You have just been hired as the Director of Logistics for Vina Bubbles Cola (VBC). In your new role, you will have responsibility for general logistical planning including functions such as inbound and outbound freight and any logistics-related functions within VBC.

VBC is a 20-year-old Vietnamese manufacturer of premium cola products. VBC is located in both Ho Chi Minh City and Hanoi where their manufacturing facilities, warehouses, and administrative offices are contained within single buildings in both cities. VBC employs 150 staff members total spread equally between the two cities, 70 of them dedicated to manufacturing, 30 to warehouse operations, and the remaining 50 in various administrative positions.

VBC has positioned its product in the 'premium' category and is enjoying yearly growth. Their primary product is a reusable shiny metal 750 ml bottle of cola that is manufactured using two primary raw materials: polished aluminum for the body of the bottle and high-density plastic for the removable lid. VBC has spent considerable effort on research and development and the bottle is industry-leading in its ability to maintain cold temperatures for longer than standard bottles by 60 minutes.

75% of VBC's sales are done through an online distributor called VinSpeed who maintains a distribution center in Danang. VinSpeed specializes in selling many product lines from beauty supplies to food products direct to Vietnamese consumers and uses small package providers and couriers to offer a one or two-day delivery to most Vietnamese households. VBC currently ships their product over the road to VinSpeed's distribution center and if ordered in FTL quantity, VBC pays for the freight expense. When LTL quantities are ordered, VBC charges the freight expense to VinSpeed. The remaining 25% of sales are done through a small group of boutique beverage specialty stores across Vietnam that have requested the product specifically to stock. These sales are normally low volume and shipped via a small package or courier service to the boutique beverage specialty store. We will focus on ONLY the plastic used to manufacture the bottle lid in this case study.

VBC purchases its high-density plastic from a distributor in Shenzhen, China. This specialty plastic is transported by an ocean carrier as LCL through the port of Hai Phong where it is then transported by intermodal rail to VBC in Hanoi and Ho Chi Minh City. The plastic is purchased in a small pellet form and packed in double-walled corrugate cartons measuring 120cm long x 100cm wide x 90cm tall. When filled, each carton weighs 680 kgs x 10 cartons total. For both the ocean and rail portions of transportation, nothing occupies the space above the boxes in the containers as they are not capable of being stacked. The standard shipping lead time is 7 days but there are times when VBC needs their product expedited sooner. Review Incoterms 2020 to understand the following statements.

VBC pays for freight from the supplier with two shipping options to address their production needs.

1. For Products shipped standard DDP Destination, the Supplier shall be responsible for all insurance costs, freight charges and import and/or export fees, duties, demurrage, taxes, etc. incurred on each shipment, and title, as well as the risk of loss, remain with the Supplier until delivery. Title, risk of loss, and freight charges shall become the responsibility of VBC if/when VBC arranges for the transport of materials from the Supplier's factory, EXW Shipping Point.
2. Expedited shipping is defined as 2-Day or Next Day delivery and is EXW Shipping Point from the Supplier to the Destination. VBC is responsible for all shipping arrangements. Title and risk of loss to such Product shall pass to VBC at the time of delivery/transfer to the common carrier from the Supplier.

A potential new supplier of plastic has been found in Bangkok, Thailand. This manufacturer produces a comparable product to the Shenzhen supplier. The new supplier in Bangkok would transport the plastic pellets in a bulk hopper car via rail or any other means to a trans-loading facility in Phnom Penh, Cambodia. At the time of this writing, the railway between Thailand and Cambodia may still be under construction but let's assume the rail is still operational so we can still include it in future plans. A packaging facility operates adjacent to the rail terminal in Phnom Penh where the plastic would then be packaged in the same cartons currently being used by the Shenzhen supplier for delivery over the road to VBC. This would add more cost to the process that needs to be addressed. The cartons would be loaded onto trucks and driven to Ho Chi Minh City only 230 kilometers away and additional trucks or ocean liners sent to Hanoi being 1,490 kilometers away. You have not been given costing information at this point but have been asked to prepare a preliminary report that would highlight the logistical differences between the two options. Compare and contrast the two suppliers' use of transportation and what impacts (cost/time discovered through your research) this would have on VBC. Then develop and present a final logistics plan for the company. When you have made a final decision, explain why you (the VBC Director of Logistics) chose your supplier as the best choice of the two. Remember that YOU are a Director of the company and expected to produce a report without asking for help from your boss.

1. Task 1 - Compare and contrast the standard and expedited modes of transportation used by the Chinese supplier versus the supplier from Thailand and what impacts this would have on VBC. The same shipping terms apply to both suppliers. Provide recommendations to improve the cost, lead time, and/or delivery options if any from both suppliers.
2. Task 2 - Discuss the new VBC transportation/freight model if they change suppliers by applying what you learned in class in terms of carrier & route selections to develop a detailed logistics plan for the given departure and arrival points. Provide an outcome with recommendations for the Board of Directors

Think of Task 1 and 2 as you did your Math problems in high school. The teacher did not accept the answer to the problem without you showing your work, right?

My lecturer also requires me to calculate the estimated shipping costs to compare from both countries. Can you guide me on how to calculate them based on the given number from the assignment? I search that shipping costs are based on the dimensions of the package, the weight of the package, destination, and delivery time but still don't know how to calculate.

https://www.shipafreight.com/tradelane/china-to-vietnam/

This link provides the transporting time

Thanks!