Page 187 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes Safety and Social Regulation

In direct contrast to reduced transportation regulation, another trend in the 1970s and 1980s was
expanded safety and social regulation. Since its inception in 1966, the federal Department of
Transportation (DOT) has taken an active role in controlling the transport and handling of
hazardous material and rules related to maximum driver hours and safety. The form of regulation
was institutionalized by the passage of the Transportation Safety Act of 1974, which formally
established safety and social regulation as a governmental initiative. Substantial legislation
impacting logistical performance was passed during the next three decades. The Hazardous
Materials Transportation Uniform Safety Act of 1990, which provided federal government control
over equipment design, hazardous material classification, packaging, and handling, took
precedence over state and local environmental regulations. Additional emphasis on
transportation safety has increased due to environmental and related liability lawsuits.
8.4.2 Rationale for Documentation

Export documentation is commonly considered to be the most complex and difficult part of
overseas marketing. You may have come across such comments as such comments tend to
discourage people from entering into export business. It is therefore, necessary to emphasize
that documentation is as much of an important activity as the conclusion of an export order and
its fulfilment.
Why is documentation needed in export business? The answer to this question lies in the nature
of the business relations between the exporter and the importer, who are operating from two
countries. If one is doing domestic business, one knows or can easily know the commercial
practices, which bind the buyer and the seller. Similarly, the possibility of business disputes is
reduced since both the buyer and the seller know or can easily know laws governing contracts.
However, when the buyer and the seller are operating in two countries, the commercial practices
and legal systems are different. Thus, for ensuring that the respective interests of the buyer and
the seller are protected, certain documentary formalities become essential.

Similarly, every country has its own laws governing imports and exports. Consequently, the
exporter has to comply with laws in his country through documentary formalities. At the same
time, he has to send some documents to the importer, which will enable him to take possession
of the goods after getting permission from the concerned government department (i.e. the
customs authorities). There is yet another reason for documentation in export trade. Such
documentation is linked with the claim of export incentives given by almost all countries world
over. Since most of these incentives are to be claimed after shipment, the exporter has to give
documentary proof of the fact of shipment.

Documentation formalities are necessary to enable the importer to get the contracted goods and
the exporter to get sale value as well as to secure export incentives. In other words, export
documents are needed to comply with commercial, legal and incentive requirements.

8.4.3 Standardized Document
The standard documents are the

1. Invoice (Commercial Invoice, Proforma Invoice)
2. Packing list
3. Certificate of Origin

4. Bill of Lading

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