The Agribusiness sector is formed by different areas of knowledge and one of them is logistics. Logistics is the process by which goods from the suppliers arrive at the hands of producers or manufacturers and finally to the consumers in optimal conditions.
In the case of the agricultural sector, most of the time these goods are fruits and vegetables and, as a result, this process requires some special conditions and has several limitations. Keep reading if you want to learn the main features of logistics in the agricultural sector.
1) Special conditions of Agrologistics
Every industry has features that differentiate them from the rest and, in the case of agriculture, the key differences are related to both processes and products. If you want to manage efficiently the logistics of an agri-business you need to analyze this:
- Products:
In most cases, these are perishable goods and need refrigeration for their transportation along the supply chain, both for maintaining their quality, shelf life, and cold chain conditions.
Also, it is important to bear in mind that some products may require special packaging devices, some are not suitable for long-distance transportation, others cannot be mixed in the same shipment…
Analyzing the needs of your product and the details of the transportation method used is essential to save costs and carry out a more efficient logistics process.
- Limitations:
Some of the limitations regarding the logistics of fruits and vegetables are that their quality and quantity will vary throughout the year and most of them are seasonal products, meaning that the same means and conditions of transportation will not work all the year for all the products.
Also, the time of production of this kind of goods will take longer than with other products and it is mandatory that they show their traceability clearly until they reach the consumer.
2) Means of transport in the agricultural sector
It is important to analyze the different means of transport that are at our disposal and choose the one that will fit in our company’s prevision of expenses and that will enable us to manage costs efficiently.
- Maritim transport: the most environmentally friendly.
- Aerial transport: the fastest one.
- Railway transport: it can carry approximately the same cargo as 400 trucks.
- Road transport: flexible, door-to-door transport.
- Multimodal transport: the cargo can arrive in any part of the world.
3) Most common Incoterms
Incoterms, International Commercial Terms, are rules that are recognized globally and that define the responsibilities of sellers and buyers in exports. This way, both parties will agree to universally set rules and there will be no misunderstandings regarding tasks, costs, risks, and responsibilities.
There are 11 types of incoterms distributed into 4 groups:
|
Group |
Modality |
Incoterms 2020 |
|
E
|
The seller gives the goods to the buyer in the facilities of the seller. |
EXW- Ex works |
|
F |
The seller sends the goods in a means of transportation chosen by the buyer. The buyer is responsible for the costs and risks of the main means of transport. |
FCA- Free carrier FAS – Free Along Side Ship FOB – Free on board |
|
C |
The seller sends the goods in a means of transportation chosen by the buyer. The buyer is responsible for the costs and risks of the main means of transport. |
CFR- Cost and Freight CIF- Cost Insurance and Freight CPT- Carriage Paid To CIP- Carriage and Insurance Paid To |
|
D |
The seller is responsible for all the expenses and risks to take the goods to the country of destination. |
DDP- Delivered Duty Paid DPU- Delivered at Place Unloaded DAP- Delivered at Place |
Would you like to learn more about the area of Agrologistics? Discover our Master in International Agribusiness Management.
References:
https://www.trade.gov/know-your-incoterms
https://www.logisticsplus.com/incoterms-heres-know/
https://www.cajamar.es/modalidades-tipos-incoterms-9af31.pdf
