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» SEA FREIGHT IN LOGISTICS MANAGEMENT
SEA FREIGHT IN LOGISTICS MANAGEMENT
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SEA FREIGHT IN LOGISTICS MANAGEMENT
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PROJECT REPORT ON
“SEA FREIGHT IN LOGISTICS
SATISH K. PARATE
T.Y.B.M.S. [Semester V] NAME OF PROJECT GUIDE
“MR. SANDIP GUPTA” S T
UNIVERSITY OF MUMBAI
2011 - 2012 DECLARATION
I SATISH KESHAV PARATE student of K.J.SOMAIYA COLLEGE of TYBMS (Semester 5) hereby declare that I have completed this project on “SEA FREIGHT IN LOGISTICS MANAGEMENT” in the Academic Year 2011-12. The Information submitted is true and original to the best of my knowledge.
Signature of Student
(Satish k. parate)
I SATISH PARATE student of K.J.SOMAIYA COLLEGE of TYBMS (Semester 5) herby certify that I have completed this project on ‘SEA FREIGHT IN LOGISTICS MANAGEMENT’ in the Academic Year 2011-12. The Information submitted is true and original to the best of my knowledge.
Signature of the Principal of The College/Institution
Signature of Project Co-coordinator
Signature of Internal Examiner
Signature of External Examiner
An Old Chinese proverb says: “When eating your bamboo sprouts, remember the men who planted them.
Now that my sprouts are ready to eat, it is time for me to express
my deepest gratitude to all those who have made this possible.” The project of “SEA FREIGHT IN LOGISTICS MANAGEMENT” is the outcome of sincere and positive contribution. I cannot justifiably translate their help, cooperation and guidance extended to me in completing this project work in words. However I
shall be failing in my duty if I don’t express thanks to a few people in particular. I would like to thank our BMS coordinator Mr.Sandip Gupta for giving this opportunity to prepare our self to face our future challenges. I would also like to thank my project guider Mr.Nilesh sadekar for giving me some suggestion to prepare this project without his support I would have not be able to make it properly. Again I would like to express my deep regards to our principal
And last but not the least I would also like to thank my family members and friends who have helped us and supported us in all possible ways.
Sr.N o 1. 2. 3. Particulars Introduction of Logistics Management Shipping Cargo Vessels Types Page No 8-10 11-19 19-26
4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
Different Types of Ship Size Terms Of Shipment Sea Transport Shipping Documents 3rd Party Logistics & 4th Party Logistics Ports In India Customs And Procedures Multimodal Transport Marine Insurance Warehousing and Warehouse Management Panama Canal Conclusion Case Study Bibliography
27-28 28-33 34-39 40-46 47-51 52-83 84 85-88 89-95 96-100 101-106 107-108 109-110 111
The analysis of the situation on the basis of transport logistics, focused logistics and transport affect the efficiency of our infrastructure, management, logistics concepts, professionals and other factors discussed in depth, and how to improve the efficiency of logistics and transport measures and suggestions put forward in this project. Key words: logistics; transport; efficiency; factor logistics and transport is the backbone of the entire logistics system, logistics and transport efficiency is to reduce the total cost of logistics the main way. At present, logistics market is just out of infancy, but the logistics and transport is still in a low efficiency for the pending problems, identify the main factors affect the transport efficiency to make up for its deficiencies, to promote the rapid development of logistics industry has a positive effect. Logistics sea freight is high transport costs in total logistics costs account for a second large proportion. The outcome of studies identified major weaknesses in the field of Freight Forwarding as follows: – – – –
Inappropriate legal framework; Need for strengthening national and sub-regional freight forwarding associations; Too many variations in the structure of companies carrying out freight forwarding activities; Faulty management systems coupled with poor delegation by power; and Lack of professional structures in the industry.
To overcome these problems an attempt has been made to highlight activities of selected sub-regional training institutions that have or could develop courses for the benefit of the sub-sector. The proposed module covers thirteen main areas of concern to overcome the weakness in the field of freight forwarding is as follows: – – – – – – – – – – – – – Elaboration on duties and responsibilities of the freight forwarder and its relationship with intervening parties; Rights, duties and responsibilities of Multimodal Transport/Freight Forwarding institutions; The art by packaging, marking and handling of special cargoes; Principles of carriage of goods by sea; Principles of carriage of goods by air; Carriage of goods by road and rail;’ Practices of customs’ activities and port procedures; The art of consolidation and intermodal transport Freight forwarding documentation practices The use of incoterms Application of documentary credits; Cargo insurance; and Liability insurance.
What do the term “Logistics Management in sea freight means?
The transportation of goods in ships, or goods sent by sea. It simply means the Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible.
Overview of Logistics
The word of logistics originates from the ancient Greek logos (?????), which means “ratio, word, calculation, reason, speech, and oration”.
Logistics as a concept is considered to evolve from the military's need to supply themselves as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistikas’ who were responsible for financial and supply distribution matters. The Oxford English dictionary defines logistics as: “The branch of military science having to do with procuring, maintaining and transporting material, personnel and facilities.”Another dictionary definition is: "The time related positioning of resources." As such, logistics is commonly seen as a branch of engineering which creates "people systems" rather than "machine systems".
In military logistics, experts manage how and when to move resources to the places they are needed. In military science, maintaining one's supply lines while disrupting those of the enemy is a crucial—some would say the most crucial— element of military strategy, since an armed force without food, fuel and ammunition is defenseless. The Iraq war was a dramatic example of the importance of logistics. It had become very necessary for the US and its allies to move huge amounts of men, materials and equipment over great distances. Led by Lieutenant General William Pagonis, Logistics was successfully used for this movement. The defeats of the
British in the American War of Independence, and the defeat of Rommel in World War II, have been largely attributed to logistical failure. The historical leaders Hannibal Barca and Alexander the Great are considered to have been logistical geniuses.
Logistics Management is ‘that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers requirements’. Logistics management is applicable to public as well as private sector, Public sector are government undertaking, government start business with and so on. Private sector is classified into sectoral segmentation of industry. Ex. electrical, mechanical, electronics etc.
Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one's business with materials and shipping out products in an increasingly globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. This can be defined as having the right item in the right quantity at the right time for the right price and is the science of process and incorporates all industry sectors. The goal of logistic
work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. In business, logistics may have either internal focus(inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption (see supply chain management). The main functions of a logistics manager include Inventory Management, purchasing, transport, warehousing, and the organizing and planning of these activities. Logistics managers combine a general knowledge of each of these functions so that there is a coordination of resources in an organization. There are two fundamentally different forms of logistics. One optimizes a steady flow of material through a network of transport links and storage nodes. The other coordinates a sequence of resources to carry out some project. Logistics as a concept is considered to evolve from the military's need to supply themselves as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistikas’ who were responsible for financial and supply distribution matters.
Shipping has multiple meanings. It can be a physical process of transporting goods and cargo, by land, air, and sea. It also can describe the movement of objects by ship.
Land or "ground" shipping can be by train or by truck. In air and sea shipments, ground transportation is often still required to take the product from its origin to the airport or seaport and then to its destination. Ground transportation is typically more affordable than air shipments, but more expensive than shipping by sea. Shipment of freight by trucks, directly from the shipper to the destination, is known as a door to door shipment. Vans and trucks make deliveries to sea ports and air ports where freight is moved in bulk. Much shipping is done aboard actual ships. An individual nation's fleet and the people that crew it are referred to its merchant navy or merchant marine. Merchant shipping is essential to the world economy, carrying 90% of international trade with 50,000 merchant ships worldwide. The term shipping in this context originated from the shipping trade of wind power ships, and has come to refer to the delivery of cargo and parcels of any size above the common mail of letters and postcards. Ship transport is watercraft carrying people (passengers) or goods (cargo). Sea transport has been the largest carrier of freight throughout recorded history. Although the importance of sea travel for passengers has decreased due to aviation, it is effective for short trips and pleasure cruises. Transport by water is cheaper than transport by air. Ship transport can be over any distance by boat, ship, sailboat or barge, over oceans and lakes, through canals or along rivers. Shipping may be for commerce, recreation or the military. Virtually any material that can be moved,
can be moved by water, however water transport becomes impractical when material delivery is highly time-critical. "General cargo" is goods packaged in boxes, cases, pallets, and barrels. Containerization revolutionized ship transport in the 1960s. When a cargo is carried in more than one mode, it is intermodal or comodal.
A nation's shipping fleet (merchant navy, merchant marine, merchant fleet) consists of the ships operated by civilian crews to transport passengers or cargo. Professionals are merchant seaman, merchant sailor, and merchant mariner, or simply seaman, sailor, or mariner. The terms "seaman" or "sailor" may refer to a member of a country's navy.
2005 registration of merchant ships (1,000 gross register tons (GRT) and over) per country. According to the 2005 CIA World Fact book, the world total number of merchant ships of 1,000 Gross Register Tons or over was 30,936. Statistics for individual countries are available at the List of merchant marine capacity by country.
A ship's complement can be divided into four categories: the deck department, the engineering department, the steward's department, and other.
An able seaman stands iceberg lookout on the bow of the freighter USNS Southern Cross during a resupply mission to McMurdo Station, Antarctica; circa 1981. Officer positions in the deck department include but not limited to: Master and his Chief, Second, and Third officers. for The official unlicensed classifications
members of the deck department are Able Seaman and Ordinary Seaman.
An able seaman stands iceberg lookout on the bow of the freighter USNS Southern Cross during a re-supply mission to McMurdo Station, Antarctica circa 1981.
A common deck crew for a ship includes: (1) Chief Officer/Chief Mate (1) Second Officer /Second Mate (1) Third Officer / Third Mate (1) Boatswain (2-6) Able Seamen (0-2) Ordinary Seamen A deck cadet is person who is carrying out mandatory seatime to achieve their officer of the watch certificate. Their time onboard is spent learning the operations and tasks of everyday life on a merchant vessel.
A ship's engineering department consists of the members of a ship's crew that operate and maintain the propulsion and other systems on board the vessel. Marine Engineering staff also deal with the "Hotel" facilities on board, notably the sewage, lighting, air conditioning and water systems. They deal with bulk fuel transfers, and require training in firefighting and first aid, as well as in dealing with the ship's boats and other nautical tasks- especially with cargo loading/discharging gear and safety systems, though the specific cargo discharge function remains the responsibility of deck officers and deck workers. On LPG and
LNG tankers however, a cargo engineer works with the deck department during cargo operations, as well as being a watch keeping engineer. A common Engineering crew for a ship includes: (1) Chief Engineer (1) Second Engineer / First Assistant Engineer (1) Third Engineer / Second Assistant Engineer (1-2) Fourth Engineer / Third Assistant Engineer (0-2) Fifth Engineer / Junior Engineer (1-3) Oiler (unlicensed qualified rating) (0-3) Greaser/s (unlicensed qualified rating) (1-5) Entry-level rating (such as Wiper (occupation), Utility man, etc.) Many American ships also carry a Qualified Member of the Engine Department. Other possible positions include Motorman, Machinist, Electrician, Refrigeration Engineer, and Tanker man. Engine Cadets are trainee engineers who are completing sea time necessary before they can obtain a watch keeping license.
A typical Steward's department for a cargo ship would be composed of a Chief Steward, a Chief Cook, and a Steward's Assistant. All three positions are typically filled by unlicensed personnel. The chief steward directs, instructs, and assigns personnel performing such functions as preparing and serving meals; cleaning and maintaining officers'
quarters and steward department areas; and receiving, issuing, and inventorying stores. On large passenger vessels, the Catering Department is headed by the Chief Purser and managed by assistant pursers. Although they enjoy the benefits of having officer rank, they generally progress through the ranks to become pursers. Under the pursers are the department heads - such as chief cook, head waiter, head barman etc. They are responsible for the administration of their own areas. The chief steward also plans menus; compiles supply, overtime, and cost control records. May requisition or purchase stores and equipment. May bake bread, rolls, cakes, pies, and pastries. A chief steward's duties may overlap with those of the Steward's Assistant, the Chief Cook, and other Steward's Department crewmembers. In the United States Merchant Marine, in order to be occupied as a chief steward a person has to have a Merchant Mariner's Document issued by the United States Coast Guard. Because of international conventions and agreements, all chief cooks who sail internationally are similarly documented by their respective countries.
Staff officer positions on a ship, including Junior Assistant Purser, Senior Assistant Purser, Purser, Chief Purser, Medical Doctor, Professional Nurse, Marine Physician Assistant, and Hospital Corpsman, are considered administrative positions and are therefore regulated by Certificates of Registry issued by the
United States Coast Guard. Pilots are also merchant marine officers and are licensed by the Coast Guard. Formerly, there was also a radio department, headed by a chief radio officer and supported by a number of radio officers. Since the introduction of GMDSS (Satellite communications) and the subsequent exemptions from carrying radio officers if the vessel is so equipped, this department has fallen away, although many ships do still carry specialist radio officers, particularly passenger vessels. Many radio officers became 'electrotechnical officers', and transferred into the engineering department.
Life at sea
Mariners live much of their life spent beyond the reach of land. They face sometimes dangerous conditions at sea. Yet men and women still go to sea. For some, the attraction is a life unencumbered with the restraints of life ashore. Sea-going adventure and a chance to see the world also appeal to many seafarers. Whatever the calling, those who live and work at sea invariably confront social isolation. Findings by the Seafarer's International Research Center indicate a leading cause of mariners leaving the industry is "almost invariably because they want to be with their families." U.S. merchant ships typically do not allow family members to accompany seafarers on voyages. Industry experts increasingly recognize isolation, stress, and fatigue as occupational hazards. Advocacy groups such as International Labour Organization, a United Nations agency, and the Nautical Institute are seeking improved international standards for mariners.
Ocean voyages are steeped in routine. Maritime tradition dictates that each day be divided into six four-hour periods. Three groups of watch keepers from the engine and deck departments work four hours on then have eight hours off watch keeping. However there are many overtime jobs to be done daily. This cycle repeats endlessly, 24 hours a day while the ship is at sea. Members of the steward department typically are day workers who put in at least eight-hour shifts. Operations at sea, including repairs, safeguarding against piracy, securing cargo, underway replenishment, and other duties provide opportunities for overtime work. Service aboard ships typically extends for months at a time, followed by protracted shore leave. However, some seamen secure jobs on ships they like and stay aboard for years. In rare cases, veteran mariners choose never to go ashore when in port. Further, the often quick turnaround of many modern ships, spending only a matter of hours in port, limits a seafarer's free-time ashore. Moreover, some foreign seamen entering U.S. ports from a watchlist of 25 high-risk countries face restrictions on shore leave due to security concerns in a post 9/11 environment. However, shore leave restrictions while in U.S. ports impact American seamen as well. For example, the International Organization of Masters, Mates & Pilots notes a trend of U.S. shipping terminal operators restricting seamen from traveling from the ship to the terminal gate. Further, in cases where transit is allowed, special "security fees" are at times assessed. Such restrictions on shore leave coupled with reduced time in port by many ships translate into longer periods at sea. Mariner’s report that extended
periods at sea living and working with shipmates who for the most part are strangers takes getting used to. At the same time, there is an opportunity to meet people from other ethnic and cultural backgrounds. Recreational opportunities have improved aboard some U.S. ships, which may feature gyms and day rooms for watching movies, swapping sea stories, and other activities. And in some cases, especially tankers, it is made possible for a mariner to be accompanied by members of his family. However, a mariner’s off duty time is largely a solitary affair, pursuing hobbies, reading, writing letters, and sleeping. On modern ocean going vessels, typically registered with a flag of convenience, life has changed immensely in the last 20 years. Most large vessels include a gym and often a swimming pool for use by the crew. Since the Exxon Valdez incident, the focus of leisure time activity has shifted from having officer and crew bars, to simply having lounge-style areas where officers or crew can sit to watch movies. With many companies now providing TVs and DVD players in cabins, and enforcing strict smoking policies, it is not surprising that the bar is now a much quieter place on most ships. In some instances games consoles are provided for the officers and crew. The officers enjoy a much higher standard of living on board ocean going vessels. Crews are generally poorly paid, poorly qualified and have to complete contracts of approx 9 months before returning home on leave. They often come from countries where the average industrial wage is still very low, such as the Philippines or India. Officers however, come from all over the world and it is not uncommon to mix the nationality of the officers on board ships. Contracts average at the 4 month mark for officers, with generous
leave. Most Ocean going vessels now operate an Unmanned Engineroom System allowing engineers to work days only. The engine room is computer controlled by night, although the duty engineer will make inspections during unmanned operation. Engineers work in a hot, humid, noisy atmosphere. Communication in the engineroom is therefore by hand signals and lip-reading, and good teamwork often stands in place of any communication at all.
Ships and watercraft
Ships and other watercraft are used for ship transport. Types can be distinguished by propulsion, size or cargo type. Recreational or educational craft still use wind power, while some smaller craft use internal combustion engines to drive one or more propellers, or in the case of jet boats, an inboard water jet. In shallow draft areas, such as the Everglades, some craft, such as the hovercraft, are propelled by large pusher-prop fans.
Cargo vessels types:
Until the 20th Century, ships generally, were all-purpose cargo vessels, with very little specialisation (with the exception of tank vessels which first appeared in the 1880s). All cargoes were carried in general purpose holds, or on deck. Modern commercial vessels are designed and built to carry specific cargo types. The names we give to the various vessel types reflect the type of cargo for which they are designed and the names we give to the various vessel types reflect the type of cargo for which they are designed and built to carry. For example, a
"bulk carrier" is specially designed to carry cargo "in bulk" and the hatch cover and hold design is focused on the carriage of raw dry cargo goods, such as coal, grain, iron ore and bauxite, which are simply poured into cavernous holds then grabbed and bulldozed out at the port of discharge. Tankers carry liquid cargo in tanks the most obvious example is the wellknown oil tanker, but even within this generic type each tanker is specially designed to carry a particular type of liquid cargo not just crude this generic type, each tanker is specially designed to carry a particular type of liquid cargo, not just crude oil. Other liquid cargoes would include petroleum products, chemicals and yes, even wine! 2 recent hybrid designs of tanker carry Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG), both of which need to be kept under pressure and at low temperature to maintain the cargo in a liquefied state. A further hybrid is the Floating Production, Storage and Offloading unit (FPSO), which is usually a large tanker (maybe a converted old VLCC, but now brand new specialized FPSOs are being built) specifically designed for the oil industry, working offshore where an onshore facility to process and store offshore oil is deemed impractical. Bulk carriers, such as the Sabrina I seen here, are cargo ships used to transport bulk cargo items such as ore or food staples (rice, grain, etc.) and similar cargo. It can be
recognized by the large box-like hatches on its deck, designed to slide outboard for loading. A bulk carrier could be either dry or wet. Most lakes are too small to accommodate bulk ships, but a large fleet of lake freighters has been plying the Great Lakes and St. Lawrence Seaway of North America for over a century.
cargo ships that carry their entire load in trucksize containers, in a technique containerization. of called They
form a common means commercial intermodal freight transport. Informally known as "box boats," they carry the majority of the world's dry cargo. Most container ships are propelled by diesel engines, and have crews of between 10 and 30 people. They generally have a large accommodation block at the stern, directly above the engine room.
Tankers are cargo ships for the transport of fluids, such as crude oil, petroleum products,
liquefied petroleum gas, liquefied natural gas and chemicals, also vegetable
oils, wine and other food -the tanker sector comprises one third of the world tonnage.
Reefer ships are cargo ships typically used to transport perishable commodities which require temperature-controlled transportation, mostly fruits, meat, fish, vegetables, dairy products and other foodstuffs.
Roll-on/roll-off ships, such as the ChiCheemaun, are cargo ships designed to carry wheeled cargo such as automobiles, trailers or railway RORO carriages. (or ro/ro)
vessels have built-in ramps which allow the cargo to be efficiently "rolled on" and "rolled off" the vessel when in port. While smaller ferries that operate across rivers and other short distances still often have built-in ramps, the term RORO is generally reserved for larger ocean-going vessels.
Coastal trading vessels, also known as coasters, are shallow-hulled ships used for trade between
locations on the same island or continent. Their shallow hulls mean that they can get through reefs where sea-going ships usually cannot (sea-going ships have a very deep hull for supplies and trade etc.).
Ferries are a form of transport, usually a boat or ship, but also other forms, carrying (or ferrying) passengers sometimes vehicles. and their Ferries
are also used to transport freight (in lorries and sometimes unpowered freight containers) and even railroad cars. Most ferries operate on regular, frequent, return services. A foot-passenger ferry with many stops, such as in Venice, is sometimes called a waterbus or water taxi. Ferries form a part of the public transport systems of many waterside cities and islands, allowing direct transit between points at a capital cost much lower than bridges or tunnels. Many of the ferries operating in Northern European waters are ro/ro ships. See the Herald of Free Enterprise and M/S Estonia disasters.
ships used for pleasure voyages, where the voyage itself and the ship's amenities are considered an essential part of the experience. Cruising has become a major part of the tourism industry, with millions of passengers each year as of 2006. The industry's rapid growth has seen nine or more newly built ships catering to a North American clientele added every year since 2001, as well as others servicing European clientele. Smaller markets such as the Asia-Pacific region are generally serviced by older tonnage displaced by new ships introduced into the high growth areas. On the Baltic sea this market is served by cruise ferries.
Ocean Liner is a passenger ship designed to transport people from one seaport to another along regular long-distance maritime routes according to a schedule. Ocean liners may also
carry cargo or mail, and may sometimes be used for other purposes. Ocean liners are usually strongly built with a high freeboard to withstand rough seas and adverse conditions encountered in the open ocean, having large capacities for fuel, food and other consumables on long voyages.
Cable layer is a deep-sea vessel designed and used to lay underwater cables for telecommunications, electricity, and such. Large superstructure and one or more spools that feed off the transom distinguish it.
A tugboat is a boat used to manoeuvre, primarily by towing or pushing other vessels shipping) (see in
harbours, over the open sea or through rivers and canals. They are also used to other
disabled ships, or equipment dredger also like towboats. A (sometimes
called a dredge) is a ship used to excavate in shallow seas or fresh water areas with the purpose of gathering up bottom sediments and disposing of them at a different location.
A barge is a flat-bottomed boat, built mainly for river and canal transport of heavy goods. Most barges are not self-propelled and need to be moved by tugboats towing or towboats pushing them. Barges on canals (towed by draft animals on an adjacent towpath) contended with the railway in the early industrial revolution but were outcompeted in the carriage of high value items due to the higher speed, falling costs, and route flexibility of rail transport.
A Multi-purpose ship (sometimes called a general cargo ship) is used to transport a variety of goods from bulk commodities to break bulk and heavy cargoes. To provide maximum trading flexibility they are usually geared and modern examples
are fitted for the carriage of containers and grains. Generally they will have large open holds and twee decks to facilitate the carriage of different cargoes on the same voyage. The crew will be highly competent in the securing of break bulk cargoes and the ship will be equipped with various lashings and other equipment for sea fastening.
Ships that fall outside these categories include Semi-submersible heavy-lift ships or OHGC (Open Hatch General Cargo).
Major ship size includes:
Handy max: Traditionally the workhorses of dry bulk, the handy and more recent handymax types remain popular ships less than 60,000dwt. The handymax sector operates in a large number of geographically dispersed global trades, mainly carrying grains and minor bulks including steel products, forest products and fertilizers. The vessels are well suited for small ports with length and draft restriction and also lacking transshipment infrastructure. This category is also used to define small-sized oil tanker.
Panamax: Represents the largest acceptable size to transit the panama canal, which can be applied to both freighters and tankers; length are restricted to a maximum of 275 meters, and widths to slightly more than 32 meters. The average size of such abig ship is about 65,000 dwt. They mainly carry coal ,grain and lesser extent, minor bulks, including steel product, forest products and fertilizers.
Capsize: refer to a rather ill-defined standard which have the common characteristics of being incapable of using the panama or Suez Canal not
necessarily bcoz of their tonnage, but bcoz of their size. These ships serve deepwater terminals handling raw materials, such as iron ore and coal.
Aframax: A tanker of standard size between 75,000 and 11,5000 dwt. The largest tanker size in the AFRA (Average freight Rate Assessment) tanker rate system.
Suezmax: This standard, which represents the limitation of Suez Canal, has evolved. Before 1067, the Suez Canal could only accommodate tanker ship with maximum of 80,000dwt. The canal was closed between 1967 and 1975 bcoz of Israel -Arab conflict. Once it reopened in 1975, the suezmax capacity went to 150,000 dwt. An enlargement to enable the canal to accommodate 200,000 dwt tankers is being considered.
VLCC: Very Large Crude Carriers, 150,000 to 320,000 dwt in size. They offer good flexibility for using terminals since many can accommodate their draft. They are used in ports that have depth limitations, mainly around the Mediterranean, West Africa and the North Sea. They can be ballasted through the Suez Canal.
ULCC: Ultra Large Crude Carriers, 300000 to 550,000 dwt in size. It is used for carrying crude oil on long routes. The enormous sizes of these vessels require custom built terminals.
Terms of shipment:
Common trading terms used in shipping goods internationally include:
• Freight on board, or free on board (FOB): The exporter delivers the goods at the specified location (and on board the vessel). Costs paid by the exporter include load and lash, including securing cargo not to move in the ships hold, protecting the cargo from contact with the double bottom to prevent slipping, and protection against damage from condensation. For example, "FOB Kunming Airport" means that the exporter delivers the goods to the airport, and pays for the cargo to be loaded and secured on the plane. The exporter is bound to deliver the goods at his cost and expense. In this case, the freight and other expenses for outbound traffic are borne by the importer. • Cost and freight (C&F, CFR, and CNF): Insurance is payable by the importer and the exporter pays the ocean shipping/air freight costs to the specified location. For example, C&F Los Angeles (the exporter pays the ocean shipping/air freight costs to Los Angeles). Many of the shipping carriers (such as UPS, DHL, and FedEx) offer guarantees on their delivery times. These are known as GSR guarantees or "guaranteed service refunds"; if the parcels are not delivered on time, the customer is entitled to a refund. • Cost, insurance, and freight (CIF): Insurance and freight are all paid by the exporter to the specified location. For example, at CIF Los Angeles, the exporter pays the ocean shipping/air freight costs to Los Angeles including the insurance. • The term "best way" generally implies that the shipper will choose the carrier who offers the lowest rate (to the shipper) for the shipment. In some cases, however, other factors, such as better insurance or faster transit time will cause the shipper to choose an option other than the lowest bidder.
• Agency Fee: Fee payable by a ship-owner or ship operator to a port agent. • Agent: A person or organization authorized to act for or on behalf of another person or organization. In the shipping field, an Agent is a corporate body with, which there is an agreement to perform particular functions on behalf of them at an agreed payment. An Agent is either a part of a shipping corporation or an independent body part of a shipping corporation or an independent body. • Bill of Lading (B/L, plural: Bs/L): A document which evidences a contract of carriage by sea. • Break Bulk Cargo: General cargo conventionally stowed as opposed to unitized, containerized and Roll On-Roll Off cargo. • Bulk Carrier: Single deck vessel designed to carry homogeneous unpacked dry cargoes such as grain, iron ore and coal. • Cargo: Goods transported or to be transported, all goods carried on a ship covered by a B/L. • Carrier: The party undertaking transport of goods from one point to another • Claim: A charge made against a carrier for loss, damage or delay. • Clean Bill of Lading: A Bill of Lading which does not contain any qualification about the apparent order and A Bill of Lading which does not contain any qualification about the apparent order and condition of the goods to be transported. • Consignee: The party such as mentioned in the transport document by whom the goods, cargo or containers are to be received.
• Consignment: A separate identifiable number of goods (available to be) transported from one consignor to one consignee via one or more than one modes of transport and specified in one single transport document. • Consignor: Shipper • Container Terminal: Place where loaded and/or empty containers are loaded or discharged into or from a means of transport. • Damaged Cargo Report: Written statement concerning established damages to cargo and/or equipment. • Dangerous Goods: Goods are to be considered dangerous if the transport of such goods might cause harm, risk, peril, or other evil to people, environment, equipment or any property whatsoever. • Dead freight: Slots paid for but not used. • Delivery Order: A carrier's delivery order (negotiable document) is used for splitting a B/L (after surrender) A carrier s delivery order (negotiable document) is used for splitting a B/L (after surrender) in different parcels and have the same function as a B/L. • Export License: Document granting permission to export as detailed within a specified time. • FTL: Full Truck Load, an indication for a truck transporting cargo directly from supplier to receiver. • Free In and Out (FIO): Transport condition denoting that the freight rate excludes the costs of loading and discharging and, if appropriate, stowage and lashing.
• Freight Invoice: An itemized list of goods shipped and services rendered stating fees and charges. • Freight Prepaid: Freight and charges to be paid by the consignor. • Freight Ton: A unit for freighting cargo according to weight and/or cubic measurement A unit for freighting cargo according to weight and/or cubic measurement. • Full Container Load (FCL): A general reference for identifying container loads of cargo loaded and/or discharged at merchants' premises. • Gantry Crane: A crane or hoisting machine mounted on a frame or structure spanning an intervening space, which often travels on rails. • Gross Tonnage (GRT): The measure of the overall size of a vessel determined in accordance with the provisions of the international convention on measurement of vessels usually expressed in register ton. • Heavy Lift: Single commodity exceeding the capacity of normal loading equipment and requiring special equipment and rigging methods for handling. • House to House Transport: The transport of cargo from the premises of the consignor to the premises of the consignee The transport of cargo from the premises of the consignor to the premises of the consignee. • Insurance Certificate: Proof of an insurance contract • Intermodal Transport: The movement of goods (containers) in one and the same loading unit or vehicle which uses successively several modes of transport without or vehicle which uses successively several modes of transport without handling of the goods themselves in changing modes.
• Less than Container Load (LCL): For operational purposes a LCL (Less than full container load) container is considered a container in which multiple consignments or parts thereof are shipped. • Letter of Indemnity: Written statement in which one party undertakes to compensate another for the costs and consequences of carrying out a certain act. The issue of a letter of indemnity is sometimes used for cases when a shipper likes receiving a clean Bill of Lading while a carrier is not shipper likes receiving a clean Bill of Lading while a carrier is not allowed to do so. Within P&O Nedlloyd the issues of letters of indemnity are contrary to the company's instructions. • Liner in Free Out (LIFO): Transport condition denoting that the freight rate is inclusive of the sea carriage and the cost of loading, the latter as per the custom of the port. It excludes the cost of discharging. • Mate's Receipt: A document signed by the chief officer of a vessel acknowledging the receipt of a certain consignment on board of that vessel. On this document, remarks can be made as to the order and condition of the consignment. • Multimodal Transport: The carriage of goods (containers) by at least two different modes of transport. • Negotiable: In terms of documents, 'negotiable' means that e.g. a Bill of Lading is handed over/transferred in the right manner (viz proper endorsement) to another person either over/transferred in the right manner (viz. proper endorsement) to another person either endorsed in blank or endorsed to a person and that person acquires, by this transfer certain rights vis-? is the goods e.g. is entitled to take possession of the goods.
• Owner: The legal owner of cargo, equipment or means of transport. • Particular Average: A fortuitous partial loss to the subject matter insured proximately caused by an insured peril but which is not a general average loss. Particular average only relates to damage and/or expenses which are exclusively borne by the owners of a vessel which has sustained damage as a result of e g heavy weather or by the owners of the cargo which has been damage as a result of e.g. heavy weather or by the owners of the cargo, which has been damaged in transit. • Quotation: Amount stated as the price according to tariff for certain services to be provided or issued to a customer with specification on conditions for carriage. • Rate: The price of a transport service. • Rebate: That part of a transport charge which the carrier agrees to return. • Roll-on Roll-off (Ro-Ro): System of loading and discharging a vessel whereby the cargo is driven on System of loading and discharging a vessel whereby the cargo is driven on and off by means of a ramp. • Schedule: A timetable including arrival/departure times of ocean- and feeder vessels and also inland transportation. It refers to named ports in a specific voyage (journey) within a certain trade indicating the voyage (number's). In general: The plan of times for starting and/or finishing activities. • Seaworthiness: Fitness of a vessel to travel in open sea mostly related to a particular voyage with a particular cargo. • Shipment: A separately identifiable collection of goods to be carried.
• Shipper: The merchant (person) by whom, in whose name or on whose behalf a contract of carriage of goods has been concluded with a carrier or any party by whom, in whose name or on whose behalf the goods are actually delivered to the carrier in relation to the contract of carriage. • Tariff: The schedule of rates, charges and related transport conditions. • Time Sheet: Statement, drawn-up by the ship's agent at the loading and discharging ports, which details the time worked in loading and discharging the cargo together with the amount of lay time used. • Voyage: A journey by sea from one port or country to another one or, in case of a round trip, to the same port.
Definition: “Transport goods and commodities by ship Goods is measured in tons but transport is Transport goods and commodities by ship. Goods is measured in tons but transport is measured by tons / miles (the weight carried multiplied by the length of the voyage). The value of a commodity is not its price or its cost but its utility , can be invariable increased by transport for example, coal which is underground has no value , but ounce transported to a person freezing in winter it can have considerable value
Characteristic Of Sea Transport:
1. Sea transport is slow – ships carrying raw material (tramp) move at around 1314 knots- container ships speed 18-25 knots.
2. Sea transport is cheap because e it can take advantage of economies of scale, large ships can reduce the cost per unit carried. 3. Sea transport connect land which separated by water.
Pattern of seaborne trade:
World seaborne trade increased strongly in 2004, reaching 6.76 billion tons of loaded goods. The annual growth rate, calculated with the provisional data available for year 2004, reached 4.3 per cent. Total maritime activities measured in ton-miles increased to 27,635 billion ton-miles, compared with25, 844 billion tonmiles in 2003. The world merchant fleet expanded to 895.8 million deadweight tons (dwt) at the beginning of 2005, a 4.5 per cent increase. Development of International sea born trade, selected years.
YEAR 1990 1995 2000 2006 2008
Tanker Cargo 1442 1871 1755 2163 2674
Dry Cargo 1124 1833 2253 9821 4724
(All Cargoes) 448 2566 796 3704 968 4008 1288 5983 1828 7416 1unit - Millions Of Tons
World seaborne trade in cargo (things to be moved) splits into three markets. 1. The Liner Market: This deals with general cargo which is usually relatively expensive compared with “bulks” and the liner ships run on scheduled routes with fixed tariff and condition. 2. The Dry Cargo Tramp Market: Tramps, in shipping terms relates to the way the ship tramps from place to place where the market drawn it .Tramps carry mainly ship load of bulk materials , the main commodities or Grain, Coal etc… . The freight rates and conditions are negotiable as per Charter parties. 3. The Tanker Market: Tankers are specialized trumps being designed to carry liquids in bulk. The oil trade routes are limited. This market contains 2 main groups, Large tankers carry the crude oil and smaller carry the refined products.
It started through the last century when steamships appeared and started offering started scheduled services between ports. They then tended to offer a faster and more highly more highly quality service than the selling ships and despite their higher freight rate tended to their rate tended to attract shippers with high value cargo who were prepared to pay extra for speed and predictable delivery dates. In the sixtieth the conventional general cargo ship was increasingly replaced by the container ship. Increasingly replaced container. Then containerization has had effect and it will continue to have on shipping industry .Container ships have a larger, faster, and a quicker turn around than the ships they replace. The containers are introduced to reduce the cargo handling cost introduced
cargo cost which has increased for more than any shipping cost and to increase productivity comparing port time for general cargo ships and container ships.
LINER FREIGHT RATES
Liner freight rates are relate to a tariff of somewhat or some sort .They are, far less volatile that those in tramp shipping. In many cases that any increases in the tariff may only take place after period of notice. To overcome short -run variation in cost such as changes in bunker prices or in rate of as changes exchanges, liner operators generally resort surcharges typical of which are BAF AND CAF.
Conferences are organization of shipping lines operating on particular route. For example, the Transpacific West Bound Freight Agreement operates on the route from the US to Far east route and the Indian sub-content. The conferences are formal agreement between shipping lines on route setting prices and sometimes pooling profits or revenues, managing capacity, a locating routes and offering loyalty discounts.
• • •
Conferences can be either open or closed to accept new members. Conferences issue a freight tariff. Conferences may also allocate output among their members by either cargo quotas or Sailing quotas. Conferences employ policing agencies to check on adherence to the tariff Conference Practice.
The conferences set prices, often based on loyalty arrangement they use two kind of loyalty contracts; The contract rates and differ rebate .The shipper sign in agreement to deal in exclusively with the conference and in turn receive discounts on the freight rate .
The conferences response to an entrant by lowering the rate on one of its vessels to compete with the entrant until entrant lost money and left the market.
In the last decade, the conferences have lost their importance and decline in the number of the members.
Charterparty A charterparty is a contract of lease of a ship in whole or in part for a long or short period of time or for a particular voyage. It has been said that its origin lies in the mediaeval Latin "carta partita" or "charta partita" or "charta divisa", where an agreement was torn into two pieces and one half was given to each party. Proof of the whole contract was no doubt difficult if one party was obstinate - modern methods of photocopying the contract for each party seem preferable Affreightment is essentially placing a ship at the disposal of another party, while transport is essentially the carrier taking charge of goods. Hire is the consideration paid under demise and time charterparties; freight is the consideration paid under voyage charterparties and bills of lading. a) Charterparty by demise A Charterparty by demise is a contract by which the ship- owner places a ship in the hands of the chartered who assumes possession and control. The consideration paid by the chartered is hire which is payable at
specified intervals during the term of the charter. Under a demise Charterparty, the ship-owner appoints the master and the crew, although they are paid and controlled by the demise chartered. • A bareboat charter is a demise charter whereby the bareboat chartered names, pays and controls the master and the crew.
Among the most common forms of demise charter are the "Baltic and International Maritime Council Standard Bareboat Charter" (Code Name: "Barecon '89"); and the "BIMCO Standard Charter" (Code Name: "Barecon 2001") forms of BIMCO.
b) Consecutive voyage charter A consecutive voyage charter party is a voyage Charterparty for a determined number of consecutive voyages. c) Slot charter - A Charterparty whereby the shipper leases one or more "slots," each capable of holding a 20-foot container, aboard a container ship. d) Space charter it is a contract whereby a capacity of carriage is put at the disposal of the shipper for the carriage of his goods during a period of time under particular terms and conditions. Whether it is a contract of Hire or a contract of carriage or even a contract of agency like a freight forwarders contract, depends on its terms. e) Time Charterparty A time Charterparty is a contract whereby the ship-owner places a fully equipped and manned ship at the disposal of the chartered for a period of time for a consideration called "hire" payable at specified intervals during the term of the charter. Among the most common forms of time
Charterparty are the New York Produce Exchange (NYPE) and the (NYPE) and Baltime. Main terms • Ships name and other details to identify her
Many other detail of the ship including total deadweight grain and bale cubic ,draft, number of decks hold and hatches, number and lifting capacity of derricks ,crane etc.
• • •
Rate of hire expressed in days or months. The period in months or years. Delivery place. Delivery time ex: not before certain date.
• Re-delivery place.
f) Voyage Charterparty: A voyage Charterparty is a contract whereby the shipowner places all or part of the carrying capacity of a ship at the disposal of the charter (the voyage chartered) for the transport of goods agreed upon, on one or more voyages, for a consideration called "freight" based on the quantity of cargo carried, and usually payable at the end of the voyage. Among the most commonly used form is the "Baltic and International Maritime Council Uniform General Charter form of BIMCO. “ Main Contract term: • Ships name and other details to identify her
name and details
• The cargo and the quantity the ship carry • The loading and discharge ports
• Rate of freight • "Lay days and canceling" ex: loading not to commence not before a certain date with charterers having the option to cancel the charter if the ship is later than the second date. • The rates of loading and discharging
Demurrage and dispatch. Total commission in involve
• Charter party forum to be used
Documentation used in international trade performs a number of separate functions and these can be divided into and can into the following categories: instruction; financial; identification; authorization.. In this section we will be dealing with those documents which are used in international trading activity.
BILL OF LADING
FUNCTION • It is evidence that a contract of carriage exists between shipper (exporter) and ship owner. • It is a receipt for goods, showing prima facie that they have been received into the charge of a carrier. • It is a document of title which allows title to the goods to be transferred by endorsement and delivery of the bill of lading.
Main details to be incorporated in the bill of lading
• Name and address of the shipper
The name of the vessel name of the packages, types contents, gross weights and volume;
• description of cargo, including identifying marks, numbers and types of • port of shipment • port of discharge
details of freight, including whether it is to be "prepaid" (at port of dispatch) or "payable at destination" (freight collect);
• Consignor's name and address which may be that of the buyer. Alternatively bills of lading may be made out to show "to order" in the consignee box or "to the order of..."
Notify party's name and address - often an agent acting on behalf of the consignee at the port of destination. However, the consignor's details may be entered in the "Notify party" consignor details be entered box where "order" bills of lading are applicable
Terms of sale The date on which the goods are received for shipment or date on which goods are shipment or shipped on board the named vessel Number of original bills issued Signature of shipping line or its appointed agent.
Principal notations on bills of lading:
Clean bills and Claused bills:
A "clean" bill of lading is one in which no notation is shown on the document relating to cargo having been received by the line or shipped in any other than good condition and correct n any than good and quantity. Thus, standard printed bills of lading usually bear the wording "Shipped (or received for shipment) in apparent good order and condition". If no clause to the contrary is entered, the bills are said to be clean. In the case where the cargo is noted to be wet, damaged or otherwise in doubtful condition or quantity, bills of lading will be issued "claused" (or "dirty"), showing the defect in the cargo. It follows that if goods are the payment purposes. Received bills and shipped bills: As has already been said above, a bill of lading constitutes a receipt for goods receipt goods delivered into the charge of a shipping line. Thus the printed lading may state standard wording on a printed bill of standard cargo. It allows are shipped under a claused bill, consignees may reject them or, alternatively, banks may not accept such bills of lading for
"Received for shipment..." and will be signed and dated by the line or its will or agents. Although this shows that the goods have moved out of the exporter's charge into that of the carrier, it does not show that actual shipment has taken place. Through bills of lading: The "through" bill of lading concept allows door-to-door shipments to be covered by a bill of lading. This became necessary following the development of containerization. Thus, this type of bill may cover ocean shipment, plus inland transport by other modes.
Combined transport bills of lading: Similar to a through bill of lading, the combined transport bill of lading allows for the contract of bill the carriage to be covered by a single document and a clearly defined single set of conditions of carriage to include the use of road and/or rail shipment at either end of the sea leg. This document will, when issued, extend the carrier's liability as set out in the carrier as set in the combined transport bill of lading to the other transport modes. Freight forwarders operating as non-vessel owning carriers (NVOCS) will most issue this type of document. Group age and house bills of lading: The concept of groupage - combining a number of individual consignments into a complete container load for shipment - has been developed over many years by freight forwarders operating services between two inland points in different countries working in conjunction with an overseas office or partner. An ocean bill of lading for a container load of group age is issued by the shipping lines showing the sending forwarder as the shipper and the receiving forwarder as the consignee. The forwarder thereafter issues his own house bills to individual exporters. These house bills become the controlling document for the release of the cargo at destination and enable the exporter, if required, to negotiate these with his customer in return for payment of the goods. It is important to note that a "house" bill of lading does not have the same status as an ocean bill issued by a shipping line as it is not a document of title, in the same sense of the word, as an ocean bill. However, it is capable of negotiation,
and is often acceptable to banks for letter of credit purposes when this has been stipulated in the credit at the time it is opened. Negotiation of bills of lading: The bill of lading is a negotiable document which allows title to goods to be transferred by endorsement and delivery. This facility gives one or other parties to the transaction control over title to the goods and for this reason letters of credit often stipulate certain types of bill of lading in order for this control to be exercised. Three basic types of endorsement are possible: 1. Endorsement by consignee: In this case the bill of lading is completed as below: • Shipper box in bill of lading: Actual shipper (exporter) • Consignee box in bill of lading: Actual consignee (buyer) • Notify box in bill of lading: Consignee's agent at port of arrival. • Completion of the bill of lading in this manner allows either the bill allows consignee to present himself in person to the line to take delivery of the goods or to endorse the bill of lading on the reverse side to allow his agent to do so and to deliver the goods to him. Thus the consignee exercises control over who takes the goods in charge at the destination port. 2. "To order" bills of lading • Bills of lading made out "to order" are completed as below: • Shipper box in bill of lading: Actual shipper (exporter)
• Consignee box in bill of lading: "To order" • Notify box in bill of lading: Actual consignee (buyer)
In this instance, the shipper must stamp and sign the bill of shipper must stamp sign the lading in order for title to the goods to be transferred to the consignee. Thus the bill of lading is useless to the consignee without this endorsement. This is a useful safeguard against bills being accidentally transmitted to buyers directly. Clearly, should this happen the buyer would not be able to take delivery of the goods and the bill of lading would have to be returned to the shipper for endorsement and presentation to the bank. Bills shipper or and bank Bills of lading completed in this manner are also said to be "To order blank endorsed".
3. To order of (bank) In this case, the bill of lading is completed as follows: • Shipper box in bill of lading Actual shipper (exporter) • Consignee box in bill of lading To the order of (bank)
Notify box in bill of lading True consignee (buyer) which, therefore, exercises control over the goods. Thus, if the bank wishes to ensure that the buyer has actually paid for the goods before he takes delivery, the bank may goods before he takes the endorse the bill of lading when payment is made.
• The bank is the party which carries out the endorsement in this instance and
Sea waybills offer a non-negotiable alternative to the bill of lading. Generally speaking, they embody the Hague-Visby Rules. With a few exceptions they are not negotiable and are, therefore, not usable as a means of transferring title to goods. A freight forwarder might use them to control groupage cargo. The sea waybill can thus be sent forward with the goods allowing the consignee to take immediate delivery. The legal protection offered to the shipper under a sea waybill is thought by some to be inferior to that offered under a bill of lading. However, being a relative new innovation, there has been insufficient time to test them in law.
Letter of guarantee:
Letter of guarantee: A written undertaking, or letter of indemnity, usually provided by a bank, promising to hold the carrier harmless, up to a certain sum, for claims that may arise from the delivery of goods to a particular person who is unable to surrender the original bills of lading in return for the goods.
Letter of indemnity:
Letter of indemnity: A written undertaking by a shipper to indemnify a carrier for any liability which any which the carrier may incur for having issued a clean bill of lading when, in fact, the goods received were not as stated on the bill of lading .Such a letter is usually a central document in a fraud, whereby the shipper and carrier knowingly misrepresent to third parties the actual order and condition of the goods at the and of the at the time of shipment or the bad order of the packing, or whereby they issue duplicate bills of lading to replace lost or stolen
originals. Letters of indemnity or stolen originals should not be condoned by courts and are generally held ineffective as against third parties.
• Definition: Studying seas and costal area which you have to find your way round to pickup and deliver your cargoes. The distances in shipping are always given in nautical miles which equal to 1852 meters. Latitude and Longitude: Latitude Is used for measuring how far North or South and Longitude how far east and west. Time is also Is function of Longitude this for every 15° you move east you advance your watch one hour and vice versa for westerly movement • Weather • Ports • Water depth and tides • Time zone
LOGISTICAL MOVEMENT BY SEA THROUGHOUT THE
Oceanic masses and rivers are the two major components of maritime circulation. Oceanic masses account for 71% of the terrestrial surface. The four major oceans relevant to maritime circulation are: the Pacific (165 millions square km), the Atlantic (82 million square km), Indian (73 million square km) and the Mediterranean (2.5 million square (2 km).
3PL (Third Party Logistics)-
“Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function.” -- Simchi-Levi (2000) “A relationship between a shipper and third party which, compared with the basic services, has more customized offerings, encompasses a broad number of service functions and is characterized by a long-term, more mutually beneficial relationship” -- Murphy & Poist (1998)
Characteristics of 3PL: ? Perform outsourced logistics activities ? Process management / Multiple activities ? More customized services ? Mutually beneficial and risk-sharing relationship ? Long-term commitments (1~ 3 years). Why is it needed?
Advantages : ? Cost reduction. ? Focus on core competency. ? Improved efficiency, service and flexibility. ? Industry-specific application. – “build-to-order” systems and e-merchants Disadvantages: ? Loss of control. ? Impact on in-house workforce.
? How is a 3PL Differentiated from a Transportation Provider?
• Transportation provider gets product from point A to point B • Could be considered a 3PL • Just one function of logistics
3PL provider assists in multiple functions.
Successful Implementation of 3PL ? Why you want to select the right provider the first time • Only about 65% of companies believe their provider is doing a “good” job. • 55% of logistics outsourcing contracts end in 3-5 years
• The source had a list of 14 key tips for success, but we are going to focus on the 5 most important issues. 1) Have an outsourcing strategy. ? Know what your outsourcing strategy is. It needs to be well thought out and measured against in house solutions and capabilities. ? SWOT analysis. As a company you should understand the strengths, weaknesses, opportunities and threats of outsourcing logistics, rather than keeping them in house. 2) Do your homework. ? Do a comprehensive study: Clearly document advantages, challenges, costs and benefits. ? Document expectations: Set down expectations in clear terms and include current costs.
? Make a site visit to the 3PL, and talk with its existing customer.
3) Measure and review performance
? Have a efficient and accurate measurement system: Qualitative measures
that focus on effectiveness and quantitative measures that focus on efficient utilization.
? Have an efficient costing system: This will help you to understand the costs
involved in outsourcing. ? “Are we making money doing this?”
4) Create an Implementation Strategy
? Create a project plan road map: Be clear who does what, create a project
management team with members from both organizations and review progress vs. planned milestones. 5) Nurture the Relationship: Both Parties must nurture the relationship to make outsourcing successful. Create mutual trust, respect and a sense of integrity. A third-party logistics provider (3PL) Provides outsourced or 'third party' logistics services to companies for part or sometimes all of their supply chain management functions. Well known 3PLs include DHL, Wincanton, NorbertDentressangle, CEVA & NYK Logistics A fourth-party logistics provider (4PL) is an independent, singularly accountable, non-asset based integrator who will assemble the resources, capabilities and technology of its own organization and other organizations, including 3PLs, to design, build and run comprehensive supply chain solutions for clients.
4PL (4th party logistics)
? Manage and direct the activities of multiple 3PLs, serving as an integrator ? Refinement on the idea of 3PLs ? 4PLs are not asset based like 3PLs
? Assembles and manages the resources, capabilities, and technology of its
own organization and other organizations to design, build and run comprehensive supply chain solutions.
Transways Express 4PL
? One stop transport and logistics supplier.
? Work with suppliers and customers.
PORTS IN INDIA
India has a long coastline, spanning 7600 kilometers, forming one of the biggest peninsulas in the world. It is serviced by 13 major ports (12 government and 1 corporate) and 187 notified minor and intermediate ports. The latest addition to major ports is Port Blair on June 2010, the 13th port in the country.
Major ports handled over 74% of all cargo traffic in 2007. However, the words "major", "intermediate" and "minor", do not have a strict association with the traffic volumes served by these ports. As an example, Mundra Port, a newly developed minor port in the state of Gujarat registered cargo traffic of around 28.8 million tonnes per annum during the financial year of 2008, which is higher than that of many major ports. The classification of Indian ports into major, minor and intermediate has an administrative significance. Indian government has a federal structure, and according to its constitution, maritime transport falls under the "concurrent list", to be administered by both the Central and the State governments. While the Central Shipping Ministry administer the major ports, the minor and intermediate ports are administered by the relevant departments or ministries in the nine coastal states— West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa, Maharashtra and Gujarat. Several of these 187 minor and intermediate ports are merely "notified"; little or no cargo handling actually takes place. These ports have been identified by the respective governments to be developed, in a phased manner, a good proportion of them involving public–private partnership. Cargo handling is projected to grow at 7.7% until 2013-14. Some 60% of India’s container traffic is handled by the Mumbai Port and Jawaharlal Nehru Port Trust in Navi Mumbai.
MAJOR PORTS IN INDIA
There are also 7 shipyards under the control of the central government of India, 2 shipyards controlled by state governments, and 19 privately owned shipyards. The major ports handled 423.4 million tons of cargo for the financial year 2005-2006, with Vishakhapatnam, Kochi, Kolkata Port, Chennai Port and Kandla carrying the greatest tonnage. Major ports can collectively handle 400+ million tons of cargo annually, and port operations have improved since the mid1990s. All major ports, except one (Ennore Port), are government administered, but private-sector participation in ports has increased. The brief information of some major ports In India is as follows:
1. CHENNAI PORT
Chennai Port formerly known as Madras Port, is the second largest port of India, behind the Mumbai Port, and the largest port in the Bay of Bengal. Being the third oldest port among the 12 major ports of India, it is over 125 years old, although maritime trade started way back in 1639 on the sea shore. It is an artificial and all-weather port with wet docks. It was a major travel port before becoming a major container port. It is a substantial reason for the economic growth of Tamil Nadu, especially for the manufacturing boom in South India, and has contributed in no small measure to the development of the city. It is due of the existence of the port that the city of Chennai became known as the Gateway of South India. The port with 3 docks, 24 berths and draft ranging from 12 to 16.5 m (39 to 54.1 ft) has become a hub port for containers, cars and project cargo in the east coast of India. Location and geography
Chennai Port lies on a flat coastal plain known as the Eastern Coastal Plains on the east coast of the Indian peninsula known as the Coromandel Coast in the Bay of Bengal. The port is situated on the thermal equator and is also coastal, which prevents extreme variation in seasonal temperature. The climate is tropical, specifically tropical wet and dry, and for most of the year, the weather is hot and humid, with temperatures ranging from a maximum of 42°C in May to a minimum of 18°C in January. The annual rainfall in the region is about 1250 mm, and the spring tides are up to 1.2 m (3 ft 11 in). Chennai Port Location Country Location Details Opened Operated by Owned by Type of harbor Size of harbor Land area Size Available berths Employees Chairman Main trades India Chennai (Madras) 1881 Chennai Port Trust Chennai Port Trust, Ministry of Shipping, Government of India Coastal breakwater, artificial, large seaport 169.97 ha (420.0 acres) 237.54 ha (587.0 acres) 407.51 ha (1,007.0 acres) 26 8,000 (2004) Atulya Misra Automobiles, motorcycles and general industrial cargo including
iron ore, granite, coal, fertilizers, petroleum products, and containers Major exports: Iron ore, leather, cotton textiles Major imports: Wheat, raw cotton, machinery. World Port Index Number Website 49450 http://www.chennaiport.gov.in/
Port layout and infrastructure Chennai port was the second smallest in the country measured by surface area, encompassing only 274 hectares. Chennai port area is divided into north, central and south zones and fishing harbors Dr. Ambedkar Dock, Satabt Jawahar Dock, and Bharathi Dock along with the container terminal, and draft ranging from 12– 16.5 m (39–54.1 ft). Jawahar Dock has 6 Area berths, Bharathi Dock has 3 berths (for oil and Type Nos. (sq.m) iron ore), the container terminal has 3 berths Covered and the moorings has 1 berth. The berths can Warehouses 12 65,686 8 36,000 handle containers as well as liquid and dry bulk Transit sheds Covered area and breakbulk cargoes. 6 43,450 for FCI No. of Container Region Water spread Land area 2 12,600 berths freight stations Inner harbour 218 acres 413 acres 16 Outer harbour 200 acres 100 acres 7 Total 418 acres 513 acres 23
Terminals Chennai Container Terminal: Chennai Container Terminal (CCT) is the first container terminal in Chennai port built in 1983. The container terminal was privatized in 2001 and is operated by DP World since 30 November 2001 with a capacity of 1.2 million TEUs. CCT is managed under a 30 year build-operatetransfer agreement set up with the Chennai Port Trust of the Government of India. The terminal is capable of handling fifth generation vessels up to 6,400 TEU and has direct services to China, West Africa, Europe and the United States. Chennai International Terminal. Chennai International Terminal Pvt Ltd (CITPL) is the second container terminal that started operations from June 22, 2009. The buildoperate-transfer facility, built at a cost of about US$110 million, is a joint venture between PSA International and Chennai-based Sical Logistics Ltd. Ro-Ro car terminal Dubbed the Detroit of Asia, Chennai is base to several international car makers, namely, Ford Motor Co., Hyundai Motor Co., Nissan Motor Co., Renault SA, Daimler AG and BMW AG. Car export (mainly Hyundai) increased by 80.25 per cent to touch 2, 48,697 during 2008-09 as against 1,37,971 in the previous year. The port handled 65 car carriers compared with 40 in the previous year. In 2009,
the port shipped nearly 274,000 cars, 10 per cent more than the previous year. The port is now the number one ro-ro car terminal in the country. After Hyundai, the ports have started attracting global manufacturers like Mahindra, Toyota, and Ford. Ford has decided to move exports to Chennai Port by 2010. Hyundai Motor India is coming up with a first-of-its-kind dedicated automobile terminal at the Chennai port. The Chennai port facility is expected to be on the lines of its Ulsan Port, from where it exports half of Korea's 1,500,000 vehicles annually. The export terminal at the Chennai port would cater to its total
Export target of 300,000 cars, which would be 50 per cent of its Cargo-Handling Equipments total Locos (diesel) Chittaranjan BHEL loco production by 2009-10. Diesel/electric loco Mobile cranes Cruise terminal Fork lift trucks The Chennai Port Trust Floating crane Electrical forklift trucks has already in place a Pay loaders cruise terminal. On an Shore electric cranes average, seven to eight Transfer cranes Tractor head cruise vessels dock in the Container quay cranes (35.5T/40T port each year. The capacity) country's first cruise ship, Top lift trucks (25T and 35T capacity) AMET Majesty, is Trailers registered in Chennai and Crawler-mounted cranes is set to start from Empty container handler Chennai on 8 June 2011. Reach stackers In 2007, a fully 10T/3T FLT
Total Units 8 10 2 12 55 1 24 7 25 10 34 4 5 32 3 1 3 7
automated, round-the-clock helpline for providing information on the ships berthed and waiting, the scale of rates and facilities available at the port, the first of its kind in the country, was established. In the same year, the Indian government agreed to lift restrictions on concessionary Sri Lankan tea and apparel exports at the port.
On 11 May 2011, the Madras High Court directed the Shipping Secretary that only clean cargo such as containers and cars be allotted to the port for handling from 1 October 2011. The port is one of the six ports in India through which drugs are permitted to be imported, which is handled by the Central Drugs Standard Control Organization (CDSCO), the other ports being Kolkata, Mumbai, Nhava Sheva, Kochi and Kandla ports. As of 2011, cargo movement to the port is increasing by 21 per cent. Single Operator Container Terminal On 16 February 2005, Dubai Ports World announced that it has formally signed an agreement with the Copt to construct, develop and operate an International Container Transshipment Terminal (ICTT) – An India Gateway Terminal – at Vallarpadam. Approval for the agreement was given by the Cabinet Committee of Economic Affairs of the Government of India, Ministry of Finance and meanwhile, the DP World will manage and subsequently transfer its operations at the Rajiv Gandhi Container Terminal in Cochin Port to the new terminal upon its completion. Vallarpadam Terminal is the largest single operator container terminal in India and the first in the country to operate in a special economic zone. The terminal makes Kochi a key centre in the shipping world reducing India’s dependence on foreign ports to handle transshipment. • In the first phase there will be 600 m Quay length and a draft of more than 15 m, when the terminal may handle 1 million TEU containers annually by the end of 2012.
• In the second phase the capacity will be enhanced to 3 million TEU's by the end of 2014. • In the third phase the terminal may handle even up to 5.5 million TEU's. The total cost of the project is estimated at 3200 crore.
2. Visakhapatnam Port.
Visakhapatnam is a major sea port on the south east coast of India. According to the history, the city was named after the god of Valor, Visakha. Visakhapatnam port Situated on the east coast of India, Visakhapatnam serves as the gateway for waterways for the state of Andhra Pradesh. Visakhapatnam has one of the country's largest ports and its oldest shipyard on the eastern coast of India. It is a land-locked harbour as it is connected to the sea by a channel cut through solid rock and sand. The shipbuilding yard situated at Visakhapatnam is the largest in India. Situated on Chennai - Kolkota corridor, the city is also a hub of on-ground traffic. The Gangavaram Sea Port is India's deepest sea port. In December 2010, Coal India agreed a deal that would allow an additional berth to be built at the port. Gangavaram Port, located in Andhra Pradesh, is India's deepest port. Inaugurated in July 2009, it has a depth of 21m. It is managed by Gangavaram Port Ltd., a special-purpose company floated by Mr. DVS Raju, who serves as its Chairman and Managing Director. The company is owned by the DVS Raju Group (59%), global Private Equity firm Warburg Pincus (30%) and the Andhra Pradesh Government (11%). Country India
Location Details Opened Owned by Size
Andhra Pradesh July 2009 Gangavaram Port Ltd. 2,800 acres (11 km2)
Statistics Website www.Gangavaram.com History of Gangavaram Port Construction of the port began in December 2005, and commercial operations commenced in August 2008. The port was formally inaugurated in July 2009, by the Andhra Pradesh Chief Minister Y S Rajasekhara Reddy. Fishermen in the Gangavaram and Dibbapalem villages, who were directly affected by the construction of the port, demanded construction of an alternative jetty and a relief and rehabilitation package. The DVS Raju group invested Rs. 1,850 crore in the development of the port. Gangavaram Port Ltd. has taken a loan of Rs. 1,170 crore from a consortium of 13 banks, including the State Bank of India, to fund the Phase I development. Comparisons with the Vizag port The first client of the Gangavaram Port Ltd. is the Rashtriya Ispat Nigam Ltd., which runs the Vizag Steel Plant, and earlier used the Vizag port. The Gangavaram Port Ltd. plans to build conveyors for taking imported raw materials directly to the Vizag Steel plant, in order to reduce the railway transportation costs.
The Union Government of India, which owns the Vizag port, had proposed a joint venture between the Vizag port and the private operator of the Gangavaram port to make sure that the Vizag port's business remains unaffected. However, this proposal was rejected by the then Andhra Pradesh Chief Minister, N. Chandrababu Naidu. DVS Raju, while talking to reporters during the port's inauguration ceremony, insisted that it would be "complementary in nature" to the Vizag port, and not a competitor. The Gangavaram port is capable of handling Super Cape size vessels of up to 200,000 DWT. The State Government plans to construct a Rs. 21-crore fourlane flyover to the Gangavaram port.
3. Ennore Port.
Ennore Port Location Country Location Details Opened Operated by Owned by Type of harbor Available berths Employees Chairman cum India Ennore, Chennai 2001 Ennore Port Limited Ennore Port Limited Seaport (Artificial) 4 86 S. Velumani
Managing Director Capacity Main trades
16.00 million tonnes (2008-09) Thermal coal, iron ore, LNG, POL, chemical and other liquids, crude and other bulk and rock mineral products
Statistics Annual cargo tonnage 11.01 million (2010-11) Annual revenue Net income 1666.5 million (2010-11)
706.4 million (2010-11) Vessels handled 294 (2010-11) Website http://www.ennoreport.gov.in/ Ennore Port, located on the Coromandel Coast about 24 km north of Chennai Port, Chennai, it is the 12th major port of India, and the first port in India which is a public company. The Ennore Port is the only corporatised major port and is registered as a company. The Centre holds a stake of about 68 per cent in the Ennore Port and the remaining 32 per cent is held by the Chennai Port Trust. The port has been able to attract an investment of 26,000 million by private entrepreneurs on various terminals and harbour craft. Ennore Port, designed as Asia’s energy port, has only 86 employees. Hailed as a landmark port, it is the first corporatized port in India. Envisaged being a satellite port to decongest and improve the environmental quality at the bustling Chennai Port, Ennore Port is evolving itself into a full-fledged port with the capacity to handle a wide range of products. With a permissible draught of 13.5 m, the port handled a total volume of 11.01 million tonnes in 2010-11, up by 2.86 per cent from the previous year. History
Ennore Port was originally conceived as a satellite port to the Chennai Port, primarily to handle thermal coal to meet the requirement of Tamil Nadu Electricity Board (TNEB) and was endowed with large chunks of land (about 2,000 acres). The scope was expanded taking into account subsequent developments such as the plan of Government of Tamil Nadu to set up a 1,880 mW LNG power project in association with a private consortium, a large petrochemical park and a naphtha cracker plant. Ennore Port was commissioned by the then Prime Minister of India on 1 February 2001. The port was set up under the Companies Act, keeping it outside the scope of the Tariff Authority for Major Ports, the tariff regulator for 11 of the 12 ports owned by the Indian government. The port was declared as a major port under the Indian Ports Act, 1908 in March 1999 and incorporated as the Ennore Port Limited under the Companies Act, 1956 in October 1999. Commercial operations commenced with Handymax geared vessels for unloading of thermal coal on 22 June 2001. With the deployment of self-unloading and gearless vessels of 65,000/77,000 DWT, full-fledged operations were started in December 2002.
Commissioned in 2001 and operating on a landlord port concept, it is outsourcing all services required for operation and maintenance, and new terminals are being developed with the participation of the private sector. During the year of 2010-11, it handled a total cargo of 11.01 million tons. The port has effectively taken over all the ore movement from the Chennai Port. By 2016, the port is expected to have the capacity to handle over 80 million tons of cargo and its coal-
handling capacity is expected to be about 43 million tons. The port is equipped to handle 16 million tonnes of coal per year from its two dedicated coal berths manned by TNEB, while its third berth promoted by Chettinad International Coal Terminal, is a common user facility that can handle 8 million tonnes per annum. Cargo handled by Ennore Port (in million tonnes) Commodity Thermal coal Iron ore Petroleum, oil and lubricants (POL) 2007-08 9.05 2.19 2008-09 9.71 1.11
0.32 0.68 (including STS) Total 11.56 11.50 According to the Maritime Agenda 2010-20, the port traffic is projected to increase to 67.44 million tonnes in 2016-17 and 71.54 million tonnes in 201920.Against this projected traffic growth, the port's capacity is expected to increase from the existing 16 million tonnes (as on March 31, 2010) to 73 million tonnes in 2016-17. The target set for the port for 2010-11 is 13.20 million tonnes against a target of 12.45 million tonnes during the previous fiscal. During 2010-11, the port handled a total of 294 vessels, including 184 dry bulk, 87 liquid bulk, 22 break bulk and 1 container vessels against 273 vessels in 2009-10, registering a 7.69% increase. Car exports took place through the port for the first time in 2010-11. A total of 54,264 cars were exported through the port by Renault Nissan Automotive India Pvt. Ltd. Terminals:
The Chettinad International Coal Terminal (CICTL), the private terminal at the port capable of handling Panamax ships, commenced operations in January 2011 and is targeting to handle nearly 5 million tonnes of coal/coke by current financial year ending March 31, 2012. The terminal was completed with equipments and conveyor systems, yard and evacuations systems with capacity to handle 8 million tonnes of coal/coke annually at project outlay of about 4,000 million. The Ennore Container Terminal (ECT), also known as the Bay of Bengal Gateway Terminal, will have an eventual planned annual capacity of 2.4 million TEUs. The construction is expected to begin by end of 2011 at a cost of £207 million, allowing the first ships to be handled in 2013. The terminal for 6,000-to8,000 TEU vessels will have a quay length of 1,000 m with 15 m water depth at the berths and will be able to handle three container vessels of up to 8,000 TEUs simultaneously. Development works: The Planning Commission has approved a rail connectivity for Ennore Port to the coal, iron and container terminals. There is a US$230-million expansion for the port in progress. An iron ore terminal is currently in the process of construction by PSA Sical. The terminal will have a capacity for 12 million tonnes of cargo per year, expandable to 15/20 million tonnes per year. Facilities include a jetty, ship loader, mechanized handling system with conveyor, storage, and a wagon unloading system. The port is expanding its cargo handling capacity to 87 million
tonnes a year in the next 5 years as mandated by the Union Government, according to a press release from Ennore Port Ltd. With the inauguration of three new terminals to handle non-TNEB coal, iron ore and cars in 2010, the installed capacity of the port had doubled from 15 million tonnes to 30 million tonnes. A 1,700-million capital dredging project was commenced at the port on 26 February 2011. Rail link: Rail connectivity project works to link coal and iron ore stackyards with Athipattu station on the Chennai–Vijayawada mainline is under the implementation at a cost of 516 million. Connectivity: The highway authority is implementing a project for construction of 30.1 km (18.7 mi) segment of Chennai-Ennore Port connectivity. Announced by the Tamil Nadu Government in 1998, the cost of the Chennai-Ennore Port Road Connectivity project, earlier called Ennore-Manali Road Improvement Project, has escalated by four times to 6,000 million. The project is to enable free flow of truck traffic from and to the Chennai port in North Chennai. The Ennore Port handles over 5,000 containers a day and trucks need to take this Ennore-Manali road for entry and exit to the port. The project is still in the "tendering" stage—previous tenders were cancelled for various reasons.
The project will commence in January 2011 and will be completed in 2 years. The Union Government has decided to lay a 21.1-kilometre (13.1 mi)-long 4-laned national highway (port corridor) connecting Ennore with Thacchur at a cost of 3,740 million.
4. HAZIRA PORT:
India: Hazira Location of Hazira Country in Gujrat and India
State District(s) Nearest city Civic agency Population • Density
Gujarat Surat Surat Hazira Area Development Authority 67,829 (2009[update]) • 404 /km2 (1,046 /sq mi)
Time zone Area • Elevation Codes • Pin code • Telephone • Vehicle Transport
IST (UTC+05:30) 168 km2 (65 sq mi) • 2 meters (6.6 ft) • 394230 • +0261 • GJ-5
Hazira is 300 kilometers north of Mumbai, 21 kilometers from Surat city and 31 kilometers from Udhana. Access is via NH-6 and NH-8. A new coastal highway connecting Hazira with Navsari which will reduce the commute time has been planned. The project to broaden NH-6 from four to six lanes is under construction with the National Highways Authority of India (NHAI).
Hazira Port is a joint-venture between Shell Gas B.V. and Total Gaz
Electricite Holdings of France. Shell holds 74% in the venture, with Total holding
the remainder . Hazira is a Port Town and a transshipment port in the Surat district in the state of Gujarat in southwestern India. Hazira is one of the major ports of India and most important element of Region. It is also known as the industrial hub of India. The town is located on the bank of the Tapti River, eight kilometers’ from the Arabian Sea. It is a centre for health tourism due to its natural springs, and also home to major industrial and shipping facilities like Essar Group of Industries, Shell, Larsen & Toubro & Reliance.
5. Kandla Port:
Country State District(s) Area • Elevation Codes • Vehicle India Gujarat Kutch • 3 metres (9.8 ft) • GJ-12
Kandla is a seaport in Kutch District of Gujarat state in western India. Located on the Gulf of Kutch, it is one of major ports on chief west coast. Kandla was constructed in the 1950s as the seaport serving western India, after the partition of India from Pakistan left the port of Karachi in Pakistan. After Indian independence in the late 1940s, the new government selected the Port of Kandla as a promising outlet to the Arabian Sea. When the Port of Karachi was lost to Pakistan, maritime trade in the area shifted to the Port of Mumbai (formerly Bombay). The Port of Kandla Special Economic Zone (KASEZ) was the first special economic zone to be established in India and in Asia. Established in 1965, the Port of Kandla SEZ is the biggest multiple-product SEZ in the country. Covering over 310 hectares, the special economic zone is just nine kilometers from
the Port of Kandla. Today, the Port of Kandla is India's hub for exporting grains and importing oil. This self-sufficient port is one of the highest-earning ports in the country. Major imports entering the Port of Kandla are petroleum, chemicals, and iron and steel machinery, but it also handles salt, textiles, and grain. Facilities: • Total Custom Bonded Port Area inside the custom fencing is 185 hectares. An additional 76.5 hectares is being developed shortly. • Eleven Dry Cargo Berths in straight quay line in sheltered creek with a totallengthof1987meters. • Six Oil jetties. • Total Custom Bonded Port Area inside the custom fencing is 185 hectares. An additional 76.5 hectares is being developed shortly. • Loading/Unloading facilities for barges available for stream handling. • Seventy licensed private Barges available at competitive rates. • Adequate storage capacities in both Dry and Liquid Areas. • Well Developed Road Network directly connecting to National Highway and
Railway Network connecting to the Broad Gauge Train Routes which is further being upgraded. Cyclone of 1998: A tropical cyclone hit the port in 1998. The official death toll was 1,000 but locals in the area believed it was closer to 10,000. Most of the casualties came from illegal immigrant workers in the port itself and poor shanty towns in the region. Although the cyclone was tracked by the Indian government for 3-4 nights no effort was made to warn port employees this catastrophe shows a failure of government and business ethics and a complete disregard for the life of the poor.
6. Port of Kolkata
The Port of Kolkata is a riverine port in the city of Kolkata, India. It is the oldest operating port in India, having originally been constructed by the British East India Company. The Port has two distinct dock systems Kolkata Docks at Kolkata and a deep water dock at Haldia Dock Complex, Haldia. In the 19th century Kolkata Port was the premier port in British India. After independence its importance decreased because of factors including the Partition of Bengal (1947), reduction in size of the port hinterland and economic stagnation in eastern India. In the 21st century due to the east Indian economic recovery and infrastructure improvements, the port grew
swiftly to become the nation's third largest container port. It was one of India's fastest growing ports in 2004-05. • History: View of the Calcutta Port in 1852 Kolkata Port was set up by the British East India Company after the company received trading rights from the Mughal emperor Aurangzeb. Following the shift of power from the company to the British crown, a port commission was set up in 1870. After the independence, the Commissioners for the Port of Kolkata was in responsibility of the port till January 1975 when Major Port Trusts Act, 1963, came into force. Kolkata Dock System (KDS): It is situated on the left bank of the Hooghly River at 22° 32' 53" N, 88° 18' 5" E — about 203 km (126 miles) upstream from the sea. The pilotage station is at Gasper/ Saugor roads, 145 Kilometers to the south of the KDS (around 58 km from the sea). The system consists of:
Kidderpore Docks (K.P. Docks) : 18 Berths, 6 Buoys / Moorings and 3 Dry Docks Netaji Subhas Docks (N.S. Docks): 10 Berths, 2 Buoys / Moorings and 2 Dry Docks Budge Budge River Moorings : 6 Petroleum Wharves Anchorages: Diamond Harbour — 1. Saugor Road 2. Sand heads
Apart from this, there are around 80 major riverine jetties, and many minor jetties, and a large number of ship breaking berths. Haldia dock complex (HDC): It is situated at 22°02' N, 88°06 E — 60 kilometers away from the pilotage station. The complex consists of: • Impounded Dock. System with 12 Berths • 3 Oil Jetties in the River
3 Barge Jetties in the River for handling Oil carried by Barges. Haldia Anchorage for LASH vessels
All the docks are impounded dock systems with locks from river
7. Port of Cochin
Location Country Location Details Opened India Kochi May 26, 1928
Operated by Cochin Port Trust and Dubai Ports World Owned by Ministry of Shipping, Government of India Available 9 berths in Ernakulam Wharf and 4 berths in Mattancherry Wharf berths Wharfs 2 Chairman Shri N. Ramachandran, IPS Statistics Annual container 2,89,817 TEU (2009) volume Value of cargo 17.43 million tonnes Website CochinPort.com The office of the Cochin Port Trust in Willingdon Island The Port of the Kochi Cochin (officially
Port) is a major port on the Arabian Sea - Indian Ocean sea-route and is one of the largest ports in India. The port lies on two islands in the Lake of Kochi namely the Willingdon Island and Vallarpadam, towards the Fort Kochi river-mouth opening onto the Arabian Sea.
The Vallarpadam International Container Trans-shipment Terminal (ICTT), a part of the Cochin Port, is the largest container trans-shipment facility in India. The port is governed by the Cochin Port Trust, a Government of India establishment. The modern port was established in 1926 and has now completed 86 years of active service. The Kochi Port is one among a line of maritime-related facilities based in the port-city of Kochi, the others being, the Cochin Shipyard, the largest shipbuilding as well as maintenance facility in India, the SPM (Single Point Mooring facility) of the Kochi Refineries - an offshore crude carrier mooring facility, and the Kochi Marina. History: The Cochin port was formed naturally due the great floods of Periyar in 1341 AD, which choked the Muziris port (Kodungallur), one of the greatest ports in ancient world. Ever since the choking of Muziris, Cochin became one of the major ports with extensive trading relations Romans, Greeks and Arabs, all lured by the traditional spice wealth of the state. The traditional port was located near Mattancherry (which still continues as Mattancherry Wharf). The construction of the dredger `Lord Willingdon' was completed in 1925. It arrived at Cochin in May 1926. It was estimated that the dredger had to be put to use for at least 20 hours a day for the next two years. . The dredged sand was used to create a new island to house Cochin Port and other trade related establishments. Around 3.2 km² of land was reclaimed during the dredging process. The strong determination of Sir Bristow and his team, finally paid success, when large steam
ship SS Padma, sailed into sailing from newly constructed inner harbour of Kochi. Speaking to the BBC on that day, Bristow proudly proclaimed his achievements at the Kochi port with the following words: I live on a large Island made from the bottom of the sea. It is called Willingdon Island, after the present Viceroy of India. From the upper floor of my house, I look down on the finest harbour in the East. In 1932, the Maritime Board of British India declared Port of Cochin as a major port. The port was opened to all vessels up to 30 feet draught. During the World War-2, the port was taken over by Royal Navy to accommodate several military cruisers and war ships. The port was returned to civil authorities on May 19, 1945. After Independence, the port was taken over by Government of India. In 1964, the administration of the Port got vested in a Board of Trustees under the Major Port Trusts Act. The port was listed as one among 12 major ports of India. Organizational structure: Cochin Port Trust is an Autonomous Body under Govt.of India and is managed by Board of Trustees constituted by the Government of India. The Board is headed by the Chairman who acts as the Chief Executive Officer. The Govt.of India may from time to time nominate the trustees in the Board representing various interests. Chairman is assisted by the Deputy Chairman who in turn is assisted by Department Heads and officials of the following departments functioning in the Port. a) General Administration Department. b) Traffic Department.
c) Accounts Department. d) Marine Department. e) Civil Engineering Department. f) Mechanical Engineering Department. g) Medical Department Navigational channel: The entrance to Port is through the Cochin Gut between the peninsular headland Vypeen and Fort Cochin. The port limits extend up to the entire backwaters and the connecting creeks and channels. The approach channel up to the Cochin Gut, is about 1000 meters long with a designed width of 200 meters and maintained dredged depth of 13.8 meters (now dredging for 18 meters for ICTT). Infrastructure facilities: A draft of 38 ft. is maintained in the Ernakulam channel along with berthing facilities, which enables the Port to bring in larger vessels to the Port. In the Mattancherry channel a draft of 30 ft. is maintained.
The Port provides round the clock pilotage to ships subject to certain restrictions on the size and draft of the vessels. There is an efficient network of railways, roads, waterways and airways, connecting the Port with the hinterland centers spread over the State of Kerala, Tamilnadu and Karnataka.
The International Container Trans-shipment Terminal (ICTT) of the Kochi Port
8. Nhava Sheva:
A Container ship at Nhava Sheva Port
Nhava Sheva is the 6th largest port and largest container port in India. The main goods exported are cotton shirts, knitted t-shirts, sporting goods, carpets, other textile articles, such as embroidery machines, boneless meat, and medicaments.The main imports are chemicals, machinery, plastics, electrical machinery, vegetable oils and aluminum and other non-ferrous metals. It has access to neighbouring Mumbai and to the hinterland of Maharashtra, Madhya Pradesh, Gujarat, Karnataka, and most of North India. It is located south east of Mumbai The port was developed to relieve pressure of the port of Bombay (Mumbai) in Bombay proper and was commissioned on May 26, 1989. It has three terminals: JNPCT, NSICT and GTI (Gateway Terminal of India). NSICT is India’s first privately managed container terminal. It is run by Dubai Ports World. Currently it is managed under a Build-Operate-Transfer agreement set up with the Jawaharlal Nehru Port Trust (JNPT) of the Government of India. Location Country Details Operated by Owned by Statistics Annual cargo tonnage Bulk: 7.88 million tons (2010-11) Container: 56.43 million tons (2010-11) Jawaharlal Nehru Port Trust Government of India India
Annual container volume Website
4.27 million TEU (2010-11) jnport.gov.in
Jawaharlal Nehru Port Trust:
Jawaharlal Nehru Port is a port in Maharashtra, India that borders the
Arabian Sea. The sea port is named after the first Prime Minister of India, Jawaharlal Nehru. It was inaugurated by the late Prime Minister of India Shri. Rajiv Gandhi in the year 1989. This is a Satellite Port which reserves 80% of its port for greenery. Jawaharlal Nehru Port was planned for construction in the year 1965. During this period India has a huge deficit of food grains. So this port was planned for importing food grains. By the time Jn port was inaugurated it started to export food grain as the country had surplus food supply. Later as a development process the port started container terminal. By the year 2003 JNPT Bulk Terminal was totally scrapped. The port is run by the Jawaharlal Nehru Port Trust, an organization entrusted with the operations of the large shipping port in Navi Mumbai, India and controlled by the Central Government of India. JN Port follows the Tariff Authority of Major Port. The port lies on the mainland, opposite the city of Mumbai across the Thane Creek. It is well connected to major highways and rail networks in India. The closest suburban railheads are CBD Belapur and Panvel.
The JNPT Container Terminal is operated by JNPT. It has a quay length of 680 meters (2,230 ft) with 3 berths. It can handle up to 15.6 million tons of cargo.  NSICT was India’s first privately managed container terminal.The Gateway Terminal (GTI) has been leased to a consortium of APM Terminals and the Container Corporation of India. It started operations in 2006.The BPCL Terminal is leased to a joint-venture between Bharat Petroleum and Indian Oil. It mostly handles crude imports and refined petroleum products exports at its 2 berths. The port is well connected by rail and road to neighbouring Mumbai and to the rest of India.
Major exports from Nhava Sheva are textiles, sporting goods, carpets, textile machinery, boneless meat, chemicals and pharmaceuticals. The main imports are chemicals, machinery, plastics, electrical machinery, vegetable oils and aluminum and other non-ferrous metals. The port handles cargo traffic mostly originating from or destined for Maharashtra, Madhya Pradesh, Gujarat, Karnataka, as well as most of North India.
In 2000 there were 102 shipping companies operating in India, of which five were privately owned and based in India and one was owned by the government (Shipping Corporation of India). In 2000 there were 639 government-owned ships, including 91 oil tankers, 79 dry cargo bulk carriers, and 10 cellular container vessels. Indian-flagged vessels carried about 15 percent of overseas cargo at Indian ports for financial year 2003.
The Port Pipavav in Saurashtra handled by APM terminals; developed by AFCONS is one of the most efficient Ports functioning in India. Port of Dhamara in Odisha (Orissa) to be inaugurated in August 2010 and will be the deepest port (18 meter deep) of India... There are another 5 ports offing in Odisha. Name Cargo % Vessel Handled Increase Traffic (2010) '000 (over (2009–10) tonnes 2009) -14.61% 22.84% 2.49% 6.20% 8.07% 14.45% -3.17% 17.19% 5.14% 6.03% -6.93% 10.10% 5.74% 3,462 1,531 2,406 2,131 1,414 872 1,186 465 1,639 3,096 273 2,776 21,251 % Container Increase Traffic (over (2009–10) 2008-09) 07.50% -0.32% 2.51% 2.5% -7.21% 15.19% 0.16% 6.89% 1.67% 4.13% 9.2% 10.29% 02.82% 502 4 98 1,216 440 290 31 17 58 4,062 -147 6,865 % Increase (over 200809) 17.01% 100.00% 13.65% 6.38% 0.22% 11.11% 6.89% 21.42% -36.95% 2.78% -6.52% 4.25%
Kolkata (Kolkata Dock System & 46,295 Haldia Dock Complex) Paradip 57,011 Visakhapatnam 65,501 Chennai 61,057 Tuticorin 23,787 Cochin 17,429 New Mangalore Port 35,528 Mormugao 48,847 Mumbai 54,543 J.N.P.T. 60,746 Ennore (corporate) 10,703 Kandla 79,521 All Indian Ports 560,968
9. Tuticorin Port Trust
Location Country Location Details Owned by Type of harbor Size of harbor Land area Employees
India Tuticorin, Tamil Nadu Tuticorin Port Trust, Ministry of Shipping, Government of India Medium seaport (Artificial) 960 acres (388.8 hectares) 2150 acres (870.75 hectares) 1,162 (2009-10) Industrial coal, copper concentrate, fertilizer, timber logs, iron ore Major imports: Coal, cement, finished fertilizers, raw fertilizer materials, rock phosphate, petroleum products, petroleum coke, and edible oils Major exports: General cargo, building materials, liquid cargoes, sugar, granite, limonite ore
Statistics Annual cargo 23.787 million tonnes (2009-10) tonnage Annual container 4,67,752 (81,68,603 tonnes) (2010-2011) volume
Tuticorin Port is one of the 12 major ports in India. It was declared to be a major port on 11 July 1974. It is second-largest port in Tamil Nadu and fourth-largest container terminal in India after Kochi International Container Transshipment Terminal, Jawaharlal Nehru Port (Mumbai) and Chennai Port.
Tuticorin Port is an artificial port. This is the third international port in Tamil Nadu and its second all-weather port. All Tuticorin Port’s traffic handling has crossed 10 million tons from April 1 to September 13, 2008, registering a growth rate of 12.08 per cent, surpassing the corresponding previous year handling of 8.96 million tons. It has services to USA, China, Europe, Sri Lanka and Mediterranean countries.
History: Tuticorin has been a centre for maritime trade and pearl fishery for more than a century. The natural harbour with a rich hinterland, activated the development of the Port, initially with wooden piers and iron screw pile pier and
connections to the railways. Tuticorin was declared as a minor anchorage port in 1868. Since then there have been various developments over the years. To cope with trade Tuticorin, sanctioned weather Tuticorin, brings largest the port the increasing through the the at which second to revenue
Government of India construction of an all-
India. On July 11, 1974, the newly constructed Tuticorin Port was declared as the 10th major port. On 1 April 1979, the erstwhile Tuticorin minor Port and the newly constructed Tuticorin major port were merged and the Tuticorin Port Trust was constituted under the Major Port Trusts Act of 1963. Operations: Tuticorin Port is an artificial deep-sea harbour formed with rubble mound-type parallel breakwaters projecting into the sea for about 4 km. (The north breakwater is 4098.66 meters long; the south breakwater is 3873.37 metres long and the distance between the breakwaters is 1275 metres). The port was designed and executed entirely through indigenous efforts. The harbour basin extends to
about 400 hectares of protected water area and is served by an approach channel of 2400 metres length and 183 metres width. Due to its strategic location in the southern peninsula and assured round-theclock operations, the port has been the nerve centre of economic activity in south Tamil Nadu. The port currently handles seven per cent of the total container traffic in India and is an important reason for investment in the southern districts of Tamil Nadu. The port is badly in need of expansion to handle the increase in traffic. The port has been upgraded to handle vessels longer than 245 m. The advantages of deploying bigger vessels are that the existing restriction on booking can be eliminated and the transshipment at Colombo port can be reduced. The Tuticorin port has the potential to be an international container transshipment hub given its unique geographical location. Activity at the port has grown at a rate of 17 per cent per year over the last five years. A large portion of the operations in the port has been privatized, including handling at the first container terminal by PSA Sical. A second container terminal has been approved for this port. Tuticorin port is becoming a gateway for South India to the US, Europe and the Mediterranean following direct sailings to these regions. Of the total exports from the port, 25 per cent were to Europe, 20 per cent to the US, 20 per cent to East Asia including China, 15 per cent to Colombo, 10 per cent to West Asia and the remainder to the Mediterranean. A naval base is to be set up under the ambit of Eastern Naval Command to strengthen the surveillance in the Gulf of Mannar and to safeguard any possible aggression in the region. Tuticorin Port Trust officials expressed their willingness
to allot a 24-acre (97,000 m2) plot on the ‘port estate’ area for the establishment of the Naval Base. The port is also helping increase the tourism in the region. A new ferry has been commenced between Tuticorin and Colombo. International service
Tuticorin is the only port in South India to provide a direct weekly container service to the United States. The transit time to the United States is 22 days. There are regular weekly direct services to Europe (transit time 17 days), China (transit time 10 days) and Red Sea Ports (transit time 8 days).
Customs clearance in the import-export trade is one of the traditional functions of
a freight forwarder. Indeed, in developing countries many freight forwarders are still restricting their activities to customs clearance at the ports. The legal status of the freight forwarder in his relationship with the customs authorities, on the one hand, and his customers, on the other, varies from country to country. In many countries, the forwarder acting as customs house agent is required to obtain a license from the Government and such a license is issued only when he establishes his professional competence by passing prescribed examinations. He may also be required to furnish security or bond for the proper performance of his functions, which may be forfeited in the event of any irregularity or misconduct on his part. In some countries, however, no license or qualifications are required for doing customs clearance work.
CUSTOMS AND PORT PROCEDURES
As customs agents are authorized by the Government to attend to the customs formalities in respect of goods to be imported or exported, they are required to ensure that the customers, interests are safeguarded. They are expected to process quickly the various documents and formalities so that their customers do not miss shipping opportunities in the export trade and do not have to pay demurrage and other charges on account of delays in the clearance of imports. To their customers, they also have a responsibility to ensure proper valuation of the goods and their appropriate classification, so as to avoid any incorrect levy of duties that may subsequently lead to prolonged correspondence involving a lot of time and money. In the performance of their functions, therefore, the customs agents have a dual responsibility to protect the interests of both their customers and the customs authorities.
Introduction: During 2004, total estimated 100 million TEUs Shipments of containerized cargoes has been moved world estimated TEUs Shipments cargoes been worldwide. The world fleet of fully cellular container ships continued to expand substantially in 2004 in terms of both number of ships and their TEU capacity; by the beginning of 2005 there were 3,206 ships with a total capacity of 7,165,352 TEUs, an increase of 5 per cent in the number of ships and 11.3 per cent in TEU capacity over the previous year, Ship sizes also continued to increase.
Containerized cargoes are packed ounce at the factory door than at every change in transport mode, thereby reducing direct cost as well as the ship time at the port. Multimodal transport: The containerization of cargo allowed cargoes to be easily and safely transferred from one mode of transport to another. Merchants and their agents physical involvement in the carriage of goods was reduced to handing them over at the point of departure and ensuring someone would receive them at the destination. The constituent elements of a multimodal carriage of goods are thus: • contract between consignor and multimodal transport operator
Whereby the multimodal transport operator agrees to arrange. and accept responsibility for
• the transport of the consignors goods from X place to Y place • by more than one mode of transport
With the right to subcontract some or all of the legs of carriage to another carrier.
Difference between modes of transport.
No. Features 1. Value &Volume 2. Speed Air High Value/low volume And high Road Medium Volume. Good Rail Medium Value Low Ocean High Volume Low Pipeline High Value/High Volume Very High
Value/medium Value/High Value/High
3. 4. 5. 6. 7.
Delivery Cost Frequency Flexibility Access Commodities
Very High Average Average Average Emergency perishable Unique Medicines
High High Average Very High Consumer
Medium Low Low High High Coal, Cement, Fruits, Petroleum Products.
Low Very Low Very High Limited Ore (Steel, Aluminum, Copper), Equipments and machinery, Food Grains
Highest Highest Limited High Gases and Petroleum Liquid
Items, High Goods, goods, Very Milk, Steel.
Perishable like Steel, Vegetable, etc. Liquid
Oil, Plants, Products.
THE APPLICABLE LAW The law with regard multimodal transport, it has to be demonstrated what law actually governs this type of carriage. Relating to: 1. The loss or damage of goods carried or which ought to have been carried in a ship 2. The carriage of goods in a ship, or any agreement for or relating to such carriage or relating to such carriage 3. Any container and any agreement relating to any container. • Different modes of carriage are governed by different laws. A multimodal contract of carriage will thus often be subject to different regimes of liability.
For example carriage by road from Vienna to Hamburg and by sea to London will be subject to the Hague Visby Rules for the sea carriage and the CMR Convention for the road carriage. Liability depends on whether the leg during which the damage occurred can be identified. The provisions of these Rules also form the basis of many combined transport bills of lading in use today. • The Rules divide liability according to whether the place of damage is known or unknown. If the place of loss is known then the applicable mandatory carriage regime applies. If there is no mandatory carriage regime, or the place of lloss iis unknown, then the system of liability contained in the Rules is used. This system of liability is drawn from the Hague Visby Rules.
• THE WAY FORWARD :
The ultimate goal of the carriage of goods is the promotion of trade by allowing business the opportunity to get its products to any market on the planet at a reasonable price. Multimodal’s seeks to achieve that goal by reducing the consignors'/consignees' (merchants') risk in transporting their goods. This is achieved, firstly by minimizing the chance of the cargo being physically damaged and secondly by reducing the chance that the merchant will be unable to recover in the case where cargo is damaged through the fault of the carrier.
The reduction of the risk of cargoes being physically damaged is achieved by packing the goods in a strong steel container and by standardizing the vessels, vehicles and cranes which handle these containers.
In the event that the cargo is actually damaged, the merchants' risk is reduced in that he can look to a single person, the multimodal transport operator, to make good his loss. In this respect the multimodal transport contract was a giant leap forward for merchants allowing complete control over who accepts responsibility for the safe carriage of cargo.(88) This single contractual carrier (MTO) responsibility significantly reduces a merchants risk of having to recover from a company with no assets, or from having to recover in an inconvenient jurisdiction.
Marine insurance A broad term including ocean and inland marine insurance. The Nationwide Marine Insurance Definition, published by the National Association of Insurance Commissioners, includes imports, exports, domestic shipments, means of communications, and personal and of communications, personal commercial property floaters as marine insurance.
Ocean marine insurance:
Coverage for these types of ocean transportation exposures: ships or Hulls; goods or cargo; earnings (such as freight, passage money, Commissions, or profit); and liability (known as protection and or profit); This insurance may be purchased by the vessel owner or any party interested in or responsible for insurable property by reason of maritime perils. • Transportation insurance: Insurance that covers merchandise or goods in the course of transit by air, rail, truck, barge or ship from a starting location to a final destination.
Transit insurance that covers a shipment of merchandise from the original point of manufacture to its final destination. • Marine insurance provides coverage against four types of losses corresponding to the four major classes of ocean marine insurance.
Hull & Machinery Insurance covers ship-owners either on basis of
voyage policy or a time policy against total loss (actual or constructive), damage to the ship in particular average and general average sacrifice, expenses to prevent loss by way of sue and labor charges, salvage charges and general average contributions and against collision liability (either three fourths or four fourths) and expenses associated with claims. • The cover is against ordinary risks (perils of the sea and other named perils) or against the named perils in the war and strike clauses. BASIC COVERAGE: • Hull and Machinery including Liability • Disbursements • Increase Value • Managers' Commission • Chartered Freight
• Insurance Premiums • Return Premium
Protection and Indemnity: P&I coverage is essentially liability insurance that protect the ship-owner for the loss of income that would have been earned upon completion of the voyage.
• BASIC COVERAGE : Personal injuries to third parties, passengers, crew, stevedores, persons on another ship, personal injuries arising out of carriage of cargo or containers, repatriation and substitution of crew, loss of effects, shipwreck unemployment indemnity, stowaways and refugees and life salvage; • Navigational and operating claims such as collisions (either one fourth or four fourths), damages to fixed and floating objects, pollution, wash damage, towage, liability under contracts for hire of cranes, wreck removal and quarantine; • Cargo claims including collision liability to cargo carried in an entered ship and general average and salvage; • Miscellaneous liabilities which include fines and confiscation, inquiring expenses, expenses arising from interference by local authorities and costs of sue and labor.
Marine Cargo Insurance: Aims to indemnify the Assured from losses or physical damages occurred
to the goods during the insured voyage as mentioned in the certificate of insurance and provided said losses or damages are covered by the insurance conditions as
agreed between the Assured and Underwriters and consigned in the insurance contract. • BASIC COVERAGE : (1) Total or Constructive Total Loss of the whole consignment hereby insured caused in the course of transit by natural calamities--heavy weather, lightning, tsunami, earthquake and flood. In case a constructive total loss is claimed for, the Insured shall abandon to the company the damaged goods and all his rights and title pertaining thereto. The goods on each lighter to or from the seagoing vessel be deemed a separate risk. be deemed separate risk "Constructive Total Loss" refers to the loss where an actual total loss appears to be unavoidable or the cost to be incurred in recovering or reconditioning the goods together with the forwarding cost to the destination named in the policy would exceed their value on arrival. (2) Total or Partial Loss caused by accidents-the carrying conveyance being grounded, stranded, and sunk or in collision with floating ice or other objects as fire or explosion. (3) Partial loss of the insured goods attributable to heavy weather, lightning and/or tsunami, where the conveyance has been grounded,, stranded,, sunk or burnt , irrespective of whether the event or events took place before or after such accidents. (4) Partial or total loss consequent on falling of entire package or packages into
sea during loading, transshipment or discharge. (5) Reasonable cost incurred by the Insured in salvaging the goods or averting or minimizing a loss recoverable under the policy, provided that such cost shall not exceed the sum Insured of the consignment so saved. (6) Losses attributable to discharge of the insured goods at a port of distress following a sea peril as well as special charges arising from loading, warehousing and forwarding of the goods at an intermediate and port of call or refuge. (7) Sacrifice in and Contribution to General Average and Salvage charges. (8)Such proportion of losses sustained by the ship-owners as is to be proportion of losses sustained ship reimbursed by the cargo owner under the Contract of Affreightment "Both to Blame Collision" clause.
Freight insurance: When a vessel is lost this coverage indemnifies the shipowner for the loss of income that would have been earned at the end of the voyage. The following proper information required to obtain insurance quotation: • Cargo description and if hazardous • Quantity and packaging • Loading port and destination • Ocean vessel (including date of build, flag and size). • Value of the goods being shipped. • Expected date of shipment. Cargo Claims Documents: • Insurance Certificate or Policy
• Bill of Lading • Shipper's Invoice • Invoice • Packing List • Survey Report • Ship's Short-landing/Discrepancy Certificate(s). • Copies of correspondence exchanged with the Carrier. GENERAL AVERAGE: Average: A term in marine insurance referring to a loss. A particular average is a partial loss. Particular Average: A fortuitous partial loss to the subject matter insured proximately caused by an insured peril but which is not a general average loss. Particular average only relates to damage and/or expenses which are exclusively borne by the owners of a vessel which has sustained damage as a result of e.g. heavy weather or by the owners of the cargo, which has been damaged in transit. General Average Abbreviation: G/A Intentional act or sacrifice which is carried out to safeguard vessel and cargo. When a vessel is in danger, the master has the right to sacrifice property and/or to incur reasonable expenditure. Measures taken for the sole benefit of any particular interest are not considered general average. A legal principle which traces its origins in ancient maritime law, general average is still part of the admiralty law of most countries. General average requires three
elements which are clearly stated by Mr. Justice Grier in Barnard v. Adams:
"1st. A common danger: a danger in which vessel, cargo and crew all participate; a danger imminent and apparently 'inevitable,' except by voluntarily incurring the loss of a portion of the whole to save the remainder.
"2nd. there must be a voluntary jettison, jactus, or casting away, of some must be portion of the joint concern for the purpose of avoiding this imminent peril, periculi imminentis evitandi causa, or, in other words, a transfer of the peril from the whole to a particular portion of the whole.
“3rd. This attempt to avoid the imminent common peril must be successful".
• General average bond : A bond prepared by the general average adjuster binding the owner of the goods to pay a proportion of the general average.
Warehousing and Warehouse Management
Warehousing is the storage of goods for profit. The physical location, the warehouse, is a storage facility that receives goods and products for the eventual distribution to consumers or other businesses. A warehouse is also called a distribution center. Warehouse management is the process of coordinating the incoming goods, the subsequent storage and tracking of the goods, and finally, the distribution of the goods to their proper destinations.
Warehousing's roots go back to the creation of granaries to store food, which was historically available for purchase during times of famine. As European explorers began to create shipping-trade routes with other nations, warehouses grew in importance for the storage of products and commodities from afar. Ports were the major location for warehouses. World War II impacted warehousing in several ways, including the need to increase the size of warehouses and the need for more mechanized methods of storing and retrieving the products and materials. As mass production grew throughout manufacturing, the needs of efficient and effective warehousing capabilities grew with it. Modern Issues:
The warehouse industry found itself recovering from a recession at the start of the twenty-first century, partially brought on by the hype of the dot-com bubble and the excess production created after it burst. It also coped with new methods of distribution, such as just-in-time (JIT) manufacturing—where warehousing is unnecessary because products are shipped directly to customers. Warehousing companies are now striving to become more than simply storage facilities. They are transforming themselves into "third-party logistics providers" or "3PLs" that provide a wide array of services and functions. In addition to packing and staging pallets, contemporary warehousing facilities offer light manufacturing, call centers, labeling, and other non-storage options. Warehouse Functions: Warehousing is a key component of the overall business supply chain. The supply chain consists of the facilities and distribution options for the procurement of materials from manufacturer to customer and all points in between. It includes the production of materials into components and finished products and then the distribution to customers. Warehouse function includes: • The storage of goods to permit managing product flow or to accommodate longer production runs.
Serving as a mixing point where products from different suppliers are mixed and then distributed to fulfill customer orders; A sales branch and customer service location; A source of supplies for production;
A staging area for final packaging or finishing.
Warehouse Operations: Warehouses are operated in several ways. Public warehousing involves the client paying a standard fee for the storage of merchandise. Private warehousing is storage and operations controlled completely by a single manufacturer. Leased warehousing is an option for more stable inventory. Contract warehousing clients pay fees regardless of whether they are using the space or not; the space is always there for them to use, however. According to Overview of Warehousing in North America, contract warehousing accounts for more than 60 percent of the U.S. commercial market. A warehouse stands empty without some form of product. Delivery of goods and materials takes place either by truck, rail, or boat on a dock or loading area. The goods are received, processed, and then sent into the warehouse for storage. The storage of goods has been the primary function for warehouses. Once the goods have been received from the manufacturer and/or shipper, they are compactly stored to maximize space within the facility. Products are placed on pallets, which allow for more consistent stacking and moving within the facility. Contract and public warehouses receive goods and products from a multitude of manufacturers and shippers. A crucial aspect of warehouse management is inventory control. Inventory control is the ability to locate and track a given product within the warehouse to facilitate quick selection and loading for order fulfillment. It is also the process of maintaining sufficient amounts of product to meet customer demands, while at the same time balancing the expense
of keeping product in storage. Perpetual, annual, physical, and cycle counting are all methods of keeping track of inventory. Order picking is the process of selecting products to fulfill an order. There are several types of picking methods: • Discrete or pick-by-order: Specific products are selected on a per order basis. • Batch or pick-by-article: Multiples of a product are selected to fulfill multiple orders. The products are sorted in the staging area and combined with other products to fulfill the orders. • Wave: Involves gathering products based on specific routing or shipping criteria. • Reverse-order: Used when part of an order is held to be combined with another order. Reverse-order picking is related to cross-docking, another function of warehouses. Cross-docking is a direct flow of goods from receiving to shipping, with little if any storage. Cross-docking is contingent on the timely delivery of products, accurate management on the loading dock, and effective ordering by the customer. Warehousing is also involved in the packaging and labeling of a product as it moves through the facility. Proper packaging is necessary for effective storage and to guard against damage. Labeling, or tagging, is an important element of the packaging. Proper labeling improves the ability to identify, track, store, and select the correct product for order fulfillment. Once the product has been selected, or picked, it is brought to a staging area for final processing and shipment. The loading dock is a hub of
activity as products are arriving for storage and being staged for distribution. Effective management of this area is crucial for warehouse success. It is here that cross-docking takes place. The final stage of warehousing is the transportation facet of delivering and shipping goods.
In the past warehouse management was very paper-intensive in its coordination of a multitude of activities. This has changed with the introduction of warehouse management system software. Warehouse management systems (WMS) assist managers in tracking products throughout the entire storage and distribution process. These systems span from simple computer automation systems to high-end, feature-rich management programs that improve order picking, facilitate better dock logistics, and monitor inventory management.
According to a Warehousing Management survey, competition in warehousing has become extremely tight because businesses seek warehouse firms with extremely thin margins. Companies are succeeding by remaining flexible and investing in technology. The main issues or trends in warehousing include radio frequency identification (RFID), transportation management systems, pick-to-light technology, and voice-activated receiving and packaging. Voice-activated receiving and packaging allows for warehouse personnel to
speak requests into the WMS, thus speeding the entire process. Transportation management systems provide an advanced level of detail on goods prior to their arrival and also provide a more specific time of delivery. RFID has dramatically improved the ability to effectively manage inventory and track the location of specific goods within the warehouse. Pick-to-light technology improves order picking along warehouse conveyor belts by monitoring and identifying products for specific shipments. A significant trend is the continuing growth of 3PL providers as companies try to cut costs and management issues by outsourcing their warehouse and distribution functions. An outcome of increased 3PL activity is a wave of mergers that are consolidating the industry. Customer demands for one-stop shopping and new technologies are a driving force behind this consolidation. Warehousing is a mature industry seeking methods to maximize profits and striving to add services to compete for customers. The warehousing industry is a key component of the supply chain and will likely remain so as long as there are manufacturers and consumers.
Panama Canal is a 77-kilometre (48 mi) ship canal in
Panama that joins the Atlantic Ocean and the Pacific Ocean and is a key conduit for international maritime trade. Built from 1904 to 1914, annual traffic has risen from about 1,000 ships in the canal's early days to 14,702 vessels in 2008, measuring a total 309.6 million Panama Canal/Universal Measurement System (PC/UMS) tons. In total over 815,000 vessels have passed through the canal. It has been named one of the seven modern wonders of the world by the American Society of Civil Engineers. One of the largest and most difficult engineering projects ever undertaken; the canal had an enormous impact on shipping between the two oceans, replacing the long and treacherous route via either the Strait of Magellan or Cape Horn at the southernmost tip of South America. A ship sailing from New York to San Francisco via the canal travels 9,500 km (5,900 mi), well under half the 22,500 km (14,000 mi) route around Cape Horn. The concept of a canal in Panama dates to the early 16th century. The first attempt to construct a canal began in 1880 under French leadership, but was abandoned after 21,900 workers died, largely from disease (particularly malaria and yellow fever) and landslides. The United States launched a second effort, incurring a further 5,600 deaths but succeeding in opening the canal in 1914. The maximum size of vessel that can use the canal is known as Panamax. A Panamax cargo ship typically has a DWT of 65,000-80,000 tonnes, but its actual cargo is restricted to about 52,500 tonnes because of draft restrictions in the canal.  The longest ship ever to transit was the San Juan Prospector, now Marcona
Prospector, an ore-bulk-oil carrier that is 973 ft (296.57 m) long, with a beam of 106 ft (32.31 m)
USS Missouri passes through the canal in 1945 The canal consists of artificial lakes, several improved and artificial channels, and three sets of locks. An additional artificial lake, Alajuela Lake (known during the American era as Madden Lake), acts as a reservoir for the canal. The layout of the canal as seen by a ship passing from the Pacific end to the Atlantic is as follows: • From the buoyed entrance channel in the Gulf of Panama (Pacific side), ships travel 13.2 km (8.2 mi) up the channel to the Miraflores locks, passing under the Bridge of the Americas. • The two-stage Miraflores lock system, including the approach wall, is 1.7
km (1.1 mi) long, with a total lift of 16.5 meters (54 ft) at mid-tide. • The artificial Miraflores Lake is the next stage, 1.7 km (1.1 mi) long, and 16.5 meters (54 ft) above sea level. • The single-stage Pedro Miguel lock, which is 1.4 km (0.87 mi) long, is the last part of the ascent with a lift of 9.5 meters (31 ft) up to the main level of the canal. • The Gaillard (Culebra) Cut slices 12.6 km (7.8 mi) through the continental divide at an altitude of 26 meters (85 ft), and passes under the Centennial Bridge. • The Chagres River (Río Chagres), a natural waterway enhanced by the damming of Lake Gatún, runs west about 8.5 km (5.3 mi), merging into Lake Gatun. • Gatun Lake, an artificial lake formed by the building of the Gatun Dam, carries vessels 24.2 km (15.0 mi) across the isthmus. • The Gatún locks, a three-stage flight of locks 1.9 km (1.2 mi) long, drop ships back down to sea level. • A 3.2 km (2.0 mi) channel forms the approach to the locks from the Atlantic side • Limón Bay (Bahía Limón), a huge natural harbour, provides an anchorage for some ships awaiting passage, and runs 8.7 km (5.4 mi) to the outer breakwater. Thus, the total length of the canal is 77.1 km (47.9 mi)..
The size of the locks determines the maximum size of ships allowed passage. Because of the importance of the canal to international trade, many ships are built to the maximum size allowed. These are known as Panamax vessels. Initially the locks at Gatun had been designed to be 28.5 meters (94 ft) wide. In 1908 the United States Navy requested that width be increased to at least 36 meters
Miter lock gate at Gatún
(118 ft) which would allow the passage of U.S. naval ships. Eventually a compromise was made and the locks were built 33.53 meters (110.0 ft) wide. Each lock is 320 meters (1,050 ft) long with the walls ranging in thickness from 15 meters (49 ft) at the base to 3 meters (9.8 ft) at the top. The central wall between the parallel locks at Gatún is 18 meters (59 ft) thick and stands in excess of 24 meters (79 ft) high. The steel lock gates measure an average of 2 meters (6.6 ft) thick, 19.5 meters (64 ft) wide and 20 meters (66 ft) high.
Tolls for the canal are decided by the Panama Canal Authority and are based on vessel type, size, and the type of cargo carried.
For container ships, the toll is assessed per the ship's capacity expressed in twenty-foot equivalent units or TEUs. One TEU is the size of a container measuring 20 feet (6.1 m) by 8 feet (2.44 m) by 8.5 feet (2.6 m). Effective May 1, 2009, this toll is US$72.00 per TEU. A Panamax container ship may carry up to 4,400 TEU. The toll is calculated differently for passenger ships and for container ships carrying no cargo (“in ballast”). As of May 1, 2009, the ballast rate is US$57.60 per TEU. Passenger vessels in excess of 30,000 tons (PC/UMS), known popularly as cruise ships, pay a rate based on the number of berths, that is, the number of passengers that can be accommodated in permanent beds. The per-berth charge is currently $92 for unoccupied berths and $115 for occupied berths. Started in 2007, this charge has greatly increased tolls for such vessels. Passenger vessels of less than 30,000 tons or with less than 33 tons per passenger are charged on the same "per-ton" schedule as freighters.
Ship Passing through Panama Canal
Small vessels up to 583 PC/UMS net tons when carrying passengers or cargo, or up to 735 PC/UMS net tons when in ballast, or up to 1,048 fully loaded displacement tons, are assessed minimum tolls based upon their length overall, according to the following : Length of vessel Up to 15.240 meters (50 ft) Toll US$1,300
More than 15.240 meters (50 ft) up to 24.384 meters (80 ft US$1,400 More than 24.384 meters (80 ft) up to 30.480 meters (100 ft) US$1,500 More than 30.480 meters (100 ft) US$2,400 The most expensive regular toll for canal passage to date was charged on May 16, 2008 to the Disney Magic, which paid US$331,200. The least expensive toll was 36 cents to American adventurer Richard Halliburton, who swam the canal in 1928. The average toll is around US$54,000. The highest fee for priority passage charged through the Transit Slot Auction System was US$220,300, paid on August 24, 2006 by the Panamax tanker Erikoussa, bypassing a 90-ship queue waiting for
the end of maintenance works on the Gatun locks, thus avoiding a seven-day delay. The normal fee would have been just US$13,430.
Logistical management in today’s globalised economy has become more competitive because WTO (World Trade Organization) & GATT (General Agreement On Trade and Tariff) regulation was diluted since 1994. This has effected logistical movement by sea globally. Which has affected public sector and the complications have also increased policies related to taxation. Moreover, India’s logistics and transport costs also have been high. According to the Chinese Federation of Logistics and Purchasing, the logistics of the operation of the 2004 National accounts statistics, in 2004, the national logistics costs for the 29 114 billion, the total cost of logistics for 21.3% of GDP, compared to the average level of developed countries 1 times higher, of which 55.8 billion for 16 transport costs, logistics costs accounted for 56.9%. At present, many commercial enterprises and more than U.S. commercial enterprises to spend up to 40% to 50% of the cost for logistics and transport. In 2007, Italian investigative bodies "Asian Observer" organizations, a survey shows that China is the world's logistics and transport one of the highest cost, every year on the use of funds in the logistics and transport up to 2 000 billion, twice the United States. 2. Logistics and transport time is long, low liquidity, according to statistics, in recent years with the logistics of manufacturing enterprises accounted for about 90% of the time. The production accounts for only about 10%. Longer result in transport turnover rate of low liquidity, working capital turnover rate of distribution of state-owned industrial
enterprises from 1.2 to 2.3 range of state-owned commercial enterprises, the United States an average of 15 to 20, some large multinational companies can to achieve 30.3. Logistics and transport business operations level is not high at present the majority of logistics and transport companies in India are from the traditional warehousing and transportation enterprises transition from the management level, the technical strength and range of services not yet on the improvement of the quality. Through his project, we can see some of Logistics Industry and the developed countries, the overall high cost and low efficiency. To solve this problem, we must first affect the efficiency of logistics and transport analysis of the factors. Second, the impact factor of the efficiency of logistics and transport 1. Infrastructure in recent years, government has invested heavily in infrastructure, especially in central and western areas of infrastructure not only requires a lot of money and takes a long time, so our infrastructure is still lagging behind needs of economic development, especially in the transport logistics by sea industry. At present, the most common mode of transport road, again is rail, sea and air transport. Road transport costs are generally higher than that of railway transport, sea transport, but road transport is still the priority for many transportation companies. This is because road transport can control the shipping time and flexibility, while maximizing the delivery of goods, protection of the state. Currently, sea transportation is often used in import and export trade as a mode of transport. But the sea is not suitable for time-sensitive goods and finished goods transport, it is suitable for bulk cargo, the goods to be transported long distances,
but it still needs more complete infrastructure, or in this way is difficult to effectively play a role. Hence for the logistical movement of goods by sea ways we need huge investments and very large capital.
Uniserve is recognized as one of Europe’s largest Sea Freight importers. Having
single-sourced their Sea Freight operations for over 20 years, customer ‘A’ were looking to move toward dual-sourcing and increasing their profile with shipping lines directly. The business was tendered out and Uniserve were awarded a 5000 teu (Twenty foot equivalent unit- a measure used for capacity in container transportation) contact to ship household furniture from China to the UK.
A significant change in market conditions and an error in customer ‘A’s order processing had led to mis-forecast volumes for household furniture in the UK market. The commitment to 5000 teu’s had been guaranteed, and the containers were ready to leave the port of origin in China. Also, the storage of such bulky
items in customer ‘A’s own DC would have put excessive strain on their distribution channels.
• Our Uniserve team travelled to China and arranged with our agent partners an extremely cost-effective solution in a Trade Free Zone. • The storage facility was at 10% of the cost of what may have been charged for goods entering the UK. As part of the storage in a Free Trade Zone, neither was there a duty tax reclaim. • • When containers were ready to ship, they were delivered into the UK Port of destination and Uniserve arranged direct delivery to customer ‘A’s customers. Results: • A massive 90% saving on storage of goods held in Chinese Trade Free Zone. • The potential to reclaim a further 12% tax rebate. • Furniture has become a more saleable part of the product-offering for customer ‘A’, due to simplified distribution in the UK. Customer ‘A’ now has a major profile with shipping lines through a tri-partite agreement.
• • • •
www.google.com www.managementparadise.com www.wikipedia.com http://accuracybook.com/glossary.htm
• • •
http://www.inboundlogistics.com/3pl/awards.shtml Shipping course- by Indian logistics group of shipping and transport. http://www.redprairie.com/Industry%20Solutions/Third%20Party %20Logistics.aspx http://logistics.about.com/od/thirdparty/a/uc041805.htm
• Economic and Social Commission for Asia and the Pacific (1990) “Manual on Freight Forwarding” • United Nations Development Programme and Economic Commission for Africa (1991) “Strategies for Human Resource and Institutional Development in Transport and Communications in Sub-Saharan Africa” • United Nations Conference for Trade and Development (UNCTAD) (1996), “Multimodal Transport Handbook for Officials and Practitioners”
Bandari College (2010), “Diploma Course in Freight Forwarding”
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