3PL Selection Services DilemmaITC Paperboards and Specialty Papers Division

What are we dealing with?▪ ITC Paperboards &

Specialty Papers Division▪ Largest manufacturer of

Packaging and Graphic Boards in South Asia

▪ The following are the types of Products manufactured in the company:▪ Packaging & Graphic Boards▪ Specialty Boards▪ Specialty Papers

Soda Recovery Process In Brief

SRP

DIGESTOR AND BLOW

TANKS

WASHING

OXIDATION

MULTIPLE EFFECT FFF EVAPORATO

R

SRBDISSOLVING TANK

GREEN LIQUOR

CLARIFIER

SLAKER & CAUSTICIZER

WHITE LIQUOR

CLARIFIER

CO2

AIR

BLACK LIQUOR

SMELT

GREEN LIQUOR

Green Lime

FILTER

LIME KILN

BLACK LIQUOR(70-80% SOLID)

FLUE GAS

WEAK WHITE LIQUOR

WASH WATER

WHITE LIQUORLIME MUD

CaO

CaCO3

Cargo- Green Lime Filter

Transport Of Odd Dimensional Cargo (ODC) From Chennai Port To Bhadrachalam Plant

There was a requirement for transport of an ODC cargo from Chennai port to ITC PSPD’s plant around 300 km from Hyderabad

Material was a project cargo required for expansion of production line

Material dimensions : 12.8mx2.7mx3.1mThis translates to : 42ftx9.1ftx10.4ft

Typical Trailer dimensions: 40ftx9ftx5.5ft(from ground level)- Flat Bed

Tonnage of cargo- 24.4 MTIndia- Max available trailer capacity- 40’ (Bed Length) with 27 MT payload carrying capacity

Issues In Transportation Of ODC Cargo▪ Project Cargo dimensions-Too large for typical flat bed trailer to carry▪ As per Central Motor Vehicles Act, 1989, maximum height of cargo from

ground level cannot exceed 13.2 ft▪ This is required as there are low hanging overhead railway lines and

electricity lines in different parts of India▪ Logistics department- Did not have expertise on transportation of such cargo▪ Earlier precedence for cargo transport- Left to supplier or contracted special

service providers▪ Contacted partner service providers and Fleet Operators to find solution for

transport of this cargo▪ One solution for the height issue is the usage of a low bed tractor trailer▪ Low Bed Tractor Trailer- Reduces bed height by nearly 3 feet.

Available OptionsTypical Flat Bed Tractor-

Trailer Low Bed Tractor Trailer

Transportation- Quotations

Request for quotations sent out to three contractors- AVX Ltd., ACE Ltd. and AC Transport Ltd.

These contractors have significant experience in transportation of project and odd dimensional cargo

AVX Ltd and AC Transport Ltd. quoted Hydraulic Trailer as suggested form of transport while ACE Ltd. suggested Mechanical Trailers for transport

Project Department was then consulted on feasibility of transport via Mechanical Trailer

Main Issue- Sensitivity of Cargo to transport

Due to road infrastructure in India, there was a chance for damage of cargo in transit

Project Department confirmed that the material is a Shell, and contained no fittings which would be damaged

Based on same, commercial and cost analysis was done for the quotations received

Comparative Statement

• As per above comparative, ACE Ltd is most economical at Rs. 8 Lakhs including all transport related costs

• Main issue- Mechanical Trailer has a carrying capacity of 27 MT as per Central Motor Vehicles Act,1989

• Transporter assured that the material can be carried

• ACE Ltd. had significant experience in transportation of such cargo

• Based on the same, a calculated risk was taken to conduct the transport via Low Bed Mechanical Trailer

AVX Ltd. ACE Ltd. AC Transport Ltd.

Material Dimension

Weight (MT) Hydraulic Trailer Mechanical Trailer (Low Bed)

Hydraulic Trailer

12.8m x 2.7m x 3.1m

24.4 Rs. 14.3 L Rs. 8 L Rs. 15 L

OutcomeThe transport of the material was delayed by nearly 20 days due

to documentation issue at Customs

Due to this, material could not be moved out of the port after loading

on the truck

Incurred demurrage charges of Rs 7500/day, coming to Rs 1.5 Lakhs

Transport from Chennai to plant took nearly 15

days due to cargo tonnage and safety

concerns

Delay was within project limit, as other

equipment required for installation had not

arrived yet

Multi Modal Transport▪ Talc, an input for paper manufacturing is procured from

Haldwani, Uttrakhand▪ Due to rainy season and lack of truck availability from

Andhra Pradesh, transport of Talc became difficult▪ Direct Truck availability from Andhra Pradesh reduced due

to drop in fish transport from Kakinada port to Northern regions

▪ Stocks depleting significantly due to this aspect leading to crisis

Alternate TransportAlternate Transport

means for transportation of

material from Haldwani were considered

One means was to bring the material

through rail via Delhi

Truck availability towards Delhi was not

an issue as they are close by (around 270

km by road)

After bringing the material to New Delhi,

rake wagon loading would be done at

railway station

From New Delhi to Hyderabad the

transportation would be by rake

Material unloaded at Hyderabad railway

station and then carried to plant via trucks (Road transport)

Entire operation in three phases- Road-

Rail-RoadCosting- Rs. 3600/MT

Option of Lift on-Lift off of trucks considered

but not found feasible

Comparative Statement

• As seen above, the Rail+ Road combination gives a saving of app. Rs. 1.8 Lakhs/month• However, the transit time increases from 10 days via Direct Road Transport to 15 days

via Rail + Road transport• As per company’s material storage policy- minimum of one month’s stock must be stored• Hence it can lead to certain stock storage issues• Cost of maintaining additional stock can be an issue• Additional factor- Rake availability from New Delhi to Hyderabad can be an issue

ITS Ltd Sun Transport

Savings (Rs./Month)

Savings (Rs. Annualized)

Material Type

Monthly Tonnage

From To Road Truck (16 MT)

Rail + Road

Talc 200 Haldwani Hyderabad Rs 4500/MT Rs 3600/MT Rs 1.8 L Rs 21.6 L

OutcomeTransport resumed from Haldwani to

Andhra Pradesh using Rail + Road transport

mode

To avoid stock storage issue, part of the

quantity was transported by direct road transport as well

Model continuing today as well