Coverage• Marine Transportation• Air Cargo Transportation• Courier and Cargo Operations• Application of IT in Logistics and Transportation
MARINE TRANSPORTATION• THE WORD MARINE OR MARITIME MEANS SOMETHING TO DO WITH SEA AND COMMERCE. IN COMON PARLANCE WHEREVER BOTH SHIPPING AND PORTS ARE INCLUDED THE WORD MARITIME IS USED. WORLD OVER THE WORD MARITIME IS ASSUMING GREATER SIGNIFICANCE AS PORTS, SHIPPING, SHIPYARDS HAVE BECOME CLOSELY LINKED.• IN THE INDIAN MARITIME SECTOR , THE SEA-BORNE TRADE IS 0F SIZE 8.5 US$ Bn AND EXPECTED GROW 15%. THE TOTAL ACTIVITY ENCOMPASSING PAN-INDIAN MOVEMENT OF CARGO (TOTAL LOGISTICS) IS OF SIZE 60 US$ Bn WHICH IS ALSO EXPECTED GROW 15%.THE NATIONS MARITIME POLICIES, GOVERNMENT AND PRIVATE INVESTMENT ETC ARE NOW GEARED TO ACHIEVE THIS GOAL
TERMS OF SALESEx-FactoryFOR Free on RailFOT Free on TruckFAS Free Alongside ShipFOB Free on BoardC&F Cost & FreightCIF Cost, Insurance & Freight
TERMS OF SALES Risk Transit + Insurance Seller Buyer Seller BuyerEx-Factory To make the goods To load and arrange transport - Yes available at the premisesFOR / FOT To load on the carrier and Cost & risk after loading - Yes obtain clear transport documentsFAS To place the goods To clear the goods for export, From sellers warehouse Yes alongside the ship on the bear cost & risk from quay till the load port quay onwardsFOB To place the goods on Bear the risk and costs after From sellers warehouse Yes board and obtain clean B/L loading till goods placed on boardC&F To pay cost and freight Bears the risk after the good From sellers warehouse Yes necessary to destination pass the ships rail till goods placed on boardCIF Same as above with cost & Same as above plus bears the To arrange insurance to arrange insurance cost of insurance from sellers warehouse till destination
PORT OPERATION• TRAFFIC DEPT• MARINE DEPARTMENT• WAREHOUSE / BONDED STORAGE• CARGO HANDLING• SECURITY CONTAINERIZATION• FIRST CONTAINER SHIPPING IN US – 1956• INTERNATIONAL CONTAINER TRANSPORT (TRANS ATLANTIC) – 1966• TRANSPACIFIC CONTAINER TRANSPORT – 1968 (700 – 1000 TEU)• 1971 (2000 – 3000 TEU VESSELS)• 2002 (7000 TEU VESSELS)• 2005 (8000 – 18000 TEU VESSELS)
NEED OF CONTAINERIZATION• OCEAN CARRIERS OR SUPPLY CHAIN ENABLERS• ONE STOP SHOP IN THE SUPPLY CHAIN• CONTAINER AS SHIPPING UNIT• REDUCED SHIPPING COST• RAPID TRANSIT TIME• FACILITATES "JUST IN TIME" INVENTORIES
ADVANTAGES• EFFICIENT CARRIAGE (WAREHOUSE TO WAREHOUSE)• REDUCED HANDLING• REDUCED RISK OF THEFT / PILFERAGE• ECONOMY IN INDIVIDUAL PACKING• PROTECTION AGAINST SEA / FRESH WATER DAMAGE• PROTECTION AGAINST EXTERNAL CONTACT DAMAGE• REDUCED RISK OF MISDELIVERY• BETTER SECURITY
TYPE OF CONTAINERS• GP DRY FREIGHT CONTAINERS• HALF HEIGHT CONTAINERS• TANK CONTAINERS• FLAT RACKS• OPEN TOP CONTAINERS• REFRIGERATED CONTAINERS• VENTILATED CONTAINERS
TERMINOLOGY APPLICABLE TO CONTAINERS• STUFFING / DESTUFFING• HOUSE STUFFING• FCL – FULL CONTAINER LOAD• LCL – LESS THAN FULL CONTAINER LOAD
NATURE OF CARGO DAMAGE• MECHANICAL -BREAKAGE, DEFORMATION• ORGANIC - DECOMPOSITION• CHEMICAL - CHANGE OF STATE• DISAPPEARANCE - PILFERAGE/MISPLACING• SHORTAGE
DOCUMENTATION REQUIREMENT(IMPORT)• ORIGINAL BILL OF LADING DULY CATALOGUE ENDORSED INSURANCE CERTIFICATE CERTIFICATE OF ORIGIN• COPY OF BILL OF LADING LETTER OF CREDIT• IMPORT LICENCE SIGHT DRAFT• INVOICE SSI/DGTD REGISTRATION• PACKING LIST CERTIFICATE• DECLARATIONS (CUSTOMS/GATT) SALES TAX REGISTRATION DETAILS (FOR MOVEMENT OF• ORDER/INDENT GOODS)• ORDER CERTIFICATE FOR LOCAL CONFIRMATION/ACCEPTANCE AGENCY COMMISSION• PROFORMA INVOICE/QUOTATION IMPORTERS/EXPORTERS CODE NUMBER ALLOTTED BY DGFT• WRITE-UP
SECURITY CONSIDERATIONS (POST 9/11 SCENARIO)– US CONTAINER SECURITY INITIATIVE (CSI) IMPLEMENTED BY US CUSTOMS IN JANUARY 2002 AUTOMATED MANIFEST SYSTEM (AMS) OR 24 HR MANIFEST RULE IMPLEMENTED FROM 2ND DECEMBER 2002 C-TPAT(CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM) EFFECTIVE FROM 25 MARCH 2005
SECURITY CONSIDERATIONS (POST 9/11 SCENARIO)• INTERNATIONAL ISPS (INTERNATIONAL SHIP & PORT FACILITY SECURITY CODE IMPLEMENTED FROM 1ST JULY 2004 SHIP SECURITY PLAN PORT FACILITY SECURITY PLAN SHIP SECURITY OFFICER COMPANY SECURITY OFFICER PORT FACILITY SECURITY OFFICER SECURITY LEVEL-1 SECURITY LEVEL-2 SECURITY LEVEL-3
Evolution of Air Cargo• Airmail.• India: pioneer of 1st airmail flight in Feb 1911.• Air Cargo: by-product of airline passenger operations.• Freighters: – Increased direct demand. – Contribution to airline operating revenues. – Emergence of Integrators.
Growth of Air Cargo Demand for Air Transport Has Outpaced the U.S. Economy Air Travel and Air Cargo vs. Real GDPSource: MIT/ICAT Sources: ATA Annual Reports and U.S. Department of Commerce (Bureau of Economic Analysis) via www.bea.gov/bea/dn/gdplev.xls
Growth of Air Cargo India: Air Cargo Growth vs. GDP Growth50.0%40.0%30.0%20.0% Dom Intl 10.0% Dom + Intl GDP 0.0%-10.0%-20.0%-30.0%
Critical Success Factors UNDERSTANDING BUSINESS & INDUSTRY NEEDSGOODS NEEDS COMPATIBLE INDUSTRY SEGMENTS• Perishables • Reliability • RMG• Just-in-time • Speed • Automotive• High value • Security • Computer/IT• High security • Information • Telecom• Emergency • Consumer Durables• Project Goods • Electronics • Floriculture • Diagnostics
Critical Success Factors• Infrastructure – Compatible ground feed • Last-mile transportation: surface • Network • Customs • Regulatory Expertise • Ground-Handling – Air service oriented to business needs • 80% of goods will be manufactured in countries other than where they will be purchased. • Reliability
Critical Success Factors• Technology – Integrated systems across the value-chain – Tracking in real-time – Customer software – Customer Relationship Management
CHALLENGES• Capacity: support to build air infrastructure – Emergence of the low-cost airline – Freighter conversions: old aircraft – Connectivity: production to consumption• Costs – High & volatile prices of ATF• Regulatory support for speedy distribution – Ground time – Charters
Emerging Trends in Air cargo• Growth rate of air cargo traffic has lately been consistently higher than passenger movement.• Development of some airports as cargo hubs: example : development of cargo village at Dubai• Use of secondary airports and multi modal transport: example: development sea-air cargo linkage at Sharjah• Joint ventures and partnerships example: Jet air with Blue dart
Nature of integrators services• Integrators started principally as express operators• Initially they work through Hub and Spoke distribution system• Integrators operate a vertically integrated structure• Integrators provide tailor made door-door express services with guaranteed delivery time• They integrate both forwarder and airline functions with in the air cargo chain
Specialized Services Offered• Multi-modal Shipping• International Freight forwarding• Customs handling• Consolidation• Break-bulk and de-consolidation• Letter of credit• Insurance
WHO IS A FREIGHT FORWARDER?• The freight forwarding professional advises clients on – the best rates, – modes of transporting goods to or from any area in the world.• The forwarder is the exporter’s agent and provides the traffic and documentation services consistent with routings and• the exporter’s needs, arranging for carriage with vessel operators, trucking companies and airlines specializing in the consolidation of container-load shipments.• Using the many resources at their disposal, forwarders find the “right match” of services available so that products are moved by the most timely and cost-effective means.
WHO IS A FREIGHT FORWARDER?• “”Customized” services to fit the clients’ operational needs are forwarder’s specialty. Forwarders coordinate arrangements for storage, pick-and-pack operations, consolidations or full container movements as well as inland transportation to provide clients with true door-to-door service.• From assisting with initial quotations or preparation of proforma invoices, to banking clients’ documents for collection, the professional ocean and or air freight forwarder is and essential component in the facilitation of international trade.
WHAT IS THE VALUE ADDITION OF A FREIGHT FORWARDER?• The sheer volume of shipping space allows the freight forwarder to offer reduced prices while ensuring available space during peak season.• Access to the on-board infrastructure essential to handling refrigerated cargo, garments on hangers, and other special needs.• Forwarding experts help ensure that shipment is in compliance with a countrys import/export regulations.• Less-than-container load (LCL) shipments can be consolidated, allowing to piggyback with other clients - and significantly reduce expense.
WHAT IS THE VALUE ADDITION OF A FREIGHT FORWARDER?• Access scheduled reports, or create them as per needs dictate through a tracking system.• Long-term relationships with major carriers mean that ability to negotiate contracts• Milestone notification via e-mail and text pager• Electronic Data Interchange (EDI) connectivity with carriers and customers• Generate customer-specific rates quotes
WHAT IS EXPORT DOCUMENTATION?• The paperwork that is required for an export sales transaction• The means by which the shipping process is facilitated and recorded.• Documentation is essential for moving goods through the channels of distribution, transferring responsibility or possession, clearing goods through customs, and facilitating payment according to the agreed upon terms.
WHAT IS THE PURPOSE OF EXPORT DOCUMENTATION?• Export documentation provides evidence that the negotiated terms between the buyer and the seller have been complied with.• Export documentation provides important information that is used by the seller, the freight companies, governments, and the buyer.
THE KEY INFORMATION CONTAINED IN EXPORT DOCUMENTS• Description of the goods • Identity of the• Mode of transportation seller/shipper – rail, air, ocean • Identity of the buyer• Terms of sale • Terms of payment – Who pays for what? • Shipping instructions• Origin of the goods • Evidence of shipment
COMMON EXPORT DOCUMENTS• Pro forma invoice • Inspection certificate• Bill of Lading • Insurance certificate• Certificate of Origin • Dock/warehouse• Packing List receipt• Commercial Invoice • Letter of credit• Shipper’s export • Draft declaration (SED)• Consular Invoice
Hub and Spoke Model• Derives its name from the Bicycle wheel• Model of no. of spokes jetting out of a central hub• Location – Hub, Paths leading to destination from the point of origin are spokes.
Difference between models • Point to point system - more routes, less frequency - Hub and spoke - Less routes, more frequency
Hub and spoke structure of UPS• The first step is the pickup; specific routes are assigned and regular stops are planned according to a tight schedule. The package will inevitably be send to the hub for consolidation. The hubs are central sorting facilities located throughout the world. All the smaller local operating centers have to take their parcels to the nearest hub which can be considerably far since there are only 6 hubs in the world.• At the hub, packages are unloaded and sorted according to the geographical location where they are bound to. Consequently, all the parcels are divided to be loaded in the courier leading to the right destination.• Deliveries are either made on the ground by cars and trucks.
Leveraging Logistics For Powering Profits Role of Technology in Logistics• Purpose: more reliability, accuracy, real time info., quality• Optimization Systems• Automatic Identification- Bar coding, RFID• Location based system• Voice based Communication• Smart Containers• Warehousing System
Leveraging Logistics For Powering ProfitsOptimization models for SCM
Leveraging Logistics For Powering Profits Supply Chain Network Optimisation• Distribution Center (DC) location analysis – Which existing DCs should remain open or be expanded? Which existing DCs should be shut down? – Which new DCs should be opened and with how much capacity? – What is the mission of each DC (e.g., which products does it handle and/or store in inventory)? – What equipment (e.g., flow-through sorters, conveyors, refrigerated storage areas) is needed at each DC to support its mission? – Which DC or DCs will serve each customer or market? – Which plant or supplier will replenish each DC for each product?
Leveraging Logistics For Powering Profits Supply Chain Network Optimisation• Worldwide sourcing of manufactured product• Tactical supply chain planning• Production scheduling• Vehicle routing• All on Realtime basis
eTracKUsing eTracK watch over your fleet with… The Third Eye R The Third Eye
UNIQUE FEATURES OF eTracK• No driver intervention• A fully automatic Real time system.• Location details are sent automatically at pre-determined intervals from remote locations.• Frequency of reporting can be remotely changed or even switched off/on.• Access to location data is through 24X 7 hours – Secured internet access anywhere in the world, on a tabular column – Toll free number 1-600-44-0550 – or by SMS, fax, Email – Mobile Query SMS – Graphically on a GIS system without any royalty payments.
Leveraging Logistics For Powering Profits What RFID can do for you• RFID-Steak: where the cow was raised, where it was fed, where slaughtered• RFID- product: which country has produced, Is it organic?, temperature history of the product• Recovery lost or stolen goods• Better recycling efforts for better environment• Self checkout at stores• Ability to reduce counterfeit drugs• Better supply chain management
Leveraging Logistics For Powering ProfitsVoice Technology- Distribution Centre• Market is worth $1.5 billion• Wal mart, Nabisco Biscuits, VSFood Service, UPS, Saturn, Timken• Warehouse picker is informed by headset speech instructions• Operator confirms the isle and pick location through 12 digit code• Quantity to be picked is instructed• Benefits of speech Technology • Order accuracy(99.3% to 99.8%) increased productivity • Real-Time inventory information • Support for multilingual operations
Leveraging Logistics For Powering Profits Smart Containers• Required Performance • Monitor and support –an access to the inside of the container • Must report its position throughout the supply chain • Must send manifest data etc for the container itself• RFID with satellite communication • GPS has dead spots and visible antennas • RFID with satellite communication is a must • Sea-cure satellite system
Leveraging Logistics For Powering Profits TRUCK / DRIVER PRODUCTIVITY• Tracing and tracking technology linked with ERP ( Through iview in SAP)• Onboard computer systems• Alert monitoring systems• Load plans and transport plans• Trailers with side loading facility
Leveraging Logistics For Powering Profits WAREHOUSING OPERATIONS EFFICIENCY• Cross Docking opportunities• Cross Docking opportunities improve with completion of Golden quadrilateral.• Dynamic blending of physical operations with Information systems• RFID systems introduction
Leveraging Logistics For Powering Profits AUTOMATED DELIVERY SYSTEMS• Tracking of products everywhere• Invoice adjustments by drivers• Less driver time spend on Paperwork• Communication with mobile Assets made possible• Electronic Billing• Wireless technologies in Warehouse, customer, sales ,cab etc.
PERVASIVE COMPUTING• Building Loads• Route optimization• Dynamic routing• Warehouse Functions – Multiple Pick slips – Inventory checking – Product replacement – Pallet and layer building – Labelling
Leveraging Logistics For Powering Profits GIS Based Reporting• Very user friendly reporting• Automatic Route planning is possible on PC’s• No license fee on GIS maps• Possible to create multiple layers on high consumption points/ population etc• Demand and Distribution data can be integrated
Leveraging Logistics For Powering Profits AMAZING AMAZON• Reached first ever profit IV Qtr 2001• Fewer items were put in wrong locations ( 12% to 4% )• Reduced inventory through better forecasting ( 18% )• Consolidation of truck despatches ( 0% to 40% ) Ability to handle complex task of distribution through IT
Leveraging Logistics For Powering Profits General Mills• High empty truck kilometers• Went for consolidation with Kellogg, Quaker oats etc. through web enabled transport exchange etc. HARRY POTTER BOOK• 1,50,000 copies to be delivered just minutes before midnight of July 8.• Yellow corp. No 1 Trucking company could do through the use of planning, Tracking systems etc.
Leveraging Logistics For Powering ProfitsOrganisation Initiative BenefitsUPS Package tracking via ring scanners Reduced cost at DCs, handhelds on trucks, wirelessUser efficiency LAN etc. Data integrityDELL Use of Ariba Buyer 62% reduction in time 61% reduction in costSchneider Tracking trucks and trailers Enhanced utilisationFORD use of where Net yard management SystemP&G Use barcode, RFID Cut inventory from 65 days to 30 days Thank You