Question

Which of the following shows the correct order of international logistics process for a LDP purchase order agreement?

1) Seller (supplier) issues a pro-forma invoice
2) Custom broker submits entry documents to U.S. Customs.
3) Carrier loads the cargo.
4) Buyer (sourcer or sourcer's customer) obtains release of merchandise.
5) Custom brokers pay duty.
6) Freight forwarder books transportation space and mode.

Answer 1

The correct order of an international logistics process for an LDP purchase order agreement begins with the seller issuing an invoice, followed by a freight forwarder booking transportation, cargo loading, customs documentation, duty payment, and finally, the buyer obtaining release of the merchandise.

Step-by-step explanation:

The international logistics process for an LDP (Landed Duty Paid) purchase order agreement typically follows a sequential order. The correct order would be:

1. Seller (supplier) issues a pro-forma invoice.
2. Freight forwarder books transportation space and mode.
3. Carrier loads the cargo.
4. Custom broker submits entry documents to U.S. Customs.
5. Custom brokers pay duty.
6. Buyer (sourcer or sourcer's customer) obtains release of merchandise.

This sequence ensures that all preparatory and regulatory steps are covered before the actual shipment of goods begins, thereby reducing the risk of delays or customs issues upon arrival in the destination country. Cargo ships, as shown in Figure 1.9, are a common mode of transportation in the global economy and integral to the international logistics process.