Tesla motors is in the process of expansion to different parts of the world. Therefore, the company needs to find out the best freight to use in the transportation of goods from one location to another. The main issues to consider while choosing the freight method to use include cost, reliability, environmental safety, and speed. Ocean freights are much cheaper and they allow business people to transport large volumes of cargo with ease. While airfreight cargos are charged in terms of weight, ocean freight charges are based on the size of the material being transported (George 38). Tesla motors being an automobile production company requires large cargo spaces to move products from one location to another. Further, using the ocean freight will enable the company to move many cars and other materials at the same time and at a cheaper cost. Ocean freights incur many costs because of warehouse storage, but Tesla motors will avoid such complications by storing its products in own warehouses or transporting the goods once they arrive at the port.
Speed and reliability are key issues in choosing the transportation means. Airfreights offer better services in relation to speed and reliability. Therefore, based on the reliability and the speed, it will be wise for Tesla motors to use airfreights in moving products from one location to another. Lastly, the safety of the environment has become an important aspect of business transactions in the current world (George 149). Therefore, the freight means chosen by the company will have a great impact on the customer satisfaction aspect of the business. Ocean freights are considered safer in terms of environmental safety, although oil spillage is a great menace to the sea life. Based on both the pros and cons of the airfreight and the ocean freight, it will be best for Tesla motors to use airfreights in moving the products from one place to another. Speed and reliability are the key points of success for the automobile industry and the airfreights will provide such benefits to the company.
The company will use the Kuala Lumpur airport to move the goods from the Port Klang (free zone) to Malaysia. Tesla will use the Ben Line Agencies as the shipping company to move the products from the port to Malaysia. The cars will be transported by air freight to the port and later moved to the Malaysian warehouse. Although the port is as free zone, the company will have to pay the load port fees and the DBN. The import duty of Malaysia uses the cost, insurance, and freight (CIF) valuation method. In other words, the cost of the materials, the insurance cost paid for the goods, and the freight costs determine the total amount that the organization pays for its products. Additionally, importing products in Malaysia included other charges such as the excise duty and the sales tax. However, most of these charges are excluded because the products will land in Port Klang, which is a free zone (George 73). The duty calculations for the shipment include:
Excise Duty 65%CIF
Environmental Tax 00
More importantly, since the products will be shipped as a bulk, the CIF will be calculated for the bulk product rather than the single items in the cargo. Further, Tesla will not pay extra costs because electronic cars do not contain ozone-depleting products.
The storage charges at the port’s warehouse is free for the last three days, so the company will not pay any money. Additionally, the popular auto and services company will help in moving the cars to the warehouse for the consumers to pick. The Automobile Association of Malaysia (AAM) shall offer the towing services to transport all cars to the warehouse.
George, Rose. Ninety percent of everything inside shipping, the invisible industry that puts clothes on your back, gas in your car, and food on your plate. New York: Metropolitan Books/ Henry Holt and Co, 2013. Print.