlets according to a _______________.
9. Since the introduction of the CRP system, Young Fashion have managed to cut
_____________________ and transport costs by about 15%.
10. Moreover, errors in order ______________________ have been reduced considerably by using scanning
technology and EDI.

The Passive voice

Ex1: a- Find in the sentences the verbs in the Passive Voice and underline them.
b- Identify the tenses in each sentence

1. Any supply chain‟s success is closely linked to the appropriate use of transportation. _________
2. In the receiving area of a warehouse, goods will be unpacked or repacked. _________
3. The goods are now being exchanged between trucks. _________
4. The list of raw materials was received by the Purchasing Department last Monday. _________
5. The raw materials were received from the suppliers and checked for quality and accuracy. ____
6. The final products are manufactured using the raw materials. _________
7. These goods will be delivered in two weeks. _________
8. The cargo has not been shipped yet. _________
9. All necessary documents have already been received. _________
10. The goods were selected in the quantities that had been required by the customer. _________
11. The sales order includes specific requirements that have to be fulfilled by the production facility.
______
12. This item is being tested at the moment. _________
13. Most of the inventory should be stored in the back-up storage area of a warehouse. _________

Ex2: Put the verbs in brackets into the correct passive form.

1. Bar code symbols ………………………………………….. (read) by an optical scanner.

2. Bar code technology …………………………………………….… (use) since the 1970s.
3. A suitable payment method must ……………………………..(choose) carefully to minimize the
payment risk.
4. These terms of payment ……………………….(use) in international trade for a long time.
5. Last year, this payment method …………………..(utilize) for paying for goods for export.
6. For the last shipment, payment ………………………………. (receive) before the ownership of the
goods …………………………………(transfer).
7. Goods ………………….(already; ship), and documents ………………..(send) to the buyer.
8. The Letter of Credit is a document that ………………………(issue) by a financial institution, or a
similar party.
9. A revocable LC can ……………………………..(cancel) without the seller‟s agreement.
10. An irrevocable LC must …………………………….(change) with the agreement of all parties of
the contract.
11. The next sale transaction …………………….(perform) by the bank through an exchange of
documents.
12. The merchandise ……………………………………….. (just; deliver).
13. The Letter of Credit ………………………………………….(have to; pay) even if something
happens to the merchandise.
14. By 1994, bar code implementation.………………………………………. (complete) by only 10% of
American companies.
Procuring / Shipping Goods

A- Writing:
Ex 1: A Spanish courier company receives a quotation for packing labels and consignment notes.
Put the words or phrases in the correct order to make sentences. The first parts have been done
for you.

Ex 3: There are seven mistakes in this email (Advice of dispatch). Can you correct them?

Dear Cheng
We are pleased to inform you that our forwarder was picked up the goods from our warehouse
yesterday. Your order has dispatched on board the vessel “Ocean Line” today. Please find attach the
following documents: delivery note N° 70007108, packing list, and shipping order.
The goods should be at your disposal at Monday 31 May 2017. Please notice that a copy of the batch
certificate will be send to you as soon as possible by mail. As soon as we receive the original batch
certificate, we will send it to you.
If you have any further questions, please let me now.
Regards
Ana Garcia, Logistic Manager
Ex 4: Write an email informing a customer about dispatch. Include the following information:

1. The order number.

2. When the consignment was sent.
3. How the consignment was shipped.
4. Where it will be delivered.
5. When it will arrive at the customer‟s premises.

B- Linking words

Ex1:Complete this executive Summary from a Human Resources department with the ideas given.

a-the situation has not improved h-they are exhausted

b- production staff do not i- everyone has to work harder
c-Our staff have been working overtime for months j- the high cost
d-we have seen decline k- salaries have to be competitive
e- heavy workload l- We are proposing training for all staff
f-they left the company m- we can check progress
g-they make mistakes

Here is the situation for the previous quarter:

Last year we were celebrating success. This year, in contrast, (1) _________we have seen decline.
In spite of our best efforts, (2) ___________________________________________________.
(3) _____________________________________.However, we are still behind schedule. We are
understaffed; consequently, (4) ______________________________________ . People are working
long hours. As a result, (5) ____________________________________. When people are tired, (6)
____________________ _____. In addition , they suffer from stress. The long working hours are not
due to (7) _________________ , but to the work system we adopt. While managers have flexible
working hours, (8) ____________________________. Some workers could not keep up with the pace;
therefore, (9) ______________________. Based on the above situation, we recommend the following:
Since we need to attract more staff, (10) _____________________________________.
(11) ______________________________________________ in order to improve efficiency.
(12) Despite___________________________, we‟ve decided that training should go ahead.
Finally, we need to set up a monitoring system so that (13) _____________________.

Ex 2: Circle the correct linking words to complete these sentences

1-The documents stated the wrong quantities. As a result However Because , the shipment was
not accepted in the warehouse.
2-The delay was because though due to an accident on the motorway.
3-They had used different packing material. Although For this reason Despite , we were
unable to identify the consignment.
4-Unfortunately, we are unable to deliver the consignment because consequently because of
technical problems in our warehouse.
5 -Although In spite of because the delay, the delivery will still arrive on schedule.
6- Our output has doubled thanks to due to despite a significant increase in production.
Ex 3: Complete the sentences with the linking words from the box

therefore because although due to as a result despite because of in spite of

1- Our customer wants to ship valuable freight, __________________ we need to think about insurance.
2-A part of the shipment seems to be damaged ___________________ rough handling.
3-_____________ the customer needed them urgently, the goods could not be delivered at the weekend.
4-The flight was cancelled ___________________ to bad weather.
5-The driver had the wrong address. _________________, it took him three hours to deliver the pallets.
6-The consignment arrived on time ___________________ all the customs formalities at the border.
7-We are unable to ship today ____________________ we‟ve had problems with our dispatch.
8 -______________________ being well secured, the load was damaged on arrival.

Ex 4: Fill in the chart with appropriate linking words

Ex 5: Complete the sentences with the correct linking word

1-I have no doubt that this accident was ________________ carelessness.

2- ___________________ increased interest in our products, sales have remained low.
3- Fosters have updated their technology. ________________, they are more competitive.
4-We need to update computers in the accounts department ____________ in the personnel department.
5-_____________________it will take more time, I think we should carry out a thorough survey.
6-There have been rumors of a take-over bid. _______________, the share price has soard.
7-This car is fast, comfortable and safe; ________________________, it is very economical.
8-Production dropped __________________________the labour strike.
EXPORT DOCUMENTS

Reading

In exporting, different Export Documents are typically used:

A- Common Export Documents include Bill of Lading, Commercial Invoice, Export Packing List.

1) Bill of Lading is a shipping document that is issued by the carrier to the shipper for receipt of the
goods. It is a contract between the owner of the goods and the carrier to deliver the goods, which gives
details of a consignment, its destination and the consignee.

- Inland Bill of Lading is issued by the trucking company and/or the railroad line for taking the goods
from the exporter‟s facility to the port of embarkation or consolidation facility.

- The Ocean Bill of Lading (OBL) is a document required for the transportation of goods overseas. The
document specifies the details of the goods that have to be transported, such as quantity, type and
destination.

- The On-board” Bill of Lading is issued for goods, which have been loaded onto the ship.

- The Through Bill of Lading is issued when the goods are to be transported by more than one carrier.
- The Container Bill of Lading is issued for the transportation of containerized goods).

- The Groupage Bill of Lading is issued for grouped consignments.

- Air Waybill (AWB) is issued when goods are sent by air.

AWBs are non-negotiable, mainly because of the short amount of time that the goods are in transit.

2) Invoices
An invoice is a document that contains specific information regarding the goods shipped.

- Commercial invoice is the seller‟s formal request for payment. It is prepared by the seller/exporter and
addressed to the buyer/importer. The invoice identifies the buyer and seller, describes the goods sold
and all terms of sale, including Incoterms, payment terms, relevant bank information, shipping details,
etc.
- Pro-forma invoice is an invoice sent to the buyer before the actual shipment. It gives the buyer a
chance to review the sale terms (quantity of goods, value, specifications) and get an import license if
required. It also allows the buyer to work with their bank to arrange any financial process for payment.
For example, to open a Documentary Credit (Letter of Credit), the buyer‟s bank will use the pro-forma
invoice as a source of information.

- Customs invoice is a special kind of invoice for the customs authorities of the importing country. It
contains additional information such as domestic value and export price of the goods.
- Consular invoice is the evidence that the goods, which are imported, are not over-priced.
3-Export Packing List is a formal document that itemizes a number of details about the cargo such as
seller, buyer, shipper, invoice number, date of shipment, mode of transport, carrier, description, the type
of package (a box, crate, drum, or carton), the quantity of packages, total net and gross weight (in
kilograms), package marks, etc. The details on the Packing List match exactly with what is specified on
the commercial invoice and Bill of Lading. But pricing information is not required on the Packing List.

B- Other documents include: certificates of origin, temporary shipment documents, other certificates for
shipments of specific goods, and export licenses.

1) Certificate of Origin (CO) is a document that declares, in which country goods were manufactured. It
is required by some countries for all or only certain products. Practically every country in the world
considers the origin of imported goods, when determining what duty will be assessed on the goods or
whether the goods may be legally imported at all. The number of required copies and language may
vary from country to country.

2) ATA CARNET (temporary shipment certificate). Carnets (“Merchandise Passports”) are

international customs documents that simplify customs procedures for the temporary import of various
types of goods. ATA CARNET is an international customs document that permits the tax-free and duty-
free temporary export and import of goods for up to one year. The acronym ATA is a combination of
French and English phrases “Admission Temporaire / Temporary Admission”.

3) Certificate of Analysis is an authenticated document issued by an appropriate authority that certifies

the quality and purity of pharmaceuticals, animal and plant products being exported. It is required for
seeds, grain, health foods, dietary supplements, fruits and vegetables, and pharmaceutical products.

4) Certificate of Free Sale is a document required in certain countries or for certain commodities
(biologics, food, drugs, medical devices and veterinary medicine). It certifies that the specified imported
goods are normally and freely sold in the exporting country‟s open markets and are approved for export.

5) Dangerous Goods Certificate. Exports submitted for handling by air carriers and air freight
forwarders classified as dangerous goods need to be accompanied by the Shipper‟s Declaration for
Dangerous Goods required by the International Air Transport Association (IATA).

6) Health Certificate is required for shipment of live animals and animal products (processed
foodstuffs, poultry, meat, fish seafood, dairy products, and eggs and egg products).

7) Insurance Certificate is used to guarantee the consignee that insurance will cover the loss of or
damage to the cargo during transit.

8) Export License is a government document that authorizes the export of specific goods in specific
quantities to a particular destination.
It is issued by the appropriate licensing agency after a careful review of the facts surrounding the given
export transaction. It is up to the exporter to determine whether the product requires a license.

Source: Yulia Stukalina (2014) Professional English for Students of Logistics

EX. Complete the following sentences.

1. Common Export Documents include Bill of Lading, Commercial Invoice, …………………….

2. Ocean Bill of Lading is a document required for ……………………………………………
3. Air Waybill is issued when goods are ………………………………………….
4. A pro-forma invoice is used by the buyer‟s bank as evidence to open a ……………………..
5. Pro-forma invoice is an invoice sent to the buyer before ………………………………..
6. Export Packing List is a formal document that itemizes a number of details about the cargo such as
………………………………………….
7. ……………………………………. is a government document that authorizes the export of specific
goods in specific quantities to a particular destination.
8. The details on the Packing List match exactly with what is specified on the commercial invoice and
…………………………………….
9. Certificate of Origin is a document that declares, in which country goods ……………………….
10. ATA Carnets are international customs documents that simplify customs procedures for
…………………………. of various types of goods.

METHODS OF PAYMENT

The following terms of payment are commonly used in domestic trade:

_ Cash with Order (CWO): the buyer sends payment with his order.

_ Cash on Delivery (COD): the buyer pays the company, which delivers the goods/the carrier.

_ Payment on invoice: the buyer receives an invoice on or after delivery, which describes the goods
delivered, the sum to be paid, the period within which the invoice must be paid.

_ Hire Purchase (HP): the customer makes a down payment (e.g. 10% of the total price) and gets the
goods; later he pays the balance/the remaining sum in instalments.

_ Open-account terms: the buyer doesn‟t pay for every delivery, but receives a statement of account
every month or quarter; which states the sum he owes the seller.

_ Leasing: the leaseholder pays rent to the lessor; the lessor gives the lessee permission to use the object
for a fixed period of time.

…………………………………………………………………………………………….
Methods of payment in international trade

Cash-in-Advance

Cash-in-Advance is a pre-payment method utilized for paying for goods for export. With cash-in-
advance payment terms, the exporter can eliminate credit risk, since payment is received before the
ownership of the goods is transferred. Wire transfers and credit cards are the most frequently employed
cash-in-advance options available to exporters. Cash-in-advance method of payment creates many risk
factors for the importers.

Cash in advance before shipment, is probably the most desirable method of all. This method of payment
is inexpensive, because it involves direct importer – exporter interaction without commercial bank
involvement. In this case the Producer/Exporter is relieved of collection problems and has immediate
use of the money if a telegraphic transfer (TT) is used. Payments by cheque, even before shipment, may
result in a collection delay of four to six weeks and, therefore, frustrate the original intention of
receiving payment before shipment has been undertaken.

While this method of payment provides early positive cash flow for the Producer/Exporter, however,
conversely advance payment could create cash flow problems for the export customer and increases his
level of risk. Generally, cash in advance lacks competitiveness and could, in some circumstances,
indicate to the customer that there is a lack of trust on the part of the Producer/Exporter. Foreign buyers
are also concerned that the goods may not be sent if payment is made in advance. Thus, exporters who
insist on this payment method as their sole manner of doing business may lose to competitors who offer
more attractive payment terms.

………………………………………………………………………………………………

Letters of Credit (Documentary Credits)

Letters of Credit are among the most secure tools available to international traders. The Letter of Credit
(LC) is a document issued by a financial institution, or a similar party. This is a promise made by the
buyer‟s bank (the opening bank) to send a certain sum of money to the seller‟s bank (the advising bank)
to be credited to the seller (beneficiary). The buyer pays its bank for rendering this service. An LC is a
commitment by a bank on behalf of the buyer that payment will be made to the exporter, provided that
the terms and conditions stated in the LC have been met, as verified through the presentation of all
required documents.

Letters of credit (LCs) are one of the most secure instruments available to international traders. The
buyer pays his or her bank to render this service. An LC is useful when reliable credit information about
a foreign buyer is difficult to obtain, but the exporter is satisfied with the creditworthiness of the buyer‟s
foreign bank. An LC also protects the buyer because no payment obligation arises until the goods have
been shipped or delivered as promised.
A revocable LC can be cancelled or changed without the seller‟s agreement. An irrevocable LC cannot
be cancelled or changed unless all parties involved in the contract agree.
Documentary Credits have a standard form. They generally contain:
- a short description of the goods
- a list of shipping documents required to obtain payment
- a final shipping date
- an expiration date for presenting the documents to the bank
Open Account

An open account transaction is a sale where the goods are shipped and delivered before payment is due,
which is usually in 30 to 90 days. This is the least secure method of trading for the exporter, but the
most attractive for buyers. Goods are shipped, and documents are sent directly to the buyer, with a
request for payment at the appropriate time. This option is the most advantageous choice for the
importer in terms of cash flow and cost, but it is the highest risk option for an exporter. An exporter has
little or no control over the process. Open Account trading should only be considered, when an exporter
is sufficiently confident that payment will be received.
Because of intense competition in export markets, foreign buyers often press exporters for open account
terms since the extension of credit by the seller to the buyer is more common abroad. Therefore,
exporters who are reluctant to extend credit may lose a sale to their competitors. However, the exporter
can offer competitive open account terms while substantially mitigating the risk of non-payment by
using one or more of the appropriate trade finance techniques, such as export credit insurance.
In a foreign sales transaction, an open account is a convenient method of payment and may be
satisfactory if the export customer is well established, has demonstrated a long and favourable payment
record, and/or has been thoroughly checked for creditworthiness. Under an open account, the
Producer/Exporter invoices his export customer, who is expected to pay, under agreed terms and within
a specified and agreed timeframe in the future.
Open account sales do, however, pose some levels of risk, since the absence of documents and banking
channels may make legal enforcement of claims difficult to pursue. Before issuing a quotation/pro-
forma invoice to an export customer, any company considering an export sale on an open account basis,
should thoroughly examine the political, economic, and commercial risks and consult with their bankers
if financing is needed to undertake the transaction.

Documentary Collections

Documentary Collection is an important bank payment method, when the sale transaction is performed
by the bank through an exchange of documents. The exporter entrusts the collection of a payment to the
remitting bank (exporter‟s bank), which sends documents to a collecting bank (importer‟s bank), along
with instructions for payment.

A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of a
payment to the remitting bank (exporter‟s bank), which sends documents to a collecting bank
(importer‟s bank), along with instructions for payment. Funds are received from the importer and
remitted to the exporter through the banks involved in the collection in exchange for those documents.
D/Cs involve using a draft that requires the importer to pay the face amount either at sight (document
against payment) or on a specified date (document against acceptance). The draft gives instructions that
specify the documents required for the transfer of title to the goods. The importer would need the
shipping documents to clear goods on arrival. In documentary sight collection, the bank holds the
documents until the importer pays for the goods, while in documents against acceptance it holds the
documents until the importer undertakes to pay for the goods at a later date.
Drafts are generally less expensive than LCs. Although banks do act as facilitators for their clients, D/Cs
offer no verification process and limited recourse in the event of non-payment. In other words,
Documentary Collections facilitate import-export operations, but they do not provide the same level of
protection as the Letter of Credit.

A sight draft is used when the seller wishes to retain title to the shipment until it reaches its destination
and is then paid for by the customer. In this case, before the product shipment can be released, the
original ocean bill of lading must be properly endorsed by the export customer and surrendered to the
shipping carrier, since it is a document that evidences title.
Bill of Exchange

This is a payment demand by an exporter instructing an importer to pay a specific sum of money at a
future date. When the bill matures, the importer pays the money to its bank, which transfers the money
to the exporter‟s bank, and then to the exporter after the bank has deducted its charges. A bill of
exchange is similar to receiving the export customer‟s cheque, issued by a bank in his country (i.e.
receiving a cheque from a foreign bank). Like all cheques, drafts sometimes carry the risk that they may
not be honoured by the bank . e.g. due to lack of funds in the customer‟s account.

The advantage of this method is that it allows the buyer a period of credit during which he can collect
the goods resell them or part of them and pay back to the seller. The seller also has the option to make
the bill payable on demand or give a discount for immediate cash payment upon acceptance of the bill.
A bank may endorse a bill of exchange before it matures. To endorse a bill is to guarantee to pay if the
buyer of goods does not. If a bill is endorsed by a well-known bank, the exporter can sell it at a discount
in the financial markets. The discount represents the interest the buyer of the bill could have earned
between the date of purchase and the bill‟s maturity date. When the bill matures, the buyer receives the
full amount. This way the exporter gets most of the money immediately, and doesn‟t have to wait for the
buyer to pay the bill.

……………………………………………………………………………………………..

Ex 1: Match each method of payment to the corresponding description

advance payment bill of exchange documentary credit (or letter of credit) open account

a. ________________________________
The exporter sends the goods and documents to the foreign buyer. The buyer pays the invoice when the
goods arrive, or within a certain period from the invoice date. This can be risky, as the exporter trusts
the buyer to honour the original sales contract.

b. _______________________________
A foreign bank issues an undertaking to the exporter (through a bank in the exporter's country) to pay
for the goods as long as the exporter complies with the conditions of the contract. This is a much safer
form of payment for the exporter.
To be even safer, the exporter can arrange for the bank in his/her country to act as "confirming bank",
which means that the bank in the exporter's country is responsible for the transaction.

c. _______________________________
A legally-binding agreement that the importer will, on acceptance of the bill, pay the exporter for the
goods. The risks are that the importer does not accept the bill even though the goods have arrived, or
dishonours an accepted bill when it matures .

d. _______________________________
The exporter does not dispatch the goods until payment has been received from the importer. There is
no risk for the exporter - all the risk is taken by the importer.
EX 2: Here are some expressions of handling payment. Match the beginning of sentences (1_8)
with the endings (a_h)
Ex 4: Put the words below into the spaces in the sentences.

bill of lading _ consignments _ courier _ defer _ forwarded _ import duty _ issuing bank _ wire
payment on delivery _ penalty _ release _ remit _ remittance _ shipment _ shipped _ tariffs _ title _ vessel

1. We are expecting two ___________________ of computer printers from China.

2. Another word for a consignment is a ___________________, even if it doesn't travel on a ship.
3. The consignment ___________________ ten days ago. I'm surprised you haven't received it yet.
4 A detailed list of a ship's cargo is called a ___________________.
5. Another word for ship is ___________________.
6. In many cases, when goods are imported, an ___________________ has to be paid.
7. Another word for import duties is ___________________.
8. A document proving that you own a consignment of goods is called a ___________________ to the goods.
9. After payment, the bank will ___________________ the title to the goods.
10. The bank took a long time to ___________________ payment to my account.
11. If we don't deliver on time, we'll have to pay a late-delivery ___________________
12. We would like to ___________________ payment until delivery of the shipment.
13. We usually ask our customers for ___________________.
14. If there's a problem with the letter of credit, I suggest you contact the ___________________.
15. The quickest way to send money to another country is to ______________ it, for example, by Western Union.
16. Thank you for sending the ___________________ by Western Union. I collected it this morning.
17. An effective way to ship consignments is to use a ___________________ such as UPS, DHL or FedEx.
18. The exporter's bank has ___________________ the bill of exchange to the importer's bank.