A STUDY ON FCL - TOTAL LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD., CHENNAI
PROJECT REPORT
Submitted to the
SCHOOL OF MANAGEMENT
In partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
By
P.LOGANATHAN
(Reg. No: 3511010353)
Under the guidance of
Mrs.R.SHENBAGAVALLI, Asst. Professor
SRM SCHOOL OF MANAGEMENT
SRM UNIVERSITY
KATTANKULATHUR 603 203
MAY 2012
SRM School of Management
SRM University
SRM Nagar, Kattankulathur – 603 203,
Kancheepuram District, Tamil Nadu.
Bonafide certificate Certified that this project report titled “A STUDY ON FCL - TOTAL
LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD., CHENNAI” is the Bonafide work of Mr.P.LOGANATHAN, (Reg. No: 3511010353) who carried
out the research under my supervision. Certified further, that to the best of my knowledge
the work “A STUDY ON FCL - TOTAL LOGISTICS IN POTA GLOBAL
LOGISTICS (INDIA) PVT. LTD., CHENNAI” reported herein does not form part of
any other project report of dissertation on the basis of which a degree or award was
conferred on an earlier occasion on this or any other candidate.
Submitted for the viva-voce examination held on -----------------------
---------------------------- -----------------------------------
Mrs.R.SHENBAGAVALLI Dr.JAYSHREE SURESH
Asst. Professor (Dean, MBA)
(Project Guide)
-----------------------------
External Examiner
SRM School of Management
SRM University
SRM Nagar, Kattankulathur – 603 203,
Kancheepuram District, Tamil Nadu.
DECLARATION
I hereby declare that the project report entitled “A STUDY ON FCL - TOTAL
LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD.,
CHENNAI” submitted to SRM School of Management in partial fulfillment of
the requirement for the award of the Degree of Master of Business Administration, is a
record of the original research work done under the supervision and guidance of
Mrs.R.SHENBAGAVALLI, SRM School of Management, SRM University, Chennai
and that it has not formed the basis for the award of any degree / associate ship /
fellowship of other similar title to any candidate of any university.
Place: Kattankulathur
Date: LOGANATHAN.P
ACKNOWLEDGEMENT
I am conscious of my indebtedness to each and every individual who helped me in
many ways in the preparation of this project.
At the very outset, I wish to express my hearty gratitude to all those who extended
their help, guidance and Suggestion and without their help it was not possible for me to
complete this Project Report.
I express my deposit and sincere thanks to our respected DEAN Mrs.
JAYASHREE SURESH who has given me an opportunity to do this project.
My profound gratitude is also due to Mrs.R.SHENBAGAVALLI, faculty guide
for their valuable guidance and constant encouragement in successful completion of this
project.
I am very much grateful for the co-operation and timely help extended to me by
Mr. G. Vidhu Balan, Manager, – Sales, Mr. Senthil, Manager - Operations in
POTA Global Logistics (India) Pvt. Ltd, Chennai for giving me an opportunity to
undergo this project.
I thank my parents and friends for their love, affection and support which helped
in the successful completion of this work.
A Study on FCL – Total A Study on FCL – Total
Logistics
TABLE OF CONTENTS
S.No Description Page
1 Executive Summary 01
2 Introduction to the Concept 02
3 Industry Profile 06
4 Company Profile 11
5 Objectives 15
6 Operational Definitions 16
7 Role of Shipper 22
8 Role of CHA 23
9 Role of Freight Forwarder/Nvocc 49
10 POTA Global Logistics Departments 52
11 Role of Liner/Common Carrier 78
12 Role of Clearing Agent 83
13 Role of Consignee 83
14 Role of Bank 74
15 INCOTERMS 88
16 Difference Between FCL & LCL 94
17 Data Analysis & Interpretation 95
18 Limitations 101
19 Suggestions 102
20 Conclusion 103
21 Abbreviations 104
22 Bibliography 107
A Study on FCL – Total
Logistics
Executive Summary
In this project the main focus is on FCL (Full Container Load). This study is done in
order to understand the whole process of an FCL export and import process. This study
emphasizes the role of forwarder/NVOCC in the total logistics of FCL shipments.
FCL: Defines the movement of cargo packed by the shipper or shipper’s agent and
unpacked by the consignee or consignee’s agent. In this type of activity, it is not the Liner
/ NVOCC operators’ responsibility for the cargo as long as the ONE TIME SEAL fixed
in the container is intact. This is mainly because the shipper undertakes the movement
of Empty Container to the Factory Premises or to a CFS / ICD and undertakes the
responsibility of all other formalities right from the unloading of cargo till off loading the
container at the CY of the port upon completion of customs and other related formalities.
In this project the flow chart of the FCL is explained with each supply chain parties role
in the movement of cargo from shipper to consignee. Also this study highlights the areas
where the FCL differs from LCL i.e. in terms of the logistical issues faced by the
company in both type of shipments. A complete difference between FCL & LCL in each
step of process is mentioned in this study.
Data analysis of the obtained data from the company is done through statistical
techniques and inferences are drawn from those analysis.
CHAPTER 1
INTRODUCTION TO CONCEPT
What is logistics? “Logistics is managing and controlling the flow of goods, energy, information and people
from source of production to market place at lowest possible cost and in right time”. This
means in our context if we look at it, in an FCL the logistics involved is from where the
container is deployed for the trade and from there the logistics process starts and lasts
until the container is reached at the destination and then returned empty at the desired
place .This also holds good for LCL.
“It involves integration of information, transportation, inventory, warehousing, material
handling, and packaging” .Here information flow between various supply chain parties is
important ,then the transportation decisions that are to be made as per customer needs,
then the inventory management is important from the equipment providers side so that
there is no delay in getting boxes and slots in the carrier . The warehousing part becomes
vital from the forwarders point where many consignments are containerized at
warehouses or CFS’s or ICD’s in landlocked places .Sometimes cargo is stuffed into
container at the shipper’s premises itself. Material handling and packaging are very
important in stuffing a cargo into the container .Proper handling of cargo increases the
safety of cargo adds more space to accommodate more cargo . Also there are customs
and other safety aspects that are to be followed while stuffing the cargo and other
protocols are also there that is to be followed for overseas destinations.
What is supply chain? “Supply chain integrates the key business process from end user through original
suppliers that provides products, services and information that add value for customers”.
Although when we talk about FCL logistics it is nothing but “Export/Import” of goods.
FCL means FULL CONTAINER LOAD of cargo which is destined to a particular
consignee from the shipper. So the supply chain parties mainly involved here (FCL) are
Forwarder, Carrier. But the underlying fact is without the shipper and consignee there is
no trade going to happen so they also are important supply chain parties, then the
transporters, warehouses, customs, CHA and any party involved in the shipment is a
partner and information flow is very important for every partner in supply chain.
What is total logistics? TOTAL LOGISTICS here emphasizes on the FCL shipments and the roles of each
partner in the supply chain with core focus on the activities of a FORWARDER of a
leading company .Also this study highlights some of the differences with LCL shipments
i.e. what are all the process that differs, the marketing, the operation wise etc.
Supply chains involve many groups of trading partners, and logistics is the key
to holding them together. Logistics is defined as the process of planning,
implementing, and controlling the efficient flow and storage of goods and their
related information. As global logistics become more demanding, and as the savings
available through supply chain efficiency become more attractive, the outsourcing of
procurement, distribution, and return logistics has become a common practice.
There are numerous factors that companies take into consideration when outsourcing and
planning their supply chain activities. First, if a firm independently manages its own
logistics, it has to divert attention from its core competencies and strengths. However, if the
firm outsources some functions, such as warehousing, inventory management, or
distribution, it is better equipped to focus on other tasks. It also benefits from having its
goods handled, stored, and delivered professionally.
Second, when entering the market in a new geographic area, it is unlikely that a firm will be
ware of the intricate details of business management within that region. These include local
documentation and procedures that require regional expertise.
For a firm to manage these activities from thousands of miles away would prove extremely
taxing, and would require continuous updates of activities and IT support. Outsourcing
logistics activities gives firms a global reach and helps them take advantage of external
market opportunities immediately.
FLPs can undertake various logistics tasks in the supply chain and in doing so add value to
the product. These tasks usually include the freight forwarder’s traditional customs clearing
and forwarding work, as well as services such as warehousing, distribution, inventory
management, co-packing, labeling, repacking, weighing, and quality control. By providing
these services, the FLP plays an essential role in domestic and international supply chains.
Firms can outsource these tasks to the FLP, saving money and limiting geographic
constrictions. The FLP can benefit the firm by reducing turnaround and transport times.
In order to survive, FLPs must provide value-added services that comprise a significant
portion of the customer’s total logistics costs. Quality, value-added service is based on
consistently providing customers with ever-improving solutions to their supply chain
needs. And supply chain participation is not an option for FLPs—it has become necessary
in an age when there is such limited value in simply facilitating the customs clearance
process. Moving freight between supplier and consumer is not enough. It is entirely
possible that, in some parts of the world, the freight forwarder as we knew him will be
extinct in five to seven years. To survive, the freight forwarder must integrate his services
into the entire supply chain system, making his expertise part of an integrated whole. The
small forwarder who has not yet discovered a way to add value to the supply chain will be
threatened by the entry of other competitors into the market. As major logistics providers,
shipping lines and forwarders merge, fewer and fewer customers need a pure forwarder
whose capacity is limited to clearing and forwarding tasks. While the freight forwarder is
evolving into an FLP who provides value-added services, banks, shipping lines, trucking
companies, terminal operators, and consultants are adding logistics services and freight
forwarding to their lists of services provided. The primitive forwarder will not be able to
compete with these flexible FLPs unless he actively integrates himself into a supply chain.
The difference between a primitive freight forwarder and an FLP is the value added
services they provide.
Industrial Profile
Shipping & Logistics Industry
Shipping
Shipping is a global industry and its prospects are closely tied to the level of economic
activity in the world. A higher level of economic growth would generally lead to higher
demand for industrial raw materials, which in turn will boost imports and exports. The
shipping market is cyclical in nature and freight rates generally tend to be volatile.
� Freight rates and earnings of the shipping companies are primarily a function of
demand and supply in the markets. While demand drivers are a function of trade growth
and geographical balance of trade (which determines the length of haul required), the
supply drivers are a function of new ship building orders as well as scrapping of existing
tonnage.
� The global shipping industry can be broadly classified into wet bulk (like crude and
petroleum products), dry bulk (like iron ore and coal) and liners. Under liners, it has
containers, MPP and Ro-Ro types of vessels. There are various benchmarks that
determine freight rates for these segments. The prominent amongst them are Baltic
Freight Index, Baltic Handymax Index (for dry bulk segment) and World Scale (for
tankers).
Key Points Supply – Determined by the addition to shipping capacity
Demand – Closely related to growth in world wide
Barriers to entry – Highly capital intensive and adequate cash flows required for
funding working capital requirements. Moreover, expertise and technical knowhow are
critical factors.
Bargaining power of suppliers – Diminishing with gradual increase in fleet supply and
intense global competition
Bargaining power of customers – High bargaining power as competition is high in the
industry
Competition – Competition is price based. However, companies with younger fleet
command a premium
Financial year’11 The effects of the downturn in the aftermath of the financial crisis continued to be felt by
the shipping industry in FY11. This was both in the dry bulk and crude carrier segments.
Freight rates remained under pressure as demand took a hit. On an average, while crude
tanker rates declined by 15% by the end of FY11, dry bulk freight rates were almost flat.
The crude and product tanker market experienced its worst period during the first quarter
of FY11 (July to August 2010). On the other hand, the dry bulk segment recovered
somewhat during this period. This was mainly on the back of high unforeseen demand for
stockpiling of dry bulk commodities (like food-grains and metals) from China.
Prospects
• In line with the revised higher estimates of global economic growth and upturn in
global consumption, the shipping freight rates have posted some improvement in the
current year. Anyways, the outcome of the ongoing European crisis as well as impact
of the new-building deliveries would be critical for the future direction of shipping
rates.
• While the European crisis is challenging the sustainability of the global economic
recovery, thereby regenerating demand side concerns, these are overshadowed by a
bigger threat of oversupply for the shipping industry. This looms large in the near
future. Out of the existing order books in all the three segments of dry bulk, crude,
and product tankers, most of the vessels are due for delivery in 2011 and 2012. This
will add to the pressure on freight rates, and would thus impact the profitability of
shipping companies.
• Apart from the Euro zone crisis, another concern for the shipping industry the cooling
down of the Chinese economy, which can regenerate demand-side concerns. This
combined with the supply-side pressures, may just worsen the outlook for the sector.
• The increase in India’s refining capacity and a pick-up in oil exploration activity
globally will benefit the offshore shipping lines as demand for their services picks up.
As a result of the commissioning of large domestic refining capacities, the import of
crude is expected to jump in the future. This would benefit shipping majors.
• Under investment in earlier years, surge in Chinese growth and scrapping of vessels
built in 1970s have all created conditions for a strong market for tankers, barring the
periods of crises. Further, the gap in charter rates between single hull and double hull
vessels is widening as more charterers prefer double hull tonnage and many states
impose restrictions on single hull tonnage. In the coming years as single hull will be
mandatorily required to be phased out, the demand for double bull tonnage will be
strong.
Prospects of growth in the Shipping industry
Marine transport sector contributes over 0.2% to the country’s GDP at constant prices
(1999 - 2000 prices). Transport sector’s contribution to the GDP has been firming up
over the last couple of years, mostly because of the growing economic activities in the
country. Shipping industry plays a significant role in the Indian economy. India has 12
major and 187 minor/intermediate ports along its coastline of around 7,517km. The fleet
strength at the end of December 2006 was 774 vessels with 8.42m Gross Registered
Tonnage (GRT). Ports serve as the gateways to the international trade in India. Major
ports in India together have handled 463.84m tonnes of cargo in 2006-07, a growth of
9.51% against the same period of the previous year. The petroleum-oil-lubricants (POL)
accounted for 33.38% of the total traffic at major ports during April-March 2007, while
iron ore constituted 17.37%, coal 12.98%, container traffic 15.84%, fertilizer 3.04%, and
others 17.49%.
According to the Planning Commission, India’s shipping fleet strength will be increased
up to 15m GRT (as per the 3rd target) by the end of 2011-12, with an estimated
investment of US$17.7 billion. The port throughput will increase up to 1,008m tones,
growing at a CAGR of 10.96% from 2007-08 to 2011-12.
Logistics Logistics is defined as “the process of planning, implementing and controlling the
efficient and effective flow, and storage of goods, services and related information from
the point of origin to the point of consumption for the purpose of conforming to customer
requirements”. The primary objective of logistics management is to effectively and
efficiently move the supply chain so as to extend the desired level of customer service at
the least cost. Thus, logistics management starts with ascertaining customers’ needs till
their fulfilment through product supplies.
Prospects of Growth in the Logistics Industry
In years gone by, the traditional warehousing and logistics facility was located by railroad
tracks, a water port, and/or freeways, usually in the least desirable parts of cities or large
towns. This stereotype then faded as gigantic, state-of-the-art facilities began to sprout in
more rural areas on the outskirts of transportation and population hubs. The World started
beginning to see such facilities showing up in even less "traditional" areas. Modern
warehouses now are being located in carefully manicured industrial parks that are
sprouting as fast as the corn and wheat once did in these open spaces-often in out-of-the-
way places. Why the emphasis on such locations for logistics companies?
Much of it is due to the great flux that the logistics industry has been undergoing in the
first three years of the 21st century. Most of these changes are being driven by a growing
trend in the manufacturing and retail sectors to form partnerships with companies to
which they can outsource non-core logistics competencies-3PL providers.
In turn, 3PL providers are continually looking to provide innovative supply chain
solutions to customers by focusing on value-added capabilities, differentiating themselves
from the competition. They focus on key objectives, such as implementing information
technologies, instituting effective management processes, integrating services and
technologies globally, and delivering comprehensive solutions that create value for 3PL
users and their supply chains. This need to partner with customers and become more
integrated into their supply chain processes has created the ancillary need to locate close
to these customers.
That isn't to say the need for easy access to transportation hubs and different modes of
transportation won't continue to be important. But the above shift in business strategy,
along with the advances in technology and enhanced communication, has opened the
door for logistics facilities to operate effortlessly in a myriad of locations.
Profit warnings, share price pressures, mergers, reorganizations, relocations, disposals,
painful layoffs and great geopolitical uncertainties can sweep away even the most
comprehensive logistics strategies – and that’s despite outstanding management over
many years. These are exceptionally difficult times and it has never been more important
to connect logistics and freight planning to executive board thinking than now. It’s easy
to lose sight of the bigger picture in the rush to cut infrastructure cost and conserve cash.
Hopefully organization succeed in protecting the business, satisfying shareholders and
analysts, but what about capacity and flexibility, morale and momentum?
Own passion for running the race matters most of all in a downturn, when people are
insecure, see only savage cost savings, and loyalty is tested. The corporation’s future will
be dominated by six factors, or faces of a cube, spelling F U T U R E.
COMPANY PROFILE OF POTA GLOBAL LOGISTICS
INDIA PVT. LTD.
POTA GLOBAL LOGISTICS
About Us POTA GLOBAL LOGISTICS is result of synchronization of positive energies between
POTA. Australia and Indian counterparts led by team of professionals who have vast
experiences in running and supporting supply chains of corporations all across the globe.
Across the key members of the management we have over 15 years of experience in all
the spheres of the conceptualizing, executing and sustaining an effective logistics
management system.
Our Vision POTA GLOBAL LOGISTICS INDIA PVT LTD is an enterprise to provide our local
suppliers and overseas buyers a logistics conduit which has nearly zero defects. Our
dedicated presence in origin and destination is a part of our strategy to be in control of the
physical movement goods as well as seamless flow of information. Our commitment to
our customers is to provide the best possible routes, deliveries at most competitive rates
for their inbound and out bound cargo.
Our Presence POTA GLOBAL LOGISTICS INDIA PVT LTD has offices at Chennai, Bangalore,
Mumbai, Cochin, Hyderabad, Tuticorin, Tirupur, Cochin and Coimbatore. Through these
offices we cater to the All India exporter and Importer communities’ requirement of ‘end
to end’ services from various Inland Container Depots (ICD) for FCL, Container Freight
Station (CFS) for LCL cargo and the International Airports for the Air traffic. Through
our JV Partners we are well represented in the Australia. Though the company is young
we already have concrete plans to have offices or representations in all major business
areas of the world.
Services Offered By Us Air Export and Import ( Air Port to Air Port and Door to Door )
Ocean Export and Import ( Sea Port to Sea Port and Door to Door )
Air / Ocean Export and Import
Import and Export Groupage
Export and Import Custom Clearance ( Air and Ocean )
STP Clearance
Our Resources
• Highly trained Manpower who have hands on experience of handling broad spectrum
of commodities for export and Import.
• Own offices, warehouses and intercity transportation facilities
• Highly automated operations based on state of art IT infrastructure and
communication equipments.
• In house capabilities to initiate organize, handle charters or special requirements.
Features of our capabilities in handling cargo through Sea, Air or Road
We offer end to end services and time bound guaranteed Door to Door delivery for your
cargo. The cargo can be transported via Air, Sea or Road.
• We are committed to be at your service 9 AM to 10 PM, Monday to Saturday. In
case of urgent shipments we organize and execute shipments under MOT on all
holidays.
• Guidance on government regulations and requirements on Export and Import
• Preparation of Export and Import documentation and the associated paperwork
inclusive of required certificates and endorsements
• Guidance and execution if required, in case of any special Handling, creation of
Packing containers and site supervision. This is inclusive of stuffing and de-stuffing
at our or customers warehouse, at ports and at dry ports (ICD)
• Providing the ideal carrier, based on the requirements to ensure the cargo reaches
destination on time at the best possible price. Our rates can match the best in the
industry.
• Adequate storage space in form of Insured warehouses having modern amenities to
facilitate measurements, packing and repacking and security to the valuable
merchandise. Transportation arrangement for pickup and delivery round the clock
• Professionals handle the clearance of your documents and goods through the port
authority (air/sea) , customs and finally hand over to the carrier in case of export and
get released in case of Imports
• Well documented procedures for operations which are automated to the extent
possible.
• Reporting through Fax, Email on the Flight and vessel status till shipment reaches
the destination.
• Tracking the cargo from Origin to the destination or vice-versa till it reaches its final
destination and updating all concerned with the current status.
• Delivery of the Post shipment documents to the vendors along with our debit note
for the service rendered.
• A very well managed service at delivery with a choice of Broker and De-
consolidating agent who ensures the last point delivery.
We Believe: The Customer Is Always Right
…………………………………………
Objectives
To study about FCL total logistics
To study about each supply chain partners.
To study exclusively about freight forwarders/ NVOCC’s.
To conduct data analysis
To compare import and export FCL shipments
To highlight FCL & LCL differences.
OPERATIONAL DEFINITIONS Flow chart of the FCL
SHIPPER
CHA
FORWARD
ER/NVOCC BANK INCOTERMS
LINER
CLEARING AGENT
CONSIGNEE
Export An export is any goods or commodities, shipped or otherwise transported out of a
country, province, and town to another part of the world in a legitimate fashion, typically
for use in trade or sale. Export products or services are provided to foreign consumers by
domestic producers.
Export Order Processing
Proforma to buyer
A pro forma invoice is much the same as a commercial invoice which, when used in
international trade, represents the details of an international sale to customs
authorities. A pro forma invoice is presented in the place of a commercial
invoice when there is no sale between the sender and the importer, or if the terms of
the sale between the seller and the buyer are such that a commercial invoice is not
yet available at the time of the international shipment. A pro forma invoice is
required to state the same facts that the commercial invoice would and the content is
prescribed by the governments who are a party to the transaction. This is sent to the
buyer in the first step.
Negotiation/order confirmation
The seller and buyer gets into negotiations for the business transactions and then the
buyer gives order confirmation to the shipper. The negotiations takes place for the
quality of cargo the specifications of cargo, the packing of cargo etc. The
responsibilities of the shipper and consignee are also determined by the
INCOTERMS. International Commercial Terms is a universally recognized set of
definitions of International trade terms, such as FOB, CFR and CIF developed by
the International Chamber of Commerce (ICC) in Paris, France. It defines the trade
contract responsibilities and liabilities between buyer and seller. It is invaluable and
a cost-saving tool. The exporter and the importer need not undergo a lengthy
negotiation about the conditions of each transaction. Once they have agreed on a
commercial term like FOB, they can sell and buy at FOB without discussing who
will be responsible for the freight, cargo insurance and other costs and risks. Under
the INCOTERMS 2000, the international commercial terms are grouped into E, F, C
and D, designated by the first letter of them.
Intimation to factory
After this it is intimated to the factory so that they can get ready for production of
the goods by acquiring raw materials and plan them accordingly for the shipment.
Production
Here the actual production of goods as specified by the buyer. The company should
take care that they produce goods as per the requirements of the buyer or else it may
be rejected by the buyer and also follow standards as required in production and also
in packing of those goods.
Movement of goods
This is where the producer generally assigns a third party to transport those goods to
a warehouse or CFS. After this the goods are then stuffed to a container .But in the
case of LCL the forwarder collects from many shippers and brings them to a
common warehouse or CFS and performs stuffing. This is done by the forwarder at
a specific date of stuffing planning; there is a lack of flexibility in LCL.
Customs processing
All the customs processing are done by the CHA and necessary documents are
prepared by them for shipment.
nk processing Ba
In
The shipper after receiving the B/L does the bank processing to get money from the
buyer. This is generally done through a Letter of Credit transaction.
centive claiming
There are various incentive schemes for exports that are provided by the government
in order to encourage exports and bring foreign revenue and also for the exporters to
be competitive in price in the global trade.
Export-Process flow-at factory-fcl load: Receipt of intimation from production the material readiness
Line choosing- based on transit sensitivity
Intimating cha/transporter to move the box to factory.
Intimating excise the stuffing plan
Loading/inspection/documentation
Sealing of the container.
Cha files the shipping bill parallel
Sealed container go to cfs for customs inspection
Customs inspection is completed and goes to container terminal
Offloading at container terminal
Loading on the feeder vessel
Confirmation on mother vessel loading
Documents to bank
Confirming to customer the eta
Incentive claiming.
IMPORTS Goods, from other countries, that are coming into our country. IMPORT PROCESS
• acement of order Pl
O
M
R
Fi
Fi
First the order is placed by the buyer and here the shipper plans accordingly his
production schedules. These production schedules are determined before in hand
according to the vessel schedules and the buyer’s choice of getting the goods.
• pening of L/c or advance payment
The Importer or the buyer generally opens the letter of credit account at his place and
intimates the shipper and he opens account at his place. Sometimes some buyers
give advance payments to facilitate shippers in their production.
• ovement of goods and intimation by supplier
The goods are transported to the buyer and he is intimated the same.
• eceipt of copy/original documents
Generally the shipper transfers the required documents to the buyer so that he can
take delivery of the cargo at his place. Depending upon the BL type such as
surrendered or seaway bill or released the documents will be sent in original or
copy.
• ling of import general manifest by liners
The liners files the import general manifest which contains all the details of all
containers that are imported or brought into the territory are mentioned. This is also
filed by the forwarders or Nvocc’s who becomes the shipper from the liners
perspective and these forwarders or Nvocc’s help in forwarding the cargo for the
actual shippers and clears the cargo for consignees.
• ling of bill of entry
This is a document that is filed with the customs in order to obtain clearance and
take delivery of cargo. This is done by the CHA.
• ssessment of bill of entry A
Pa
In
Pa
D
This is done by the customs authorities in assessing the duties that are to be paid for
the imported cargo.
• yment of duty
After assessment the amount of duty that is to be paid for the cargo is paid to the
government.
• spection of the material at cfs/port
The customs authorities inspect the inbound cargo whether the cargo is legal and the
cargo is allowed to be imported by the government. They also verify the cargo
details as filed in the bill of entry and IGM.
• ss out order
Pass out order is given by the customs to move the cargo to their factories or
warehouse etc.
• elivery from cfs/port to factory/warehouse
After the pass out order the container is transported out of the CFS to the factory or
warehouse of the buyer or the actual consignee.
ROLE OF SHIPPER Shipper Shipper is one who generally exports the cargo but in shipping this term varies at
different perspectives. Shipper is one who holds the cargo with him. He may either
manufacture the cargo according to the consignee’s needs, or he may also acquire goods
locally from different manufacture and export those products. ROLE OF CHA
CHA (Custom’s House Agent)
A Custom House Agent is somebody entitled to act upon a company’s behalf on actions
involving the import and export of goods. The phrase is most commonly used in India.
There such agents must be licensed under section 146 of the Customs Act.
The purpose of a custom house agent is to tackle the problem that management of many
businesses simply does not have the resources to personally deal with import and export
issues. This is a particular concern given that India is traditionally a trading nation. There
is also a high degree of bureaucracy in Indian business.
The laws governing a custom house agent specifically state that any action they take is
treated legally as if it was made by the company itself. In legal terms, the agent is treated
as if they were the legal owner of the goods they deal with. One exception to this is that a
custom house agent cannot normally be held personally responsible for any duty that is
not paid by the company.
A custom house agent must be licensed by the local Commissioner of Customs. This is a
two stage process, involving an initial temporary license. Application is only open to
university graduates with legal employment status and sound finances.
To be eligible to become a custom house agent, a candidate must have experience
working in customs-related issues. This experience must be at least a set amount of time.
In most cases this is three years, but a commissioner may reduce this to one year if the
candidate makes an acceptable case to do so, in writing.
Once somebody has a temporary license, they have one year to become a regular license
holder. This is done by passing an examination, which is held twice a year. If a candidate
has not passed the examination by the end of their first year, they may be granted a six-
month or one-year extension to allow further attempts. Such extensions are only granted
to candidates who can show they have carried out a set level of work during their time as
a temporary license holder. Candidates are allowed a maximum of three attempts at
passing the examination.
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Export procedure
ROLE OF EXPORTER (ASSISTED BY CHA)
Procedures to be followed by Exporter
Every exporter should take following initial steps:
1. tain BIN (Business Identification Number) from DGFT. It is a PAN based
number
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2. en current account with designated bank for credit of duty drawback claims
3. gister licenses / advance license / DEPB etc. at the customs station, if exports are
under Export Promotion Schemes
Exporter has to submit ‘shipping bill’ for export by sea or air and ‘Bill of Export’ for
export by road. Goods have to be assessed for duty; even if no duty is payable for most
of exports, as ‘Nil Duty’ assessment is also an assessment.
ROLE OF “CHA” IN EXPORT PROCESS:
EXPORT PROCEDURE:
No stoppage of export consignment
Exports are vital for our economy. Any stoppage in export consignment means loss of
export orders to the exporter and loss of foreign exchange to the country. Hence, it has
been provided that movement of export consignment will not be interrupted and no
export consignment shall be withheld for any reason whatsoever. In case of any doubt,
customs authorities may ask for an undertaking that the export is on sole responsibility of
the exporter.
Entry Outward
The vessel should be granted ‘Entry Outward’. Loading can start only after entry outward
is granted under (Section 39) of Customs Act. Steamer Agents can file ‘application for
entry outwards’ 14 days in advance so that intending exporters can start submitting
‘Shipping Bills’. This ensures that formalities are completed as quickly as possible and
loading in ship starts quickly.
Loading with permission
Export goods can be loaded only after Shipping Bill or Bill of Export, duly passed by
Customs Officer is handed over by Exporter to the person-in-charge of conveyance. In
case of baggage and mail bags, shipping bill is not necessary, but permission of Customs
Officer is required (section 40).
Export Manifest
As per section 41, an Export Manifest/Export Report in prescribed form should be
submitted before departure. The report is popularly called as ‘Export General Manifest’
- EGM. The details required are similar to import manifest. Such manifest/report can be
amended or supplemented with permission, if there was no fraudulent intention. Such
report should be declared as true by the person-in-charge signing the export manifest.
This report is not required if the conveyance is carrying only luggage of occupants.
Shipping Bill to be submitted by Exporter
Shipping Bill and Bill of Export Regulations prescribe form of shipping bills. It should
be submitted in quadruplicate. If drawback claim is to be made, one additional copy
should be submitted. There are five forms:
(a) Shipping Bill for export of goods under claim for duty drawback - these should be in
Green color
(b) Shipping Bill for export of dutiable goods - this should be yellow color
(c) Shipping bill for export of duty free goods - it should be white color
(d) Shipping bill for export of duty free goods ex-bond - i.e. from bonded store room - it
should be pink color
(e) Shipping Bill for export under DEPB scheme - Blue color.
The shipping bill form requires details like name of exporter, consignee, Invoice
Number, details of packing, description of goods, quantity, FOB Value etc. Appropriate
form of shipping bill should be used.
Relevant documents i.e. copies of packing list, invoices, export contract, letter of credit
etc. are also to be submitted. In case of excisable goods, from ARE-1 prepared at the
time of clearance from factory should also be submitted.
Customs authorities give serial number to shipping bill, when it is presented.
Excise formalities at the time of Export
If the goods are cleared by manufacturer for export, the goods are accompanied by ARE-
1 (earlier AR-4). This form should be submitted to customs authorities. The Customs
Officer certifies that the goods under this form have indeed been exported. This form has
then to be submitted to Maritime Commissioner for obtaining ‘proof of export’. The
bond executed by Manufacturer-exporter with excise authorities is released only when
‘proof of export’ is accepted by Maritime Commissioner or Assistant Commissioner,
where bond was executed.
Duty drawback formalities
If the exporter intends to claim duty drawback on his exports, he has to follow prescribed
procedures and submit necessary papers. The procedures are discussed in the chapter on
‘Export Incentives'. He has to make endorsement of shipping bill that claim for duty
drawback is being made. If he fails to do so due to genuine reasons, Commissioner of
Customs can grant exemption from this provision. [Provision to rule 12(1) (a) of Duty
Drawback Rules].
G R / SDF / SOFTEX Form under FEMA - Reserve Bank of India has prescribed GR /
SDF form under FEMA. “G R” stands for ‘Guaranteed Receipt’ form, while SDF stands
for 'Statutory Declaration Form’). SDF form is to be used where shipping bills are
processed electronically in customs house, while GR form is used when shipping bills are
processed manually in customs house.
Other documents required for export
Exporter also has to prepare other documents like
(a) Four copies of Commercial Invoice
(b) Four copies of Packing List
(c) Certificate of Origin or pre-shipment inspection where required
(d) Insurance policy
(e) Letter of Credit
(f) Declaration of Value
(g) Excise ARE-1/ARE-2 form as applicable
(h) GR / SDF form prescribed by RBI in duplicate
(i) Letter showing BIN Number.
RCMC certificate from Export Promotion Council
Various Export Promotion Councils have been set up to promote and develop exports.
(E.g. Engineering Export Promotion Council, and Apparel Export Promotion Council,
etc.) Exporter has to become member of the concerned Export Promotion Council and
obtain RCMC - Registration cum membership Certificate.
Check in customs
Document submitted is processed by customs authorities, and following are checked
Value and classification of goods under drawback schedule in case of drawback shipping bills
Export duty / cess if applicable
Advance License shipping bills are checked to ensure that description in invoice and final product specified in Advance License matches. If necessary, samples may be drawn and assessment may be done after visual inspection or testing
Exportability of goods under EXIM policy and other laws - Some exports are totally prohibited under various Acts e.g. items restricted or prohibited under Foreign Trade (Regulation) Act; antiques; art treasures; Arms; narcotics etc. Some items like tea, coffee and coir products can be exported only against authorization/license under respective Acts.
Examination of goods before export
After shipping bill is passed by export department, the goods are presented to shed
appraiser (exports) in dock for examination. Goods will be examined by examiner. This
inspection is necessary (a) to ensure that prohibited goods are not exported (b) goods
tally with description and invoice (c) duty drawback, where applicable, is correctly
claimed.
Let Export Order by Customs Authorities
Customs Officer will verify the contents and after he is satisfied that goods are not
prohibited for exports and that export duty, if applicable is paid, will permit clearance
(Section 51) by giving ‘let ship’ or ‘let export’ order.
GR-1, ARE-1, octroi papers, quota certification for export etc. are also signed. Exporter’s
copy of shipping Bill, GR-1, and ARE-1 etc. duly certified are handed over to exporter or
CHA. Drawback claims papers are also processed.
Processing under EDI system
Under EDI system, declarations in prescribed form are to be filed through ‘Service
Centre’ of customs. After verification, shipping bill number is generated by the system,
which is endorsed on printed checklist generated for verification of data. Goods are
inspected at docks on the basis of printed check list. All documents are submitted to
Customs Officer along with checklist. If goods and documents are found in order, ‘let
export’ order is issued. Then two copies of Shipping Bill are generated – one customs
and other exporter’s copy. Exporter’s copy is generated only after EGM (Export General
Manifest) is submitted by shipping agent. These are signed by CHA and customs officer
and then by Appraiser. SDF, ARE-1, control papers, quota certification for export etc. are
also signed. Exporter’s copy of Shipping Bill, SDF, ARE-1 etc. duly signed are handed
over to exporter or CHA.
Conveyance to leave on written order
The vessel or aircraft which has brought imported goods or which carry export goods
cannot leave that customs station unless a written order is given by Customs Officer.
Such order is given only after (a) export manifest is submitted (b) shipping bills or bills
of export, bills of transshipment etc. are submitted (c) duties on stores consumed are paid
or payment of the same is secured (d) no penalty is leviable (e) export duty, if applicable,
is paid. Such permission is not required if the conveyance is carrying only luggage of
occupants.
Other Customs Procedures
Besides the aforesaid procedures, various other procedures have been prescribed. These
are mainly to be followed by the person in charge of conveyance.
Boat Notes
If the vessel has to unload only a small cargo, it may not spend time in having berth in
the port. If the small cargo is to be sent to shore, it may be loaded in a small boat and sent
to shore. As per section 35, such small boat must be accompanied by a ‘Boat Note’. Boat
Notes Regulations provide that such Boat Notes will be issued by Customs Officer. It
will be maintained in duplicate and should be serially numbered. Boat Note should be in
prescribed form.
In case of export, if small export cargo is to be loaded in ship through small boat, no Boat
Note is required if the cargo is accompanied by the ‘Shipping Bill’, otherwise, Boat Note
is required. Boat Note is also required for transshipment of cargo, i.e. transfer from one
ship to another or for re-shipment.
Transit Goods
Section 53 provide that any goods imported in any conveyance will be allowed to remain
on the conveyance and to be transited without payment of customs duty, to any place out
of India or any customs station. However, all these goods must be mentioned in import
manifest or import report submitted by person in charge of conveyance. Such goods
should not be ‘prohibited goods’ under section 11 of Customs Act. [The conveyance may
be vehicle, ship or aircraft]. After transit, the goods may go to another customs station.
On arrival at customs station, the goods will be liable to customs duty as if it is first
importation in India. - Section 55.
Transshipment of Goods
Goods imported in any customs station can be transshipped without payment of duty, u/s
54 of Customs Act. Transshipment means transfer from one conveyance to another. [The
conveyance may be vehicle, ship or aircraft]. Such transshipment may be to any major
port or airport in India. The goods can be transshipped to any other customs station in
India if customs officer is satisfied that the goods are bona fide intended for
transshipment to any customs station. The facility is available at all customs ports and
Inland Container Depots (ICDs).
Goods to be transshipped must be specified in Import Manifest or Import report and a
‘Bill of Transshipment’ should be submitted to Customs Officer. In case of goods being
transshipped under an international treaty or bilateral agreement between Government of
India and Government of a foreign country, a Declaration of Transshipment shall be
submitted instead of Bill of Transshipment.
Such goods should not be ‘prohibited goods’ under section 11 of Customs Act. The
goods should be sealed during transshipment by customs officer. A bond has to be
executed for the purpose. After execution of bond, a certificate from customs officer has
to be submitted within one month that goods have been properly transferred [Goods
Imported (Conditions of Transshipment) Regulations, 1995]. On arrival at customs
station, they will be liable to customs duty as if it is first importation in India (Section
55).
Transit and Transshipment
Distinction between transit and transshipment is that in 'transit' goods continue to be on
same vessel, while in transshipment, goods are transferred to another vessel / vehicle.
Hence, procedures are also different.
Coastal goods
A coastal goods means goods transported from one port in India to another port in India,
but does not include imported goods. Thus, a coastal goods means, goods taken by ship
from one Indian port to another. No export or import is involved, but control is necessary
to ensure that coastal goods are not diverted illegally for export.
Loading of coastal goods
The Consignor should submit bill of coastal goods to Customs Officer (section 93). Form
of the bill has been prescribed. These will be loaded by master of vessel only after ‘bill of
coastal goods’ is passed (section 93). Master of Vessel will carry an ‘Advice Book’
where entries will be made by Customs Officer. This ‘Advice Book’ has to be presented
for inspection of Customs Officers, if called for. After loading, the vessel can leave only
after obtaining written order from Customs Officer. As per notification No 15/98-NT
dated 27.2.1998, exemption has been granted for delivery of 'Advice Book' at each port
of call. However, the 'Advice Book' will have to be submitted for inspection on board of
vessel, when called for.
Unloading of coastal goods
Unloading of coastal goods should be done only at Customs Port or coastal port
appointed by CBEC under section 7 of Customs Act. On arrival, all bills relating to
goods which are to be unloaded will be delivered to Customs Officer. Unloading can be
done only after obtaining permission from Customs Officer. Customs Officer can inspect
goods and ask for questions and documents relating to goods. Goods will be unloaded at
approved place under supervision of Customs Officer.
ROLE OF CHA IN IMPORT Receiving Documents Usually a job starts with receiving documents from the consignee. The documents
include the following
a) Bill of lading
Shipment of the goods usually evidenced in a document called bill of lading. It is
defined as a receipt for goods shipped on board on ship, signed by the person or his
agent who contracts to carry them, and stating the terms on which the goods were
delivered to and received by the ship.
b) Commercial Invoice
An invoice or bill is a commercial document issued by a seller to the buyer,
indicating the products, quantities, and agreed prices for products or services the
seller has provided the buyer. An invoice indicates the buyer must pay the seller,
according to the payment terms.
Flow chart of import process
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The buyer has a maximum amount of days to pay these goods and are sometimes offered
a discount if paid before.
c) Packing List
Packing list will describes how the cargo is being packed and what contains in a
particular packet.
d) Certificate of Origin
A Certificate of Origin (often abbreviated to CO or COO) is a document used in
international trade. It traditionally states from what country the shipped goods
originate, but "originate" in a CO does not mean the country the goods are shipped
from, but the country where their goods are actually made.
e) Health Certificate
It is generally applicable for consumable goods, chemicals.
Job Number Job number is allocated based on air or sea cargo. The following are required to allocate
job no
1) Flight/Vessel Number
2) ETA (Estimated Time of Arrival)
3) Description of the cargo
4) Invoice Number & date
5) Bill of lading Number & date
6) No. of Packages & weight
7) Description of the cargo
Customs Station
Imported goods are permitted to be unloaded only at specified places. Similarly, goods
can be exported only from specified area. In view of this, definitions of ‘Customs
Station’ are important.
Customs area means all area of Customs Station and includes any area where imported
goods or export goods are ordinarily kept pending clearance by Customs authorities.
Thus, ‘Customs Area’ could include some area even outside the ‘Customs Station’.
Customs Station means
a) Customs port
b) Inland container depot
c) Customs airport and
d) Land customs station.
Section 7 of Customs Act empowers CBEC (Board) to appoint * Customs ports *
Customs airports * Places for inland container depots * Coastal ports. These are
appointed by issuing a notification. Section 8 authorizes Commissioner of Customs to
approve proper places in any customs port, customs airport or costal port for unloading
and loading of goods or for any class of goods and specify the limits of customs area.
Thus, the place (city / town / village etc.) is approved by CBEC, while exact location
within that city / town / village is approved by Commissioner of Customs.
Bill of Entry A bill of entry is a document filed with customs for the purpose of clearance of export or
import cargo. It will have the description of goods which are being imported or
exported. The bill of entry is examined by customs officials to confirm that the contents
of a shipment conform to the law, and to determine which taxes, tariffs, and restrictions
may apply to the shipment. This document must be prepared by the importer or exporter,
with many companies hiring a clerk specifically to handle the process of preparing bills
of entry. A typical bill of entry includes a description of the goods in the shipment,
including details and the quantity of the goods, along with an estimate of their value.
Customs officials reserve the right to inspect the shipment to determine whether or not it
is consistent with the bill of entry, and discrepancies can be grounds for legal
proceedings. Once a bill of entry has been reviewed and the shipment has been inspected,
it can be cleared for sale or transfer. If there is a problem, customs may opt to confiscate
the goods.
Many nations have specific laws about how bills of entry should be formatted and
presented. It is important to have accurate documentation, or goods can be held up in
customs. This can cause an inconvenience in some cases, and spoilage or destruction of
the goods in others; a shipment of fruit, for example, will not hold up through a lengthy
retention by customs while details of the shipment are worked out. Companies keep
copies of their bills of entry on record as part of their financial paperwork; they need to
be able to track the movement of shipments. These forms are also used by customs
officials to track the type of goods being moved over their borders, and in the case of
objects with import and export quotas, to make sure that these quotas are not exceeded.
This paperwork is also used in the preparation of statistics which are designed to shed
light on a nation's economic health and trade balance with other nations.
Types of Bill of Entry
Bills of Entry should be of one of three types. Out of these, two types are for clearance
from customs while third is for clearance from warehouse.
Bill of entry for home consumption
This form, called ‘Bill of Entry for Home Consumption’, is used when the imported
goods are to be cleared on payment of full duty. Home consumption means use within
India. It is white colored and hence often called ‘white bill of entry’.
Bill of entry for warehousing
If the imported goods are not required immediately, importer may like to store the goods
in a warehouse without payment of duty under a bond and then clear from warehouse
when required on payment of duty. This will enable him to defer payment of customs
duty till goods are actually required by him. This Bill of Entry is printed on yellow paper
and often called ‘Yellow Bill of Entry’. It is also called ‘Into Bond Bill of Entry’ as bond
is executed for transfer of goods in warehouse without payment of duty.
Bill of entry for ex-bond clearance
The third type is for Ex-Bond clearance. This is used for clearance from the warehouse
on payment of duty and is printed on green paper. The goods are classified and value is
assessed at the time of clearance from customs port. Thus, value and classification is not
required to be determined in this bill of entry. The columns in this bill of entry are similar
to other bills of entry. However, declaration by importer is not required as the goods are
already assessed.
Rate of duty for clearance from warehouse
It may be noted that rate of duty applicable is as prevalent on date of removal from
warehouse. Thus, if rate has changed after goods are cleared from customs port, customs
duty as assessed on yellow bill of entry and as paid on green bill of entry will not be
same.
IGM
IGM stands for Import General Manifest, is the declaration to be filed by the shipping
lines with the designated officer of Customs. Every ship which enters Indian waters with
the intention of discharging cargo is statutorily bound to deliver this document under
section 30 of the Customs Act. Person in charge of the vessel is required to file this
document declaring the truthfulness of contents within 24 hours of the arrival of the
vessel. IGM contains the application for entry inward along with the general declaration,
cargo declaration and ship stores declaration of particular goods to be unloaded from the
cargo.
The import manifest in case of vessel or aircraft is required to be submitted prior to
arrival of a vessel or aircraft. Import report (in case of vehicle) has to be submitted
within 12 hours of arrival at the customs station. If the report / manifest could not be
submitted within prescribed time, person-in-charge or any person specified as
responsible by a notification is liable to penalty up to Rs 50,000. Such penalty will not be
imposed if the excise officer is satisfied that there was sufficient cause for the delay
[Section 30(1)].
IGM can be submitted electronically through EDI facility. Normally, the Agents submit
the Import Manifest before arrival, so that maximum possible formalities are completed
before vessel or aircraft arrives. This also enables importers to file ‘Bill of Entry’ in
advance.
Grant of Entry Inwards by Customs Officer
Unloading of cargo can start only after Customs Officer grants ‘Entry Inwards’. Such
entry inwards can be granted only when berthing accommodation is granted to a vessel.
If there is heavy congestion at port, shipping berth may not be available and in such case,
‘Entry Inwards’ cannot be granted. This date is highly relevant for determining rate of
customs duty applicable.
Mention of BIN on Bill of Entry
A BIN (Business Identification Number) is allotted to each importer and exporter w.e.f.
1.4.2001. It is a 15 digit code based on PAN of Income Tax (PAN is a 10 digit code).
[Earlier an IEC (Import Export code) number issued by DGFT was required to be
mentioned on Bill of Entry].
Filing of Bill of Entry
Normally, Bill of Entry is filed by CHA on behalf of the importer. Customs work at some
ports has been computerized. In that case, the Bill of Entry has to be filed electronically,
i.e. through Customs EDI system through computerization of work. Procedure for the
same has been prescribed vides Bill of Entry (Electronic Declaration) Regulations, 1995.
Documents to be submitted by Importer
Documents required by customs authorities are required to be submitted to enable them
to
a) Check the goods
b) Decide value and classification of goods and
c) To ensure that the import is legally permitted.
The documents that are essentially required are
(i) Invoice
(ii) Packing List
(iii) Bill of Lading / Delivery Order
(iv) GATT declaration form duly filled in
(v) Importers / CHAs declaration duly signed
(vi) Import License or attested photocopy when clearance is under license
(vii) Letter of Credit / Bank Draft wherever necessary
(viii) Insurance memo or insurance policy
(ix) Industrial License if required
(x) Certificate of country of origin, if preferential rate is claimed
(xi) Technical literature.
(xii) Test report in case of chemicals
(xiii) Advance License / DEPB in original, where applicable
(xiv) Split up of value of spares, components and machinery
(xv) No commission declaration.
A declaration in prescribed form about correctness of information should be submitted.
Electronic submission under EDI system
Where EDI system is implemented, formal submission of Bill of Entry is not required, as
it is generated in computer system. Importer should submit declaration in electronic
format to ‘Service Centre’. A signed paper copy of declaration for non-reputability
should be submitted. Bill of Entry number is generated by system which is endorsed on
printed check list. Original documents are to be submitted only at the stage of
examination.
Delivery Order (D/O)
In the mean course of time, a document which is necessary to take the delivery of the
cargo from CFS, Warehouse or from the yard which is D/O. D/O is the abbreviation for
the term Delivery Order. A delivery Order is a document from a consignor, a shipper, or
an owner of freight which orders the release of the transportation of cargo to another
party. Usually the written order permits the direct delivery of goods to a warehouseman,
carrier or other person who in the course of their ordinary business issues warehouse
receipts or bills of lading.
According to the Uniform Commercial Code (UCC) a delivery order refers to an "order
given by an owner of goods to a person in possession of them (the carrier or
warehouseman) directing that person to deliver the goods to a person named in the
order."
A Delivery Order which is used for the import of cargo should not to be confused with
delivery instructions. Delivery Instructions provides "specific information to the inland
carrier concerning the arrangement made by the forwarder to deliver the merchandise to
the particular pier or steamship line."
Assessment of Duty and Clearance
The documents submitted by importer are checked and assessed by Customs authorities
and then goods are cleared. Section 2(2) defines ‘assessment’ as follows – ‘Assessment’
includes provisional assessment, reassessment and any order of assessment in which the
duty assessed is Nil. Thus, ‘assessment’ includes ‘Nil’ assessment.
Enrolling Bill of Entry –
Bill of Entry submitted by importer or Customs House Agent is cross-checked with
‘Import Manifest’ submitted by person in charge of vessel / carrier. It is noted if the
description tallies. ‘Noting’ really means taking down the record by customs officer. This
date is relevant for determining rate of customs duty. Serial number is given in the import
section. Otherwise, it is returned for clarifications. In case of EDI system, noting is done
by the system itself which also generates bill of entry number.
Date of presentation of bill of entry is highly relevant and the rate of duty as applicable
on this date will be considered for calculating the duty payable. Bill of Entry is accepted
only after proper scrutiny viz., import manifest and various declarations given in bill of
entry and attached documents like invoice, bill of lading etc. If such documents are not
attached, the authorities can refuse to accept the Bill of Entry, and hence submission of
such incomplete Bill of Entry cannot be taken as date of presentation of Bill of Entry
Prior Entry of Bill of Entry
After the goods are unloaded, these have to be cleared within stipulated time - usually
three working days. If these are not so removed, demurrage is charged by port
trust/airport authorities, which is very high. Hence, importer wants to complete as many
formalities as possible before ship arrives. Proviso to Section 46(3) of Customs Act
allows importer to present bill of entry up to 30 days before expected date of arrival of
vessel. In such case, duty will be payable at the rate applicable on the date on which
‘Entry Inward’ is granted to vessel and not the date of presentation of Bill of Entry, but
rate of exchange will be as prevalent on date of submission of bill of entry.
Assessment of Customs duty
Section 17 provides that assessment of goods will be made after Bill of Entry is filed.
Date stamp of receipt is put on the ‘Bill of Entry’ and then it is sent to appraising
department either manually or electronically. There are various Appraising groups for
different Chapter headings. Each group is under an Assistant/Deputy Commissioner.
Group consists of ‘Examiners’ and ‘Appraisers’.
Appraising the goods
Appraiser has to
a. Correctly classify the goods
b. decide the Value for purpose of Customs duty
c. Find out rate of duty applicable as per any exemption notification and
d. Verify that goods are not imported in violation of any law.
He can call for any further documents that may be required for assessment. If he is of the
opinion that goods have to be examined for appraisal, he will issue an examination order,
usually on the reverse of Bill of Entry. If such order is issued, the Bill of Entry is
presented to appraising staff at docks / air cargo complexes, where the goods are
examined in presence of importer’s representative. Assessment is finalized after getting
the report of examination.
Valuation of goods
As per rule 10 of Customs Valuation Rules, the importer has to file declaration about full
'value' of goods. If the assessing officer has doubts about the truth and accuracy of 'value'
as declared, he can ask importer to submit further information, details and documents. If
the doubt persists, the assessing officer can reject the value declared by importer [Rule
10A (1) of Customs Valuation Rules]. If the importer requests the assessing officer has to
clarify the doubts in the value declared by importer [Rule 10A (2)]. If the value declared
by importer is rejected, the assessing officer can value imported goods on other basis e.g.
value of identical goods, value of similar goods etc. as provided in Customs Valuation
Rules. [This amendment has been made w.e.f. 19.2.98, as per WTO agreement.
However, it has been held that burden of proof of under valuation is on department].
Assessing Officer should not arbitrarily reject the declared value and increase the
assessable value. He should follow due process of law and issue appealable order.
Approval of assessment
The assessment has to be approved by Assistant Commissioner, if the value is more than
Rs one lakh. (In cases covered under ‘fast track clearance for imports’, appraiser is also
authorized to approve valuation). After the approval, duty payable is typed by a “pin-
point typewriter” so that it cannot be tampered with. Assessing Officer should sign in full
in Bill of Entry followed by his name, preferably by rubber stamp.
EDI assessment
In the EDI system, the cargo declaration is transferred to assessing officer in the groups
electronically. Processing is done on the screen itself. All calculations are done by the
system itself. If assessing officer needs clarification, he can raise a query. The query is
printed at service centre and importer replies through service centre. Facility of tele-
enquiry about status of documents is provided in major customs stations. Under EDI,
normally, documents are inspected only after assessment. After assessment, copy of Bill
of Entry is printed at service centre. Final Bill of Entry is printed only after ‘Out of
Charge’ order is given by customs officer.
Amendment to Documents
Importer, exporter or ‘Person In charge’ has to submit various documents to customs
authorities like Bill of Entry, Import Manifest, Export Manifest etc. Sometimes, it may
become necessary to amend the document due to various reasons like change in
classification, clerical mistake in document, change in unloading / loading plan of vessel
etc. In such case, permission to amend these documents has to be obtained from customs
authorities [Section 149]. Such permission can be given if there are no fraudulent
intentions.
In case of bill of entry, shipping bill or bill of export, it can be amended after clearance
only on the basis of documentary evidence which was in existence at the time the goods
were cleared, warehoused or exported, and not on basis of any subsequent document.
Payment of customs duty
After assessment of duty, necessary duty is paid. Regular importers and Custom House
Agents keep current account with Customs department. The duty can be debited to such
current account, or it can be paid in cash/DD through TR-6 challan in designated banks
After payment of duty, if goods were already examined, delivery of goods can be taken
from custodians (port trust) after paying their dues. If goods were not examined before
assessment, these have to be submitted for examination in import shed to the examining
staff. After shed appraiser gives ‘out of charge’ order, delivery of goods can be taken
from custodian.
First and second system of assessment
There are two systems of assessment. Section 17(2) provides for assessment after
examination of goods and section 17(4) provides for assessment on basis of documents,
followed by inspection and testing of goods.
“First appraisement system” or 'first check procedure' is followed if the appraiser is not
able to make assessment on the basis of documents submitted and deems that inspection
is necessary. Goods are examined first and then these are assessed. This method is
followed only if assessment is not possible on basis of documents. The importer himself
may also request 'first check procedure', if he cannot give all required details regarding
description / value of goods. He has to make request for first check examination at the
time of filing of Bill of Entry or at data entry stage in case of EDI. He has to give reason
for seeking first appraisement. The examination order is recorded on Bill of Entry and
then returned to importer / CHA. It is then presented to import shed for examination. The
shed appraiser / Dock examiner examines the goods as per examination order and records
his findings. If samples are required, they are taken out. In case of EDI system, the report
of examination is given in the computer itself. The goods are then assessed to duty by
appraiser.
In “Second Appraisement System” or 'second check procedure', which is normally
followed, assessment is done on basis of documents and then goods are examined. Such
examination is not mandatory. It is done on selective basis on the basis of ‘risk
assessment’ or specific intelligence report. Section 17(4) of Customs Act specifically
provides that if initially assessment is done on basis of documents, re-assessment can be
done after examination or testing of goods or otherwise, if it is found subsequent to
examination or testing or otherwise, that any statement made on Bill of Entry or any
information supplied is not true in respect of matter relevant to assessment of duty.
First appraisement is generally carried out in following cases
If complete documents are not submitted
Goods are to be tested for correct classification
Goods are re-imported
Goods are damaged or deteriorated and abatement is claimed
Goods are abandoned and remission of duty is applied for
When goods are provisionally assessed
When importer himself requests for examination of goods before payment of duty.
Examination of goods
Examiners carry out physical examination and quantitative checking like weighing,
measuring etc. Selected packages are opened and examined on sample basis in ‘Customs
Examination Yard’. Examination report is prepared by the examiner.
Accelerated Clearance of Imports and Exports Scheme (ACS)
Finance Minister, in his budget speech on 28-2-2003, had announced a ‘self assessment
scheme’ for importers and exporters. As per the scheme, importer will himself determine
classification of goods including claim for exemption benefits. Computer System will
calculate the duty based on his declaration. Physical inspection of imported goods will be
done by risk-assessment and management techniques on a computer based system and
not on the orders of customs examining staff. Audit of import documents will not be by
existing system of concurrent audit but will be done by post-clearance audit, as prevalent
in developed countries.
The scheme is announced through administrative instructions, without making any
change in statutory provisions. Hence, the scheme is not same as ‘self removal’ under
Central Excise. Presently, the scheme is introduced on trial basis at Air Customs, Sahar
(Mumbai), ICD, New Delhi and Chennai Sea Customs.
In case of imports, the scheme will be open to all status holders under EXIM policy,
Central and State Government PSUs and other importers who have been importing for at
least two years and have filed at least 25 Bills of Entry in preceding year. In case of
exports, the scheme will be open to all status holders under EXIM policy,
EOU/STP/EHTP units whose goods have been sealed in presence of customs/excise
officers, Central and State Government PSUs, manufacturer-exporters who have been
exporting for at least two years and have filed at least 25 Shipping Bills in preceding year
and bulk exporters. - - Certain sensitive items have been excluded from the provisions.
Importer/exporter intending to avail this facility has to make application to
Commissioner. The clearances will be subject to post clearance audit.
Provisional Assessment
Section 18 of Customs Act, 1962 provide that provisional assessment can be done in
following cases
When Customs Officer is satisfied that importer or exporter is unable to produce
document or furnish information required for assessment
It is deemed necessary to carry out chemical or other tests of goods
When importer/exporter has produced all documents, but Customs Officer still deems
it necessary to make further enquiry.
In such cases, assessment is done on provisional basis. The importer/exporter has to
furnish guarantee/security as required by Customs Officer for payment of difference if
any. Goods can be cleared after payment of duty provisionally assessed and after
providing the security. After final assessment, difference is paid by importer or refunded
to him as the case may be. If the imported goods were warehoused after provisional
assessment, the Customs Officer may require importer to execute a bond for twice the
difference in duty, if duty finally assessed is higher [section 18(2) (a)]. The bond is
called as 'P D Bond' (Provisional Duty Bond). The bond is with security or surety. Bank
guarantee can also be given as a security.
Checking of duty drawback / license documents
Documents in respect of Duty Entitlement Pass Book (DEPB), advance license, duty
drawback etc. will be checked.
Execution of bond and payment of duty
Once the duty is assessed, the bill of entry is returned to importer. The Bill of Entry
should be presented to competent for calculation and pinpointing of the duty. If bond has
to be executed, it will be taken in bond section.
Payment of duty
If goods are to be removed to a warehouse, duty payment is not required. The goods can
be taken to a warehouse under bond, without payment of duty. However, if goods are to
be removed for home consumption, payment of customs duty is required. CHA or the
importer can take it for payment of customs duty. Large importers and CHA have P.D.
accounts with customs. Duty can be paid either in cash or through P.D. account. P. D.
account means provisional duty account. This is a current account, similar to PLA in
central excise. The importer or CHA pays lump sum amount in the account and gets
credit on the amount paid. He can pay customs duty by debiting the amount in P.D.
(Provisional Duty) account. If the importer does not have an account, he can pay duty by
cash using TR-6 challan. Of course, payment through PD account is very convenient and
quick.
The duty should be paid within five working days (i.e. within five days excluding
holidays) after the ‘Bill of Entry’ is returned to the importer for payment of duty [Section
47(2)].
Interest for late payment
If duty is not paid within 5 working days as aforesaid, interest is payable. Such interest
can be in between 10% to 36% as may be notified by Central Government. [Section
47(2) of Customs Act, 1962]Interest rate is 15% w.e.f. 13-5-2002. [Notification No.
28/2002-Cus (NT) dated 13-5-2002] Earlier, interest rate was 24% p.a, w.e.f. 1-3-2000,
as per notification No. 34/2000-Cus (NT)].
Disposal if goods are not cleared within 30 days
As per section 48 of Customs Act, goods must be cleared within 30 days after unloading.
Customs Officer can grant extension. Otherwise, goods can be sold after giving notice to
importer. However, animals, perishable goods and hazardous goods can be sold any time
- even before 30 days. Arms & ammunition can be sold only with permission of Central
Government.
Out of Customs Charge Order
After goods are examined, it is verified that import is not prohibited and after customs
duty is paid, Customs Officer will issue ‘Out of Customs Charge’ order under section 47.
Goods can be cleared from customs area only on receipt of such order. This is an
‘adjudicating order’ within the meaning of Customs Act, even if it is passed by Appraiser
and not by Assistant Commissioner.
Demurrage if goods not cleared
Heavy demurrage is payable if goods are not cleared from port within free days.
Relevant Date for Rate and Valuation of Customs Duty –
Section 15 of Customs Act prescribes that rate of duty and tariff valuation applicable to
imported goods shall be the rate and valuation in force at one of the following dates.
a) If the goods are entered for home consumption, the date on which bill of entry is
presented
b) In case of warehoused goods, when Bill of Entry for home consumption is presented
u/s 68 for clearance from warehouse and
c) In other cases, date of payment of duty.
Concept of territorial waters not relevant
It may be noted that concept of date of entering into territorial waters’ is not relevant for
purposes of determination of rate of customs duty.
Billing & Payment
After all the formalities with the customs are done & the cargo is being delivered to the
customer, then it is the final stage of the import process. A proper billing with all
expenses incurred has to be sent to the customer and the customer will cross check and
will make the payment. With this the process of import clearance is over.
ROLE OF A FREIGHT FORWARDER/NVOCC Freight Forwarders
A freight forwarder, forwarder, or forwarding agent is a person or company that
organizes shipments for individuals or other companies and may also act as a carrier. A
forwarder is often not active as a carrier and acts only as an agent, in other words as a
third-party (non-asset-based) logistics provider that dispatches shipments via asset-based
carriers and that books or otherwise arranges space for these shipments. Carrier types
include ships, airplanes, trucks, and railroads.
Freight forwarders typically arrange cargo movement to an international destination.
Also referred to as international freight forwarders, they have the expertise that allows
them to prepare and process the documentation and perform related activities pertaining
to international shipments. Some of the typical information reviewed by a freight
forwarder is the commercial invoice, shipper's export declaration, bill of lading and other
documents required by the carrier or country of export, import, or transshipment. Much
of this information is now processed in a paperless environment.
NVOCC–NON VESSEL OPERATING/OWING CONTAINER
CARRIER
As the name indicates, NVOCC operators do not own a vessel. Their function is that of
principal to the shipper and they ultimately become the customer for a Liner who carries
their box. Few of them may have own containers and they will be issuing their own Bill
of Lading and they will be having a wide network in the sector they operate.
They issue their House Bill of Lading to the Shippers and them upon handing over the
container to the Liner, get Liner Bill of Lading. This Original Bill of Lading will be
forwarded to the counter party of the NVOCC operator at the destination end and they
surrender this to the Liner.
Alternatively, to avoid the delay in sending the original document to the destination end,
the same will be surrendered at the load port Liner / agents office itself. The Liner /
Agent at the load port will send an electronic message to the discharge port about the
surrendering of original bill of lading at the load port and to release the delivery order
based on the endorsement of the freight forwarder / NVOCC operator itself.
NVOCC Operators issue House-to-House Bill of Lading or Combined Transport
Document to the shipper since they undertake the movement from the Shippers ware
house and taking the responsibility of reaching the cargo till the buyer’s warehouse. It is
not the same pattern of working for all the operators but in the present days, the amount
of significance given to Logistics Providers are of immense importance and this type of
functioning is gaining greater acceptance among the shippers as well as buyers since the
entire activity is under single point control.
Few other operators’ just function as freight forwarders and their role of play are limited
to the extent of contacting the shippers and booking the cargo through a particular
Liner. They will have a contracted freight charges with the Liner and depending upon
their strength to offer volume of business to a particular line and to a particular sector,
they enjoy good discounts on the tariff. When they get the rates based on a committed
volume, they hunt around shippers and they book the cargo through them to a Liner
wherein they have a better freight charges. The difference in booking the price would be
their profit i.e., the difference between the buying rate and the selling rate to the
customer. In this case, the bill of lading will directly be given to the customer from the
Liner office and there is no involvement of house bill of lading and the related
surrendering formalities at the destination counter.
Freight Forwarding
Introduction Freight Forwarding is a vital part of international trade activity. The company will face
many difficulties if it does not take into account how the goods will be delivered to the
market. The issue of freight forwarding must be considered at an early stage of the
development of the export marketing plan as it raises several concerns that need to be
addressed quickly. Not only does the exporter need to understand which INCOTERMS
to stipulate and work to, but the method of transport also needs to be considered (see
road, rail, sea, air). Packaging is also another factor that needs to be considered, as is
insurance. Much of the hassle can be taken out of the exporter’s hands by using an
effective freight forwarder, but as with any supplier care needs to be taken to ensure that
the supplier meets the needs of the organization.
Selecting a Freight Forwarder
There are certain criteria to take into consideration when selecting a freight forwarder to
undertake export transportation. Keeping costs down will always be one of the most
important criteria for any exporting company, so it is important to approach more than
one forwarder in the first instance to ascertain the best price. Rates between forwarders
always vary because some forwarders specialize in some destinations but not others, so
their rates for those areas will invariably be better. Always attempt to find out whether
the service to the destination you require is the forwarder’s own service, or whether they
will subcontract the work to another forwarder – subcontracted work will usually be
more expensive.
Services Provided by a Freight Forwarder Traditionally, the role of the freight forwarder was simply to undertake transportation on
behalf of exporting companies. However, they must now provide a whole range of
additional services to keep up with the competition.
1. Export transportation This is still the key role for most freight forwarders
2. Export Documentation Advice Forwarders are constantly dealing with export transportation so it is vital for them to
keep up to date with documentation requirements for the countries with which
they do business. It will be within their own interest to convey any knowledge and advice
to existing and potential exporters, so they may obtain the business when transportation
is required.
3. Storage Many forwarders now have their own depots and warehouses as well as offices, and are
willing to store goods for exporters for a number of reasons. These may include exporters
wanting goods out of their own premises to make room for more stock, but not wanting
to actually export the goods yet, so they may use the forwarder’s warehouse.
4. Order Picking Some companies, such as mail order companies, may store a large quantity of goods with
forwarders, which may be broken down and consolidated into orders as and when they
are processed at the company’s premises.
POTA Global Logistics Departments:
ORGANIZATION STRUCTURE
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Customer service Department
Regularly communicating to the customers and keeping them posted of the present trends
and the available schedules and the expected changes enabling the customer to plan for
their activity. There is no end to list out few activities to cover under the customer
service. It depends upon the expected level of the customer and the affordable limit of
the Service Provider. The customer service dept is a co-ordination of all other
departments where any job related in communicating to the customer or liaising with the
customers for any details or queries or issues are handled by this dept. this dept works as
the front end of the company.
Customer enquiry
The customer enquires about the rates and charges that are applicable for the shipment.
The customer also gives the details of the cargo such as the no. of packages, type of
cargo, weight, dimensions etc. this helps the company to provide details on the no. of teus
required and type of container for the shipment. In case of LCL the cbm, stowing details
are necessary to the company.
Vessel schedule & Routing The customer service department responds to the enquiry by sending the vessel schedules
such as the ETA, ETD for the POL and POD .They also provide the routings for the
shipments, because it may differ from liner to liner .The transit time also will differ from
liner to liner, the transshipment port may also differ and rates also. So the customer
service department also gives Transshipment Advices , Wherever the liner shipping
companies are offering service between long distanced ports, other than the companies
that operate direct vessels, essentially there will be a trans shipment of container before it
reaching the final destination through a transshipment port. The transshipment advice
provided by the forwarder will help the exporter/importer .These information are obtained
by the department either from the liner or from his agent.
Customer confirmation Based on information provided by the customer service dept the shipper decides on the
shipment of cargo. He conforms to the customer service on the date of shipment,
particular vessel etc. A basic job no. allocation is done by the dept with details such as
type of cargo, weight, packages, POL, POD etc.
Stuffing confirmation When the cargo is moved to the cfs, the cargo is then stuffed to the container with the help
of labor and machinery. Then the staff at cfs sends a report to the company on confirming
the stuffing, and then that report is forwarded to the customer by the customer service
dept. at times the cargo may be stuffed in containers at the factory premises too. The
shipper may have their own godown to stuff in containers and these godown are
authorized by customs and central excise .but in LCL all cargo are moved to cfs and
stuffing is done by the company only. This is a report send with details such as vessel
name, voyage no., and container no, shipping bill no., POL & POD.
Tracking The customer service dept keeps a continuous tracking of the shipment and send due
confirmations for the same at once to the customers. The customer service dept sends
confirmations for stuffed containers, then the confirmation for onboard confirmation for
container that is placed on vessel, then confirmations on transshipment point, then the
arrival of container at the POD. The customer service dept also gives details to the
customers when they request for particular information about the cargo or container. The
department gives the Shipment Status Information with any one of the available
information like container number, bill of lading number; the shipment status can be
viewed from the website of the liner shipping company. The importer/ consignee agent
also can get the information about their shipment sitting in their place at any point of time.
ADVICE ON CARGO ARRIVAL
Though sending of cargo arrival notice to the consignee or importer or any notify party
as mentioned in the bill of lading is not legally required to be issued by the
forwarder/NVOCC; but in practice most of the them are following the pattern of sending
the cargo arrival notice to the party mentioned in the bill of lading as a value added
service. Many customers act upon receipt of cargo arrival notice. When the shipment
takes place between two ports where the transit time is very less, getting the documents
through the banking channel and having the follow-up with the office to get the
information takes a lot of time and this may result in a delay in clearing the consignment.
To avoid such delay because of not knowing the arrival details and to provide the
customer with timely information on arrival of cargo at the port of destination, such
cargo arrival notice is sent.
Pod status & D/O The customer service dept sends information about the arrival of cargo in the port of
destination. They also send remainder to the shippers about the containers that are not
taken for delivery by the consignee. If d/o is issued for delivery to the consignee’s that
information is also forwarded to the shipper.
OPERATIONS DEPARTMENT
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POTA booking First initially the customer makes a booking to the POTA. This is done by creating a job
with the details that are given by the customer. A job no. is allocated for that particular
s only used for all future transactions and references.
f cargo dimensions, type, packages the agent makes a booking to
tting boxes from the liner of the required
ntioned in the container release order or they
er terminal.
porter may be owned by the forwarder/NVOCC or it may be outsourced
pecified place for stuffing. There
rder.
of shipping bill which is filed for export is forwarded to liner/NVOCC for filing
shipment. This job i
Liner booking Then with the details o
liner for the container.
Requesting Plot Permission Once the liner booking is made the liner issues the booking no to the agent with this the
agent requests for plot permission i.e., for ge
type, size and specification.
Getting Confirmation from Liner The liner then gives the Container Release order is like a confirmation receipt for moving
the empty container from the plot to the CFS/Warehouse/any placed required by the
shipper. Generally container numbers are me
are allotted at the empty contain
Handover to transporter The obtained document from the liner is forwarded to the transporter to move the
container from the empty plot to the specified place by the agent. The transporter may be
an in-house trans
to a third party.
Get Empty Container The transporter will move the empty container to the s
the stuffing is undertaken by the transporter/forwa
Submit SB to the Liner for EGM filing A copy
EGM.
Obtain FORM 13 from liner This is a document that is given by the liner so that the container after clearance for
export in the CFS/factory/warehouse can be moved to the terminal of port premises. The
document is issued only before the arrival of vessel that is bound to take the cargo. The
liner in this document mentions the gate opening date and timings and gate cutoff date
and timings. All the containers should be brought within this period. The containers can
ervice request) from the liner.
er they send a confirmation on the same to the customers
ders or nvocc’s.
ich several house bill of
ed to actual shippers by the forwarders/nvocc’s.
e Captain or the agent of the shipping line upon loading
the cargo / container on the ship.
e to issue a document called Bill of Lading to their
d agents.
oving Container to CFS
and transferred on wheels to another vehicle or it is moved to the factory for d-
stuffing.
also be brought after this time through SSR (special s
Check whether container placed on board Once the containers are brought inside terminal the line takes care of placing it onboard.
The liner once places the contain
such as forwar
Obtain BL The bill of lading is issued by the liner once the vessel has sailed. The bill of lading
issued by the liner is termed as master bill of lading with wh
ladings are issu
Obtain MR
Upon verification of the export order given by the customs authorities a document called
Mate Receipt will be signed by th
The bill of lading will generally be released by the shipping companies, upon exchange
of the Mate Receipt produced by the shipper or his agent. After having loaded the
container in their ship, they will hav
Exporters or their authorize
Inbound Operations
M After the IGM is filed by the documentations department and vessel arrives to port, the
containers are unloaded from the vessel and it is moved to container yard inside the port.
After this the container is moved to the desired CFS for clearance of cargo. The clearance
of cargo is handed over to the CHA. After the clearance the cargo is d-stuffed either in
CFS itself
Follow Up On Empty Container Timely follow-up should be made with the customers for delivering empty containers in
the respective yard.
Documentation This team is responsible for obtaining the information about the cargo that is shipped by
the exporter as this is required by the Customs & Port Authorities and other regulatory
bodies apart from the shipper and the consignee as per their business transaction. The
information is shared with the destination agent and relay ports in order to facilitate
reporting to the Customs and Port Authorities in the country of importation.
B/L Department Stuffing report from CFS/Warehouse
Stuffing confirmation report to customers
Preparation of draft B/L
Preparation of original B/L
Stuffing report from CFS/Warehouse
After the cargo is moved in to the CFS it is being stuffed in to the container. Before
stuffing, the actual measurements of the cargo are being surveyed by a firm which is
authorized by the government. The operations staff of the company fills all those
particulars related to cargo, CHA, container no., destination in a pre defined form and the
same is sent to the B/L department.
Stuffing Confirmation report to customers
The B/L Department updates all the information in Ifact software to the corresponding
job no previously assigned by the customer service department. With this updating the
customer service department sends the stuffing confirmation report to the customer.
Preparation of Draft B/L
The B/L department requests the customer to send a draft B/L of the B/L particulars.
With these particulars the B/L department prepares a B/L and sends back to customer for
verification and authorization by the customer. If the customer finds any discrepancies,
they edit and send the corrected B/L to the B/L department.
Preparation of Original B/L The customer while sending the final draft B/L to the B/L department they also send a
confirmation message upon which the original B/L is prepared. Three copies of original
B/L is generally issued.
Obtaining original B/L from Liner
Based on the final draft obtained from the customers, the B/L department forwards the
same to the liner. The liner again asks for a confirmation from the company for the above
mentioned details to issue the master B/L.
Preparation of EGM export general Manifest
It is the process to file such a document with the Local Customs Authorities giving
details of the shipment effected i.e., the details of cargo carried by them from the local
Port to another. This document contains details of all the containers that are due to be
carried by the carrier. Here since the forwarder takes the responsibility of a carrier they
file this document and also the Liner also will file the document to the customs that is
obtained from various NVOCC’s or forwarders.
Releasing Bill Of Lading The releasing of Bill of Lading to the customer is an important function. The Bill of
Lading has got three important functions:
1. It is a title document
2. It is an evidence of contract of carriage
3. It is a receipt for having received the goods
Bill of lading is an important document that transfers the title of goods from the seller to
the buyer and hence enough care and caution need to be exercised before releasing such a
document by the shipping company. `
It has to be ensured that the customs authorities have authorized the cargo / container to
move out of the port through proper endorsement in the shipping bill and other relevant
documents.
Upon verification of the export order given by the customs authorities a document called
Mate Receipt will be signed by the Captain or the agent of the shipping line upon loading
the cargo / container on the ship.
The bill of lading will generally be released by the shipping companies, upon exchange
of the Mate Receipt produced by the shipper or his agent. After having accepted the
cargo, they will have to issue a document called Bill of Lading to their Exporters or their
authorized agents when the liner issues a master B/L for all the consignments.
Bill Of Lading – Draft Creation & Final B/L Releasing The important function of documentation department will be creating a Bill of Lading.
The following are the guidelines to prepare a B/L. The Head is responsible for adhering
to the procedure laid down by the company, by all his / her department personnel.
Upon receipt of copy of Shipping Instruction from the customer, they should check and
review the information with their available data. If any clarification is required from
Shipper, they should ask for the same.
When Shipper requests a destination that is not a port of call of the shipping line, they
must decline such requests, or consult the sales or customer service department. The
customer will have to be informed about the port of calls of the liner that the company
has advised and the suitable one as accepted by the customer to be finalized.
In case of Shipper provides an address of Notify Party who is not located in the same
country as the B/L Place of Delivery, they should ensure that Shipper also provides a
contact party and address at Final Destination and should be marked in ‘Also Notify
Party’.
Shipper has to provide the piece count for each container, weight, seal number and the
department should check all these information.
Container number on Shipping Instruction should match the shipment details under
relevant booking number. The booking number is recorded on the Shipping Instruction
given by the customer generally.
Once the details are checked the B/L will be created and saved in draft status. Before the
Original Bill of Lading is taken out, the following are checked:
• Bill type
• Number of originals and copies
• Date
• Parties: The Name of Shipper, The Consignee, Notify Party and Also Notify Party
• Cargo: Number and type of packages and description of goods
• In case of Dangerous Cargo - the UN number, Class number and Flash point
• Equipment: Container number(s) and Seal number(s).
After the complete checking of BL data, the department personnel of the respective
location must issue the draft copy along with the proforma invoice to the customer.
Releasing Bill Of Lading On receiving any change request from the Shipper or Forwarder, the changes should be
made and the same be resent to the customer either through mail or by fax. Upon
acceptance of the draft by the Shipper / Forwarder the Bills of lading should be made
available for final printing.
On collection of all the B/L charges from the customer in the prescribed form, they may
issue the Original B/L to the customer.
Raising the invoice of customer to the finance department The documentation department will be getting the advice from the Finance Department
about the Rate of Exchange to be adopted. Since the freight amount and other related
charges will be in foreign currency, to answer to customer queries and to update them on
the amount to be paid by them, the exchange rate adopted by the company should be
made known to the documentation personnel.
Sea way B/L Only one copy B/L released (while import scanned copy of this copy B/L is enough to get
delivery order.)
The practice of seaway bill is in existence, where the buyer and seller have got a better
relationship and the money transfer is not an issue between the parties. In the case of
Bill of Lading, as we have seen in the earlier session, it has got an important function
known as “Document of Title”. Before the consignee takes delivery of cargo, the
consignee has to surrender the bill of lading with due and proper endorsements. The bill
of lading can be obtained from the banker of the importer only upon payment of due
amount towards the value of the consignment or in the case of credit arrangements, with
a due undertaking to settle the payment on due date. Immediately upon shipment, the
exporter has to make arrangements for submission of documents to the importers bank
through their bank. The time taken by the exporter to submit the documents to the bank
depends upon the conditions laid down in the letter of credit or in the purchase order in
case of transactions not covered by a letter of credit.
When the distance between the port of loading and the port of discharge is more and the
transit time is also more, there will be no much of delay in the importer getting the
documents. Whereas in the case of short distanced route, the vessel will report earlier
and the documents may come late. In these circumstances, to avoid the delay in getting
the consignment, the exporter and importer may prefer using a Seaway Bill.
The shipping company, to meet customers’ request for a speedy release of cargo at
destination, issues Sea Way bill. The generally followed procedure in case of seaway
bill transaction is given as below:
pping company, upon receiving the request from customer for Sea Waybill, must
request the customer to submit the
Shi
Dur
If the freig
Seaway bi
Shipper's Letter of Indemnity, in the prescribed
format.
ing documentation process, they should ensure the following in documentation
system:
1. ht and related dues are collected from the customer already, “Sea Waybill”
can be issued.
2. ll can be issued only to straight consignment and not “To Order”
consignments. Sea Waybill should show proper remark “SEA WAYBILL NON
NEGOTIABLE”
The more important thing in case of releasing seaway bill is that the shipping company
informing the other end about the issuance of seaway bill.
The all relevant documents of the transaction – Shippers request for seaway bill, copy of
seaway bill, letter of indemnity and other relevant communications exchanged into
between the shipping company and the customer should be kept in the office till the
transaction is completely closed i.e., till at the other end the party taking delivery and
after taking delivery for a reasonable time.
Surrender B/L
Only one Original B/L released and that to submit and they get back the photo copy of
that B/L with surrender seal (while import scanned copy of this copy B/L is enough to get
delivery order.)
Release of Cargo without Production of OBL As we have noticed in the Seaway bill, many times based on the situational requirement
and relationship maintained between the shipper and consignee, shipper and the shipping
company, consignee and shipping company, there may be a situation where the disport
office may have to release the cargo in the absence of producing the original bill of
lading. In such situations, there should be a set of procedure would generally be
followed.
To release the cargo to the consignee, disport will ask the shipper to surrender the
Original Bill of Lading. When shipper or shipper’s agent requests for cargo release to
consignee at destination without presentation of an Original B/L, a full set of duly
endorsed Original B/L by shipper must be surrendered at the load port itself. If the
shipper had not collected the OBL, they will have to issue a Cargo Release Request
letter printed on their letterhead.
On receipt of such letter from the shippers, the shipping company will send a
communication to the discharge port to affect the delivery to the consignee without
insisting for the original bill of lading. But before sending such a message, they will
ensure that all related charges are collected from the shipper.
After receipt of full set of duly endorsed Original B/L, or Shippers letter if Original B/L
is not collected, the shipping company will request the shipper to put in writing
specifying to whom the cargo should be released to at destination, if shipment is
consigned “to order”. For direct consignment, cargo must be released to the named
consignee on the Bills of Lading.
The Original B/L together with shipper’s request letter and other relevant documents will
be kept in the office sending such release message for a reasonable period.
Switch Bill of Lading Switch B/L request usually arises when the buyer who is the title holder of the full set of
Original B/L re-sells the cargo to an ultimate buyer in a triangular transaction. Due to
commercial needs, the original buyer does not wish to disclose to the seller (shipper) the
ultimate buyer information and also not to the ultimate buyer the seller’s information.
When B/L is switched, only the name & address of the shipper, consignee, notify party
are allowed to be changed on the new B/L.
If Change of Destination is required, they should follow set of guidelines.
For Switch B/L change of destination, the original/actual Place of Receipt and Port of
Loading must not be changed. Only the new Port of Discharge and/or the Final
Destination allowed to be changed on the new B/L.
Purpose and the issuance of Switch Bill of Lading is a commercial practice followed by
shipping companies to ensure that the actual buyer and seller are not coming to know
about each other and to protect the secrecy of commercial transactions; a merchant trader
is using this system of switch bill of lading. When the importance is so high, a shipping
company, before issuing an amendment, should take the proper care. The shipping
companies generally scrutinize the following.
B/L requestor’s identity as rightful title owner
On receipt of customer request for Switch B/L, they must verify the requestor’s identity
as to whether he/she is the title-holder.
They should request the customer to surrender the full set of Original B/L duly
signed/stamped along with a letter in the customer’s company letter-head clearly
specifying:
The B/L number,
Request for Switch B/L,
The name & address of the new shipper, consignee and notify party
Acceptance of additional costs incurred, if any.
Upon receipt of full set of Original B/L, the documentation department personnel must
check the endorsement at the back of the B/L is completed, and also ensure that the chain
of endorsement is not broken.
It should also be ensured that the requestor is the last title-holder, signed and stamped the
full set of Original B/L surrendered.
If any endorsement is broken, or the requestor being the last title-holder did not
sign/stamp the full set of surrendered Original B/L, a request is placed with the customer
to complete all endorsement. If the requestor is unable to comply, the shipping company
can decline Switch B/L request.
If the loading ports are in other regions, all money receivable in India must follow the
guidelines of Management for realizing the payments. If payment is realized and the
request / requestor are a genuine one, they can issue a new set of Original B/L from
system.
All charges incurred and Change of Destination costs if it is involved will be collected
before release of the new set of Original B/L to the customer, unless the shipping
company has extended some credit facility to the customer. But generally the forwarders
provide credit facilities to the shippers.
The full set of Original B/L for issuing switch BL, is preserved with copy of new set of
Switch B/L in the Switch B/L file kept in the office issuing the same for a reasonable
time.
Release B/L
In this case 3 Original B/L and 3 Copy B/L released (while import all the three original
B/L needed to get delivery order.)
Received for Shipment B/L At the time of Final BL release, if the customer request for Received for Shipment BL,
due to date issue based on the Letter of Credit (LC) stipulation or other reason like
container shut out, after checking that the container is in the port prior to the BL date and
if the shipping bill is handed over by the customer, with the stamp “Received for
Shipment” or the clause as per local requirement in the body of the Original Bill of
Lading, Received for Shipment Bill can be released.
In normal practice, the shipping instruction is submitted to the shipping company within
2/3 days from the date of vessel sailing. But in cases where if the transit time is within
two days so generally the forwarder issues the BL so that the processes that is to be
carried out by the shipper can be done as the master bill of lading will be issued much
later. Due to circumstances beyond the control of the shipper, there may be some delay in
submitting the shipping instructions to the shipping line by the forwarder as the customer
would have given the same. The shipping Line can prepare and release the Bill of
Lading only upon receipt of the shipping instructions. Any delay in providing the
shipping instruction will delay the bill of lading release. In case of late receipt of
shipping instruction, generally the follow-up with the Shipper / Agent will be made.
Documents like Non-negotiable B/L, Shipping Instruction and any waiver details will be
kept in the office for future references.
The process will be in total complete, if there is no request for amendment is received by
the shipping Line. But in normal course, a shipper may seek amendments in the bill of
lading for various reasons. To list out few of the reasons, the actual consignee might be
not in a position to take delivery of cargo and in such circumstances; the shipper could
have identified an alternate buyer. In this case, the amendment may be for the change of
consignee. After releasing the original bill of lading, the shipper may be asking for a
different port of destination based on the request made by the consignee / importer. Had
the documents not negotiated with the bank, it becomes essential for the shipper to get an
amendment. After negotiating the documents, for the reason mentioned in the beginning,
there may be a different system followed by the shipping companies. Instead of
amending it on the original bill of lading, a communication be sent from load port to the
destination port using email / fax.
The amendments may have to be given either on request made by the customer and based
on the internal request made by the department because of their mistakes.
When an amendment to be issued due to Customers Request, the following need to be
checked:
ere should be a request in writing from the customer, which is the important
requirement before proceeding with any amendment.
Th
If
W
shipment has arrived at discharge port – consult with discharge office whether the
amendment can be made and if any additional charges will apply and / or relevant
parties will accept changed payment terms.
hen the amendments can be made and additional charges will apply, the customer
must confirm in writing their agreement to pay all additional charges and if required
surrender full set of Original bills of lading before changes are processed.
ce the necessary written acceptance is received and full set of Original bills of
lading surrendered, subject to payment of any charges, either an amendment be
made or another set of Original Bill of Lading be issued. In the absence of full set of
Original bills of lading, there should be no issue of any new set of Original bill of
lading to customer.
On
Handling Lost Bill of Lading In the course of transit, there may be a possibility that the documents sent might get lost.
In such events, the consignee should not face losses because of not taking delivery in the
absence of Original Bill of Lading. At the same point of time, if the documents are lost
before negotiation, the exporter / shipper cannot negotiate the documents and realize the
money. To avoid this problem, shipping companies will be in a position to offer some
solutions to the parties. The procedure may vary between the companies to companies
and the focus is given hereunder on the general areas where the care needs to be taken to
protect the interest of the shipping company.
The shipper should make a request to the company in writing for issuance of
Replacement Bill of Lading against the Lost Original Bill of Lading. Such request
should be accompanied with a Letter of Indemnity from the shipper as prescribed by the
Shipping Company. The Bond will be executed duly endorsed by the banker to the effect
of indemnifying the vessel owner, carrier and their agents for issuing such second set of
original bill of lading.
Before issuing the second set of original bill of lading, they should check with the
discharge port whether the Cargo is released or the delivery order is issued for the cargo
against which the second set of original bill of lading is sought for. A communication
should be sent to the discharge port about the lost bill of lading. Once the port of
discharge confirms that the cargo is not delivered / the delivery order is not released,
process for issuing the second set of original bill of lading can be commenced.
The second set of original bill of lading should contain a text similar to that mentioned
stating “SECOND SET OF OBL ISSUED IN PLACE OF LOST B/L” or the same. The
following will be generally in practice in case of second set of original bill of lading:
ods are to be delivered against the reissued set of original B/L, provided the
goods have not been delivered against the first set of original B/L, which declared
lost by shipper.
Go
Ha
In
d the goods already been delivered against the first set of original bill of lading,
the reissued set of original bill of lading will automatically be considered null and
void.
case the first set of original bill of lading presented after the goods have been
delivered against this reissued set of original bill of lading, the first issued set of
original bill of lading will be considered null and void.
The load port office should send a communication to the port of discharge/destination
and concerned parties stating that the cargo be released against the replacement set of
Original Bills of Lading.
The office that issues the replacement bill of lading will keep the concerned records in
their file for a reasonable time. The records will include the Indemnity Bond, Request
Letter, OBL copy, and Replacement bill of lading copy, communication sent to discharge
port and other relevant communications and documents of the transaction.
Change of Destination Whenever there is a request from the shipper to change the port of destination, after
loading the cargo onboard vessel, the shipping company may accept such request. In case
of accepting such requests, the process will start with the letter of request from the
shipper asking for such a change of destination. Once the letter is received, the
additional charges will be collected from the shipper and the bill of lading will be
released.
The change of destination request along with the details of charges collected will be in
record for a reasonable time.
Import
Filing of Import General Manifest Every shipping company will have to file a document with customs authorities giving
details about the shipment and such a document is known as Import General Manifest.
This is an important document containing the entire details about the shipment and acts
as a controlling document right from the time of arrival of cargo / container in a port till
it moves out of charge of a liner.
This document generally contains the following information:
Name of the shipping line / agent
Name of the ship
Port where the report is made
Nationality of the ship
Name of the Master
Port of Loading
Line No.
Bill of Lading Number & Date
No & Kind of packages – cases, cartons, bales, pieces, etc.
Marks & Numbers
Gross Weight
Description of Goods
Names of Consignee / Importer
Date of presentation of Bill of Entry
Name of Customs House Agent
Rotation Number
Most of the relevant information will have to be filled by the Liner / Agent and the
document will be filed with Customs Authorities.
This document is very essential for the customs authorities to cross verify the
information produced by the agents in the bill of entry to keep control on un-cleared
cargo by the respective party.
Release / Delivery Order for Inbound Shipments
The consignee / importer / their agents can take delivery of cargo only against the
submission of Delivery Order to the concerned custodian of cargo. Before releasing the
delivery order, generally the following precautions will be taken by the import
department personnel
• Ensure Original Bills of Lading presented
• The respective containers discharged from the vessel and reached the respective CFS
/ ICD
• The freight Invoice is issued to the customer
• When the Customer or the Customer’s agent comes to the counter to collect Release /
Delivery orders, personnel at the counter must ensure a duly signed & stamped OBL,
without broken endorsement.
• In case of Telex Release, personnel at the counter verify the copy of the B/L brought
by the consignee for Release / Delivery orders, with the telex message details.
• If no OBL is presented, Release/Delivery orders must not be issued, except under
following conditions: -
• Prior arrangement has been made, with confirmed shippers consent for presentation
of Letter of Indemnity for Direct consignment, or Letter of Indemnity with Bank
Guarantee for TO ORDER consignment.
• Load Port / Origin Office have confirmed surrender of full set of OBL at loading end.
• Sea Waybill – the Customer or the Customer’s agent must present a copy of the
Seaway Bill.
Inbound Documentation Personnel at the counter must verify the OBL or the Sea
Waybill, as presented.
Handling of Abandoned Cargo A Reminder Notice be sent to the Customer, giving details of shipment in the first place,
notifying about the un-cleared cargo and inform them to clear the cargo before end of 60
days period. This notice will generally be sent by Registered Post. After sending the
notice, if no response is received in a reasonable time, the Import Department will have
to inform the Load-port to contact shipper and the Local Import Sales personnel about
the situation.
If the cargo still remains un-cleared, Customs Department may bring the cargo for
auction. To prevent this, the imports department should send reminder notices to the
parties mentioned in the bill of lading. Such communication may be effected through
Registered Post.
Based on the feedback received from the shipper / importer / agents, the process of
abandoning may get prolonged. If Customer does not take delivery or respond to the
reminder, then they will have to inform Load-port to contact shipper and inform about
the situation, and alert them on the Shipper's liability according to the bill of lading terms
when cargo is abandoned.
The Load-port can request the shipper to settle the outstanding collect charge and
demurrage and inform shipper on those amounts. The Imports Division may also check
with the shipper to see if they want the cargo to be returned, diverted to another location
and / or to change to a new Customer if they prove still hold the ownership of cargo by
title and have in possession OB/L issued against shipment unless covered by Sea Waybill
or Express B/L.
Based on the input from the Origin, if shipper wants cargo to be shipped back to them,
and they will pay the outstanding freight / charges as well as the additional
freight/charges of the returned shipment, the liner should make arrangements to send
back the consignment after collecting necessary charges through the load-port, without
delay and inform the Customer on the decision of shipper to return cargo. The import
documentation personnel will do the entire documentation and co-ordination functions.
CARGO HELD BY CUSTOMS / GOVERNMENT AUTHORITIES
On receiving the letter from the CFS, informing the Inbound documents department
about the Custom’s decision of the auctioning the Cargo, they will contact and send a
registered letter to the consignee or the notify party to approach the customs to resolve
the issue at the earliest.
If the consignee or the notify party is not traceable
The liner should inform the load port to get in touch with the shipper and inform them of
the situation. They will also inform the Origin of the projected expenses/ cost / delays
and decision of the Customs authority. They should handover the below mentioned
documents to the Operations team for their further process or for any potential claims:
• Full correspondence in hard copy
• Bill of Lading copy
• Copy of Register Letter sent to Customer
• Registration copy
• Copy of reminder Letters sent via fax / email
Marketing Department Marketing plays an important role in organization. It is the bridge between customer and
the company.
The important functions of marketing dept as follows:
ng the services offered by POTA in this Ocean transport business and
competitive rate for their services.
Explaini
Geograp
nding for the enquiry of customers, then there with the support of Customer
service d
anning and schedules.
hical area where POTA is strong and best coated with less transit time.
Respo
epartment.
Regular reminder for weekly pl
SALES sales plan to meet lure customers to obtain POTA services, this is done for
o t target customers as per the plans.
The visit customers and inform them of the service patterns, schedules and
o er’s requirement including details like cargo
o ated charges; negotiate freight rates if
o Work closely with the customer and offer the best possible assistance to meet their
o e spent on the field to ensure there is a good coverage of the market
o
o customers and increase the customer base.
o e
requirements.
o Prepare
short/long term plans.
Review existing customers and lis
o
conditions.
Discuss and understand custom
description, packing, special conditions under the order, letter of credit conditions, if
any and shipment schedules.
Provide freight rates as per Tariff and associ
required in consultation with the pricing desk.
requirements.
Maximize the tim
and maintain a record of business generated.
Maintain constant contact with customers and gain their support to ensure that
sufficient business is generated for the company as the company would have entered
into service contracts with liners.
Identify new customers while retaining old
o Market intelligence: Provide updates and feedback on market conditions and
information about competition activity to the Marketing team above the new trends in
the market so that new strategies can be developed to maintain a sustained growth.
Share the outcome of the business meetings with the customers with the rest of th
organization like customer service, operation, documentation and finance during
weekly meetings or as and when required so that they are aware of the customers’
Accounts It is the responsibility of the accounts / finance department to co-ordinate with the load
etailed break up of charges need to be paid before releasing the
g the delivery orders, it has to be ensured that the freight and all other
ted. If any other additional charges are to be collected, the
ent between the ports, either after
ance or after completion of the shipment but
he statutory compliances are met with
ed in a proper way. The co-ordination with the
to be very properly maintained for the
ed and the remuneration account is updated and reviewed for any
ayment at regularly intervals.
port, to get the freight amount and to collect it from the respective consignee or his
authorized agent.
Generally most of the shipping companies will prepare an invoice and the same is given
to the customers with d
delivery order. This invoice can be collected from the documentation department and
upon payment, the finance department makes a stamp in the invoice evidencing
collection of payment, verification upon which the delivery order is generated and given
to the parties.
Billing to Customers Before releasin
relevant charges are collec
customer should be contacted and a confirmation be obtained. Upon getting the
confirmation invoice be raised and charges collected.
Freight Collection & Remittance The shipping companies accept the cargo for shipm
collecting the freight amount well in adv
before releasing the delivery order at the port of destination. Every bill of lading is
stamped either Freight Collected or Freight to Pay.
Audit / Internal Administration Finance department responsibility is to ensure that t
and the books of accounts are maintain
Auditors / Local Administrators on related issues will be the responsibility of the Finance
Department.
The receivables and payables will have
transactions perform
balance p
ROLE OF LINERS/COMMON CARRIER COMMON CARRIER Common carrier is a carrier who holds hims carry from place to another the
goods of any person for a hire or reward. One type of such a carrier is a ship that offers
the regular sc transporting
space to all who wish to take advantage of offer, and then
s the Liner faced few a problems since it happened to have a dual functioning, it got
also, cargo vessels were not allowed
carry passengers.
Fixed Schedule
for loading or discharge, it has to be made available irrespective of the cargo
vailability. For example if the ETA of the vessel is made as 01-02-008, the vessel has
port as scheduled.
the control of the vessel operator.
elf ready to
heduled service is called a cargo Liner. A vessel engaged in
goods for reward and offering
it is called a liner service. A vessel is operating as a common carrier in a regular
scheduled route and in regular schedule of time, it is said to be in a Liner Service.
Until the demise of Sea Passenger Services in the 1960s, many Liners provided a
combined service with Cargo, Passengers and Mail.
A
divided into functional types – namely The Passenger Ships and Cargo Vessels. While
the passenger ships carried limited quantities of mail
to
The main requirements to recognize a service, as a Liner Service will have to have the
following:
A vessel should have a fixed sailing schedule. If a vessel is expected to be available in a
port either
a
to call on that particular
Depending upon weather conditions and unexpected technical faults of the ship, the
variance of arrival date to a particular port will not affect the basic and basis of liner
shipping function, since the delay is beyond
Every Liner used to give regular advertisement announcing its arrival and departure
schedule enabling the merchants as well as their agents to plan for the shipments and to
make the cargo available in the port in order to ensure loading of the cargo in the vessel.
ny cargo moved towards the port before the window / gate opening of the particular
all at the respective port. No deviation from the route
wed be ility of cargo at any one of the ports in the trade
route fixed already.
above, it is a Common carrier having fixed trade route and a fixed
operating in a trade route as per schedule and just any one or trial
A
vessel, shall have to wait till the gate is opened enabling the port to receive the cargo /
container in the respective yard.
Fixed Route
Fixed Schedule goes with fixed route. A vessel expected to cover various ports will have
to have a fixed time schedule to c
will be allo cause of non-availab
To summarize, Liners Services sail on scheduled dates, ply on a regular scheduled
service between groups of Ports, irrespective of Cargo availability.
Regularity
Liner Service as seen
schedule. With all these, regularity in service is also one of the main characteristics of a
Liner Service.
Regularity means,
service in the region and calling off the service from the route. Any trial service in a
route may be an ad-hoc service and this cannot be recognized as a Liner Service.
LINER ternational liner shipping is a sophisticated network of regularly scheduled services that
ansports goods from anywhere in the world to anywhere in the world at low cost and
ith greater energy efficiency than any other form of international transportation. Liner
he most efficient mode of transport for goods.
iers of cargo. This means that they perform the ocean transport of
earns the profit predominantly
Nvocc are the actual
cargo, special types of containers are also
Booking Request and Confirmation
e load port and disport. A booking request
e details of shipment. Shipping company
In
tr
w
shipping is t
Liner is the actual carr
containers. The liner allots slots for freight forwarders/NVOCC’s etc. The liners and the
freight forwarders generally enter in to the service contracts in various trading routes.
In this way the freight forwarders gains slots through these contracts and sell the same to
customers with a markup price. The difference in the price
for the forwarders with other supplementing charges. First the liner company markets its
services to the forwarders, who in turn markets the services of liner with the value added
services to the customers that the forwarders are going to provide.
As we have already seen, the agents involved at various stages in doing a shipment.
Many processes by the forwarders/Nvocc are similar to the liner as both the
forwarders/Nvocc and Liner act as carriers. The liners are the ocean carriers. The
customers of liner are predominantly the people who establish service contracts with
them such as forwarders/Nvocc. The customers of forwarders /
shippers or agents of them such as CHA etc.
Standardization of Containers
The General Purpose containers are of standard in size having standard width and height
and vary only in length. The length of the containers used in trade generally is of 20’;
40’ and 45’.According to the requirement of
used.
Before the development of computer system and e-mail bookings, the shipper either
directly or through his logistics provider will check with the shipping line for making a
booking for transportation of cargo between th
will be manually prepared and sent giving th
will confirm separately about the booking to the shipper / their agents. The mailing /
couriering the booking request and the line confirming the status itself will take not less
than 2/3 days depending upon the distance between the shippers place and the shipping
line’s office.
Now with the development of computer system, the booking can be made ON LINE
through the EDI facility available with the Liner. There should be a proper interface
between the customer office and the liner office for availing the best possible results.
The shipper c
an send the Booking request, which can be accepted and confirmed by the
ly a time consuming process but also require lot of
thus occupying huge space even after completion
liner office in few minutes by a mail.
Bill of Lading Information Earlier the system was such that the manual draft preparation of bill of lading would be
checked by the shipper or his agent and upon their confirming the details; original bill of
lading will be typed. This was not on
paper documents to be kept in the file
of shipment. With the EDI facility, the template once created can be saved and only if
any corrections / additions / modifications required, the same be done by the shipper /
their agents and sent to the liner office. Liner office can prepare the Original Bill of
Lading without spending much of time and keeping the templates received from shipper
does not require much of space to store. .
Invoicing Liner office can send in their invoice through system for their services. This ensures
that the invoice is reaching the concerned person in the shipper’s office in time.
Arrival Notice Information very shipper would be closely monitoring the arrival status of the cargo. One of the
is to send cargo arrival notices and transshipment
r than answering to customer queries on a regularly basis. Most of
E
functions of the shipping company
advices. The EDI facility reduces the work load of taking independent notices and
produces a set of notices for the data imported through EDI from the load port /
transshipment hub.
The development of web based updating enables the shipping company to concentrate in
their activities rathe
the shipping companies update their website wherein the details of shipment are captured
from the time of loading till the arrival of cargo in the disport. When the details are
getting updated in the web site of the liners, based on the relationship established
between the customer and the liner office, through this EDI facility, directly the liner
office can reach the arrival information to the customer’s office.
ROLE OF CLEARING AGENT
eans any person who is engaged in providing any service, either directly
ROLE OF CONSIGNEE
buyer. One to whom a consignment is made.
When the goods consigned to him are his own and they have been ordered to be sent they
It is usual in bills of lading to state that the goods are to be delivered to the consignee or
When a person acts publicly as a consignee there is an implied engagement on his part
Clearing agent m
or indirectly, concerned with the clearing and forwarding operations in any manner to any
other person and includes a consignment agent. Once the cargo arrives at the port/ CFS
the clearing agent at the consignee’s place will go with the necessary documents and take
delivery of cargo. In order to take delivery of cargo there are many processes that are to
be done which is already mentioned in CHA import process and the clearing and
forwarders agent.
Party, who is to receive goods, is usually the
are at his risk the moment the consignment is made according to his direction; and the
persons employed in the transmission of the goods are his agents. When the goods are not
his own, if he accept the consignment he is bound to pursue the instructions of the
consignor; as if the goods be consigned upon condition that the consignee will accept the
consignor's bills, he is bound to accept them.
his assigns, him or them paying freight; in such case the consignee or his assigns, by
accepting the goods, by implication become bound to pay the freight.
that he will be vigilant in receiving goods consigned to his care, so as to make him
responsible for any loss which the owner may sustain in consequence of his neglect.
ROLE OF BANK
The bank plays a vital role in transactions between the shipper and consignee. The bank
an L/C, and also referred to as a documentary
ement between banks, known as the
/C
Revocability
Transferability
At Sight & Stance
Elements of L/C ter)
Ben
Issu nk)
Adv
Con
Negotiating Bank (usually exporter’s bank)
is involved in order to reduce the risk of uncertainty in getting the payments. This is
made possible through letter of credit transactions.
What is Letter of Credit (L/C)? A letter of credit, often abbreviated as
credit, is a document issued by a financial institution which essentially acts as an
irrevocable guarantee of payment to a beneficiary.
A commercial letter of credit is a contractual agre
issuing bank, on behalf of one of its customers, authorizing another bank, known as the
advising or confirming bank, to make payment to the beneficiary. The issuing bank, on
the request of its customer, opens the letter of credit. The issuing bank makes a
commitment to honor drawings made under the credit. The beneficiary is normally the
provider of goods and/or services.
Characteristics & Types of L Negotiability
• Applicant (impor
• eficiary (exporter)
• ing Bank (importer’s ba
• ising Bank
• firming Bank
•
• A payment undertaking given by a bank (issuing bank)
• On behalf of a buyer (applicant)
• To pay a seller (beneficiary) for a given amount of money
• On presentation of specified documents representing the supply of goods
• Within specified time limits
• Documents must confirm to terms and conditions set out in the letter of credit
• Documents to be presented at a specified place
Types of L/C 1. Irrevocable / Revocable
2. Confirmed / Unconfirmed
3. Revolving L/c
4. Red clause L/c
5. Green clause L/c
6. Back to Back L/c
Step-by-step process
I. Buyer and seller agree to conduct business. The seller wants a letter of credit to
guarantee payment.
II. Buyer applies to his bank for a letter of credit in favor of the seller.
III. Buyer's bank approves the credit risk of the buyer, issues and forwards the credit
to its correspondent bank (advising or confirming). The correspondent bank is
usually located in the same geographical location as the seller (beneficiary).
IV. Advising bank will authenticate the credit and forward the original credit to the
seller (beneficiary).
V. Seller (beneficiary) ships the goods, then verifies and develops the documentary
requirements to support the letter of credit. Documentary requirements may vary
greatly depending on the perceived risk involved in dealing with a particular
company.
VI. Seller presents the required documents to the negotiating bank to be processed for
payment.
VII. Negotiating bank examines the documents for compliance with the terms and
conditions of the letter of credit
VIII. If the documents are correct, the negotiating bank will claim the funds fm the
issuing bank.
IX. Negotiating bank will forward the documents to the issuing bank.
X. Issuing bank will examine the documents for compliance. If they are in order, the
issuing bank will debit the buyer's account & remit the money to beneficiary’s
bank on due date.
XI. Issuing bank forwards the documents to the buyer.
The price of LCs The issuer (importer/applicant) pays the LC fee to the bank for opening the L/C, and
may in turn charge this on to the beneficiary.
Its approximately 0.25% of the L/C amount per quarter
It may vary from country to country
Who Governs Letter Of Credit • Letters of credit used in international transactions are governed by the publications
of International Chamber of Commerce (ICC) Uniform Customs and Practice for
Documentary Credits (UCPDC).
• The general provisions and definitions of the International Chamber of Commerce
are binding on all parties.
• (ICC 600 - UCPDC)
International Chamber of Commerce (ICC)
• The International Chamber of Commerce (ICC) is an international organization that
works to promote and support global trade and globalization.
• It serves as an advocate of world business in the global economy, in the interests of
economic growth, job creation, and prosperity.
• ICC has direct access to national governments worldwide through its national
committees.
• The ICC was founded in 1919 to serve world business by promoting trade and
investment, open markets for goods and services, and the free flow of capital. The
organization's international secretariat established in Paris
• ICC’s activities include mediation, dispute resolution, advocating open trade,
advocating market economy systems, combating commercial crime etc.,
INCOTERMS
Incoterms (International Commercial Terms) are a series of international sales terms
widely used throughout the world. They define monetary transaction and role
responsibilities for both sides of the international trading buyer and seller transaction.
The purpose of standardized incoterms is to determine export and import clearance
responsibilities, who owns the risk for the condition of the products at each stage in the
transport process, and who is responsible for paying for what.
Incoterms were first produced in 1936. Since that time expert international trade lawyers
and practitioners have made six updates, completing in 2000. Contracts that include
incoterms, produced in 2008 or 2009, should abide by the 2000 standard.
Ex-Works (EXW)
The seller delivers when he places the goods at the disposal of the buyer at the seller's
premises or another named place (i.e. works, factory, warehouse, etc.,) not cleared for
export and not loaded on any collecting vehicle. This term thus represents the minimum
obligation for the seller, and the buyer has to bear all costs and risks involved in taking
the goods from the seller's premises.
Free Carrier (FCA)
The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at
the named place. It should be noted that the chosen place of delivery has an impact on the
obligations of loading and unloading the goods at that place. If delivery occurs at the
seller's premises, the seller is responsible for loading. If delivery occurs at any other
place, the seller is not responsible for unloading. This term may be used irrespective of
the mode of transport, including multimodal transport.
"Carrier" means any person who, in a contract of carriage, undertakes to perform or to
procure the performance of transport by rail, road, air, sea, inland waterway or by a
combination of such modes. If the buyer nominates a person other than a carrier to
receive the goods, the seller is deemed to have fulfilled his obligation to deliver the
goods when they are delivered to that person.
Free Alongside Ship (FAS)
The seller delivers when the goods are placed alongside the vessel at the named port of
shipment. This means that the buyer has to bear all costs and risks of loss or damage of
the goods from that moment. The FAS term requires the seller to clear the goods for
export.
Free On-Board (FOB)
The seller delivers when the goods pass the ship's call at the named port of shipment.
This means that the buyer has to bear all costs and risks of loss of or damage to the goods
from that point. The FOB term requires the seller to clear the goods for export. This term
can be used only for sea or inland waterway transport.
Cost and Freight (CFR)
The seller delivers when the goods pass the ship's rail in the port of shipment. The seller
must pay the costs and freight necessary to bring the goods to the named port of
destination but the risk of loss of or damage to the goods, as well as any additional costs
due to events occurring after the time of delivery, are transferred from the seller to the
buyer. The CFR term requires the seller to clear the goods for export.
Cost, Insurance & Freight (CIF)
The seller delivers when the goods pass the ship's rail in the port of shipment. The seller
must pay the costs and freight necessary to bring the goods to the named port of
destination, but the risk of loss of or damage to the goods, as well as any additional costs
due to events occurring after the time of delivery, are transferred from the seller to the
buyer.
However, with CIF the seller also has to procure marine insurance against the buyer’s
risk of loss of or damage to the goods during the carriage. Consequently, the seller
contracts for insurance and pays the insurance premium. The buyer should note that
under the CIF term the seller is required to obtain insurance only on minimum coverage.
Should the buyer wish to have protection of greater coverage, he would either need to
agree as much expressly with the seller or to make his own extra insurance arrangements.
The CIF term requires the seller to clear the goods for export. This term can be used only
for sea and inland waterway transport. If the parties do not intend to deliver the goods
across the ship's rail, the CIP term should be used.
Carriage and Insurance Paid to (CIP)
The seller delivers the goods to the carrier nominated by him but the seller must in
addition pay the cost of carriage necessary to bring the goods to the named destination.
This means that the buyer bears all risks and any additional costs occurring after the
goods have been delivered. However, in CIP the seller also has to procure insurance
against the buyer's risk of loss of or damage to the goods during the carriage.
Consequently, the seller contracts for insurance and pays the insurance premium. The
buyer should note that under the CIP term the seller is required to obtain insurance only
on minimum coverage. Should the buyer wish to have the protection of greater cover, he
would either need to agree as much expressly with the seller or to make his own extra
insurance arrangements.
"Carrier" means any person who, in a contract of carriage, undertakes to perform or to
procure the performance of transportation by rail, road, air, sea, inland waterway or by a
combination of such modes.
If subsequent carriers are used for the carriage to the agreed destination, the risk passes
when the goods have been delivered to the first carrier. The CIP term requires the seller
to clear the goods for export.
Carriage Paid to (CPT)
The seller delivers the goods to the carrier nominated by him but the seller must in
addition pay the cost of carriage necessary to bring the goods to the named destination.
This means that the buyer bears all risks and any other costs occurring after the goods
have been so delivered.
“Carrier" means any person who, in a contract of carriage, undertakes to perform or to
procure the performance of transport, by rail, road, air, sea, inland waterway or by a
combination of such modes.
If subsequent carriers are used for the carriage to the agreed destination, the risk passes
when the goods have been delivered to the first carrier, The CPT term requires the seller
to clear the goods for export.
Delivered At Frontier (DAF)
The seller delivers when the goods are placed at the disposal of the buyer on the arriving
means of transport not unloaded, cleared for export, but not cleared for import at the
named point and place at the frontier, but before the customs border of the adjoining
country. The term "frontier" may be used for any frontier including that of the country of
export. Therefore, it is of vital importance that the frontier in question be defined
precisely by always naming the point and place in the term.
However, if the parties wish the seller to be responsible for the unloading of the goods
from the arriving means of transport and to bear the risks and costs of unloading, this
should be made clear by adding explicit wording to this effect in the contract of sale.
Delivered Ex-Ship (DES)
It means that the seller delivers when the goods are placed at the disposal of the buyer on
board the ship not cleared for import at the named port of destination. The seller has to
bear all the costs and risks involved in bringing the goods to the named port of
destination before discharging. If the parties wish the seller to bear the costs and risks of
discharging the goods, then the DEQ term should be used. This term can be used only
when the goods are to be delivered by see or Inland waterway or multimodal transport on
a vessel in the port of destination.
Delivered Ex-Quay (DEQ)
The seller delivers when the goods are placed at the disposal of the buyer not cleared for
import on the quay (wharf) at the named port of destination. The seller has to bear costs
and risks involved in bringing the goods to the named port of destination and discharging
the goods on the quay (wharf). The DEQ term requires the buyer to clear the goods for
import and to pay for all formalities, duties, taxes and other charges upon import. If the
parties wish to include in the seller's obligations all or part of the costs payable upon
import of the goods this should be made clear by adding explicit wording to this effect in
the contract of sale.
This term can be used only when the goods are to be delivered by sea or inland waterway
or multimodal transport on discharging from a vessel onto the quay (wharf) in the port of
destination. However if the parties wish to include in the seller's obligations the risks and
costs of the handling of the goods from the quay to another place (warehouse, terminal,
transport station, etc.) in or outside the port, the DDU or DDP terms should be used.
Delivered Duty Unpaid (DDU)
The seller delivers the goods to the buyer, not cleared for import, and not unloaded from
any arriving means of transport at the named place of destination. The seller has to bear
the costs and risks involved in bringing the goods thereto, other than, where applicable,
any "duty" (which term includes the responsibility for and the risks of the carrying out of
customs formalities, and the payment of formalities, customs dudes, taxes and other
charges) for import in the country of destination. Such "duty" has to be borne by the
buyer as well as any costs and risks caused by his failure to clear the goods for import in
time. However, if the parties wish the seller to carry out customs formalities and bear the
costs and risks resulting there from as well as some of the costs payable upon import of
the goods should be made clear by adding explicit wording to this effect in the contract
of sale.
Delivery Duty Paid (DDP)
The seller delivers the goods to the buyer, cleared for import, and not unloaded from any
arriving means of transport at the named place of destination. The seller has to bear all
the costs and risks involved in bringing the goods thereto including, where applicable,
any "duty” (which term includes the responsibility for and the risks of the carrying out of
customs formalities and the payment of formalities, customs duties, taxes and other
charges) for import in the country of destination.
Whilst the EXW term represents the minimum obligation for the seller, DDP represents
the maximum obligation. This term should not be used if the seller is unable directly or
indirectly to obtain the import license. However, if the parties wish to exclude from the
seller's obligations some of the costs payable upon import of the goods (such as value-
added tax: VAT), this should be made clear by adding explicit wording to this effect in
the contract of sale. If the parties wish the buyer to bear all risks and costs of the import,
the DDU term should be used.
DIFFERENCE BETWEEN FCL AND LCL
Particulars FCL LCL Shipper In this only one shipper and
one consignee is involved Here many shippers and many consignees are involved
CHA There is no change in documentation of CHA in exports and imports for both FCL and LCL.
Forwarder/Nvocc There is no consolidation of cargo.
The cargo is consolidated from different shippers as one consignment.
The marketing and sales of FCL is based on the volume of teus handled by the company
The marketing and sales of Lcl is the Cbm allotted in the Teu.
There is flexibility for the shipper to stuff cargo as per the consignees specification or based on the vessel schedule , vessel transit time etc.
Here the shipper should be ready with the cargo as per the forwarders plan to do that consignment or the consolidator should have enough space to allot the shipper to ship the cargo.
Freight rates are collected on per teu basis
Freight rates are collected on the per cbm basis
Responsibility with shipper Responsibility with forwarder
Prior planning is not required for freight forwarder.
Prior planning is a must by freight forwarder that is communicated to shippers
Liner Stuffing can be done outside forwarders place.
Stuffing is done at forwarders place.
Homogenous cargo Heterogeneous cargo Safety of cargo is much higher in FCL
Safety of cargo is difficult as different cargo are stuffed
DATA ANALYSIS AND INTERPRETATION STATISTICAL TOOLS Co-efficient of Variation Objective
Comparison & Consistency of two distributions
The Relative Measure of dispersion based on standard deviation is defined by
(S.D/Mean) * 100
In order to decide which of the two distributions is more variable, we compare the co-
efficient of variation (CV). The distribution with greater CV is set to be more variable.
By comparing the CV we can decide which distribution is more variable or more
consistent.
Here the two available distributions are the export volumes of FCL/LCL TEU’s in
monthly basis for a year. From this we can infer which of the two distributions volume of
TEU is more variable or more consistent
Objective The objective of using this data is to identify the co-efficient of variation between the export and import FCL shipments for the year 2011. Manipulations Mean of Exports: ∑x /12
Mean(x) =1843/12=>153.58
Mean of imports: ∑y / 12
Mean(y) =234 / 12 =>19.5
Standard Deviation(x) = (∑x^2 / 12 – (∑x/12) ^2) ^0.5
=(329251/12-(153.58)^2)^0.5
=62.04.
MONTH EXPORT(x) IMPORT(y) x^2 y^2
JAN 77 31 5929 961
FEB 93 10 8649 100
MAR 155 8 24025 64
APR 281 15 78961 225
MAY 242 16 58564 256
JUN 224 23 50176 529
JUL 179 14 32041 196
AUG 139 21 19321 441
SEP 109 20 11881 400
OCT 102 20 10404 400
NOV 124 22 15376 484
DEC 118 34 13924 1156
Tot 1843 234 329251 5212
Mean 153.583333 19.5
SD 62.0462977 7.354137158
CV 40.3991086 37.71352389
Standard Deviation(y) = (∑y^2 / 12 – (∑y/12) ^2) ^0.5
=(5212/12-(19.5)^2)^0.5
=7.35
Co-efficient of variation: (Standard deviation/ mean)*100
Co-efficient of variation(x) = 62.04/153.08=>40.04
Co-efficient of variation(y) = 7.35/19.5=>37.71
INTERPRETATIONS The export volume is more variable than the import volume or the import volume is more
consistent than the export volume.
Time Series
Objective Forecasting & Trend Analysis
A time series, as the name indicates, is a set of observations arranged in chronological
order. Examples of time series are:
The hourly series closing price o shares in stock exchange
The weekly series attendance in a Public Limited Company
The monthly series of steel production
The annual series of national income
A time series shows that the observed values of the variable fluctuate from time to time.
Thus, an analysis of time series involves an examination of the past observations and
estimation of future values. The variations in the time series are due to various factors
like change in population, consumer tastes, weather conditions, customs and several
others. The object of time series analysis is to identify and isolate these factors. These
variations of time series are broadly grouped into four types called components of times
series. They are
1. Secular trend
2. Seasonal Variation
3. Cyclical Variation
4. Irregular Variation
The formula for time series is
Y = a + bx where,
a = 1/n(∑y-b∑x)
b = ((∑x)(∑y)-n∑xy)/((∑x)^2)-n∑x^2
Here we are going to forecast from the previous year data with respect to exports and
imports respectively. The trend analysis graph of exports and imports are inferred by
obtaining the trend values.
Time Series of Export Data Trend values x months y exports dx dx^2 dx*y
1 77 -5 25 -385 170.03 2 93 -4 16 -372 167.04 3 155 -3 9 -465 164.05 4 281 -2 4 -562 161.06 5 242 -1 1 -242 158.07 6 224 0 0 0 155.08 7 179 1 1 179 152.09 8 139 2 4 278 149.1 9 109 3 9 327 146.11 10 102 4 16 408 143.12 11 124 5 25 620 140.13 12 118 6 36 708 137.14
Total 1843 6 146 494 1843.02
y = a + bx
b = ((∑x)(∑y)-n∑xy)/((∑x)^2)-n∑x^2
b = -2.98951
a = 1/12(∑y-b∑x)
a = 155.0781
Interpretations Decreasing Trend Of Export Volume
The image part with relationship ID rId37 was not found in the file.
Time Series of Import Data x
months y
imports dx dx^2 dx*y trend values
1 31 -5 25 -155 14.55
2 10 -4 16 -40 15.45
3 8 -3 9 -24 16.35
4 15 -2 4 -30 17.25
5 16 -1 1 -16 18.15
6 23 0 0 0 19.05
7 14 1 1 14 19.95
8 21 2 4 42 20.85
9 20 3 9 60 21.75
10 20 4 16 80 22.65
11 22 5 25 110 23.55
12 34 6 36 204 24.45
Total 234 6 146 245 234 y = a + bx
b = ((∑x)(∑y)-n∑xy)/((∑x)^2)-n∑x^2
b = 0.895104895
a = 1/12(∑y-b∑x)
a = 19.05244755
Interpretations Increasing Trend of Import data
The image part with relationship ID rId38 was not found in the file.
LIMITATIONS
Lack of responsibility by some operators to handle extraordinary situations
leading to claims.
Poor maintenance of containers leading to damages and unhappy consignees.
Shippers inadequately packing cargo which cannot withstand multiple handling
like in transshipment points or involving multimodal transport.
Shippers ignoring the packaging requirement at destination, e.g. the WPM (Wood
Packaging Material) regulation, AQIS (Australian Quarantine) etc.
Shippers not providing the documentation Invoice, Packing List, Declarations,
Import Licenses, etc. required for smooth deliveries at destinations.
Mis-declaration of ‘hazardous’ cargoes, declaring wrong weights, leading to
accidents and loss of property.
Fraudulent exports made to claim export benefits leading to unclaimed cargoes at
destination and hence carrier charges remaining unpaid.
SUGGESTIONS
No Loss of control
When an Fcl shipment is done the overall logistics movement should be in a
coherent manner right from the shipper to the consignee.
• No Discontinuity of services
Discontinuity of services should not happen to the shipper or consignee by the
forwarder as the flow of information should be there within the supply chain
partners.
• No Differences of opinion
There should be a clarity of thought between the supply chain partners in handling
the
shipment.
• Selecting the right forwarder
The forwarder should be selected by analyzing the key factors such as cost,
quality and service levels.
Conclusion
This study reveals about the logistics process of an FCL shipment that is practically done
in a freight forwarding company. The report gives an in depth view on all the supply
chain parties who are involved in the movement of cargo either directly or indirectly. The
study also highlights how it varies from LCL in certain aspects. As we have seen there
are many steps to be followed for completing a shipment with many hindrances that come
through the way in completing an assignment. These hindrances are bound to happen in
shipping as it is a dynamic industry. It is so dynamic that it depends not only on humans
and technology but also on nature.
The successful completion of a shipment depends greatly through efficient planning and
organizing by competent people. Also the success depends on team effort from all the
parties who are involved in the shipment.
Future Growth To be a logistics winner in the coming years organizations need to use the downturn to
reshape for growth, propelled by an unshakeable conviction that the mission is still
important, that more prosperous times lie ahead, and that in some way the company
infrastructure is helping to build a better kind of services to customers.
Logistics is inevitable in the future and essentially the management policy also has a
significant role in the future of world. Generally the study is being featured with all
aspects of management in Logistics and Freight areas. (Logistics include Transportation,
Warehousing, Network Design, Cross docking, and Value Adding).
There is lot of scope in improving the infrastructure facilities in the logistics sector as the
future of logistics sector is going to significantly contribute to the growth of country’s
economy in the near future.
ABBREVATIONS
LCL – Less than container Load
FCL – Full Container Load
CFS – Container Freight Station
ICD – Inland Container Depot
CHA – Customs House Agent
IT – Information Technology
NVOCC – Non Vessel Operation Common Carrier
BIN – Business Identification Number
PAN – Personal Account Number
DGFT – Director General of Foreign Trade
DGCA – Director General of Civil Aviation
DEPB – Duty Entitlement Pass Book
EGM – Export General Manifest
IGM – Import General
SB – Shipping Bill
BE/BOE – Bill of Entry
RBI – Reserve Bank of India
ETA – Estimated Time of Arrival
ETD – Estimated Time of Departure
B/L – Bill of Lading
L/C – Letter of Credit
EDI – Electronic Data Interchange
CO/COO – Country of Origin
UCPDC – Uniform Customs & Practice for Documentary Credit
ICC – International Chamber of Commerce
DO – Delivery Order
FEMA – Foreign Exchange Management Act
FERA – Foreign Exchange Regulatory Act
ACS – Accelerated Clearance of Export & Import Scheme
EOU – Export Oriented Unit
STP – Software Technological Park
EXIM – Export Import
POL – Port of Loading
POD – Port of Departure
MR – Mate Receipt
SSR – Special Service Request
OBL – Original Bill of Lading
HBL – House Bill of Lading
INCOTERMS – International Commercial Terms
EXW – Ex-Works
FCA – Free Carrier
FAS – Free Alongside Ship
FOB – Free On Board
CFR – Cost & Freight
CIF – Cost, Insurance & Freight
CIP – Carriage & Insurance Paid to
CPT – Carriage Paid to
DAF – Delivered At Frontier
DES – Delivered Ex-ship
DEQ – Delivered Ex-Quay
DDU – Delivered Duty Unpaid
DDP – Delivered Duty Paid
3PL – 3rd Party Logistics
4PL – 4th Party Logistics
BIBLIOGRAPHY
Websites www.businessreviewindia.in
www.indiaprline.com
www.firstresearch.com
www.alibaba.com
www.speedycargo.com
www.12manage.com
Magazines Inbound Logistics
Cargo Systems
Books Elements of Shipping by Alan E Branch
Introduction to Logistics Systems Planning and Control by Gianpaolo Ghizni, Gilbert
Laporte, Roberto Musmanno.