SUPPLY CHAIN MANAGEMENT
DECEMBER- 2008 SECTION-C
7. CUSTOMER SERVICE IS FREQUENTLY VIEWED AS PRIMARY INTERFACE BETWEEN LOGISTICS AND
MARKETING. DISCUSS THE NATURE OF INTERFACE AND HOW IT MAY BE CHANGING
8. “MULTIMODAL TRANSPORT”. DISCUSS THE RELEVANCE IN INTERNATINAL TRADE
Multimodal Transport can be viewed as “the chain that interconnects different links or modes of
transport -air, sea, and land- into one complete process that ensures an efficient and cost-effective
door-to-door movement of goods under the responsibility of a single transport operator, known as a
Multimodal Transport Operator (MTO), on one transport document”.
Multimodal transport, as understood by many, refers to a transport system usually operated by
one carrier with more than one mode of transport under the control or ownership of one
operator. It involves the use of more than one means of transport such as a combination of
truck, railcar, aeroplane or ship in succession to each other e.g. a container line which operates
both a ship and a rail system of double stack trains.
Advantages of multimodal transport
Minimises time loss at trans-shipment points
Multimodal transport, which is planned and coordinated as a single operation, minimises the loss
of time and the risk of loss, pilferage and damage to cargo at trans-shipment points. The
multimodal transport operator maintains his own communication links and coordinates
interchange and onward carriage smoothly at trans-shipment points.
Provides faster transit of goods
The faster transit of goods made possible under multimodal transport reduces the disadvantages
of distance from markets and the tying-up of capital. In an era of Globalization the distance
between origin or source materials and consumer is increasing thanks to the development of
Reduces burden of documentation and formalities
The burden of issuing multiple documentation and other formalities connected with each
segmented of the transport chain is reduced to a minimum.
The savings in costs resulting from these advantages are usually reflected in the through freight
rates charged by the multimodal transport operator and also in the cost of cargo insurance. As
savings are passed onto the consumer demand increases.
Establishes only one agency to deal with
The consignor has to deal with only the multimodal transport operator in all matters relating to
the transportation of his goods, including the settlement of claims for loss of goods, or damage to
them, or delay in delivery at destination.
Reduces cost of exports
The inherent advantages of multimodal transport system will help to reduce the cost of exports
and improve their competitive position in the international market.
Forms of multimodal transport operations
Currently, different types of multimodal transport operations involving different combinations are
taking place, such as:
IMPORTANT TERMINOLOGY IN MULTIMODAL TRANSPORT
Modes of Transport: The method of transport used for the movement of goods.
e.g. by rail, road, sea or air.
Means of Transport: The vehicle used for transport, e.g. ship, truck, or aircraft.
Types of Means of Transport: The type of vehicle used in the transport process.
e.g. wide-body, tank truck, passenger vessel, etc.
Unimodal Transport: The transport by one mode of transport only, where each carrier issues his
own transport document (B/L,airwaybill, consignment note, etc.).
Combined Transport: The transportation of goods in one and the same loading unit or vehicle
by a combination of road, rail, and inland waterway modes.
Intermodal Transport: The transportation of goods by several modes of transport where one
carrier organises the whole transport from one point or port of origin via one or more interface
points to a final port or point. Depending on how responsibility for the entire transport is
shared, different types of documents areused.
9. LIST THE MAJOR INDIAN PORT. DISCUSS BRIEFLY THE ROLE IN FOREIGN TRADE WITH RESPECT TO
MAJOR INDIAN PORTS ARE:-
Region/State/UT Major Ports
Gujarat 1 (Kandla)
Maharashtra 2 (Mumbai, Nava Sheva)
Goa 1 (Mormugao)
Karnataka 1 (New Mangalore)
Kerala 1 (Cochin)
Tamil Nadu 2 (Chennai, Tuticorin)
Andhra Pradesh 1 Vizag
Orissa 1 (Paradip)
West Bengal 1 (Calcutta)
Ports of India are very important gateway for international trade i.e. imports and exports. Maximum
of the cargo that goes out of the country and that comes in the country is through these ports of
India. These ports play an important role in strategic planning of imports and exports of the country.
India’s international trade by sea amounts to over 90% of foreign trade that take place via 13 major
and 187 minor ports of India. These ports of India are held responsible for playing a dominant role in
developing the country’s trade and commerce.
India being the largest peninsular country in the world has about 7516.6 kilometers long coastline,
which currently houses 13 major and 187 minor ports that contribute about 90% of the Foreign Trade.
Out of these 12 are managed by Government and one by Corporate. The latest addition to the list of
major ports of India is Port Blair. It was added in June 2010, making it the 13th port in the country.
India is lucky to have major water bodies on its sides that is the east as well as the west side.
Bounded by the Indian Ocean on the south, the Arabian Sea on the south-west, and the Bay of Bengal
on the south-east.
The major Ports of India are:
1. Mumbai Port : Mumbai port is the biggest and busiest of all the ports of India. Mumbai Port
was established as the Bombay Port Trust on June 26, 1873. Mumbai port handles 11 per cent
of the total sea-borne traffic of India. It is a natural deep-water harbor in the southern portion
of the Ulhas River estuary. Not many people know that the official name of Mumbai harbor is
“Front Bay”. The port was the pre-eminent commercial ports of India in the nineteenth and
twentieth centuries. It is known as the gateway to India, and has been a primary factor in the
emergence of Mumbai as the commercial capital of India.
2. KandlaPort : Kandla is a tidal port located on the Gulf of Kutch and is one of major ports of
India on the west coast. It is one of the important ports of India in Kutch district of Gujarat
state in western part. Kandla seaport is the result of partition. It was constructed in the 1950s
as the chief seaport serving western India, after the partition of India from Pakistan left the
port of Karachi in Pakistan.
3. MarmugaoPort : Marmugao is one of the oldest Ports of India located on the west coast. The
port also serves as a naval base. It is one of the premier iron ore exporting ports of India with
an annual throughput of around 26.74 million tonnes of iron ore traffic. It was commissioned
in the year1888 and was declared a major port in 1964. Today the quantity of iron ore
exported from Marmugao port constitutes 39 per cent of the total iron ore exports of India.
4. Visakhapatnam Port : Visakhapatnam is the deepest land-locked and protected port in
India. It is one of the largest Ports of India in terms of the cargo handled. Visakhapatnam port
also serves as home to the Eastern Naval Command of the Indian Navy. The port construction
started in the year 1927 and completed in the year 1933. the first vessel entered the port on 7
October 1933. It is one of the busiest ports of India. It is the most scenic of all the ports as it
is surrounded by a hill on the south side and is often compared to the Durban port because of
5. Chennai Port : It is one of the oldest Ports of India located in the southern part. The Chennai
Port has an artificial harbor. This gateway port for all cargo has completed about 130 years of
service to India’s maritime trade. Before it was made an artificial harbor, the initial piers were
built in 1861 but was destroyed by 1868 and 1872 storms. Later the process of making an
artificial harbor was initiated and the operation started in the year 1881.
6. Kolkata Port : Kolkata also enjoys the importance of one of the major ports of India. The
Kolkata port is the only riverine port of all the ports of India and has two docks namely
Kolkata dock and Haldia dock. Kolkata Dock System is situated on the left bank of the river
Hooghly and has a comprehensive range of facilities to handle and transport various cargo
including heavy lifts. Kolkata port has the largest dry dock of all the major ports of India.
7. Jawaharlal Nehru Port (JNPT) : It is the fastest growing of all the ports of India. The port is
located in Navi Mumbai and is managed by Jawaharlal Nehru Port Trust and controlled by the
Central Government of India. It handles 65 per cent of India’s container traffic. The port is
connected pretty well with all major highways and railway stations.
8. New Mangalore Port : The New Mangalore Port, the only major port of Karnataka was
inaugurated on 11th January 1975. It is the one of all the Ports of India to export Kudremukh
iron-ore. The major commodities exported through the port are iron ore concentrates &pellets,
iron ore fines, granite stones, containerized cargo etc. The major imports are crude and
petroleum, oil and lubricants (POL) products, LPG, wood pulp, timber logs, finished fertilizers,
liquid ammonia, phosphoric acid, other liquid chemicals, containerized cargo, etc.
9. TuticorinPort : Tuticorin Port was a minor port until Tuticorin minor port and the newly
constructed Tuticorin major port were merged and the Tuticorin Port Trust was constituted.
Then it became one of the major ports of India and started exporting a variety of cargo meant
for the neighboring countries of Sri Lanka, Maldives, etc and the coastal regions of India.
10. Cochin Port : Cochin is one of the fastest growing ports of India and a popular gateway to
Indian peninsula. The port is located on the south-est coast of India. It is located on an island
named Willingdon Island which is an artificial Island tucked inside the backwaters of Kerala.
11. ParadipPort : The foundation stone of the Paradip Port was laid in January 1962 by then
Prime Minister Mr. Jawaharlal Nehru. Government of India declared Paradip as the eighth
major port of India on April 18, 1966 making it the first major port on the east coast
commissioned in independent India. It is one of the important ports of India that serve the
eastern and central parts of the country.
Container cargo represents only about 30% by value of India’s external trade—pale when compared
with the global containerized cargo average of 70-75%. At a growth rate of 19%, India’s container
cargo traffic is estimated to reach 21 million TEUs(tonnes and twenty foot equivalent units) by 2016 .
In case of India, shipping constitutes an essential component of the country’s international trade since
about 90 per cent of her overseas trade in terms of volume and about 77 per cent in terms of value
moves by sea. In view of the vital role played by shipping industry in furthering the growth of overseas
trade, as also as a direct earner and saver of foreign exchange, the Government right from the beginning
of planning era in 1950-51 has been endeavoring to build adequate national fleet. Shipping is a valuable
invisible export or foreign exchange earner for any country. Over the period, Indian shipping has
improved its foreign exchange flows, as the gross earnings/receipts increased from Rs 26.98 billion in
1991-92 to Rs 57.2 billion in 1999-2000 and the net inflows increased from Rs 15.6 billion to Rs 35.3
billion during the same period.
10. THE LOGISTICS COST IS HIGH IN INDIA AS COMPARED TO DEVELOPED COUNTRIES. DISCUSS IN
DETAILS THE REASON FOR THIS AND ITS IMPACT ON BUSINESS
Better overall logistics performance and trade facilitation are strongly associated with trade
expansion, export diversification, attractiveness to foreign direct investment and economic growth,
says the World Bank.
The logistics sector in India remains mired in several complexities which could hold it back. These
inefficiencies in transport,
poor condition of storage infrastructure,
a complex tax structure,
low rate of technology adoption and poor skills of the logistics professionals.
There is still no multimodal solution.
Warehousing is still considered as a real-estate than a logistics service.
Pending resolution of the Goods and Service Tax has hampered the warehousing industry.
Logistics cost is 13% of India’s GDP in comparison to 11% in Europe and 9% in the U.S. Of the total
logistics cost, transportation represents 39% while warehousing, packaging and inventory accounts for
24% of the total costs.
Higher logistics costs is mainly due to poor infrastructure facilities in the country. The higher logistics
cost represents higher products/services’ cost in the international market.