introduction of logistics & shipping

8/3/2019 Introduction of Logistics & Shipping

http://slidepdf.com/reader/full/introduction-of-logistics-shipping 1/32

Logistics & Shipping Management

Prof: S.B.Choughule

EMIB-IIFT-New Delhi

Member of Port & Logistics Committee

Maharashtra Chambers Of Commerce & Industry

http://www.cilt.org.sg/



Importance of Logistics

• India’s logistics sector is in the tremendousgrowth path. Logistics activities are expandingdue to,

• Globalization – • Expansion of manufacturing base in India

• Geographical location -Logistics hub

• Fast growing retail sector

• According to Logistics expert , even company save 1 % of its logistics cost, India will save INR 25,000 crore per year



Elements of Logistics Activities included in Logistics Management

• Procurement- Sourcing & purchasing

• Warehousing & Storage of finish product

• Material Handling at warehouses ports & ICD

• Transportation of goods with various mode of transport

• Inventory Control –Minimization at given point

• Physical Distribution of finish product from

factory to buyer• Information & Communication

• Packaging

http://www.logisticsmgmt.com/



Defination of Logistics

The management of the storage and flows ofgoods, services and informationthroughout from origin of supplier to the

end user of finish products3 R in Logistics

1) Right time

2) Right quantity

3) Right place Mumbai’s Dabewala is best

logistics service provider



Types of Logistics

• Inbound –

• From procurement of raw material at originto the factory (production centre ) with

various mode of transport• Outbound

• Supply of finish product from factory to

distribution centeres and end usercustomer

• ESSAR steel Ltd is best example in India



Inbound & Out Bound logistics

Factory

Supplier

TransportWholesaler

Retailer

Inbound Logistics Out bound logistics

Import of Raw material Export of Finish product

End user

India



Importance of Sea Transport

• Used by firms for delivery of goods from distantsuppliers, mostly conducted in containers of variedsize. This mode is ideal for transportation of heavy andbulky goods and suitable for products with long leadtimes.

Liner shipping &Tramp shipping

Iron ore export to China

Container export to Europe

Sea transport is cheapest mode of transport



3rd Party Logistics

• Third Party Logistics (3PL) providerhandles all or most of freight of theorganizations including the management

of information by the third party, freeingthe company from day to day interactionwith carriers, and having to oversee

hundreds or thousands of shipment.



Logistics cost

• Break up of cost• Transport -40%• Inventory 24%

• Order processing and Administration -10%• Warehousing 10 %• other cost –Documentation Taxation etc 16%• ------------------------------------------

• Total 100%• ---------------------------------------------• Which cost can be saved?



Logistics Cost

• India INC increasingly looking to cut theirlogistics costs in a bid to improve theirprofit margins, Thus role of Logistics is

important for profit maximization

• According to Logistics expert , evencompany save 1 % of logistics cost India

will save INR 25,000 crore per year



Logistics cost % of GDP

• USA -8%

• North America -10.77

• Europe -11.79• Asia pacific -11.64

• Remaining 11.74

• India -13 -14 %



Freight broker

• A freight broker falls into the category oftransportation intermediary, which is acompany that is neither a shipper nor

carrier, but plays a role in the movement ofcargo

• He guides to shipper

• His service is free to shipper

• Bombay Freight Broker Association



Freight Forwarder

• A person whose business is to act as anagent on behalf of the shipper.

• A International freight forwarder movingcargo from one country to other country

• From seller to buyer

• Example –INCOTERM Ex works• Freight Forwarder Association of India



CHA

• A Custom House Agent is somebodyentitled to act upon a company’s behalf on

actions involving the import and export of

goods.

• There such agents must be licensedunder section 146 of the Customs

Act.1962• Bombay Customs House Agents Association



CHA-Customs House Agents –Export

• CHA files shipping bill in Customs House

• Passing shipping bill

• Arrangement of Customs Examination

• Obtain Let export Order from Customs• Co ordination with shipping line

• Obtaining Bill of Lading from shipping company

•Insurance policy from Insurance company• E.P copy from Customs after export

• Liasoning with Customs-port-shipping line



Shipping Agents

• Shipping agents represent charterers, receivers or shipowners. Their main role is to liaise between their clientsand the various entities that service vessels in portincluding

• Arrival Departure Formalities with port & customsauthorities

• Bunkering-Supply of fuel• Marketing for cargo• Collect Freight and remittance to ship owner

• Issue Bill of Lading• MANSA-• Mumbai Nhava Sheva Shipping Agents Association of

India



Carrier

• Any person or entity who, in a contract ofcarriage, undertakes to perform or toprocure the performance of carriage by

rail, road, sea, air, inland waterway or by acombination of such modes

INSA Indian National Ship owner Association of India



container terminal Operator

• A container terminal is a facility wherecargo containers are transshipped betweendifferent transport vehicles, for onwardtransportation. The transshipment may be

between ships and land vehicles, forexample trains or trucks, in which case theterminal is described as a maritime

container terminal• NSICT

• JNPCT

• GTICT

http://en.wikipedia.org/wiki/Intermodal_container

http://en.wikipedia.org/wiki/Transshipment

http://en.wikipedia.org/wiki/Ship

http://en.wikipedia.org/wiki/Train

http://en.wikipedia.org/wiki/Truck

http://en.wikipedia.org/wiki/Truck

http://en.wikipedia.org/wiki/Train


http://en.wikipedia.org/wiki/Transshipment

http://en.wikipedia.org/wiki/Intermodal_container



CFS operator

• CFS operator brings container fromTerminal to his CFS on behalf shippingline. He provides customs examinationservice. He collects his dues and givesphysically delivery to CHA/importer There

are 23 CFS attached to JNPT port



Charterer

• Chartering is an activity within the shipping industry. In some cases a charterer may owncargo and employ a shipbroker to find a ship todeliver the cargo for a certain price, calledfreight rate. Example –Essar Steel

• Freight rates may be on a per-ton basis over acertain route (e.g. for iron ore between Hazira(Gujarat ) or

• alternatively may be expressed in terms of atotal sum - normally in U.S. dollars - per day forthe agreed duration of the charter

http://en.wikipedia.org/wiki/Shipping

http://en.wikipedia.org/wiki/Cargo

http://en.wikipedia.org/wiki/Shipbroker



http://en.wikipedia.org/wiki/Freight_rate









Ocean Bill of Lading

Issued by: Steamship line

Purpose: Each carrier has its own bill of lading form.Serves as contract of carriage between carrier and

shipper, spelling out legal responsibilities and liabilitylimits for all parties to the shipment.

The B/L also can be used to transfer title to the goods toa party named in the document.

Specifics shipment details, such as number of pieces,weight, destination, etc.

Usually three signed originals issued.



NVOCC

• Non-vessel operating common carrier. A firmthat offers the same services as an oceancarrier, but which does not own or operate avessel.

• NVOCCs usually act as consolidators, acceptingsmall shipments (LCL) and consolidating theminto full container loads.

• They then act as a shipper, tendering the

containers to ocean common carriers.• In India, their service is available at ICD• NVOCC has to register with D G shipping



Charterer

• Chartering is an activity within the shipping industry. In some cases a charterer may owncargo and employ a shipbroker to find a ship todeliver the cargo for a certain price, calledfreight rate. Example –Essar Steel

• Freight rates may be on a per-ton basis over acertain route (e.g. for iron ore between Hazira(Gujarat ) or

• alternatively may be expressed in terms of atotal sum - normally in U.S. dollars - per day forthe agreed duration of the charter















voyage chartering

• A voyage charter is the hiring of a vesseland crew for a voyage between a load portand a discharge port. The charterer pays

the vessel owner on a per-ton or lump-sum basis. The owner pays the port costs(excluding stevedoring), fuel costs and

crew costs.

http://en.wikipedia.org/wiki/Lump-sum


http://en.wikipedia.org/wiki/Stevedoring

http://en.wikipedia.org/wiki/Stevedoring






Time chartering

• A time charter is the hiring of a vessel fora specific period of time; the owner stillmanages the vessel but the charterer

selects the ports and directs the vesselwhere to go. The charterer pays for all fuelthe vessel consumes, port charges, and a

daily 'hire' to the owner of the vessel



bareboat charter

• A bareboat charter is an arrangement forthe hiring of a vessel whereby noadministration or technical maintenance is

included as part of the agreement. Thecharterer pays for all operating expenses,including fuel, crew, port expenses and

hull insurance. Usually, the charter period(normally years) ends with the chartererobtaining title (ownership) in the hull

http://en.wikipedia.org/wiki/Bareboat_charter


http://en.wikipedia.org/wiki/Marine_insurance

http://en.wikipedia.org/wiki/Marine_insurance





Ocean freight

• The freight is the remuneration payable for thecarriage of goods in a ship from port of loadingto port of discharge (JNPT to Colombo)

• Freight Pre paid

• Freight paid by the shipper to the carrier whenmerchandise is tendered for shipment. Notrefundable if the merchandise does not arrive atthe intended destination

• Freight Payable at Destination When the ocean freight of a shipment is paid atthe time of delivery at the foreign port.



Types of freight

• Break Bulk

• 1) Lump Sump freight

• 2) Advance freight

• 3) Pro Rata Freight• 4) Dead Freight

• Types of Freight in containerization

• Commodity Box Rate

• FAK –Freight All kinds

• Tariff Rate



Terminal Handling charges

• The terminal handling charges is in naturea component of international containertransport freight. It is a practice in the main

trading countries (regions) that the linercompanies collect terminal handlingcharges at the port of loading from theconsignors and collect terminal handling

charges at the port of discharge from theconsignees. This covers loading unloadingcharges of container



Surcharge

• BAF or Bunker Adjustment Factor - Fuelsurcharge. It reflects changes of price ofoil on the world market. In sea freight

contracts typically changes quarterly.

• CAF-Currency adjustment Factor

• This is related to exchange rate fluctuation

with domestic currency USD V/s INR –

Covering risk



Port Congestion Surcharges

• Shipping line imposing this surchargewhen there is delay to ship in particularport



Thanks

• 20 August 2010• Prof: S.B. Choughule

• [email protected]

mailto:[email protected]

mailto:[email protected]

introduction of logistics & shipping

Documents