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Step 8: Preparing your export plan

You are here:Step 8: Preparing your export plan >Preparing an export marketing strategy for your firm > Export distribution > Physical distribution and transportation alternatives



Physical distribution and transportation alternatives


Your transport alternatives

We have said that one of the key distribution decisions you will need to make is how you will physically move your goods from your factory to the foreign customer (i.e. your choice of transportation method), and who will help with this (the transportation intermediary). In this regard, there are essentially four transportation alternatives available to you. They are:

  1. Air transportation - One of the major ways of transporting goods overseas and especially well suited for small, light-weight and high-value goods.

  2. Sea (or marine) transportation - the most common transportation method for the majority of goods moving overseas from South Africa and especially so for bulky and heavy goods.
  3. Rail transportation - Clearly not appropriate for overseas transportation, but is common for moving goods into Southern Africa, as well as from the inland cities such as Johannesburg and Pretoria to the ports in South Africa. The differences in railway guages means that our railways cannot reach deep into Africa.
  4. Road transportation - Road is the major competitor to rail transportation within South Africa and Southern Africa. Road transportation is also not appropriate for overseas transportation, but is the main means of transporting goods deeper into Africa.

There are other transportation alternatives used elsewhere in the world

In other parts of the world, you may come across alternative transportation methods. Barges are common in Europe and the US; camels, horses, donkeys and other pack-animals are often used to reach far-away places in the Sahara desert, places in South America and in Asia; bicycles are often the 'last mile' means of transportation in Asia; while human-power is sometimes used in third-world countries.


Courier companies

In recent years, courier companies have begun to play an increasingly important role in distribution. In the past, courier companies were seen as 'parcel' companies. The collected a small parcel or package from your office and delivered it to some distant address (either in the same country or in some other country). The major players such as DHL, FedEx and UPS have become so good at their business and have built up such a massive logistical infrastructure that they can now deliver pretty much anything, anywhere. Today courier companies are striving to become the logistics arm or partners of companies who don't want to get bogged down with logistical issues. Through outsourcing, companies can reduce the cost and risk associated with the task of distribution. This is especially so in the case of exporting, and you may want to discuss with one or more courier firms how they might be able to help you with your export distribution. Although a courier company could be seen as another transportation alternative, they, in turn, make use of air, sea, road and rail services to deliver the goods.

Transportation intermediaries - transport representatives

Once you have decided on how to transport your goods to the end user, you also need to decide on who will handle or facilitate the transportation for you. Obviously, you could do it yourself and many medium-to-large export firms do have managers who look after their respective international logistics. They generally liaise and interact with the representatives of airlines, shipping companies, the railways (i.e. Spoornet), or individual road hauling firms. After all, these representatives of the transportation companies are there to help you choose the best transportation alternative to meet your export needs and will gladly advise you on how to overcome many of the problems you are likely to face.

Transportation intermediaries - freight forwarders

Notwithstanding their help, you may still want to turn to a freight forwarding company to look after these transportation matters for you. This may be a wise decision if you are not a regular or experienced exporter. Freight forwarders make their livilihood from faciliating the logisitics surrounding the movement of goods domestically and internationally. They usually have international partners that will handle the overseas component of the logistics on their (and your) behalf, and they normally offer and door to door services, thus taking a lot of the stress and problems associated with international logistics off your hands. The use of freight forwarders is perhaps is the most common way of facilitating international trasnportation.

Transportation intermediaries - customs clearing agents

Your freight forwarder (or your firm) may also make use of a customs clearing firm on the 'other side' to ensure that your goods are cleared through customs quickly and effortlessly. Customs clearing is can become a nightmare and there are firms that specialise in this service. They normally have a good working relationship with the customs authorties in the target country and they know the laws and rules intimately. They may even have an account with the customs authority and may be able to offer you payment terms that will help your cash-flow problems (although you should not expect this facility for the start - they will usually only offer you this facility after years of trading with you).

Transportation intermediaries versus distribution intermediaries

In the case of market-entry and in-market distribution, you will also make use of intermediaries such as import agents, distributors, wholesalers, or even retailers. These intermediaries clearly have an impact on not only your overall distribution strategy, but also impact on the physical distribution of your goods. However, they are different from the transport intermediaries mentioned above, as these distribution intermediaries also have a marketing function to fulfil and have more direct and greater impact on your distribution activities. The transportation intermediaries (transport representatives, freight forwarders, clearing agents, etc.) are more faciliators of the distribution proces have less of a direct impact on your marketing strategy.


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Step 8: more information

Step 8: Preparing your export plan
      Synopsis of research already done
      Revisiting an export SWOT analysis of the firm
      Setting the export objectives of the firm
      Preparing an export marketing strategy for your firm
                  The export product
                  The export price
                  Export promotion
                  Export distribution
                        .Market entry channels
                        .In-market distribution decisions
                        .The influence of payment and Incoterms on distribution
                        .The Whole Channel concept
      Preparing an export budget for your firm
      Outlining an implementation schedule for your export activities
      Preparing and presenting your export plan
      Obtaining approval for your export plan


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More information on Step 8
Learning to export...
The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
Step 16: Handling the export logistics
Step 17: Export documentation
Step 18: Providing follow-up support
Step 19: Getting paid
Step 20: Reviewing and improving the export process
Step 21: Export Management
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