Universidad del Azuay Faculty of Law School of International Studies Comparative Analysis of the Logistics Performance of Ecuador and the members of the Andean Community of Nations (ACN) based on the Logistics Performance Index Graduate thesis prior to obtaining a Bilingual Bachelor in International Studies minor in Foreign Trade Author: Fabricio Buestán Quinde Director: Antonio Torres Cuenca-Ecuador 2015 DEDICATION This undergraduate thesis is dedicated to all of my family and friends who have given me unconditional support, especially to my brother, Josué, who is the one who encouraged me to complete this goal in my life. ii ACKNOWLEDGEMENT Foremost, I am grateful to God for his entire blessings and for putting in my life the people who have helped me overcome various obstacles to complete the goal that I set out to achieve. I want to thank with my mother and my younger brother for their constant support, my father for his words of encouragement, and my uncle, José, for his assistance. I cannot forget to mention my friends who despite of the distance, have continued supporting me to finish my academic research. I would like to express deep appreciation for my thesis supervisor, Eng. Antonio Torres, who I consider my mentor. He has given me knowledge, time, patience and dedication to finish successfully this undergraduate thesis. A special thanks to Justice Court of the Andean Community of Nations and the Economic Commercial Office of Peru´s Embassy, both located in Quito, for supporting me in the development of this thesis. iii Table of Contents DEDICATION ....................................................................................................................... ii ACKNOWLEDGEMENT .................................................................................................... iii ABSTRACT ........................................................................................................................ viii INTRODUCTION.................................................................................................................. 1 1. CHAPTER I: LOGISTICS OF INTERNACIONAL PHYSICAL DISTRIBUTION ... 2 1.1. Logistics of International Distribution ....................................................................... 2 1.1.1. Concept of logistics ................................................................................................................. 2 1.1.2. Fundamentals of logistics in business ............................................................................. 3 1.1.3. Approaches of the logistics .................................................................................................. 4 1.1.4. Objectives of International Logistics ............................................................................... 7 1.2. International Physical Distribution ............................................................................ 8 1.2.1. Basic Guidelines of the International Physical Distribution .................................. 8 1.2.2. Actors in operations of Foreign Trade ............................................................................ 9 1.3. Supply Chain ..................................................................................................................... 12 1.3.1. Concept ...................................................................................................................................... 12 1.3.2. Transportation in a supply chain .................................................................................... 13 1.3.3. Importance of logistic and supply chain ...................................................................... 13 1.3.4. Coordination in supply chain ............................................................................................ 13 1.4. Modes of International Transport ............................................................................ 14 1.4.1. Basis of the operations and transport ........................................................................... 14 1.4.2. Characteristic of International Transportation ........................................................ 14 1.4.3. Objective of Efficient Transport ....................................................................................... 15 1.4.4. Modes of transport in international load ..................................................................... 15 1.4.4.1. Maritime Transport ........................................................................................................................ 16 1.4.4.2. Air Transport ..................................................................................................................................... 17 1.4.4.3. Land and Multimodal Transport .............................................................................................. 19 1.4.4.3.1. Main means employed in land transport .................................................................... 19 1.4.4.3.2. Multimodal System ............................................................................................................... 21 1.5. Cost Component: For Country Export and Matrix of International Physical Distribution. .............................................................................................................................. 22 1.5.1. Matrix of International Physical Distribution ............................................................ 24 CONCLUSION .................................................................................................................... 25 2. CHAPTER II: LOGISTIC FEATURE OF THE MEMBERS OF THE ANDEAN COMMUNITY OF NATIONS ........................................................................................... 26 2.1. Logistics profile of Bolivia ............................................................................................ 26 2.1.1. General Overview .................................................................................................................. 26 2.1.1.1. Geographic Location ...................................................................................................................... 26 2.1.1.2. Area ....................................................................................................................................................... 27 2.1.1.3. Population .......................................................................................................................................... 27 2.1.1.4. Currency/Language........................................................................................................................ 28 2.1.2. Political and Territorial Administration of the State .............................................. 28 2.1.3. Conditions of access to the market destiny in terms of means of transportation ..................................................................................................................................... 28 2.1.3.1. Maritime route .................................................................................................................................. 28 2.1.3.2. Terrestrial routes ............................................................................................................................ 31 2.1.3.3. Aerial routes ...................................................................................................................................... 33 2.1.4. Requested documents in Customs .................................................................................. 34 2.1.5. Access Barriers ....................................................................................................................... 35 2.1.6. Internal Logistics and Distribution ................................................................................ 36 iv 2.2. Logistics profile of Colombia ....................................................................................... 37 2.2.1. General Overview .................................................................................................................. 37 2.2.1.1. Geographic Location ...................................................................................................................... 37 2.2.1.2. Area ....................................................................................................................................................... 38 2.2.1.2. Population .......................................................................................................................................... 39 2.2.1.3. Currency / Language ..................................................................................................................... 39 2.2.2. Political and territorial administration of the State ................................................ 39 2.2.3. Conditions of access to the market destiny in terms of means of transportation. .................................................................................................................................... 39 2.2.3.1. Maritime route .................................................................................................................................. 40 2.2.3.2. Road Routes ....................................................................................................................................... 43 2.2.3.3. Aerial Routes ....................................................................................................................................