Logistic 24.05.17
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The document provides an overview of export logistics and supply chain management, detailing interconnected activities from raw material to finished goods. It explains logistics management as a subset of supply chain management and covers various transportation modes, shipping companies, cargo types, and the roles of different stakeholders, including freight forwarders and customs agents. Additionally, it explains critical concepts such as direct shipment versus transshipment, types of containers, and warehouse functions in international trade.
Logistic 24.05.17
- 1. By Ravikeerthi Rao & Subramaniam Part 1 EXPORT LOGISTICS MANAGEMENT
- 2. SUPPLY CHAIN MANAGEMENT (SCM) • Supply Chain Management (SCM) is a series of interconnected activities related to the transformation and movement of raw material to the finished goods till it reaches to the end user. • It is the outcome of the efforts of multiple organizations that helped in making this chain of activities successful.
- 3. SUPPLY CHAIN MANAGEMENT (SCM) For example, • One Entrepreneur decided to start the Retail business. • She needs the Merchandise to sell. • What are the activities involved in buying & selling these Merchandise?
- 4. SUPPLY CHAIN MANAGEMENT (SCM) • The activities may include :
- 5. SUPPLY CHAIN MANAGEMENT (SCM) Supply Chain Management
- 6. SUPPLY CHAIN MANAGEMENT (SCM) • Above all, the supply chain management involves the coordination and collaboration with the parties like suppliers, intermediaries, distributors and customers. • Logistics Management is a small portion of Supply Chain Management that deals with the management of goods in an efficient way.
- 7. LOGISTICS • Logistics is the process of : • planning, • implementing, and • controlling procedures for the efficient and effective transportation and storage of goods, including services and related information, from the point of origin to the point of consumption.
- 8. TYPES OF TRANSPORTATION • In the international trade, there are various forms of transportation that one can use to get their products from India to wherever the product needs to go. • These transportation types used are the following: • Sea freight • Air freight • Rail freight • Road freight • River freight
- 9. TYPES OF TRANSPORTATION • Sea freight and air freight are perhaps the two most common forms of transportation for getting products from India to distant markets in Europe, and elsewhere. • Road and Rail are also important forms of transportation in order to get the goods from the incoming port to the final destination (be it a warehouse or a distribution centre).
- 10. TYPES OF TRANSPORTATION • A Liner (freight or cargo or ocean) is a cargo ship sailing on a regular schedule and offer cargo space for shippers. • A tramp ship which does not have a fixed schedule or published ports of call. • Tramp ships (also called tramp freighters) trade on an ad hoc basis depending on whatever cargo is required to be shipped wherever.
- 11. DIFFERENCE BETWEEN FREIGHT AND CARGO • “Cargo” and “freight” are the terms that are usually associated with transporting goods. • “Freight” means a cargo being transported via truck, train, plane, and ship. • “Cargo,” on the other hand, is usually used when the goods are transported via plane or ship.
- 12. DIFFERENCE BETWEEN FREIGHT AND CARGO • However, the “freight” is also the term used for the payment when the certain goods are transported , while “cargo” refers to the goods or the products and nothing else. • Cargo does not mean the money being charged for the transport. • Most cargo being transported can be referred to as freight.
- 13. TYPES OF SHIPPING COMPANIES • There are three types of shipping companies. They are: • Liner operators - vessels that carry containers, these sail on fixed dates and to predetermined ports. • Charter operators - vessels that are utilised for a specific voyage. • Tanker and dry bulk operators - vessels that carry bulk cargo such as oil and grains
- 14. DIRECT SHIPMENT VS TRANSHIPMENT Direct shipment • A direct service from the load port of origin country to the discharge port of destination. • Direct shipping happens when a vessel ships the cargo on one shipping service to its final destination,
- 15. DIRECT SHIPMENT VS TRANSHIPMENT • Transshipment or transhipment means - Transfer of a shipment from one carrier, or more commonly, from one vessel to another whereas in transit. • Transshipments are usually made : • where there is no direct air, land, or sea link between the consignor's and consignee's countries, • where the intended port of entry is blocked. Because transhipment exposes the shipment to a higher probability of damage or loss, some purchase orders or letters of credit specifically prohibit it.
- 16. TRANSHIPMENT • Purposes of Transshipment : • To achieve a lower transport cost; • To hide the identity of the port or country of origin and legally or illegally achieving new country-of- origin status for the merchandise; or • To circumventing the foreign trade policies of the country-of-origin or the country of destination (for purposely evading certain trade laws or regulations).
- 17. Draft (or draught) • The depth of a ship while in the water. • Measured as the vertical distance between the waterline and the lowest edge of the keel.
- 18. • Indian ports have an average draft ranging from 8m to 12m. • Bigger ships, that can carry larger quantities of cargo, cannot call directly (visit the port) due to lack of adequate draft or depth at the berths and channels. • In comparison, the draft available at major ports ranges from 12m to 23m, which enables them to handle even new generation big container vessels and tankers.
- 19. MOTHER VESSEL VS FEEDER VESSEL • Literally speaking, a "mother vessel" (an "M.V.") is a term in oceangoing transport -- basically a seagoing ship that serves only major ports. • The word M.V. is usually used in contrast to a "feeder vessel".
- 20. MOTHER VESSEL VS FEEDER VESSEL • Feeders or Feeder vessels are the vessels that pick up shipping containers from the smaller ports that have less draft & have vessel length restrictions. • Feeder vessel is normally small in size compared to Mother vessel, hence, they can easily navigate the smaller ports. • Feeder vessels serves between smaller ports and major ports. • In other words, feeder vessels feeds cargo to Mother vessel from smaller ports for exports and from major main ports to smaller ports for imports.
- 21. TYPES OF CARGO SHIPS • The following the different types of cargo ships are used in international trade: • (https://www.slideshare.net/krunal111/unit-1-categories20of20-cargo)
- 22. Tankers • These ships are designed to carry liquid cargos such as oil, petroleum, certain types of chemicals and other types of viscous cargoes (even wine). TYPES OF CARGO SHIPS
- 23. Container ships • Perhaps one of the most common type of merchant vessel you will encounter is the container ship which has been specially designed to carry containers TYPES OF CARGO SHIPS
- 24. Ro-Ro • So called because they are roll-on/roll-off ships where cars and trucks are driven directly into the hold of this vessel across a ramp usually at the back or stern of the ship. TYPES OF CARGO SHIPS
- 25. TYPES OF CARGO SHIPS General cargo ships • These are ships that have holds for carrying general and break- bulk (non-containerised) cargos and for this reason they may also be referred to as break-bulk ships. • These ships are often equipped with their own gantry cranes and are capable of loading and offloading their cargos themselves. • They complement container ships by carrying cargo that won’t fit a container, as well as cargos that are too small for a full container load (referred to as less-than full container load or LCL).
- 26. TYPES OF CARGO SHIPS
- 27. Bulk carriers • As the names suggests, these types of vessels are designed to carry bulky cargos, usually grains (such as maize) and ores (such as coal). TYPES OF CARGO SHIPS
- 28. Reefer ships • These are ships designed to carry perishable cargos that require refrigeration or some form of temperature control such as fruits, meat, fish, vegetables, dairy products and other foodstuffs. TYPES OF CARGO SHIPS
- 29. Chemical carriers • Some chemicals need to be transported in specially vessels specifically designed to handle the chemical in question (such as natural gas). TYPES OF CARGO SHIPS
- 30. Lift-on/lift-off or Lo-Lo ships • They have their own gantry or crane on board, these vessels can load and discharge their own cargoes. TYPES OF CARGO SHIPS
- 32. TYPES OF CONTAINER • Dry storage container. ... • Flat rack container. ... • Open top container. ... • Tunnel container. ... • Open side storage container. ... • Double doors container. ... • Refrigerated ISO containers. ... • Insulated or thermal containers.
- 33. • The difference between them depends on the type of goods that will be transported and their particular characteristics to perform the loading and / or the transportation.
- 36. The characteristics of the different containers: • • Standard: It is a closed container y the most used for general loads. Its opening is for front and real loading. • • High cube: : It is a container similar to the standard, but a bit longer in length. • • Reefer: It is a refrigerated container. • • Open top: It is a container with the top open through which the goods are loaded. • • Fixed flat rack: container with the sides opened. • • Collapsible flat rack: It is a container like the fixed flat rack, but collapsible. • There are other containers, but for specific types of goods, such as tanks, vented, for bulks, etc...
- 37. WAREHOUSE • A warehouse is a commercial building for storage of goods. • Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. • They are usually large plain buildings in industrial areas of cities, towns and villages.
- 38. TYPES OF WAREHOUSE • Private Warehousing • Public Warehousing • Government Warehouses • Bonded Warehouses • Co-operative Warehouses
- 39. CFS Container Freight Station (CFS) • A dedicated port or container terminal area, usually consisting of one or more sheds or warehouses and uncovered storage areas where cargo is loaded (“stuffed”) into or unloaded (“stripped”) from containers and may be temporarily stored in the sheds or warehouses.
- 40. ICD • ICD means Inland Container Depot situated at inland points away from sea ports. ICD is a term used in India in the field of Imports and Export of sea shipments. ICD is formed to help importers and exporters to handle their shipments near their place of location.
- 41. Bonded warehouse • A warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.
- 42. • The World Trade Organization (WTO) defines “Trade Procedures” as “activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade”.
- 43. • Several intermediaries are involved in international transport operations, and in the next few slides we will name them and explain their most important functions.
- 44. CARGO CLEARANCE SERVICES • When small to large shipment is delivered from one destination to another, be it national or international ports, the handling of packages from its source location to destination location is known as Cargo handling. • The custom tasks and procedures involved throughout the process are referred to as Cargo Clearance Services.
- 45. SHIPPING LINES • Regular shipping lines provide small and medium shippers with regular service • to different geographical destinations, stopovers and fixed ports with preset prices and rates, • that mainly engaged in international cargo transportation or transportation of general cargos and containers.
- 46. SHIPPING LINES • The shipping line is responsible for the movement of the cargo from port‐to‐port, organizes each vessel’s rotation, and operates on strictly commercial terms. • Some of the more commonly known shipping lines include Maersk, Seaboard, Seafreight, and Intermarine.
- 47. Carrier: • The person or company responsible for the movement of goods, by air, sea, road or rail, either by their own means or outsourced. • A carrier is a party who contracts with a shipper for the transport of goods by sea.
- 48. NON‐VESSEL OPERATING COMMON CARRIERS (NVOCC) • A cargo consolidator in ocean trades who buys space from a carrier and resells it to smaller shippers. • The NVOCC issues bills of lading, publishes tariffs, and otherwise conducts itself as an ocean common carrier, except that it does not provide the actual ocean or intermodal service. • They performs a similar service as a shipping line, such as performing consolidation and containerization, etc. • The major difference is that they do not own vessels.
- 49. Shipping agent : • The representative of the ship-owner of the vessel at port, and who makes all necessary arrangements with local authorities thereby helping both the ship and the crew and facilitates supplies as may be required. • (Here Supplies includes : Fresh water including Drinking water, food stuffs, fresh fruits & vegetables, groceries and other sundries, fuel, etc.)
- 50. FREIGHT FORWARDER • A freight forwarder is an agent for the exporter in moving cargo to an overseas destination. • Traditionally freight forwarders dealing with cargo bookings and contract with a Carrier to move the goods.
- 51. FREIGHT FORWARDER • They have the expertise in ocean freight and air freight as well as all of the paperwork involved. • These agents are familiar with the import rules and regulations of foreign countries, the methods of shipping, and the documents related to foreign trade. • Export freight forwarders are licensed by the International Air Transport Association to handle air freight and the Federal Maritime Commission to handle ocean freight.
- 52. FREIGHT FORWARDER • Freight forwarders can help exporters prepare price quotes by advising on : • freight costs, • port charges, • consular fees, • costs of special documentation, • insurance costs, and • their handling fees. • In short - The forwarder advises his client, on the most effective and economical way to make the shipments entrusted to him.
- 53. FREIGHT FORWARDER • Other services that forwarders may provide in relation to international transportation of goods are those logistic services such as storage, handling, packaging, etc. • The freight forwarders can reserve the necessary space on a vessel, aircraft, train, or truck. • They can even help arrange for warehouse space and storage of products at destination.
- 54. FREIGHT FORWARDERS • Once the cargo arrives at the port, freight forwarders may make the necessary arrangements with customs brokers to ensure that the goods comply with customs export documentation regulations. • In addition, they may have the goods delivered to the carrier in time for loading. • They may also prepare the bill of lading and any special required documentation. • After shipment, they forward all documents directly to the Exporter /customer.
- 55. FREIGHT FORWARDERS • Freight forwarders can also make arrangements with customs brokers overseas to ensure that the goods comply with customs export documentation regulations.
- 56. Longshoreman: • Is the company or person in charge of loading and unloading the ship as well as of any handling needed. • Longshoreman is also referred as docker, port worker, or dock worker.
- 57. Stevedore • Individual or firm that employs longshoremen to load and unload vessels. Stevedoring charges • Fees for loading and stowing or unloading a ship.
- 58. Consignee of goods: • Person or legal entity designated by the sender to take charge of the goods and deliver them to the recipient. • The consignee may be the buyer of the goods, or a party acting as import agent for the buyer.
- 59. The receiver • is the party who takes receipt of the goods from the sea carrier at the port or place of delivery. • Some consignees will take direct delivery of goods from carriers, • but many consignees in the liner trades employ an agent such as a freight forwarder to act as a “clearing agent” in the customs and other formalities of importing the goods, and for transportation of goods to their ultimate destination. • When loss or damage to goods is discovered on discharge, it is often the receiver who notifies the carrier.
- 60. The notify party • (a term found in most bills of lading and sea waybills) is the party who must be informed by the carrier of the ship’s arrival, so that collection of the goods can be arranged. • The notify party may be the consignee or a receiver.
- 61. CUSTOMS CLEARANCE • Customs business is limited to those activities involving transactions related : • to the entry and admissibility of merchandise; • its classification and valuation; • the payment of duties, taxes, or other charges assessed or collected; • or the refund, rebate, or drawback thereof.
- 62. CUSTOMS CLEARANCE • The Customs clearance work involves : • preparation and submission of documentations required to facilitate export (or imports into the country), • representing client during customs examination, assessment, • payment of duty and co taking delivery of cargo from customs after clearance along with documents.
- 63. Customs Agent / customs brokers : • Normally this is the person authorized by the Directorate General of Customs to process the necessary paperwork, and settle the taxes on import and export operations, before the governmental authorities. • A customs house agent (CHA)’s work can also be handled by Forwarder.
- 64. CUSTOMS HOUSE AGENT Customs House Agent • Cargo Clearance is a very technical and highly regulated activity (for obvious reasons). • CHA act as agents of importers/exporters with the objective of using their expertise in smooth clearance of cargo at the customs - export and import.
- 65. CUSTOMS HOUSE AGENT • Like the Forwarder, the CHA will recommend efficient means for clearing goods through the red tape of customs entry rules and regulations
- 66. CUSTOMS HOUSE AGENT • Customs Agents prepare the document of Shipping Bills. • Preparing shipping bill involves Classification of cargo under specific classification that is a critical activity in the entire process. • CHA is also known as Customhouse Broker in US.
- 67. • (This PPT has been prepared for internal training purpose)