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Logistics & Supply chain industry in India:

Current status

SUMMER PROJECT
ON
Logistics & Supply chain industry in India:
Current status

A REPORT SUBMITTED TO IMED, BHARTI VIDYAPEETH


UNIVERSITY, PUNE

SUBMITTED TO SUBMITTED BY
Director, Honorable SARANSH SINGH
Dr. Nitin Nayak KR. KUMUD RANJAN
IMED,BVU,PUNE

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Logistics & Supply chain industry in India:
Current status

INSTITUTE OF MANAGEMENT AND


ENTREPRENEURSHIP DEVELOPMENT,
BHARATI VIDYAPEETH UNIVERSITY,
ERANDAWANE, PAUND ROAD, PUNE-411038(INDIA)

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Logistics & Supply chain industry in India:
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PREFACE

The success of any business entirely depends on the survey done about the
particular product. This survey should be effective and it is very important to do

it cautiously. The topic given to me was" LOGISTICS & SUPPLY CHAIN

INDUSTRY IN INDIA” I have tried to put my best efforts to complete this task
on the basis of skill that I have achieved during my studies in the institute.

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Logistics & Supply chain industry in India:
Current status

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Logistics & Supply chain industry in India:
Current status

CERTIFICATE

This is to certify that the project work done on “ ASSESSING CUSTOMER


POTENTIAL AND PREFERENCES FOR NVOCC IN THE LOGISTICS INDUSTRY”
submitted to Ishan Institute of Management & Technology, Greater Noida by
Nisha Singh in partial fulfillment of the requirement for the award of degree of PG
Diploma in Business Management, is a bonafide work is the original one has not
been submitted anywhere else for any other degree/diploma

Name of the guide. -MR. ALOK TRIPATHI

Seal/Stamp of the guide Date:

Addresses-
TVS

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Logistics & Supply chain industry in India:
Current status

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Logistics & Supply chain industry in India:
Current status

ACKNOWLEDGEMENT

It gives me immense pleasure to express my deepest gratitude towards


Mr.Sarwan Karwedkar and other faculty members for providing me with the
opportunity to undertake this summer training, which helped me to learn so
much.

I would also like to express my sincere thanks to prof. Kakde who professed me
to choose the right title for my project study and whose constant guidance and
support helped me to use my efforts & potential efficiently, enabled me to rectify
all possible errors to present this report impressively.His constant support has
been the key to my achievements on the projects.

I would also forward my gratitude to Mr.John Mathew who had arranged for my
summer training. My acknowledgement and gratitude to my Guide Mr.Alok
Tripathi whose timwly guidance made me complete this project and further
enhance my skills and knowledge to grow as an accomplished virtuoso from a
bumbling amateur in the management field.
I would also thanks to Mr. and all other staff in TVS logistics who were very amicable and co-
operative.
Lastly, I would also take a moment to express my heartfelt thanks to my parent
and professors who gave their constant assistance propelling me to prove my
best.

SARANSH SINGH
MUDGAL
Kr.KUMUD RAJAN

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Logistics & Supply chain industry in India:
Current status

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Logistics & Supply chain industry in India:
Current status

DECLERATION

The summer Project on “ASSESSING CUSTOMER POTENTIAL AND


PREFERENCES FOR NVOCC IN THE LOGISTICS INDUSTRY” under the
guidance of Ms. Sona Handa is the original work done by me. This is the property
of the Institute and use of this report without prior permission of the Institute will
be considered illegal and actionable.

Date: Signature

(Student Name)

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Logistics & Supply chain industry in India:
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EXECUTIVE SUMMARY

Definition
LOGISTICS IS THE ART AND SCIENCE OF MANAGEMENT, ENGINEERING AND
TECHNICAL ACTIVITIES CONCERNED WITH REQUIREMENTS, DESIGN AND
SUPPLYING, MAINTAINING RESOURCES TO SUPPORT OBJECTIVES, PLANS AND
OPERATION.
Fierce competition in today’s market has forced business enterprises to invest in
and focus on supply chains. The growth in telecommunication and transportation
technologies has led to further growth of the supply chain. The supply chain, also
known as the logistics network, consists of suppliers, manufacturing centers,
warehouses, distribution centers and retail outlets, as well as raw materials,
work-in-process inventory and finished products that flow between the facilities.
The logistics management takes into consideration every facility that has an
impact on cost. It plays an important role in making the product conform to
customer requirements. Also it involves efficient integration of suppliers,
manufacturers, warehouses and stores and encompasses the firms’ activities at
many levels, from the strategic level through the tactical to the operational level.
Logistics is a challenging and important activity because it serves as an
integrating or boundary spanning function. It links suppliers with customers and it
integrates functional entities across a company. With the ever-growing
competition in today’s market place it becomes necessary for a firm to use its
resources to focus on strategic opportunities. This includes several internal
factors like management style, culture, human resources, facilities and several
external factors like technology, globalization and competition. This is where the
concept of logistics plays a major role, i.e. it helps to leverage certain advantages
the firm has in the marketplace.
B. Role of Logistics
It is important to recognize the importance of a dynamic balance between the
minute details and the main elements involved in a product. The Role of Logistics

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Logistics & Supply chain industry in India:
Current status
is to maintain that balance. Once the firm realizes the importance of logistics it is
necessary that the firm make full and efficient use of logistics. The first step is to
create a buyer value for the customer and a strategic value for the firm.

The customer is the most important asset for a company. He drives the entire
supply chain including manufacturing, marketing and logistics. Hence it is
important for a firm to have a clear understanding of what the customer
demands and to keep up to the customers expectations. Once a company has a
clear understanding of its customer’s requirements it must device a strategy on
how to use logistics to achieve it. This means that the company has to have a
clear understanding or assessment of company’s strategic direction.
Various steps involved in a logistics strategy development and planning process.
Visioning: this includes the systematic development of an organizational
consensus regarding the key inputs to the logistics planning process as well as
identification of the potential alternative logistics approaches. This is an
important step for the following reasons:
• Helps to define a strategic direction to the company and also to get a clear
understanding the role of logistics in it.
• Get a clear idea of the requirements of the various segments of customers.
• Have a look at the various factors that would affect the strategy of the
company.
• Define alternative strategies and also the scope of the planning effort.
Strategic analysis: this involves taking a look at the various components
involved in the process and selecting the best logistics process among the
alternatives. These components, which are to be reviewed, are revealed during
he first step. This may include revamping the entire process to assessing how a
single component can be used more effectively.
Planning: this involves the assembling of a plan that outlines the mission and
goals for the logistics function and the programs and activities to achieve these
goals. Logistics planning is an iterative process. The plans have to be redefined
every year to improve the quality of performance.

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Managing change: this involves effective management to implement
enhanced ways of conducting business. The management should keeping
changing the plans in accordance with the change in the market and also coach
the organization to effectively embrace this change.

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C. Current Logistics Related Issues


There are several factors that affect logistics. These issues need to be
anticipated, prepared for and taken advantage of for a company to be successful
in today’s market. They are
External:
• Globalisation
• Technology
• Workforce 2000
• challenging nature of the work force
• Environmental concerns
Internal:
• Customer service and quality
• Third party networks
• Supply chain management
• Changes in management and organization style
Listed below are some of the steps that could be followed to mitigate the above
mentioned issues:
Performance:
• Better service for customers
• Improved productivity
• Assess just in time and quick response needs
System structure:
• Better relationship with vendors, customers and third parties to more
effectively manage the supply chain
• Better relationship within and across the organization
Technology integration:
• Better information systems that connect functions and organizations

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• Combine information and material handling systems for increased efficiency
and effectiveness
Indian logistics market report provides vital insights into all facets of the Indian
logistics market which is useful for manufacturers, importers, exporters and the
people who are in the business of transporting cargo who require critical inputs

about the logistics scenario in India. It covers most of the service providers
associated with road, sea, air and railways along with inputs pertaining to the
infrastructure. This report is a must have for anybody trying to understand the
Indian logistics market. It will serve as an invaluable reference tool for the
industry, government and academe. The report explains industry structure for
different logistics - road, sea, air and rail. It also deals with intermediaries and
support service providers separately. The report covers the market dynamics,
cost structure, import duties and export-import processes, issues and challenges,
government policies/initiatives, regulatory environment and policy related
framework. Regulations include mainly guidelines for movement of hazardous
goods and safety issues in transportation in all the segments. The report provides
profiles of major players and information on key corporate data, business profile,
financial performance, recent developments and their respective strategies.
Lastly, the report gives outlook for Indian Railways; road transport providers;
aviation; shipping and ports.

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Logistics & Supply chain industry in India:
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Logistics & Supply chain industry in India:
Current status

TABLE OF CONTENTS

 TITLE PAGE
 CERTIFICATE
 ACKNOWLEDGEMENT
 DECRERATION
 EXECUTIVE SUMMARY

CHAPTER – ONE

Company profile

1. Introduction of Global logistic Solution (GLS)


2. Area serves by GLS
3. Clauses of Bill of lading

CHAPTER – TWO

Comparison With Other Business

1. Sea Sky
2. GGL
3. All Cargo Global Logistics

CHAPTER – THREE
TRADE PROFILE

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1. About Indian Industry, Economy & Trade


2. About logistics
a) History of logistics
b) Evaluation of logistics
c) Growth in logistics
d) Logistics in India
e) Logistics not a Chain
3. Role of consolidator/NVOCC in international cargo business
4. Container freighting practices
5. Supply Chain Management
6. About LCL load
7. Export
8. Evolution of container cargo
9. Containerization
10. Trends in containerization
11. Processing of an Export order Preshipment
12. Form of Export Sales Contract

CHAPTER – FOUR
MARKETING STRATEGY OF THE COMPANY

1. Introduction
2. Key elements of successful market strategy
3. SWOT Analysis of the company
4. Developing market Strategy for the Company
5. Marketing Plan of the Company
a. Identifying Strength and Weakness
b. Work Plan to Implement
c. Clean up the Data Base

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Logistics & Supply chain industry in India:
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d. Focus on the market

CHAPTER-FIVE
MANAGEMENT HIRERACHY

CHAPTER – SIX
GOVERNMENT POLICIES RELATED TO THE BUSINESS
Export Import (EXIM) Policies

CHAPTER – SEVEN
TAX ASPECTS
1. Sales Tax in relation to Export and Import
2. Foreign Exchange Management Bill
3. Avoidance of Double Taxation
4. Money Laundering Bill

CHAPTER – EIGHT
OBJECTIVE

CHAPTER- NINE
RESEARCH METHODOLOGY

CHAPTER-TEN
LITARATE REVIEW

CHAPTER-ELEVAN
SYNOPSIS

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Logistics & Supply chain industry in India:
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CHAPTER-TWELVE
DATA ANALYSIS

CHAPTER-THIRTEEN
GRAPHICAL REPRESENTATION

CHAPTER-FOURTEEN
SWOT ANALYSIS

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Logistics & Supply chain industry in India:
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CHAPTER-FIFTEEN
LIMITATION

CHAPTER-SIXTEEN
MAJOR PROBLEM

CHAPTER-SEVENTEEN
FUTURE ASPECTS

CHAPTER-EIGHTEEN
CONCLUSION

CHAPTER-NINETEEN
BIBILOGRAPHY

CHAPTER-TWENTY
WORDS OF THANKS

CHAPTER-TWENTY-ONE
ANNEXURE

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Logistics & Supply chain industry in India:
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CHAPTER-1

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Logistics & Supply chain industry in India:
Current status

Chapter 1
Company profile

Global Logistics Solutions (I) Pvt. Ltd.


Global Logistics: Bridging latitudes

The role of a Neutral NVOCC/MTO is to facilitate international trade for the Exim
fraternity (through freight forwarders and CHAs) by playing a key role in the
supply chain and facilitate domestic and overseas logistics both by air and SEA
through services that are efficient, economical and easy to execute. In order to
achieve this, Global Logistics Solutions India (GLS) was established in October
2006, by four dynamic young professionals with a burning entrepreneurial desire.
With a cumulative experience of more than 50 years behind them, a team of four
professionals from a common background and a myriad of exposures, decided to
come together to fulfil their entrepreneurial desire and at the same time create a
company that values it’s people, who significantly contribute to the growth of a
company (something the management themselves have experienced). Having
travelled around the world and being exposed to businesses overseas makes it
that much easier for the management to understand the domestic and
international customer’s needs and provide just the perfect solutions that would
benefit their businesses.
Within the last six months GLS has become a name to reckon with in India and
overseas for consolidation and freight forwarding activities. In its first phase of
launch the company has set up four regional offices in Mumbai, Chennai, Kolkata
and Delhi. In the second phase spanning a period of 18 months, the company will
be opening 11 more offices in the secondary cargo centres, ports and ICDs taking
the cumulative number of owned operations within India to 15. In addition to this
GLS would be establishing its presence through a network of agents and
franchisees in the tertiary cargo centres and take it’s presence to every corner of

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the country, in the process become a true pan India logistics services provider
with a global reach.
GLS has had a very successful run overseas in terms of networking with some of
the largest independent regional players. These independent entities network

internally and along with GLS cross leverage the strengths to maximize synergies
that translates to higher efficiencies in executing business and achieve customer
satisfaction by providing cost effective world class services.
This advantage has seen GLS grow from an entry level player six months ago to a
major force in the consolidation and forwarding business. It offers Neutral
NVOCC/MTO services to the local and multinational freight forwarding companies
and Customs House Agents (CHA) across India and has been able to garner
support from some of the biggest names in the business. The market has
accepted GLS as a quality player and a company who can be trusted with their
valuable produce and ship it globally giving it the GLS advantage. This trust
helped GLS achieve it’s first milestone of 100 TEUS (twenty feet equivalent unit)
of LCL consolidation boxes in Mumbai within three months of it commencement
of operations. It has also establish 20 weekly direct services from Nhava Sheva
and simultaneously take a lead in markets like Kolkata within three months of
launch.. GLS has also established direct LCL import services from China,
Hongkong and Singapore to Chennai, Nhava Sheva, Kolkata and Delhi and is able
to carry LCL shipments to India from all the major sourcing points across Asia. It
is in the process of starting import services from Europe and USA shortly. GLS
has set very high standards to measure its performance and the management is
focused on making the company have a pan India presence within two years and
then expand overseas to create a global footprint. While the market watches this
newest player on the block grow from strength to strength, the management is
determined to make the company a leader in providing global logistics solutions.

Bridging latitudes... With growing need for international logistics services and a
constant evolution in the field of global transportation, GLS is committed to

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continuously innovate itself as a comprehensive solutions provider for the
international business community.
Facilitating International Trade through..
• Connections that ensure delivery commitments are lived up to.
• Services that are, efficient, economical and easy to execute.
• Network that covers around 2500 destinations.
• Solutions that address special needs of your cargo
• Technology that informs and empowers, and

• People who make all the difference.


The Vision
To emerge as a market leader in providing global logistics services, to be
recognized for its values and ethical business practices, to deliver professional
and personalized services to achieve highest levels of customer satisfaction.
Mission
To mobilize all its resources to offer clients high quality integrated logistics
solutions that adds value to the customer’s supply chain needs by bringing
benefits of reduced costs and higher efficiencies through the implementation of
systems and processes, innovative solutions and exceptional services from a
highly motivated team of professionals.

Focus on lcl consolidation


GLS is a professional international NVOCC. We specialize in
groupage/consolidation services via road, sea, air, and rail. We cater to exports
from India to anywhere in the world and vice versa. GLS offers "direct"
consolidation services to over 50 destinations around the world covering all major
ports. Being one of the only neutral nvoccs/mto offering a uniform network within
India, this makes GLS a ideal partner for our customers for executing their lcl
shipments to and from the sub-continent.

THE 3E APPROACH

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We benchmark our services on ease, efficiency and economy. Our simplified work
procedures ensure ease in dealing. Our web based real time tracing and tracking
services make it easy to monitor the progress of your consignment. Our customer
focused and committed global network ensures efficiency while executing
deliveries. We leverage our relationships with our business partners through
global contracts to offer you competitive rates for every destination.

Ethical Relationship
GLS maintains absolute Neutrality and follows ethical business practices to
ensure that every intermediary's interest is protected and business is executed in
strict confidentiality. Quite naturally, most Customs Brokers (CHA's), MNC's and
freight

forwarders consider GLS as an ideal business partner while trusting it with their
valuable business, be it LCL or FCL.
GLS believes in Fair Business Practices to create a win-win situation with business
associates, global partners and internal customers as well. The Management is
focused on creating that conducive environment which promotes ethical business
practices across all its offices and in the process have an ideal environment for
sound and fair business practices.

The GLS Advantage.


GLS offers clients single window services for imports and exports. Our network of
own offices, global network of agents and strategic partners ensure your
shipments is given personal attention from departure to delivery. GLS’s
investments into state of the art electronic tracking give you near to real time
information on the progress shipments make till they are delivered safe and
sound. GLS’s 3E service makes it the ideal logistics partner for all your shipping
needs

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AREA SERVE BY THE GLOBAL LOGISTIC SOLUTION (INDIA )
PVT LTD

• FCL
• LCL
• MULTIPLICITY CONSOLIDATION
• AIR FREIGHT
• PROJECT CARGO

3E FCL freight forwarding is just the beginning..


GLS offers competitive freight rates on premium carriers to global destinations.
We add value to our freight forwarding service by offering value Added services
such as:
• Offering port to port services to destinations worldwide
• Accepting "Door to Door" DDU/DDP moves for exports
• Handling containerized over dimensional cargo
• Handling cross trade business from origins around the world

GLS's extensive international network, contracts on premium carriers and


competitive pricing achieved through economics of scale enables the company to
offer FCL freight forwarding services that are truly unique and add value to the
customers needs.

3E LCL Consolidation Services..


GLS offers regular LCL services to nearly 2500 destinations worldwide through a
host of direct services to major ports and at the same time using numerous
International Hubs for distribution.
Aggregation of LCL cargoes and consolidation activities being the core business
of the company it is very focused about its execution. This is done through with a
highly motivated team of professionals with a proven track record, a net work of

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owned offices and franchisees in India that covers the length and breadth of the
country, a established network of agents who are all majors in their respective
regions giving our customers best of both worlds irrespective of which sector the
business is headed.
Our valuable customers comprise of some of the biggest names in Freight
Forwarding in the domestic market, Multi-National Companies having global
presence and conglomerates that have the most stringent business needs in
the forwarding business goes to underline our commitment to being the ideal
business associate for your global logistics needs.

MULTIPLICITY CONSOLIDATION
GLS's Multi-City Consolidation for export and import cargo is of great benefit to
small and medium trade centers. It facilitates transshipment of LCL cargo to and
from India for delivering and sourcing globally.
EXPORT
Accepting LCL cargoes from all major centers within India and Nepal, sending
them in dedicated containers/CBTs to the gateway for final consolidation and
distribution to ;worldwide destinations.
These services empower customers to execute shipments from literally wherever
they are thus empowering them with opportunities available from all the major

ports while custom clearing their LCL shipments locally.

IMPORT
Offering LCL services for imports to all the major centers from the Gateway Ports
in India. Currently these services cover LCL consolidation to New Delhi and
Ahmedabad from Mumbai (Nhava Sheva), Bangalore and Hyderabad from
Chennai. New services will be launched to cater to other major centers like
Kanpur, Ludhiana, Jaipur and Moradabad in the North while the South would see

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services to Tirupur, Selum and Coimbatore being introduced in phases.

These services make it possible for importers across the length and breadth of
the country to customs clear their goods locally instead of the conventional
method of doing it all at the Gateway ports.

AIR FREIGHT
With its global network of partners who are seasoned players in the Air Freight
business and IATA affiliates.
GLS is capable of offering it’s customers a very comprehensive Air freight service
to and from India. In order to retain and do justice to it’s neutral image as an
NVOCC, GLS is offering services to the local freight forwarders who are either not
affiliated with IATA or lack a global presence through owned offices or network
partners.

The ultimate objective is to focus on imports and offer the advantages of our
network to the freight forwarding fraternity and provide a neutral service that
enhances their productivity and control on business from the end customer.
Exports are restricted to handling routed business that is not secured from sales
efforts locally or poaching of controlled traffic of our customers.

PROJECT CARGO
The core team of GLS is an experienced lot in handling projects, be it turnkey
logistics contract executions and management to offering logistics solutions for
bulk business, over dimensional cargoes and heavy lifts. Its subsidiaries and
associates from whom some of the functions are outsourced have the extensive
experience and

have been involved in participating in some of the most prestigious logistics


projects in the country.

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Most of the network partners of GLS internationally are service providers to the
infrastructure based industry, exposing them in handling small and large scale
projects backed by a track record of successful completion of jobs on a turn key
basis giving GLS the confidence to accept challenges globally.
GLS offers all the services related to handling projects under one roof and
delivers a seamless logistics solution to the customer irrespective of the
magnitude of the shipment making it the most aggressive entrant and a sound
alternative to existing players in the field.
BILL OF LADING CLAUSES
Carrier's Tarrif
Warranty
Negotiability and title to the goods
Certain rights and immunities for the carrier and other persons
Carrier's Responsibility
Merchant's Responsibility
Containers
Temperature Controlled Cargo
Inspection of Goods
Matters affecting performance
Methods and Route of Transportation
Deck Cargo (and live stock)
Notification and Delivery Clause
Both to blame collision
General Average
General Average
Charges
Lien
Variation of the Contract
Partial Validity

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1.DEFINITIONS

(a) "Carrier" means the Company stated on the front of this Bill of Lading as
being the Carrier and on whose behalf this Bill of Lading has been signed.

(b) "Merchant" includes the shipper, the consignee, the receiver of the Goods,
the holder of this Bill of Lading, any person owning or entitled to the possession
of the Goods or this Bill of Lading, any person having a present or future interest
in the Goods or any person acting on behalf of any of the above mentioned
persons.

(c) "Goods" includes the cargo supplied by the Merchant and includes any
container not supplied by or on behalf of the carrier but excludes live animals &
goods carried on deck.

(d) "Container" includes any container, trailer, transportable tank, lift van, flat,
pallet or any similar article of transport used to consolidate goods.

(e) "Carriage" means the whole of the operations and services undertaken or
performed by or on behalf of the Carrier in respect of the Goods.

(f) "Combined Transport" arises where the Carriage called for by this Bill of
Lading is not a Port to Port Shipment.

(g) "Port to Port Shipment" arises where the Place of Receipt and the Place of
Delivery are not indicated on the front of this Bill of Lading or if both the Place of
Receipt and the Place of Delivery indicated are ports and the Bill of Lading does
not in the nomination of the Place of Receipt or the Place of Delivery on the front
hereof specify any place or spot within the area of the port so nominated.

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(h) "Hague Rules" means the provisions of the International Convention for
Unification of certain Rules relating to Bills of Lading signed at Brussels on 25th
August 1924.

(i) "Hague-Visby Rules" means the Hague Rules as amended by the Protocol
signed at Brussels on 23rd February 1968 and scheduled to the COGSA,
Singapore.

(j) “COGSA” means the Carriage of Goods by Sea Act of Singapore.

(k) “COGSA (USA)” means the Carriage of Goods by Sea Act of the United States
of
America.

(l) “COGWA” means the Carriage of Goods by Water Act 1936 of Canada.

(m) "Charges" includes freight and all expenses and money obligations incurred
and payable by the Merchant.

(n) "Shipping Unit" includes freight unit and the term "unit" as used in the Hague
Rules and Hague-Visby Rules.

(o) "Person" includes an individual, a partnership, a body corporate or other


entity.

(p) "Stuffed" includes filled, consolidated, packed, loaded or secured.

(q) “Authority” means a duly constituted legal body or person acting within its
legal powers and exercising jurisdiction within any nation, state, municipality or
port.

(r) "Owner" equal to "Merchant".

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2. CARRIER'S TARIFF
The provisions of the Carrier's applicable Tariff, if any, are incorporated herein.
Copies of such provisions are obtainable from the Carrier or his agents upon
request or where applicable from a government body with whom the Tariff has
been filed. In the case of inconsistency between the Bill of Lading and the Tariff,
this Bill of Lading shall prevail.

3. WARRANTY
a. The Merchant warrants that in agreeing to the terms hereof he is or is the
agent of and has the authority of the person owning or entitled to the possession
of the Goods or any person who has a present or future interest in the Goods and
is accepting these Terms & Conditions for and on behalf of all such persons.
Nothing in this Bill of Lading may be varied or cancelled except by a Director of
the carrier company endorsed on the Bill of Lading in writing and stamped by the
company official stamp.

b. The parties, in accepting this Bill of Lading, hereby unreservedly agree to the
sole jurisdiction of the Singapore Courts and the applicability of Singapore Law to
any dispute arising herefrom.

4. NEGOTIABILITY AND TITLE TO THE GOODS


(i) This Bill of Lading shall be non-negotiable unless made out "to order" in which
event it shall be negotiable and shall constitute title to the Goods and the holder
shall be entitled to receive or to transfer the Goods herein described.

(ii) This Bill of Lading shall be prima facie evidence of the taking in charge by the
Carrier of the Goods as herein described. However proof to the contrary shall not

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be admissible when this Bill of Lading has been negotiated or transferred for
valuable consideration to a third party acting in good faith.

(iii) The Merchant accepts full liability for all Statements and particulars as to the
contents, quality, quantity, weight, numbers, marks and/or value of the packages
inserted herein and undertakes to indemnify and hold the carriers and all persons
interested in the ship or vessel harmless from all demands, claims, liabilities,
actions and expenses arising out of such Statements and to pay all costs,
expenses, losses and damages including costs of solicitors on an indemnity basis
for any breach of warranty/description or resulting therefrom.

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5. CERTAIN RIGHTS AND IMMUNITIES FOR THE CARRIER AND OTHER


PERSONS

(i) The Carrier shall be entitled to sub-contract on any terms the whole or any
part of the Carriage and the Merchant agrees to be bound thereby on those
terms.
(ii) The Merchant undertakes that no claim or allegation shall be made against
any person or vessel whatsoever, other than the Carrier, including, but not
limited to the Carrier's servants or agents, any independent contractor and his
servants or agents, and all others by whom the whole or any part of the Carriage,
whether directly or indirectly, is procured, performed or undertaken, which
imposes or attempts to impose upon any such person or vessel any liability
whatsoever in connection with the Goods of the Carriage; and if any claim or
allegation should nevertheless be made, to defend, indemnify and hold harmless
the Carrier against all consequences thereof. Without prejudice to the foregoing
every such person and vessel shall have the benefit of all provisions herein
benefiting the Carrier as if such provisions were entered into expressly for his
benefit and in entering into this contract the Carrier, to the extent of these
provisions, does so not only on his own behalf but also as agent or trustee for
such persons and vessels and such persons and vessels and such persons and
vessels shall to this extent be or be deemed to be parties to this contract.
(iii) The Merchant shall defend, indemnify and hold harmless the Carrier against
any claim or liability and any and all expenses, costs or disbursements arising
therefrom on a full indemnity basis arising from the Carriage of the Goods insofar
as such claim or liability exceeds the Carrier's liability under this Bill of Lading,
which shall apply irrespective of whether the claim lies in contract or in Tort. The
Merchant specifically agrees that any judgment or award made in any jurisdiction
whatsoever in so far as it exceeds the limits set out in this Bill or excluded by this
Bill of Lading shall not be registrable or enforceable against the carrier.
(iv) The Merchant undertakes, in addition and without prejudice to any of these
conditions, that he shall in any event indemnify the Carriers against all liabilities

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whatsoever including but not limited to penalties imposed by the relevant
authorities suffered directly or indirectly from or in connection with the
Merchant's instructions or their implementation or the goods and in particular the
Merchant shall indemnify the carrier in respect of any liability whatsoever it may
be under to

any haulier, carrier, warehousemen or other person whatsoever at any time


involved with the goods arising out of any claim made directly or indirectly
against any such party by the Merchant or by any sender, consignee or owner of
the goods or by any person interested in the goods or any other person
whatsoever.

(v) The Carrier reserves the right at its sole discretion at any time before
receiving or collecting or otherwise dealing with any goods or before transporting
by conveyance any goods to refuse to receive or collect or convey or deal with
the same or where received to return, offload, part-carry or transship the goods
without assigning any reason whatsoever and without any liability whatsoever,
notwithstanding whether the goods are booked or not or otherwise.
(vi) In all cases of losses, damages, delay, non-delivery from whatsoever cause
arising in a non-carriage by sea situation and which are not excluded by any
other provisions in this Bill of Lading the Carriers liability shall be limited to and in
no event whatsoever exceed S$1.00 per kilogram, unless otherwise provided by
statute.

6. CARRIER'S RESPONSIBILITY
(i) CLAUSE PARAMOUNT
(a) Subject to clause 13 below this Bill of Lading insofar as it relates to sea
carriage by any vessel whether named herein or not shall have effect subject to
the Hague Rules or any legislation making such Rules or the Hague-Visby Rules
compulsorily applicable (such as COGSA, COGSA(USA) or COGWA) to the Bill of

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Lading and the provisions of the Hague Rules or applicable legislation shall be
deemed incorporated herein.
The Hague Rules or Hague-Visby Rules or COGSA or COGSA(USA) or COGWA if
this Bill of Lading is subject to U.S. or Canadian Law respectively shall apply to
the carriage of goods by inland waterways and reference to carriage by sea and
such Rules shall be deemed to include reference to inland waterways.
If and to the extent that the provisions of the Harter Act of the USA 1893 would
otherwise be compulsorily applicable to regulate the Carrier’s responsibility for
the goods during any period prior to loading on or after discharge from the vessel
the Carrier’s responsibility shall instead be determined by the provisions of 6(3)
below,

but if such provisions are found to be inapplicable or invalid such responsibility


shall be subject to COGSA.

(b) The Carrier shall be entitled to (and nothing in this Bill of Lading shall operate
to deprive or limit such entitlement) the full benefit and rights to all limitations of
and exclusion from liability and all rights conferred or authorised by any
applicable law, statute or regulation of any country and without prejudice to the
generality of the foregoing also any law, statute or regulation available to the
Owner of the vessel(s) on which the Goods are carried.
(ii) PORT TO PORT SHIPMENT
The responsibility of the Carrier is limited to that part of the Carriage from and
during loading onto the vessel up to and during discharge from the vessel and
the Carrier shall not be liable for any loss or damage whatsoever in respect of the
Goods or for any other matter arising during any other part of the Carriage even
though Charges for the whole Carriage have been charged by the Carrier. The
Merchant constitutes the Carrier as agent to enter into contracts on behalf of the
Merchant with others for transport, storage, handling or any other services in
respect of the Goods prior to loading and subsequent to discharge of the Goods
from the vessel without responsibility for any act or omission whatsoever on the

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part of the Carrier or others and the Carrier may as such agent enter into
contracts with others on any terms whatsoever including terms less favourable
than the terms in this Bill of Lading.
(iii) COMBINED TRANSPORT
Save as is otherwise provided in this Bill of Lading, the Carrier shall be liable for
loss of or damage to the Goods occurring from the time that the Goods are taken
into his charge until the time of delivery to the extent set out below.
(A) Where the stage of Carriage where the loss or damage occurred cannot be
proved:-
(i) The Carrier shall be entitled to rely upon all exclusions from liability under the
Rules or legislation that would have been applied under 6(1)(a) above had the
loss or damage occurred at sea or, if there was no carriage by sea, under the
Hague Rules or COGSA or COGSA (USA) or COGWA if this Bill of Lading is subject
to US, or Canadian law respectively.

(ii) Where under (i) above, the Carrier is not liable in respect of some of the
factors causing the loss or damage, he shall only be liable to the extent that
those factors for which he is liable have contributed to the loss or damage.
(iii) Subject to 6(C)(iii) below, where the Hague Rules or any legislation applying
such Rules or the Hague-Visby rules (such as COGSA or COGWA) is not
compulsorily applicable, the Carrier’s liability shall not exceed S$1.00 per kilo of
the gross weight of the Goods lost, damaged or in respect of which the claim
arises or the value of such Goods, whichever is the lesser.
(iv) The value of the Goods shall be determined according to the commodity
exchange price at the place and time of delivery to the Merchant or at the place
and time when they should have been so delivered or if there is no such price
according to the current market price by reference to the normal value of Goods
of the same kind and quality, at such place and time, always provided that the
onus of proving such current market price shall be on the claimant failing which
the carriers valuation shall be valid absolutely for all purposes.
(B) Where the stage of Carriage where the loss or damage occurred can be
proved:

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(i) the liability of the Carrier shall be determined by the provisions contained in
any international convention or national law of the country which provisions:
(a) cannot be departed from by private contract to the detriment of the
Merchant; and
(b) would have applied if the Merchant had made a separate and direct contract
with the Carrier in respect of the particular stage of Carriage where the loss or
damage occurred and had received as evidence thereof any particular document
which must be issued in order to make such international convention or national
law applicable;
(ii) with respect to the transportation in the United States of America or in
Canada to the Port of Loading or from the Port of Discharge, the responsibility of
the Carrier shall be limited to procure transportation by carriers (one or more)
and such transportation shall be subject to the inland carriers’ contracts of
carriage and tariffs and any law compulsorily applicable. The Carrier guarantees
the fulfillment of such inland carriers’ obligations under their contracts and
tariffs.
(iii) Where neither (i) or (ii) above apply, any liability of the Carrier shall be
determined by 6(iii)(A) above.
(C) GENERAL PROVISIONS
(i) Delay and/or Consequential Loss
Save as otherwise provided herein, the Carrier shall in no circumstances be liable
for direct, indirect or consequential loss or damage caused by delay or any other
cause whatsoever and howsoever caused.Without prejudice to the foregoing, if
the Carrier is found liable for delay, and where such delay is not excluded
elsewhere in these provisions, liability shall be limited to the freight applicable to
the relevant stage of the transport.

(ii) Insofar as the duties under this Bill of Lading relates to situations other than
sea carriage, including but not limited to, pre-shipment or post-shipment,
trucking, warehousing, storage, packing, labeling, stuffing/unstuffing, domestic or
local trucking, clearance, customs, documentation, delivery, collection etc it is
mutually hereby agreed that in any event whatsoever and whether the action is

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in contract or in tort, the carrier's liability shall be limited to S$1.00 per kilogram
only. Carrier’s liability as spelt out hereunder shall be without prejudice to the
carriers’ rights to be paid/reimbursed for their costs of the services provided and
which shall be paid in priority to any other claim.

(iii) Package or Shipping Unit Limitation


Where the Hague Rules or any legislation making such Rules compulsorily
applicable to this Bill of Lading apply, the Carrier shall not, unless a declared
value has been noted in accordance with (iii) below, be or become liable for any
loss or damage to or in connection with the Goods in an amount per package or
shipping unit in excess of the package or shipping unit limitation as laid down by
such Rules or legislation. If no limitation amount is applicable under such Rules or
legislation, the limitation shall be S$1.00 per kilogram or S$500.00 per package
or invoice value, whichever is lesser always provided, that in respect of goods of
a fragile or perishable nature or special goods, these are carried solely at the
Merchant's risk without any liability whatsoever of the Carriers.
(iv) Ad Valorem: Declared Value of Package or Shipping Unit
The Carrier's liability may be increased to a higher value by a declaration in
writing of the value of the Goods by the shipper upon delivery to the Carrier of
the Goods for shipment, such higher value being inserted on the front of this Bill
of Lading in the space provided and, if required by the Carrier, extra freight paid.
In such case, if the actual value of the Goods shall exceed such declared value,
the value shall nevertheless be deemed to be the declared value and the
Carrier's liability, if any, shall not exceed the declared value and any partial loss
or damage shall be adjusted pro rata on the basis of such declared value.

(v) Definition of Package or Shipping Unit


Where a Container is used to consolidate Goods and such Container is stuffed by
the Carrier, the number of packages or shipping units stated on the face of this
Bill of Lading in the box provided shall be deemed the number of packages or
shipping units for the purpose of any limit of liability per package or shipping unit
provided in any international convention or national law relating to the carriage

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of Goods by sea. Except as aforesaid the Container shall be considered the
package or shipping unit.

The words shipping unit shall mean each physical unit or piece of cargo not
shipped in a package, including articles or things of any description whatsoever,
except Goods shipped in bulk, and irrespective of the weight or measurement
unit employed in calculating freight charges. As to Goods shipped in bulk, the
limitation applicable thereto shall be the limitation provided in such convention
or law which may be applicable, and in no event shall anything herein be
construed to be a waiver of limitation as to Goods shipped in bulk.
(vi) Rust, etc.
It is agreed that superficial rust, oxidation or any like condition due to moisture,
is not a condition of damage but is inherent to the nature of the Goods and
acknowledgement of receipt of the Goods in apparent good order and condition is
not a representation that such conditions of rust, oxidation or the like did not
exist on receipt.
(vii) Notice of Loss or Damage
The Carrier shall be deemed prima facie to have delivered the Goods as
described in this Bill of Lading unless notice of loss of or damage to the Goods
indicating the general nature of such loss or damage, shall have been given in
writing to the Carrier or to his representative at the place of delivery before or at
the time of removal of the Goods into the custody of the person entitled to
delivery thereof under this Bill of Lading or, if the loss or damage is not apparent,
within three consecutive days thereafter and the parties hereby agree that failure
to give notice as aforesaid shall discharge the Carrier absolutely of all liability
whatsoever.
(viii) Time-bar

(a) The Carrier shall be discharged of all liability in so far as it relates to sea
carriage unless suit is brought in the proper forum and written notice thereof
received by the Carrier within twelve months after delivery of the Goods or the

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date when the Goods should have been delivered subject always to Clause 6(C)
(iii) above.

(b) In all other situations not incurred or related to during sea carriage, the
Carrier shall in any event be discharged of all liability unless suit is brought within
9 months of the date of the event giving rise to the claim.

7. MERCHANT'S RESPONSIBILITY
(i) The description and particulars of the Goods set out on the face hereof are
furnished by the Merchant and the Merchant warrants to the Carrier that the
description and particulars including, but not limited to, of weight, content,
measure, quantity, quality, condition, marks, numbers and value are correct.
(ii) The Merchant shall comply with all applicable laws, regulations and
requirements of customs, port and other authorities and shall bear and pay all
duties, taxes, fines, imposts, expenses and losses incurred or suffered by reason
thereof or by reason of any illegal, incorrect or insufficient marking, numbering or
addressing of the Goods or any other shipper/Merchant related fault or cause.

(iii) The Merchant undertakes that the Goods are packed in a manner adequate
to withstand the ordinary risks of Carriage having regard to their nature and in
compliance with all laws, regulations and requirements which may be applicable.

(iv) No Goods which are or may become dangerous, inflammable or damaging or


which are or may become liable to damage any property or person whatsoever
shall be tendered to the Carrier for Carriage without the Carrier's express consent
in writing and without the Container or other covering in which the Goods are to
be transported and the Goods being distinctly marked on the outside so as to
indicate the nature and character of any such articles and so as to comply with
all applicable laws, regulations and requirements. If any such articles are
delivered to the Carrier without such written consent and marking or if in the

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opinion of the Carrier the articles are or are liable to become of a dangerous,
inflammable or

damaging nature, the same may at any time be destroyed, disposed of,
abandoned, or rendered harmless without compensation to the Merchant and
without prejudice to the Carrier's right to Charges and to an indemnity for any
costs, losses, expenses or fines.

(v) The Merchant shall be liable for the loss, damage, contamination, soiling,
detention or demurrage before, during and after the Carriage of property
(including, but not limited to Containers) of the Carrier or any person or vessel
(other than the Merchant) referred to in 5(ii) above caused by the Merchant or
any person acting on his behalf or for which the Merchant is otherwise
responsible.

(vi) The Merchant shall defend, indemnify and hold harmless the Carrier against
any loss, damage, claim, liability or expense whatsoever arising from any breach
of the provisions of this clause 7 or from any cause in connection with the Goods
for which the Carrier is not responsible or the consequences of which the
Carriers’ responsibility is excluded by these conditions.

8. CONTAINERS
(i) Goods may be stuffed by the Carrier in or on Containers and Goods may be
stuffed with other Goods.
(ii) The terms of this Bill of Lading shall govern the responsibility of the Carrier in
connection with or arising out of the supply of a Container to the Merchant,
whether supplied before or after the Goods are received by the Carrier or
delivered to the Merchant.

(iii) If a Container has been stuffed by or on behalf of the Merchant.

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(a) the Carrier shall not be liable for loss of or damage to the Goods in any
circumstances whatsoever.
(b) the Merchant shall defend, indemnify and hold harmless the Carrier against
any loss, damage, claim, liability or expense whatsoever arising from the matters
covered by (a) above.

(iv) Where the Carrier is instructed to provide a Container, in the absence of a


written request to the contrary, the Carrier is not under an obligation to provide a
Container of any particular type or quality.
9. TEMPERATURE CONTROLLED CARGO
(i) The Merchant undertakes not to tender for transportation any Goods which
require temperature control without previously giving written notice (and filling in
the box on the front of this Bill of Lading if this Bill of Lading has been prepared
by the Merchant or a person acting on his behalf) of their nature and particular
temperature range to be maintained and in the case of a temperature controlled
Container stuffed by or on behalf of the Merchant further undertakes that the
Container has been properly pre-cooled, that the Goods have been properly
stuffed into the container and that its thermostatic controls have been properly
set by the Merchant before receipt of the Goods by the Carrier.
If the above requirements are not complied with the Carrier shall not be liable for
any loss of or damage to the Goods caused by such non-compliance.
(ii) The Carrier shall not be liable for any loss of or damage to the Goods arising
from defects, derangement, breakdown, stoppage of the temperature controlling
machinery, plant insulation or any apparatus of the Container, provided that the
Carrier shall before or at the beginning of the Carriage exercise due diligence to
maintain the refrigerated Container in an efficient state.

10. INSPECTION OF GOODS

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The Carrier or any person authorised by the Carrier shall be entitled, but under
no obligation, to open any Container or package at any time and to inspect the
Goods.

11. MATTERS AFFECTING PERFORMANCE


(i) If at any time the Carriage is or is likely to be affected by any hindrance, risk,
delay, difficulty or disadvantage of any kind (including the condition of the
Goods), whensoever and howsoever arising (whether or not the Carriage has
commenced) the Carrier may:
(a) without notice to the Merchant abandon the Carriage of the Goods and where
reasonably possible place the Goods or any part of them at the Merchant's
disposal

at any place which the Carrier may deem safe and convenient, whereupon the
responsibility of the Carrier in respect of such Goods shall cease;
(b) without prejudice to the Carrier's right subsequently to abandon the Carriage
under (a) above continue the Carriage. In any event the Carrier shall be entitled
to full Charges on Goods received for Carriage and the Merchant shall pay any
additional costs resulting from the above-mentioned circumstances.
(ii) The liability of the Carrier in respect of the Goods shall cease on the delivery
or other disposition of the Goods in accordance with the orders or
recommendation given by any government or authority or any person acting or
purporting to act as or on behalf of such government or authority.
(iii) The Carrier does not undertake that the goods shall arrive at any place, at
any particular time or for any particular market or purpose.

(iv) In the event of force majeure, the contract shall remain in force, the carriers’
obligation shall however be suspended for so long as the force majeure situation
lasts. A force majeure is any and all circumstances which the carriers could not
reasonably prevent and the consequences of which he could not avoid.

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12. METHODS AND ROUTE OF TRANSPORTATION


(i) The Carrier may at any time and without notice to the Merchant:
use any means of transport or storage whatsoever; load or carry the Goods on
any vessel whether named on the front hereof or not; transfer the Goods from
one conveyance to another including transshipping or carrying the same on
another vessel than that named on the front hereof or by any other means of
transport whatsoever; at any place unpack and remove Goods which have been
stuffed in or on a Container and forward the same in any manner whatsoever;
proceed at any speed and by any route in his discretion (whether or not the
nearest or most direct or customary or advertised route) and proceed to or stay
at any place whatsoever once or more often and in any order; load or unload the
Goods from any conveyance at any place (whether or not the place is a port
named on the front hereof as the intended Port of Loading or intended Port of
Discharge); comply with any orders or recommendations given by any
government or authority or any person or body acting or purporting to act as or
on behalf of such government or authority or

having under the terms of the insurance on the conveyance employed by the
Carrier the right to give orders or directions, permit the vessel to proceed with or
without pilots, to tow or be towed or to be dry-docked; permit the vessel to carry
livestock, Goods of all kinds, dangerous or otherwise, contraband, explosives,
munitions or warlike stores and sail armed or unarmed and to do such acts as in
the sole opinion of the Carrier may be necessary, expedient or incidental to the
performance of the Carrier's obligations.
(ii) The liberties set out in (i) above may be invoked by the Carrier at its sole
discretion for any purposes whatsoever whether or not connected with the
Carriage of the Goods. Anything done in accordance with (i) above or any delay
arising therefrom shall be deemed to be within the contractual Carriage and shall
not be a deviation of whatsoever nature or degree.

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(iii) The Carrier shall be entitled but under no obligation to depart from the
Merchant's instructions in any respect if in the sole opinion of the Carrier there is
good reason to do so in the Merchant's interest and the Carrier shall not thereby
incur any additional liability whatsoever. The Merchant shall pay any additional
costs resulting from the abovementioned circumstances.

13. DECK CARGO AND LIVESTOCK


(i) Goods of any description whether containerized or not may be stowed on or
under deck at the Carrier’s sole discretion and without notice to the Merchant
and such stowage shall not be a deviation of whatsoever nature or degree
subject to (ii) below, such Goods whether carried on deck or under deck shall
participate in General Average and such Goods (other than livestock) shall be
deemed to be within the definition of Goods for the purposes of the Hague Rules
or any legislation making such Rules or the Hague-Visby Rules compulsorily
applicable to this Bill of Lading.

(ii) Goods (not being Goods stuffed in or on Containers other than open flats or
pallets) which are stated on the front of this Bill of Lading to be carried on deck
and which are so carried (and livestock, whether or not carried on deck) are
carried without responsibility on the part of the Carrier for loss or damage of
whatsoever nature arising during carriage by sea or inland waterway whether
caused by

unseaworthiness or negligence or any other cause whatsoever and are carried


entirely at shipper's risk.

14. DELIVERY OF GOODS


If delivery of the Goods or any part thereof is not taken by the Merchant at the
time and place when and where the Carrier is entitled to call upon the Merchant
to take delivery thereof, the Carrier shall be entitled without notice to remove
from a Container the Goods or that part thereof if stuffed in or on a Container and

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to store the Goods or that part thereof ashore, afloat, in the open or, under cover
at the sole risk and expense of the Merchant. Such storage shall constitute due
delivery hereunder, and thereupon the liability of the Carrier in respect of the
Goods or that part thereof shall cease.

15. BOTH-TO-BLAME COLLISION


If the vessel on which the Goods are carried (the carrying vessel) comes into
collision with any other vessel or object (the non-carrying vessel or object) as a
result of the negligence of the non-carrying vessel or object or the owner of,
charterer or person responsible for the non-carrying vessel or object, the
Merchant undertakes to defend, indemnify and hold harmless the carrier against
all claims by or liability to (and any expense arising therefrom) any vessel or
person in respect of any loss of, or damage to, or any claim whatsoever of the
Merchant paid or payable to the Merchant by the non-carrying vessel or object or
the owner or charterer or person responsible for the non-carrying vessel or object
and set-off, recouped or recovered by such vessel, object or person(s) against the
Carrier, the carrying vessel or her owners or charterers.

16. GENERAL AVERAGE


(i) The Carrier may declare General Average which shall be adjustable according
to the York/Antwerp Rules of 1974 at any place at the option of the Carrier and
the Amended Jason Clause as approved by BIMCO is to be considered as
incorporated herein and the Merchant shall provide such security as may be
required by the Carrier in this connection.

(ii) Notwithstanding (i) above, the Merchant shall defend, indemnify and hold
harmless the Carrier in respect of any claim (and any expense arising therefrom)
of General Average nature which may be made on the Carrier and shall provide
such security as may be required by the Carrier in this connection.

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(iii) The Carrier shall be under no obligation to take any steps whatsoever to
collect security for General Average contributions due to or by the Merchant.

17. CHARGES
(i) Charges shall be deemed fully earned on receipt of the Goods by the Carrier
and shall be paid and non-returnable in any event.
(ii) The Charges have been calculated on the basis of particulars furnished by or
on behalf of the Merchant. The Carrier shall be entitled to production of the
commercial invoice for the Goods or true copy thereof and to inspect, reweigh,
re-measure and revalue the Goods and if the particulars are found by the Carrier
to be incorrect the Merchant shall pay the Carrier the correct Charges (credit
being given for the Charges charged) and the costs incurred by the Carrier in
establishing the correct particulars.
(iii) All Charges shall be paid without any set-off, counter-claim, deduction or stay
of execution and the Merchant shall remain liable for payment on all unpaid
charges due to the carrier, irrespective of whether the charges be on "freight
prepaid" or "freight collect" basis and the shipper, consignee and all parties
claiming under the Bill of Lading shall be jointly and severally liable to reimburse
the Carrier for the same upon demand.
(iv) Where goods are accepted or dealt with upon instructions to collect freight,
duties, charges or other expenses from the Consignee or any other person the
Merchant shall remain responsible for the same if they are not paid by such
consignee or other person immediately when due.
(v) An interest charge of 2% per month shall be levied on all invoices/charges
remaining unpaid more than 30 days from due date.
(vi) In the event the Carrier has to commence legal proceedings for recovery of
their payment for invoices/charges, the Merchant or Customer shall be liable to
pay legal costs on a full indemnity/solicitor and own client basis.

18. LIEN

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The Carrier shall have a particular and general lien on any and all Goods and
documents belonging to the Merchant or shipped by or consigned to him in the
possession, custody or control of the Carrier's or its agents for all sums
whatsoever due at any time to the Carrier from the Merchant and for General
Average contributions to whomsoever due and for the costs of recovering the
same and if the lien be not satisfied within 28 days of a notice in writing by the
Carrier to the Merchant the Carrier shall have the right to dispose or sell the
Goods and documents by public auction or private treaty, without notice to the
Merchant and at the Merchant's expense and without any liability towards the
Merchant, and at the sole discretion of the Carrier. For the avoidance of doubt, in
the event that the proceeds of sale are insufficient to satisfy all sums due to the
Carrier, the Carrier shall be entitled to recover from the Merchant all sums which
remain outstanding. All liens of the Carrier shall be considered as secured and
the Carrier shall rank in priority as a secured creditor in the event of the
Merchant’s bankruptcy or Winding-up.
19. VARIATION OF THE CONTRACT
No servant or agent of the Carrier shall have power to waive or vary any of the
terms hereof unless such waiver or variation is in writing and is specifically
authorised or ratified in writing by a director or officer of the Carrier who has the
actual authority of the Carrier so to waive or vary.

20. PARTIAL INVALIDITY


If any provision in this Bill of Lading is held to be invalid or unenforceable by any
court or regulatory or self-regulatory agency or body, such invalidity or
unenforceability shall attach only to such provision. The validity of the remaining
provisions shall not be affected thereby and this Bill of Lading contract shall be
carried out as if such invalid or unenforceable provision were not contained
herein.

21. NON-SUBROGATION

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The Merchant hereby agrees that he shall insure the goods and keep the goods
insured for the total period of the carriage and delivery under this Bill of Lading
and covenants that such insurance shall contain a non-subrogation clause/waiver
of

subrogation. In the event the shipper/Merchant fails to do so, he hereby


specifically waives for himself and for all his heirs, successors and subrogees any
and all rights of claim against the Carrier arising out of the carriage and delivery
of goods under this Bill of Lading.

22. DISPOSAL
The Carrier shall be entitled but under no obligation, at the expense of the
Merchant payable on demand and without any liability on the part of the Carrier
to the Merchant, to sell or dispose, upon giving 21 days notice in writing to the
Merchant at the last known address, of Goods which in the sole opinion of the
Carrier cannot be delivered as instructed or without notice to the Merchant of
goods which have perished, deteriorated or altered or which has caused or may
cause loss or damage to any person or property or to contravene any applicable
laws or regulations and such disposal shall be without prejudice to any claims the
Carrier may have against the Merchant.

23. NOTICE
Notice may be effected by service by post or telefax and shall be conclusively
deemed to have been received on the third day following the day on which it was
posted or faxed to the last known address or telefax of the recipient intended.

24. RATES
The Carrier shall have the option of charging by value, weight or measurement.

25. WAIVER

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The waiver by the Carrier of any breach or default of any of these conditions shall
not be construed as any waiver of any delay or omission on the part of the
Carrier to exercise any rights that it has under these conditions operate as any
waiver of any breach or default of the Merchant.

26. CRTPA Clause


A person who is not a party to this contract shall have no right under the
Contracts (Rights of Third Parties) Act 2001 to enforce any of its terms.

INSURANCE
• Loss for or damage to cargo occurring during the policy year as a result of
Breach of Contract or in common law where liability arises under MTO
documents.
• Liability to third parties by reason of liability imposed upon the insured by law
and/or assumed by the insured under the Insured's Contract. The loss of life or
bodily injury, 3rd party property damage including 3rd party cargo.
• Cost and expenses involved in re-routing of the cargo to the correct destination
including any professional negligence, error or omission on the part of the
insured and/or their agents.
• Liability to Authorities like Customs, Port Authorities for any breach of
regulations which can even lead to fine and penalties being imposed by the
authorities.
Claims arising under the Liability Insurance Policies particularly under B/L
contracts will have to be supported by evidence of negligence on the part of the
insured before a claim can be considered.
Further, under MTO documents sub-contracting is allowed and therefore even a
sub-contractors will be involved in the claims procedure particularly to establish
whether there is any negligence attributable to them which will enable the
Liability Underwriters to take recourse to recovery from such sub-contractors
under their own documents which may be a normal ship owners B/L, or a road
transport receipt or railway receipt.

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Container Specfications Table

CONTAINER TYPE OUTSIDE DIMENSION INSIDE DIMENSION


VOLUME
L W H L W H CBM
20' DRY BOX 6.0452.438 2.438 5.918 2.337 2.21 31
20' HIGH CUBE 6.045 2.438 2.5915.918 2.337 2.413 33
20' REEFER 6.045 2.438 2.438 5.385 2.1591.956 23
20' OPEN TOP 6.045 2.4382.438 5.918 2.337 2.286 32
20' FLAT RACK 6.045 2.438 2.438 5.6392.413 2.311 -
20' OPEN SLIDE 6.0452.438 2.438 5.918 2.337 2.21031
40' DRY BOX 12.192 2.438 2.59112.040 2.337 2.338 67
40' HIGH CUBE 12.192 2.438 2.896 12.040 2.3372.692 76
40' REEFER 12.192 2.4382.591 12.040 2.235 2.159 58

40' REEFER HIGH 12.192 2.438 2.743 12.040 2.235 2.311 62


40' OPEN TOP 12.192 2.438 2.438 12.040 2.337 2.26164
45' HIGH CUBE 13.716 2.438 2.89613.564 2.286 2.692 85

The insured accordingly will have to protect the recovery rights of the liability
insurer in all cases where the negligence on the sub-contractor's part is
established by evidence.
The Liability Insurance Policy is a contract of pure indemnity and therefore it does
not guarantee all claims that arise unless such claims are established under the
contract. Under the MTO of Goods Act and under MTO documents the time limit
for taking legal action against the MTO is 9 months only.

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CHAPTER-2

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CHAPTER-2
COMPETITION WITH OTHER BUSINESS

SEASKY LOGISTIC
Services
SeaSky Worldwide provides a wide range of services in logistics for shipping all
types of products. We offer a dynamic array of services from exporting even
personal effects to providing the logistics for large industrial projects, we offer it
all...personally managed and professionally executed. Our export clientele range
from Bio-Parma to Large Industrial Manufacturers to Small Family owned
business. Our experienced staff provide our customers with the guidance and
coordination to get their shipments to its final destination...without any hassles.
Our operations in India cater to all modes of international and domestic
transportation. For both Import and Export with N.V.O.C.C operations and
customs clearance we provide in-house worldwide transportation of cargo by Sea
and Air Freight. We also specialize in value added logistics, door to door services
to ensure that we maintain control of our customers’ product at all times.

• Shipping

• Air Cargo

• Baggage

• Customs Clearance

• Packing

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• Transportation

GGL
GGL (formerly Golden Gulf Line) is a leading global Neutral Non Vessel Operating
Common Carrier (NVOCC), and the global front -ranking consolidator. Built on a
strategic and strong global network of agents and partners, and with 30 offices
worldwide, we are committed to providing our clients with the most proficient,
cost effective, reliable and quality transportation of their freight all across the
globe. We operate our hubs at Singapore, Port Kelang, Colombo, Dubai in
addition to offering direct groupage services to and from strategic worldwide
points.
In course of our 18 years of operation, we at GGL have applied our expertise in
the service industry and knowledge of the NVOCC market and achieved a
reputation of delivering an unrivaled quality of standards, innovation and
customer service. GGL, known for its hallmark for being a quality conscious
organization, comprises of young and highly motivated professionals, dedicated
to exceeding customers’ expectations and providing the ideal global freight
transport solutions that international markets require from transportation
partners worldwide.
Our relentless pursuit of unending excellence through innovation has earned us
not only the trust of customers, but the admiration of our competitors as well.
With GGL Line’s extensive experience in the industry, you get a superior service
which is known for its reliability
GGL LINE has started direct sailings to Busan for less-than-container-load (LCL)
shipments.
The line said that it feels the trade between Singapore and Busan continues to
grow and it is the right time to enter the market. Machinery, garments, windmills,
exhibition cargo and metals are among the items exported from Singapore to

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Busan.
By using a number of ships the transit time from Singapore to Busan will be less
than seven days.
GGL Line is a separate NVOCC business division of the Dubai-headquartered
logistics company, Freight Systems Ltd.

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WSA
Introduction
WSA's position as a leading NVOCC / forwarder enables the choice of the
more frequent, reliable sailings to any worldwide destinations.
Our team of international transportation specialists ensures punctual
documentation and necessary procedures are followed-up, to achieve the
delivery time that we have made ourselves committed to our customers as we
named ourselves "Warranted Safe Arrival".
On top of our experience in operating our warehousing and long-term
relationships with Customs globally, WSA ensures smooth customs clearance,
cargo delivery, storage, and distribution.
Being the founder of WSA Lines back in 1983. I am delighted to take this
opportunity to thank all members of WSA Lines who devoted their tremendous
effort in making this 15th anniversary a glorious one. I would address this as our
2nd milestone because our 1st milestone was laid in 1994 after our Singapore
office was established. Why? Our overseas offices started multiplying since then.
There are 39 offices in 14 countries at this moment of my writing. 1997 has been
a historical year for Hong Kong. As a Hong Kong based company, we are proud of
the return of Hong Kong to China. On top of that, the enormous resource from
China benefited us. It was back in 1990 when the importance of cargo from China
was foreseen, our first office was established in Shanghai, China in 1991. Until
today we have 7 offices in China.
The combined cargo force formed a major foundation towards our success today
and the years to come. In this ever changing market it's so competitive that
envisioned our survival depends on having our own network. We are not
blindfolded in expanding. Detailed market research and thorough consideration
have always been behind our setups. Proven success of our Shanghai &
Singapore offices was the main driving force in our rapid expansion.
It has been my good luck to have all these energetic, knowledgeable &
aggressive young managers joining WSA Lines. With our experience and network,

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we form a perfect combination complimentary to each other. Technology brings
human beings closer and makes the world smaller. We are fully aware that unless
we are well equipped, decent service can’t be provided. That's why our
management spends

great effort in studying the rapid developing technology world like computers,
communications etc. With the backup our network, such can be induced into our
system at an economy of scale. From then, it will be easier to link up with our
future expansion into related industries like warehouse, inland transportation etc.
We are not contented with our success at this moment. The precious experience,
cargo source, client base, worldwide network, knowledgeable staff members etc,
which we gained through the course of hard work in the past 15 years will form
as part of our key resource for our future development.
Whereby we are looking forward to provide a point to point, multimodal, total
logistics service to our valuable customers, as a token of appreciation for their
valuable patronage. Most of all, we are looking forward to creating more job
opportunity by our doing so, linking up the different cultures of mankind and
making the world better place to live in. While in the meantime, our staff
members may enjoy a better career achievement in the rapid expanding world of
WSA. Yes, we work harder everyday.
Vision
To WSA, no business is too small, and yet no business is too big. The unity of
WSA network forms a powerful partnership unmatched by our competitors. WSA
prides itself on its focus on the customers - our partners. We believe in long-term,
mutually beneficial relationships with our customers and create value through
collaboration to enhance customer competitiveness.
WSA understands that information technology plays a vital part in the container
transportation industry and has been a pioneer in developing IT solutions for
many years. Technology stands at the edge of this competition world. The more
advanced it is, the more competitive one becomes in the market. That in turn will
benefit our customers in long run in enjoying our economy of scale. We

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recognized this many years ago. There's no end to technology, but we are
working hard to keep up with the most updated ones. WSA will remain at the
forefront of IT applications and solutions for the industry.
MISSION
Customers
are always right. We apologize even when our customer complains by mistake,
because we let it happen. Years from now, it does not matter how much was in
our

bank accounts, what houses we lived in, or what cars we drove. But it makes a
world of difference because we make our customers smile.
Opportunity
think positive. Optimist sees opportunity in difficulty.
Success
doesn't come to us. We go to it. The moment we wonder win or lose, we'll
probably lose. "Wai Shing" Originates from "Great Success" in Chinese
characters.
Teamwork
allows common people obtain uncommon results. It collects individual
accomplishment towards organizational objectives. We never doubt a small
group of thoughtful, committed people can change the world. This is what made
WSA today.
Venture
unless we have the courage to lose sight of the shore, we can never discover new
continents.
Service
sales generates customers. Quality service keeps satisfied customers coming
back to us
Insurance Coverage

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To better serve your needs, we recommend and offer Marine Cargo Insurance for
vessel, aircraft, rail and truck. Insurance will protect shipper and/or consignee
when losses occur by providing full coverage of value or replacement cost.

Cargo Claim Basics


To better serve your needs, we recommend and offer Marine Cargo Insurance for
vessel, aircraft, railroad and truck. Insurance will protect shipper and/or
consignee when losses occur by providing full coverage of value or replacement
cost.
Your attention is drawn to the obligation of the customer/shipper/consignee to
insure the goods under clause 21 of the WSA Lines Bill of Lading.
If a claim arises, please provide the following:
1. A letter of claim setting out the circumstances of loss/damage, with the
name/voyage of the vessel, port of loading/port of discharge, WSA Lines Bill of

Lading No., Master B/L details, ETA/ETD of vessel, destination of cargo and nature
of loss/damage (e.g. location short landed)
2. Commercial Invoice
3. Packing/Weight List
4. Bill of Lading (Legible copies showing front and reduce of Original, will all
endorsements thereon
5. Copies of any other B/L is issued/MBL
6. Insurance Certificate/policy covering the goods
7. Delivery Receipt for the cargo
8. Customs/Trade-Net declarations for the cargo/Import/Export Permits
9. Complete survey Reports with all attachments/photographs (clear originals)
10. Notice to carriers of loss / damage
11. All correspondence with parties on the claim, including carriers, freight
forwarders, port authorities, insurers and hauliers
12. Port authority short landing/damage certificate if applicable

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13. Statement of claim/loss computation from the claimant
14. Salvage/Disposal Certificate if damaged cargo has been disposed of
15. Repair estimates
16. Photographs/diagrams/pictures of the loss/damage, where available
17. Stuffing tally if stuffed by Customer/FCL shipments
18. Analysis Certificates
19. Airway Bills (if air cargo consignments)
20. Where applicable, the Sale & Purchase Contract for the goods
21. All documents which are in a language other than the English Language
must be accompanied by a certified translation in English in order to be
considered

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ALL CARGO GLOBAL LOGISTICS

COMPANY PROFILE
Established in 1993, Allcargo has emerged as a leading Logistics service provider
today. In just 13 years of its existence the Company has entrenched itself well,
not only on the Indian logistics scene, but also at a global level achieving a global
footprint through the acquisition of the Belgium based ECU Hold NV. Allcargo has
always been the leading LCL (Less than a Container Load) consolidator in India
offering direct outbound and inbound LCL groupage services to and from major
cargo destinations worldwide.
Allcargo’s success stems from its commitment towards providing world class
logistic services to international business. At Allcargo, the customer remains the
focal point in the formulation of services that can be provided. This emphasis has
led to a constant innovation in the services that we provide which in turn have
enhanced our performance standards. We have added a host of services to our
existing portfolio and are emerging as an integrated logistics player in the
country.
Allcargo’s present operations are in five key areas of the logistics business:
• Multi-modal Transport Operations
• Container Freight Stations
• Project Cargo Handling
• Airfreight
• Transport Logistics
Large as well as small exporters and importers often have cargo that is not
enough to fill an entire container. To meet the requirement of shipping such LCL
cargo, Allcargo offers Less than Container Load Consolidation services. Allcargo
pioneered this service in India and maintains it’s leadership position in this
business. With an extensive branch and franchisee network in India as well as a
strong agent network internationally through ECU HOLD NV, Allcargo is able to
deliver and receive cargo to and from over 4000 locations across the world. Our

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strong focus on offering direct services to a large number of locations, the
Company has provided our customers with the advantages of reduced transit
time, reduced handling of cargo and higher cost efficiencies.

Allcargo has also pioneered Multi City Consolidation in India. Multi city
consolidation involves movement of cargo under a bond from inland locations
particularly (ICD’s) to gateway ports for export cargo and vice-versa for import
cargo. Allcargo with its expertise in the business is capable of handling the entire
chain in the process right from collecting the cargo from the shipper’s doorstep,
aggregating LCL cargo, transportation under bond, re-working at cargo hubs and
arranging carriage to final destinations. As for importers, the Company caters to
the delivery needs of its clients at various ICD locations through Multi-City
Consolidation.
FCL Forwarding
In addition to LCL consolidation, Allcargo also offers FCL (Full Container Load)
forwarding services to it’s customers. With our leadership position in LCL
consolidation and the large volumes of containerized cargo handled, we are also
able to offer cost effective FCL forwarding solutions to our customers. Value
added services such as ex-works pick-up and door delivery at desitnation, duty
paid deliveries in various countries and a strong IT systems based information
tracking has led to Allcargo’s growing presence in this segment of the logistics
business.
Ever since its inception, Allcargo has been a committed player providing services
to facilitate international and domestic trade. In a bid to further consolidate its
position as an integrated service provider, the Company has also diversified into
the dynamic world of air freight business. With air freight being an important
element of supply chain management, Allcargo has not been too far behind in
entering this fast growth sub-segment of the logistics industry. With an
experience of nearly two decades in the freight market the company has
developed capabilities of delivering sound services while simultaneously keeping

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customer costs on the lower side. ECU Line, the company acquired by Allcargo
has a rapidly growing air freight business under the brand name ECU AIR and a
global network of agents that facilitates the handling of in bound and out bound
Air Cargo. Allcargo acquired the IATA registration in March 2006 enabling the
Company to issue it’s own Airway Bill paving the way for rapid growth in this
segment of the MTO business as well.
Container Freight Stations are an extension of the port enabling the customs
clearance of export and import cargo and the warehousing of cargo without
congesting the ports. Though its entry into this segment has been quite recent,

Allcargo has made rapid inroads graduating from the operation of just one CFS
which commenced in 2003 to implementing two more Container Freight Stations
at the ports of Chennai and Mundra. Its first CFS, the Transindia Logistic Park
Container Freight Station located 18 KM from the Jawaharlal Nehru Port Trust is a
state-of-the-art, ISO certified CFS. Spread over almost 23 acres of land it is fully
equipped with a paved yard, warehouse area, reefer plugging point and a parking
area for trucks. Having commenced with just 10 acres of land the Transindia
Logistic Park has grown to 23 acres in just three years of its operations handling
a storage capacity of 4000 TEUs. It can handle more than 10,000 TEUs per month
on a continuous basis.
The two new projects under implementation will add another 104,000 TEU’s per
annum capacity in the first phase of development. The Chennai CFS is one of the
closest to the Chennai Container Terminal and is spread over a 16 acre area and
the first phase is planned to be commissioned by February 2007. The Mundra CFS
spread over a 16 acre area will also be commissioned by January 2007. Land for
the third project for an Inland Container Depot is under acquisition and when
commissioned by end 2007 will add another 52,000 TEU capacity in its first
phase of development.

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CHAPTER-3

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CHAPTER-3
TRADE PROFILE

India: Economy, Industry & Trade

A New Era
Though agriculture has been the main preoccupation of the bulk of the Indian
population, the founding fathers saw India becoming a prosperous and modern
State with a good industrial base. Programmes were formulated to build an
adequate infrastructure for rapid industrialisation.
Since independence, India has achieved a good measure of self-sufficiency in
manufacturing a variety of basic and capital goods. The output of the major
industries includes aircraft, ships, cars, locomotives, heavy electrical machinery,
construction equipment, power generation and transmission equipment,
chemicals, precision instruments, communication equipment and computers.
Early planners in free India had to keep in mind two aims: all-round development
and generation of large- scale job opportunities. Economic development
strategies were evolved with an eye on these twin objectives.

New International Economic Order


As a responsible and progressive member of the international community, India
is continuing her untiring efforts to bring about a constructive dialogue between
the developed and developing countries in their quest for a cooperative approach
towards a new international economic order. India is convinced that the
establishment of an equitable international economic order involving structural
and other changes is the only answer to the various economic ills and problems
of development confronting the world today.

New International Economic Order

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The international confidence in India's economy has been fully restored.
The reforms launched have made India an attractive place for investment. Duties
have been lowered, repatriation of profit made liberal and levels of foreign equity

raised considerably, 100 percent in case of export oriented industry.


While several multinational companies have entered the Indian market, some
Indian companies have also begun to gain international recognition. In the field of
computer software, India is among the major exporting nations with an overflow
of scientists in the field.
The fourth WTO Ministerial Conference was held at Doha, Qatar from 9 to 14
November, 2001 to decide upon the future work programme of the WTO. While
there were strong pressures to launch a comprehensive round of negotiations
including multilateral regimes on investment, competition policy, trade
facilitation, government procurement and environment, India was opposed to
overburdening of the multilateral trading system with non-trade or new issues in
the agenda. It felt that WTO already had a sufficiently large agenda consisting of
mandated negotiations and mandated reviews and, therefore, India underlined
the need for resolving the implementation issues, arising from the current
agreements in a time-bound manner before addressing new issues for
negotiations. India played a proactive role in the deliberations at the fourth
Ministerial Conference at Doha. The outcome of the conference takes into
account a number of concerns expressed by India.
Exports, on the BOP basis, grew by 19.6 per cent in US dollar terms in 2000-01,
accelerating sharply from the 9.5 per cent growth in the previous year. Total
imports recorded a moderate growth of 7.0 per cent during 2000-01, much lower
than the sharp increase of 16.5 per cent in 1999-2000. The moderate growth in
imports during 2000-01 was essentially attributable to a 24.1 per cent increase in
the oil import bill. Non-oil import growth, on BOP basis, remained subdued at only
2.0 per cent.

NRIs

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The government acknowledges the great role that the vast number of Indians
living and working abroad, the NRIs, can play in accelerating the pace of
development in the country. In the 1980s, the contribution of the NRIs through
their remittances was instrumental to a large extent in stabilising the balance of
payment situation. Several initiatives have been taken to attract NRI investments
in industry, shares and debentures. The NRIs are allowed 100 per cent
investment in 34 priority and

infrastructure facilities on non-repatriation basis. Approval is given automatically


on investment in certain technical collaborations. They can buy Indian
Development Bonds and acquire or transfer any property in India without waiting
for government approval. The Foreign Exchange Regulation Act has been
amended to permit NRIs to deal in foreign currency and they can also bring in
five kg of gold. There are programmes to utilise the scientific and technical
talents of the NRIs with the help of the Council of Scientific and Industrial
Research.

Infrastructure
In view of their crucial importance, power, transport and other infrastructure
industries are owned by the State. As a result of special attention given to the
area in recent years, the infrastructure industries have been growing at the rate
of nine to ten per cent annually.

Key Economic Sectors


The Indian Economy grew by 5.4 per cent in 2001-02, which is considered one of
the highest growth rates in the world for the year. This growth is supported by a
growth rate of 5.7 per cent in agriculture and allied sectors, 3.3 per cent in
industry and 6.5 per cent in services.

Research and Development

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Research and Development activities are supported by the governments at the
Centre and the states as well as by public and private sector undertakings. The
Department of Scientific and Industrial Research recognises over 1,200 in-house
R&D units. About 200 research laboratories exist in government departments and
agencies. The benefits of the R&D works are reaching various fields like industry,
agriculture and commerce.

Traditional Industry
Indian handicrafts have withstood competition from machines over the years. The
skills are passed on from one generation to the next. The handicraft and
handloom sector is a major source of rural employment and earns substantial
foreign exchange. Traditional textiles are as popular abroad as they are within
the country.

The major export items include hand-knotted carpets, art metalware, hand-
printed textiles and leather, wood and cane wares.

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Logistics
Logistics is the art and science of managing and controlling the flow of goods,
energy, information and other resources like products, services, and people, from
the source of production to the marketplace. It is difficult to accomplish any
marketing or manufacturing without logistical support. It involves the integration
of information, transportation, inventory, warehousing, material handling, and
packaging. The operating responsibility of logistics is the geographical
repositioning of raw materials, work in process, and finished inventories where
required at the lowest cost possible.

Origins and definition
The word of logistics originates from the ancient Greek logos (λόγος), which
means “ratio, word, calculation, reason, speech, oration”. Logistics is a concept
considered to have evolved from the military's need to supply themselves as
they moved from their base to a forward position. In ancient Greek, Roman and
Byzantine empires, there were military officers with the title ‘Logistikas’ who
were responsible for financial and supply distribution matters.
The Oxford English dictionary defines logistics as: “The branch of military science
having to do with procuring, maintaining and transporting material, personnel
and facilities.”Another dictionary definition is: "The time related positioning of
resources." As such, logistics is commonly seen as a branch of engineering which
creates "people systems" rather than "machine systems".

Military logistics
In military logistics, experts manage how and when to move resources to the
places they are needed. In military science, maintaining one's supply lines while
disrupting those of the enemy is a crucial—some would say the most crucial—
element of military strategy, since an armed force without food, fuel and
ammunition is defenseless.

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The Iraq war was a dramatic example of the importance of logistics. It had
become very necessary for the US and its allies to move huge amounts of men,
materials and equipment over great distances. Led by Lieutenant General William
Pagonis,

Logistics was successfully used for this movement. The defeat of the British in
the American War of Independence, and the defeat of Rommel in World War II,
have been largely attributed to logistical failure. The historical leaders Hannibal
Barca, Alexander the Great and the Duke of Wellington are considered to have
been logistical geniuses.

Logistics Management
Logistics Management is that part of the supply chain which plans, implements
and controls the efficient, effective forward and reverse flow and storage of
goods, services and related information between the point of origin and the point
of consumption in order to meet customers' requirements.

Business logistics
Logistics as a business concept evolved only in the 1950s. This was mainly due to
the increasing complexity of supplying one's business with materials and
shipping out products in an increasingly globalized supply chain, calling for
experts in the field who are called Supply Chain Logisticians. This can be defined
as having the right item in the right quantity at the right time at the right place
for the right price and is the science of process and incorporates all industry
sectors. The goal of logistic work is to manage the fruition of project life cycles,
supply chains and resultant efficiencies.
In business, logistics may have either internal focus(inbound logistics), or
external focus (outbound logistics) covering the flow and storage of materials
from point of origin to point of consumption (see nsupply chai management). The
main functions of a logistics manager include Inventory Management,
purchasing, transport, warehousing, and the organizing and planning of thes

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activities. Logistics managers combine a general knowledge of each of these
functions so that there is a coordination of resources in an organization. There
are two fundamentally different forms of logistics. One optimizes a steady flow of
material through a network of transport links and storage nodes. The other
coordinates a sequence of resources to carry out some project.

Production logistics
The term is used for describing logistic processes within an industry. The purpose
of production logistics is to ensure that each machine and workstation is being
fed with the right product in the right quantity and quality at the right point in
time.
The issue is not the transportation itself, but to streamline and control the flow
through the value adding processes and eliminate non-value adding ones.
Production logistics can be applied in existing as well as new plants.
Manufacturing in an existing plant is a constantly changing process. Machines are
exchanged and new ones added, which gives the opportunity to improve the
production logistics system accordingly. Production logistics provides the means
to achieve customer response and capital efficiency.

History of Logistics / Supply Chain Management


Logistics has always been a critical part as one of the 4 P’s in Marketing: Product,
Place, Price and Promotion. The “Place” component ensures the product is at the
right place, at the right time, in the right quantity and the right quality. Read
about how the logistics discipline started and where it is headed.
• Military Roots
Logistics received recognition in military operations during World War II. It gained
its momentum as it contributed to the effective distribution of machinery and
supplies to troops. A service delivery failure here may mean an increase in
unnecessary fatalities. Peter Drucker (a business guru in the 1960’s) identified
logistics as a growing concern within business. This generated more prominence
towards the practice of logistics.

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• Deregulation
As the economies in North America evolved in the 1970’s and 1980’s,
transportation deregulation changed the competitive landscape of business.
Carriers were free to charge their customers (Shippers) a competitive rate for
their shipments. Warehousing companies that typically acted as surplus
inventory storage locations, married up with transportation companies to offer
customers full-service solution capabilities. This formed the beginning of the 3rd
party logistics business and paved the way for outsourcing logistical activities.

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• Globalization
With the advent of globalization, firms began to seek ways of cutting their
production costs. Thus, multi-national corporations re-located their factors of
production to low-wage countries to gain a competitive advantage. Increasingly,
more and more countries are joining the World Trade Organization (WTO) and
opening their country to foreign capital investment (most recently in China).
Retail giants like Wal*Mart exploit these new efficiencies and increase their
imports from new emerging economies to reduce product prices in their stores.
Thus, the new challenge is how to manage the product and information flows
around the world. The increased pressure on managing these operations further
underscored the importance of logistics as an area for optimization.

• Information Technology
Another contributor that led to an increased presence for logistics was the
explosion in information technology and use of computers throughout the 1980’s
and onwards. The cost of computing has decreased year after year since then
and computing power rose exponentially. The use of the Internet and increased
bandwidth capacity further enhanced and enabled quick connectivity and
collaborative relationships that reduced inventories and created a Just-In-Time
operating opportunity for organizations. These efficiencies reduced errors,
increased fill-rates and cut overall operating costs for organizations.

• Supply Chain Management


As the above factors fuelled efficiencies, logistics gained more prominence in
organizations. A natural extension was to link the logistical operations from each
firm to the entire supply chain. The new paradigm became known as the
‘systems approach’ to supply chain management and introduced the concept of
trade-offs. In order to achieve least total supply chain cost, operational
integration of the 5 main areas of logistics must be simultaneously optimized:
Warehousing, Transportation, Inventory, Order Processing and Lot Quantities.

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Optimizing any one of these areas individually will sub-optimize the system as a
whole. For example, a single warehouse in a network would achieve the lowest
warehousing cost. This would create high transportation costs as suppliers ship
over greater distances to ship

products into the warehouse and conversely, outbound to its market distribution
area. The addition of a second warehouse in the network would reduce
transportation costs more than the marginal cost of operating the second
warehouse, which would reduce total supply chain costs.

• Future Challenges
As the business landscape constantly changes with mergers & acquisitions and
as globalization grows, there are corresponding changes in the supply chain that
need to continuously be optimized to ensure least total supply chain costs. Radio
Frequency Identification (RFID) and other technologies will continue to drive
down inventories as better information is made available in a timely manner.
Since supply chain activities cross over all functional areas in an organization
(such as Marketing, Finance and Human Resources), new metrics must be
developed to track true supply chain costs and identify the impact on new costs
as corporate strategies change. Organizations that measure and benchmark
these costs will have a sustainable competitive advantage going forward.
mission.

Evolution of Logistics Theory


Logistics theory has evolved firstly based on the practical management of
logistics, and secondly, based on the ideal ways for managing logistics. Logistics
theory has first been developed for special functions such as production,
inventories, and transport; later it was necessary to combine these. Also, logistics
was first seen in a restricted environment, where own control could be exercised.
Nowadays, many logistics functions have been outsourced, business structures
have changed,, and logistics has became a strategic competitive factor.

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Management of logistics concerns the whole demand and supply chain across
business borders requiring logistical visibility. In addition, enablers such as
infrastructure and technology also evolve.
1. Introduction
Logistics evolved during planning and exercising crusades and military
expeditions, as well as with the development of trade. The practicality of logistics
is also seen with its involvement in everyday life. The beginning of logistics
theory can

be dated to second world war, and in business logistics, to 1950’s. During the
Second World War, also the computer age was started, which enabled analysis
with the evolving operations research models. The main application areas of
operations research in the beginning involved logistics problems such as
transportation routes, inventory models.
Logistics management as an independent discipline started to evolve under
management science. Models geared to minimization of costs were developed.
Both modelling and OR methods developed. Since these models often were
simplifications, the solutions lacked true applicability.
In business world, external situations such as oil crisis, growing competition,
and increasing customer demands made logistics a management issue, and in
gaining more importance, logistics became eventually the top level issue in
management. Integration of production scheduling and materials management
was needed, and on the other hand, transports were analysed taking inventories
into consideration at the same time.
Network models for restructuring the distribution networks were taken into
use. Several rounds of streamlining the number of warehouses in distribution
networks have been seen. The models initially were facilities location problems,
now the analysis is based on costs, availability, and delivery service levels in an
environment of many factories, markets, products, and time periods.

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OR-models started to become too complex, and the same problems with
simplifications remained. Logistics became a management discipline in its own
right.
Control over own management environment had to widened, especially
when materials management was considered. Logistical efficiency became a
competitive factor when providing customer service, and obtaining cost
efficiency. During structural change, outsourcing of non-core functions became a
trend. Most companies outsourced first their transports, then also their
inventories and sourcing, so most of the logistical operations were outsourced.
Partnerships, alliances, and cooperation became a management strategy as well
as a research area.
Forecasts of demand have become extremely crucial. Seasonality,
perishability, risk handling, shorter life cycles, shorter times to market all make
more demands on both the accuracy and quickness of forecasts. For all
participants in the logistics

chain, they have great importance. Visibility will be the main strategic
competitive issue in logistics management across company borders.
Early references to logistics be located in business literature. Prior to the 1950’s,
the typical enterprise performed the work of logistics purely on functional basis..
Logistics management, as a discipline in management science and practice,
was defined in US in 1950-60’s when the potential of efficient material
distribution to decrease companies’ direct product costs was realized. The
physical distribution models were developed because of the following four
factors: 1) shifts in consumer demand patterns and attitudes toward more
demanding needs for high availability and variety of products, 2) cost pressures
on industry, 3) progress in computer technology, and 4) the influences of military
experience.
The change in logistics practices faced significant opposition. Managers,
responsible for specific functions, were not happy with organizational changes
that were considered necessary for implementing logistics in broader meaning..

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During the oil crisis in 1970’s , both transportation costs and interest rates
(thus also inventory carrying costs) increased simultaneously, and the
importance of logistics was really understood by top management. Optimization
of physical distribution alone was not enough, it was necessary to integrate
purchasing and materials handling into it as well.
The most significant drivers for integrated logistics during 1980’s and early
1990’s were as 1) significant regulatory change, 2) microprocessor
commercialisation, 3) information revolution, 4) widespread adoption of quality
improvements, and 5) the growth of partnerships and strategic alliances.
This integration process was leading to an evolution of logistics management that
according to the increasing number of logistics literature, Gradually logistics
management became cross functional within the whole organization
Logistics plays very central role in creating value for the customer, as both
inbound and outbound logistics are presented as primary activities in the chain.
Logistics increased importance, as it was seen as an activity that enables
companies to improve customer value, and not only regarded internally as cost-
efficiency target.
An abundance of definitions of logistics have been presented. The term Supply
Chain was introduced, and had to be distinguished from logistics. There is a view
that logistics is contained in a company’s internal processes, whereas supply
chain is a more holistic concept. The current interpretation is also that the
supply chain

creates products and services that are transferred from suppliers to end
customers. This interpretation has been complemented with the term demand
chain, defined to transfer demand information from end customer markets to
suppliers. Combined, demand and supply chain create demand-supply chain, an
end-to-end network. It can be noted, that the traditional term logistics chain has
also been defined to cover the material flow from raw material end to final
customer end, the demand information flow to the opposite direction, and
transfer of payments as well; the modern view is that in the supply chain,

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logistics is a subset . Analytical approaches even in the beginning of 2000’s rely
on traditional methods of statistics and operations research.
3. Evolution platforms
The evolution of production supply chains depends on the previous platforms of
best practice.The stages seen in the supply chains over the past forty years. In
the 1960’s, the goal was to secure the stability of production, which was
achieved by modelling and optimising the economic batch sizes, safety stocks,
and reorder levels. This provided a natural platform for adoption of material
requirements planning (MRP) in the 1970’s and early 1980’s. MRP is built on a
push system, where materials are ordered against a projected demand.
Manufacturing is arranged along ordered schedules. MRP attempts to eliminate
safety stock and cycle stock, Flexibility is taken up by varying the demand on the
suppliers.
Simultaneously, in Japan, just-in-time (JIT) practices were evolving alongside with
total quality management (TQM), with the goal to eliminate all waste from
manufacturing and inventories. JIT and TQM were business philosophies
supported by several interconnected principles, which were defined around the
three QCD principles: a continually improving quality assurance system to meet
customer requirements, a continually improving cost management system to
provide the product at an attractive price to the customer while securing
reasonable profits for the company, and a continually improving delivery system
to ensure that products arrive on time. Huge improvements were seen. Without
integrating all three principles, there would have been the risk of concentrating
on trading costs for quality and customer response. JIT production is a pull
system. Capacity is matched to the demand. Production patterns are regular, but
manufacturing systems are flexible. Batch quantities are economic, supplier lead
times are short,

sproduct range was narrow, and demand patterns in the market are regular. JIT
prevailed in the 1980’s and in the beginning of 1990’s.

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JIT was a natural platform for the lean production and lean supply systems
emerging in the 1990’s. In lean systems, all waste, also time wastes, were
eliminated. Total inventories, for production, in production work in process, and
in finished goods inventories, were minimized. Cost transparency in the supply
chain was necessary, for production flexibility, multi-skilled workers were needed,
work queues were shortened, change-over times were reduced, product
variability was great but product volumes were low. During this period,
synchronous manufacturing was introduced, product modularisation,
postponements and pushing order penetration point upstream. At every stage,
continuous improvement was the target.
Value stream management and value stream mapping was one of the methods
to achieve lean management and excellence in the supply chains.
The need for greater flexibility and shorter times to market and customers,
brought out the next stage of responsive supply chains. Quick response to
customer requirements, supply flexibility, and customized manufacturing are all
geared for better customer service. Production schedules were synchronized with
final demand, supply processes were controlled, and capability to integrate
trading partners, full use of electronic commerce, and concurrent product
development were taken into use.
In 2000’s, e-business has already brought out a significant change. Improvement
in the service level and inventory level could not be achieved simultaneously
earlier. Recent developments in information technology and communication
technology, together with better understanding of supply chain strategies, have
led to innovative approaches so that the firm can improve both objectives
simultaneously.
From lean manufacturing and supply chains, the next platform to emerge at the
end of 1990’s, is the process model and the agile supply chain. These involve
goods and products with short life cycles, volatile demand, high product variety,
customer service driver is availability, not cost alone. Profit margin is high, and
dominant cost factor is marketability cost. Stockout penalties are immediate and
volatile, information enrichment is obligatory, and forecasting methods have

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become consultative. The need for new customer relation management systems,
with better

forecasting capabilities is imminent. Agility means, that capacity and demand


variances have to be benefited.
4. Supply chain management
Supply chain management has been defined as a management philosophy]
having the following characteristics: 1) A systems approach to view the supply
chain as a whole, and to managing the total flow of goods from the supplier to
the end customer, 2) a strategic orientation toward co-operative efforts to
synchronize operational and strategic capabilities, and 3) a customer focus on
customer value and customer satisfaction.
For better management, different forms of partnerships, alliances and
cooperation have evolved. Value chain concept has become a competitive
strategy.
Supply chain management also needs tools, and one of these is a rigorous
attention to quality, already introduced by TQM. Outsourcing has made
subcontracting to play a larger role, and quality considerations concerning both
products and services have become an essential, generally accepted practice.
Quality measures and performance measures have been collected into strategic
performance measurement systems, as presented by e.g. Gattorna and Walters ,
Hines et al. Hughes et al., Anupindi et al., Frazelle, and Bowersox and Closs.
The measurement systems are used also in evaluating new partnership and
subcontracting relationships.
One of the challenges in supply chain management is to effectively manage
uncertainty. For new products entering the markets, there are no demand models
to be used in forecasts. At the same time, the proliferation of the products makes
it increasingly harder to predict demand for a specific model. Moreover,
significant price declines are common, reducing the profits of the products with
short life cycles.

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5. Processes
In many companies, enterprise resource planning (ERP) systems have
become the standard backbone of companies’ IT .Their implementation requires
that the companies define their operations as processes. Change from functional
operations of logistics into the processes changes also the management from
functional areas into holistic logistics management, and at the same time,
logistics gained

importance in the business. The change into process model is also a time
consuming process itself. The SCOR-model as well as ERP-systems are also
standardizing the processes. Harrison and van Hoek consider that improvement
of logistical performance means that the processes have to be improved, and one
of the key issues is to regard the management of timeliness in the logistics
pipeline. Alignment of processes within the pipeline makes it possible to ensure
also JIT and lean thinking, vendor managed inventories, and quick response.
This also can be considered as leading to the next supply chain platform: the
agile, responsive supply chain.
6. Trends
Logistics today is more challenging than ever. Logistics is one of the crucial
areas, which make the distinction of business success. Time factor has become
more and more important in competition. Product life cycles are becoming
shorter. Time to market for new products and versions is a crucial competitive
factor. Product Life Cycle Management has become a new issue to make short
life cycles longer, more profitable, and better to control. Time is also of essence
in making on-time deliveries, and competition is seen also in the delivery times;
this is a phenomena reappearing because of global sourcing. Shorter delivery
times force the industry to be situated closer to the customers, or to have
distribution centres close to customers, or to choose suitable partners and make
suitable business acquisitions in order to reach the markets.

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Globalization is seen not only in sourcing, but also in new business structures.
Mergers of companies have increased the number of global companies. Others
also connect via alliances, collaborations, and partnerships into global markets as
well into local sourcing networks. This increases the logistical complexity, which
is becoming increasingly hard to control. Complexity is formed by the number of
suppliers, sourcing chains, product items, product construction, spare part items
for maintenance and repairs, factories, warehouses, distribution chains, sales
points, participants in the logistics chain, services connected to the products and
sales, afters sales services, customers, geographical and national differences,
transport modes, measures, and the time factors.In global companies,
streamlining and unifying processes and , IT is a standard strategy. Large
companies also require that their partners and collaborators will align their
processes similarly,

otherwise logistical effectiveness suffers. Process alignment is a necessary


prerequisite in getting into partnerships today.
Logistical visibility is difficult to achieve even within a company, especially a
multinational environment. Logistical visibility is necessary also externally within
companies, otherwise demand forecasting is extremely difficult. Improved
visibility makes it possible to obtain more accurate information in real time of the
actual demand, without the accumulating Forrester effect or the bull-whip effect
in the logistics chain. Even two- tier visibility between two consecutive companies
in the supply chain is rare, but as the e-business applications in business-to-
business cases increase, also the bipolar visibility will become more general.
Three- tier visibility is very difficult to achieve. Looking from the customer end
backwards, the supplier may consider his sourcing to be strategic information,
and vice versa, a company may not be able to obtain the visibility to his
customer’s customer, because the first tier customer “owns” them. Very strong
incentive is needed, and often this consists of truly strategic relationships in the
supply chain.
Visibility over company barriers also makes vendor managed inventories (VMI)
possible. This requires trust on both sides. The best applications are in the

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distribution of heating oil, delivering beverages to shop shelves, and in the basic
Kanban process.
Logistical chains are not true chains but are actually networks. A company
usually likes to have more than one source to supply it, especially in order to
avoid risks in sourcing, but also to lower the prices by competition among the
suppliers. Similarly, a company is in a much better situation when it has more
than one customer. The network problems become very large, because each
company in the network has its own personal subnet of suppliers and customers,
as well as competing companies. Even internal complexity of a company depends
on the number of product and subpart items, suppliers, sites, distribution, and
time periods. The simplification of internal networks of companies is a constantly
renewed process, until the simplification also reduces competitiveness. Then
again, new strategies are needed in order to reach the markets. In restructuring,
the fusions and fissions of companies change the internal networks radically,
and the networks need to be reanalysed. Even in changing subcontractors, the
combined networks needs to be reorganised.

One of the factors adding to complexity is the change of measures within the
manufacturing process. Especially in process manufacturing, the measures
concerning the materials change while the materials are transformed in the
production process into the final sales products. Raw wood is considered as bulk,
cellulose and paper are again bulk, but each measured differently. Paper is then
cut into rolls and sheets, so the measures become discrete, and the number of
paper qualities with customized measures increases the final product variety
many times. At each stage, the material is in a different form or constitution, and
thus requires different control and quality parameters as well. Glass and textiles
are analogous, as well as mining into finished metals.
In assembly manufacturing, modularity is a way to decrease the variety of the
subparts, as well as to push backwards the point of finalizing (postpone) the
product. This is a way to shorten the total production time when an order is

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received, and thus decrease also the time to customer. Another reason for
modularity is to make repairs, maintenance, and modernization more simplified.
Benchmarking has become very popular for companies in assessing their ways of
doing business and taking care of logistics. Best practices are derived, and
usually the companies with best practices survive best in the chaotic situations
[Boyson et al. [5]). SCOR [26] is used in modelling the processes, aligning them,
but also in benchmarking. As a benchmarking tool, it is used to provide standard
measures for comparing the efficiency of processes. In literature, several
measures are presented to measure the efficiency of processes and operations.
Nowadays, quality is assumed, time, cost, and service levels are the most
important logistical measures.
Virtual warehousing came to existence by the use of information technology,
products were delivered directly from the producer to the customer. This
required the development of large databases, datawarehouses, to have exact
information of all product items, versions, suppliers and customers. Typical
applications concerned spare parts production and deliveries, as well as
electronic product components.
One of the trends seen especially in the consumer markets is the existence of
brands. Brand names have become so important, that business mergers are
made for the reason of obtaining brand ownership. When the actual
manufacturing is subcontracted to countries with cheaper production costs, the
result is that the customer may not know where and by whom the purchased
product was actually

made. Another strong brand trend is that big marketing chains are selling
products under the market chain brand, and again, the actual producer and
product may change unexpectedly, since the producers are chosen periodically
by bidding processes.
Mobility of production and subcontracting depending on finding cheaper
production opportunities has especially been applied in textile industry and in
electronics. Market areas also have an affect on the site selection for new

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production plants in order to avoid taxes and duties in exports. Now this mobility
of production is widening into other manufacturing areas as well.
7. Research
Outsourcing was seen as the way to concentrate in core business. If the final
customer interface is outsourced, the vital link to customer information on the
usability and needs for product development may be lost. Thus, the partnership
with the sales organization is vital in order for that information to be available.
Outsourcing should be done with great care. Valore “Value Added Logistics
Research” project] VALSSI (Value Added Logistics Services) – project is a research
project at LUT where outsourcing has been studied in an after sales application.
Logistical functions and operations are typically outsourced. Then it is important
to know how to obtain these services in the best way. The logistics service
operators have also become global, offering a wide range of services. In the
VALSSI-project, the services were developed in a modular fashion
Many companies also let their service providers choose the actual transport
routes, which is seen at key points in the infrastructure as sudden strong
changes of transport volumes (f.i. ports, cross-docking terminals), when the
service provider for a company is changed. Thus the decision making on actual
operations in logistics are outsourced as well, it is required only that the service
provider makes the deliveries on time, with required quality, and with agreed
cost.
Large companies make many requirements to their suppliers, especially on
standardizing the company interface operations, and the large companies also
want to decrease the number of contacts. This means that these suppliers, in
order to stay in business, have to start process alignment, cooperation, and
develop into system providers. This means that SME-companies have to form
dynamic networks.

Still, the local SME companies face the competition of national and international
companies.

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8. Emerging best practice platforms and development needs


In modern, fast changing environment, the companie’s survival depends on
agility, adaptability, and alignment (AAA). According to Lee [19], the AAA is the
present best practice. Increasing product variety proliferation implies need for
flexibility driven by uncertainty. Shortening product and technology cycles imply
that logistics networks are more and more dynamic. Vertical integration to
outsourcing causes that there are multiple players with differentiating interests.
Agility helps to respond to uncertainties with speed and effectiveness;
adaptability helps to adjust to the shifts in the supply chains and networks, and
alignment helps in synchronizing multiple interests and incentives. Agility and
adaptability include the aspects of preparedness and readiness in crises
situations, design flexibility, supply flexibility, performance management, and
tracking and tracing (and acting upon information). Alignment concerns
alignment of information, identity, and incentive. Information alignment means
sharing common knowledge, to achieve visibility for better planning. Identity
alignment means that the roles and responsibilities of the partners are clear in
order to act efficiently and with flexibility. Incentive alignment means
accountability of cost, risk, and gains; all partners should share equitably, and
agree on overall performance measures and targets.
New technology, long waited for and still not quite there, is RFID. The
applications tend to be seen as tracking and tracing, gathering information in
lots, without need to touch, of the items in warehouse, vehicle, or delivery
consignment. It is obvious, that it also gives opportunities for flexible dynamic
control.Also smart materials are being developed. In transportation, also new
technologies are under development.For gaining insight to the future, logistics
roadmaps have become widely developed. Scenario work is also gaining
strength. Both used to be applied in companies internally, now more general and
wider application is becoming apparent.
The general opinion is that the present day software does not respond to the
needs in logistics. Customer relations management systems do not have

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analytical capabilities. The same view concerns forecasting methods. Much of the
logistics

specialized software is still not integrated, and they still analyse constrained
problem areas. Traditional methods of operations research do not produce
satisfactory results in the more complex and dynamic environment. New
modelling techniques and solution methods have to be developed.
Some of the theory is developed on an idealistic view, such examples are for
instance the economic order quantity, value chain, and logistical visibility. These
theoretical ideals have been visionary, and they have become drivers of
development in logistics. Both value chain approach and logistical visibility are
clearly also trendsetters leading to excellence. Thus logistical theory evolves also
on the setting of goals.
The third way of development of logistics is the analysis methodology, and
the theory involved in the theoretical basis of the methods. There is clearly a
need for new methods, with wider range of information access, with ability to
work with relationship issues, and ability to be applied in dynamic situations. The
methods also need to be able to handle large amount of data and increasing
complexity.
Assessing the future is also increasingly important. It is seen in the need of
better forecasting methods, which are able to handle more data and complexity,
so that they simulate expert systems. It is also seen in the increasing popularity
of scenario working and technology roadmap-applications, which are used both in
company environment and in national level. Identification of weak signals, which
may become trend setters, is considered to be extremely important.

Growth in Logistics - An Overview


Introduction
With the growth of the industries there was the boom in the logistics sector.Open
market also open the opportunity for logistics industries to grow and bom itself.
Logistics call for an understanding of the total supply chain, the elements of

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which include inventories, packing, forwarding, freight, storage and handling.
Logistics is responsible for all the movement that takes place within the
organization whether it is inbound logistics of incoming, raw materials or
movement within the company or the physical distribution of finished goods,
logistics encompasses all of these.
Typical logistics framework mainly consists of Physical Supply, Internal
Operations and Physical Distribution of Goods and Services. To put it more
simply, the

material supply logistics starts from the base level of “generation of the
demand”, through the “process of purchase” and “supply of material from the
vendor” right through to “final acceptance” and “payments to the supplier” and
“issue to the indenter” and has to be considered as a “one whole activity” with
each stage having an impact on price/cost of material supply.
Logistics is, in itself, a system; it is a network of related activities with the
purpose of managing the orderly flow of material and personnel within the
logistics channel.

DEFINITION :
The simplest way to.describe logistics is to say that it is all about ways and
means of meeting the demand for materials i.e. satisfying the customer with
what he wants, when he wants, where he wants etc.
Definition includes outbound, inbound, internal and external movements and
returns of material for environmental purposes. The logistics concentrate on
dynamic processes, related to the flow of materials and the relationship between
the materials and their use at different facilities.
The most wide spread definition from council of Logistics Management says that
“Logistics is the part of the supply chain process and plans, implements and
controls the efficient, effective flow and storage of goods, services and related
information from the point of origin to the point of consumption in order to meet
customers requirements.”

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SCOPE:
Logistics is not confined to manufacturing operation alone. It is relevant to all
enterprises, including Govt. institutions such as Hospitals and schools and service
organization such as retailers, banks and financial service organizations. The
study of logistics is especially important for bulk raw materials, where substantial
outflow of freight is involved. Management of Logistics is an art which is
extremely difficult to perfect in India, JIT ends up being SHIT - some how in time.
The study of logistics is important to establish a lean supply chain which would
give an advantage of quick product change over, capability, excellent short and
long term forecast visibility and JIT capability.

MODES OF TRANSPORTATION IN LOGISTICS :


In order to transport material from one place to another Logistics Managers are
using Rail, Road, Air, Water & Pipe Line as the modes of Transportation. A
logistics expert needs to understand these modes based on priorities, product
type. lead time etc. to decide the appropriate mode of Transportation.
Rail: Used for delivery of a wide range of goods including coal, iron ore, cement,
food grains, fertilizers, steel, petroleum products and other heavy goods.

Road : Used by suppliers to deliver goods in a cost effective manner and best
suited for short distances. Many transport companies have expertise for fast
delivery, packaging etc. for making scheduled delivery.

Air: Used mostly for delivery of high value and tow volume goods from distant
suppliers, usually not connected by any other mode of Transportation. It is also
suitable for emergent item to be imported for some specific requirement.

Water : Used by firms for delivery of goods from distant suppliers, mostly
conducted in containers of varied size. This mode is ideal for transportation of
heavy and bulky goods and suitable for products with long lead times.

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Pipe Line : Used by oil sector companies for mass movement of Petroleum
products including gases. Due to quite low operating cost it is one of the
preferred mode of transportation.

THIRD PARTY LOGISTICS :

Third Party Logistics (3PL) provider handles all or most of freight of the
organizations including the management of information by the third party,
freeing the company from day to day interaction with carriers, and having to
oversee hundreds or thousands of shipment. New and cheaper information flow
resulting from internet enabled solutions, will lead not only achieving immediate
cost reductions in operations but also to enormous productivity gains over the
next few

years.
The tracking and control of movement of goods drive freight optimization and
asset utilization. The options are : increased trailer utilisation, combining full
truckload shipments, consolidation, aggregation of smaller buyers. Purchase
asset based transportation is becoming increasingly a commodity.
To put simply, 3PL refers to the outsourcing of a logistics function. It could be the
use of a transportation carrier, a warehouse, or a third party freight manager to
perform all or part of a company’s production distribution functions.

The principle reasons of for this function are as under:


• Globalization of sourcing, manufacturing and distribution leading to an increase
in the complexity of material movement.
• Competition that has forced companies towards more responsiveness and a
reduction in inventories. An increased need for small but frequent shipments with
100 percent reliability, requiring core competence in logistics management.

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• Resource constraints that require companies to concentrate only on their core
manufacturing or new product development activities.

FOURTH PARTY LOGISTICS


Fourth Party Logistics (4PL) provider is a supply chain integrator that assembles
and manages the resources, capabilities and technology of its own organization
with those of complementary service provider to deliver a comprehensive supply
chain solution.
4PL is emerging as a path to achieve more than the one time operating cost
reductions and asset transfers of a traditional outsourcing arrangement. Through
alliances between best-of-breed third party service providers, technology
providers and management consultants.

4PL organizations can create unique and comprehensive supply chain solutions
that cannot be achieved by any single provider. According to John Gaftorna,
“White oufsourcing third party logistics is now a accepted business practice,
Fourth Party Logistics is emerging as a breakthrough solution to modern supply
chain challenges... to provide maximum overall benefits.”

4PL can be described as the complete outsourcing of the logistics function


including procurement of service providers. 4 PL companies are suppliers which
have the expertise to manage resources, value delivery processes and
technology for their clients in order to allow their clients to totally outsource their
logistics management activity. The 4PLs do not compete with 3PLs as they have
superior expertise in their respective fields by virtue of their investment and
specialization.
4PL providers do not own assets for transportation or warehousing, but rather
leverage the solutions created by 3PL.providers, in order to identify and provide
‘best in class’ services to their clients. There are many variations of the 4PL
model that are practiced.

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Three different models are summarized as under;
A) Lead logistics provider: The 4PL provider acts as an in house freight
management company, it might or might not have a role in the selection of 3 PL
partners. It takes care of transport invoicing and the monitoring of the
performance of the 3 PLs.
B) Solution Integrator: In this variant of the model, the 4PL acts as the integrator
of various 3PLS and as a single window for freight negotiations, 3PI selection and
freight management on behalf of its client.
C) Industry Innovator: Under this model the 4PL uses its expertise and resources
to create a solution not for any single client, but for offering 4PL services to a
number of clients in an industry.
The services provided by a 4PL provider are:
• Freight Negotiations with 3PLs
• Freight Contract Management
• Transport Billing
• Continuous Improvement Programs
• Management of Service Providers
• IT Solutions
• Risk Management and Insurance
• Cash-flow Management.

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RESERVE LOGISTICS:
Increasingly, as a strategy, to compete on services, companies offer repair and
replacement services for their products under the warranty periods. The
defective products are often shipped across international borders to common
repair centers to be refurbished and returned to the originating station. Logistics
service providers who offer these services have to tackle issues pertaining to
duty payment on refurbished products, customs documentation and the
establishment of collection points for repair for the customers.

CONCLUSION:
Logistics is one of the area of the supply chain i.e. growing at a tremendous case
as the Internet and E-Commerce is drastically changing the range, delivery time
and the speed of information as well as ordering and payment process. Due to
the big boon of information technology, greatly influencing and enhancing the
effectiveness of logistics, the time is not far when 5 PLs and 6 PLs may emerge
which will probably we doing part of the manufacturing and marketing for the
organizations.

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Logistics in India
India spends about 13.0 percent of its total Gross Domestic Product (GDP) on
logistics, as per 2005 estimates. The major logistics functions for the Indian
industries include Transportation, Warehousing, Freight Forwarding, and other
Value Added Operations including Management of Information Systems (MIS). Of
these functions, transportation and freight forwarding have been traditionally
outsourced to external service providers with relevant expertise and
infrastructure. The warehousing and MIS functions have been mostly managed
in-house by industries.
But the huge diversity in geographic conditions, consumer habits, and
infrastructure conditions across the country make it a major challenge for Indian
industries to efficiently manage their supply chain to reach all parts of the
country. Additionally, India’s retail network is very vast, estimated at about 3.3
million outlets in 2005. The highest priority of all industries in India is to achieve
a consistent presence of their products across maximum possible section of this
vast retail network. This could be achieved through a well knit end-to-end
logistics process managed efficiently by a professional logistics service provider.
Nevertheless, the logistics industry, providing services to fulfill these major
logistics needs of the Indian industries is highly fragmented. The transportation
service provider segment is completely dominated by small trucking companies
and individual truckers. The freight forwarding service provider segment is also
represented by thousands of small customs brokers and clearing & forwarding
agents. Similarly, there are a huge number of participants in the warehousing
service segment and MIS service segment also. Few service providers have the
capability to provide more than one service and it is very rare that a single
service provider has the capability to provide all the logistics services. Such
fragmentation had lead Indian industries to outsource packets of individual
logistics functions to different service providers while retaining the overall control
of logistics in-house, despite incurring heavy administrative and infrastructural
costs.

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Third Party Logistics – An Overview


Third Party Logistics (3PL), the concept of a single professional logistics service
provider managing the entire logistics functions of a company, had originated in
the

developed economies of Europe and America, to relieve industries from huge


logistics costs apart from the hassles of dealing with multiple in-coherent logistics
service providers. It proved to be immensely successful in improving logistics
efficiency of majority of industries and quickly gained popularity, spreading
across the globe. In the process, several professional logistics service providers
offering that kind of services have emerged to be leading 3PL providers with
operations in multiple continents.
In the initial stages, 3PL providers offered only basic logistics services such as
warehousing and transportation. But with growing logistics needs of
organizations to remain competitive in globalized economies, 3PL providers have
evolved to offer several other value added services ranging from packaging to
supply chain planning.
Advent and Growth of 3PL Industry in India
3PL industry’s origin in India can be traced back to mid 1990s. The industry was
pioneered by global logistics majors as a part of extending these services to the
Indian subsidiaries of multinational companies in automobile, electronics and
FMCG sectors. Indian subsidiaries of multinational companies in these sectors
took cue from their parent companies and began to outsource a share of their
logistics functions to these specialist service providers. Though insignificant in
the first few years, Indian 3PL industry is experiencing a rapid growth after year
2000. The number of participants in this industry had grown to be more than 400
by year 2005.
The Indian 3PL industry can be divided into three distinct tiers - National Major
3PL companies with nationwide presence, Regional 3PL companies with strong
presence in one or two regions, and Small Remote 3PL companies.

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3PL Market in India – Poised for a Remarkable Growth
The 3PL market in India is still in a relatively nascent stage, with multinational
companies in all industries being the predominant users of these services.
However, domestic major companies in leading industry sectors have also begun
to follow the footsteps of their multinational counterparts, starting with
outsourcing their basic logistics functions. Realizing the significant cost
reductions and several other benefits gained by these companies, the large
numbers of small to medium

companies in all the industries are gearing up to use 3PL services in their logistic
functions, resulting in a tremendous potential market for the 3PL market in India.

The opportunities for growth of 3PL usage could be varied among different types
of companies. The multinational companies that are already using 3PL in basic
logistic functions might graduate to outsourcing value-added advanced services
such as customer support, inbound logistics, and reverse logistics. Whereas, the
domestic major companies might increase their 3PL usage in the basic logistic
functions and occasionally experiment with the value-added advanced services.
On the contrary, the small and medium companies could just begin to use 3PL
services for their basic logistic functions.
Nevertheless, considering that the most important logistics functions for Indian
industries still are transportation and warehousing, which are likely to be
outsourced to 3PL in increasing share, a high level of growth is estimated for the
Indian 3PL market in the next 5-7 years. The Indian 3PL market, estimated at
about US$890.3 billion in 2005, is expected to grow at a compound annual
growth rate of 21.9 percent to reach US$3,556.7 million in 2012.
Frost & Sullivan’s research identified that the largest end-user industry for 3PL
services as of 2005, is the auto industry. A lot of multinational automobile
makers, like Suzuki, Honda, and Ford, have set up manufacturing bases in India,
and have been major users of 3PL services. Expansion of manufacturing facilities

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by most of these companies indicates huge potential for 3PL services in this
industry. Other sectors that have shown substantial contribution to 3PL market
and significant growth potential include the information technology (IT) hardware
and electronics, Fast Moving Consumer Goods (FMCG), and retail sectors.
A Few Challenges to be addressed for Maintaining the
Momentum
Geographic diversity of India needing varied logistics expertise for each region is
a major challenge to be addressed by 3PL service providers. India has a diverse
geographic scenario coupled with a diverse consumer habit scenario in each of
its 25 states. Logistics operation in each state requires a suitable model that
facilitates the effective storage and transportation of goods mostly sold in that
state, making it very difficult for adopting a uniform logistics model. 3PL service
companies interested in serving a particular company would have to offer
multiple solutions to

fulfill the nationwide logistics needs of that company. Infrastructure limitations in


India, which limit the scope of logistics services package are another concern for
3PL service providers. The congested roadways and ports resulting in significant
delay in movement of goods, affect the performance of 3PL service providers.
Similarly, lack of sufficient warehousing and specialized storage facilities beyond
major cities of the country result in 3PL service providers to restrain from offering
warehousing services across the country, hence resulting in their failure to
become the complete logistics service providers for clients. Building own
warehousing facilities in strategic geographic locations that would serve as hubs
for specific regions, could address this problem.The complicated tax structure,
deep-rooted corruption and high bureaucratic control are some other hassles
faced by 3PL service providers in providing the best of logistics solutions for their
clients. However, despite the existence of challenges, several factors are driving
the growth of Indian 3PL market.
Some Factors That are Driving Indian Logistics towards 3PL

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Value Added Tax (VAT), the Indian Government’s proposed uniform tax regime, is
expected to drive Indian industries towards using more 3PL services. Introduced
partially in 2005, a full implementation of this regime is expected to necessitate
having centralized large warehouses in regional hub cities, to achieve best
efficiency in logistics. Since building such large warehouses requires huge
investments, most Indian companies are likely to outsource the warehousing
function, creating immense potential market for 3PL service providers. Leading
companies in major industries have already started planning for the new scenario
and the required warehousing capacity to be outsourced. Others are expected to
follow them soon. The government of India’s increased focus on improving
logistics infrastructure is expected to have a huge positive impact on 3PL market.
The government has invested US $17 billion to upgrade highway networks, with
the implementation of two major projects, namely the Golden Quadrilateral
network and the North-South-East-West (NSEW) Corridor. Apart from this, in a
remarkable infrastructure related decision, the government has opened up rail
freight operations to private players, thereby creating opportunities for cheaper
and faster movement of goods. Transportation by rail is definitely cheaper than
by road, as trains are faster and have lower costs per unit distance traveled. This
is expected to enable 3PL service

providers in offering more cost-effective services to clients, thereby increasing


the 3PL usage by all industries.
Apart from these factors, the increasing list of multinational companies starting
operations in India is expected to fuel the growth of 3PL market. Entry of giants
like
BMW, Flextronics, and Wal-Mart are expected to contribute to considerable
growth of 3PL usage in their respective industry sectors. The opening up of the
Indian economy to foreign investments is expected to attract more companies
into the country, thereby adding momentum to 3PL market growth. The wide-
spread information technology awareness and expertise in India is also expected
to help 3PL companies in offering several value added services using IT such as

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Fleet Management Systems, Warehouse Management Systems, and integrated
Supply Chain Management systems.
Conclusion
The Indian 3PL market is set to grow tremendously in the next 5-7 years,
spearheading the growth of logistics market. Several factors including
government’s support are instrumental in this growth. Though certain challenges
remain to be addressed, the general trend is highly positive. With scenario highly
favorable for them, the onus is now on 3PL service companies to offer quality
services at affordable pricing, and delivering consistent results to maintain the
momentum. For now, surely 3PL is the way forward for Indian Logistics Market.

LOGISTICS IS NOT A CHAIN


Executive Summary
This paper will challenge the supposition that “logistics” is a chain, and further
reject the notion that it is comprised of two distinct sides, supply and demand.
The chain portrays logistics to be stagnant and linear; it also suggests that supply
and demand are two separate chains. This view causes rigidity of thought and
creates a contrary set of theoretical business rules, forcing those involved to
think within those limitations.
Logistics is dynamic! It is comprised of many moving components that
continually interact, constantly adding substance to an evolving process. The
very definition of logistics, “the discipline that manages the flow of raw material
through the finishing process and responsible for customer satisfaction”, clearly
demonstrates

that its current representation as a chain is in direct contravention of the “flow”.


It will also be argued that there are no distinct sides, that supply and demand is
part of a continuous cycle.
This white paper will:

Challenge the notion that logistics is a chain

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1. Propose that there are two major components of logistics
2. Identify macrologistics and a representative sample of the major and sub-
components of micrologistics
3. Discuss the logistics dichotomy
4. Discuss evolving logistics concepts
Why Is This Subject Important?
In decision making theory, understanding differences and the levels of difference
is a mission critical element that must be incorporated and operate pervasively
throughout the entire decision process! The complexity of logistics as it relates to
today’s and tomorrows worldwide commerce requires a clear understanding of
these various differences and a fresh look. The current concept that logistics is
best described as the “supply and demand chain” whose links portray the
functional elements, incorrectly postures logistics as being linear and unfluent.
Logistics is a fluent and dynamic process; the “chain” must be replaced in order
to maximize the benefits and to bring this important discipline to the next level!
Knowing that there is a difference between micrologistics and macrologistics will
allow you to effectively and efficiently:
• Identify weaknesses
• Identify areas of opportunity
• Select the most appropriate tools, products and services
• Achieve successful collaboration
• Reach in to an enhanced database
• Affect improved communications
• Establish new reasoning paths for study and analysis

Limitations of the Chain

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Logistics and supply/demand chain are words that are incorrectly used
interchangeably and to describe each other. It therefore follows that the
application and reasoning are circular; so, effective articulation, with resultant
success, is impossible. These factors, coupled with the belief that logistics is a
chain have made the goal of world class logistics excellence amorphous. If the
notion of the chain continues to represent logistics, we will see a continuation of
insufficient ROI,
underutilization, poor response to tasks and events and a significant misuse of
management intelligence, talent and time.

Because needs are constantly changing and because there is probably an equal
number of solutions occurring, it becomes exceedingly more difficult to efficiently
and effectively match a need or needs with the appropriate solution or solutions.
The “chain” limits our abilities and capabilities because it is serial and of singular
dimension. Further, Navi Radjou, of Forrester Research, in his article (Supply
Chain e-Business, July/August 2002), “Exit supply chains; enter adaptive supply
networks”, states, “Existing supply-chain apps don’t help manufacturers sense or
respond to changes in their operations network because they insulate static plans
from dynamic execution reality.” By virtue of these restrictions, our thoughts
have been channeled into believing that our only tool is one that is
“comprehensive”. If we only have a limited number of needs or just a few needs
that must be satisfied today, acquisition of this comprehensive tool is likened to,
“squeezing an orange grove for a glass of juice”.

Since logistics is responsible for managing, integrating and controlling the flow of
information, material and money, it must have the capability of targeting a
specific issue and establishing the best method of approach. In order to plan and
control these flows, the current view of logistics as a chain has been unable to
keep up with the needs analysis and the selection of effective solutions.

Logistics professionals recognize and appreciate the importance of, “squeezing


only the appropriate oranges, so as to extract the correct amount of juice” and

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they clearly understand the importance of a continual harvest. Logistics
portrayed as a

chain continually forces the belief that identifying issues and solving problems
must be performed in linear or serial, flat, static and unfluent environment.

Most companies throughout the world have embraced logistics and its
importance in achieving superior customer service, operations and profit
improvement. There has been a proliferation of logistics software systems,
products, tools and services over the last several years. They are offered by
general developers, 3PL’s and by other companies whose initial development
purpose was for internal use. Further,
there has been a great deal of dialog within and between companies, addressing
the subject specifically for the benefit of those business partners. Additionally,
the dialog is occurring in many forms such as, seminars, case studies, white
papers, webinars, on-line communities, management presentations, lectures at
educational institutions and advertisements. Through this labyrinth, little
consensus has been achieved, therefore diminishing the ability to achieve a
higher level of logistics success as well as limiting effective collaboration. It is
clear that the logistics discipline and practice needs to evolve.

An Awakening
At least, one company recognized that there is a logistics dichotomy and has
developed its products, tools, services and systems from a “new” perspective,
“simpler is better”. As a Transportation Management Services Provider it focuses
on incremental and connectible discrete vertical products and service offerings
within the Transportation Management Spectrum. Consistent with this
perspective, this approach recognizes and appreciates the importance of getting
its glass of juice from one orange. Through this understanding, logistics can
continue to evolve, reaching higher levels of benefit, understanding and
acceptance.

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Two Major Components of Logistics


The notion of this paper is that logistics should be viewed as a set of gears; the
gears collectively represent macrologistics, while individually they represent
micrologistics. At the micrologistics level, each of the cogs represents the
discrete logistics functions. The graphic below will symbolize this proposition.

Basis for the Words


At the outset, it is important to point out that there are no commonly used
definitions of micrologistics and macrologistics. The definitions of these terms
that have been reviewed were found to be product oriented, or identify the name
of a logistics company or division and therefore are inconsistent and diverse. In
order to properly understand this topic it is imperative that shared definitions be
established. The method of approach that we selected to establish the shared
definitions for this paper, was to first consider the pure words, micro and macro,
and then to consider analogous terms. Microeconomics and macroeconomics
have been chosen as the terms that are most analogous to micrologistics and
macrologistics. By substituting appropriate words within the definitions, we
believe that reasonable definitions of micrologistics and macrologistics have
been achieved, at least, for this paper.

Shared Definitions for this Paper


Logistics is the discipline that manages the flow of raw material through the
finishing process and is ultimately responsible for customer satisfaction.
Micro is defined as, Basic or small-scale.
Macro is defined as, Large in scope or extent; large-scale
Microeconomics is the study of the operations of the components of a national
economy, such as individual firms, households, and consumers.

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Macroeconomics is the study of the overall aspects and workings of a national
economy, such as income, output, and the interrelationship among diverse
economic sectors.
Micrologistics is the study of the operations of the components of logistics,
such as transportation procurement, inventory control, data, freight tracing-audit
and payment.
Macrologistics is the study of the overall aspects and workings of logistics.

The Logistics Gears Drive Logistics


The graphic below identifies an overview of logistics and considers “gears”
instead of links in a chain. Essentially, gears demonstrate fluidity, while links in a
chain are

stagnant. This distinction recognizes the fact that there is a moving force or
engine that drives logistics and reinforces the fact that logistics is dynamic. In
the operating logistics process, one change causes another change. The
application of dynamics enables logistics and transportation professionals to
intelligently identify and forecast their needs and assign achievable goals. An
inherent advantage is planned response with predicable results.

Separating the Overall from the Components


Macrologistics are represented by the gears collectively in the above graphic and
as such would be concerned with the overall aspects and workings of logistics
management. The individual gears would represent micrologistics and address
the components of logistics, such as transportation, inventory, and warehousing.
The cogs on the gears represent the respective subcategories.
As an example, Transportation as a micrologistics component could have the
following subcategories: rating, routing, tracing and tracking, sourcing, auditing
and payment, management reports.
Warehousing’s cogs could include: receiving, put-away, replenishment, cycle-
counting, picking, packing, shipping, kitting, returns.

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Inventory’s cogs might include: turns, safety-stock, cycle-stock, transit-stock,
strategic-stock, replenishment frequency, consignment-stock.

The Logistics Gears; Driving the Process


Benefits
Reduce replacement and spare parts inventory Minimize reverse logistics
processing costs Improve return and repair cycle times Eliminate unnecessary
returns shipping costs Improve utilization of inspection
Facilities Maximize service network profitability Improve responsiveness to
customers Effectively managing the reverse logistics process is critical to
maximizing customer loyalty, meeting service-level agreements and driving high-
margin services revenue. In an effort to achieve these objectives, companies
build inventory buffers to ensure replacement product availability and use costly
manual processes to track return and repair orders.These practices are
particularly common among service providers that must coordinate

the activities of field technicians, transportation providers, inspection sites,


distribution centers and repair vendors. An application within the the Yantra 7x
product suite,Yantra Reverse Logistics improves customer
responsiveness, reduces inventory levels and minimizes operational costs
through real-time control of the return and repair cycle.YantraReverse Logistics
offers robust returns management capabilities specifically built for complex
operations, enabling your organization to more effectively manage the “end-to-
end” reverse logistics process and obtain integrated control over all orders
related to the return.
Manage the Reverse Logistics Process
Across Multiple Locations
Yantra Reverse Logistics provides maximum flexibility to manage the returns
process according to your organization’s business requirements. Easily
configurable workflows can handle returns according

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to any order or product-related attribute. Flexible Return Merchandise
Authorization (RMA) generation rules and return node selection logic let business
users dictate the steps for initiating and processing returns.This eliminates the
manual process used by many companies to fill gaps in enterprise or legacy
applications.
Increased flexibility and control results in shorter reverse logistics cycle times,
thereby reducing replacement inventory levels.
Leverage Returns as a Source of Supply
Many companies are unaware of the amount of inventory tied up in the return
and repair process. High-value products and parts may sit in technicians’ vans or
inspection centers for weeks before they are sent for repair or returned to
stock.Often these parts require no repair and could immediately be resold to
another customer. Yantra Reverse Logistics enables companies to effectively
track items throughout the return and repair process and automates the
procedures that return items to stock. Real-time status updates from service and
repair organizations enable your company to truly leverage the reverse logistics
cycle as a source of supply.

Improve the Customer Experience


Providing a positive post-sales service experience is critical in any industry.
However, when companies have entered into service-level agreements with their
customers, the cost of failure increases significantly. By providing integrated
control over all orders related to the return (i.e. the original sales orders, the
replacement order, the repair order, etc.),Yantra Reverse Logistics leverages
real-time information to improve the quality of customer service, while
eliminating inventory buffer stocks and costly manual processes.
Rever

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Logistics & Supply chain industry in India:
Current status
FREIGHT FORWARDING
1. FREIGHT FORWARDER
• No Internationally accepted definition
• Originally a Commission agent for attending to port, shipping & customs
formalities for and on behalf of the exporter.
• Today, an essential link in trade and transport for and on behalf of exporter
& Importer.

2. FREIGHT FORWADER’S SERVICES FOR EXPORTERS


• Choice of routes.
• Reservation of shipping space.
• Inland transportation.
• Packing.
• Warehouse
• Insurance
• Post, custom and shipping documentation.
• Overseas transport service.
• Assistance in filling claims.
• Monitoring movement of goods to import.
• General advisory services.

3. FREIGHT FORWADER’S SERVICE FOR IMPORTER

• Monitoring movement of goods.


• Servicing and checking all relevant documents.
• Customs and port documentation.
• Warehousing

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
• Transportation
• Delivering goods to consignee.
• Assistance in filling claims.

4. FREIGHT FORWARDERS RELATIONSHIP WITH INTERVENING


PARTIES

• Custom commissionerate
• Post trust
• Banks
• Consular office
• Health department
• Carrier
• Chamber of commerce

5. FORWADER AS PRINCIPAL
• Containerization / multimodal transport service.
• Independent contractor with all responsibilities and liabilities.

6. CHOICE OF FREIGHT FORWADER : FACTOR


• Specialization
 Product specialization
 Country specialization
• Organization and activities
• Financial standing
• Fees

7. RIGHTS / DUTIES / RESPONSIBILITY

• Legal status varies from country to country

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
• Standard condition in accordance with commercial practice or legal system
in each country.
• Accepts liability for his own / his employees’ fault.
• Does not accept liability for acts or omission of third party.

PORT AND SHIPPING FORMALITIES

Constitutes an important stages in physical distribution management and


processing of export orders. Procedural formalities for shipment of export cargo
differs from port to port because of different reason e.g. post trust act, Dock Bye
Laws, custom of trade etc. Like custom formalities, these are normally attended
to by freight forwarders who specialize in handling this part of export
transactions. Export cargo can be brought to the port only after the ship has
been allotted a berth and cleared for loading. Some port authorities in India
require the shippers to pay port charges and have their shipping bills passed by
the customs before carting their goods to the docks. At the Mumbai port however
shipper have the facility of paying port charges after the shipment.
Before bringing the cargo to the shipment shed, the shipper has to obtain the
carting permission from the shed superintendent and also the ship’s agent on the
document prescribed by the port trust. This document is known differently at
different ports e.g. docks challan in Calcutta, port trust copy of the shipping bill
at Mumbai and export application at other ports in India.
When goods are brought at the dock gates, the shipper has to present the port
document and the vehicle ticket (in duplicate) to the gate inspector. All the gate,
the documents are compared and checked to ensure that only such goods, which
have been permitted, are brought to the docks for shipment. The packages /
bundle / cases in each vehicle are counted to see that their number tallies with
the number mentioned in the respective vehicle tickets. Vehicles are allowed to
move to the concerned shipment shed and particulars of cargo passed through

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
the gate are recorded in a register maintained at this point. Coinciding with the
arrival of the

vehicles in the shipment shed, the shipper submits the vehicle ticket duly
endorsed by the gate inspector, export application/ dock challan / port trust copy
of shipping bill (duly passed by the customs) and a receipt in lieu of payment of
port charges, where necessary to the shed superintendent. As cargo is unloaded
in the shipment shed, details of the cargo received are entered in the ‘Shed Export
Cargo Register’, which is maintained shipper-wise and ship-wise.
The shipper then approaches the custom appraiser and customs preventive
officer for physical examination of goods and obtains ‘Let export / Let Ship’
endorsement on the shipping bill. The shed superintendent maintains a record of
these endorsements in the port trust’s documents also. The cargo is then allowed
to shipped. On completion of shipment details of cargo actually shipped are
recorded in the ‘ Shed Export Cargo Register’ from the shipping tally sheets’,
which are maintained by the port trust, and also the shipping lines. On receipt of
cargo onboard, the master of the vessel issues a document called the Mate’s
Receipt in respect of every shipment taken on board. At some ports, the issuance
of Mate’s Receipt is preceded by another document, which has to be exchanged
for the Male’s Receipt. Port authorities collect the Mate’s Receipt from the master
or the Chief Officer of the vessel and pass them on to the respective shippers
only after ensuring receipt of all port dues. No Claused Mate’s Receipt are
accepted by the port authorities, unless authorized by the shipper(s).
After collecting the Mate’s Receipt, the shipper(exporter or his agent) prepare the
bill of lading on blank forms supplied to him by the shipping company and
present 2-3 originals and some non negotiable copies of the document at the
shipping company’s office for the signature of the authorized officer along with
the Mate’s Receipt. The Mates Receipt is the important document because it is
required to be exchanged for Bill of Lading. The shipper must, therefore collect
this document because from the Shed Superintended immediately after it has
been received by the latter to avoid delays and problems, which might follows if
it is not collected in time.Bill of Lading may be marked ‘Freight Paid’ or ‘Freight to

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
Pay’. If the freight is pre paid, i.e. paid by the exporter, the Bill of Lading is
marked or stamped to the effect and where freight is not pre-paid, the bill of
Lading is marked ‘ Freight to Pay’ or ‘Freight Collect’. The shipping company
retains the Mate’s receipt. Before signing and parting with the Bill of Lading, the
shipping company ensures that all the clauses appearing on the Mate’s Receipt
are reproduced on the Bill of Lading also.

IMPORTANT STAGES

1. Goods brought to port after vessel declared for loading, shipping Bills (SB)
passed by customs, ‘Carting Permission’ obtained from port shed superintended /
shipping line’s agent and port charges paid.

2. Payment of port charges document, port trust document (PTD) plus shipping
Bill duly passed by customs.

3. Carting of goods to Docks, the following documents are to be presented at


Gate.
• Shipping Bill passed by custom
• Port trust document with ‘Carting Permission’.
• Evidence of payment of port charges.

4. Document checked at gate and endorsed to Shed Superintended, goods


checked where possible.

5. Statement of goods sent from gate to Shed Superintendet.

6. Arrival of goods in Shed.


• Presentation of documents plus goods
• Entry of particulars in ‘Shed Register’

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Logistics & Supply chain industry in India:
Current status
• Unloading of goods in Shed / outside shed
• Unloading tally (must match with it)

7. Customs Examination of goods in Docks


• At ICDs / CFS in case of containerized cargo
• Endorsement o shipping Bill/ port trust document
• Entry in shed register

8. Supervision of loading by custom preventive officer, after ‘LET SHIP’


endorsement on shipping Bill and port trust document.

9. Loading of goods ‘On-Board’


• Tally by port trust clerk and shipping line’s clerk
• Exchange of tallies
• Acknowledgment of goods ‘On-board’ by Master of Vessel on shipping Bill
and port trust document.

10. Issuance of Mate’s Receipt by Master of vessel to Exporter through port trust

11. Exchange of Mate’s Receipt for Bill of lading at shipping line’s office.

CUSTOM CLEARANCE OF EXPORT CARGO

1. Submission of documents at the customs house.

• Relevant shipping Bill (SB) with declaration

o Duty free goods(black)


o Dutiable goods(yellow or lemon yellow)

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Logistics & Supply chain industry in India:
Current status
o Under claim for duty draw back(green)
o Goods Ex-Bond(pink)

• Invoice
• Packing list
• Contract / letter of credit
• Guaranteed remittance forms
• AR 4 (0) + (D), AR form for central excise
• Quality control / post inspection certificate
• Any other like ceiling price certificate, floor price certificate etc.

1. Checking of documents and allotment of shipping Bill number


2. Sorting of shipping Bill: According to type and product group
3. GR Formalities- cross reference
4. Duty assessment and collection
5. Shipping Bill (original)-statistics department
6. “Let Export subject to Physical Examination” endorsement on shipping
Bill.
7. GR (original) with statement to RBI
8. Movement of goods to docks
9. Presentation of documents at Dock Gate
• Shipping Bill duly passed by customs
• Port trust document bearing carting endorsements and proof of payment of
port charges
• Vehicle ticktet

10. Endorsement of document to shed superintendent (port)


11. Recording of information regarding goods received in Port trust Record
12. Physical examination of goods by custom officer
13. “Let Export” endorsement by custom officer on shipping bill

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Logistics & Supply chain industry in India:
Current status
14. “Let Ship” endorsement by custom preventive officer (CPO) in charge of
supervisionof loading operation.
15. Shipment Tally” loading of goods / containers on board maintained by
ship
16. Acknowledgment by master of vessel on shipping bill and transport
document
17. Issuance of Mate’s Receipt by Master of Vessel to port trust;s shed
superintendent
18. Collection of Mate’s Receipt by shipper from port trust’s shed
superintendent
19. Exchange Mate’s Receipt for Bill of Lading at shipping line’s Office.

FLOW PROCESS STAEMENT SHOWING THE DIFFERENT STAGES


OF CUSTOM CLEARANCE OF EXPORT CARGO FOR
DIFFERENT TYPES OF SHIPPING BILLS

1. Exporter or his agent drops inside the box kept outside the export
department the shipping bill and other related documents.

• Shipping bill (in duplicate triplicate or quadruplicate) duly filled in and


signed
• Declaration regarding truth of statement made in the shipping bill
• Invoice copy (required No. of copies)
• GR from (original+duplicate)
• Export license (wherever required)
• Original contract or correspondence leading to contract
• Contract registration certificate
• Packing list
• AR4 from (original, duplicate and sixtuplicate)

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Logistics & Supply chain industry in India:
Current status
• Any other

2. Collection of shipping bills and ministerial action thereon.


• Shipping bill along with other documents are collected at fixed
intervals every 15 min. or half an hour.
• They are then stamped with date and time and numbered according to
their category e.g. free shipping bills, dutiable, shipping bills, coastal shipping bills,
drawback shipping bills.
• In this process it is also ensured that the shipping bills are in proper
form, duly prepared and signed and all the relevant documents are attached.
Information given in the documents is also cross-checked.

3. Disposal of shipping bills relating to Baggage, Re-export and Non Dutiable


item where no foreign exchange is involved.
• These shipping bills along with the related documents are sent to the
index clerk who checks the GR Waiver’ formalities
• He endorses on the shipping bills “Let Export After Examination”
• Shipping bills are then sent to the window delivery clerk who detaches
the original copy of the shipping bill for being sent to the statistics department
• Other copies are given to the party to arrange for movement of goods
to dock for examination and shipment

4. Action in appraisement section regarding dutiable shipping bills,


drawback shipping bills and all other shipping bills involving foreign exchange.
• Allocation of shipping bills among different groups for appraisement
purposes
• Verification of the facts specified in the shipping bill regarding quality,
weight, value etc., with refrence to the invoice and contract. Value is to be verified
also with refrence to the price information available with the appraiser. Shipping

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Logistics & Supply chain industry in India:
Current status
bills under claims for duty drawback and under DEEC are properly scrutinized to
verify their genuineness
• In case of items subject to export licenses, it is verified whether the export
is in keeping with the licensing formalities and within limits allowed
• Classification number as per harmonized system of menclature(HSN) for
the item and the rate of duty application to it any, are then verified
• Endorsement of examination order is made on the shipping bill indicating
the extent of physical examination at the dock with the initial of the appraiser
concerned. The shipping bill are approved by the concerned appraiser
• In case of those shipping bills where the amount of duly drawback or the
values of consignment under DEEC is high, the shipping bills are approved by AC
• Shipping bills are then sent to the GR clerk

5. Action by GR clerk
• Checking GR from number given in the shipping bill
• Putting shipping bill number on the GR form
• Comparing value given in GR from with the value in the shipping bill
• Detaching GR from original from the shipping bills for being sent to the
Reserve Bank of India

6. Delivery of shipping bills to the party for further action


• Free shipping bills under claims for drawback are sent to statement clerk for
necessary records
• Shipping bills are then sent to the window delivery clerk for being handed
over to the party to arrange for shipment of goods

• The original copy of the shipping bill is detached at this stage for being sent
to the statistical department
• The dutiable shipping bills are given to the party for payment of export duty
in the cash and account department

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status

7. Payment of Export duty


• Dropping of shipping bills in the box kept in the cash & accounting
department
• Collecting and stamping of shipping bills
• Checking of calculation of duly by the computist and putting the stamp and
duty amount by him
• Comparing the original and duplicate shipping bills to ensure that duty
amount are correctly entered
• Shipping bills are then given to window delivery clerk to be handed over to
the party concerned
• The party presents the shipping bills with cash / cheque to the shroff who
enters the amount in the shroff rough sheet
• Putting the oval stamp on the shipping bill and export duty receipt which is
attached with the shipping bill
• The shroff enters the amount in the oval stamp and initials
• The shipping bills are then sent to the cash sheet writer who enters the
amount in the register of Export Duty and Endorses the register number on the
shipping bill
• Then the shipping bills are presented to the ‘out of charge clerk’ who
checks the amount in the register and the shipping bills and initials on the shipping
bills and the register
• The original shipping bill is then detached to be sent to statistics
department for compilation
• The duplicate shipping bill and export duty receipt are sent to window
delivery clerk to be given to party
• The party after receiving the duplicate shipping bill arranges for the
movement of goods to the dock for shipment.

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Logistics & Supply chain industry in India:
Current status
• In case the payment of duty is to be effected through adjustment in deposit
account of the party concerned the following steps are involved

• Shipping bills are handed over to deposit sheet account department


• The deposit sheet writer enters the export duty in the register of export
duty and the register number is endorsed on the shipping bill
• Then the shipping bill are sent to the ledger clerk
• The ledger clerk debits the amount in ledger. He then detaches the original
for checks with reference to entries in the ledger
• The duplicate shipping bill is passed on to the window delivery clerk for
being handed over to the party

8. Examination by shed appraiser/ examiner at the dock


• Clearing and forwarding agent present the shipping bill to the shed
appraiser after the export cargo has been brought to the shed by fulfilling various
formalities required in connection with movement of export cargo with the port
trust authority. Along with shipping the following documents are to be presented: -
a. Invoice
b. Packing list
c. AR-4 form or AR-5 form as the case may be
d. Agmark certificate, quality control certificate etc. whichever is applicable
• The shed appraiser assigns the shipping bill to one of the examiners. He
specifies the packages to be examined.
• Examiner examines the packages as specified by the appraiser in
accordance with the examination order given by custom house appraiser and
records report on duplicate copy of shipping bill and the triplicate copy of the
shipping bill.
• The shipping bill with examiner’s report and the sample of goods if
necessary, are brought to the shed appraiser who signs the ‘Let Export’ order on
the shipping bills

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Logistics & Supply chain industry in India:
Current status

9. ‘LET SHIP’ Order by the preventive officer on the shipping bill

• After the ‘Let export’ order is given on the shipping bill by the shed
appraiser, shipping bill along with all other documents mentioned earlier is
presented to the preventive officer in charge of the vessel in which export cargo is
to be loaded.
• P.O. verifies that AR-4 forms, export permit, inspection certificate etc. is
duly presented and that the ‘Let Export’ order is specified on the shipping bill. He
compares the particulars of AR-4 form with those of shipping bills.
• If everything is in order he endorses on the duplicate copy of the shipping
bill with ‘passed for shipment’ seal and initials.
• After the ‘Let ship’ order the duplicate copy of the shipping bill is given to
the shipper or his agent to be handed over to the shipping company. The in charge
of the carrier allows loading on the basis of this proof.

10. Shipment of Export cargo under the Supervision of P.O.


• The export cargo is loaded on the vessel under overall supervision of the
P.O.
• He checks up the loading operation with reference to shipping bills
(duplicate copy) and tallies being prepared by the ship staff and the port trust staff

11. Endorsement on Export promotion copy of shipping bill / AR-4 form etc
By the P.O.
• Signature of the master of vessel is obtained the duplicate copy of shipping
bill to indicate receipt of the content.
• The full or part shipment stamp the case may be is put by the P.O. with his
signature on the duplicate copy of the shipping bill.
• After loading is over P.O. verifies shipment with refrence to Mate’s Receipt
given by the steamer agent presented by the shipper’s agent.

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
• Certificate regarding shipment of export cargo in specified column is put by
P.O. on original, duplicate and sixtuplicate copy of AR-4 form, on the Export
promotion copy of shipping bills, on cervical invoice and any other document as
required by the shipper.

• Duplicate copy of AR-4 form is sent directly to the rebate sanctioning


authority by P.O. and the other documents along with the Mate Receipt are
Handed over to the shipper or his agent.

• The shipper or his agent presents the Mate Repptto the agent of the carrier
and obtains bill of lading.

CUSTOM CLEARANCE OF EXPORT CARGO AT ICDs


7. Submission of SB with relevant documents at container unit of customs at
ICD plus 2 transference copies of SB.
8. Noting and security of the documents.
9. Casting of the goods to ICD/CFS.
10. Physical examination order
11. Examination of goods and examination report on SB (D)/(T).
12. “Let Export” order
13. Stuffing of containers: endorsement on SB
14. Shipper showing export promotion copy of SB to MTO who issues MTD
(BL).
15. Containers sealed and sent to gateway port along with 2 transference
copies of SB through railways.
16. Container plus SB (T) copies presented to customs at gateway port.
17. Shipment under preventive supervision of the customs
18. Endorsement of fact of shipment by CPO on transference copies of SB.
19. Filling of export general manifest (EGM) of ICD originating goods at the
customs container unit at gateway port.

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Logistics & Supply chain industry in India:
Current status
20. Telexing fact of shipment by the customs at ICD plus date of entry
outwards of vessel within 24 hrs with SB number an date.
21. Dispatch of 1 transference copy of SB with endorsement by CPO to ICD’s
customs commissione rate along with statement showing SB number & date, date
of filling of EGM, date of dispatch of documents to ICD customs.
22. ICD customs on receipt of transference copy of SB document are co-
related for the purpose of DBK. Central Excise duty on finished product for export
by exporter.

DOCUMENTARY CREDITS

• A document involving merchandise is a wtitten undertaking by a bank to


pay in accordance with instruction from the buyer (applicant) a certain sum of
money to the seller (beneficiary) , within a prescribed time limit and against
stipulated documents covering the transport from seller to buyer.
• A document therefore:
• Is an arrangement by the bank for setting international trading transaction
• Provide a form of security for the parties involved
• Ensures payment once it is evident that the terms and condition of the
credit have been fulfilled
• Means that payment is based on documents only and not on merchandise
or services involved
• Seller and buyer enter into the contract
• Buyer instruct his bank to issue a document in favor of the seller
(beneficiary)
• Issuing bank asks a bank in the exporter’s country to advise / confirm the
credit to the exporter

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
• Exporter on receipt of credit makes shipment and submits the required
shipping documents evidencing shipment , as per the terms of credit , to the
advising / confirming bank
• The A/C bank checks the documents presented by the exporter in
consonance with the “Doctrine of strict compliance” and, if satisfied, settles the
exporters claim either by payment or acceptance or negotiation, as per the terms
of credit and then sends the documents to the issuing bank.
• The issuing bank gives the document to the importer on payment for the
goods
• Importer takes delivery of the goods on submission of documents to the
carrier.

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status

ADVANTAGES OF DOCUMENT

Document offers both the parties to transaction, maximum possible security


combined with facilities for receiving assistance in financing it. The buyer does
not normally have to pay until he receives the agreed documentary evidence that
the stipulated condition have been compiled with. The seller can be certain of
payment by the bank provided the documents on submitted correctly. He can
dispatch the goods as soon as he is advised that the credit has been opened by
the bank of the buyer and made available at a bank in the country of the seller.
All the parties involved are assured of uniform interpretation and application of
the terms and provision in documentary credits.

TYPES OF DOCUMENTARY CREDIT

• Revocable documentary credit : - This can be amended or cancelled at any


time without prior notification and there can be no legal recourse against such an
action . involves risks as the credit may be amended or cancelled while the goods
are in transit or before the documents are presented. The seller would than face
the problem of obtaining payment from a foreign party. But can revoke it without
prior notice up to the moment of payment.
• Irrevocable letter of credit or documentary credit: - Such a documentary
credit can be amended or cancelled with agreement of the parties involved. As
there are often 2 bank involved i.e. importer bank and the advising bank, the
buyer can ask for an irrevocable letter of credit or be confirmed by the advising
bank. The irrevocable letter of credit thus becomes confirmed irrevocable letter of
credit. This is preferable from many points of view. However, the seller may
remain dependent on a foreign bank for payment. This credit is less favorable from
the buyers’ point of view as the credit can be amended or revoked if all parties
agreed.

INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT


Logistics & Supply chain industry in India:
Current status
• Confirmed letter of credit: - This is the best guarantee since a bank in the
sellers country has added its undertaking regarding payment, accepting or
negotiation, tothat of the issuing bank.

From the buyer viewpoint the difference between an irrevocable and a confirmed
irrevocable credit is that if he is bearing the charges he will have to pay 2 bank
charges.

SETTLEMENT UNDER DOCUMENTARY CREDIT

There are 2 ways in which settlement takes place under documentary credit
• By payment
• By acceptance
• By negotiation

1.By payment

• The seller sends the documents to the A/C bank.


• After examining the documents the A/C bank makes the payment or
provided the documents are in order
• The bank send the documents to the issuing bank sends the documents to
the issuing bank (importer) and claims reimbursement.

2. Settlement by acceptance
• The seller transmits to the advising or the confirming bank the documents
accompanied by a draft drawn on that bank at the specified tenor.
• After examining the documents the advising /conforming bank on which
draft is drawn accepts the draft.

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Logistics & Supply chain industry in India:
Current status
• The bank then sends the document to the issuing bank informing it that at
maturity it will obtain reimbursement as already agreed with the issuing bank.
• A banker’s acceptance is a time bill of exchange or is term or usance draft
drawn on and accepted by a bank. In accepting the draft signifies the face value at
maturity to the party presenting it for payment at the appropriate time.

3. Settlement by negotiation
• The seller tranmit to the advising bank the documents accompanied by a
draft at the sight or at tenor depending on the condition of credit drawn on the
issuing bank on the buyer.
• The negotiating bank may negotiate the draft subject to deduction of
discount of discount or interest or commission. The credit may also provide for
these changes to be born by the applicant (buyer)
• The negotiating bank send the documents and draft to the issuing ban for
payment at sight or at maturity by means of which the negotiating bank is
reimbursed.
• A documentary credit, which is available by negotiation, must clearly state
so. The negotiation is carried “with recourse” against the drawer unless the credit
has been previously conformed by the negotiating bank.

DOCUMENTARY CREDIT
The beneficiary on receipt of the credit should check that:
• The type of credit and the terms and condition with the sales
• There are no unacceptable conditions
• The documents cannot be obtained in the form required
• The description of the merchandise of commodity, and any unit price,
conforms to the sales contract
• The amount of the credit is sufficient to cover all costs permitted by the
terms of the contract

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Logistics & Supply chain industry in India:
Current status
• The shipping and expiry dates, and the period of time for presentation of
the documents following the issuance of the transport documents, allow sufficient
time for the processing the order, effecting shipment and making presentation of
the documents to the bank for payment acceptance or negotiation
• The point of dispatch or taking in charge of the goods, or loading on board,
as the case may be, or of discharge or final.
• The provision for insurance is in accordance with the terms of the sale.

ROLE OF CONSOLIDATOR/NVOCC IN INTERNATIONAL CARGO


BUSINESS
Consolidation is a highly specialized wing of shipping on the whole offering
NVOCC and MTO services as an added advantage. Owing to its inherent benefit
such as saving in cost and the safety to cargo, the concept has become very
popular in international movement of cargo and multi-modalism. The
consolidators play a very vital role in providing services to a segment of the EXIM
trade who have requirements like moving small parcels around the world that
may be of commercial value or just trade samples or personal effects. It is the
intermediary between the shipper on the one hand and the carrier on the other.
Shipping line accepts shipment directly from shippers, freight forwarders,
consolidators etc. It is of utmost importance that correct procedure is followed if
the shipment is to reach its destination expediously and safely. Particular
attention must be paid to the accurate completion of documents, packaging and
labeling to comply with International Trade practices and norms under the UN
charter and at the same time meet specific requirements as per government
regulation in different countries.
Apart from procuring business in terms of cargo, consolidators offers some
additional services to the clients that forms a part of a more comprehensive
logistics service. These include:-

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Logistics & Supply chain industry in India:
Current status
(1) Pick up of cargo from the shipper’s warehouse.
(2) Storage of such cargo in their warehouse until time when such cargo is ready
for customs clearance and ultimately handed over to the carrier.
(3) The consolidator does all necessary documentation and customs clearance
procedure.
(4) Cargo tracing.
(5) Feedback information to the shipper regarding the status of the cargo.
By handling over the cargo to a consolidator the actual shipper may be relieved
from all these procedure and can avail all such services and can yet reach the
cargo to the desired destination in a timely and cost effective manner. By taking
the entire responsibility of providing a reliable solution provider the shipper /
consignee can stay focused in developing their business avoiding the loss of
valuable time in managing various vendors to ensure that tendered business is in
safe hands. This

is the essence of a consolidator / NVOCC business practice and how well they
can double up their resources in providing a comprehensive logistic solution.
The role of a NVOCC/Consolidator in international business is important due to
the Concept of consolidation, NVOCC operation and freight forwarding and the
extensive use the consolidators make of it. The process of consolidation or
Freight Forwarding which an NVOCC does results in the shipper becoming a
customer for the NVOCC while the choice of carrier remains with the NVOCC
depending on terms and conditions of the sale/contract.
The question is why shipper negotiate Freight with a consolidator and not the
carrier directly. There are a few reasons that govern this and some being as
follows:
• Offer Single window service option for all activities.
• Due to having a large network the volumes controlled by a
NVOCC/Consolidator is substantial and that gives them better bargaining powers.
• Volume contracts with carriers also play an important role in achieving
better freight rates.

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Periodic and sustained inducements for the carrier offering port to port calls is of
utmost important and this is achieved through the business generated by
consolidator or NVOCC due to their local market know how, infrastructure and
market coverage.

 FREIGHT PAYMENT
Freight Prepaid  The shipper pays the freight at the port of loading.
Freight Collect  The consignee pays the freight at the port of destination.
AT ORIGIN

SHIPPER ------------------------------------------------------------------ CONSIGNEE


1. THROUGH BANK
2. ADVANCE PAYMENT

Through Bank
Shipper (B/L)  Bank (shipper’s)  Bank ( consignee’s )  Consignee

The consignee has to pay to the bank and then the bank will release the B/L to
the consignee. After that the consignee with the B/L contacts the agent at
destination for Delivery Order.
Advance Payment
Shipper  Consignee ( To Order Of Bank in the B/L )
This means that there is some advance payment. In this case the original B/L is
endorsed by the shipper (on the back of the B/L).
AT DESTINATION
Through Bank
Bank (B/L)  Consignee  C & F Agent  Consolidator  Delivery Order

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After bank endorsement on the back of the original B/L, it is handed over to the
consignee for further endorsement. Then the C & F agent endorses the B/L and
hands it over to the consolidation agent for cargo release order.
MARKETING PROCESS:
The definition is a useful step in understanding the market process. The first and
formidable way of looking at the whole marketing process is the component parts
of product, price, place, (or distribution) and promotion.
The aim must be to achieve the optimum combination of the 4 P’s. In order to
determine the activities to be undertaken by the Forwarder / Consolidator so as
to apply the principles of marketing - the service providers begin with a rigorous
process of analysis of the customer and the market.
No forwarder / consolidator can hope to be successful unless it conducts a
parallel process of investigation into its marketing environment, the background
against which the marketing activity will take place. Once customers are
understood and the marketing environment known, the forwarder / consolidator
is in a position to plot a well-defined and properly communicated market
strategy, without which no forwarder / consolidator can hope to be successful.
Subsequently to the definition of strategy three processes follow logically those
of product development, pricing and marketing. These activities define the
products, which will be offered to the customer in order to implement the chosen
strategy. The final stage of marketing is that of selling. To make the successful
application of principles of marketing service provider must be able to sell hard
and successfully.

THE PRODUCT
Product is anything that can be offered to market for attention, acquisition, use
or consumption which include physical objects, services, personalities, places,
organization and ideas or anything else that has the capacity to provide the
satisfaction, use or perhaps the profit desired by the customers.

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Consolidation agents products are services which have been defined as any
activity or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything.
A consolidator acts as a mediator between the exporter and the carrier. The
product of a consolidation company is its services.
IDENTIFYING THE CUSTOMER:
In any area of marketing, the distinction between the customer and the
consumer is fundamental. The consumer is a person who actually uses the
product, whereas the customer is the decision-maker with regard to choice of
supplier. Customer and consumer may or may not be the same person. In service
marketing the interest is in the customer who choose service of a particular
forwarder / consolidator.
TARGET CUSTOMERS:
International Freight Forwarders  International forwarders provide a lot of
routed cargoes by their counterparts (overseas).
(1) Custom House Agents(Clearing Agents)  Clearing Agents control cargoes
sourced from local and outstation shippers. They also execute the clearing of
consignments for international business.
(2) Freight Brokers  Brokers control the traditional export houses.
(3) Shippers directly.

MARKETING STRATEGY FOLLOWED (EXPORT):


Product Sales / Management
(1) The customers are appraised of the services e.g. direct consols provided by
the company which the customers usually prefers, highlighting the advantages of
the services (direct consols) like safe transit, fixed sailing schedule and less
handling are features that matter most.

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(2) Healthy relationship with the counterparts (overseas) and highlighting the
networks strength in terms of performance and presence is of vital importance.
Having a network that perform all that is expected of in making a safe and sound
delivery is one of the key parameters that need to be met for a service to deliver
what is expected in the contract or agreement. The stronger the network and
fewer the number of intermediaries only enhances the efficiency and this goes a
long way in customer satisfaction. That is why companies with uniform and large
networks excel in getting selling their services at the same living up to
expectation of the customer.

(3) Another important strategy is being neutral service provider where you do
not trample on your customer base in the process of targeting business. This is
explained if you take an example like Domestic and International Freight
Forwarders who happen to be the biggest customer base for Consolidators and
NVOCC operators. Their clients are direct shippers and consignee and they rely
on Carrier, NVOCC or Consolidators for a part of the logistic they need to provide.
If a carrier starts marketing to a the shipper directly eliminating the scope of an
NVOCC or Consolidator to participate it will jeopardize the support and effect the
business on the whole. So being neutral and targeting a set customer base and
mover over to another without harming the interest of the existing customer
base is important in strategic sales planning.

(4) Competitive rates are offered after negotiation with the clients though the
focus is always on the service provided.
SELLING IN THE FREIGHT MARKET
Consolidators selling into freight market can be divided into 2 segments:-
(1) Client Retention and Existing Traffic Management.
(2) Generating new traffic.

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Client Retention and Existing Traffic Management


This is perhaps the most difficult task especially in today’s competitive
environment. This necessitates a very effective and strong marketing task force
and extensive market coverage and presence. This involves activities like trying
to achieve lower rates, Better service levels with by adding new features
periodically. Regular Customer follow up a team of Customer Relation Managers.
Study the requirements on a per shipment basis and keep clients abreast of the
developments on their valuable business moving through the service provider.
One of the most important factors is pricing that needs to remain competitive
and continues to provide an edge to the customer in closing overseas deal to
facilitate his business.
This also involves providing the customer a higher level of service. Loyalty is a
very important criterion in this trade. Proper feedback to customers and keeping
in touch in times of necessity and emergency are all indication of higher service
level. After that customers are ready to pay a little more to achieve a higher
service level. This is one of the most effective means of marketing.
Traffic Generation:
Generating new traffic is significantly possible by approaching producers /
exporters with proposals of broadening the basis of their distribution. If any
producer switches to using ocean freight he will have a worldwide market open to
him. Further more traffic generation is also possible by highlighting the
advantages which marine transport can bring to the producers like it can provide
the movement of higher volume of cargo at lower rates to remote destinations.
Traffic generation is also possible by approaching customers using the services of
other consolidators / forwarders or attacking customers of sectors that provide
higher volume of business. For this purpose port reports are helpful which
provide the list of customers using competitors’ services. Similarly sector wise
statistics can provide an overall picture of the volume of business to different
sectors of the world highlighting the profitable sectors.

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Hence it can be inferred that more customers or more volume of business can be
generated by enlarging the range of service and by offering improved quality of
service. The present competitive circumstances calls for changing the product
profile and engaging in organized sector wise marketing by offering specialized
value

added services. Therefore it is clear that selling in the freight market involves
targeting the potential freight customers and identifying the profitable sectors.
CONCLUSION
Over the last few decades there has been a great technological revolution in
business environment due to liberalization in the open market scenario.
Therefore in order to ensure firm footing in the competitive market, traders are
very serious to fulfill the customer’s need and satisfaction.
Traders are very much interested to send the desired commodities to the desired
destination safely at least possible time at while remaining cost effective in order
to survive in today’s competitive environment.
The most sensitive part of any organization today is its effective and aggressive
marketing. Getting volume business is the order of the day. This can be possible
only through adapting very aggressive and intense marketing policies
emphasizing the advantages of consolidation business along with focussing on
the sectors providing higher volume of trade and margins.

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CONTAINER FREIGHTING PRACTICES

1. Containerization has considerably modified the freighting pattern for


general cargoes.
2. Introduction of commodity box rates (CBRs) – reasons : simplification of
tariff structure and benefits to shippers, particularly large scale. CBRs are
consistent with the concept of "change what the tariff can bear".
3. Relevant container freighting rules introduced following CBRs. Rates for
FCL/FCL and FCL/LCL cargoes are offered provided freight is paid by one party
only.
4. Some conferences/shipping lines give option of CBR or rate assessed on a
revenue ton basis
5. Shipping lines may allow stuffing of additional cargo in a container subject
to CBR, provided extra freight is paid in all such cargo on the basis of revenue tons
stowed in each container at the relevant tariff rate plus other charges as
applicable.
6. Discounted CBRs under volume-incentive scheme, offered by some
shipping lines/conferences.
7. Cargo offered by shipper in BB may be containerized by the carrier at its
own expense, for the convenience of vessel.
8. Terminal handling charge per TEU/ FEU is levied by the carrier for both
shipper stuffed and carrier stuffed container.
9. Shipping lines/conferences may provide multi-modal transport services
and issue through bills of lading.
10. Time-volume rate system under which a shipper become eligible for
specified rates of discount on FCL rates, is applicable if the carrier is of offered
more than a specified number of containers with cargo during the contracted
period. The rate of discount may increase on a graduated scale. This is beneficial
for freight forwarders/consolidates and shippers, particularly large scale.

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11. TEU/FEU rates are based on minimum utilization requirement of
containers, differing from tariff to tariff - from as low as 60-70 –75-80 –85-90
(and even 95%) for container weight or measurement capacity.

12. Merchant packed goods on FCL/FCL or FCL/LCL basis: Unless


specifically stated. Freight charges is be assessed on the basis of the rate
applicable to each unit, piece or package in the container as listed by the
merchant. Where different articles are packed in one unit piece or package,
freight is assessed at the rate yielding the highest return to the carrier in that
unit, piece or package.
In the absence of detailed declaration by the merchant, freight is
assessed on the internal cubic measurement of the container charged at the
rate of freight applicable to the highest freighted unit, piece or package within
the container.
13. Carrier stuffed containers - LCL/LCL or LCL/FCL. Where different
articles are contained in any one unit, piece or package, freight is charged at
the rate yielding the highest return in that unit, piece, etc.
14. Carrier stuffed containers - LCL/LCL or LCL/FCL. Where different
articles are contained in any one unit, piece or package, freight is charged at
the rate yielding the highest return in that unit, piece, etc.

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SUPPLY CHAIN MANAGEMENT


.
Supply chain management (SCM) is the process of planning, implementing, and
controlling the operations of the supply chain with the purpose to satisfy
customer requirements as efficiently as possible. Supply chain management
spans all movement and storage of raw materials, work-in-process inventory, and
finished goods from point-of-origin to point-of-consumption. The term supply
chain management was coined by consultant Keith Oliver, of strategy consulting
firm Booz Allen Hamilton in 1982.
The definition one America professional association put forward is that
Supply Chain Management encompasses the planning and management of all
activities involved in sourcing, procurement, conversion, and logistics
management activities. Importantly, it also includes coordination and
collaboration with channel partners, which can be suppliers, intermediaries, third-
party service providers, and customers. In essence, Supply Chain Management
integrates supply and demand management within and across companies.
Supply chain event management (abbreviated as SCEM) is a consideration of all
possible occurring events and factors that can cause a disruption in a supply
chain. With SCEM possible scenarios can be created and solutions can be
planned.
Some experts distinguish supply chain management and logistics, while others
consider the terms to be interchangeable.
Supply chain management is also a category of software products.
Supply chain management problems
Supply chain management must address the following problems:
• Distribution Network Configuration: Number and location of suppliers,
production facilities, distribution centers, warehouses and customers.
• Distribution Strategy: Centralized versus decentralized, direct shipment,
Cross docking, pull or push strategies, third party logistics.

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• Information: Integrate systems and processes through the supply chain to
share valuable information, including demand signals, forecasts, inventory and
transportation etc.
• Inventory Management: Quantity and location of inventory including raw
materials, work-in-process and finished goods.

Supply chain execution is managing and coordinating the movement of materials


information and funds across the supply chain. The flow is bi-directional.
Activities/functions
Supply chain management is a cross-functional approach to managing the
movement of raw materials into an organization and the movement of finished
goods out of the organization toward the end-consumer. As corporations strive to
focus on core competencies and become more flexible, they have reduced their
ownership of raw materials sources and distribution channels. These functions
are increasingly being outsourced to other corporations that can perform the
activities better or more cost effectively. The effect has been to increase the
number of companies involved in satisfying consumer demand, while reducing
management control of daily logistics operations. Less control and more supply
chain partners led to the creation of supply chain management concepts. The
purpose of supply chain management is to improve trust and collaboration
among supply chain partners, thus improving inventory visibility and improving
inventory velocity.
Several models have been proposed for understanding the activities required to
manage material movements across organizational and functional boundaries.
SCOR is a supply chain management model promoted by the Supply-Chain
Management Council. Another model is the SCM Model proposed by the Global
Supply Chain Forum (GSCF). Supply chain activities can be grouped into
strategic, tactical, and operational levels of activities.
Strategic
• Strategic network optimization, including the number, location, and size of
warehouses, distribution centers and facilities.

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• Strategic partnership with suppliers, distributors, and customers, creating
communication channels for critical information and operational improvements
such as cross docking, direct shipping, and third-party logistics.
• Product design coordination, so that new and existing products can be
optimally integrated into the supply chain, load management
• Information Technology infrastructure, to support supply chain operations.
• Where to make and what to make or buy decisions
• Align overall organizational strategy with supply strategy

Tactical
• Sourcing contracts and other purchasing decisions.
• Production decisions, including contracting, locations, scheduling, and
planning process definition.
• Inventory decisions, including quantity, location, and quality of inventory.
• Transportation strategy, including frequency, routes, and contracting.
• Benchmarking of all operations against competitors and implementation of
best practices throughout the enterprise.
• Milestone payments
Operational
• Daily production and distribution planning, including all nodes in the supply
chain.
• Production scheduling for each manufacturing facility in the supply chain
(minute by minute).
• Demand planning and forecasting, coordinating the demand forecast of all
customers and sharing the forecast with all suppliers.
• Sourcing planning, including current inventory and forecast demand, in
collaboration with all suppliers.
• Inbound operations, including transportation from suppliers and receiving
inventory.

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• Production operations, including the consumption of materials and flow of
finished goods.
• Outbound operations, including all fulfillment activities and transportation
to customers.
• Order promising, accounting for all constraints in the supply chain,
including all suppliers, manufacturing facilities. distribution centers, and other
customers.
Supply chain management
Organizations increasingly find that they must rely on effective supply chains, or
networks, to successfully compete in the global market and networked economy.
[1]
In Peter Drucker's (1998) management's new paradigms, this concept of
business relationships extends beyond traditional enterprise boundaries and
seeks to organize entire business processes throughout a value chain of multiple
companies.

During the past decades, globalization, outsourcing and information technology


have enabled many organizations such as Dell and Hewlett Packard, to
successfully operate solid collaborative supply networks in which each
specialized business partner focuses on only a few key strategic activities (Scott,
1993). This inter-organizational supply network can be acknowledged as a new
form of organization. However, with the complicated interactions among the
players, the network structure fits neither "market" nor "hierarchy" categories
(Powell, 1990). It is not clear what kind of performance impacts different supply
network structures could have on firms, and little is known about the coordination
conditions and trade-offs that may exist among the players. From a system's
point of view, a complex network structure can be decomposed into individual
component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply
network concentrate on the inputs and outputs of the processes, with little
concern for the internal management working of other individual players.
Therefore, the choice of internal management control structure is known to
impact local firm performance (Mintzberg, 1979).

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In the 21st century, there have been few changes in business environment that
have contributed to the development of supply chain networks. First, as an
outcome of globalization and proliferation of multi-national companies, joint
ventures, strategic alliances and business partnerships were found to be
significant success factors, following the earlier "Just-In-Time", "Lean
Management" and "Agile Manufacturing" practices. Second, technological
changes, particularly the dramatic fall in information communication costs, a
paramount component of transaction costs, has led to changes in coordination
among the members of the supply chain network (Coase, 1998).
Many researchers have recognized these kinds of supply network structure as a
new organization form, using terms such as "Keiretsu", "Extended Enterprise",
"Virtual Corporation", Global Production Network", and "Next Generation
Manufacturing System".[3] In general, such a structure can be defined as "a group
of semi-independent organizations, each with their capabilities, which collaborate
in ever-changing constellations to serve one or more markets in order to achieve
some business goal specific to that collaboration" (Akkermans, 2001).

Supply chain business process integration


Successful SCM requires a change from managing individual functions to
integrating activities into key supply chain processes. An example scenario: the
purchasing department places orders as requirements become appropriate.
Marketing, responding to customer demand, communicates with several
distributors and retailers, and attempts to satisfy this demand. Shared
information between supply chain partners can only be fully leveraged through
process integration.
Supply chain business process integration involves collaborative work between
buyers and suppliers, joint product development, common systems and shared
information. According to Lambert and Cooper (2000) operating an integrated
supply chain requires continuous information flows, which in turn assist to
achieve the best product flows. However, in many companies, management has
reached the conclusion that optimizing the product flows cannot be accomplished

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without implementing a process approach to the business. The key supply chain
processes stated by Lambert (2004) are:
• Customer relationship management
• Customer service management
• Demand management
• Order fulfillment
• Manufacturing flow management
• Supplier relationship management
• Product development and commercialization
• Returns management
One could suggest other key critical supply business processes
combining these processes stated by Lambert such as:
a. Customer service management
b. Procurement
c. Product development and commercialization
d. Manufacturing flow management/support
e. Physical distribution
f. Outsourcing/partnerships
g. Performance measurement

a) Customer service management process


Customer Relationship Management concerns the relationship between the
organization and its customers.Customer service provides the source of customer
information. It also provides the customer with real-time information on
promising dates and product availability through interfaces with the company's
production and distribution operations. Successful organizations use following
steps to build customer relationships:
• determine mutually satisfying goals between organization and customers
• establish and maintain customer rapport
• produce positive feelings in the organization and the customers
b) Procurement process

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Strategic plans are developed with suppliers to support the manufacturing flow
management process and development of new products. In firms where
operations extend globally, sourcing should be managed on a global basis. The
desired outcome is a win-win relationship, where both parties benefit, and
reduction times in the design cycle and product development is achieved. Also,
the purchasing function develops rapid communication systems, such as
electronic data interchange (EDI) and Internet linkages to transfer possible
requirements more rapidly. Activities related to obtaining products and materials
from outside suppliers. This requires performing resource planning, supply
sourcing, negotiation, order placement, inbound transportation, storage and
handling and quality assurance. Also, includes the responsibility to coordinate
with suppliers in scheduling, supply continuity, hedging, and research to new
sources or programmes.
c) Product development and commercialization
Here, customers and suppliers must be united into the product development
process, thus to reduce time to market. As product life cycles shorten, the
appropriate products must be developed and successfully launched in ever
shorter time-schedules to remain competitive. According to Lambert and Cooper
(2000), managers of the product development and commercialization process
must:
1. coordinate with customer relationship management to identify customer-
articulated needs;
2. select materials and suppliers in conjunction with procurement, and

3. develop production technology in manufacturing flow to manufacture and


integrate into the best supply chain flow for the product/market combination.
d) Manufacturing flow management process
The manufacturing process is produced and supplies products to the distribution
channels based on past forecasts. Manufacturing processes must be flexible to
respond to market changes, and must accommodate mass customization. Orders
are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Also,

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changes in the manufacturing flow process lead to shorter cycle times, meaning
improved responsiveness and efficiency of demand to customers. Activities
related to planning, scheduling and supporting manufacturing operations, such
as work-in-process storage, handling, transportation, and time phasing of
components, inventory at manufacturing sites and maximum flexibility in the
coordination of geographic and final assemblies postponement of physical
distribution operations.
e) Physical distribution
This concerns movement of a finished product/service to customers. In physical
distribution, the customer is the final destination of a marketing channel, and the
availability of the product/service is a vital part of each channel participant's
marketing effort. It is also through the physical distribution process that the time
and space of
customer service become an integral part of marketing, thus it links a marketing
channel with its customers (e.g. links manufacturers, wholesalers, retailers).

f) Outsourcing/partnerships
This is not just outsourcing the procurement of materials and components, but
also outsourcing of services that traditionally have been provided in-house. The
logic of this trend is that the company will increasingly focus on those activities in
the value chain where it has a distinctive advantage and everything else it will
outsource. This movement has been particularly evident in logistics where the
provision of transport, warehousing and inventory control is increasingly
subcontracted to specialists or logistics partners. Also, to manage and control
this network of partners and suppliers requires a blend of both central and local
involvement. Hence, strategic decisions need to be taken centrally with the
monitoring and

control of supplier performance and day-to-day liaison with logistics partners


being best managed at a local level

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g) Performance Management
Successful SCM Experts found a strong relationship from the largest arcs of
supplier and customer integration to market share and profitability. By taking
advantage of supplier capabilities and emphasizing a long-term supply chain
perspective in customer relationships can be both correlated with firm
performance. As logistics competency becomes a more critical factor in creating
and maintaining competitive advantage, logistics measurement becomes
increasingly important because the difference between profitable and
unprofitable operations becomes more narrow. A.T. Kearney Consultants (1985)
noted that firms engaging in comprehensive performance measurement realized
improvements in overall productivity. According to experts internal measures are
generally collected and analyzed by the firm including
1. Cost
2. Customer Service
3. Productivity measures
4. Asset measurement, and
5. Quality.
External performance measurement is examined through customer perception
measures and "best practice" benchmarking, and includes 1) customer
perception measurement, and 2) best practice benchmarking.
Components of supply chain management are 1. Standardisation 2.
Postponement 3. Customisation
Supply chain management components integration
The management components of SCM
The SCM management components are the third element of the four-square
circulation framework. The level of integration and management of a business
process link is a function of the number and level, ranging from low to high, of
components added to the link (Ellram and Cooper, 1990; Houlihan, 1985).
Consequently, adding more management components or increasing the level of
each component can increase the level of integration of the business process

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link. The literature on business process reengineering,[4] buyer-supplier
relationships,[5] and

SCM suggests various possible components that must receive managerial


attention when managing supply relationships. Lambert and Cooper (2000)
identified the following components which are:
• Planning and control
• Work structure
• Organization structure
• Product flow facility structure
• Information flow facility structure
• Management methods
• Power and leadership structure
• Risk and reward structure
• Culture and attitude
However, a more careful examination of the existing literature[] will lead us to a
more comprehensive structure of what should be the key critical supply chain
components, the "branches" of the previous identified supply chain business
processes, that is what kind of relationship the components may have that are
related with suppliers and customers accordingly. Bowersox and Closs states that
the emphasis on cooperation represents the synergism leading to the highest
level of joint achievement (Bowersox and Closs, 1996). A primary level channel
participant is a business that is willing to participate in the inventory ownership
responsibility or assume other aspects financial risk, thus including primary level
components (Bowersox and Closs, 1996). A secondary level participant
(specialized), is a business that participates in channel relationships by
performing essential services for primary participants, thus including secondary
level components, which are supporting the primary ones. Also, third level
channel participants and components may be included, that will support the
primary level channel participants, and which are the fundamental branches of
the secondary level components.

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Consequently, Lambert and Cooper's framework of supply chain components,
does not lead us to the conclusion about what are the primary or secondary
(specialized) level supply chain components ( see Bowersox and Closs, 1996, p.g.
93), that is what supply chain components should be viewed as primary or
secondary, and how should these components be structured in order to have a
more comprehensive supply chain structure and to examine the supply chain as
an integrative one

COMPONENTS OF SUPPLY CHAIN MANAGEMENT


1. For customer service management: Includes the primary level
component of customer relationship management, and secondary level
components such as benchmarking and order fulfillment.
2. For product development and commercialization: Includes the primary
level component of Product Data Management (PDM), and secondary level
components such as market share, customer satisfaction, profit margins, and
returns to stakeholders.
3. For physical distribution, Manufacturing support and Procurement:
Includes the primary level component of enterprise resource planning (ERP), with
secondary level components such as warehouse management, material
management, manufacturing planning, personnel management, and
postponement (order management).
4. For performance measurement: This includes the primary level
component of logistics performance measurement, which is correlated with the
information flow facility structure within the organization. Secondary level
components may include four types of measurement such as: variation, direction,
decision and policy measurements. More specifically, in accordance with these
secondary level components total cost analysis (TCA), customer profitability
analysis (CPA), and Asset management could be concerned as well. In general,
information flow facility structure is regarded by two important requirements,
which are a) planning and Coordination flows, and b)operational requirements.

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5. For outsourcing: This includes the primary level component of
management methods and the company's cutting-edge strategy and its vital
strategic objectives that the company will identify and adopt for particular
strategic initiatives in key the areas of technology information, operations,
manufacturing capabilities, and logistics (secondary level components).

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When you don't have enough cargo to fill an ocean freight container, UPS Supply
Chain Solutions offers LCL service between major ports worldwide. We have an
extensive network of capabilities and container freight stations. That means we
can

offer you space within a container that is shared with other customers’ goods to
deliver economical usage-based costing, while providing Full-Container-Load
(FCL) frequency, routing and visibility.
As one of the world's leading Non-Vessel Operating Common Carriers (NVOCC),
we can provide LCL service that features:
• Global network coverage - over 1,000 facilities in over 180 countries
• Frequent sailings with fast transit times
• Reliability and adherence to scheduled sailings
• Competitive pricing
• Shipment visibility for multiple freight modes
• Capability of providing end-to-end solutions
LCL keeps goods moving in your supply chain because you can send them as
soon as they are ready rather than waiting until you have a full container. The
following services are included:
• Receipt of customer’s cargo at the origin Container Freight Station (CFS)
• Consolidation of customer’s cargo with cargo from similarly situated
merchants
• Issuance of house bill of lading

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• Ocean shipment
• Deconsolidation at destination CFS and release to consignee
LCL service can be effectively combined with these service offerings to provide
an end-to-end solution:
• Supplier Management, for effective management of vendors and goods prior
to shipment
• Transportation of goods to CFS for consolidation
• Freight insurance and financing products from UPS Capital
• Customs Brokerage services for entry and clearance
• Transportation of shipment and delivery to consignee following
deconsolidation at destination CFS
Our LCL service is unique because it adheres to fixed scheduling, operates with
UPS economies of scale, and fully integrates with our superior visibility tools and
broad portfolio of value-added services.

EXPORT

In economics, an export is any good or commodity, transported from one


country to another country in a legitimate fashion, typically for use in trade.
Export is an important part of international trade. Its counterpart is import.
Export goods or services are provided to foreign consumers by domestic
producers. Export of commercial quantities of goods normally requires
involvement of the Customs authorities in both the country of export and the
country of import.
The advent of small trades over the internet such as through Amazon, e-Bay and
the like, have largely by-passed the involvement of Customs in many countries
due to the low individual values of these trades. Nonetheless these small exports
are still subject to legal restrictions applied by the country of export, particularly
in respect of strategic export limitations.

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History
.The theory of international trade and commercial policy is one of the oldest
branches of economic thought starting with the ancient Greeks up to the present
era. Exporting is a major component of international trade, and thus is argued
constantly and consistently throughout the ages. Two dual views concerning
trade present themselves. The first, recognizes the benefits of international
exchange. The other concerns itself with the possibly that certain domestic
industries (or laborers, or culture) could be harmed by foreign competition.
Process
Methods of transfer include a product or good or information being mailed, hand-
delivered, up-loaded to an internet site, or downloaded from an internet site. It
can be sent in the form of a facsimile, email or during a telephone conversation.
United States
The Bureau of Industry and Security (BIS) is responsible for implementing and
enforcing the Export Administration Regulations (EAR), which regulate the export
and reexport of most commercial items. Some commodities require certification
in order to export. There are different qualifications for what need to be done in
order to export a good.

Dependent on the category,the 'item' falls under, the company may need to
attain a license as a requisite to exportation. Some restrictions vary from country
to country. The most restricted destinations are the embargoed countries and
those countries designated as supporting terrorist activities, including Cuba,
Libya, North Korea, Sudan, Syria and Iran. Some products obtained worldwide
restrictions.
An item is considered an export whether or not it is leaving the United States
temporarily, if it is leaving the United State but is not for sale (a gift), or if it is
going to a wholly owned U.S. subsidiary in a foreign country. A foreign-origin item
exported from the United States, transmitted or transhipped through the United

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States, or being returned from the United States to its foreign country of origin is
considered an export.
How an item is transported outside of the United States does not matter in
determining export license requirements.
Barriers
Trade barriers are generally defined as government laws, regulations, policy, or
practices that either protect domestic products from foreign competition or
artificially stimulate exports of particular domestic products. While restrictive
business practices sometimes have a similar effect, they are not usually regarded
as trade barriers. The most common foreign trade barriers are government-
imposed measures and policies that restrict, prevent, or impede the international
exchange of goods and services.
Strategic
International agreements limit trade in, and the transfer of, certain types of
goods and information e.g. goods associated with weapons of mass destruction,
arms and torture. Examples are Nuclear Suppliers Group - limiting trade in
nuclear weapons and associated goods (currently only 45 countries), The
Australia Group - limiting trade in chemical & biological weapons and associated
goods (currently only 39 countries), Missile Technology Control Regime - limiting
trade in the means of delivering weapons of mass destruction (currently only 34
countries) and The Wassenaar Arrangement - limiting trade in conventional arms
and technological developments (currently only 40 countries)

Tariffs
A tariff is a tax placed on a specific good or set of goods exported from or
imported to a country, creating an economic barrier to trade.
Usually the tactic is used when a country's domestic output of the good is falling
and imports from foreign competitors are rising, particularly if there exist
strategic reasons for retaining a domestic production capability.
Some failing industries receive a protection with an effect similar to a subsidies in
that by placing the tariff on the industry, the industry is less enticed to produce

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goods in a quicker, cheaper, and more productive fashion. The third reason for a
tariff involves skirting of what is called dumping. Dumping curtails a country
producing highly excessive amounts of goods and dumping the goods on another
foreign country, producing the effect of prices that are "too low". Too low can
refer to either the price of the good on from the foreign market being lower than
the domestic market. The other reference refers to the producer selling the
product at a price in which there is no profit or a loss. The purpose (and expected
outcome) of the tariff is to encourage spending on domestic goods and services.
Protective tariffs protect what are known as infant industries that are in the
phase of expansive growth. A tariff is used temporarily to allow the industry to
freely grow without the level of competition usually garnered. However, this line
of debate is only valid if the resources are more productive in their new use than
they would be if the industry had not been started. Also, the industry eventually
must incorporate itself into a market without the protection of government
subsidies.
Tariffs create tension between countries. Examples include the United States
steel tariff of 2002 and when China placed a 14% tariff on imported autoparts.
Such tariffs usually lead to filing a complaint with the World Trade Organization
(WTO) and, if that fails, could eventually head toward the country placing a tariff
against the other nation in spite, to impress pressure to remove the tariff.
Subsidies
To subsidize an industry or company refers to, in this instance, a governmental
providing supplemental financial support to manipulate the price below market
value. Subsidies are generally used for failing industries that need a boost in
domestic spending. Subsidizing encourages greater demand for a good or service
because of the slashed price.

The effect of subsidies deters other countries that are able to produce a specific
product or service at a faster, cheaper, and more productive rate. With the
lowered price, these efficient producers cannot compete. The life of a subsidy is

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generally short-lived, but sometimes can be implemented on a more permanent
basis.
The agricultural industry is commonly subsidized, both in the United States, and
in other countries including Japan and nations located in the European Union
(EU).
Critics argue such subsidies cost developing nations $24 billion annually in lost
income according to a study by the International Food Policy Research Institute, a
D.C. group funded partly by the World Bank. However, other nations are not the
only economic 'losers'. Subsidies in the U.S. heavily depend upon taxpayer
dollars. In 2000, the U.S. spent an all-time record $32.3 billion for the agricultural
industry. The EU spends about $50 billion annually, nearly half its annual budget
on its common agricultural policy and rural development.
Exports and free trade
Pros
The theory of comparative advantage materialized during the first quarter of the
19th century in the writings of 'classical economists'. While David Ricardo is most
credited with the development of the theory of his Principles of Political
Economy, 1817), James Mills and Robert Torrens produced similar ideas. The idea
stems from a country that is able to produce a commodity at the lowest of all
countries, should be encouraged by removing competition. The single commodity
with the greatest difference in terms of low prices is encouraged to increase
production, while the second and subsequent commodities should either be
decreased in levels of production, or removed altogether.
Export Promotion
Export Promotion is an International Marketing Strategy of Business
Management. Nowadays every Individual and country applying extra ordinary
Export Promotion Techniques to increase the volume of Exports. For the process
of Export Promotion, Marketing communication is the first and foremost thing. To
deliver or Communicating any kind of information, expertise and specialization
Media is most important thing. For your product Export promotion first analyze

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Cost of promotion and reachability of media. There are a number of medias are
available for Export Promotion.

Print Media (Export Directories, Journals, Magazines etc.) Electronic Media (TV.
Radio, etc.) Internet (Search Engines, Business Directories) Other Media (Trade
Fairs) In the above media Internet is cheapest and most reachable media for
Export Promotion. For internet promotion Exporters should be Visible on Different
Business Directories, B2B Directories, and also on Search Engines.
In the U.S., the U.S. Department of Commerce provides U.S. companies the
opportunity to promote their products and services for free.The Export Yellow
Pages The Export Yellow Pages is published online and in print and is delivered to
embassies, trade centers, consulates, and associations worldwide.
There are Few Global B2B directories and also Country specific Directories. U.S.A-
Kelly Search India- Tradeget China- Alibaba
Mercantilists advocated that government policy directly arrange the flow of
commerce to conform to their beliefs. They sought a highly interventionist
agenda, using taxes on trade to manipulate the balance of trade or commodity
composition of trade in favor of the home country.
Mercantilism, the first systematic body of thought devoted to international trade,
emerged during the 17th and 18th centuries in Europe. While most views
surfacing from this school of thought differed, a commonly argued key objective
of trade was to promote a "favorable" balance of trade, referring to a time when
the value of domestic goods exported exceeds the value of foreign goods
imported. The "favorable" balance in turn created a balance of trade surplus.
Mercantilists advocated that government policy directly arrange the flow of
commerce to conform to their beliefs. They sought a highly interventionist
agenda, using taxes on trade to manipulate the balance of trade or commodity
composition of trade in favor of the home country
Processing Of An Export Order Preshipment
INTRODUCTION

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An export order has to be processed to meet the requirements of materials
required by the importers. The export order as expeditiously as possible so that
the buyers can receive the materials on time, as per their delivery schedules and
also conforming to the specifications stipulated by them.
When different traders undertake business, they certainly have good intentions
to carry out their trade deals faithfully and smoothly to earn a well-deserved
profit.

Therefore, it is necessary for carrying on business transactions smoothly and


profitably that the area of disputes during performance of contracts is narrowed
down and provision is made for amicable and quick settlement of disputes that
may still arise. Such details of transaction along with agreed terms and condition
are recorded and signed by both exporter and importer, to form a contract.
To achieve the above purpose businessmen must devote proper attention at the
time of drafting their business contracts, by including comprehensive and precise
terms and conditions on all-important aspects of the trade deal in the contract.
Firstly the contract should be drawn up in writing. In the absence of written
contract the nature and extent of the right and duties of the parties to the trade
deal will have to be gathered from circumstances evidence or legal implications
which may give rise to a number of uncertainties and difference of option or
disputes between the parties, during the performance of the contracts. Secondly
the contract should be comprehensive and precise, i.e. should cover all important
points and contingencies in clear and unambiguous terms. And last but not least,
it must contain arbitration clause law applicable to the contract and jurisdiction in
case a dispute arises.
There are many Parties, acts and publications Involved
The most Important Acts/publications that must be consulted by an exporter in
connection with the processing of an export order are
• Customs Act, 1962
• Foreign Exchange Regulation Act, 1973
• Schedule of charges of goods in respect of the port of shipment

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• Handbooks of export Promotion
• Import-export Policy
• Vols I & II
• Handbook of Import-exporter
• The Foreign Buyer
• The Negotiating bank
• The Shipping Company
• The In insurance company
• The RBI of India
• The chief Controller of Import & Export

• The collector of customs


• The port commissioners
• The clearing & forwarding Agents
There are various steps involved under processing of an export order
(pre-shipment)
First Stage
Entering into an Export contract
In order to avoid disputes, it is necessary to enter into an export contract with
the overseas buyer. For this purpose, export contract should be carefully drafted
incorporating comprehensive but in precise terms, all relevant and important
conditions of the trade deal.
There should not be any ambiguity regarding the exact specifications of goods
and terms of sale including export price, mode of payment, storage and
distribution methods, type of packaging, port of shipment, delivery schedule etc.

The different aspects of an export contract are enumerated as under:


Product, Standards and Specifications
Quantity
Inspection

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Total Value of Contract
Terms of Delivery
Taxes, Duties and Charges
Period of Delivery/Shipment
Packing, Labeling and Marking
Terms of Payment-- Amount/Mode & Currency
Discounts and Commissions
Licenses and Permits
Insurance
Documentary Requirements
Guarantee
Force Majeure of Excuse for Non-performance of contract

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Remedies
Arbitration it will not be out of place to mention here the importance of
arbitration clause in an export contract
Court proceedings do not offer a satisfactory method for settlement of
commercial disputes, as they involve inevitable delays, costs and technicalities.
On the other hand, arbitration provides an economic, expeditious and informal
remedy for settlement of commercial disputes. Arbitration proceedings are
conducted in privacy and the awards are kept confidential. The Arbitrator is
usually an expert in the subject matter of the dispute. The dates for arbitration
meetings are fixed with the convenience of all concerned. Thus, arbitration is the
most suitable way for settlements of commercial disputes and it may invariably
be used by businessmen in their commercial dealings.
Timely and adequate credit facilities, at the pre-shipment as well as post-
shipment stage, are essential for exporters to realize their full export potential.
Exporters may not, however, be able to obtain such facilities from their bankers
for several reasons, e.g., the exporter may be relatively new to export business,
the extent of facilities needed by him may be out of proportion to the equity of
the firms or the value of collateral's offered by the exporter may be inadequate.
The exporter should scrutinize the export order with reference to the terms and
conditions of the contract. This is the most crucial stage. Therefore, it is
necessary for carrying on business transactions smoothly and profitably that the
area of disputes during performance of contracts is narrowed down and provision
is made for amicable and quick settlement of disputes that may still arise. Such
details of transaction along with agreed terms and condition are recorded and
signed by both exporter and importer, to form a contract.
The most important documents that are usally demanded by the importer bank
are
• Bill of Exchange
• Commercial Invoice
• On-board Clean Bill Of Lading

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• Marine Insurance Policy
• Packing List
• Certificate of Orgin

• The exporter should confirm the Export Order only the terms and conditions
of the L/C have been found to be in order.
The export purchase order should be examines carefully and its contents
scrutinized in terms of the Proforma Invoice/ contract sent to the foreign buyer,
on the following aspects.
1. Items (Product)
2. Size and Specifications should be same as per offer/ quotation
3. Preshipment Inspection should be either by exporter himself or an agency
easily available.
4. Payment conditions are same as stipulated.
5. Special packaging, labeling and marketing requirements, if any, should be
noted for compliance
6. Shipment and delivery date is in conformity with the exporters production
plans whether:
• Part shipment is allowed.
• Trans-shipment is permissible or not.
• Port of shipment/ destination is same or changed.
7. Documents particularly those, which are required with the bill of exchange.
8. Guarantee /warrantee clause should be same as per quotation/offer.
9. Force Majeure
10. Arbitration as per Indian arbitration clause for international contracts or
other acceptable international clauses as agreed between the parties.
Second Stage
As soon as the export order has been confirmed, preparations for the dispatch of
goods are stated. A ‘delivery note’ (in duplicate) is sent to the work manager or
the Factory Manager. This note should contain the description of the goods as

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has been given in the export order, along with a copy of the instructions given by
the importer. The date by which the goods must be manufactured the date by
which the necessary formalities must be completed, the requisite time margins to
be given and the shipment must be clearly intimated to the works manager. The
specification and instruction to be intimated to the supplier of export goods shall,
however, remain the same.

Third Stage
As soon as the export order has been confirmed or finalized, preparations are
made for the production or procurement of the goods to be exported. The
manufacture-exporter has to raise an internal indent on the production
department/division, which may also be sent either to the works manager or the
factory manager. The indent should contain the description of the goods given in
the export order, together with a copy of the instructions given by the importer.
The order details, such as the date by which the goods must be manufactured,
the date by which necessary formalities must be completed the date of shipment,
etc. are also mentioned. A merchant-exporter has either to obtain the required
goods from the market or to get them manufactured from other domestic
manufactures.
As soon as the goods have been manufactured or procured, the following
procedures are to be followed.
1. The clearance of the Excise Authorities has to be obtained. This can be
done in two ways.
• The first way is to make payment of the excise duty at the time of
removing the export consignment from the factory and file a claim for rebate of
duty after exportation of goods.
• The second’s way is to secure clearance under bond. This involves
entering into a bond under such terms and conditions as the collector of customs
may decide. When the export goods are removed from the factory, a debit entry
for excise duty is made in the Bond account of the exporter. This obligation is

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discharged after exportation of the goods. The exporter has tp prepare two
important documents AR-4 A Form and Gate Pass Form
AR-4 A Form is to be prepared in quintuplicate and Form GP-1/GP-2 is to be
prepared in triplicate. These are presented to the Range Superintendent, Central
Excise, who after Necessary formalities signs all copies. The original and
duplicate copies are given back to the exporter, the Triplicate copy is sent to the
Maritime Collector; the fourth copy is kept by the office of the Range
Superintendent. The original copy of form GP-2 is also given to the exporter.
The other authority, which is to be approached immediately at this stage, is
the export inspection agency for conducting quality control and pre-shipment

inspection. An inspector is deputed by the inspection agency to inspect the


export consignment. If the goods conform to the prescribed specifications, an
inspection certificate is issued.
2. The goods are dispatched to the port of shipment and Railway Receipt is
obtained
Fourth Stage
After the goods have been dispatched to the port town, the works manager sends
a ‘dispatch advice’ to the Export Department. Soon after, an application is sent to
the insurance company for marine insurance cover. The insurance policy is
obtained in duplicate
At this stage all formalities in relation to floor price regulations, Canalization,
Certificate of Orgin, ECGC Cover and Consular Invoice wherever necessary,
should be completed. Thereafter the export department sends the following
documents to its clearing and forwarding agents along with detailed instructions.

1. Commercial Invoice showing the details and value of goods


2. Original Export Order
3. Original Letter Of Credit
4. GR Form
5. AR-4 A/ AR-4 Form (Original & Duplicate copies)

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6. Excise Gate Pass (Original)
7. Packing and weight Lists
8. Certificate of Inspection
9. Declaration Form in Triplicate
10. Consular Invoice
11. Export License
12. Endorsements regarding floor Price
13. Purchase Memo
14. Railway Receipt

Fifth Stage
If the item being exported requires an export license the same s the export
purchase order should be examines carefully and its contents scrutinized in
terms of the Proforma Invoice/ contract sent to the foreign buyer, on the
following aspects.
11. Items (Product)
12. Size and Specifications should be same as per offer/ quotation
13. Preshipment Inspection should be either by exporter himself or an agency
easily available.
14. Payment conditions are same as stipulated.
15. Special packaging, labeling and marketing requirements, if any, should be
noted for compliance
16. Shipment and delivery date is in conformity with the exporters production
plans whether:
• Part shipment is allowed.
• Trans-shipment is permissible or not.
• Port of shipment/ destination is same or changed.
17. Documents particularly those, which are required with the bill of exchange.
18. Guarantee /warrantee clause should be same as per quotation/offer.
19. Force Majeure

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20. Arbitration as per Indian arbitration clause for international contracts or
other acceptable international clauses as agreed between the parties.
Should be procured by the exporter from the licensing authority, i.e. chief
controller of imports and exports.
After the shipping bill has been passed by the customs the clearing and
forwarding agents presents the Port Trust Copy of the shipping bill to the shed
superintendent of the Port Trust and obtains carting order for bringing the export
cargo in the transit shed fro physical examination. Thereafter, in the case of shed
cargo, the Dock Challan is prepared. Where the ship loads overside, the dock
charges are indicated on the shipping bill itself and therefore, no separate Dock
Challan is prepared. The following details are given in the Dock Challan
1. Consignee’s name and address
2. Vessel’s name
3. Port of destination
4. Exporter’s name
5. Marks and Number of Packages
6. Gross weight
7. Measurement in cubic meters or weight in metric tons
8. Port charges payable
9. Other details
The dock challan is processed in the following manner
 Place in receiving box
 The clerk calculates and checks the port commissioner’s shipping
charges
 Deposit with cash clerk
 Sheet writer
 Distributing clerk release the Dock Challan to the clearing and
forwarding agent after debiting clerk the exporter’s account with the port
commissioners, if maintained or after collection of charge in cash or by Banker’s
cheque.

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Sixth Stage
The clearing and forwarding agents takes delivery of the consignment from the
Railways and arranges its storage in the warehouse. Thereafter he prepares the
requisite copies of the shipping bill. The most important particulars which are to
be filled in the shipping bills are: -
1. Consignee’s name and address
2. Vessel’s name
3. Rotation number allotted by the customs to the vessel
4. Agent’s name
5. Colors
6. Port
7. Final Destination
8. Exporter’s name and address
9. Number of the packages
10. Marks and numbers
11. Gross, net and rare weight
12. Description
13. Real value
14. F.O.B value
15. Country of Origin
16. Code number of the goods
17. Number and date of the Exchange Control GR Form
18. AR-4 A/ AR-4 number and date
19. Export license number
There are three types of shipping bills, namely
 Shipping Bill for free goods
 Dutiable shipping Bill and
 Drawback Shipping Bill
The shipping bill must be prepared according to the category of the export
goods. The shipping bill with requisite number of copies (usually five copies) is

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submitted to the Export Department of the customs house along with documents
from serial no.1 to serial no 13 specified in the fourth stage.
Seventh stage
The passed shipping bill including the dock challan, where submitted, cart Ticket
or boat note in case of overside cargo are carried by the authorized licensed
sircar accompanying the goods for making the cargo ready for shipment after
finally being passed by the port commissioners and the customs shed staff. For
shed cargo in dock the following steps are taken:
 Gate warder checks documents, registered and permits entry of cargo into
dock
 Export shed writer accepts dock challan and cart ticket
 Receiving clerk issues unloading slip for cargo from lorry after checking its
condition.
 The supercargo arranges unloading cargo from lorry
 The writer registered dock challan in manifest and sends it to the customs
preventive officer for endorsement
 The preventive officers examines and checks the contents, weight, e.t.c, of
the goods and if, in order, makes an endorsement. “Let Ship” on the duplicate
copy of the shipping bill, and Dock Challan is finally signed by the Customs
Divisional Officer
 The port commissioner writes in shed register the details and releases the
dock challan
 The supercargo takes over control of the cargo for shipment, in case of
overside cargo; the cargo is lighted to the cargo for shipment. In case of overside
cargo, the cargo is lightered to the slip accompanied by a Boat Note and the
shipping bill. The boat note and the shipping bill are then registered with the
customs for which a pass is issued.
Eighth stage
Pre-shipment inspections are required when mandated by the government
of the importing country. These governments argue that pre-shipment
inspections are necessary in order to ensure that the price charged by the

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exporter reflects the true value of the goods, to prevent substandard goods from
entering their country and to deflect attempts to avoid the payment of customs
duties.
Exporter should apply to EIC for Pre-Shipment inspection. Under the Export
(quality control and Inspection) Act 1963, the EIC will depute an inspector for
carrying out quality control and inspection exportable products, after carrying out
the inspection if the consignment is found to conform to the prescribed
specification, each packages in the consignment is sealed by the inspecting
officers. For each consignment declared export worthy, a certificate of inspection
is issued by the inspection agency, in which the details of each consignments are
incorporated. The original copy of the certificate is valid for the customs
authorities, who ensure that only the consignment whose details are given on the
certificate is permitted for shipment. The goods are then dispatched to the port
of shipment and the exporter obtains railway receipt. Pre-Shipment inspection for
export houses and large houses stands withdrawn under the New-Exim policy.
However, small units are still subjected to it. Government of India has introduced
a scheme to recognize and suitably reward manufactures that have acquired the
ISO 9000 (series) or any other internationally recognized equivalent certification
of quality. Such manufactures will be eligible for grant of special import licenses.
Ninth Stage
You should make an application for pre-shipment advance to your banker along
with the following documents:
Confirmed export order/contract or L/C etc. in original. Where it is not available,
an undertaking to the effect that the same will be produced to the bank within a
reasonable time for verification and endorsement should be given.

An undertaking that the advance will be utilized for the specific purpose of
procuring/manufacturing/shipping etc., of the goods meant for export only, as
stated in the relative confirmed export order or the L/C.

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Tenth Stage
As soon as the goods are ready for export, the exporter has to apply to insurance
policy is insisted upon by the importer an insurance cover/policy as the case may
be where an insurance policy is insisted upon by the importer, will not do. The
policy would be for C.I.F value plus 10 per cent to cover expenses. The exporter
should obtain the insurance policy in duplicate. at this stage all formalities in
relation to floor price regulations, certificate of Orgin. Export credit and
Guarantee cover etc. should be completed
Eleventh Stage
Issue Instruction to the clearing and Forwarding Agents
A detailed note is prepared for the clearing and forwarding agent, giving
instructions regarding the shipment of the consignment (example the shipment
may be made under claim drawback). Along with this note a master document
and form of bank guarantee should be forwarded to the forwarding agent
Twelfth Stage
On receipt of the above documents the clearing and forwarding agent takes
delivery of the consignment from the railway/road authorities and arranges for its
storage in a warehouse.
The clearing and forwarding agent then prepares the shipping bill and presents
them along with the above documents to the export department of the customs
house. The customs appraiser examines these documents and appraises the
value of the goods. If everything is in order he endorses the duplicate copy of the
shipping bill and indicates the extent of physical examination to be carried out to
the docks. All the documents, except GR-1 form the original shipping bill and a
copy of the master document are returned to the clearing and forwarding agent
for presentation to the dock appraiser.
The clearing and forwarding agent presents the port trust copy of the shipping
bill to the shed superintendent of the port trust and obtains a carting order. This
enables him to cart the cargo to the transit shed for physical examination. If

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satisfied the dock appraise makes an “out of charge” endorsement on the
duplicate copy of the shipping bill and returns it with the order documents.
The duplicate copy of the shipping bill is now presented to the preventive officer
of the custom department who endorses it with “Let Ship” order.
It is then handed over to the agent of the shipping company in taken of
authorization by the customs to accept the cargo on board the vessel. As soon as
the goods are loaded on board the ship, the certain issues a receipt, known as
the Mate Receipt to the shed superintendent.
The clearing and forwarding agent then pays the port charges and takes delivery
of the Mate Receipt, which is presented, to the preventive officer, who records
the certificate of shipment. This certificate is recorded on all copies of the
shipping bill. AR-4/AR-4A form (original & duplicate copies) and railway freight
rebate application (triplicate copy) and returned to the clearing and a forwarding
agent. He presents the mate receipt to the shipping company for the issue of a
bill of lading.
Thirteenth Stage
The clearing and forwarding agent return the master document to the exporter at
this stage along with.
1. Shipping Bill
2. Original L/C (contract) order
3. AR-4/AR-4A form in duplicate
4. Full set of clean-on-board bill of lading together with the required number of
non-negotiable copies.
Fourteenth Stage
Intimation is sent to the importers indicating the date of dispatch of goods and
the name of slip by which they have been sent .The following documents are also
enclosed
 A non-negotiable copy of the B/L
 Master Document copy
Fifteenth Stage

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Presented of documents by the exporter to bank. The following documents are
now presented by the exporter for negotiation/collection
1. Master documents
2. GR-1 Form (duplicate and triplicate)
3. Full set of clean-on-board bill of lading (all negotiable copies plus one non
negotiable copy)
4. Original L/C
5. Bank Certification in prescribed form (in duplicate)
6. Marine Insurance policy (in duplicate)
7. Export Contract/order and
8. B/L
Sixteenth Stage
Bank examines the documents with reference to the terms and conditions of the
original order and also of the L/C. the exporter’s bank screens the above
documents and sends a set of the following documents to the importer’s bank.
1. Master documents (Original copy)
2. Marine Insurance policy
3. Negotiable B/L (Original copy)
4. Bill of Exchange (Original copy)
The banker sends GR-1 form (duplicate copy) to the exchange control
departments of the RBI. The triplicate copy of the form is sent to the RBI on
receipt of payment from abroad.
The banker returns the following documents to the exporter
 Original copy of the bank Certificate
 Attested copies of the master document
The exporter receives payment against the above documents. The banker also
sends to the concerned joint chief controller of imports and exports a duplicate
copy of the bank certificate.
Seventeenth Stage

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Central excise rebate claim is filed by the exporter with the concerned maritime
collector of central Excise for rebate on the Central excise duty or for getting
credit in his bon account as the case may me.

Eighteenth Stage
Advance License /special license
The exporter should file an application to the licensing authority for an advance
license/special license in accordance with the export-import policy of the country
at that point of time.

Cargo ship
Container ship
A cargo ship or freighter is any sort of ship or vessel that carries cargo, goods,
and materials from one port to another. Thousands of cargo carriers ply the
world's seas and oceans each year; they handle the bulk of international trade.
Cargo ships are usually specially designed for the task, often being equipped with
cranes and other mechanisms to load and unload, and come in all sizes. Today,
they are almost always built of welded steel, and with some exceptions generally
have a life expectancy of 25 to 30 years before being scrapped.
Types
Specialized types of cargo vessels include container ships and bulk carriers
(technically tankers of all sizes are cargo ships, although they are routinely
thought of as a separate category).
History
The earliest records of waterborne activity mention the carriage of items for
trade; the evidence of history and archaeology shows the practice to be
widespread by the beginning of the 1st millennium BC. The desire to operate
trade routes over longer distances and at more seasons of the year motivated
improvements in ship design during the Middle Ages.

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Before the middle of the 19th century, the incidence of piracy resulted in most
cargo ships being armed, sometimes quite heavily, as in the case of the Manila
galleons and East Indiamen.
Piracy
Piracy is still quite common in some waters, particularly around Asia, most
notably in the Malacca Straits, a narrow channel between Indonesia and
Singapore / Malaysia. In 2004, the governments of those three nations agreed to
provide better protection for the ships passing through the Straits. Also piracy
prone are the waters off Somalia and Nigeria, while smaller vessels are also in
danger along parts of the South American coasts.

Definitions
While the definitions have become "cross-pollinated" over the years, "cargo"
technically refers to the goods carried aboard the ship for hire, while "freight"
refers to the compensation the ship or charterer receives for carrying the cargo.
Generally, the modern ocean shipping business is divided into two classes:
1. Liner business: typically (but not exclusively) container vessels (wherein
"general cargo" is carried in 20 or 40-foot "boxes"), operating as "common
carriers", calling a regularly-published schedule of ports. A common carrier refers
to a regulated service where any member of the public may book cargo for
shipment, according to long-established and internationally agreed rules.
2. Tramp-tanker business: generally this is private business arranged between
the shipper and receiver and facilitated by the vessel owners or operators, who
offer their vessels for hire to carry bulk (dry or liquid) or break bulk (cargoes with
individually handled pieces) to any suitable port(s) in the world, according to a
specifically drawn contract, called a charter party.
Larger cargo ships are generally operated by shipping lines: companies that
specialize in the handling of cargo in general. Smaller vessels, such as coasters,
are often owned by their operators.
Vessel prefixes: Before the vessel's name will be found a category designation.
Naval ships, for example, will have "USS" (United States Ship), "HMS" (Her/His

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Majesty's Ship), "HTMS" (His Thai Majesty's Ship). Merchant ships may have "RMS
(Royal Mail Ship, usually a passenger liner), "MV" (Motor Vessel, (powered by
Diesel). "SS" (Steam Ship, now seldom seen, powered by steam). "TS",
sometimes found in first position before a merchant ship's prefix, denotes that it
has Twin Screws.
Famous cargo ships would include the Liberty ships of World War II, partly based
on a British design, the sections for which were prefabricated all over the USA
and then assembled by shipbuilders in an average of 6 weeks with the record
being just over 4 days. These ships allowed the Allies to replace sunken cargo
vessels at a rate greater than the Kriegsmarine's U-boats could sink them, and
contributed significantly to the war effort, the delivery of supplies, and eventual
victory over the Axis powers.
Lake freighters built for the Great Lakes in North America differ in design from
"salties" because of the difference in wave size and frequency in the lakes. A
number

of these boats are so large that they cannot leave the lakes because they do not
fit into the locks on the Saint Lawrence Seaway.
Sizes of cargo ships
Cargo ships are categorized partly by their capacity, partly by their weight, and
partly by their dimensions (often with reference to the various canals and canal
locks through which they can travel). Some common categories include:
 Small Handy size, carriers of 20,000-28,000 deadweight tonnage
 Handy size, carriers of 28,000-40,000 deadweight tonnage
 Handymax, carriers of 40,000-50,000 dwt
 Seawaymax, the largest size which can traverse the St Lawrence Seaway
 Aframax, oil tankers between 75,000 and 115,000 dwt. This is the largest
size defined by the average freight rate assessment (AFRA) scheme.
 Suezmax, the largest size which can traverse the Suez Canal
 Panamax, the largest size which can traverse the Panama Canal
(generally: vessels with a width smaller than 32.2 meter)

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 Malaccamax, the largest size which can traverse the Straits of Malacca
 Capesize, vessels larger than Panamax and Suezmax, which must
traverse the Cape of Good Hope and Cape Horn in order to travel between oceans
 VLCC (Very Large Crude Carrier), supertankers between 150,000 and
320,000 dwt
 ULCC (Ultra Large Crude Carrier), enormous supertankers between
320,000 and 550,000 dwt

Containerization
Containerization
Containerization is a system of intermodal freight transport cargo transport
using standard ISO containers (known as Shipping Containers or Isotainers)
that can be loaded and sealed intact onto container ships, railroad cars, planes,
and trucks.
Containerization is also the term given to the process of determining the best
carton, box or pallet to be used to ship a single item or number of items.
ISO container dimensions and payloads
There are five common standard lengths, 20-ft (6.1 m), 40-ft (12.2 m), 45-ft (13.7
m), 48-ft (14.6 m), and 53-ft (16.2 m). United States domestic standard
containers are generally 48-ft and 53-ft (rail and truck). Container capacity is
measured in

twenty-foot equivalent units (TEU, or sometimes teu). An equivalent unit is a


measure of containerized cargo capacity equal to one standard 20 ft (length) × 8
ft (width) × 8 ft 6 in (height) container. In metric units this is 6.10 m (length) ×
2.44 m (width) × 2.59 m (height), or approximately 38.5 m³. These sell at about
US$2,500 in China, the biggest manufacturer.[1]
Most containers today are of the 40-ft (12.2 m) variety and are known as 40-foot
containers. This is equivalent to 2 TEU. 45-foot (13.7 m) containers are also
designated 2 TEU. Two TEU are equivalent to one forty-foot equivalent unit (FEU).
High cube containers have a height of 9 ft 6 in (2.9 m), while half-height
containers, used for heavy loads, have a height of 4 ft 3 in (1.3 m). When

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converting containers to TEUs, the height of the containers typically is not
considered.
The use of US measurements (also still used in UK) to describe container size
(TEU, FEU) despite the fact that much of the world uses the metric system
reflects the fact that US shipping companies played a major part in the
development of containers. The overwhelming need to have a standard size for
containers, in order that they fit all ships, cranes, and trucks, and the length of
time that the current container sizes have been in use, makes changing to an
even metric size impractical.
The maximum gross mass for a 20-ft dry cargo container is 24,000 kg, and for a
40-ft, (inc. the 2.87 m (9 ft 6 in) high cube container), it is 30,480 kg. Allowing for
the tare mass of the container, the maximum payload mass is there reduced to
approx. 21,600 kg for 20-ft, and 26,500 kg for 40-ft containers.[2]
Standard containers
The 20 foot container is the most common container worldwide, but the 40 foot
container is increasingly replacing it. The longer container types are also
becoming more common, and are especially common in North America. Shorter
containers, e.g. 10 foot containers, also exist, but are rarely used.
The following table shows the weights and dimensions of the three most common
types of containers worldwide. The weights and dimensions quoted below are
averages. Different manufacture series of the same type of container may
slightly vary in actual size and weight.

45′ high-cube
20′ container 40′ container
container
imperi metri imperi metri imperi metri
al c al c al c
external lengt 20′ 4″ 6.058 40′ 0″ 12.19 45′ 0″ 13.71

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h m 2m 6m
widt 2.438 2.438 2.438
dimensio 8′ 0″ 8′ 0″ 8′ 0″
h m m m
ns
heig 2.591 2.591 2.896
8′ 6″ 8′ 6″ 9′ 6″
ht m m m
19′ 39′
lengt 5.898 12.03 13.55
4 13/16 5 45/64 44′ 4″
h m 2m 6m
″ ″
interior 7′ 7′ 7′
widt 2.352 2.352 2.352
dimensio 8 19/32 8 19/32 8 19/32
h m m m
ns ″ ″ ″
7′ 7′ 8′
heig 2.385 2.385 2.698
9 57/64 9 57/64 9 15/16
ht m m m
″ ″ ″
2.343 2.343 2.343
width 7′ 8 1/8″ 7′ 8 1/8″ 7′ 8 1/8″
m m m
door
8′
aperture heig 2.280 2.280 2.585
7′ 5 3/4″ 7′ 5 3/4″ 5 49/64
ht m m m

1,169 33.1 2,385 67.5 3,040 86.1
volume
ft³ m³ ft³ m³ ft³ m³
maximum gross 52,910 24,00 67,200 30,48 67,200 30,48
mass lb 0 kg lb 0 kg lb 0 kg
5,140 2,330 4,000 10,580 4,800
empty weight 8,820 lb
lb kg kg lb kg
47,770 21,67 58,380 26,48 56,620 25,68
net load
lb 0 kg lb 0 kg lb 0 kg
20′ heavy tested containers are available for heavy goods (eg. heavy machinery).
These allow a maximum weight of 67,200 lb (30,480 kg), an empty weight of
5.,290 lb (2,400 kg) and a net load of 61,910 lb (28,080 kg).

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Shipping container history
Containers produced a huge reduction in port handling costs, contributing
significantly to lower freight charges and, in turn, boosting trade flows. Almost
every manufactured product humans consume spends some time in a container.
Containerization is an important element of the innovations in logistics that
revolutionized freight handling in the 20th century.
Efforts to ship cargo in containers date to the 19th century. By the 1920s,
railroads on several continents were carrying containers that could be transferred
to trucks or ships, but these containers were invariably small by today's
standards. From 1926 to 1947, the Chicago North Shore and Milwaukee Railway
carried motor carrier vehicles and shippers' vehicles loaded on flatcars between
Milwaukee, Wisconsin and Chicago, Illinois. Beginning in 1929, Seatrain Lines
carried railroad boxcars on its sea vessels to transport goods between New York
and Cuba. In the mid-1930s, the Chicago Great Western Railway and then the
New Haven Railroad began "piggy-back" service (transporting highway freight
trailers on flatcars) limited to their own railroads. By 1953, the CB&Q, the
Chicago and Eastern Illinois and the Southern Pacific railroads had joined the
innovation. Most cars were surplus flatcars equipped with new decks. By 1955, an
additional 25 railroads had begun some form of piggy-back trailer service.
The first vessels purpose-built to carry containers began operation in Denmark in
1951. Ships began carrying containers between Seattle and Alaska in 1951. The
worlds first truly intermodal container system used purpose-built container ship
the Clifford J. Rodgers built in Montreal in 1955 and owned by the White Pass and
Yukon Route. Its first trip carried 600 containers between North Vancouver,
British Columbia and Skagway, Alaska on November 26, 1955; in Skagway, the
containers were unloaded to purpose-built railroad cars for transport north to the
Yukon, in the first intermodal service using trucks, ships and railroad cars.
Southbound containers were loaded by shippers in the Yukon, moved by rail, ship
and truck, to

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their consignees, without opening. This first intermodal system operated from
November 1955 for many years.
The U.S. container shipping industry dates to 1956, when trucking entrepreneur
Malcom McLean put 58 containers aboard a refitted tanker ship, the "Ideal-X,"
and sailed them from Newark to Houston. What was new about McLean's
innovation was the idea of using large containers that were never opened in
transit between shipper and consignee and that were transferable on an
intermodal basis, among trucks, ships and railroad cars. McLean had initially
favored the construction of "trailerships" - taking trailers from large trucks and
stowing them in a ship’s cargo hold. This method of stowage, referred to as roll-
on/roll-off, was not adopted because of the large waste in potential cargo space
onboard the vessel, known as broken stowage. Instead, he modified his original
concept into loading just the containers, not the chassis, onto the ships, hence
the desgnation container ship or "box" ship..
During the first twenty years of growth containerization meant using completely
different, and incompatible, container sizes and corner fittings from one country
to another. There were dozens of incompatible container systems in the U.S.
alone. Among the biggest operators, the Matson Navigation Company had a fleet
of 24-foot containers while Sea-Land Service, Inc used 35-foot containers. The
standard sizes and fitting and reinforcement norms that exist now evolved out of
a series of compromises between international shipping companies, European
railroads, U.S. railroads, and U.S. trucking companies. The bulk of the discussions
occurred in the late 1960s and the first draft of the resulting ISO standards were
prepared for publication in 1970.
A social cost arises as a result of the high cost of transporting the empty
containers back to the original shipping point by agents. This cost, often greater
than that of containers themselves, results in large areas in ports and
warehouses to be occupied by empty containers left when at the destination. In
2004 in the US this has ironically generated a contest addressed to those that
present the best project for alternative use of these abandoned containers.

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In the United States, at first, containerization grew despite the unfavorable
regulatory structure of the 1960s. But the United States' present fully integrated
systems became possible only after the Interstate Commerce Commission's

regulatory oversight was cut back (and later abolished in 1995), trucking and rail
were deregulated in the 1970s and maritime rates were deregulated in 1984.
Containerization has revolutionized cargo shipping. Today, approximately 90% of
non-bulk cargo worldwide moves by containers stacked on transport ships; 26%
of all containers originate from China. As of 2005, some 18 million total
containers make over 200 million trips per year. There are ships that can carry
over 14,500 TEU ("Emma Mærsk", 396 m long, launched August 2006). It has
even been predicted that, at some point, container ships will be constrained in
size only by the Straits of Malacca—one of the world's busiest shipping lanes—
linking the Indian Ocean to the Pacific Ocean. This so-called Malaccamax size
constrains a ship to dimensions of 470 m in length and 60 m wide (1542 feet *
197 feet).
However, few initially foresaw the extent of the influence containerization would
bring to the shipping industry. In the 1950s, Harvard University economist
Benjamin Chinitz predicted that containerization would benefit New York by
allowing it to ship industrial goods produced there more cheaply to the Southern
United States than other areas, but did not anticipate that containerization might
make it cheaper to import such goods from abroad. Most economic studies of
containerization merely assumed that shipping companies would begin to replace
older forms of transportation with containerization, but did not predict that the
process of containerization itself would have some influence on producers and
the extent of trading.
A converted container used as an office at a building site.
The widespread use of ISO standard containers has driven modifications in other
freight-moving standards, gradually forcing removable truck bodies or swap
bodies into the standard sizes and shapes (though without the strength needed
to be stacked), and changing completely the worldwide use of freight pallets that
fit into ISO containers or into commercial vehicles.

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Improved cargo security is also an important benefit of containerization. The
cargo is not visible to the casual viewer and thus is less likely to be stolen and
the doors of the containers are generally sealed so that tampering is more
evident. This has reduced the "falling off the truck" syndrome that long plagued
the shipping industry.
Use of the same basic sizes of containers across the globe has lessened the
problems caused by incompatible rail gauge sizes in different countries. The
majority of the rail networks in the world operate on a 1,435 mm (4 ft 8½ in)
gauge

track known as standard gauge but many countries like Russia, Finland and Spain
use broader gauges while other many countries in Africa and South America use
narrower gauges on their networks. The use of container trains in all these
countries makes trans-shipment between different gauge trains easier, with
automatic or semi-automatic equipment.
Some of the largest global companies containerizing containers today are Patrick
Global Shipping, Bowen Exports and Theiler & Sons Goods, LLC.
Loss at sea
Containers occasionally fall from the ships that carry them, something that
occurs an estimated 2,000 to 10,000 times each year. For instance, on November
30, 2006, a container washed ashore on the Outer Banks of North Carolina, along
with thousands of bags of its cargo of tortilla chips. Containers lost at sea do not
necessarily sink, but seldom float very high out of the water, making them a
shipping hazard that is difficult to detect. Freight from lost containers has
provided oceanographers with unexpected opportunities to track global ocean
currents, notably a cargo of Friendly Floatees.

Double-stack containerization
A railroad car with a 20' tank container and a conventional 20' container.
Most flatcars cannot carry more than one standard 40 foot container, but if the
rail line has been built with sufficient vertical clearance, a well car can accept a

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container and still leave enough clearance for another container on top. This
usually precludes operation of double-stacked wagons on lines with overhead
electric wiring (exception: Betuweroute). Double stacking has been used in North
America since American President Lines introduced this "double stack" principle
under the name of "Stacktrain" rail service in 1984. It saved shippers money and
now accounts for almost 70 percent of intermodal freight transport shipments in
the United States, in part due to the generous vertical clearances used by US
railroads.

ISO container types


Various container types are available for different needs:
• General purpose dry van for boxes, cartons, cases, sacks, bales, pallets,
drums in standard, high or half height
• High cube palletwide containers for europallet compatibility
• Temperature controlled from −25 °C to +25 °C reefer
• Open top bulktainers for bulk minerals, heavy machinery
• Open side for loading oversize pallet
• Flushfolding flat-rack containers for heavy and bulky semi-finished goods,
out of gauge cargo
• Platform or bolster for barrels and drums, crates, cable drums, out of gauge
cargo, machinery, and processed timber
• Ventilated containers for organic products requiring ventilation
• Tank containers for bulk liquids and dangerous goods
• Rolling floor for difficult to handle cargo
• Gas bottle
• Generator
• Collapsible ISO
• Swapbody
Biggest ISO container companies
Top 10 container shipping companies in order of TEU capacity, first
January 2006

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TEU Market Number of
Company
capacity[7] Share ships
A.P. Moller-Maersk Group 1,665,272 18.2% 549
Mediterranean Shipping
865,890 8.6% 299
Company S.A.
CMA CGM 507,954 5.6% 256
Evergreen Marine Corporation 477,911 5.2% 153
Hapag-Lloyd 412,344 4.5% 140
China Shipping Container Lines 346,493 3.8% 111
American President Lines 331,437 3.6% 99
Hanjin-Senator 328,794 3.6% 145
COSCO 322,326 3.5% 118
NYK Line 302,213 3.3% 105
Other container systems
• Haus-zu-Haus (Germany)
• RACE (container) (Australia)
Determining the best carton, box or pallet
While the creation of the best container for shipping of newly created product is
called "Containerization", the term also applies to determining the right box and
the best placement inside that box in order fulfillment. This may be planned by
software modules in a warehouse management system. This optimization
software calculates the best spatial position of each item within such constraints
as their ability to stack and crush resistance
TRENDS IN CONTAINERIZATION
INTRODUCTION
Before containerization, cargo handling practices had not changed for over 100
years. Building pallets and loading them into the holds of ships was a slow and
labour-intensive process, and the cargoes were vulnerable to damage and theft.
Therefore, the invention of containerization is regarded by some as the most
significant shipping innovation of the 20th century. Domestic container shipping
emerged in the United States in the late 1950s and international flows
commenced roughly a decade later.

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Using a sealed steel “box” of standardized dimensions (measured in twenty-foot
equivalent units or TEUs) to transport cargo has a number of advantages. Most
importantly, total shipping time has been reduced because the containers may
be transferred from ship to rail to truck, and back again, very quickly. As the box
is secure and protects the cargo inside, theft and damage have been greatly
reduced. Furthermore, the development of climate-controlled containers has
made it possible to ship temperature-sensitive products over great distances by
sea, rail and truck. The introduction of containers has lowered the cost of marine
shipping to the extent that surface transport services are usually the more
expensive components of a total import or export container movement, even
though the surface transport is usually over a shorter distance. The lower costs
of containerized trade have stimulated global trade, and the use of containers
has been credited for double-digit growth in trade with emerging economies.

The shift to containerization was made possible through significant investments


on the part of ports, railways and trucking companies. Moving containers
required modifications to ships, rail cars and truck chassis so that the boxes
could be locked down and, usually, stacked. In addition, investment was required
in specialized equipment and infrastructure at marine terminals for transferring
containers back and forth from ship to railcar and truck.
This paper provides a description of the historic and expected future growth in
containerization. It then explains the capacity constraints that threaten to limit
the growth in North America’s container trade. Finally, it provides projections of
growth in container traffic in Canada and some information about capacity at
Canada’s container ports.
GROWTH IN CONTAINERIZATION
Containers can carry anything, but they are particularly well suited for
transporting perishable and manufactured goods. Economic trends such as the
globalization of the supply chain and trade liberalization have greatly stimulated
the demand for containerized transport.
Growth in North American container volumes outstripped the pace of economic
growth between 1990 and 2004. As shown in Figure 1, North American TEUs

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grew at about 7% per year over this period. That rate is expected to continue,
leading to a doubling of North American container volumes in 10 years. Growth
rates would vary from port to port, however, depending on their ability to
accommodate increases in traffic.

Figure 1: Container Volume History and Forecast:


Continental United States and Canada

World container growth appears to have been even more impressive than in
North America alone. One major independent shipping consultancy estimates
that growth in container volumes has exceeded 10% annually over the last 15
years. It predicts that container demand worldwide will nearly double by 2015,
as shown in Table 1.

Table 1: Forecast of Container Port Demand by Region to 2015 (Million

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TEUs)
Region 2004 2010 2015
Asia 159.1 240.5 303.4
Americas 62.2 90.7 118.8
North America 41.1 56.9 71.6
Europe/Mediterranea
74.1 105.8 139.5
n
Others 36.8 58.2 85.6
Total 332.2 495.1 647.3
* Totals may not add due to rounding.
Source: Ocean Shipping Consultants Limited, Press Release, January 2005.

As can be seen in Table 1, Asia is by far the largest market for containers in the
world and is expected to continue to grow rapidly. Through 2015, exceptional
growth in container demand is expected in the sub-regions of Southeast Asia,
Central and South America, South Europe and the Mediterranean as well as the
Middle East and the Indian subcontinent. The source of the figures in Table 1 is
less bullish about the North American market than the forecast in Figure 1,
predicting approximately 75% growth in container demand through 2015.
As container demand has grown, the size of container vessels has also increased
impressively. The world’s largest container ship in the early 1980scarried some
3,400 TEUs, compared to the largest container ships in recent years which can
carry about 9,200. The rapid evolution of container ships is due to the significant
efficiency gains and cost savings associated with operating larger ships. Today,
the vessels calling at ports commonly carry between 6,000 and 8,000 TEUs, but
the evolution continues as 9,600-TEU vessels are currently under construction.
Some predict that the next jump in ship size will be to 12,000 TEUs but that it will
require advances in propulsion technology to be economically viable. Ultimately,
the depth of the Malacca Strait between Indonesia and Malaysia is expected to
be the constraint on future ship capacity, limiting it to around 18,000 TEUs.

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CONSTRAINTS ON CONTAINERIZATION GROWTH
It is estimated that over 40% of major North American container ports already
experience congestion during peak periods of the year. The deployment of ever-
larger ships is expected to cause an even greater strain on facilities during peak
periods. Perhaps for this reason, more than half (65%) of major North American
container port operators expect congestion to worsen in the next five years.
Shortages in capacity at marine terminals and in surface distribution networks
are viewed as the main constraints to current and future growth in containerized
trade. To maximize container-handling capacity, marine terminals need deep
channels to provide larger ships with access, and efficient and sufficient
equipment (e.g., gantry cranes and forklifts) on the dock to load and unload them
rapidly. It is also an advantage if terminals have abundant space to stack and
store the containers, can offer electrical outlets to plug in refrigerated (“reefer”)
containers and are equipped with a computerized system for tracking container
locations and

movements. Furthermore, port managers need to have the flexibility to adopt


efficiency-enhancing processes. Unfortunately, the reality at many ports is that
financing channel deepening and container-handling and -tracking equipment is a
challenge, they have limited space to expand, and the labour unions representing
port workers typically oppose changes that increase efficiency because they can
threaten jobs.
There are also capacity issues with inland transportation by rail and truck.
Ideally, rail companies would have abundant track linking dockside operations
into an extensive, preferably transcontinental, network and have sufficient
equipment to transport all of the boxes without delay. Similarly, trucking
companies should possess sufficient power units (cabs) to transport boxes and
sophisticated scheduling processes that can efficiently match their own
equipment with that of the ocean carriers or leasing companies (boxes and
chassis). Given the periodic congestion existing today at North American ports, it
would seem that capacities both at container terminals and in surface

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transportation networks have not expanded fast enough and/or are not
consistently coordinated.
Government and port community stakeholders may present additional obstacles
to capacity enhancement. For example, the government may not make a priority
of building or improving road infrastructure so that it can accommodate high
levels of container traffic by truck. Also, the risk that the government will make
regulation increasingly stringent in the areas of security, environmental
protection and safety creates disincentives for new trucking firms to enter the
industry and for incumbents to invest further. For their part, communities
located close to ports often oppose port expansion projects for environmental
and other reasons.
Interestingly, a recent survey that asked the top North American ports to rank 25
capacity factors (e.g., conditions at the terminal, labour issues and surface
transport services) revealed that port managers’ greatest concern is with the
capacity constraints imposed by local roads. Second and third most important
capacity factors, according to the ports surveyed, were capacity constraints in
rail and truck services. None of these three areas is under the ports’ control;
they depend on decisions by government and private industry.

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SUGGESTED FORM OF EXPORT SALES CONTRACT


1. NAME and ADDRESS of the PARTIES
Sellers ………………………….
…………………………..
………………………….
Buyers …………………………
………………………….
.…………………………
………………………….
2. We the above named parties, hereafter known as ‘Sellers’ and ‘Buyers’
respectively, have entered into this contract for sale of …………………….. on
at …………………………… subject to the following conditions:
(A) GOODS (Description) ……………………
(i) QUALITY …………………………….
(ii) QUALITY (Specification) ……………
(iii) PACKING
(i) Customary OR
(ii) Any Special Requirement (if any)
Note: Trick the box against the desired specification
B) INSPECTION
Describe the goods, their quality and specifications as per the agreement. The
agency for inspection / certification of quality and/or quality may also be
stipulated).
(B) PRICE
(i) Currently …………………..
(ii) Basis of Price
EXW : FCA : FOB : CIF : CFR :
CPT : CIP : Any other (specify)
(iii) Price per unit ………………………………
(iv) Total amount ……………………………….

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Commission / Discount will become payable only after realization of total
proceeds.

Prices are subject to Escalation on account of increase(s) in freight charges,


taxes / duties etc. due to reasons beyond the control of Sellers.

(C) MODE OF PAYMENT:


(i) Cash in Advance OR Bill of Exchange : Sight Draft Or Usance Draft
____________ days after Sight

(ii) Documentary LC : Irrevoable OR Confirmed

Documents against Payment

(iii) Documents against Acceptance

(iv) Any other (specify)

(D) SHIPMENT
* (i) Basis of Shipment
EXW : FOB : CFR : DES : DEQ
Any other (specify)
(ii) Period of shipment
Not earlier than …………..
Not later than …………….

(iii) Mode of shipment


Sea : Air : Multimodal Transport : Rail etc.
(a) Place of Pre-carriage …………………
(b) Name of Pre-carriage …………………
(c) Placing Port of Shipment ………………
(d) Placed Port of Discharge ……………….
(e) Place Port of two Destination ……….
Indicate specifically whether place or port

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Note : Tick the box against the designed specification
(E) DOCUMENTS
Documents is normally tendered:
(i) Commercial Invoice
(ii) Packing List
(iii) Bill of Lading / Air Waybill / Multimodal Transport Document
: Railway Receipt : : LWB
(iv) Bill of Exchange : Sight Draft OR Usance Draft __________ days
After Sight
(v) Insurance Policy Insurance Certificate in case of CIF Sales) as
(vi) Certificate of Origin
(vii) Certificate of Inspection (Where Required)
(viii) Shipment Advice
(ix) Any other (specify)
(G) INSURANCE
(i) Party Responsible :
Seller OR Buyer
(ii) Insurance Coverage :
Insurance Cargo Clause : ‘A’ OR ‘B’ OR ‘C’ Indicate if ‘SRCC’
AND /OR War Risks Coverage required.
Note : Trick the box against the desired specification.
(H) PASSING OF PROPERTY AND RISK

The risk shall finally pass from the severs Buyers when the good are delivered
at the Seller’s place of work OR when the goods pass the ship’s rail
and are covered by insurance as per the terms. But, the property in the
goods shall finally pass to the Buyers only after payment has been made.
(I) FORCE MAJEURE
Sellers shall not be responsible for any delay in the performance of this
contract due to any of the causes or circumstances beyond their control such
as Act of God, War, Riots, Strikes, Civil Commotion, Lockouts, Act of State,

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Industrial Disputes, Fire, Damage or Accident to the Mill/Factory or its
machinery cancellation or suspension of inland/overseas transport services by
concerned Transport Services Operators or such like causes or
circumstances, subject to notice of the possibility of delay in performance of
this contract being given by the Sellers to the Buyers.
Sellers shall be entitled to extension of time for the performance of this
contract for a period corresponding to the period of delay caused by or as a
consequence of any of the causes and / or consequences mentioned above
and the Buyers shall accept the goods so affected without allowance as soon
as they are ready and freight can be secured.

(J) ARBITRATION
All disputes arising under, out of or in connection with this contrct shall be
finally settled by ARBITRATION by …………………… (name of
Arbitration(s) / Arbitral institution).
2. Any other special conditions, prevalent in or relevant to the
particular line of trade or trade transaction may be specified.

INSTITUTIONAL ARRANGEMENTS FOR


RESOLVING SHIPPER’S PROBLEMS
1. In ocean trade logistics, shippers have to end outer a wide range of
problems. These may be in the realm of freight rates, surcharges, adequacy
of shipping services and terms and conditions of carriage. Seeking solution,
or even expecting adequate response from shipping lines, to these problems
may well be beyond the capacity of the individual shipper. It is, therefore,
import for the shippers to organise themselves in the form of Shippers
Associations or Councils so that they can have the advantage of greater
resources and combined strengths in negotiating meaningfully with the
representatives of shipping lines or shipping conferences and other
concerned parties.

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2. Shippers associations/Councils are organisations with membership of
Trade/Commodity Associations and individual companies, with shared
objectives, at the regional/national level for the purpose of taking collective
decisions with a unified approach in negotiations with representatives of
shipping lines, port authorities and other concerned interests. The objective
and effectiveness of a ‘Shippers’ Association or a Council will depend largely
on the extent of commitment of its members to common objectives and on the
frame work of Government Policy and legislation within which it has to
operate. In a de-regulated shipping environment it is all the more necessary
for the shippers to maximize their combined negotiating strength to get a fair
deal from shipping conferences or representatives of independent shipping
lives and other concerned interests in maritime transport. In order to be
successful in negotiation with Shipping Lines / Conferences it is important for
Shippers Association/ Council to be adequately, if not fully, representative of
the shippers’ interests. The

representative character of a Shippers’ Association implies a broad-based


membership, covering as many products / commodity interests as possible, so
as to command recognition and respect from the more organised shipowners’
organisations and concerned Government bodies.
3. With a view to serving its objectives the Shippers’ Associations or
Councils must have independent secretariat with permanent staff of
professional competent people for an objective analysis of the Shippers’
problems and offering advice to Trade Associations and individual shippers in
solving their difficulties, whether individual or general, in trade logistics. Apart
from attending to day-to-day problems of the shippers, the other activities of
the Shippers’ Association/ Council may include publicity and education of
shippers via organisation of workshops, seminars, study tours, publication
of information bulletins or periodicals, short-term management development
programmes in trade logistics and or providing Technical support of the
centralized cargo booking scheme by independent agencies in the interest
of more efficient management and utilization of port and shipping

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services, to the satisfaction of both the users and providers of trade related
maritime transport services.
4. It is also important for the Shippers’ Associations to be financially strong so
as to be able support an independent secretariat for the purpose of collection,
analysis and dissemination of information among member organisations and
companies and for strengthening the negotiating skills and abilities for
equitable solutions to their problems. Strong financial resources are required
for the creation of requisite infrastructure for generating the necessary
awareness among existing and potential members on the importance and role
of transport, in general, and ocean transport in particular, in overseas
physical distribution management. Strong shippers, organisations are also
instrumental in giving quality inputs for shaping the maritime policy of a
country.
Shippers’ organisations can also enlist support of Governments in their
respective countries for their activities. The UN Convention of Code for Liner
Conferences provides for an positive role which Governments may play in the
consultation arrangements between conferences and Shippers’ Councils.
5. The rationale of a shippers’ Association / Council exists in finding
satisfactory solutions to the problems facing the users of maritime transport

services in particular and trade logistics in general. These problems are of


equal concern to the providers of maritime transport services. The success
of Shippers’ Association of Council, therefore, depends upon its ability to
emphasize and strike mutuality of interest among shippers and ship-owners in
resolving the problems in ocean transport logistics. This underscores the
paramount need for consultation in an abiding basis on the part of Shippers’
Association / Councils with representatives independent Shipping Lines /
Conferences, Port Authorities, Railways, Road Transport Associations,
Association of Multi-Modal Transport Operators, banks and Insurance
Underwriters and other concerned Government Sponsored Bodies. The UN
Convention of Code for Liner Conferences provides, inter alia, the guidelines
for meaningful consultation between shippers organisations and Shipping

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Conferences. This could as well, be emulated as the model for Consultation
with other concerned interests/ bodies in the trade logistics sector.

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CHAPTER-4

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Current status

CHAPTER-4
MARKETING STRATEGY

MARKETING STRATEGY OF THE COMPANY


Introduction
Central to any successful marketing strategy is an understanding of our
customers and their needs. The ability to satisfy our customers' needs better
than our competitors are able to help our build customer loyalty and increase
sales.
However, both customer needs and the business environment in which we
operate are constantly changing. Our marketing strategy needs to consider what
changes are taking place, and the opportunities and threats that are emerging.
A marketing strategy will also help to assess how successful we are at meeting
our customers' needs, as well as how successful our competitors are. It may also
help us to identify new markets that we can successfully target.
This guide helps you to identify which customers to focus on and your key
objectives in reaching them. It explains what to include in our marketing strategy
and how it can be used as the basis for effective action.

Key elements of a successful marketing strategy


One of the key elements of a successful marketing strategy is a thorough
understanding of who our customers are and what "needs" they are looking to
satisfy. Customer groups or segments can be identified and each targeted with
marketing activity that specifically addresses their particular needs.
In order to meet customer needs and remain competitive, it is important to
identify and respond to any changes in customer needs and attitudes in our
industry and in the broader economic climate. It is therefore vital that we assess
our business environment when developing your marketing strategy.

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We then create a marketing strategy that makes the most of our strengths and
matches them to the needs of the customers we want to target. For example, if a
particular group of customers is looking for quality first and foremost, then our
marketing activity aimed at them should draw attention to the high quality
service we can provide.

It is important to think through the consequences of our marketing strategy to


make sure it's realistic. For example, there is no point in basing a strategy on
rapid growth if we won't be able to produce enough goods. The best strategy will
reflect our own strengths and weaknesses..
A key element often overlooked is that of monitoring and evaluating how
effective our strategy has been. This control element not only helps us to see
how the strategy is performing in practice, it also help us to inform our future
marketing strategy.
Our marketing plan needs to be constantly reviewed and updated or replaced
when necessary - just like our products or services.

SWOT Analysis
Our strategy must take account of how our business' strengths and weaknesses
will affect your marketing.
Begin our marketing strategy document with an honest and rigorous SWOT
analysis, looking at your strengths, weaknesses, opportunities and threats.
Strengths could include:
personal and flexible customer service
special features or benefits that our product offers
specialist skills
Weaknesses could include:
lack of an established reputation
newly formed company.
Opportunities could include:
increased demand from a particular market sector

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using the Internet to reach new markets
new technologies that allow you to improve product quality
Threats could include:
the emergence of a new competitor
more sophisticated, attractive or cheaper versions of our service
new legislation increasing our costs
a downturn in the economy, reducing overall demand

Having done our analysis, we can then measure the potential effects each
element may have on our marketing strategy.
For example, if new regulations will increase the cost of competing in a market
where we are already weak, we might want to look for other opportunities. On
the other hand, if we have a good reputation and our key competitor is
struggling, the regulations might present the opportunity to push aggressively for
new customers.

Developing our marketing strategy


With an understanding of our business' internal strengths and weaknesses and
the external opportunities and threats, we can develop a strategy that plays to
our own strengths and matches them to the emerging opportunities. We can
also identify your weaknesses and try to minimise them.The next step is to draw
up a detailed marketing plan that sets out the specific actions to put that
strategy into practice.
Basically, Global logistics generally focus on the niche market. It focus on
customer like CHA and Forwarder and they are the target market. Reason behind
to target this segment of the market is explore GLS more business. For eg- if GLS
go to 1 exporter they can get say 10 shipment and if they approach to 1 cha /
forwarder then 1 cha/ forwader may have 10 exporter and from each exporter
they have 10 shipment so in that case from 1 cha / forwader they can get 100
shipment so this is the reason why they target this particular segment of the

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market. Beside this GLS also assure the client not to approach their customer it’s
a sense of faith we develop in our client. GLS develop their marketing strategy
based on the theory of market positoning it implies to develop a position in the
mind of the customer by providing services according to them.

.What GLS did


Identify strengths and weaknesses
"In 2006 the company born and doing well, but our approach to marketing was
hit-and-miss. We went through the business from top to bottom and pinpointed
our strengths and weaknesses.
"On the plus side, customer research showed that we are known for quality
service and most of by the staff of the company involved in this trade for a long
period. On the minus side, brand awareness was low . We also used published
academic

research to find out more about our target customers' mindset and what they
want. We used all the information to create a marketing strategy with clear
objectives. These included developing our network of partnerships, raising brand
awareness, positioning ourselves as strategic thinkers in our market, and getting
more business through referrals."

Work to a plan
"With clear objectives in mind, writing and implementing a marketing plan was
easier. We changed our marketing mix and our approach:
Our printed newsletter, our main direct marketing method, our advertising and
customer research was made more customer-focused by including market
briefings. Feedback has improved and we've had several approaches from new
clients who've received it.
Beside cold calling, we stepped up marketing via our network of partners. We
provided them with clear information so that they could promote all our services

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to their clients. Now, about 20 per cent of what we bill is to partners rather than
end users.
To establish ourselves as strategic thinkers in our markets we began getting
articles published in relevant trade journals. This raised brand awareness and
enhanced our reputation. We also use re-prints of the articles as a direct
marketing tool.
We also re-designed our website and launched an Interview Guide on CD-Rom to
show the flexibility of our services.
"We now review our marketing strategy and update the plan every six months.
As a result of one review, we decided to attend a big trade conference, which
worked extremely well for us and generated a lot of new leads."

Clean up the database


"Marketing to existing customers is easier and cheaper than starting from scratch
with new ones, because existing customers are aware of our service and
employes. However, to market effectively to this group required a better
customer database than we had. As a result we decided to update our customer
database. It's just as well we did, because as we updated it we found that
approximately 40 per cent of the entries contained errors, duplications or were
completely irrelevant.

"We now have a proper database management strategy. We nominated one


person internally to take responsibility and now it's kept up to date meticulously.
We also use bought-in contact databases to help us target new customers."
Before looking at new markets, we think about how we can get the most out of
your existing customer base - it's usually more economical and quicker than
finding new customers.

Focus on the market


Your marketing strategy document should:

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analyse the different needs of different groups of customers focus on a market
niche where we can be the best aim to put most of our efforts into the 20 per
cent of customers who provide 80 per cent of profits Don't forget the follow-up
Put our marketing strategy into effect with a marketing plan that sets out actions,
dates, costs, resources and effective selling programmes. Measure the
effectiveness of what we do. Be prepared to change things that aren't working.
Pitfalls to avoid Making assumptions about what customers want. Ignoring the
competition. Trying to compete on price alone. Relying on too few customers.
Trying to grow too quickly.
Becoming complacent about what you offer and failing to innovate.

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CHAPTER-5

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Board

Regional
Director Regional Regional
Director Director
(NI and (SI) (WI)
EI)

Exports Imports Branch Branch


Mgr Mgr Mgr Mgr

Sales Ops Sales Ops

Service
Docs Docs Svc

Finance,
Admin &
HR

Domescti Internatio
c A/c nal A/c

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CHAPTER - 6

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CHAPTER-6
GOVERNMENT POLICIES

Export Import (EXIM) Policy


Export Related Schemes : Duty reimbursement to exporters, duty free
licence/facilities to exporters & procedures
1. Duty Drawback Scheme
Exporters are eligible for reimbursement of all custom duty paid on imported
inputs of an export product. In a few cases, adhoc quantum of duty drawback is
fixed to facilitate quick reimbursement. In other cases, the exporter has to
submit his claims for re-imbursement with supporting evidence to the
Commissioner (Duty Drawback) in the Department of Revenue, Ministry of
Finance. So far Duty Drawback Rates for 77 electronic items have been fixed to
facilitate the exporters. All Industry Drawback Rate (based on average worked
out from data submitted by the concerned industry sector) and Brand Rate of
Drawback (based on company specific data) are currently prevalent.
2. Duty Exemption Schemes
The schemes consist of Duty Free Licence, Advance Licence and Duty
Entitlement Pass Book ( DEPB ).
Duty Free License
Duty Free License includes Advance Licence, Advance Intermediate License and
Special Imprest License. Imports of inputs, which are physically incorporated in
the exported product (making normal allowance for wastage), are permitted
against a duty free licence. Application for duty exemption has to be filed in the
prescribed proforma with the Office of the Licensing Authority of Directorate
General of Foreign Trade (DGFT) under whose jurisdiction the applicant falls.
Exporters are eligible for the Customs Duty Free Licenses against specific order
or on production programme on the basis of up to 100% of the average FOB
value of their exports in the preceding three licensing years. Such licence is
issued in accordance with the policy and procedure in force on the date of issue

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of the licence and is subject to the fulfillment of time bound export obligation and
value addition as may be specified.
A Duty Free license needs to specify the following:
• The name and description of the items to be imported and exported.
• Quantity of each item to be imported or if the quantity can’t be indicated,
the value of the item.
• The CIF value of imports.
• The FOB value and quantity of export product.
Advance Licence
An Advance Licence is granted to a merchant-exporter or manufacturer-exporter
for the import of inputs required for the manufacture of goods without payment
of basic customs duty. However, such inputs shall be subject to the payment of
additional customs duty equal to the excise duty at the time of import, which
shall be adjusted as specified in the policy. Manufacturer-exporters as well as
merchant-exporters are also exempt advance licence and/or material imported
thereunder is not transferred even after completion of export obligation.
Standard input/output norms for 227 electronic items have been fixed. The
eligible exporters of Electronic products also have an option to avail the Special
Advance Licensing Scheme for export of electronic products.
The revised EXIM policy from April 1, 1999, introduced Annual Advance Licence
to reduce avoidable interface between the exporter and the DGFT. This facility
allows necessary flexibility in the import of duty free inputs. The exporter may
import any prescribed input as per input-output norms throughout the year
without approaching DGFT. Licences are issued without stipulation of minimum
value addition. In such cases of self-declaration, the exporter will not wait for the
decision of Regional Advance Licensing Committee (RALC)/Zonal Advance
Licensing Committee (ZALC) for fixation of adhoc norms. The items and
quantities permitted against such licences would be subject to subsequent
fixation of norms by the Headquarters Special Advance Licensing Committee
(SALC). In addition, Advance Intermediate Licence is granted to a manufacturer-
exporter for the import of inputs required in the manufacture of goods to be

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supplied to the ultimate exporter holding an Advance licence/Special Imprest
Licence. Whereas, Special Imprest Licence is granted to a main contractor for the
import of inputs required for the manufacture of goods to be supplied to the
specified categories of "Deemed exports" as covered in the EXIM Policy.
DEPB Scheme
Another popular scheme for exporters is the DEPB, which may be phased out or
modified in the next financial year. Under DEPB (Duty Entitlement Pass Book)

Scheme, exporters are eligible to claim customs duty credit as a specified


percentage of FOB value of exports made in freely convertible currency. The
credit shall be available against such export products and at such rates as
specified by the DGFT. So far, credit rates for 93 electronic items have been
notified under DEPB Scheme. The Pass Book would be issued with one year
validity period on post-export basis at single port of registration. The scheme
covers both manufacturer and merchant exporters. Any item except those in the
negative list shall be allowed for import. Third party exports are also admissible
for credit under DEPB Scheme . The DEPB on post-export basis and/or the items
imported against it is fully transferable. Some additional facilities as listed below
have been provided for better implementation of the Scheme:
DEPB rates rationalised to adjust for changes in Customs duties with caps fixed
on some items A number of ports have been added for availing facilities under
the Duty Exemption Scheme, including DEPB The threshold limit of Rs 200 million
for fixing new DEPB rates removed
Deemed Exports
Following categories of supply of goods from India by main/sub-contractors are
regarded as 'Deemed Export' under the EXIM Policy:
(a) against duty free licences/DFRC under the Duty Exemption/Remission Scheme
(b) to EOUs or units located in EPZs, EHTPs, SEZs and STPs
(c) for projects financed by the multilateral or bilateral agencies/Funds as notified
by the Department of Economic Affairs, Ministry of Finance under international
competitive bidding in accordance with the procedures of those Agencies/Funds

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where the legal agreement provided for tender evaluations without including the
custom duty
(d) for Capital Goods to holders of licences under the Export Promotion Capital
Goods (EPCG) Scheme and those including in unassembled/disassembled
condition as well as plants, machinery, tools, dies and such goods which are used
for installation purposes till the stage of commercial production and spares to the
extent of 10% of the FOR value to fertilizer plants
(e) to any project or purpose in respect of which the Ministry of Finance, by a
notification, permits the Import of such goods at Zero custom duty coupled with
the extension of deemed export benefits to domestic supplies

(f) to the power refineries not covered above and coal, hydrocarbon, rail, road,
port, civil aviation, bridges and other infrastructure projects provided minimum
specific investment is Rs 1000 million or more
(g) marine freight containers supplied by 100% EOU (Domestic freight
containers-manufacturers) provided the said containers are exported out of India
within 6 months or such further period as permitted by the Customs
(h) to projects funded by UN agencies

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CHAPTER-7

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CHAPTER-7
TAX ASPECTS

SALES TAX IN RELATION TO EXPORT AND IMPORT


Article 286(1) of the Constitution of India states that no law of a State shall
impose, or authorize importation of, a tax on the sale or purchase of goods where
such sale or purchase takes place:
 Outside the state, or
 In the course of the import of the goods into, or export of goods out of the
territory of India.
(2) Parliament may by law formulate principles for determining when a sale or
purchase of goods takes place in any of the ways mentioned in Clause (1).
This article is infact a restriction as to imposition of tax to sale or purchase of
goods. State legislation has been empowered to frame such instructions but
within some restrictions.
“In the course of export or import”: when a transaction is considered in the
course of export or in the course of import is decided by certain principles. When
a transaction relates to two states i.e. inter-state trade or transaction, state
government of the two states can’t impose sales tax.
Provisions are available in the Constitution of other countries like U.K., as the
government wants to encourage export and import. If the tax is imposed on
export then cost price of goods in international market will increase, and it will be
difficult to compete. Therefore no tax is imposed. Tax is not under the control of
state government for import or export. To have a unified policy, Central
Government has power to frame laws and to consider a transaction in course of
export or import.
An exporter can be a manufacturer or a trader. Both are prevalent and the
purchase made by exporter from local market and export to foreign countries:
Both these are constituted “in course of Exports”. Traders who purchase goods
from local market and sell to importer of foreign countries. There are two

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different transactions and no sales tax to be paid on local purchases as well as on
exports made by the trader. Section 5 of Central Sales Tax Act exempts the
paying of sales tax on these two transactions. In 286(2) Parliament exercises its
authority to frame

the Central Sales Tax law and Sec 5 of CST defines “in course of Export” and “in
course of Import”.
Section 5 of CST:
When a sale or purchase of goods said to take place “in course of Import or
Export”.

Clause 1: A sale or purchase of goods shall be deemed to take place “in course
of Export” of the goods out of the territory of India only if the sale / purchase
either occasions such export or is affected by a transfer of documents of title to
the goods after the goods have crossed the customs frontier of India.
The two conditions are:
 When sales / purchase occasions the export i.e. a contract is signed
between Indian exporter and Foreign importer.
 When goods have been loaded and crossed the customs frontier of India
and document of title (B/L) is endorsed in favour of buyer.

Clause 2: A sale / purchase of goods shall be deemed to take place “in the
course of Import” of the goods into the territory of India only if a sale /
purchase either occasions such import is affected by the transfer of documents of
title to the goods before the goods have crossed the customs frontiers of India
i.e. 12 nautical miles.
Sales Tax Authority thought that they were not able to collect adequate tax so
case came to Supreme Court “Sirajuddin case”. He was an iron ore mine
owner and exporting goods not directly but there a PSU i.e. STC, STC purchased it
from him and then exported. This local purchase and export were exempted from

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sales tax. This was challenged and matter went to Supreme Court Sirajuddin said
that he had no role in exports, STC was shown as exporter in all documents. He
was only loading the material on the vessels under directions of STC. STC had
contract with Importer and a Back-to-Back Letter of Credit between STC and
Sirajuddin. He took another plea that I am doing nothing. Supreme Court did not
accept it and his case was pronounced and said that only the contract with for
party is exempted from tax. Local sales not exempted and are liable to sales tax
in terms of local sales tax Act. This judgement brought difficulty to Exporters as
they had to pay tax on local purchases, which led to price increase, and difficult
to compete so practice developed that purchases were made when prices were
low in local market. These were stored by him and exported when demand arose.
PSU and all exporters felt

this problem so representatives made and GOI found that state showed decline in
exports. Relief given was in way of amendment of the CST Act 1976. A plea was
taken before Supreme Court that a term “in course of export / import” has been
used on constitution i.e. the intention of Parliament is to involve many
transactions (local, export/import) but Supreme Court did not accept it and said
that intention of Parliament was frustrated.

In 1976, a sub section was added to Section 5 of CST Act:


Clause 3: not withstanding anything contained in sub-section1, the last sale or
purchase of any goods preceding the sale / purchase occasioning the export of
those goods out of the territory of India, shall be deemed to be in the course of
such export, if such last sale or purchase took place after and was for the
purpose of complying with the agreement or order for in relation to such export.
A link is to be established between the export order or export and local purchase.
But this is not a correct stand. For example, we make a contract with local seller
on 9.9.85 and you get an export order on 10.10.86. A view can be taken that
since we have to link the two, then local sales not will be exempted. But this is
not so as we have to link the actual purchase with export order i.e. actual local

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purchases have to be done after we receive order even though a contract may be
signed before.

How to link the actual local purchase with export order ?


Government has formulated H-Form in two parts supplied to the exporter by the
Sales Tax Authority. The exporter gives this H-Form to local seller. This form
contains details of order procured by him, and all details of actual exports done.

Part-I: Purchases shown to Sales Tax Authority


Part-II: Exports
For example: If an exporter has to export iron ore with some specifications and
contents demanded by importer. But exporter does not possess such iron ore. So
he makes purchase of two different specifications and mixes them upto achieve
the required specification. Thus Sales Tax is not imposed on the two local sales if
the exporter proves that he has mixed the two to get the required specification
for exports. Also exporter need not purchase full quantity from one supplier but

purchases can be done from the local suppliers and all such purchases will be
exempted from Sales Tax.

CLAUSES TO PROTECT AN IMPORTER:


1. Submission of Performance Guarantee Bond by the exporter to ensure timely
shipment of the goods.
2. Material to be strictly supplied according to the specification agreed to in the
contract.
3. Tolerance or variance in the quality of the goods to the minimum extent.
4. Trial shipment clause: It is in the interest of an importer to provide in the
contract that the exporter shall first ship the material on trial basis i.e. the other
shipments to be agreed only if the trial shipment goods are arrived by the
importer.

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5. Payment of the value of the material to be exported should be made only
through a Letter of Credit strictly on the basis of agreed documents.
6. If the goods are to be inspected at various stages for example at the
manufacturing place i.e. before the goods are packed or when the goods are
placed on board the vessel or when the goods are discharged at the place of
destination it is always in the interest of the importer to provide in the contract
that discharge port results shall be final and accepted by both the parties.
7. To provide in the contract that if there is lapse or default in supply of that
material or if there is delay in the supply or if the goods are not supplied at all,
the buyer shall have an option either to cancel the quantity defaulted or the
contract or claim liquidated damages.
8. The proper law of contract is the law, which determines or governs the rights
and obligations of the parties to the contract. The importer should insist that
proper law of the contract should be the law of the importing country.

IMPORTANT CLAUSES FROM THE POINT OF VIEW OF AN EXPORTER:


1. Payment of the price of the goods being exported should be through a
Confirmed Letter of Credit.
2. Property or title to the goods should pass from an exporter to an importer
only after payment has been released to the exporter. Efforts should be made to
provide that lien of the exporter shall be retained in the goods till the payment is
received by the exporter.

3. A provision should be made for escalation of the price of the goods under
certain circumstances. Such contingencies should be specifically provided in the
contract.
4. In order to protect himself from the delay or non-supply of the material due
to causes beyond his control, there should be a Force Majeure Clause.
5. In order to resolve any dispute or difference that may arise under the
contract, that matter should be referred to arbitration in the exporting country.

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Foreign exchange management Bill


The object of the bill is to consolidate and amend the law relating to forex with
the objectives of facilitating external trade and payments and for promoting the
orderly development and maintenance of forex market in India. It will be known
as the Foreign Exchange Management Act, it shall extent to the whole of India
and it should also apply to all branches, offices and agencies outside India owned
or controlled by a person resident in India.
Securities means shares, stocks, bonds, debentures, government securities,
saving certificates under Government Saving Certificates Act applies, units of UTI
or any other mutual funds etc. it however does not includes the Bill of Exchange
or promissory notes other then Government Promissory Notes.
Regulation and management of forex: except as provided in the Act no person
shall in any manner deal in or transfer any forex or foreign securities to any
person not being an authorized person except as provided in this Act. No person
resident in India can acquire, hold, own, possess or transfer any foreign
exchange, foreign securities or any immovable property situated outside India.
The RBI may by regulation prohibit, restrict or regulate the following:
 Transfer or issue of any foreign securities by a person resident in India.
 Transfer or issue of any security by a person resident outside India.
 Transfer or issue of any security or foreign security by any branch office or
an agency in India of a person resident outside India.
 Any borrowing or lending in Rupees, in whatever form or by whatever name
called between a person resident in India and a person resident outside India.
 Any borrowing or lending in forex in whatever form or by whatever name
called.
 Deposits between persons resident in India any persons outside India.
 Export / Import or holding of company.
 Transfer of immoveable property outside India other than a lease not
exceeding five years by a person resident outside India.

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 Giving of a guarantee or security in respect of any debt obligation or other
liability incurred by a person resident in India and owned to a person resident
outside India or by a person resident outside India.

EXPORTS OF GOODS AND SERVICES


Every exporter of goods shall furnish to the RBI or to such other authority a
declaration in such form and in such manner as may be specified containing true
and correct material particulars including the amount representing the full export
value or if the full export value of the goods is not ascertainable at the time of
export the value which the exporter having regard to the prevailing market
conditions expects to receive on the sale of the goods in market conditions
expects to receive on the sale of the goods in a market outside India. The
exporter shall also furnish to RBI such other information as may be required by
RBI for the purpose of insuring the realization of he export sales proceeds by
such exporter. Every exporter of services shall furnish to RBI or to such other
authorities a declaration containing the true and correct material particulars in
relation to payment for such services where any amount of forex is due or has
accrued to any person resident in India such person shall take all reasonable
steps to realize and repatriate to India such forex within the specified period.

AUTHORISED PERSON
RBI may on an application authorize any person to be known as authorized
person to deal in forex or in foreign securities. The authority given to an
authorized person may be revoked by RBI at any time if it is in public interest to
do so or if the authorized person failed to comply with the conditions prescribed
for the authorized person or if he contravenes any of the provisions of the Act, or
any rule, regulation, notifications, directions or orders. RBI may at any time order
for an inspection to be made by any officer of the RBI.
Penalties

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If any person contravenes any provisions of the Act, rules, regulation,
notification, directions and orders issued under the authority of the Act, he shall
upon adjudication be liable to a penalty upto twice the amount involved in such
contraventions or upto Rs. 1,00,000 where the amount is not quantifiable and
where such contravention is continuing one. Further penalty may be extended to
Rs. 5,000 for everyday after the day during which the contravention continues. A
defaulter of the punishment may be kept in civil law for a particular period.

APPOINTMENT / ADJUDICATION AND APPEAL


Or the purpose of adjudication the Central Government may appoint as many
officers of the Central Government as it may deem fit as he adjudicating
authorities for holding an equity after giving the accused, a reasonable
opportunity of being heard for the purpose of imposing any penalties. The Central
Government is also authorized to establish an appellate tribunal for foreign
exchange to hear appeals against the order of the adjudicating authorities. Every
appeal shall be filed within a period of 45 days from the date on which he
receives a copy of the order made by the adjudicating authority. The appellate
tribunal shall consist of a chairperson and members holding office for a period of
5 years or upto the age of 65 years in case of chairperson and 62 years in case of
the members. The staff and salary is determined by the central Government. The
appellate tribunal can summon and enforce the attendance of any person for his
examination. It can order the discovery and production of documents; the
tribunal can issue commissions for the examination of the witness or documents.
The tribunal can review his decision; there are other powers, which are given to
the tribunal. All the decisions in the tribunal are taken by majority. The concerned
person or a lawyer or an advocate can appear before the tribunal. The
government can appoint presiding officer to appear before the tribunal on behalf
of department. Any person aggrieved by any decision or order of the appellate
tribunal may file an appeal before the date of communication of the decision or
the order. The Central Government shall establish a Directorate of Enforcement

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for the purpose of this Act. The Directorate exercises various powers under the
Income Tax Act. The Foreign Exchange Regulation Act 1973 shall be repealed by
this Act.

AVOIDANCE OF DOUBLE TAXATION


NEED OF TAX TREATIES
The pattern of taxation of income is almost similar all over the world. Income is to
be charged to tax in the hands of person who ha derived it at the place where he
has derived it or where he resides. With the growth of international trade the
problem increases in size and complexity. It is in the common interest of all
countries to arrive at the tax agreements which will not merely insure that the
same income is not taxed twice over in the country of origin of the income i.e.
the source

country as well as he country of its destination or the country of residence of the


tax payer and thus promote the development of commerce and minimize the
scope for tax evasion and facilitate the recovery of tax dues. This is the
background, the aim and rationale of the bilateral tax treaties. The conflict of
interest between the resident and source countries remained unresolved for a
long time. League of Nations organized a model bilateral Convention which
drafted a Model Treaty. Efforts were made by the organization for European
Economic Organization for Economic Co-operation and Development to draft a
Model tax avoidance treaty. After World War-II many countries in Asia and Africa
got independence and started improving their economies. The desirability of
promoting greater inflows for foreign investment to developing countries on
condition, which are politically acceptable besides being economically and
socially beneficial, has been frequently affirmed in resolutions of the General
Assembly, the UN Economic & Social Council and UN Conference on Trade &
Development. India being a developing country has necessarily had to look to the
developed nations for better technology larger capital and expertise at the same
time it has also to strengthen its economic co-operation with other developing

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countries with these ends in view India has entered into several bilateral tax
treaties. In 1968 Secretary General of United Nations setup the ad-hoc group of
experts on tax treaties between the developed and developing countries. This
group consisted of tax officials and experts from various countries including
India. This group of experts drafted the final Model Convention, which has been
published by UN in 1980. The Model Convention of UN of the UN draft has now
become the standard format for the tax treaties, which are being concluded
between the developed and developing nations.

HIGHLIGHTS OF THE UN MODEL


The UN Model represents a compromise between the source principle and the
resident principle although it gives more weight to the source principle then does
the OECD Model. The provisions in the draft UN Model are based on the
recognition by the source country that taxation income from foreign capital
would take into account expenses allocable to the earning of the income so that
such income would be taxed or a net basis and the taxation would not be so high
as to discourage investment and it would take into account the appropriation of
sharing of revenue

with the country providing the capital revenue with the country providing the
capital. It also embodies the idea that the resident country may extent a measure
of relief from double taxation through either the foreign tax credit or exemption
method. The Sub-section 1 of Section 90 of the Income Tax Act enables the
Central Government to enter into an agreement with the government of the other
country not merely for avoidance of double taxation of income but also on the
ground of relief in respect of income on which income tax has been paid in both
countries. It also helps in exchange of information for counter acting tax
avoidance and evasion. A person is resident in India if he spends 182 days in
India and in the year previous to any assessment year i.e. the year income of
which is the subject matter of assessment. Anyone whether or not he is Indian
citizen who has been found resident on this basis during nine out of ten years

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preceding the year in which any income was derived by him or who has been in
India for a period amounting in all to two years during the seven years preceding
that year is treated as ordinarily resident for the purposes. The tax treaties
become relevant only where any income accruing or deemed to accrue or rise to
any resident in India during any particular year is charged to tax in his hand in
India and also in some other country or any income is derived in any other
country by any person who is ordinarily resident of India and who is therefore
liable to the tax or his world income and that income is taxed in both the
countries. A person who is ordinarily resident in India is entitled to fall back on
provisions of Section 90 and 91 of the Income Tax Act. Permanent resident of
other countries with which India has tax treaties, who have suffered tax on their
income both in India and in the home countries will have to seek the necessary
remedy where they are assessed for tax. But there tax eligibility in India will also
be subject to the restrictions imposed by relevant tax treaties. The grater merit
of the tax treaties where ever practicable they incorporate unequivocal
provisions for avoidance of double taxation of income accruing or arising in the
treaty countries instead of leaving any scope of discretion of the tax authorities.

MONEY LAUNDERING BILL


The Bill was earlier introduced in the Lok Sabha on 4th August 1999. But it was
referred to Standing Committee, as the Lok Sabha, which was dissolved due to
fall of the government, could not pass it. The main purpose of this legislation was
to

setup an adjudicating authority to deal with cases of laundering and also an


appellate tribunal where individuals and corporates could appeal on the ruling of
the authority. Acquisition, possession or owing of money, moveable and
immoveable asset for criminal activities especially drug and narcotics
transaction would amount to money laundering. Money laundering has
been considered a cognizable offence. Even concealing information on proceeds
or gains of the crime may, within India or abroad is regarded as laundering.

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According to the proposed legislation those committing offence of money
laundering are punishable with rigorous imprisonment ranging from 3-7 years,
which could be extended to 10 years. In addition to the punishment a fine of up
to Rs. 5,00,000 can also be imposed. Apart from corporates and individuals,
banking and non-banking financial companies have also been covered under the
provisions of the Bill. The adjudicating authority headed by a Chairperson has
been given the right to confiscate property of those who resorting to money
laundering. The Chairperson shall not be below the rank of joint secretary of the
GOI. An administrator could be appointed by the authority to manage the assets
and properties that have been confiscated. Banking companies, financial
institutions and intermediaries are expected to furnish transaction records to the
authority and not to the Income Tax Commissioner. Failure to maintain or submit
such transaction records would attract a fine ranging from Rs. 2,000 – 1,00,000.
As per the Bill the RBI in consultation with the Ministry of Finance (MoF) would
decide on the manner in which the financial data is to be stored or retained.
Since the authority has been given a quasi-judicial status, none of the orders or
its rulings can be contested or challenged in the local courts. Individuals or
corporates can approach the three member appellate tribunal that is being setup
specifically to deal with such cases of laundering. An appeal could be filed within
45 days of the authorities ruling. Local courts have no jurisdiction on the rulings
of the tribunal but High Courts and Supreme Court are competent to hear cases
against the rulings and orders of the Appellate Tribunal. The GOI proposes to
setup special courts to deal with specialized cases. The authority has been given
to the money laundering agencies to search and seize properties and funds
collected through laundering. It can arrest persons involved in the money
laundering. By bringing the Money Laundering Bill the GOI has sought to curb
illegal monetary transactions dealing in moveable and immoveable properties.
The Bill seems to be in consonance

with the commitment made by India at the UN Convention against the illicit
traffic in Narcotics and Drugs. The Basely Statement to which India is a party
seeks to prevent laundering of money.

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CHAPTER-8

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CHAPTER-8
OBJECTIVES
 To study the reasons causing mushrooming of logistics in India.
 To study the contribution of exporter and importer in the growth of logistics
in India.
 To study the factor which affect the growth of NVOCC and freight
forwarder.
 To find the strength and weaknesses of NVOCC in India.
 To study the marketing strategy followed by NVOCC and freight forwarders.
 To know the factor which affect freight forwarder and MNCs to choose their
service provider.

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CHAPTER-9

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Chapter-9

RESEARCH METHODOLOGY
Methodology is the key to any kind research. It helps to maintain a track of what
to do and not to do. It has various approaches to it. A good methodology works
as a strong plan for collecting both primary and secondary data. There are
different ways of adopting good methodology. There are two main ways to collect
data, which is, primary and secondary. In fact, both are necessary to provide a
balanced study on any kind of research.

STATEMENT OF OBJECTIVES
 To find the possibility growth of logistics in India.
 To find the strength and weaknesses of NVOCC in India.
 To study the marketing strategy followed by NVOCC and freight forwarders.
 To know the factor which affect freight forwarder and MNCs to choose their
Service provider.

Secondary Research
The data collected through this research is that data, which has already been
collected by someone for a different purpose. In other words, the secondary data
is someone else's work, which is shared by other people as a view to their
perceptions and research work. Most research requires the collection of primary
data to be supported with the secondary data. In other words, it is always a good
idea to use other people's point of view as it can contribute to support the
findings considerably.

Initially, the author undertook the secondary research in order to cover literature
review for his dissertation. Through secondary research author was also able to

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support the ideas of other writers who have written about the subject of
'empowerment'.
The author took 'paper based sources', such as, books, journals, periodicals,
newspapers and magazines for collecting data. Various books

Primary Research
This research follows the procedure of collecting the data through interviews,
questionnaires, observation, Case studies, diaries, portfolios, etc. In fact this
research is called primary because it is the initial step which the author has to
take in order to begin the research. Two techniques has been used by the author
for this research namely questionnaires and interviews. This technique help in
generating qualitative data. The reason why author has chosen questionnaire as
one of the method of collecting primary data is that it is relatively cheap and can
be accessible through post e-mail, fax, etc. Also it is an effective means through
which one can explore the others mind. (Module Study Guide]. The author took
interviews with employees of the four hotels and the managers in order to give
the qualitative feedback. This method of qualitative data is most useful as it
gives insight into how individuals or groups think about their surroundings. It
helps in identifying and assessing emotions, values and attitude of interviewer.
This also helps to get the accurate information from the primary research.
Special efforts were made to seek out different areas to gain a better perspective
of the distributors.

RESEARCH DESIGN
There exist two types of research. These types can broadly be classified as
follows:
1. Exploratory, and
2. Conclusive
Exploratory research seeks to discover new relationship and establish
hypothesis. While conclusive research is designed to help choose among various
possible courses of action that is to make decisions.

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CHAPTER-10

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CHAPTER-10
LITERATURE REVIEW
MARKETING
Marketing is a societal process by which individual and groups obtain what they
need and want through creating, offering and freely exchanging products and
services of value with or other wise it is the process of planning and executing
the conception, pricing, promotion, and distribution of ideas, goods. Services to
create exchanges that satisfy individual and organizational goals.

MARKETING STRATEGY
Marketing strategy is a set of objective polices and rules that leas the company's
marketing efforts. It is the marketing approach to accomplish the bread objective
of the marketing plan. The various of marketing strategy are given below.
1. Selecting largest markets segmentation.
2. Positioning
3. Product
4. Price
5. Place
6. Promotion
7. Research and Development
8. Marketing research

1. Marketing Segmentation and selecting target market: - It is


an effort to increases a company's precision marketing. The starting of any
segmentation discussion is mass marketing. In mass marketing the seller
engages in the mass promotion of one product for all buyers. Market segment
consist of a large identifiable group within a market with similar wants,
purchasing power geographical location, buying attitudes or buying habit. It is an
approach midway between mass marketing and individual marketing. Through

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this, the choice of distribution channels, and communication channels become
much easier. The researcher try to form segment by looking at consumer
characteristics; geographic, and psychographics. After segmenting the market
then target market selected.

2. Positioning: - The positioning is a creative exercise done with an existing


product. The well known products generally hold a distinctive position in
consumers' minds. The positioning requires that every tangible aspect of product,
price, place and promotion must support the chosen positioning strategy.
Company should develop a unique selling proposition strategy. Company s
should develop a unique selling proposition (USP) for each brand and stick to it.
Price, PPL consistently promotes its DAP fertilizer by higher yield at lower cost. As
companies increase the number of claims for their brand, they risk disbelief and a
loss of clear positioning. In general a company must avoid four major positioning
errors. Those under positioning over positioning confused positioning and doubt
positioning.

3. Product: - A product is any offering that can satisfy a need or want. The
major types of basic offering are goods services, experiences, events, places,
properties, organization, information and ideas. The company gives more
importance in- quality, packaging, services etc to satisfy the customers. The
product has its life cycle. The product strategic is modified in different stages of
product life cycle.

4. Price: - It is the most importance aspect in company's point of view. Price of


the product will be decided by the company according to the competitor's price.

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5. Place: - This plays a major role in the entire marketing system. The
company emphasis on its distribution network. Proper distribution network gives
proper availability of the product.

6. Promotion: - Promotion is the one of the major aspects in marketing


strategy. By adopting various promotional activities the company create strong
brand image. It is also helps in increasing the brand awareness. It includes
advertising sales promotion and public relation etc.

7. Research and Development: - After testing, the new product


manager must develop a preliminary marketing strategy plan for in trod using
the new product in to the market. The plan consists of three parts. The first part
describes the target market's size, structure and behavior. The second part our
line s the planned price, distribution strategy and marketing budget for the first
year. The third part of the development describes the long run sales and profit
goals and marketing - mix strategy over come.

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CHAPTER-11

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CHAPTER-11
SYNOPSIS

Title of the Project: ASSESSING CUSTOMER POTENTIAL AND PREFERENCES


FOR NVOCC IN LOGISTICS INDUSTRY.

Name of the Researcher : Nisha Singh

Name of the Guide : Ms. Sona Handa .

Designation : Manager

Area of Study : NCR

Types of research : Conclusive

Sample size : 65

Sample type : QUOTA SAMPLING

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CHAPTER-12

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CHAPTER-12
RESEARCH WORK AND DATA ANALYSIS

This part of the chapter consists of research work which work which has been
undertaken by the researcher before discussing in detail let us have the clear
view of some basic concept, Marketing, Marketing Research, Questionnaire,
Meaning of Survey & its Methods, Meaning of Feedback how it is important.

Marketing
Marketing is getting right goods and services to the right people and to the right
place at the right time at the right price using the right promotional technique.
According to famous marketing guru ‘Philip Kotler’ “Marketing is a human activity
directed at satisfying needs and wants through exchange process”

Marketing Research
The American Marketing Association has defined Marketing Research as “The
Systematic gathering, Recording, and Analyzing of the data about problems
relating to the marketing of goods and services”
Market Research is only a part of the marketing research and covers only a few
aspects of marketing; it is only a sub-function of marketing research. Marketing
Research is only research in to market. It cover the aspects regarding size and
nature of the market including export market, dividing the customer in term of
age, sex, income (Market Segmentation) economic aspect of marketing etc.
Therefore Marketing Research may be defined as the systematic investigation of
the facts relevant to various aspect in marketing. The basic purpose of decision
making process.

Scope of Marketing Research

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(i) Product and Service Research
(ii) Market Research
(iii) Promotion Research
(iv) Distribution Research
(v) Corporate Responsibility Research

Steps in Marketing Research

(i) Problems Definition


(ii) Decision on Fact Gathering Procedure
(iii) Data Collection
(iv) Data Evaluation
(v) Interpreting Data
(vi) Research Design
(vii) Field Work
(viii) Data Analysis and Interpretation
(ix) Report Presentation
Method of Marketing Research
(A) Survey Method
(B) Experimental Method
Questionnaire
Questionnaire in this case means a set of organized question which is prepared
in accordance with the particular case, in other words it refer to the self-
administered process where by the respondent himself/herself read the questions
and record his/her answer without assistance of an interviewer. Here in this
project work questionnaire method practice along with the personal interview.
Questionnaire is more highly structured and standardized.
Survey Method

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The Survey method is complex operations which require some technical
knowledge. Usually three general methods are used for conducting this survey
method they are as follows,
1. Personal Interview/Questionnaire
2. Mail Survey
3. Telephonic Survey
Here in this research work survey method has been widely executed the three
phase of this survey method i.e., personal interview/questionnaire, mail survey,
telephonic survey.
Experimental Method
This method is more related to the production aspects of an organization. The
quality of the ultimate result of continuous research and experiments.
Sources of Data
Data’s are the useful information or any forms of document designed in a
systematic and standardize manner which are used for some further
proceedings. One of the important tools for conducting marketing research is the
availability of necessary and useful data. Some time the data are available
readily in one form or the other and some time the data are collected afresh. The
sources of information fall under two categories, Internal Sources and External
Sources. In this particular project the major sources were as follows:-
Internal Sources
A business organization has definitely to keep certain records such as financial
accounting records, sales records, and other information relating to the business
process, these records provides ample information, good use can be made of the
various information which an organization usually keeps for its own purposes in
the future. Here in this case we have got lot many information from inside the
organization
Major Statistical Tools Used in This Project
Sampling Type: Here the type of Sampling was Quota Sampling

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Sampling Size: We tried to maximize the sampling size. In this process we sought
an appointment with the key personnel and get a response from them. Most of
the respondents were the key decision makers in the filed of Human Resources
Department. This care was taken just to ensure that in the process of
administering the questionnaire they could know about the services that could be
offered.
Collation of the data post which each and every data question was analyzed
Objective and subjective analysis of the results as fallout of the responses from
the respondents. Analysis of the variance in the whole exercise nullifying some
extreme responses, which do not fit into the system.
FEEDBACK FROM THE RESPONDANTS AND GRAPHS
FEEDBACK
■■The term ‘Feedback’ means responds from the respondent, here in this case
a set of questionnaire is paced before the respondent at the end of the meeting
put a request to fill up the questionnaire; the filled questionnaire is the feedback
in this case based on the feedback of the questionnaire the particular chart is to
be prepared.
■■With this background in mind a questionnaire was administered to the
corporate and the responses were collated. Each question was analyzed and
results were recorded.

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CHAPTER-13

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Q1: Kindly tick the logitics solution you are presently providing to your
Customers?
a) Exports b) Imports c) Both
Export Import Both
16 6 43

Type

 As per the graph about 66% of the respondent provide both Export & Import
logistics solution to the customer.

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Q2: Which mode of freight solution you are presently using?
a) AIR b) SEA c) BOTH
AIR SEA BOTH
4 13 48

 As per the graph is concern it shows that 74% of the customer use both Air
& Sea as the mode of freight solution.
 20% of the customer use Sea as the mode of freight solution.
 And very less % use Air as mode of freight solution.
 So from the above point it is being concluded that maximum of customer use
both mode of the freight solution.

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Q4: Please rate the following parameters on a scale of 10 that influence
the decision making while choosing a service provider / consolidater?
Particulars Less priority( 0-3) Medium High priority(7-10)
priority(4-
6)
a) Ex. BL release 15 7 42
b)Imp. DO release 25 8 31
c) Ex. Freight rate 16 3 45
d) Imp. Freight rate 27 3 33
e) Imp. Destination 24 7 34
charges
f) Relationship Mgt. 11 13 37
g) Personalised 22 6 36
services
h) Problem solving 37 4 37
i) Online services & 21 11 32
IT
j) Office location 28 13 23
distance

70

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From the above graph it is being concluded that while choosing their service
provider customer preferred 1st Export freight rate 2nd Export BL release 3rd
Relationship Mgt. 4th problem solving 5th personalized service 6th online sevice &
IT 7th Imp. Freight rate 8th Imp. Destination charge 9th Imp. DO release & 10th Off.
Location distance.
 Ex. Freight rate & BL release play important role while choosing their
service provider

 Beside this management relationship between the service provider &


customer are also preferred to choose the service provider by the customer.

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Q5: Have you heared about GLS if yes please confirm the medium?
a) Advertisement in Exim b) Sales person c) Social events
d) Coverages in journals e) Bronchures f) any others

• As per the graph is concerned 33 respondent suggested that awareness


about the GLS is due to the frequent visits of the sales persons in market.
nses

• 21 respondents suggested that awareness about the GLS is due to the


Advertisement in Exim.
• Awareness about GLS is also made through other medium like knowing the
staff members, knowing the management and so on.

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• And very less responses is for social events, coverage in journals &
bronchures.
 So from the above points it is being concluded that GLS is having an
active sales force and continuous follow-up which trap the market.
 Beside this advertisement in Exim is also important for the GLS.

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Q6: For a new service provider pricing/rating should be?


a) Skimmed b) Mixed c) Margimal d) penetrating
e) Cost plus f) any other

ANALYSIS: -

• As per as the graph is concern it shows that 45% of the customer


o Suggest to have a Marginal pricing for a new service provider.
• 17% suggested to have Mixed prcing.
• 11% suggest to have penetrating pricing
• Very less percentage say 5% suggested to have skimmed pricing
 So based upon the percentage of customer opinion for a new
NVOCC/service provider pricing/rating should be Marginal due to growing
competition of this trade in the market.

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Q8: Would you be interested to change your preferences to a new service


provider with experienced people if they meet your requirement?
a) Definitely yes b) Definitely No c) Cant say d) Probably yes e)
Probably No
Definitely yes Definitly No Cant Probably Probably
say yes No
27 11 8 19 0

ANALYSIS: -

• As per as the graph is concern it shows that 43% of the customer


• are.ready to change their service provider.
• 28% of the customer may or may not change their service provider.

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• 17% of the customer will not change their service provider.
• 12% of the customer have neutral opinion i.e. they cant say that whether
they will change or not change their service provider.
 So based upon the percentage of customer opinion it is being
concluded that 43% are the target customer of GLS and where as 40% of the
target customer need to be cracked to change their service provider.

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CHAPTER-14

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CHAPTER-14
SWOT ANALYSIS
STRENGTH
 Competitive price
 Service Maintenance
 Experienced Management
 High market potential
 Tapped network distribution
 personal and flexible customer service
 specialist skills
WEAKNESS
 lack of an established reputation
 newly formed company
. Opportunities:
 increased demand from a particular market sector
 using the Internet to reach new markets
 new technologies that allow you to improve product quality
Threats
 the emergence of a new competitor
 more sophisticated, attractive or cheaper versions of our service
 new legislation increasing our costs
 a downturn in the economy, reducing overall demand

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CHAPTER-15

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CHAPTER-15

LIMITATIONS
Throughout the study utmost care has been taken to avoid biases, errors so as
to ensure authenticity and accuracy. But there is possibility for some
discrepancies to come in between due to following limitations:
 Respondents may give their biased opinion, as they know the identity of
interviewer.
 Assumption is made that views and suggestion given by the respondent are
his own perception and idea.
 The study is not free from sampling error
 Seasonal changes in sales figures may affect the quantitative data. ,
 A person tends to lie if he is being noticed and since the questionnaire was
targeted on mature persons the veracity of the answer cannot be granted.
 Last but not the least and the most deciding factor paucity of time.

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CHAPTER-16

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CHAPTER-16

MAJOR PROBLEM
Over the past decade, India has been one of the fastest-growing economies in
the world – only second after China. India has witnessed tremendous growth not
only in the domestic front but also on the export front. For Indian industry, the
future is expected to be even better than the recent past and as per most
projections. India will be the fastest growing of the world's major economies.
Unfortunately, this growth has not been facilitated by the Logistics industry, but
has happened largely despite it. This impressive growth story would not be
sustainable if the Logistics industry does not improve its performance and
provide credible support to the Indian industry. Beyond all this hype and euphoria
about the India growth story, given the realities of the Indian Logistics industry,
we need to critically examine the capability of Indian Logistics industry to support
demand placed on it in the future. Though direct logistics cost in India is not very
high but if one includes indirect, hidden and opportunity costs paid by the
industry because of poor service, logistics is likely to become the biggest
bottleneck for India’s growth.
The major hurdles faced by India’s Logistics industry are:
�lack of standards and processes within the industry,
� inadequate infrastructure,
� ineffective usage of information technology, and
� lack of skilled manpower.
Improving efficiency and effectiveness of Indian logistics is going to be a
Herculean task and would require concerted efforts on the part of all the
stakeholders including government and industry bodies. Though on the whole,
the Logistics industry suffers from poor image, there have been several success
stories where it has performed well by adopting good practices and industries.

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The auto components and automobile industry have managed to provide high
quality service to domestic as well as international customers at moderate cost.
Organised retailing is straining at the leash, leveraging good logistics practices to
source from the agriculture sector. In addition, a growing India would mean
agricultural growth, a construction boom and the need for infrastructure based
connectivity. Apart from learning from the best practices around the globe, Indian
logistics can study the innovative practices followed by some of the leading
sectors in Indian industry so as to improve efficiency and effectiveness of
logistics operations. In this journey towards excellence, the Logistics industry can
also leverage Indian leadership in the IT industry. World over, IT has played an
enabling role in improving logistics services, and to some extent effective use of
IT can neutralize some of the constraints posed by poor infrastructure. This
journey towards excellence can be facilitated by industry by diffusing better
logistics processes and standards by shippers as well as service providers.
The government has to play a key role by working on hard and soft
infrastructure. Hard infrastructure would mean investments in rail, road, ports
and waterways, pipelines and airports. Soft infrastructure would require enabling
policy structure and support for human resource development for the Logistics
industry. One of the major problems faced by the Logistics Industry is that,
despite being a major link in the system, it does not enjoy industry status.
Consequently, logistics service providers do not have access to low-interest funds
and other incentives available to other industry players. The government should
provide industry status to the Logistics sector.

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CHAPTER-17

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CHAPTER-17

FUTURE ASPECTS
India is already a heavyweight globally in the services sector. Manufacturing still
makes up only a relatively small proportion of GDP—about 20 per cent compared
to China’s 45 per cent—but it is growing, both in terms of domestic focus and
exports. India’s container trade has been growing at around 15 per cent over the
past five years. That means the logistics services business will be growing at a
multiple of the box trade, probably around 20 per cent and more per year. The
growth in demand presents significant opportunities for the logistics industry, as
also challenges.
India’s current trade profile provides important clues about the development of
logistics industry.The US is the biggest origin and destination market for both
import and export and China is rapidly rising on both fronts. But the key fact is
that a big chunk of India’s trade remains confined to textile products and apparel,
low-end manufacturing, with imports naturally dominated by raw materials. A big
part of the manufacturing sector has been focused on the domestic market.
In some areas, notably, apparel exports, there is vital emphasis on logistics and
speed to market for the delivery of time-dependent ‘perishable’ goods. For the
bulk of trade into and out of India, it is not the case; relatively inefficient,
individual transport services can be cobbled together to get goods to the market.
This will change. As the trade profile changes, so will the need for more reliable,
seamless supply chain solutions that offer real-time visibility along the pipeline.
We have seen in other locations globally that the key driver of demand for world-
class logistics services is a critical mass of MNCs whose bottomline success
requires low-cost manufacturing locations, connected to highly efficient supply
lines. Secondly, some pieces of hardware are either missing or not up to the
global standards. Ports, for example, are for the most part choked up or not set
up for increased container transportation. Road and rail connectivity is patchy

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and waterways, while exciting, are not yet big on the radar screen as far as
volumes are concerned. Add to that a lack of capabilities or competition in some
segments of the supply chain, absence of common standards for equipment and
technology, and intra-provincial barriers.
These are the key factors playing on the minds of MNCs looking for alternative
lower-cost sourcing locations or wanting to reduce their dependence on China
and other Asian countries.
Broadly, the elements of integrated supply chain include:
• Supply chain management design
• International ocean/air transportation
• Consolidation/distribution
• Document delivery
• Deconsolidation distribution
• Multimodal transportation
• Warehousing and DCs
• Delivery to point-of-sale
An effective logistics provider should have the expertise and global connectivity
to manage cargo through an integrated network from the time it leaves the
warehouse to delivery at destination to customer locations and distribution
centres. Expertise in freight analysis, audit and payment, plus service-level
reporting is the customer’s weapon in the everyday battle to move freight more
efficiently.
.

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CHAPTER-18

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CHAPTER-18
CONCLUSION:
Logistics is one of the area of the supply chain i.e. growing at a tremendous case
as the Internet and E-Commerce is drastically changing the range, delivery time
and the speed of information as well as ordering and payment process. Due to
the big boon of information technology, greatly influencing and enhancing the
effectiveness of logistics, the time is not far when 5 PLs and 6 PLs may emerge
which will probably we doing part of the manufacturing and marketing for the
organizations.
The Indian 3PL market is set to grow tremendously in the next 5-7 years,
spearheading the growth of logistics market. Several factors including
government’s support are instrumental in this growth. Though certain challenges
remain to be addressed, the general trend is highly positive. With scenario highly
favorable for them, the onus is now on 3PL service companies to offer quality
services at affordable pricing, and delivering consistent results to maintain the
momentum. For now, surely 3PL is the way forward for Indian Logistics Market.
Over the last few decades there has been a great technological revolution in
business environment due to liberalization in the open market scenario.
Therefore in order to ensure firm footing in the competitive market, traders are
very serious to fulfill the customer’s need and satisfaction.
Traders are very much interested to send the desired commodities to the desired
destination safely at least possible time at while remaining cost effective in order
to survive in today’s competitive environment.
The most sensitive part of any organization today is its effective and aggressive
marketing. Getting volume business is the order of the day. This can be possible
only through adapting very aggressive and intense marketing policies
emphasizing the advantages of consolidation business along with focussing on
the sectors providing higher volume of trade and margins.

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CHAPTER-19

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CHAPTER-19
BIBLIOGRAPHY

BOOK’S TITLE : CARGO TALK


EXIM WORLD
LOGISTICS & SUPPLY CHAIN
MANAGEMENT

ABOUT THE ORGANITION


ABOUT THE PRODUCTS
COMPETITORS

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CHAPTER-20

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CHAPTER-20

WORD OF THANKS
I pay my heartly regards to the regards to the chairman Dr. D.K.Garg ,
IIMT,Greater Noida , our Dean Mr. M.K.Verma and the Placement co-
ordinator Mr.Gyanesh Sinha for lending me their kind support for completion
of my Project. I would like to give thanks to all those who financially , morally
support me during the project work.
I am very much thankful to the Management of “GLOBAL
LOGISTICS SOLUTION”. Especially to Mr. AJIT BISWAS & Ms. SONA HANDA
whose cooperation and guidance was a milestone in completion of the project
work. I am also thankful to all the staff of GLOBAL LOGISTICS SOLUTION
who helped me lot in preparing the summer project.
Though I have tried my level best in doing such kind of project even then I can
not done any mistake that would have occurred during any project work.
I would like to welcome any type of suggestion from the side of readers , so that
I may correct anomalies , if any.

NISHA
SINGH

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CHAPTER-21

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CHAPTER-21
ANNEXURE

THE UN CONVENTION OF CODE OF CONDUCT FOR LINER


CONFERENCES, 1974
1. The UN Code came into force from October 8, 1983, when the
conditions stipulated in the Convention were satisfied.
2. The Code applied solely to Liner Conferences, and not to lines operating
outside the Conferences as outsiders.
3. The Code is aimed at establishing an internationally accepted system of
self-regulation in liner shipping and is the first international initiative towards
shippers’ interests being included in an international convention.
4. The Code specifies the right of national shipping lines to join a
Conference, Conferences may take into account the views of the Shippers’
Councils on an application to join a Conference.
5. The Code provides for self policing of Conferences.
6. The Code provides for the entitlement of Conferences to co-operation
from shippers and shippers’ organisations to combat mal-practices.
7. The Code requires the shippers to organise themselves into National
Shippers’ Organisations.
8. The Code provides for supply of information by shippers concerning the
expected volume and nature of their cargoes to shipping conferences.
9. The code recognize the right of National Shipping Lines to carry a fair
share of the trade originating from and terminating in their countries.
National Shipping Lines to have equal rights to participate in the freight and
volume carried by the Conferences on each route, with their flag carriers

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having the right to 40 percent of such traffic (popularly known as the
40:40:20 Principle).

10. Settlement of disputes via international conciliation.


1. “Mattero of Common Interest” identified under the Code and requiring
consultatins between Shipping Conferences and Shippers Organisations
include, inter-alia.
(a) General Rate Increase (GRI) : to be subject to Conferences
notice of not less than 150 days in advance or any other period agreed.
Consultations with shippers to start within 30 days after announcement.
Failing agreement, the issue may be submitted to international mandatory
conciliation.
GRI proposals to be supported by audited cost data.
Time proposals to be supported by audited cost data.
(b) ‘Promotional’ and / or ‘Special’ freight rates from the standpoint of
developing countries wishing to open up new markets, inter alia, supported
by low transport cost.
(c) Imposition of, and related changes in, surcharges.
(d) Loyalty agreements - their introduction / changes in their form and
general conditions.
(e) Changes in tariff classification of ports, i.e. down grading a main port to
an out-port rank which may make carriage to/from such a port costlier.
(f) Effect of new technologies in transport – conventional cargo that can no
longer be carried.
(g) Adequacy and quality of service.
(h) Rules and Procedures for consultation between Shippers’ Councils and
Conferences.
(i) Participation by Governments in consultation, but with no decisive role
or power in the consultation procedure.

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THE MULTIMODAL TRANSPORTATION OF GOODS
ACT, 1993
No. 28 OF 1993
[2nd April, 1993]
An Act to provide for the regulation of the multimodal transportation of
goods, from any place in India to a place outside India, on the basis of
amultimodal transport contract and for matters connected therewith or
incidental thereto.
Be it enacted by Parliament in the Forty-fourth Year of the Republic of India
as follows:-
CHAPTER-I
PRELIMINARY
1. (1)This Act may be called the Multimodal Transportation of Goods Act,
1993.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall be deemed to have come into force on the 16th day of October,
1992.
2. In this Act, unless the context otherwise requires––
• ‘carrier’ means a person who is engaged in the business of
transporting for hire goods by road, rail, inland waterways or sea;
• ‘competent authority’ means any person or authority authorised
by the Central Government, by notification in the Official Gazetee, to perform
the functions of the competent authority under this Act;
• ‘consignee’ means the person named as consignee in the
multimodal transport contract;
• “consignment’ means the goods entrusted to a multimodal
transport operator for multimodal transportation;
• ‘consignor’ means the person, named in the multimodal transport
contract as consignor, by whom or on whose behalf the goods covered by such

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contract are entrusted to a multimodal transport operator for multimodal
transportation;
• “delivery” means ––
(i) in the case of a negotiable multimodal transport document,
delivering of the consignment to, or placing the consignment at the disposal of,
the consignee or any other person entitled to receive it;
(ii) in the case of a non-negotiable multimodal transport
document, delivering of the consignment to, or placing the consignment at the
disposal of the consignee or any person authorised by the consignee to accept
delivery of the consignment on his behalf;
(b) “endorsee’ means the person in whose favour an endorsement is
made, and in the case of successive endorsement, the person in whose favour
the last endorsement is made;
(c) “endorsement’ means the signing by the consignee or the endorsee
after adding a direction on a negotiable multimodal transport document to pass
the property in the goods mentioned in such document to a specified person;
(d) “goods” includes ––
(i) containers, pallets or similar articles of transport used to consolidate goods; and animals;
(e) “mode of transport” means carriage of goods by road, rail, inland
waterways or sea;
(f) “multimodal transportation’ means carriage of goods by two, or
more modes of transport from the place of acceptance of the goods in India to
a place of delivery of the goods outside India;
(g) “multimodal transport contract” means a contract entered into by the
consignor and the multimodal transport operator for multimodal
transportation;
(h) “multimodal transport operator” means any person who ––
• concludes a multimodal transport contract on his own behalf or through
another person acting on his behalf;

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• acts as principal, and not as an agent either of the consignor or of the
carrier participating in the multimodal transportation, and who assumes
responsibility for the performance of the said contract; and
• is registered under sub-section (3) of section 4;
“negotiable multimodal transport document” means a multi-modal transport
document which is –
(ii) made out to order or to bearer; or
(iii) made out order and is transferable by endorsement; or
(iv) made out to bearer and is transferable without endorsement;
(i) “non-negotiable multimodal trasnport document” means a
multimodal transport document which indicates only one named consignee;
(j) “prescribed” means prescribed by rules made under this Act;
(k) “registration’ means registration of multimodal transport operator
under sub-section (3) of section 4.
CHAPTER-II
REGULATION OF MULTIMODAL TRANSPORTATION
3. No person shall carry on or commence the business of multimodal
transportation unless he is registered under this Act:
Provided that a person carrying on the business of multimodal transportation
immediately before the commencement of this Act. may continue to do so far
a period of three months from such commencement; and if he has made an
application for registration within the said period, till the disposal of such
application.
4. (1)Any person may apply for registration to the competent authority to carry
on or commence the business of multimodal transportation.
(2)An application under sub-section (i) shall be made in such form as may be
prescribed and shall be accompanied by a fee of ten thousand rupees.
(3)On receipt of the application, the competent authority shall satisfy that the
applicant fulfils the following conditions, namely:-

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(a) (i)that the applicant is a shipping company or a company engaged in the
business of freight forwarding in India or abroad with a minimum annual
turnover of fifty lakh rupees during the immediate preceding financial year or an
average annual turnover of fifty lakh rupees during the preceding three financial
years as certified by a chartered accountant within the meaning of the
Chartered Accountants Act, 1949;
(ii) That if the applicant is a company other than a company specified in sub-
clause (i) the subscribed share capital of such company is not less than fifty
lakh rupees.
(b) That the applicant has offices or agents or representatives in not less
than two other countries, and on being so satisfied, register the applicant as
a multimodal transport operator and grant a certificate to it to carry on or
commence the business of multimodal transportation:
Provided that the competent authority may, for reasons to be recorded in
writing, refuse to grand registration it is satisfied that the applicant does not
fulfill the said conditions.
(4) A certificate granted under sub-section (3) shall be valid for a period of
one year and may be renewed from time to time for a further period of one
year at a time.
(5) An application for renewal shall be made in such form as may be
prescribed and shall be accompanied by a fee of two thousand rupees.
5. The competent authority may, if it is satisfied at any time after
registration that:-
(a) any statement in, or in relation to, any application under sub-section (2)
of section 4 or its renewal under sub-section (5) of that section, is incorrect
or false in any material particular, or
(b) any of the provision of this Act or the rules made there-under has been
contravened by the multimodal transport operator; or

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(c) the multimodal transport operator has not entered into any multimodal
transport contract during the preceding two years after his registration, cancel
by order the certificate of registration:
Provided that no such registration shall be cancelled unless the multimodal
transport operator has been given a reasonable opportunity of showing
cause against the proposed action.
6. (1)Any person aggrieved by an order made by the competent authority
under-section 5 may prefer an appeal to the Central Government within such
period as may be prescribed.
(2) No appeal shall be admitted if it is preferred after the expiry of the
prescribed period:
Provided that an appeal may be admitted after the expiry of the prescribed
period if the appellant satisfied the Central Government that he had sufficient
cause for not preferring the appeal within the prescribed period.
(3) Every appeal made under this section shall be made in such form and on
payment of such fees as may be prescribed and shall be accompanied by a
copy of the order appealed against.
(4) On receipt of any such appeal, the Central Government shall, after giving
the parties a reasonable opportunity of being heard and after making such
inquiry as it deems proper, make such order as it thinks fit.
CHAPTER III
MULTIMODAL TRANSPORT DOCUMENT
7. (1) Where the consignor and the multimodal transport operator have
entered into a contract for the multimodal transportation and the multimodel
transport operator has taken charge of the goods, he shall, at the option of the
consignor, issue a negotiable or non-negotiable multimodal transport
document.
(2) The multimodal transport document shall be signed by the multimodal
transport operator or by a person duly authorised by him.

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8. (1) Every consignee named in the negotiable or non-negotiable
multimodal transport document and every endorsee of such document as the
case may be to whom the property in the goods mentioned therein shall pass,
upon or by reason of such consignment or endorsement, shall have all the
rights and liabilities of the consignor.
(2) Nothing contained in sub-section (1) shall prejudice or affect the right of
the multimodal trasnport operator to claim freight from the consignor or
enforce any liability of the consignee or endorsee by reason of his being such
consignee or endorsee.
9. The multimodal transport document shall contain the following particulars,
namely:-
(a) the general nature of the goods, the leading marks necessary for
identification of the goods, the character of the goods (including dangerous
goods), number of packages or units and the gross weight and quantity of the
goods;
(b) apparent condition of the goods:
(c) the name and principal place of business of the multimedia transport
operator;
(d)the name of the consignor:
(e) the name of the consignee, if specified by the consignor:
(f) the place and date of taking charge of the goods by the multimodal
transport operator;
(g) the place of delivery of the goods;
(h) the date or the period of delivery of the goods at the place of
delivery;
(i) whether it is negotiable or non-negotiable;
(j) the place and date of its issue;
(k) freight payable by the consignor or the consignee, as the case may be;
(l) the signature of the multimodal transport operator or of a person duly
authorised by him;

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(m) the intended journey route, modes of transport and places of
transshipment, if known at the time of its issue;
(n)terms of shipment and a statement that the document has been issued
subject to and in accordance with this Act; and
(o) any other particular which the parties may agree to insert in the document;
if any such particular is not inconsistent with any law for the time being in
force.
10. (1) Where the multimodal transport operator or a person acting on his
behalf knows, or has reasonable grounds to suspect, that the ‘particulars’
furnished by the consignor in the multimodal transport document do not
accurately represent the goods actually taken in charge, or if he has no
reasonable means of checking such particulars, the multimedal transport
operator or a person acting on his behalf shall insert in the multimodal transport
document a reservation specifying the inaccuracies, if any, the grounds of
suspicion or the absence of reasonable means of checking the particulars.
(2) Where the multimodal transport operator or a person acting on his behalf
fails to insert the reservation in the multimodal transport document relating to
the apparent condition of the goods, he shall be deemed to have accepted the
goods in apparent good condition.
11. Save as provided in section 10. ––
(a) the multimodal transport document shall be prima facie evidence of the
fact that the multimodal transport operator has taken charge of the goods as
described in the document; and
(b) no proof to the contrary by the multimodal transport operator shall be
admissible if the multimodal transport document is issued in negotiable form
and has been transmitted to the consignee or transferred by the consignee to a
third party, if the consignee or the third party has acted in good faith relying on
the description of the goods in the document.
12. (1) The consignor shall be deemed to have guaranteed to the
multimodal transport operator the adequancy and acuracy, at the time the

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multimodal transport operator takes charge of the goods, of the particulars
referred to in clauses (a) and (b) of section 9 as furnished by the consignor
for insertion in the multimodal trasnport document.
(2) The consignor shall indemnify the multimodal transport operator against
loss resulting from inadequacy or inaccuracy of the particulars referred to in
sub-section (1).
(3) The right of the multimodal transport operator under sub-section
(2) shall in no way limit his liability under the multimodal transport contract
to any person other than the consigner.

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CHAPTER IV
RESPONSIBILITIES AND LIABILITIES OF THE MULTIMODAL TRANSPORT OPERATOR
13. (1)The multimodal transport operator shall be liable for loss resulting
from––
(a) any loss, of, or damage to, the consignment;
(b) delay in delivery of the consignment and any consequential loss or damage
arising from such delay, where such loss, damage or delay in delivery took
place while the consignment was in his charge;
Provided that the multimodal transport operator shall not be liable if he proves
that no fault or neglect on his part or that of his servants or agents had caused
or contributed to such loss, damage or delay in delivery;
Provided further that the multimodal transport operator shall not be liable for
loss or damage arising out of delay in delivery unless the consignor had made a
declaration of interest in timely delivery which has been accepted by the
multimodal transport operator.
Explanation –– for the purposes of this sub-section, “delay in delivery” shall be
deemed to occur when the consignment has not been delivered within the time
expressly agreed upon or, in the absence of such agreement, within a
reasonable time required by a diligent multimodel transport operator, having
regard to the circumstances of the case to effect the delivery of the
consignment.
(2) If the consignment has not bee delivered within ninety consecutive days
following the date of delivery expressly agreed upon or their reasonable time
referred to in the Explanation to sub-section (1) the claimant may treat the
consignment as lost.
14. (1) Where a multimodal transport operator becomes liable for any loss
of, or damage to, any consignment, the nature and value whereof have not been
declared by the consigner before such consignment has been taken in charge

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by the multimodal transport operator and the stage of transport at which such
loss damage occurred is not known then the liability of the multimodal
transport operation to pay compensation shall not exceed two special Drawing
Rights per kilogram of the gross weight of the consignment lost or damaged or
666.67 Special Drawing Rights per package or unit lost or damaged,
whichever is higher.
Explanation –– for the purposes of this subsection; where a container, pallet or
similar article of transport is loaded with more than one package or unit, the
packages or units enumerated in the multimodal transport document, as
packed in such container, pallet or similar article of transport shall be deemed
as packages or units.
(2) Notwithstanding anything contained in subsection (1), if the multimodal
transportation does not according to the multimodal transport contract, include
carriage of goods by sea or by inland waterways, the liability of the multimodal
transport operator shall be limited to an amount not exceeding 838 Special
Drawing Rights per kilogram of the gross weight of the goods lost or damaged.
15. Where a multimodal transport operator become liable, for any loss of, or
damage to, any consignment, the nature and value whereof have not been
declared by the consigner before such consignment has been taken in charge
by the multimodal transport operator and the stage of transport at which such
loss or damage occurred is known, then the limit of the liability of the
multimodal transport operator for such loss or damage shall be determined in
accordance with the provisions of the relevant law applicable in relation to the
mode of transport during the course of which the loss or damage occurred and
any stipulation in the multimodal transport contract to the contrary shall be
void and unenforceable.
16. Where delay in delivery of the consignment occurs under any of the
circumstances mentioned in the Explanation to sub-section (1) of section 13,
or any consequential loss or damage arises from such delay, the liability of the

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multimodal transport operator shall be limited to the freight payable for the
consignment so delayed.
17. (1) Assessment of compensation for loss of or damage to, the
consignment shall be made with reference to the value of such consignment at
the place where, and the time at which, such consignment is delivered to the
consignee or at the place and time when, in accordance with the multimodal
transport contract, it should have been delivered.
(2) The value of the consignment shall be determined according to the
current commodity exchange price, or, if there is no such price, according to
the current market price, or if the current market price is not ascertainable,
with reference to the normal value of a consignment of the same kind and
quality.
18. The multimodal transport operator shall not be entitled to the benefit of
limitation of liability under any of the provisions of this Chapter it is proved
that the loss, damage or delay in delivery of consignment resulted from an act
or omission of the multimodal transport operator with intent to cause such
loss, damage or delay or recklessly and with knowledge that such loss,
damage or delay would probably result.
19. The multimodal transport operator shall not in any case, be liable for an
amount greater than the liability for total loss of goods for which a person will
be entitled to make a claim against him under the provisions of this Act.
20. (1) The delivery of the consignment to the consignee by the
multimodal transport operator shall be treated as prime facie evidence of
delivery of the goods as described in the multimodal transport document unless
notice of the general nature of loss of, or damage to, the goods is given, in
wring, by the consignee to the multimodal transport operator at the time of
handing over of the goods to the consignee.
(2) Where the loss or damage is not apparent, the provisions of sub-section (1)
shall apply unless notice in writing is given by the consignee of the loss of, or

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damage to the goods within six consecutive days after the day when the goods
were handed over to the consignee.

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CHAPTER V
MISCELLANEOUS
21. (1) Where the consignor hands over the prescribed dangerous goods
to a multimodal transport operator or any person acting on behalf of such
operator, the consignor shall inform him of the nature of the dangerous goods
and, if necessary, the precautions to be taken while transporting such goods.
(2) Where the consignor fails to inform the multimodal transport operator or the
other person acting on behalf of such operator of the nature of the danagerous
goods and such operator or person does not otherwise have knowledge of the
dangerous goods––
(a) the consignor shall be liable to the multimodal transport operator or the
other person acting on behalf of such operator for all loss resulting from the
multimodal transportation of such goods; and
(b) the goods may at any time be unloaded, destroyed or rendered innocuous
as the circumstances may require, without payment of compensation.
22. (1) The multimodal transport operator who has not been paid the
amount of consideration stipulated in the multimodal transport contract shall
have a lien on the consignment and on the documents in his possession.
(2) Notwithstanding anything contained in sections 13, 16 and 18, the
period during which the goods are in possession of the multimodal transport
operator in exercise of his right of lien referred to in sub-section (1) shall not
be included for the purposes of calculating the time of delay under any of those
sections.
23. Notwithstanding anything contained in any other provision of this Act, it
shall be lawful for the parties to the multimodal transport contract to include in
the multimodal document any provision relating to general average.
Explanation –– For the purposes of this section, “general average” means loss,
damage or expense reasonably incurred in order to avert danager to property in

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common peril and in the common interest involved in the multimodal
transportation.
24. The multimodal transport operator shall not be liable under any of the
provisions of this Act unless action against him is brought within nine months
of : ––
(a) the date of delivery of the goods, or
(b) the date when the goods should have been delivered, or
(c) the date on and from which the party entitled to receive delivery of the
goods has the right to treat the goods as lost under subsection (2)
of section 13.
25. Any party to the multimodal transport contract may institute an action in
a court which is competent and within the jurisdiction of which is situated one of
the following places, namely:-
(a) the principal place of business, or, in the absence thereof, the habitual
residence of the defendant; or
(b) the place where the multimodal transport contract was made, provided
that the defendant has a place of business, branch or agency at such place; or
(c) the place of taking charge of the goods for multimodal transportation
or the place of delivery thereof; or
(d) any other place specified in the multimodal transport contract and
evidenced in the multimodal transport document.
26. (1) The parties to a multimodal transport may provide therein that any
dispute which may arise in relation to multimodal transportation under the
provisions of this Act shall be referred to arbitration.

(2) The arbitration proceeding may be instituted at such place accordance


with such procedure as may be specified in the multimodal transport
document.
27. The Central Government may, by notification in the Official Gazette,
direct that any power exercisable by it under this Act, except the power under

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section 30, shall, in such circumstances and subject to such conditions. If any,
as may be specified therein, be exercisable also by such or authority as may
be specified in the notification.
28. No person registered as a multimodal transport operator shall enter into
any contract for multimodal transportation except in accordance with the
provisions of this Act and any contract, to the extent it is inconsistent with
the said provisions, shall be void and unenforceable.
29. The provisions of this Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the time being in force or
in any instrument having effect by virtue of any law other than this Act.
30. (1) The Central Government may by notification in the Official Gazette,
make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing


provisions, such rules may provide for all or any of the following matters,
namely:––
(a) the forms in which applications shall be made under section 4;
(b) the period within which appeal shall be preferred under subsection (1) of
section 6;
(c) the form in which an appeal shall be preferred under section 6 and the
amount of fee payable in respect of such appeal;
(d) dangerous goods for the purpose of section 21;
(e) any other matter which is to be, or may be, prescribed.
(3) Every rule made under this Act shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session, for a total period
of thirty days which may be comprised in session or in two or more successive
sessions, and if, before the expiry of the session immediate following the session
or the successive sessions aforesaid, both Houses agree in ‘making any
modicication in the rule or both Houses agree that the rule should not be
made, the rule shall thereafter have effect only in such modified form or be of

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no effect, as the case may be; so, however that any such modiciation or shall
be without prejudice to the 31. On and from the date of the commi of this
Act, the enactments specified in Parts I, II and III of the Schedule shall be the
manner specified therein.
32. (1) The Multimodal Transportion
(2) Notwithstanding such repeal, anything done the said Ordinance, shall be
deemed to have been done or takes under the corresponding provisions of this
Act.

SCHEDULE
RULES RELATING TO BILLS OF LADING
ARTICLE - 1- DEFINITIONS
In these Rules the following expressions have the meaning hereby
assigned to them respectively, that is to say:
a) “Carrier” includes the owner or the character who enters into a contract of
carriage with a shipper.
b) “Contract of Carriage” applies only to contract carriage covered by a bill of
lading or any similar document of title, in so far as such document relates to the
carriage of goods by sea including any aforesaid issued under or pursuant to a
charter party from the moment at which such bill of lading or similar
document of title regulates the relations between a carrier and a holder of the
same.
c) “Goods” includes goods, wares, merchandises and articles of every kind
whatsoever, except live animals and cargo which by the contract of carriage is
stated as being on dock and is so carried.
d) “Ship” means any vessel used for the carriage of goods by sea;
e) “Carriage of goods” covers the period from the time when the goods are
loaded on to the time when they are discharged from the ship.

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ARTICLE – II - RISKS
Subject to the provisions of Article VI, under every contract of carriage of goods
by sea the carrier, 1 in relation to the loading, handling, stowage, carriage,
custody, care and discharge of such goods, shall be subject to the
responsibilities and liabilities, and entitled to the right stand immunities
hereinafter set forth.
ARTICLE – III - RESPONSIBILITIES AND LIABILITIES
1. The carrier shall be bound, before and at the beginning of the voyage, to
exercise due diligence to:
a) Make the ship seaworthy
b) Properly man, equip and supply the ships
c) Make the holds, refrigerating and cool chambers, and all other parts of
the ship in which goods are carried, fit and safe for their reception, carriage
and preservation.
2. Subject to the provisions of Article-IV, the carrier shall properly and
carefully load, handle, stow, carry, keep, care for and discharge the goods
carried.
3. After receiving the goods into his charge, the carrier, or the master or
agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill
of lading showing among other things:
a) The loading marks necessary for identification of the goods as the same are
furnished in writing by the shipper before the loading of such goods starts,
provided such marks are stamped or otherwise shown clearly upon the goods if
uncovered, or on the cases or coverings in which such goods are contained, in
such a manner as should ordinarily remain legible until the end of the
voyage;
b) Either the number of packages or pieces, or the quantity, or weight, as the
case may be, as urnished in writing by the shippers;
c) The apparent order and condition of the goods

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Provided that no carrier, master or agent of the carrier, shall be bound to state or
show in the bill of lading any marks, number, quantity, or weight which he
has reasonable ground for suspecting not accurately to represent the goods
actually received, or which he has had no reasonable means of checking.
4. Such a bill of lading shall be prima facie evidence of the receipt by the
carrier of the goods as therein described in accordance with paragraph
(3 (a), (b) and (c).
5. The shipper shall be deemed to have guaranteed to the carrier the accuracy
at the time of shipment of the marks, number, quantity, and weight, as
furnished by him, and the shipper shall indemnify the carrier against all loss,
damages, and expenses arising or resulting from inaccuracies in such
particulars. The right of the carrier to such indemnity shall in no way limit his
responsibility and liability under the contract of carriage to any person other
than the shipper.
6. Unless notice of loss or damage and the general nature of such loss or
damage be given in writing to the carrier or his agent at the port of discharge
before or at the time of the removal of the goods into the custody of the person
entitled to delivery thereof under the contract of carriage, or if the loss or
damage be not apparent, within three days, such removal shall be prima
facie evidence of the delivery by the carrier of the goods as described in the bill
of lading.

The Notice in writing need not be given if the state of the goods has not
the time of their receipt been the subject of joint survey or finspection.
In any event the carrier and the ship shall be discharged from all liability in
respect of loss or damage unless suit is brought within one year after delivery of
goods or the date when the goods should have been delivered.
In the case of any actual or apprehended loss damage, the carrier and the
receiver shall give all reasonable facilities to each other for inspecting and
tallying the goods.

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7. After the goods are loaded the bill of lading to be issued by the carrier,
master or agent of the carrier, to the shipper shall, if the shipper so demands,
be a “shipped” bill of lading, provided that, if the shipper shall have previously
taken up any document of title to such goods, he shall surrender the same as
against the issue of the “shipped” bill of lading, but at the option of the carrier
such document of title may be noted at the port of shipment by the carrier,
master, or agent with the name or names of the ship or ships upon which the
goods have been shipped and the date or dates of shipment, and when so noted
the same shall for the purpose of this article be deemed to constitute a
“shipped” bill of lading.
8. Any clause, covenant or agreement in contract of carriage relieving the
carrier or the ship from liability for loss or damage to or in connection with
goods arising from negligence, fault or failure in the duties and obligations
provided in this Article or lessening such liability otherwise than as provided in
these Rules, shall be null and void and of no effect. A benefit or insurance
or similar clause shall be deemed to be a clause relieving the carrier from
liability.

ARTICLE - IV- RIGHTS AND IMMUNITIES


1. Neither the carrier nor the ship shall be liable for loss or damage arising or
resulting from unseaworthiness unless caused by want of due diligence on the
part of the carrier to make the ship seaworthy, and to secure that the ship is
properly manned, equipped and supplied, and to make the holds, refrigerating
and cooling chambers and all other parts of the ship in which goods are carried-
fit and safe for their receiption, carriage and preservation in accordance with
the provisions of paragraph-I of Article-III.
Wherever loss or damage has resulted from unseaworthiness, the burden of
preving the exercise of due diligence shall be on the carrier or other person
claiming exemption under this section.

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2. Neither the carrier nor the ship shall be responsible for loss or damage
arising or resulting from:
a) Act, neglect, or default of the master, mariner, pilot, or the servants of the
carrier in the nevigation or in the management of the ship;
b) Fire, unless caused by the actual fault or privity of the
carrier;
c) Perils, dangers and accidents of the sea or other navigable
waters;
d) Act of God;
e) Act of war;
f) Act of public enemies;
g) Arrest or restraint of princes, rulers or people, or seizure
under legal
procedures;
h) Quarantine restriction;
i) Act or omission of the shipper or owner of the goods, his agent, or
representative;
j) Strikes or lock-outs or stoppage or restraint of labour
from whatever cause, whether partial or general;
k) Riots and civil commotions;
l) Saving or attempting to save life or property at sea;
m) Wastage in bulk or weight or any other loss or damage
arising from inherent defect, quality, or vice of the goods;
n) Insufficiency of packing:
o) Insufficiency or inadequacy of markets;
p) Latent defects not discoverable buy due diligence;
q) Any other cause arising without the actual fault or privity
of the carrier, or without the fault or neglect of the agents or servants of the
carrier, but the burden of proof shall be on the person claiming the benefit of
this exception to show that neither the actual fault or privity of the carrier nor

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the fault or neglect of the agents or servants of the carrier contributed to the
loss or damage.

3. The shipper shall not be responsible for loss or damage sustained by the
carrier or the ship arising or resulting from any cause without the act, fault or
neglect of the shipper, his agents or his servants.

4. Any deviation in saving or attempting to save life or property at sea, or


any reasonable deviation shall not be deemed to be an infringement or breach of
these Rules or of the contract of carriage, and the carrier shall not be liable for
any loss or damage resulting therefrom.
5. Neither the carrier nor the ship small in any event be or become liable for
any loss or damage to or in connection with goods in an amount exceeding 100 *
per package or unit, or the equivalent of that sum in other currency, unless the
nature and value of such goods have been declared by the shipper before
shipment and inserted in the bill of lading.
This declaration if embodied in the bill of lading shall be prima facie evidence
but shall not be binding or conclusive on the carrier.
By agreement between the carrier, master or agent of the carrier and the
shipper another maximum amount than that mentioned in this paragraph may
be fixed, provided that such maximum shall not be loss than the figure above
named.
Neither the carrier not the ship shall be responsible in any event for loss or
damage to or in connection with goods if the nature or value thereof has been
knowingly mis-stated by the shipper in the bill of lading.
6. Goods of an inflammable, explosive or dangerous nature to the shipment
where of the carrier, master or agents f the carrier, has not consented, with
knowledge of their nature and character, may at any time before-discharge be
landed at any place or destroyed or rendered innocuous by the carrier without

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compensation, and the shipper of such goods shall be liable for all damages
and expenses directly or indirectly arising out of resulting from such shipment.
If any such goods shipped with such knowledge and consent shall become a
danger to the ship or cargo, they may in like manner be landed at any place
or destroyed or rendered innocuous by the carrier without liability on the part
of the carrier except to general average, if any.

ARTICLE – V : SURRENDER OF RIGHTS AND IMMUNITIES,


AND OF RESPONSIBILITIES AND LIABILITIES
A carrier shall be at liberty to surrender in whole or in the part all or any of has
rights and immunities or to increase any of his response shall be embodied in
the bill of lading issued to the shipper.
The provision of these Rules shall not be applicable to charter-parties, but if
bills of lading are issued in the case of a ship under a charter party they shall
comply with the terms of these Rules. Nothing in these shall be held to
prevent the insertion in a bill of lading of any lawful provision regarding general
average.
ARTICLE-VI : SPECIAL CONDITION
Notwithstanding the provisions of the proceeding Articles, a carrier, master or
agent of the carrier and a shipper shall in regard to any particular goods be at
liberty to enter into any agreement in any terms as to the responsibility and
liability of the carrier for such goods, and as to the rights and immunities of the
carrier in respect of such goods or his obligation as to seaworthiness, so-far-as
this stipulation is not contrary to public policy, or the diligence of his servants or
agents in regard to the loading, handling, stowage carriage, custody, care, and
discharge of the goods carried by sea, provided that in this case no bill of lading
has been or shall be issued and that the terms agreed shall be embodied in a
receipt which shall be a non-negotiable document and shall be marked as such.
Any agreement so entered into shall have full legal effect:

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“Provided that the Article shall not apply to ordinary commercial shipments
made in the ordinary course of trade, but only to other shipment where the
charter or condition of the property to be carrier or the circumstances, terms
and conditions under which the carriage is to be performed, are such as
reasonably to justify a special agreement.

ARTICLE - VII : LIMITATIONS ON THE APPLICATION OF


THE RULES
Nothing herein contained shall prevent a carrier or a shipper from entering into
any agreement, stipulation, condition, reservation or exemption as to the
responsibility and liability of the carrier or the ship for the loss or damage to or
in connection with the custody and care and handling of goods prior to the
loading on the subsequent to the discharge from the ship on which the goods
are carried by sea.
ARTICLE - VIII : LIMITATION OF LIABILITY
The provisions of these Rules shall not affect the rights and obligations of the
carrier under any Statue or the time being in force relating to the limitation of
the liability of owners of sea-going vessels.

ARTICLE – IX
The monetaryfd units mentioned in these Rules are to be taken to be gold
value.

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MARITIME CASES
I. Under a c.i.f. contract the bill of lading tendered by the seller must protect
the buyer from the port of shipment to the port of destination.
The sellers sold to the buyers a quantity of cod guano to be shipped from
Norway c.i.f. Kobe or Yokohama. It was shipped on board the Kiev from Braatvag
(in Norway) to Hamburg under a bill of lading dated 22nd April, 1920, and
thence transshipped in the Atlas Maru for delivery in Japan. At Hamburg the
agent of the Atlas Maru issued a through bill of lading 5th May, 1920, stating that
the goods had been “shipped from Braatvag according to bill of lading on 22 nd
April, 1920. Shipped in apparent good order and condition by (the seller) on
board the Kiev, laying in or off the Port of Braatvag and bound to Hamburg for
transhipment into the …… Atlas Maru”. The buyers refused to accept the bill of
lading when tendered to them.
Held by the House of Lords, that they were entitled to do so. The through bill of
lading only contained the contract with the owners of the Atlas Maru and in no
way bound the owners of the Kiev, for the statement in it was only a recital of
the facts and not words of contract. Under a c.i.f. contract the bill of lading
tendered must protect the buyer from shipment to destination. In any event,
the bill of lading should be procured is shipment, and this bill was issued 13
days after shipment in another port in another country.
II. In the case of c.i.f. contract the bill of lading tendered by the seller must,
as regards the quantity of goods shipped, correspond exactly with the amount
specified in the contract of sale.
The sellers shipped, 3,800 tons of wheat at Bombay and stated that they
had appropriate 3,000 tons to the contract made with the buyers. There were
two bills of lading representing 1,750 tons each and two for 250 tons each and
the sellers offered to delivery to the buyers either all the bills of lading or two for
1,750 tons each. The buyers refused to accept the offer or pay any part of the
price.

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Held, by the Court of Appeal, that the buyers were justified in doing, so, for
they were entitled to a bill of lading representing the amount specified in the
contract.

TERMS USED IN LOGISTICS


Additional services
An extra service such as professional cleaners or handyman, or specialist
equipment such as a ladderlift, which is outside the scope of a standard
quotation and incurs additional charges.

Agent
In countries where we do not have a service centre, we may require assistance
from one of our trusted partner agents for the purpose of performing origin,
freight/transport, or destination services on our behalf.

Bill of lading
Document giving proof of particular goods having been loaded on a ship. The bill
of lading is normally required in order to obtain the release of the goods at
arrival. For air freight, there is an airway bill.

Carrier
The company providing the freight and transport for your household goods.

Crew foreman
One person in each team will have overall responsibility for managing the crew
during the packing/loading, or unloading/unpacking of the customer’s belongings.

Customs clearance
Customs formalities to be completed at origin, in transit and at destination.

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Demurrage
Cost imposed at port for storage.

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Destination agent
In countries where we do not have a service centre, we may require assistance
from one of our trusted partner agents for the purpose of performing destination,
freight/transport services on our behalf.

Estimate
One of the main purposes of the pre-move survey is to estimate the shipment
volume/weight, this will then provide the basis for our quotation/proposal.

FCL (Full container load)


FCL provides you with sole use of a sea freight-shipping container.

FIDI
The moving industry association of international moving companies, responsible
for providing a forum for the advancement of integrity, quality and mutual co-
operation for those companies focused on the intercontinental movement of
household effects.

FAIM
FAIM is an independent quality assurance standard dedicated to international
moving. The standard has been developed under the title of FIDI-FAIM (FIDI
Accredited International Mover) and covers two levels: FIDI-FAIM (the standard
level of certification) and FIDIFAIMISO (which requires a higher pass mark).

Gross volumetric weight


The chargeable weight of an individual package is the gross or volumetric weight
rounded up to the nearest pound/kilo.

High value items

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All high value items should be disclosed/individually listed on your insurance
documentation. Your mover/insurer may require you to provide proof of your
valuation. NB: most insurers will not cover jewellery and you should therefore
hand carry such items.

Inventory
If your household goods and personal effects are insured through your mover,
you should receive documentation including the insurance terms and conditions.
These will detail exactly what is covered by the insurance policy. You will also be
required to provide a list of the items to be insured

Insurance
If your household goods and personal effects are insured through your mover,
you should receive documentation including the insurance terms and conditions.
These will detail exactly what is covered by the insurance policy. You will also be
required to provide a list of the items to be insured(see Valuation).

Ladder lift
A ladder lift is a piece of specialist machinery sometimes required to load heavy
goods from high places such as a high window.

LCL (Less than container load)


If the volume of your sea freight shipment does not justify a full container load,
your goods can be transported in a sealed wooden case within a shared
container. This is then known as LCL.

Long carry
This is an additional charge payable for carrying articles longer distances
between the mover’s vehicle and your residence.

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Measurement
The industry standard uses: Cft – cubic feet, Cbm – cubic metres, Lbs – pounds
and Kgs – kilograms.
Order/tracking number
The number used to identify and track your shipment.

Origin agent
In countries where we do not have a service centre, we may require assistance
from one of our trusted partner agents for the purpose of performing origin and
freight/transport services on our behalf.

Packing inventory
A detailed list of your household goods that will be compiled by the packing crew
prior to loading your shipment and which shows the condition of each item.

Pre-move survey
The visit to your home, which enables us to discuss and assess your
requirements and to estimate the volume/weight of goods to be shipped.

Quotation/proposal
The document in which we outline our services and charges to move your
household goods.

Quotation/proposal acceptance
Your written agreement accepting our quotation/proposal.

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Shuttle service
Use of a smaller vehicle may sometimes be required to shuttle goods from
residence to the warehouse or ultimate carrier. This can occur where a residence
is inaccessible to the mover’s European vehicle or shipping container.

Stair carry
An extra charge for carrying items up or down more than one flight of stairs.

SIT (Storage in transit)


Temporary warehouse storage of your shipment pending further transportation,
for example, while an air freight shipment is being cased in our warehouse and
then awaits collection by the airline.

Transit time
The estimated time that your move will take from door to door, in working days
(eg Monday to Friday).

Valuation
Generally provided for insurance, this would be your estimated value of
household goods and personal effects to be transported and/or stored.

Warehouse handling
An additional charge applicable when goods are received into storage. This
charge compensates the mover for the additional handling and physical
placement of items within the warehouse.

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Custom clearance is the custom formalities for the freight subjected to the
procedure for authorization of free circulation of the freight when it is released
from the custom control and enters in full disposal of the importer provided all
required charges, tariffs and other duties paid.

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