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Introduction to last pg number Introduction to last pg number Document Transcript

  • 11. INTRODUCTIONDistribution is a very important component of Logistics & Supply chain management.Distribution in supply chain management refers to the distribution of a good from onebusiness to another. It can be factory to supplier, supplier to retailer, or retailer to endcustomer. It is defined as a chain of intermediaries, each passing the product down thechain to the next organization, before it finally reaches the consumer or end-user. Thisprocess is known as the distribution chain or the channel. Each of the elements in thesechains will have their own specific needs, which the producer must take into account,along with those of the all-important end-user.The channel decision is very important. In theory at least, there is a form of trade-off: thecost of using intermediaries to achieve wider distribution is supposedly lower. Indeed,most consumer goods manufacturers could never justify the cost of selling direct to theirconsumers, except by mail order. Many suppliers seem to assume that once their producthas been sold into the channel, into the beginning of the distribution chain, their job isfinished. Yet that distribution chain is merely assuming a part of the suppliersresponsibility; and, if they have any aspirations to be market-oriented, their job shouldreally be extended to managing all the processes involved in that chain, until the productor service arrives with the end-user. There has been a growing recognition that it isthrough logistics and supply chain management that the twin goals of cost reduction ansservice enhancement can be achieved. Better management of the pipeline means thatcustomers are served more effectively and yet the costs of providing that service isreduced.
  • 21.1 Industry profileThe international shipping industry is responsible for the operation of merchant ships whichtransport goods and passengers by sea. ICS and ISF represent shipowners and shipmanagement companies that operate merchant ships.The shipping industry is responsible for transporting 90% of the worlds trade. The safetyrecord of shipping is the envy of shore-based transport sectors and is by far the mostenvironmentally friendly form of transport. The 40,000 ships that comprise the internationaltrading fleet are technically sophisticated, high value assets and the operation of merchantships generates an estimated annual income of over US $200 billion in freight rates within theglobal economy.The shipping industry is a truly global community. It is intrinsically international; indeed it wasthe very first global industry. Because of the international nature of shipping it is regulated byUnited Nations agencies and the International Maritime Organization (which is based inLondon) in particular. Modern shipping involves companies from every nation on the planetand virtually every nationality is represented in the seafaring population and the industrysshore-based workforce.There are other closely inter-related sectors of the shipping industry not directly covered bythis site. These include: liner agents, chartering brokers, port agents, sale and purchase brokers,maritime insurers and ship surveyors, as well as import/export brokers and a wide range ofancillary industries.
  • 31.2 COMPANY PROFILEMarine hub enterprises is renowned for its domain expertise and efficient ocean freightforwarding in logistics. Even though it was started in the year of 2010, it gained its grounds froma group of people who’ve got 10 yrs and plus experience in logistics .Which majorly includescustom clearance, Freight forwarding, break bulks, and project cargos services. Marine HubEnterprises has its operation in Chennai, Tuticorin, Singapore. We provide flexible logisticsservices from planning to all the way delivery of goods. All our solutions are developedinternally, including customs brokerage, air cargo, ocean cargo, domestic services, riskmanagement, distribution, security, import and export compliance. This comprehensive, flexiblespectrum of services is supported by information technology to provide a high level of inventoryvisibility and track and trace capabilities. The Company is on course for further expansion, thecompany is continuously extending its network.MISSIONEnhance through operational excellence, customer satisfaction and loyalty, created byprofessionalism, global vision and financial strength of the organization.VISION“To develop into a global service provider of integrated logistics that provides excellentcustomer-centric logistic solutions.”
  • 4BUSINESSCUSTOM CLEARANCEWith the current emphasis on free trade agreements and global sourcing, Customs issues haveassumed an increasingly important role in the supply chain. Our global Customs services focuson the compliance, release, and reporting needs of the marketplace, which we refer to as the“Customs value stream.FREIGHT FORWARDINGWe provide unique, reliable and impressive freight forwarding services to our clients. We offerservices at cost effective taking care of complete documentation for custom clearance. Ouragents provide safe, and timely delivery of consignments. We are capable of handling delicateand sensitive shipments.
  • 5PROJECT HANDLINGWe provide complete solutions, we do pre-moving plan, customs formalities, dismantling,planning over dimension cargos, shipping and delivery to destination.PROJECT CARGO SERVICESWe provide specialized cargo transportation services to shippers of heavy and over dimensionalequipment and integrated logistics management for all sectors.We are global network encompass with needed experience and capabilities for heavy life,oversized shipments and other challenges that are encountered when dealing within theexecution. Our complex requirements encompass to create and implement effective solutions likeearly projection of transportation cost with on site planning with the customers.
  • 6CONTAINER TRADING & LEASINGWe provide both buying and selling of containers. If required, we can arrange for delivery to anylocation.We do provide fabricated containers on lease for short or long term for rentals.SHIP BROKING SERVICESShip broking and Chartering is an important part of the business and has been a rapidlydeveloping, being active agents for years we have considerably extended the range of services.We have close relationship with leading ship-owners, operators, traders and co-brokersthroughout the world. We have strong relationship with Indian shippers & consignees, whichensures cargoes for our principals directly on guided terms & conditions. We deal bulk andgeneral cargo.
  • 7LOGISTICS CONSULTANCYWe use best logistics solutions at all times and therefore you can be sure that we will deliver theright logistics & supply chain solutions for your business.HEAVY MACHINERY ERECTIONWe have experience and expertise team for more than a decade and has capability in human andhardware resources and experience to provide reliable services for project cargos.We have technical team supported by its fleet of specialized equipment is known for their skill inplant erection and positioning of Heavy Machinery, Large Storage Tanks, Reactors andTransformers. We have earned an enviable record for many heavy lifting accomplishments inChennai. We have heavy lifting cranes for hire, Hydraulic Jockeys, Transport Trolley, Rollersand other Tools & Tackles for leading and positioning of Heavy Machinery.
  • 81.3 OBJECTIVE OF THE STUDYPRIMARY OBJECTIVE 1. To study the distribution channel in shipping goods 2. To study the risk involved and how to overcome it.SECONDARY OBJECTIVE 3. To study the cost incurred in transporting goods to various destinations.
  • 91.4 SCOPE OF THE STUDY The scope of the study is confined to marine hub enterprises. The study provides valuable information to the firm to analyze various risk factors in logistics through secondary data. The study will help the firm in following to minimize the transportation costs incurred.
  • 10 1.5 LIMITATIONS1. The study is based on the secondary data published in newspapers, books and journals of the researchers. Sometimes data which is published by the researchers cannot analyse fresh situation means old data and wrong data is collected by inherent error.2. The time & cost plan an important role when one goes for a particular study. Due to the time & cost constrains large collection of datas couldnt be interpreted.
  • 11REVIEW OF LITERATUREMr. Harpreet Singh “CII INSTITUTE OF LOGISTICS”Main recommendations to handle logistics activities for are:Complete transparency amongst all the channel partners:Proper co-ordination and transparency is very much required amongst all the channels partners,so that effective utilization of resources can be done at all the stages of the logistic. Along withthis timeliness of the information flow is very much important in such type of project. For e.g theinformation about the exact size and weight of the consignment should be available fromsupplier to the transporter for enabling him to finalize the most suitable vehicle.A sense of mutual trust and risk sharing mechanism.:Since in this type of project three main parties are involved and the main priorities are differentof each of them. For success of the project in the most cost effective way, a sense of mutual trustand risk bearing ability should be their.Selection of feasible and practical approach:One of the most important thing is to evaluate no of feasible options and then selecting the mostpractical option or the approach. Before planning any activity, select no of options availableconsidering the various resources available and the limitations. And then the most feasibleapproach should by implemented.V.V . sople in “logistics management” said that “ Logistics has advanced from the warehousingand transportation to boardrooms of the successful leading companies across the world. Logisticcapabilities supplement the supply chain operation. It plays an important role in bothorganizational strategy and organizational environment. The leading global retail giants, Wal-
  • 12Mart and Levi Strauss focus on their distinctive logistic capabilities to maintain their competitiveadvantage. The efficiency and effectiveness of inventory movement across the supply chaindepends on the capability of logistics management. Logistics plays a key role in customer servicestrategy of the organization. With the emergence of e-commerce, logistics operations havebecome more challenging than ever, because the competition is just a click away.”Y. H. Venus Lun, Kee-hung Lai and T. C. Edwin Cheng in “Shipping and logisticsmanagement” says that “The term shipping has evolved from its original relationship to shipsand seaborne trade, to encompass any mode of transport that moves goods between two points.The implication of the extended meaning of shipping is that the shipping industry has becomemore complex, as well as more dynamic.Traditionally, the theory and knowledge of shippingmanagement and operations are transferred in the workplace, from practitioners to newcomers;little has been systemically organized and published in books. Shipping and LogisticsManagement serves to consolidate the knowledge its authors have acquired from being educatorsand observers of the shipping industry. Against the background of a global businessenvironment, it explains how the shipping market functions, examining the strategic andoperational issues that affect entrepreneurs in this industry. Shipping and Logistics Managementalso aims to answer several important questions in the shipping industry, including: What are theshipping markets? How are freight rates determined? What are the shipping cost structures?What are the patterns of sea transport? and How do companies in the shipping industryoperate?An invaluable source of information for researchers and advanced, or graduate, students,Shipping and Logistics Management is also a useful reference for shipping practitioners andconsultants”Kent in “global logistics” says that “Manufacturing a quality product is no longer sufficient byitself to guarantee customer loyalty. Companies must consistently deliver their product when andwhere customers demand it at a reasonable price. Global Logistics Management providesstudents and managers with an accessible overview of logistics in a global setting.In order tokeep readers with little or no knowledge of logistics focused on the topic, the book is written in astraightforward, uncomplicated way, and real-life examples from all over the world help put thetheoretical points discussed into context. Global Logistics Management will help provide present
  • 13and future business leaders with the knowledge and skills necessary to turn their corporatelogistics activities into a source of sustainable competitive advantage.Donald waters in “global logistics and distribution planning” says that “ Logistics has a keystrategic role to play in the long-term plans of major companies, and is recognized as a vital partof every organization. To a large extent this crucial new role is due to an expanded view oflogistics, which now includes all the activities related to the supply chain from initial suppliersthrough to final customersincluding:developments in logisticssupply chain strategieslean logisticsefficient customer responselogistics in different countriespartnering and strategic alliancesre-engineering the logistics function
  • 14 PROCESS OF DISTRIBUTION CHANNELWhen shipping a product overseas, the exporter must be aware of packing, labeling,documentation, and insurance requirements. It is important that exporters ensure that themerchandise is: • Packed correctly so that it arrives in good condition; • Labeled correctly to ensure that the goods are handled properly and arrive on time at the right place; • Documented correctly to meet U.S. and foreign government requirements, as well as proper collection standards; and • Insured against damage, loss, pilferage and delay.Most exporters rely on an international freight forwarder to perform these services because of themultitude of considerations involved in physically exporting goods.Freight ForwardersAn international freight forwarder is an agent for the exporter in moving cargo to an overseasdestination. These agents are familiar with the import rules and regulations of foreign countries ,the methods of shipping, and the documents related to foreign trade. Export freight forwardersare licensed by the International Air Transport Association (IATA) to handle air freight and theFederal Maritime Commission to handle ocean freight.Freight forwarders assist exporters in preparing price quotations by advising on freight costs,port charges, consular fees, costs of special documentation, insurance costs, and their handlingfees. They recommend the packing methods that will protect the merchandise during transit orcan arrange to have the merchandise packed at the port or containerized. If the exporter prefers,freight forwarders can reserve the necessay space on a vessel, aircraft, train, or truck. The costfor their services is a legitimate export cost that should be included in the price charged to thecustomer.Once the order is ready for shipment, freight forwarders should be review all documents toensure that everything is in order. This is of particular importance with letter of credit paymentterms. They may also prepare the bill of lading and any special required documentation. After
  • 15shipment, they can route the documents to the seller, the buyer, or to a paying bank. Freightforwarders can also make arrangements with customs brokers overseas to ensure that the goodscomply with customs export documentation regulations. A customs broker is an individual orcompany that is licensed to transact customs business on behalf of others. Customs business islimited to those activities involving transactions related to the entry and admissibility ofmerchandise; its classification and valuation; the payment of duties, taxes, or other chargesassessed or collected; or the refund, rebate, or drawback thereof.PackingExporters should be aware of the demands that international shipping puts on packaged goods.Exporters should jeep four potential problems in mind when designing an export shipping crate:breakage, moisture, pilferage and excess weight.Generally, cargo is carried in containers, but sometimes it is still shipped as breakbulk cargo.Besides the normal handling encountered in domestic transportation, a breakbulk shipmenttransported by ocean freight may be loaded aboard vessels in a net or by a sling, conveyor, orchute, that puts an added strain on the package. During the voyage, goods may be stacked on topof or come into violent contact with other goods. Overseas, handling facilities may be lesssophisticated than in the United States and the cargo could be dragged, pushed, rolled, ordropped during unloading, while moving through customs, or in transit to the final destination.Moisture is a constant concern because condensation may develop in the hold of a ship even if itis equipped with air conditioning and a dehumidifier. Another aspect of this problem is thatcargo may also be unloaded in precipitation, or the foreign port may not have covered storagefacilities. Theft and pilferage are added risks.Buyers are often familiar with the port systems overseas, so they will often specify packagingrequirements. If the buyer does not specify this, be sure the goods are prepared using theseguidelines: • Pack in strong containers, adequately sealed and filled when possible. • To provide proper bracing in the container, regardless of size, make sure the weight is evenly distributed.
  • 16 • Goods should be palletized and when possible containerized. • Packages and packing filler should be made of moisture-resistant material. • To avoid pilferage, avoid writing contents or brand names on packages. Other safeguards include using straps, seals, and shrink wrapping. • Observe any product-specific hazardous materials packing requirements.One popular method of shipment is to use containers obtained from carriers or private leasingcompanies. These containers vary in size, material, and construction and accommodate mostcargo, but they are best suited for standard package sizes and shapes. Also, refrigerated andliquid bulk containers are usually readily available. Some containers are no more than semi-trucktrailers lifted off their wheels, placed on a vessel at the port of export and then transferred toanother set of wheels at the port of import.Normally, air shipments require less heavy packing than ocean shipments, though they shouldstill be adequately protected, especially if they are highly pilferable. In many instances, standarddomestic packing is acceptable, especially if the product is durable and there is no concern fordisplay packaging. In other instances, high-test (at least 250 pounds per square inch) cardboardor tri-wall construction boxes are more than adequate.Finally, because transportation costs are determined by volume and weight, specially reinforcedand lightweight packing materials have been developed for exporting. Packing goods tominimize volume and weight while reinforcing them may save money, as well as ensure that thegoods are properly packed. It is recommended that a professional firm be hired to pack theproducts if the supplier is not equipped to do so. This service is usually provided at a moderatecost.
  • 17LabelingSpecific marking and labeling is used on export shipping cartons and containers to: • Meet shipping regulations; • Ensure proper handling; • Conceal the identity of the contents; • Help receivers identify shipments; and • Insure compliance with environmental and safety standards.The overseas buyer usually specifies which export marks should appear on the cargo for easyidentification by receivers. Products can require many markings for shipment. For example,exporters need to put the following markings on cartons to be shipped: • Shippers mark; • Country of origin • Weight marking (in pounds and in kilograms) • Number of packages and size of cases (in inches and centimeters) • Handling marks (international pictorial symbols) • Cautionary markings, such as "This Side Up" or "Use No Hooks" (in English and in the language of the country of destination); • Port of entry; • Labels for hazardous materials (universal symbols adapted by the International Air Transport Association and the International Maritime Organization); and; • Ingredients (if applicable, also included in the language of the destination country).Packages should be clearly marked to prevent misunderstandings and delays in shipping. Lettersare generally stenciled onto packages and containers in waterproof ink. Markings should appearon three faces of the container, preferably on the top and on the two ends or the two sides. Antold markings must be completely removed from previously used packaging.In addition to the port marks, the customer identification code, and an indication of origin, themarks should include the package number, gross and net weights, and dimensions. If more than
  • 18one package is being shipped, the total number of packages in the shipment should be includedin the markings. The exporter should also add any special handling instructions. It is a good ideato repeat these instructions in the language of the country of destination. and use standardinternational shipping and handling symbols.Customs regulations regarding freight labeling are strictly enforced. For example, manycountries require that the country of origin be clearly labeled on each imported package. Mostfreight forwarders and export packing specialists can supply the necessary information regardingspecific regulations.DocumentationExporters should seriously consider having the freight forwarder handle the formidable amountof documentation that exporting requires as forwarders are specialists in this process. Thefollowing documents are commonly used in exporting; but which of them are necessary in aparticular transaction depends on the requirements of the exporter’s government and thegovernment of the importing country. • A bill of lading is a contract between the owner of the goods and the carrier (as with domestic shipments). For vessels, there are two types: 1.straight bill of lading- which is nonnegotiable 2.negotiable or shippers order bill of lading. The latter can be bought, sold, or traded while the goods are in transit. The customer usually needs an original as proof of ownership to take possession of the goods • A commercial invoice is a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods when assessing customs duties. Governments that use the commercial invoice to control imports will often specify its form, content, number of copies, language to be used, and other characteristics.
  • 19• A consular invoice is a document that is required in some countries. It describes the shipment of goods and shows information such as the consignor, consignee, and value of the shipment. Certified by the consular official of the foreign country stationed here, it is used by the countrys customs officials to verify the value, quantity, and nature of the shipment.• A certificate of origin is a document that is required in certain nations. It is a signed statement as to the origin of the export item. Certificate of origin are usually signed through a semiofficial organization, such as a local chamber of commerce. A certificate may still be required even if the commercial invoice contains the information .• A NAFTA certificate of origin is required for products traded among the NAFTA countries (Canada, the United States, and Mexico).• Inspection certification is required by some purchasers and countries in order to attest to the specifications of the goods shipped. This is usually performed by a third party and often obtained from independent testing organizations.• A dock receipt and a warehouse receipt are used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the ship line for export.• A destination control statement appears on the commercial invoice, and ocean or air waybill of lading to notify the carrier and all foreign parties that the item can be exported only to certain destinations.• An export license is a government document that authorizes the export of specific goods in specific quantities to a particular destination. This document may be required for most or all exports to some countries or for other countries only under special circumstances.• An export packing list considerably more detailed and informative than a standard domestic packing list. It an itemizes the material in each individual package and indicates the type of package, such as a box, crate, drum, or carton. It also shows the individual net, legal, tare, and gross weights and measurements for each package . Package markings should be shown along with the shippers and buyers references. The list is used by the shipper or forwarding agent to determine the total shipment weight and
  • 20 volume and whether the correct cargo is being shipped. In addition, U.S. and foreign customs officials may use the list to check the cargo . • An insurance certificate is used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit .Documentation must be precise because slight discrepancies or omissions may preventmerchandise from being exported, result in nonpayment, or even result in the seizure of theexporters goods by U.S. or foreign government customs. Collection documents are subject toprecise time limits and may not be honored by a bank if the time has expired. Mostdocumentation is routine for freight forwarders and customs brokers, but the exporter isultimately responsible for the accuracy of its documents.The number and kind of documents the exporter must deal with varies depending on thedestination of the shipment. Because each country has different import regulations, the exportermust be careful to provide all proper documentation.ShippingThe handling of transportation is similar for domestic and export orders. Export marks are addedto the standard information on a domestic bill of lading. These marks show the name of theexporting carrier and the latest allowed arrival date at the port of export. Instructions for theinland carrier to notify the international freight forwarder by telephone upon arrival should alsobe included.Exporters may find it useful to consult with a freight forwarder when determining the method ofinternational shipping. Since carriers are often used for large and bulky shipments, the exportershould reserve space on the carrier well before actual shipment date. This reservation is calledthe booking contract.International shipments are increasingly made on a through bill of lading under a multimodalcontract. The multimodal transit operator (frequently one of the transporters) takes charge of andresponsibility for the entire movement from factory to final destination.
  • 21The cost of the shipment, the delivery schedule, and the accessibility to the shipped product bythe foreign buyer are all factors to consider when determining the method of internationalshipping. Although air carriers can be more expensive, their cost may be offset by lowerdomestic shipping costs (for example, using a local airport instead of a coastal seaport) andquicker delivery times.Before shipping, the firm should be sure to check with the foreign buyer about the destination ofthe goods. Buyers often want the goods to be shipped to a free-trade zone or a free port wherethey are exempt from import duties .InsuranceDamaging weather conditions, rough handling by carriers, and other common hazards to cargomake insurance an important protection for exporters. If the terms of sale make the exporterresponsible for insurance, the exporter should either obtain its own policy or insure the cargounder a freight forwarders policy for a fee. If the terms of sale make the foreign buyerresponsible, the exporter should not assume (or even take the buyers word) that adequateinsurance has been obtained. If the buyer neglects to obtain adequate coverage, damage to thecargo may cause a major financial loss to the exporter. Shipments by sea are covered by marinecargo insurance Export shipments are usually insured against loss, damage, and delay in transitby cargo insurance. Carrier liability is frequently limited by international agreements.Additionally, the coverage is substantially different from domestic coverage. Arrangements forinsurance may be made by either the buyer or the seller, in accordance with the terms of sale.Exporters are advised to consult with international insurance carriers or freight forwarders formore information.Although sellers and buyers can agree to different components, coverage is usually placed at 110percent of the CIF (cost, insurance, freight) or CIP (carriage and insurance paid to) value.
  • 22HOW MARINE HUB ENTERPRISE FUNCTION CUSTOMER MARINE HUB ENTERPRISE SUPPLIER CUSTOM HOUSE AGENT FREIGHT FORWARD NON VESSEL OPERATING CARGO VESSEL OPERATOR CONSIGNEE
  • 23CUSTOMER:The customer may be individuals , companies , industries who want to export or import goodsfrom or to other countries.SUPPLIER:They are the person eho supplies the good which has to be exported to other destination bymarine hub enterprise. Marine hub collects the goods from the supllier and transport it towarehouse.CUSTOM HOUSE AGENT:Custom house agent are the agents who acts in the behalf of marin ehub in fulfilling the legalformalities and documentation.FREIGHT FORWARDING:In freight forwarding brokers re choosen and brokerage is fixed for carrying out the distributionprocess to make the good in transit in ship. Its the brokers part now to play in shipping of goods.Brokers are given all the details of which destination the goods has to be reached and what timelimit given by the importer.NON-VESSEL OPERATING CARGO:Non-vessel operating cargo is containerisation. Containers has to be allocated. Here the size,typeof container, where the good to be placed inside the container whiche may be individual or bulkis selected according to the type of the good to be shipped.
  • 24VESSEL OPERATOR:In this , customs authority chech the goods and all the legal formalities according to the rules andregulations, bills checking and true documentation. Once the clearance of proof of documents aremade the conatainers are allowed to loaded into cargo.CONSIGNEE:Consignee is the importer or the person to whom the goods belong too. Impporters agents withthe leagal formalities gets the goods from the dock and make the goods reaches the consigneesplace.
  • 25PORTS OF INDIA
  • 26WORLD SEA PORTS
  • 27 RISKRisk has many facets and has been studied widely in many settings for many decades.But risk in a supply chain management context is a rather new field of study, just assupply chain management is a new field of research. Supply chain risk managementattempts to reduce supply chain vulnerability via a coordinated holistic approach,involving all supply chain stakeholders, which identifies and analyses the risk of failurepoints within the supply chain. Mitigation plans to manage these risks can involvelogistics, finance and risk management disciplines; the ultimate goal being to ensuresupply chain continuity in the event of a scenario which otherwise have interruptednormal business and thereby profitability.While logistics service buyers and managers incharge of organising transport and distribution have a functional responsibility to managerisks within their department and their area of specialisation, companies also face higher-level risks (corporate governance, compliance with regulations) where responsibility forrisks is mandated at senior board level.
  • 28 TYPES OF RISKLack of inventoryCarrier delays and non-performanceTransport and logistics cost volatilityTransport congestionNew environmental legislation affecting logisticsMergers and acquisitions among service providersCargo theftLiability for loss or delaysBankruptcy of transport providerFines for non-compliance, sometimes running into millions of dollars.Fire in transitLeakage of goodsNatural disaster
  • 29 HOW TO OVERCOME THESE RISK1. Insuring goods is the best way to overcome the risk at any situation.2. Check the goods before packing for any leakage.3. Avoid illegal goods.4. Check the documentation properly according to the regulations.5. Containerisation has to be done according to the type of good that has to be shipped.6. In case of fire, throw out the good which is in fire to the sea and the claim insurance from other agency to safeguard the loss of the damaged goods.7. Avoid damage goods.8. Pack the goods tight and properly that it can be easily shifted.
  • 30RESEARCH METHODOLOGYGATHER INFORMATIONFirst interaction would be with the officials involved in the back end process to know how theentire system works/ automation of such process, manual process involved and responsibility.Front end staff would be contacted to know the management of business process involvedtransportation of cargos from warehouses and CFS to the destinations.SOURCES OF DATAPRIMARY DATA Primary data would be collected from the manager regarding the costs involved, profitsgained, fixed costs and other miscellaneous factors.SECONDARY DATA Secondary data could be gathered by collecting the information disclosed by the firmregarding the overall costs involved in transportation of cargos which is inclusive of all the taxes,customs, vessel operation charges, etc.It also includes fixed costs and variable costs.
  • 31DATA ANALYSIS AND INTERPRETATIONData analysis is done by the use of TORA software, thus for carrying out a transportationproblem for calculating the minimum cost incurred in transportation of various goods to certaindestinations. Hence the minimum risk involving combinations could be analyzed.TRANSPORTATION PROBLEM:The transportation problem includes two factors, Cargos and Containers which gives the cost fortransportation of each pallet from CFS (container freight station) to the port of the destinationinclusive of all expenses. The demand and the supply of all the products are also given, whichthe least total transportation can be calculated. Since the risk is closely associated with theoverall cost, minimum risk could be analyzed by calculating the overall cost. The informationgiven is the transportation of goods in five different containers to different location as mentionedbelow.CARGOS Vs CONTAINERS Colombo Singapore Dubai Georgia S. SUPPLY Africa Perishable 1500 1700 1300 2100 1500 70 goods Consumer 700 300 900 600 600 60 goods Granites 300 400 600 500 400 40 Machines 500 400 600 500 500 70 DEMAND 50 50 40 50 50 240Demand: The total number pallets allotted for Marine Hub enterprises in the particular container.Supply: the total number of pallets of product a company can transport in s shipment.
  • 32Total transportation cost:optimum transportation costFrom To Amount Unit cost Route costPerishable Colombo 0 1500.00 0goods Singapore 0 1700.00 0 Dubai 40 1300.0 52000.00 Georgia 0 2100.00 0 S. Africa 30 1500.00 45000.00Consumer Colombo 0 700.00 0goods Singapore 50 300.00 15000.00 Dubai 0 900.00 0 Georgia 0 600.00 0 S. Africa 10 600.00 6000.00Granites Colombo 40 300.00 12000.00 Singapore 0 400.00 0 Dubai 0 600.00 0 Georgia 0 500.00 0 S. Africa 0 400.00 0Machines Colombo 10 500.00 5000.00 Singapore 0 400.00 0 Dubai 0 600.00 0 Georgia 50 500.00 25000.00 S. Africa 10 500.00 5000.00
  • 33Summary of transportation costs:Node Supply/demand Total cost Av. cost/unitPerishable goods 70 97000.00 1385.71Consumer goods 60 21000.00 350.00Granites 40 12000.00 300.00Machines 70 35000.00INFERENCE:The total cost: 165000.0000(ALTERNATIVE solution detected at route < 2, 4 >Minimum risk thus occur only in routes [(s1,d3)]
  • 34 FINDINGS1. Maximum growth is shown by sea as compare to the road and air.2. Sea freight shows the improvement due to better movement for the overseas movement of goods and also least cost incur when shipping of goods by sea but it takes more time and less safe than the air modes.
  • 35 SUGGESTIONS AND RECOMMENDATIONS1. Scheduling of service time point of arrival and departure of ships and has great scope forimprovement. They never run on time.2. proper co-ordination and transparency is very much required amongst all the channelpartners.3. Legal system is not in keeping with the modern outlook of life and business. The laws areout mode and require comprehensive amendments. It can be made easier.4.The system and procedure obtaining in government department are incontinent, timeconsuming and not at all business centric.5. Logistics development is absolutely necessary.6. advanced technology has to be used to reduce the risks .7.The company can transport the goods to the place which costs comparatively lesser.8.The risks can be minimized by shipping goods that would cost less and non-perishablepreferably.9.The demand should be met with proper supply to enhance the flow of goods continuouslyrather than placing them at warehouses.
  • 36 CONCLUSIONDistribution channel are among the most complex and least understood areas of logisticsoperations.it is within the channel that the ultimate success or faiure of a business isdetermined.This is clearly related to competition. It is also the firm’s ability to establish effectivesupply chain relationships.the establishment and maintenanceof the effective relationship requireeffective relationships require significant change in traditional managerial practices. Some firmsmake provision of selected services their core competency. The distributional channel mustcomplete the assortment of merchandise that results in the right products being at the right placeat the right time.
  • 37 BIBLIOGRAPHYLogistical management by Donald j. bowersox and David j. clossLogistics and supply chain management by Martin ChristopherWebsites:www.wikipedia.comwww.scribd.comwww.mapsofindia.comwww.logisticsindia.comwww.marinehubenterprise.comwww.importsexports.com