Shipping & logistics 5 sunday.

LOGISTICS
 LOGISTICS MEANSACTIVITIES CARRIED
OUT SIMULTANEOUSLYTOACHIEVEA
DESIRED GOAL IN LEAST POSSIBLE TIME
AT LEAST COST.
 LOGISTICS INVOLVETHE INTEGRATION OF
INFORMATION,TRANSPORTATION,INVENT
ORY,WAREHOUSING , MATERIAL
HANDLING & PACKAGING.

LOGISTICS
 LOGISTICS ISTHE GEOGROPHICAL
POSITIONING OF RAW MATERIAL, WORK IN
PROCESS & FINISHED INVENTORIES WHERE
REQUIRED ATTHE LEASE POSSIBLE COST.
 LOGISTICS EXPENDITURETYPICALY RANGE
FROM 5%TO 35 % OF SALES DEPENDING ON
THETYPE OF BUSINESS.
 LOGISTICS COST ONCE EXPENDED CAN NOT
BE REVERSED.

TYPES OF LOGISTICS ACTIVITIES
 CUSTOMER SERVICE
 TRANSPORTATION
 INVENTORY MANAGEMENT
 DISTRIBUTION

SUPPLY CHAIN MANAGEMENT & LOGISTICS.
The supply chain encompasses a bigger picture.
Supply chain management is the umbrella that
covers all aspects of the sourcing and procurement of
goods. Basically, supply chain management forms
and manages the business-to-business links that
allow for the ultimate sale of goods to consumers.
Logistics, basically getting the freight from one place
to the other, is a function that falls under the wide
umbrella of supply chain management, but is only
one part of the entire process.

 In short it can be said that supply chain
management takes care of the design, planning,
execution, control, and monitoring of supply
chain activities with the sole objective of creating
net value and leveraging worldwide logistics.
 On the other hand logistics can be simply
defined as the management of the flow of goods
and the services between the point of origin and
the point of consumption in order

to meet the requirements of customers. It is
interesting to note that logistics is a business
concept that was introduced for the first time in the
year 1953. Business logistics is nothing but having
the right item in the right quantity at the right time
at the right place for the right price in right
condition to the right customer.

GLOBAL LOGISTICS.
Domestic Logistics focuses on performing Value-
added Services in a relatively controlled
environment .
Global Logistics operations must accommodate
all domestic requirement & also deal with
increased uncertainties associated with
distance, demand , diversity & documentation.

Export Logistics Planning.
 A plan is a predetermined course of action
to achieve a specified goal. It is an
intellectual process characterized by
thinking before doing. It is an attempt on
the part of manager to anticipate the
future in order to achieve better
performance. Planning is the primary
function of management.

 Export Logistics Planning process is
entirely different than Domestic planning
Process. The importer today is interested
in accurate delivery Schedule rather than
ad hoc delivery Schedule. To overcome this
Exporter is compelled to Backward
Planning rather than forward Planning for
which it requires some basic tools.

TOOLS.
 World Route Map.
 Calendar- Depicting 3 Months.( PM/CM/NM).
 Calendar- Customs/Dock Holiday list.
 Page a Day- Diary.
 Services of Shipping Lines & Routes.
 Destination wise tentativeTransitTime.
 CommunicationTools.

Customer Expectations Related to
Logistics Performance
 Reliability.
 Responsiveness.
 Access.
 Communication.
 Credibility.
 Security.
 Courtesy.
 Competency.

Customer Expectations Related to
Logistics Performance
 Tangibles.
 Knowing the Customer.

INBOUND LOGISTICS.
PRESHIPMENT STAGE
SHIPMENT STAGE
POSTSHIPMENT STAGE

PRESHIPMENT STAGE
 RECEIPT OF AN ENQUIRY.
 TO SEND AN OFFER.
 RECEIPT OF PURCHASE ORDER.
 TO SEND PROFORMA INVOICE.
 RECEIPT OF L/C.
 ARRANGING FOR PRESHIPMENT FINANCE.
 ARRANGING FOR MANUFACTURING A PRODUCT.
 READINESS OF PRODUCT.
 IN HOUSE QUALITY CONTROL INSPECTION.
 ARRANGING FOR PRESHIPMENT INSPECTION (IF
REQUIRED).
 ARRANGING FOR DESPATCH.

AGENCIES INVOLVED IN EXPORT SHIPMENTS
 CUSTOMS. (MINISTRY OF FINANCE)
 DGFT (MINISTRY OF COMMERCE)
 PORTS. (MINISTRY OF SURFACE
TRANSPORT)
 CENTRAL EXCISE (MINISTRY OF FINANCE).
 RESERVE BANK OF INDIA
 AUTHORISED DEALERS
 COMMERCIAL BANKS

 EXPORT PROMOTION COUNCIL/BOARDS/EDA.
 CHAMBERS OF COMMERCE
 SALESTAX DEPARTMENT
 INCOMETAX DEPARTMENT
 LOCAL AUTHORITIES (OCTROI/TOT)
 CUSTOM BROKERS ( CHA ).
 SHIPPING CO’S/AIRWAYS/ROAD TRANSPORT
 FREIGHT FORWARDERS
 NVOCC’S
 EXPORT INSPECTION AGENCY

 PRIVATE INSPECTIONAGENCIES
 TRANSPORTERS
 ECGC
 LOGISTICS CO.

SHIPMENT STAGE
 PASSING OF PRESHIPMENT DOCUMENTS IN CUSTOMS.
 UNLOADING OF CONSIGNMENTAT MUMBAI/JNPT/MUNDRA PORT.
 EXAMINATIONOF CONSIGNMENTAT PORT (DOCK STUFFING).
 OUT OF CHARGE OF CONSIGNMENT.
 STUFFINGOF CONSIGNMENT IN CASE OF “DOCK STUFFING.”
 LOADINGOF CONSIGNMENTON BOARD.

SHIPMENT STAGE
 DOCK STUFFING.
 FACTORY STUFFING.
 DOCK STUFFING- ICD.
 FACTORY STUFFING-ICD.

ADVANTAGES OF “DOCK STUFFING”
 CHOICE OF SHIIPING CO.
 IMMEDIATE DESPATCH OFCONSIGNMENT
ONTRUCKS/TRAILERS.
 DETENTION OF CONT. AVOIDED.
 SHORT SHIPMENT POSSIBLE.
 SUITABLE FOR LCL CARGO.

DISADVANTAGES OF “DOCK STUFFING”
 TIME CONSUMING-.
 MISHANDLING OF CONSIGNMENT.
 IMPROPER STUFFING.
 NON -AVAILABILITY OF MHE AT CFS.
 NON-SUITABILITY FOR FRAGILE CARGO.
 INCREASE IN LOGISTICS COST.

ADVANTAGES OF “FACTORY STUFFING”
 TIME SAVING.
 PROPER IN HOUSE STUFFING AS PER
CUSTOMERS REQUIREMENT.
 COSTADVANTAGE.
 MINIMUM FORMALITIES AT “GATEWAY
PORT”.
 UNLOADING OF CONT.WITHOUT PASSING
DOCS.

DISADVANTAGES OF “FACTORY STUFFING”
 DETENTION OF CONT. IF CONSIGNMENT
DELAYEDAT PLANT.
 SHORT SHIPMENT NOT POSSIBLE.
 DELAY IN DESPATCH DUETO NON-
ARRIVAL OF CONT. AT FACTORY.
 WAITING PERIODAT PORT IN CASE OF
MISSING OFVESSEL.

ADVANTAGES OF “ICD”
 QUICK PASSING OF DOCS.
 MINIMUM FORMALITIES AT GATEWAY PORT.
 BACKLOADING AT FACTORY POSSIBLE.
 ARRIVAL OF CONT. AT BECK-N-CALL.
 RAILTRANSPORTATION IS CHEAPERTHAN
ROADTRANSPORTATION.
 CARRYING CAPACITY IS MORE IN RAIL
TRANSPORTATION COMPAREDTO ROAD
TRANSPORTATION.

DISADVANTAGES OF “ICD”
 LIMITED CHOICE OF SHIPPING CO’S.
 DELAY DUETOTRANSPORT (RAIL/ROAD)
PROBLEM.
 FULL CONTAINER RACK.
 TRACKING OF CONT. DIFFICULT.
 HOLDING OF CONTAINER DIFFICULT.
 OCEAN FREIGHT COST MORE DUETO REPO
OF EMPTY CONT.

POST SHIPMENT STAGE
 TO CHECK LOADING OF CONSIGNMENT.
 TO SEND LOADING CONFIRMATIONTO CUSTOMER..
 NEGOTIATION OF DOCUMENTS.
 TO COMPLETE PROOF OF EXPORT FORMALITIES.
 TO CLAIM INCENTIVE FROM GOVERNMENT.

BACK TO TOWN PROCEDURE.
 TRAILER METWITH AN ACCIDENT/STUFFING
DISTURBEDVERY CLOSETO PLANT.
 TRAILER METWITH AN ACCIDENT/STUFFING
DISTURBED IN BETWEEN PLANT & PORT OF
LOADING.
 CONTAINER DAMAGE/ STUFFING DISTURBED
OBSERVED JUST OUTSIDE BUFFERYARD
 CONTAINER GOT DAMAGED /STUFFING DISTURBED
INSIDETHE “BUFFERYARD”.
 CONTAINERTO “HOLD”AFTER SAILING OFTHE
VESSEL.
 CONTAINER REACHED DESTINATIONTO DIVERT.

Significance of Transport
 Connects regions of production to regions of
Consumption.
 Increases demand of Consumer Goods,
 Decreases Cost of Production.
 Leads to dispersal of Population from a
metropolitan city.
 New areas are opened to the people & new
markets for products.

Choice of the Mode of Transport
 Cost-Freight Charges.
 Speed-TransitTime.
 Carrying capacity.
 Safety.
 Location of Place of Origin &
Place of Destination.
 Type of Cargo.

Transport Cost is influenced by
following factors.
 Distance.
 Volume.
 Density.
 Stow ability.
 Handling.
 Liability.
 Market Factors.

FREIGHT STRUCTURE
Transportation provides a unique service in
the form of movement of goods and people.
This service involves the use of raw material,
components, etc. and financial resources.

FREIGHT STRUCTURE
Principles that determine the transport cost are:
1) Opportunity Cost
2) Cost of Service Principle
3) Value of Service Principle
4) Principle of Differential Charging
5) Total Cost of Service
6) Locational Discrimination
7) Class Discrimination

MODES AND MEANS OF TRANSPORT
Overland Transport Water Transport Air Transport
Road Pipeline Transmission
Transport Transport of Electricity
by wires
Coastal Ocean
transport
National International
Railway
Transport
Electricity Operated
Trolleys
Inland Water Transport
by River, Lakes etc.

Road Transport.
 Characteristics.
1. More Elastic. Door to Door Service.
2. Cost of Loading & Unloading is limited.
3. By Rail Road Coordination, faraway distance
can be covered.
4. All weather Roads.
5. Trucks have limited Carrying Capacity.
6. Limited use in InternationalTrade.

Road Transport.
 North America.
1. Canada.
2. USA.
 Europe.
 CIS.
 Asia- China, India & Japan.
 South America-Argentina, Brazil & Peru.

Road Transport.
 Major Highways.
1. Canadian Highway.
2. Autobahns-Germany.
3. Autoroutes-France.
4. Motorways- UK.
5. Autos trade- Italy.

Rail Transport.
1. Cheapest & Fastest mode of LandTransport.
2. Railways also Carry passengers in large
numbers.
3. Opened up New areas for Industries.
4. Rail Transport in not flexible.
5. Construction of Railways is influenced by
Climate & Soil.
6. Using different gauges is Inconvenient.

Rail Transport.
 According to the functioning of Railways
Classification is as under.
1. Local Network.
2. Cross country Lines.
3. Lines of Penetration.
4. Transcontinental Railways.
 USA & Canada.
 CIS.
 Chile Argentina.

Rail Transport.
 North America- 40% of Rail length.
1. Canada.-Southern Part of Canada.
2. USA.
 Europe.
 CIS.
 Asia- China, India & Japan.
 South America-Argentina, Brazil & Peru.

Rail Transport.
 Australia.
 Africa.

Pipeline Transport.
1. Used for carrying liquid Chemicals & gas or
Crude oil for Refining Purpose. Or
2. Drinking water for Urbanites. Or
3. Milk from dairy farms to the Distribution
Centers. Or
4. Gas to Consumers for Domestic Use.
5. Initial cost of Construction is heavy.

Pipeline Transport.
6. Maintenance Cost isVery high.
7. Extremely Uneven for harsh Climate.
8. Political Considerations.

water Transport.
1. Cheapest form ofTransport.
2. Most suitable for carrying Bulky , heavy &
cheap Commodities over distances.
3. Used maximum in InternationalTrade.
4. WaterTransport does not require repairs
exceptTerminal points i.e at the port side.
5. Slow mode ofTransport. .
6. Controlled by flow ofWater, rapids & falls.

water Transport-Inland Waterways.
 Canada- St. Lawrence.
 USA-Mississippi River, Great Lakes -3000 Km)
 Europe.
1. Rhine- Switzerland.
2. Danube- Germany.
3. Elbe-Germany.
 CIS-Volga River.
 China-Yangtze & Siking.

Air Transport.
1. Fastest mode ofTransport.
2. Cost of operation, maintenance , safety is
maximum.
3. Carrying Capacity is minimum.
4. Construction of Runway , Skilled worker etc
is very costly.
5. Smooth running where Sky is Clear &
visibility is good.

Air Transport.
6. Snowfall, heavy rainfall, fast winds are found
harmful to smooth operation.
7. Fear of hijacking of aircrafts for political
reasons .
8. Gravity anomalies such as BermudaTriangle.

Air Transport.
 USA.- 50% ofWorld Passengers.
 Canada.
 Europe.
 CIS.
 Asia-
 South America.
 Australia.

Impact of Transportation on
Logistics Cost.
India’s Logistics Cost as % of GDP is already
high double that of the developed Countries
& substantially higher than other BRIC
nations.
India is Over dependence on Road Freight
means that logistics Cost as % of GDP is as
high as 13% to 14% compared to 7% & 8% in
developed Countries & 9% to 10% in other
BRIC countries.The same is 18% in CIS.

Logistics Cost.
Transportation related challenges : The
predominant mode of Transportation of
Freight Cargo in India is roads . In India nearly
61% of the Cargo is transported by Road , 30 %
by Rail & rest by AIR, Inland Waterways &
Pipelines. This is Compared to 37% share of
Road in USA & 22% in China. This is well
known fact that movement of Bulk Cargo by
Road is always less efficient as compared to
Rail.

Logistics Cost.
 India has a coastline of around 7500 km with
nearly 200 Ports. But the barely 8% of total
domestic cargo ( on a ton-km basis ) is
moved by coastal Shipping.
 The reasons for Poor utilization of coastal
waterways include :-
1. High costs at major ports.
2. Shallow berths at non major ports.

Logistics Cost.
3. Multiplicity of NonTariff Barrier.
4. Inadequate Road & Rail connectivity.
5. Impediments of import & operation of Ships.

Inland Waterways.
 Contribution of Inland Waterway Cost.
1. Germany – 25%
2. USA- 14 %
3. China- 9 %.
4. India- 0.5 %

WORLD OCEAN ROUTES.
 NORTH ATLANTIC ROUTE.
 MEDITERRANEAN-ASIATIC ROUTE.
 CAPE OF GOOD HOPE ROUTE.
 NORTHWEST EUROPETO SOUTH
AMERICAN ROUTE.
 PANAMA CANAL ROUTE.
 TRANS PACIFIC ROUTE.

COMPOSITION OF INTERNATIONAL TRADE
BY SEA(10000 MILLION TON)
GENERAL CARGO.
 Manufactured or Semi Manufactured Goods.
 Packed cargo like –Cases, Drums, Bags,
Cartons etc.
BULK CARGO.
(A) DRY CARGO.
(B) LIQUID CARGO.

COMPOSITION OF INTERNATIONAL TRADE
BY SEA(10000 MILLION TON)
BULK CARGO.
DRY CARGO. LIQUID CARGO.
GRAINS. PETROLEUM CRUDE
ORE. PETROLEUM PRODUCT.
FERTILIZERS. LIQUID CHEMICALS.
VEGETABLE OIL.

COMPOSITION OF INTERNATIONAL TRADE BY
SEA(10000 MILLION TON)
GENERAL GARGO. BULK CARGO.
(1/3) (VOLUME) (2/3)
(40%) (VALUE) (60%)

TYPES OF SHIPS
 BULK/BREAK BULKVESSEL.
 CELLULARVESSEL.
 RO ROVESSEL.
 COMBIVESSEL.
 TANKERS.
 LASH BARGE SHIPS..

CLASSIFICATION OF CONTAINERS
 STEEL CONTAINERS.
 ALUMINIUM CONTANERS.
 GRP CONTAINERS.

Advantages of Steel Containers.
 They are cheapest.
 They can be more easily repaired
compared to other types of
Containers.
 They can resist damage.

Disadvantages of Steel Containers.
 They can have an economic life of
about 10 years.
 They will have moreTare weight
compared to other types of
Containers.
 They suffer by being more prone to
corrosion.

TYPES OF CONTAINERS
 NORMAL CONTAINER (G.P).
 SPECIALTYPES OF CONTAINERS.
 OPENTOP CONTAINERS.
 DRY BULK CONTAINERS.
 REEFER CONTAINERS.
 FLAT RACK CONTAINERS.
 HANGER CONTAINERS.
 CATTLE CONTAINERS.
 TANK CONTAINERS.
 CAR STORAGE CONTAINERS.

TYPES OF LEASING ARRANGEMENT
 TRIP LEASE OR SHORTTERM LEASE.
 LONGTERM LEASE.
 FINANCIAL LEASE.
 MASTER LEASE.

ADVANTAGES OF CONTAINERISATION
 SHIPOWNERS
 REDUCTION IN PORTTIMEOF SHIPS.
 IMPROVEDWORKING RATIO OF SHIPS.
 SHIPPERS/CONSIGNEE
 REDUCTION IN PACKING COST.
 REDUCTIONOF DAMAGE.
 REDUCTION IN MARINE INSURANCECLAIM.
 PROTECTIONTO FRAGILE CARGO.
 REDUCTION IN INLANDTRANSPORT COST.
 FASTER & RELIABLE DELIVERY.
 RETENTIONOF ORIGINALQUALITY.
 PHYSICAL SEPRATIONOF DIRTY CARGO.
 SIMPLIFICATIONOF DOCS PROCEDURE.
 LESS INVENTORYCOST DUETO LESSTRANSIT.
 STABLE INVENTORYCONTROL DUETO STABILISED DELIVERY
SCHEDULE.

PARAMETRES FOR SELECTING SHIPPING LINE.
 Ocean Freight.
 TransitTime.
 Transshipment –Direct Line Preferred Or
MinimumTransshipment,
 Frequency OfVessels From Loading Port &/Or
Transshipment Ports.
 Availability of Containers at ICD.
 Availability Of Space.
 Availability Of Special Equipments. Eg. “Open
Top, Reefers, Flat Rack Etc.
 After Shipment Service.
 CreditTerms.

PARAMETRES FOR SELECTING SHIPPING LINE.
 Update On Services.
 DoorTo Door Services.
 Maximum Free days at Loading & Destination
Port.
 Customer’s preferred Shipping line.
 Warehousing.- At Destination Companies
Like Apl And Maersk ProvideThese Services.
 Comprehensive Network. (Cooperation
Between All Regional Offices.)

CONTAINERWISE COSTING
SHIPMENT OF ONE 40’ CONT. FROM SAN FRANCISCO TO NAPLES
REVENUE $ 3200
EXPENSES :
COMMISSION 10% …………… 320
PICK UP AT SAN FRANCISCO 50
RAILING TO BALTIMORE 900
TRANSFER AT BALTIMORE 50
TERMINAL EXP. AT BALTIMORE 300
DISCHARGE AT LEGHORN 160
TRANSFER AT LEGHORN 30
RAILING TO NAPLES 250
DELIVERYAT NAPLES 60
CONT. 100 DAYS @ $ 4 PER DAY 400
SHIPS (2) TEU SLOTS $ 300 PER CONT. 600
TOTAL……………….. 3120 $3120
* PROFIT / LOSS $ 80

Why Shipping lines Rates differ?
 Routes.
 Availability of containers.
 Head Haul/Back Haul.
 TransitTime/Transshipment.
 Origin & Destination Presence.
 Sailing Frequency.
 Local Cost Advantage.
 Operational Excellence at Origin &
Destination.

Why Shipping lines Rates differ?
 Inventory Outlook.
 Allocation Capacity.
 Free Period Cost.

Case Study
Case Study on
“ Selection of Shipping Line”

TYPES OF SHIPPING SERVICES.
 LINER
 TRAMP

LINER SHIPPING.
 Regularity of sailing to schedule ports of call.
 Coverage of wide range of Ports.
 Fixed Frequency.
 Fixed Route.
 Stability of Freight rates for long period.
 Uniform rates for all shipper.

MODES OF CHARTERING.
 VOYAGE CHARTER.
 TIME CHARTER/PERIODCHARTER.
 TRIP-TIME CHARTER.
 BAREBOATCHARTER.
 CONSECUTIVEVOYAGES.
 DEMISE CHARTER

CHARTER PARTY CLAUSES.
 Description ofVessel.
 Voyage.
 Safe Port / Safe Berth.
 Cargo.
 Freight Payment.
 Loading & Discharging Rates &Terms.
 Lay time.
 Strike Clause.

CHARTER PARTY CLAUSES.
 Ceaser Clause.
 Lien Clause.
 Arbitration.

Multimodal Transport
“International multimodal transport
has been defined as the carriage of
goods from one country to another
by more than one mode of transport
on the basis of single contract.”

Scope of Services of Multimodal
Transport Operators (MTOs)
 Ancillary transport service – FCL
 Packing advice service – LCL
 Packing supervision – LCL
 Weighment and measurement supervision
 MTO evidencing MT agreement
 Insurance of HBL
 Reserve space on the DIFF, mode of transport
 Supervision of loading and unloading of goods at all
modes of transport
 Guarantee to customs administration at transit country
 Liable for loss of or damage of goods at both the ends
 Regular updating to consignor/consignee

Types of Multimodal Transport
Operators (MTOs)
1. Vessel Operating MTOs
Individual shipping cos./consortia
Producers/exporters-users of own transport operations.
2. Non-Vessel Operating MTOs (NVO MTOs)
Freight forwarders
Road transport operators
Railways
Airlines
New cos. Specialised in MT operations.

Warehousing.
 Warehouse is a storage structure constructed
for the protection of the quality & quantity of
the stored produce. The need for a warehouse
arises due to the time gap between
production & consumption of products.
 Warehousing or storage refers to holding &
preservation of goods until they are
dispatched to the customers. By bridging this
gap storage creates time utility.

Warehousing.
A warehouse is typically viewed as a place to
store inventory . However, in many logistical
system designs , the role of warehouse is more
properly viewed as switching facility as
contrasted to a storage facility.
In the 1980’s, central focus was on improved
configuration of warehouse systems & handling
technologies.

Warehousing.
In the 1990’s the primary focus of warehousing
is flexibility & effective use of Information
technology.
Flexibility is necessary to respond to expanding
customer demand in terms of product &
shipment profile.
Advance information technology offers some of
this flexibility by allowing warehouse
operation to quickly react to changes.

Warehouse Functionality.
 Economic Benefits.
1. Consolidation.
2. Break Bulk & Cross Dock.
3. Processing/Postponement.
4. Stockpiling.

Plant A
Plant B
Plant C
Consolidation
warehouses
X Y Z
Customer
CONSOLIDATION

BREAK BULK OPERATION
Customer X
Customer Y
Customer Z
Break bulk
warehouse
Plant A

Warehouse Functionality.
 Service Benefits.
1. Spot Stock.
2. Assortment.
3. Mixing.
4. Production Support.
5. Market Presence.

DISTRIBUTION ASSORTMENT
Company A
or
Plant A
Distribution
centre
Company B
or
Plant B
Company C
or
Plant C
Customer X
Customer Y
Customer Z

IN-TRANSIT MIXING
Plant A
Plant B
Plant C
Warehouse
transit mixing
point
Product D
Customer W
A B C D
Customer X
A B C D
Customer Y
A B C
Customer Z
A B

MANUFACTURING SUPPORT
Vendor A
Manufacturing
warehouses
Assembly plant
Vendor C
Vendor B

Types of Warehouse.
 PrivateWarehouse.
 PublicWarehouse.
 ContractWarehouse.

Planning the distribution
warehouse.
 Site Selection.
 Product mix considerations.
 Expansion.
 Selection of MHE systems.
 Warehouse layout.
 Precise determination ofWarehouse Space.
 Warehouse Design.

Value added Warehousing.
 Cross-Dock/trans loading.
 Customer Returns.
 Home Delivery.
 In-transit merge.
 Kan Ban.
 Kitting.
 Labeling/Pre-ticketing.
 Lot Control.

 Mass Customization/Post-ponment.
 Manufacturing Support.
 Order fulfillment.
 Pick/Pack.
 Pool distribution.
 Repair/refurbish.
 Returnable Container management.
 Reverse logistics.

 RFID tag application.
 Sequencing/metering.
 Specialty/Packaging.
 Store Support/direct store delivery( DSD).

WAREHOUSING SECTIONS
 Section-57 :- Appointing of public
warehouses
 Section-58 :- Licensing of private
warehouses
 Section-59 :-Warehousing bond
 Section-60 :- Permission for deposit of
goods in a warehouse

 Section-61 :- Period for which goods may
remain warehoused
 Section-62 :- Control over warehoused
goods
 Section-63 :- Payment of rent and
warehouse charges
 Section-64 :- Owner’s right to deal with
warehoused goods

 Section-65 :- Manufacture and other
operations in relation to
goods in a warehouse
 Section-66 :- Power to exempt imported
materials used in the
manufacture of goods in
warehouse

 Section-67 :- Removal of goods from one
warehouse to another
 Section-68 :- Clearance of warehoused
goods for home consumption
 Section-69 :- Clearance of warehoused
goods for exportation
 Section-70 :- Allowance in case of volatile
goods

 Section-71 :- Goods not to be taken out of
warehouse except as
provided by this Act
 Section-72 :- Goods improperly removed
from warehouse, etc.
 Section-73 :- Cancellation and return of
warehousing bond

INCOTERMS.
 The Incoterms® rules are an internationally
recognized standard and are used worldwide
in international and domestic contracts for
the sale of goods. First published in 1936,
Incoterms® rules provide internationally
accepted definitions and rules of
interpretation for most common commercial
terms.

INCOTERMS.
 They help traders avoid costly
misunderstandings by clarifying the tasks,
costs and risks involved in the delivery of
goods from sellers to buyers.
 The rules have been developed and
maintained by experts and practitioners
brought together by ICC and have become
the standard in international business rules
setting.

INCOTERMS’2000
 Group E: Seller making goods available to Buyer at
Seller's own Place- (Departure).
 Group F: Seller delivers the goods to the carrier,
appointed by Buyer (Main Carriage freight unpaid at
seller's end.)
 Group C: Seller undertakes carriage of goods (Main
carriage Freight Paid by him.)
 Group D: Seller undertakes all cost & risk unto the
country of Destination (Arrival.)

INCOTERMS’2000
 Group E: EXW Ex works (…. Named Place of Seller).
 Group F: FCA Free Carrier (…Named Place).
 FAS Free alongside ship (… Named port of Shipment).
 FOB Free on Board (…. Named port of Shipment).
 Group C: CFR Cost & freight (…. Named port of Destination).
 CIF Cost, insurance & freight (…. Named port of Destination).
 CPT Carriage paid to (…. Named place of Destination).
 CIP Carriage & Insurance Paid to (…. Named place of
 Destination).
 Group D DAF Delivered at Frontier (… named place of Buyer)
 DES Delivered EX Ship (…. Named port of Destination)
 DEQ Delivered Ex Quay (Duty paid) (…. Named port of
 Destination)
 DDU Delivered Duty Unpaid (…. Named place of Destination)
 DDP Delivered Duty paid (…. Named place of Destination)

INCOTERMS’2010
 Group E: EXW Ex works (…. Named Place of Seller).
 Group F: FCA Free Carrier (…Named Place).
 FAS Free alongside ship (… Named port of Shipment).
 FOB Free on Board (…. Named port of Shipment).
 Group C: CFR Cost & freight (…. Named port of Destination).
 CIF Cost, insurance & freight (…. Named port of
 Destination).
 CPT Carriage paid to (…. Named place of Destination).
 CIP Carriage & Insurance Paid to (…. Named place of
 Destination).
 Group D DAT Delivered atTerminal (…named terminal at port or
 place of Destination)
DAP Delivered at Place (…. Named place of Destination)
 DDP Delivered Duty paid (…. Named place ).

CHOOSING AN APPROPRATE INCOTERMS
 SMALL EXPORTER EXPORTING TO BIG
CUSTOMER SHOULD OPT FOR EXW.
 BIG EXPORTER EXPORTINGTO SMALL
CUSTOMER SHOULD OPT FOR DDP.
 IMPORTER HAVING GLOBALTIE UPWITH
SHIPPING CO SHOULD OPT FOR FOB.
 SPLITTHETERMS IN CASE OF DDU & DDP
SHIPMENT.
 COMPARE LOGISTICS COST WITH 3 PL &
SELECT AN INCOTERM.

PAYMENT TERMS
 ADVANCE.
 D/A (DOCUMENTS AGAINST
ACCEPTANCE).
 D/P (DOCUMENTS AGAINST
PAYMENT).
 L/C (LETTER OF CREDIT).

LETTER OF CREDIT.
 A letter of credit is basically a guarantee from
a bank that a particular seller will receive a
payment due from a particular buyer. The
bank guarantees that the seller will receive a
specified amount of money within a specified
time. In return for guaranteeing the payment,
the bank will require that strict terms are
met. It will want to receive certain documents
- for example shipping confirmation - as proof

TYPES OF L/C’S
 Irrevocable credit
 Irrevocable confirmed credit
 Transferable L/C.
 Back to Back L/C.
 Revolving L/C.

The Uniform Customs and Practices (UCP)
for Documentary Credits were first issued
in 1933 by the International Chamber of
Commerce. The purpose was to overcome
conflicting national laws on letters of
credit as well as to bring about uniformity
in banking practices. The rules have been
revised a number of times.
UCP

UCP- REVISION.
 1933 – Uniform Customs and Practice for Commercial Documentary Credits
 1951 Revision - Uniform Customs and Practice for Commercial Documentary
 Credits
 1962 Revision - Uniform Customs and Practice for Documentary Credits
 1974 Revision – Uniform Customs and Practice for Documentary Credits
 1983 Revision – Uniform Customs and Practice for Documentary
 Credits (UCP 400)

UCP 600
 The recent revision, UCP 600, took more
than three years of consultation and the
Consulting Group, which comprised more
than 40 representatives from 26 countries
proposed changes to the various drafts.
During its 24-25 October 2006 meeting,
the ICC Commission on BankingTechnique
and Practice approved new UCP 600 rules
for documentary credits

UCP 600
 The UCP 600 has come into effect from July 1,
2007 onwards and UCP 600 has a number of
substantial changes that affect not only how
banks will determine compliance, but also how
contracts for sales utilizing Letter of Credits
should be written. Some of the new articles in
UCP 600 have adopted practices in International
Standard Banking Practices (ISBP) .

UCP 600
 "UCP" is the common reference for
the Uniform Customs and Practice for
Documentary Credits.The objective
of the UCP is to create a set of
contractual rules that would establish
uniformity to conflicting national
regulations.

ISBP
(International Standard Banking Practices).
 The ISBP is a checklist of best practices
worldwide for checking documents under the
UCP, ICC’s universally used rules on letters of
credit.
 Because the UCP rules are general in nature,
it was necessary to define in greater detail
the term “international standard banking
practice”, first found in UCP 500 sub-article 13
(a), the previous version of the UCP.

ISBP 681
 The ISBP, which was revised in 2007 as ISBP
681, is credited with dramatically reducing
the number of discrepancies between banks
dealing with documentary credits. The ISBP
addresses a range of subjects, for example,
typing errors, mathematical calculations,
drafts and how they are drawn, description of
the goods in invoices and signing of bills of
lading, among others.

ISBP 681
(Documents Covered)
 DRAFTS
 INVOICES
 TRANSPORT DOCUMENTCOVERINGAT LEASTTWO DIFFERENT
MODESOFTRANSPORT
 BILLOF LADING
 CHARTER PARTY BILL OF LADING
 AIRTRANSPORT DOCUMENT
 ROAD, RAIL OR INLANDWATERWAYTRANSPORT DOCUMENTS
 INSURANCE DOCUMENTAND COVERAGE
 CERTIFICATESOF ORIGIN

ISBP 745
 ISBP 2013 is the latest & the most
comprehensive guide to handling & examining
the Documents under Letters of Credits.
 ISBP 2013 published by ICC with the ICC
publication No.745.
 All professionals, Banking , Logistics, Insurance
& Legal & Corporate Professionals & academics
worldwide who deal with Letters of Credit can
use ISBP 2013.
 It is a great companion to UCP 600.

ISBP 745
(Additional Documents Covered)
 PACKING LIST
 WEIGHT LIST
 BENEFICIARY CERTIFICATE
 NON-NEGOTIABLE SEAWAYBILLS
 ANALYSIS, INSPECTION, HEALTH,
QUANTITYAND QUALITY CERTIFICATE

3PL
A THIRD PARTY LOGISTIC PROVIDER IS A
FIRMTHAT PROVIDES OUTSOURCED OR
“ THIRD PARTY” LOGISTICS SERVICES TO
COMPANIES FOR PART OR SOMETIMES ALL
OF THEIR SUPPLY CHAIN MANAGEMENT
FUNCTION.

3 PL
THIRD PARTY LOGISTICS PROVIDERS TYPICALY
SPECIALIZE IN INTEGRATED WAREHOUSING &
TRANSPORTATION SERVICES THAT CAN BE
SCALED & CUSTOMISED TOCUSTOMER’S NEEDS
BASED ON MARKET CONDITIONS & THE
DEMANDS & DELIVERY SERVICE REQUIREMENT
FORTHEIR PRODUCTS & MATERIALS.

3 PL
 ADVANTAGES OF 3PL
1. FOCUS ON CORE COMPETENCY
2. TECHNOLOGICAL FLEXIBILITY
3. GEOGRAPHICAL COVERAGE
 DISADVANTAGES OF 3PL
1. LOSS OF CONTROL
2. HIGH EXIT BARRIERS
3. UNEXPECTED FAILURE

4PL.
4PL IS A SUPPLY CHAIN INTEGRATOR THAT
ASSEMBLES & MANAGESTHE RESOURCE
CAPABILITIES &TECHNOLOGY OF IT’S
ORGANISATION WITHTHOSE OF
COMPLIMENTARY SERVICE PROVIDERSTO
DELIVER A COMPREHENSIVE SUPPLY CHAIN
SOLUTION.

4 PL
 ADVANTAGES OF 4PL
1. REVENUE GROWTH
2. INVENTORY CONTROL
3. LARGE RETURNS ON CAPITAL
 DISADVANTAGES OF 4PL
1. INEXPERIENCE
2. NON ASSET BASE
3. LACK OF FAITH
4. FEW PLAYERS

MARINE INSURANCE
 Marine Insurance play a very important role in
the filed of overseas commerce and internal
trade of a country.
 It is closely linked with Banking and Shipping.
 Banks generally finance the goods which are
transported by ships or by other means of
transport in the case of internal trade and Marine
Insurance protects such goods against loss or
damage. Without such protection the entire
trade structure is bound to suffer.

MARINE INSURANCE
 Marine Insurance can be divided broadly into
two groups
• Cargo Insurance
• Hull Insurance

MARINE INSURANCE
 Types of Marine Cargo Policy-
• For InlandTransit
(a) Specific Policy
(b) Open Policy
(c) Special Declaration Policy
(d) Multi-Transit Policy
• For Import/Export
(a) Specific Policy
(b) Open Cover
(c) Custom Duty Cover

IMPORTANCE OF EXPORT DOCUMENTS
 NO. OF DOCUMENTS (HEAVY DOCUMENTATION).
 INVOLVEMENT OF DIFF. GOVT.
AGENCIES/INSTITUTIONS.
 COMPLEX FORMALITIES.
 FOREIGN EXCHANGE INVOLVEMENT.
 PAYMENT RISK.
 RULES & REGULATIONS OF IMPORTING COUNTRY.
 DELIVERY COMMITMENT.
 EXPORT INCENTIVE.
 MULTIPLETRANSFER OFTITLE.
 TRANSACTION COST.

ELECTRONIC DATA INTERCHANGE (EDI)
EDI IS THE COMPUTER TO COMPUTER EXCHANGE OF
BUSINESS DATA IN A PUBLICLY PUBLISHED &
GLOBALLY STANDARDISED FORMAT.
EDI IS THE TRANSFER OF STRUCTURED BUSINESS
DATA, BY AGREED MESSAGE STANDARDS, FROM ONE
COMPUTER APPLICATION TO ANOTHER BY
ELECTRONIC MEANS AND WITH A MINIMUM OF
HUMAN INTERVENTION.

1. PREVENTING CLERICAL ERROR.
2. TIME SAVING
3. REDUCTION IN TRANSACTION COST.
4. QUICK ACCESS TO INFORMATION BY USERS.
5. STRATEGIC INTEGRATION OF DATA.
6. MINIMISATION OF PAPER USE.
ADVANTAGES OF (EDI)

EXPORT DOCUMENTS
COMMERCIAL DOCUMENTS REGULATORY DOCUMENTS
1. Enquiry 1. Invoice (pre-shipment)
2. Purchase Order 2. Packing List (pre-shipment)
3. Proforma Invoice 3. Excise Challan
4. Commercial Invoice 4. ARE 1
5. Packing List 5.Declaration.
6. Shipping Instructions 6. Annexure “A”
7. Intimation for inspection 7. Annexure “C”
8. Certificate of inspection / Quality Control. 8. Shipping Bill.
9. Freight Payment Certificate
9. Insurance Declaration
10. Certificate of Insurance
11. ShippingOrder
12. Mate Receipt

EXPORT DOCUMENTS
COMMERCIAL DOCUMENTS REGULATORY DOCUMENTS
13. Bill of Lading / CombinedTransport
Documents.
14. Application for Certificate of Origin.
15. Certificate of Origin / GSP
16. Bill of Exchange / Sight Draft
17. ShipmentAdvice
18. Letter of Bank for collection /
negotiation of documents.

Verified Gross Mass.
 Misdeclaration of cargo weight is a major hazard which
often results in cargo claims, structural damages to
vessels and also poses a significant risk to the lives of
staff.
 The International Maritime Organization (IMO) has
amended the SOLAS (Safety of Life at Sea) convention
under regulation 2 of chapter VI which mandates the
declaration of the Verified Gross Mass (VGM) of a packed
container before loading on board vessels within a
prescribed cut-off date / time to the shipping line and / or
port terminal authorities.

Verified Gross Mass.
 Effective 1st July 2016, the regulation stipulates the use
of two approved methods to declare the VGM for each
container by the shipper or his representative.
 SOLAS regulation for weighing containers allows two
ways for weighing packed containers in order to obtain
the Verified Gross Mass (VGM) for each container by the
shipper or his representative.
 As per the regulation, either of the two approved
methods must be used to declare the verified gross
mass: Method 1 & Method 2.

POST SHIPMENT DOCUMENTS REQUIRED
FOR NEGOTIATION
a) Covering letter to Bank.
b) Original L/C or Purchase Order
c) Bills of Exchange
d) Invoice
e) Consular Invoice
f) Packing List
g) Certificate of Origin or G.S.P.
h) B/L. (3) Originals.
i) Weighment Certificate
j) Test Certificate
k) Ins. Certificate in case of CIF.
l) Fumigation Certificate in case of “Australia” & “USA”.
m) Intermodal Certificate.
n) Packing declaration in case of “Australia”
o) Advance Cargo Declaration (CRF)
p) Third party inspection certificate (CRF)
q) Shipment Advice.
r) SDF Form (Duplicate copy)
s) Any other document as per requirement of L/C.

POST SHIPMENT DOCUMENTS REQUIRED
FOR NEGOTIATION
 Certificate from Shipper reg. Sending of N/N documents.
 Certificate from Shipper reg. Partial Qty as per P/I is of the same lot.
 Certificate from Shipper that the goods are strictly as per Proforma Invoice and
are of Indian origin.
 NVOCC B/L not acceptable.
 Age certificate from shipping co.
 Certificate from shipping co. reg. Non calling at “Israeli port”
 Freight certificate as per requirement of L/C.

Check list for Pre-Shipment
Documentation.
1. To check the quantity of Invoice with ARE-1 and Packing List
2. To check whether the P.O. & / or L/C no. is correctly mentioned on Pre-
shipment documents.
3. To check the Rate / Size /Value and description as per P.O. / L/C with the
Pre-shipment Invoice.
4. To mention Incentive Scheme on Pre-shipment invoice.
5. To mention MEIS/SEIS.
6. To mention commission as per as per Agency Agreement on Pre-
Shipment Invoice..
7. To mention EPCG License No. If the Export Obligation is to be
completed in EPCG.

Check list for Post-Shipment
Documentation.
1. To prepare the documents with clear copy of Purchase Order & / or L/C.
2. To check the Quantity / Rate /Value & Description as per the Pre-
shipment central excise attested Invoice.
3. To check No. of cases, Gross Weight / Nett Weights as per the Packing
List.
4. B/L is prepared, as per L/C & or P.O. Description of Goods should be
strictly as per L/C & / or P.O. check last Date of Shipment and Expiry date
as per the L/C accordingly B/L date is to be taken. Claused B/L is to be
avoided.
5. To check Shipper, Consignee, Notify party, Second Notify Party, Port of
Destination (via) final destination, Shipping Agents Name and Address
and “SHIPPED ON BOARD” stamp with date stamp.
6. Original set of documents to be prepared strictly as per the L/C & / or P.O.
7. All Certificates and documents are attached strictly as per theTerms and
Conditions of the L/C.

IMPORT PROCEDURE(SECOND CHECK)
 NOTING
 ASSESSMENT
 DUTY PAYMENT
 EXAMINATION
 OUT OF CHARGE.

 NOTING
 ASSESSMENT
 EXAMINATION
 REASSESSMENT
 DUTY PAYMENT
 OUT OF CHARGE.
IMPORT PROCEDURE(FIRST CHECK)

LOGISTICS MIS
 Forecast Report.
 PPC Report.
 Material availability Report.
 Dispatch Advice.
 Daily Dispatch Report.
 Shipment Status Report.
 Sales Report.

Registration formalities for
Exports
 Obtaining Permanent Account Number (PAN)
 Opening bank Account
 Registration for Organisation
 Obtaining Importer-ExporterCode Number (IEC
No.)
 Registration withVAT and SalesTax Authority
 Registration with Export Promotion Council

Registration formalities for
Exports.
 Registration with Export Credit and
Guarantee Corporation of India (ECGC)
 Registration with other Authorities
 Federation of Indian Export Organisation
(FIEO)
 IndianTrade Promotion Organisation (ITPO)
 Chambers Of Commerce (COC)
 Productivity Councils, etc.

srbinju67k@yahoo.com
THANK YOU

Shipping & logistics 5 sunday.

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