Summer Internship Project Reporton

CUSTOM CLEARANCE PROCEDURE IN LOGISTICSBy

Mohit Chauhan

B.COM(HONS)of 2013Under the Supervision of

Dr. C. P. SinghAssistant Professor

Department of MarketingIn Partial Fulfilment of the Requirements for the Degree of

Master of Business Administration – Marketing & SalesAt

AMITY COLLEGE OF COMMERCE AND FINANCEAMITY UNIVERSITY UTTAR PRADESH

SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA2013

DECLARATION

Title of Project Report ………………………………………………………………………………………………………… I declare (a)That the work presented for assessment in this Summer Internship Report is my own, that it has not previously been presented for another assessment and that my debts (for words, data, arguments and ideas) have been appropriately acknowledged (b)That the work conforms to the guidelines for presentation and style set out in the relevant documentation.

Date : …………… Pradeep Kumar A0101907142 MBA – M&S Class of 2013

CERTIFICATE

I Dr. C. P. Singh hereby certify that Rohit Razdan student of Bachelor of Commerce (H) at Amity College of Commerce & Finance, Amity University Uttar Pradesh has completed the Project Report on ―The Dimensions of Reverse Logistics: A Study of the Indian Organized Retail Environment‖, under my guidance. Dr. C. P. Singh Assistant Professor Department of Marketing

ACKNOWLEDGEMENT

We are very thankful to Tolani Institute of Management Studies who give us such

opportunity to work out for project on foreign trade. We also express our gratitude to Mr.

Apurva Maheta for his precious help during the entire course.

We are very thankful to all employees of Shakti Forwarders Pvt. Ltd., Gandhidham for

supporting and providing us the necessary knowledge that would help in our future

quests. During our training period, we have not only learnt the standard Custom Clearance

procedure but also learned about other aspects of for running the shipping departments

smoothly.

The various department of the organization work in close co-ordination with each other

in order to achieve a common end.

We would also like to thanks Mr. Suresh Maheta, Mr. Rajesh Naiyer, Mr. Paresh

chaturvedi, Mr.Dharmesh, Mr. Manoj for their guidance which help us to complete our

project. Once again we heartly thankful to Shakti Forwarders Pvt. Ltd who help us in

making a project of procedure of custom clearance for import and export and gives us an

opportunity to learn under kind guidance and learning environment.

TABLE OF CONTENTS

INTRODUCTION ................................................................................................... 1 CHAPTER ............................................................................................................... 3 ANOTHER CHAPTER ........................................................................................... 5 A section of the second chapter ..................................................................... 6 Another section ............................................................................................. 8 Subsection of the section.................................................................... 10 Another subsection ............................................................................ 10 Subdivision of the third level................................................... 11 Further subdivision.................................................................. 12 ANOTHER CHAPTER.......................................................................................... 15 SUMMARY AND CONCLUSION……............................................................... 18 APPENDIX A. TITLE OF THE FIRST APPENDIX ………............................... 20 APPENDIX B. ANOTHER APPENDIX............................................................... 21 REFERENCES....................................................................................................... 23

INTRODUCTION

In view of the rapidly and constantly changing business environment globally and fast

evolving trade and commerce scenario in India vis-à-vis global market, there is

increasing requirement of reliable and dependable integrated logistics solutions

providers who can provide comprehensive, professional and dependable logistics

support to the industry, keeping the same in mind and with the vision to provide

quality and professional comprehensive logistics solutions to the international &

domestic trade.

In the development of any country’s economy, exports play a crucial role. Export is the

most important aspect of earning foreign exchange. A country should have to be

equipped with natural resources, so that it can sell these resources into the

international market.

With the opening up of the Indian economy, the international trade has been increased

significantly as there are less restriction on exports and imports.

More and more multinationals are registering their entry into the Indian market. The

imported products are now in well reach of Indian customers. The living standard has

been improved. This results in substantial amount of growth in both exports and

imports.

The procedure of both the exports and imports are time consuming and complicated. In

this regard there are several logistic companies and custom house agents providing their

services on the behalf of the exporters and importers to facilitate the trade between

them. These custom house agents and logistics companies take over the responsibility

of sending the goods from the exporter’s premises to the importer premises, which also

includes the most important aspect of custom clearance.

All-Ways Logistics India Pvt. Ltd. is a leading name for custom clearance. Over the

years they have operated smoothly with their wide spectrum of personalized services.

1.2 Indust ry:

Indian shipping scenario:

India has 12 major ports and 185 minor/intermediate ports. Over 90 percent by

volume and 70 percent by value of India’s overseas trade, aggregate of exports and

imports, is carried out through maritime transport along its 7617 km long coast line.

India has the largest merchant shipping fleet among the developing countries and its

merchant shipping fleet ranks 18th in the world, in terms of fleet size. Another silver

lining is the average age of the India’s merchant shipping fleet is only 12.7 years as

compared to the international average of 17 years .but, India’s share, sadly, constitutes only

1.45% of the world’s cargo carrying capacity.

As on April 1, 2005, India has a total of 686 ships comprising 8.01 Million Gross

Tonnage (GT) and 13.28 Million Dead Weight Tonnage (DWT). The shipping

corporation of India (SCI), the country’s largest carrier, owns and manages 82 ships

with 2.54 million GT and accounts for 40 percent of national tonnage. India is also

among the few countries that offer fair and free competition to all shipping companies for

obtaining cargo. There is no cargo reservation policy in India.

Indian shipping has remained a deferred subject till independence. Only after

independence, the development of shipping has attracted the state policy. The subject of

shipping, in the beginning, has been dealt with by the ministry of commerce, till

1949 and subsequently, in 1951, it has been shifted to the ministry of transport and

shipping. In 1947, the government of India has announced the national policy on

shipping, aiming at the total development of the industry. In order to accelerate the

developmental efforts, the necessity for a centralized administrative organization has

been felt. Accordingly in September necessity for a centralized administrative

organization has been felt. Accordingly in September 1949, the directorate general of

shipping with its headquarters at Bombay has been established with the objectives of

promotion and development of Indian shipping industry.

Shipping Company:

“Shipping Company is companies which invest his capital in purchase of ships and

provide transport service through the sea to its customers is known as shipping

company.”

Basically the shipping companies provide services in two ways

1. TRAMP SHIPS

2. LINER SHIPS

Tramp Ships:-

Tramp ship or general trader, does not operate on a fixed sailing schedule, but merely

trades in all parts of the world in search of cargo, primarily bulk shipments. It is a

chartered ship prepared to carry anything anywhere. Its cargoes include coal, grain,

timber, sugar, ores, fertilizers, etc like which are carried in complete shiploads.

Tramp tankers are specialized vessels. They may be under charter or be operated by an

industrial company, that is oil company, motor manufacturer, etc to suit their own

individual/market needs.

Liner Ships:-

Liner ship operates on a fixed route between two ports or two series of ports. They

operate on a regular scheduled service. They sail on scheduled dates/times whether they

are full or not. The cost of using the service (freight) can be quoted from a fixed tariff.

Container ships in deep sea trades and roe ship in the short sea trades feature

prominently in this field.

Different Types of Ships:-

1. Container ships

2. Roll-on/roll-off ships

3. Break-bulk ships

4. Crude carries

5. Dry-bulk carriers

6. Gas carriers

Container Ship:-

Container ship is also known as a ‘BOX SHIP’

Container ships cater to only containerized cargo and generally have cranes on

board. They can store up to 4 tiers of containers below the main deck and up

to 3 tiers above deck.

Roll – on / Roll - off Ships:-

Roll-on/roll-of ships were created to accommodate cargo that was

self propelled, such as automobiles or trucks, or cargo that could be

wheeled into a ship, such as railroad cars. They are essentially floating

garages. It takes long time to load such vehicles over the rail it is preferable

to load them by rolling them onto the ship.

Roll-on/Roll-of ships therefore have a portion of their hull that opens up

and acts as a ramp on which the vehicles are driven before being parked on

the many decks of the ship and secured with chains. The hull opening is

either on the side of the ship or on its stern (rear).This ship have an

advantage in that specialized lifting equipment is not required, even for the

heaviest of loads, since the cargo rolls under its own power or pulled by a

tractor.

Break-Bulk Ships:

Break-bulk cargo ships are multipurpose ships that can transport shipments

of unusual sizes, unitized on pallets, in bags, or in crates.

Due to increasing role of RORO (Roll-on/Roll-off) ships, container ships,

break-bulk ships share of international trade is decreasing.

The advantage of break-bulk ships is that they can call at just about any port

to pick up different kinds of cargo loads, giving them a flexibility that

container ships do not yet have.

The main problem with a break-bulk ship stems from its labor-

intensive loading and unloading because each unit of cargo handles separately.

Crude Carriers:-

3

Crude carriers are the bulk ships dedicated to the transport of petroleum products,

whether unrefined or refined, such as gasoline or diesel fuel.

The crude carriers are also known as VLCC (Very Large Crude Carriers) and

ULCC (Ultra Large Crude Carriers).

VLCCs and ULCCs are such large ships that they can call on only a few ports in

the world; since their draft, when loaded, can reach 35 meters(115 feet) they need

very deep ports for berthing.

Dry-Bulk Carriers:

Dry-bulk carriers operate on the same basis as oil tankers in that they are

chartered for a whole voyage.

Dry-bulk ships have several holds in their hull, in which non-unitized

cargo is placed.

Dry bulk ships carry agricultural products, such as cereals, as well as

coal, ores, scrap iron, dry chemicals, and other bulk commodities.

Dry-bulk ships are generally small enough to fit through the PANAMA CANAL.

Gas Carriers:

Another important bulk trade is the transportation of Liquefied Natural Gas

(LNG) and of Liquefied Petroleum Gas (LPG). These types of carriers have a very

distinctive shape. These ships hold several spheres of compressed gasses, only

part of which are visible above their main deck.

The LNG and LPG trades tend to be slightly different than the average bulk

transport, as they are used in a particular trade for long periods of time, on long-

term contracts-called time charter parties and therefore nearly have a sailing

schedule, not unlike liner ships.

Containerization:

‘Containerization’, the term very familiar to present day shipping industry is a

completely unknown concept, a few decades back. Malcolm McLean, owner of a huge

trucking company in USA, who has first conceived the idea of containerization by

transporting containers though ‘ideal-x’ in 1956 and initiated a revolution in the history

of shipping industry.

Before containerization, cargo has to be loaded first into the truck and later truck is to

driven to the port, unload the goods at the port and them into the ship at the port. This has

been a cumbersome process and, in consequence, consumed a lot of time. For

completing the exercise, ships are detained in the port for about ten days for the entire

process of unloading and loading. With the arrival of containerization, shippers have

started stuffing into containers, at their own place, and containers are brought to the

container yard (inland container depot) for shipment. This process has greatly

facilitated in two, after unloading the containers and loading them again into the ship. The

process of containerization has decongested the ports that are heavily crowded.

Shipping is truly the lynchpin of global economy and international trade. More than

90% of world merchandise trade is carried by sea and over 50% of that volume is

containerized. In today’s era of globalization, international trade has evolved to the level

where almost no nation can be self-sufficient and global trade has fostered an

interdependency and inter-connectivity between countries. Shipping has always

provided the most cost-effective means of transportation over long distances and

containerization has played a crucial role in world maritime transport.

What is meant by containerization?

Containerization is the practice of carrying goods in containers of uniform shape and size

for shipping. Almost anything can be stored in a container, but they are

particularly useful for the transport of manufactured goods. It is a method of

distribution of goods using containers. The use of containers has, indeed, facilitated

carriage of goods using containers. The use of containers has, indeed, facilitated

carriage of goods. Exporters need to go to the seaport for export of goods. Instead the

goods sent to inland container depot/ container freight station for sending to the

destination.

Since 1950s, containers have revolutionized sea-borne trade, and now carry around

90% of all manufactured goods by sea. The transporters in developed countries have

started making use of containerization, early now; developing countries have started

making use of containerization, early. Now, developing countries too are taking a

greater advantage in using containers for transportation of goods. Different countries are

giving logistic support, giving the necessary boost to improve the required

infrastructure to containerization, for encouraging export industry.

Containerization is to contribute about 22.66% to total cargo by 2010-11.

The robust growth of India’s manufacturing industry has pushed up India’s

containerization. India’s containerization has over 70% of total exported cargo, and

around 40% imported cargo. The Government of India has pursued a policy of

developing a number of Inland Container Depots and Container Freight Stations to

facilitate modal interchange and distribution of cargo and most importantly to avoid

awkward customs procedures from the waterfront. Containerization at major ports of

India contributed about 11% of total cargo handled at those ports in 2000-01; it

increased to 16% in 2005-06 and is estimated to further increase to 22.7% by 2010-

11.

Challenges Container port demand and capacity imbalance:

In view of the buoyant global merchandise trade scenario, container port demand has

been growing rapidly. Globalization has spurted merchandise trade, which is ready for big

stride. During the last four years, world container traffic has been growing at over

9.2% per annum, while container port capacity is growing at an average 4.5% per

annum. There will be requirement for additional port capacity to be built if the current

trend and port utilization level is maintained by 2010. The projected global container

demand and container port capacity illustrates that there will be a huge difference

between container port demand and capacity in the next four to five years. This is one of

the major challenges for global container trade. Extra capacity should be built to meet

the growing demand.

Types of containers-:

There are different types of containers. The popular types are:

1. General purpose containers-:

There are the most common type of containers and are the ones with which most

people are familiar. Each general-purpose container is fully closed and has width

doors at one end for access. Both liquid and solid substances can be loaded in these

containers. Based on length of the container, the container is generally known as a 20 ft

container or 40 ft container, in practice. Hazardous or dangerous cargo can not be loaded

into general-purpose containers.

2. Reefer containers (refrigerated) -:

These play an important role in South - Africa’s exports of perishable products, and are

designed to carry cargoes at temperatures reading down to deep frozen. For

refrigeration, they are fitted with electrical equipment for supply of necessary

electricity.

3. Dry bulk containers-:

These are built especially for the carriage of dry powders and granular substances in

bulk.

4. Open top/open sided containers-:

These are built for heavy and awkward pieces of cargo. These containers are ideal

where height of the cargo is in excess of height of the standard general purpose

containers.

5. Liquid cargo containers-:

These are ideal for bulk liquids, such as wine, fruit concentrates, vegetable oils,

detergents and various other non-hazardous chemicals. Bulk liquid bags, designed to

carry specific commodities, can fit into these containers.

6. Hanger containers-:

They are used for the shipment of garments on hangers.

Custom House Agent:

“Custom House Agent” means a person licensed, temporarily or otherwise, under the

regulations made under sub-section (2) of section 146 of the Customs Act, 1962.

A person is permitted to operate as a customs house agent, temporarily under

regulation 8(1) and permanently under regulation 10, of the Customs House Agents

Licensing Regulations, 1984.

The services rendered by the custom house agent are not merely limited to the

clearing of the import and export consignment. The CHA also renders the service of

loading/unloading of import or export goods from/at the premises of the

exporter/importer, the packing, weighment, measurement of the export goods, the

transportation of the export goods to the customs station or the import goods from the

custom station to the importers premises, carrying out of various statutory and other

formalities such as payment of expenses on account of de-stuffing/ pelletisation

terminal handling, fumigation, drawback/ DEEC processing, survey /amendment fees,

dock fees, repairing and examination charges, landing and container charges, statutory

labour etc this expenses paid on behalf of importer and exporter. The CHA is

ordinarily reimbursed by the importer/ exporter for whom the above services are

rendered.

COMP ANY P ROF ILE: -

All-Ways Logistics India Pvt. Ltd. an ISO 9001:2008 company was established in January, 2008 by the group of logistics professionals who has experience of more than 20 years.

All-Ways Logistics is also a member of World Cargo Alliance family (IGLN) and their reach is global at all air ports / sea ports in the World with their worldwide network of Agents / partners / Associates' offices.

Mr Deepak Gupta , CEO of All-Ways Logistics, is a fellow member of the Institute of chartered accountant of India and worked at senior management positions in various companies.

At present approx. 50 team members are working with All-Ways Logistics who are also eager to provide the best services to their customers for their all freight and logistics needs. The head office is in New Delhi and Branch/associate offices are at Mumbai, Chennai, Kolkata, Mundra, Kandla, Vizag, Haldia, Cochin, Bangalore, Hyderabad, Agra, Jaipur, Ludhiana, Chandigarh, Dehradun, Kanpur, Ahmadabad, Pune.

THE VISION:-

To be a new logistics leader meeting the challenges of global trade. To be a leading logistics global company offering one stop solutions of all logistics needs

at anywhere in the world. Lead from front through high standard of quality services to all the customers and

associates worldwide.

THE MISSION:-

To enhance the competitive edge by offering unique value added quality services with the best practices of the industry.

To be innovative and continuously updating technological advances to ensure on real time services to the customers and continuously strives for excellence.

To provide tailor made solutions to the customers according to their logistics requirements time to time.

Major items handled by Shakti Forwarders are as follows:

Export s : sanitary ware, stainless steel utensils, readymade garments, soya, engineering goods,

sesame seeds, groundnuts, rice, textiles etc.

I mport s : non ferrous and ferrous metal scrap, consumer goods, soap raw material, chemicals, fabrics, capital goods, rubber products, dates, dry fruits, auto parts, furniture items etc.

Management Team:

Sr. No. Director's Name Designation1 MR. DEEPAK KUMAR GUPTA DIRECTOR2 MR. MANURAJ GUPTA DIRECTOR3 MR. BALBIR SINGH RAWAT G.M.4 MR. ASHISH CHAWLA G.M.(SALES)

Head office of All-ways Logistics Pvt. Ltd.:-

KH-810, Mahipalpur, Vasant Kunj Road, Behind Apra Maruti Suzuki Show Room,New Delhi-110037 (INDIA).

Registered office of All-ways Logistics Pvt. Ltd.:-

60, Savarkar ApartmentPlot No. 39, I.P. ExtensionPatparganj, New Delhi-110092.

Branch offices of All-ways Logistics Pvt. Ltd.:-

MUMBAI OPERATION OFFICE 707, Prabhat Centre AnnexePlot no. 7, Sector 1A, CBD BelapurNavi Mumbai-400614 (India)Mumbai-400072

CHENNAI OFFICEAll-Ways Logistics India Pvt. Ltd.No: 69, 5th floor, Leelavathi BuildingArmenian St, Chennai - 600001(India)

BANGALORE OFFICEAll-Ways Logistics India Pvt. Ltd.1112/584 A, MES ColonyKonena Aghara, HAL PostAirport Exit Road Bangalore – 560017 (Karnataka)

HYDERABAD OFFICEAll-Ways Logistics India Pvt. Ltd.2ND Floor, 128/2 RT Water Tank LanePrakash Nagar , Begum Pet Hyderabad  – 500016 (Andhra Pradesh)

COCHIN OFFICE All-Ways Logistics India Pvt. Ltd.37/201 4C , Plot No.47 , Jawahar Nagar Kodvanthara , Kochi-682020 (Kerala)

GUJARAT (GANDHIDHAM) OFFICEAll-Ways Logistics India Pvt. Ltd.Office No. 105, Plot No. 84, Mani Comlex First Floor, Behind Madhuban Cinema Hall Gandhidham, Kutch,Gujarat-370201