Inbound export Brazil: a case study at Volvo Logistics Corporation

Abstract: Volvo Logistics Corporation (VLC) is a wholly-owned subsidiary within the
Volvo Group who designs, handles and develops business logistics systems
for the automotive and aviation industry worldwide. They are represented in
Europe, North and South America and Asia, close to customers' largest
plants or logistic hubs. VLC have around 900 employees and their turnover
during 2005 was SEK 8 billion.

At the department Volvo Logistics Inbound Export Overseas in Gothenburg,
they manage the shipment of production material from suppliers in Europe to
Volvo do Brasil (VdB) in Brazil.

The purpose of this thesis is to investigate if the VLC/VdB information set-
up is advantageous and provide recommendations for an improved information
set-up for the inbound material flow to Brazil from the European suppliers.

In order to fulfill this purpose the author has performed a literature
review about relevant areas involved in the field of international inbound
transportation. The costs for two set-ups within VLC have been mapped and
the possibilities given from Volvo Logistics do Brasil’s (VLdB) received
status as freight forwarder have been investigated. Further the author has
performed benchmarking studies against other companies working with export
to Brazil.

In the thesis it is concluded that VLC/VdB should include more containers
to each Bill of Lading (B/L) since the costs related to customs clearance
in Brazil is related to the number of B/Ls and not invoices. VLC should
also, based on the findings from the cost mapping in this study, welcome
VdB for a discussion whether the consolidation of invoices is to prefer.
There is no cost saving potential from this at the customs clearance. If
this is agreed upon it is recommended that VLC should make use of VLdB’s
freight forward status in order to facilitate the debiting of their
logistics services performed for VdB.

Further it is recommended that, if the consolidation of invoices will
continue, VLC should propose a change of responsibility in the VLC/VdB
agreement. VLC should issue a consolidated invoice only based on
information from the suppliers’ delivery note/invoice. All deviations
should be handled by VdB since this would provide economies of scale and a
more effective and clear communication within the inbound supply chain.