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LCL Logistix
Logistics
Logistics refers to various functions associated with the organizational disciplines
of planning, managing and controlling the flow of goods and services, people and
related information. It includes all the steps that are required to achieve the timely
delivery of a product, goods or services from the point of origin to the point of
destination.
y All activities that are involved in the movement of goods and services fromthe point of origin to the point of final consumption are grouped under the
term 'logistics'.
y The art of managing or supervising all these activities when groupedtogether as a collective unit, are placed under 'logistics management'.
logistics has been defined as the part of the process of supply chain that plan,
control and implement an effective and efficient flow for the purpose of storage of
goods and services and other related information from the point of commencement
to the point of final consumption with a aim to satisfy the requirements of its
existing and prospective customers.
Difference between supply chain management and logistics
Supply chain management is the process of planning, implementing and
controlling the operations of supply chain. It includes all movement and storage of
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raw materials, work in process inventory and finished items to the customer.
Supply chain management is usually procurement, managing the suppliers and the
flow of goods.
Logistics is managing the real movement (at the ground level)
Logistics Terms
There are some terms which relate to the concept of Logistics and anyaspirant who wants to have a deep insight into the overall procedure of logistics
must be aware of these frequently used phrases.
Certificate of Origin
This refers to a certified document that is used in foreign commerce with
regard to the origin of goods. This document certifies that the products which are
ready to be exported have been manufactured in a specific geographical location
and country. This certificate is sent to the importer by exporter of the product. This
may be beneficial in claiming any concessions. This certificate needs to be signed
by the exporter of the product and needs to be certified by the local chamber of
commerce.
Warehousing
This is the procedure of storing goods at a safe and clean place for the
purpose of safeguarding the goods and may involve keeping goods to be sold at
later stage. This can be described as a place or store where merchandise or
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products are kept. It is done for safe keeping of goods, usually for sale at a later
time.
Distribution
It refers to a process of the movement of people, services and resources to
the place of their consumption or where they are required. This usually involves
storage, transportation, issue and disposal of goods.
Transportation
It refers to the movement of supplies, goods, people and equipment by any
mode of transport such as rail, trolley, water or air. This is considered to be
important aspect of any organization as timely delivery of products ensures
customer satisfaction and brand name for organization. The mode of transportation
may be dependent on several factors like customer requirements and specifications,
past experiences, speed and geographical locations.
Consignor
He is a person who makes the shipment of goods for the purpose of
delivering the same by any mode of transport such as sea, trolley, land or air. Also
known as shipper or sender. He is usually liable for hiring the transportation
vehicle for the goods sent by shipment to be delivered to the consignee. In a
transaction based on credit, he has the right to stop the goods in transit.
Consignee
This refers to an individual, company or manufacturer to whom a shipper or
seller sends merchandise. Intermediate consignee refers to a party who is
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responsible for merchandise delivery to the ultimate consignee. Ultimate
consignee, on the other hand, refers to a party who is in the actual receipt of the
merchandise in an export-related transaction.
Air Way bill
This refers to a bill of lading that is related to air transportation, which tends
to serve as the shipper's receipt. It indicates that the carrier company has consented
to the listed goods and under an obligation to carry the products that are delivered
in the form of a consignment to the destination airport in accordance with the
conditions specified to the consignee and consignor. Air way bills are always non-negotiable.
LCL LOGISTIX (INDIA) PVT. LTD
COMPANY PROFILE
Born out of a vision, a single minded objective that puts service before
anything else, LCL surged forth as a leader in the Indian NVOCC scenario. Itsmeteoric rise stems out of a solid foundation. The management boasts of over 20
years of rich and varied experience in the shipping industry.
LCL's ability to respect and appreciate the customer's needs and then tailor
logistics solutions and make the same available right at the customer's premises has
been the single guiding force behind LCL's spectacular growth. This growth is
based on a solid foundation of trust that LCL enjoys with the trade whether it is a
large corporation, small business or a major shipping line.
LCL group is one of the most well represented groups in India today with offices
and representations in almost all major ports and inland points.
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Locations
As activity grew, LCL threw open operations from multiple centers in India.
Today LCL has offices in all the major metropolitan points and export potential
ICD's to service customers' needs efficiently.
AFFILIATIONS
International AirTransport Association
International Federation of Freight Forwarders Association
International MultiModal Transport Association ( IMMTA )
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Federation of Freight Forwarders Association of India
Association of Multimodal Transport Operators of India
Indian Merchant Chambers ( IMC )
Services
LCL is a world leader in implementing tailor-made integrated logistics programs.
So you can manage your materials, products and information from vendors all the
way to your customer's door-step. Our specialists engineer every solution around
one hub to YOU so be it air/ocean transport, warehousing, custom brokerage, trade
consulting or distribution, every service obeys your orders with clockwork
precision.
Take a look at what's on offer:
y Custom Brokerage.y Scheduled FCL & LCL Service.y De-Consolidation & on-Forwarding.y Project Management.y Pick up Consolidation and Containerization
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Customs brokerage
This is about profession that involves the 'clearing' of goods through
customs barriers forimporters and exporters (usually businesses). This involves the
preparation of documents and/or electronic submissions, the calculation (and
usually the payment) on behalf of the client of taxes, duties and excises, and
facilitating communication between the importer/exporter and governmental
authorities
Scheduled FCL & LCL Service.
FCL - Full container load
LCL - Less than container load
This refers to occupancy of space in the container by the exporter. This
process is made routine and scheduled manner. Its details can be obtained in
upcoming pages.
De-Consolidation & on-Forwarding.
Separating a 'consolidated' (usually containerized) shipment into its original
constituent shipments, for delivery to their respective consignees. Also called
degroupage.
Project management
It is the discipline ofplanning, organizing and managingresources to bring
about the successful completion of specific project goals and objectives. Aproject
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is a finite endeavor--having specific start and completion dates--undertaken to
meet particular goals and objectives, usually to bring about beneficial change or
added value. The primary challenge of project management is to achieve all of the
project goals
Pick up Consolidation and Containerization
It refers to fusing all the individual concerns and they bring together. Later
they make consolidated things to containers to make safe path for destination.
Sea Freight
A major portion of the globally traded goods is shipped using Ocean vessels.
Today LCL's main line of freight forwarding business is ocean freight forwarding
service. This service is the best solution for delivering economically sizable loads
of cargoes. We have extensive experience handling both general and specialized
shipments including both inbound and outbound cargoes.
LCL can ensure your consignment travels by the most cost-effective route to
almost anywhere in the world. With import and export movements by full
container loads (FCL), or less than container loads (LCL) from major markets
around the world we utilize both conference and non conference vessels to give
you a choice that best meets your requirements. Furthermore, if you have a large
number of suppliers with small consignments destined for different locations, we
can consolidate them in F.C.L shipping containers, and coordinate theconsignments. Thus, saving you time and money.
We can handle your sea freight collections, container loading, documentation and
actual movements, no matter what size or shape your import or export
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consignments. You can rely on our comprehensive door to door service. In
addition, we can arrange the best shipping options such as multimodal
combinations of land/sea/air to meet your specific needs for safety, schedule and
location.
Air Freight
LCL is an IATA Licensed freight forwarder that combines air freight with
ocean freight, customs brokerage, inland transportation and integrated logistics.
LCL Group's comprehensive, cost-effective service guarantees that your air freight
shipment will be delivered on time and within budget every time you choose ourglobal solutions.
Warehousing & Distribution
LCL Group's warehousing network is located throughout India. Our logistics
centers, in strategic locations are designed to support your global sourcing and
J.I.T. material management needs. These centers also serve as central distribution
hubs for direct-to-customer shipments. Best of all, with LCL Group, your company
avoids the expense or investment of maintaining dedicated warehousing facilities
in multiple locations.
Transportation
Keeping in line with our commitment towards providing efficient cargo
management services to our customer we have promulgated a Transportation
division and armed it with Closed Body Trucks this would enable and ensure
timely and efficient movements of our Shipper and Consignee cargoes. In addition
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to CBT's we have also deployed trailers of different capacities to facilitate the
movement of containers in order to serve the Export / Import FCL trade.
Projects
Company would like to introduce projects division, which will specialize in
project and heavy lift transportation, marine chartering, and RoRo shipping. Our
mission is to become a strong player in these niche markets with an innovative
approach and high service level to serve our clients even better in these dynamic
sectors.
Our project and heavy lift division is particularly specializing in globaltransportation of any kind of heavy lift, oversized units and project related cargoes,
either as ocean transport only or as integrated transport to jobsite.
Our aim is to, through personal contact, understand and support our clients on all
levels of project preparation and planning enabling them to achieve best possible
and cost-effective handling of their goods.
The freight forwarding and contracting department are handling complicated,
integrated movements from factory to foundation, as well as general project
forwarding, including heavy haulage, cranage and customs handling worldwide.
Such requirements are always handled with complete and careful coordination
keeping in mind project schedules as well as all aspects and possibilities available.
As we are shipping variety of cargoes, in many cases we are able to combine
cargoes from various projects creating thereby savings for all involved.
Providing specialised marine vessels and tailor made marine transport solutions is
another service we are offering. Our specialised marine chartering department
sources any type of special carrier for any specific project always keeping in mind
most economic, technically feasible and safe handling of the cargo.
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Departments
Every organization should have various activities to be performed in routine
basis so the organistaion work composes of various looped mechanism. So in
order to breakup the tough actions various departments have been formed. The
departments divide the work and its ease to carry the process in well stipulated
manner. So in the LCL logistics the departments are as follows
y Sales and marketingy Operationy Customs clearancey Documentationy Accounts
These are the various classifications in the departments and the name of the
department will insist its function clearly. In short let me describe the details they
do full details can be seen in individual head.
Sales and marketing: in this the main work is to market the service among the
business people and to take the initial setup for the order
Operation: this vested with major activities like document filing and it hold the
functions to deal with customs and the procedures.
Documentation: this is about various paperwork that are to be filled and
maintenance of various forms that deal to government and export also import.
Accounts: this section deals with the fund related activities this section keeps
record on payment and receipts.
These are just an overview about their major function their details are as follows
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ORGANISATION CHART
CEO
Regional manager
Branch
Manager
Sales and
marketing
Operation &
Customs clearance
Documentation Accounts
Staffs
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Sales and marketing
NVOCC
Non-vessel operating common carrier -- they're kind of like subcontractorsfor shipping. They book large quantities of space on ships and sell smaller
quantities of space to shippers. They also consolidate multiple shipments into one
container load that moves under one bill of lading.
As LCL logistix belongs to NVOCC they used to keep reserve the space in the
ships and they market the space availability to the various exporter. As Karur is
prone for its exports in home textile products there will be regular consignments so
its essential to have better marketing. Similarly the company uses its maximum
effort to proliferate the market by involving with unique strategies and services.
Space reservation Offer to public
In this department the major process is to promote sales to the concern theydo with their marketing. They promote their strength and facilities offered to the
people and get image of reliable among business people and finally get the
consignment.
They seek the exporter and get the details about the order to be delivered and the
complete details about time, place, type of goods, space needed, and all the
calculation will be carried out and the department will evaluate the proper vesselthat suits the consignor needs after getting the proper info regarding with the vessel
the details will be mentioned to the consignor regarding with the vessel type,
freight no., carrier, etc and the it will be getting the confirmation from the
consignor then the department function is about booking.
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Process flowchart:
Seek for the consignment
Meet the demands of the consignment
Scrutinize
Confirmation
Booking
Booking is the final stage for the initial step once the order is confirmed by the
exporter and the details about the goods will help to determine the facility needed
for shipment after analyzing the all the department will get confirmation from theexporter about the date, time and all other vital things that makes the process
smooth. When the confirmation is made simultaneously the confirmation to the
vessel will be carried. Once this step is over the space is allotted for that particular
exporter.
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The company also allots an individual person who will be in charge for the
particular transaction until it carried down. So the person has to provide all kind of
clarification to the exporter in all circumstance. This makes the exporter to feel
comfort. This also helps to structure effective customer relationship.
Freight charge
Usually its classified into two types like
y Free on board (FOB)y Freight prepaid (FPP)
Free on board (FOB)
FREE ON BOARD means the seller fulfills its obligation to deliver when the
goods have passed over the ship's rail at the named port of shipment. The buyer has
to bear all costs and risks of loss of or damage to the goods from that point. FREE
ON BOARD requires the seller to clear the goods for export
Freight prepaid (FPP)
Air or ocean freight charges that are paid at the port of origin or loading, and
are billed to the importer in the exporter's invoice. It is not refundable even if the
shipment fails to arrive at its destination.
So based on the deed which is made by the exporter or importer the freight charge
will be collected.
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Operation department
The operation department holds all the major activities with rearding to
goods movment from the place of exporter to the ship. It has the major division
called customs clerance department. It has both functions for import or export. So
normally this department have hight priority in functioning. The procedure also
differ from type of cargo and the purpose import or export. Generally document
filing and customs is the divisions that perform the most activities in this
department. So the two roles 1) filing of documents 2) customs
The procedure for export are as follows
Obtaining the cargo and documents from exporter
Arrangement for carrier
Filing the douments
Customs examination
Stuffing
Container initiating
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Bill of lading
Tracking
As Karur is majorly involved in export the organisation is mainly concerned about
export of the goods than import. It also acts as clearing and forwarding division in
customs. This helps the consignment flow in easy manner by clearing the
requirements of customs. As CFS is located in Karur most of the consignment
moved to CFS and the clearance procedure will be carried out in CFS itself, this
made the shipment procedure very easy aafter getting clerance the consignment
will be sent to the concerned port.
CFS
A facility at which (export) cargo is received from merchants for loading
(stuffing) into containers or at which (import) cargo is unloaded (stripped) fromcontainers and delivered to merchants.
Import procedure
Import general manifest
Bill of entry (Request letter reference with consignee, shipper, material)
Bill of entry filing
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Pest control
Cargo assessment / auditing
Customs clearance
Duty
Cargo release
While booking the vessel there are 2 kinds of option they are
FCL - Full container load
LCL - Less than container load
On basis of the export cargo the option will be selected. The FCL and LCL are
differentiated, in practice, on whether the 'whole container' or 'not the whole
container' is intended for the consignee.
The FCL means the load reaches its allowable maximum (or full) weight or
measurement. In practice, however, the FCL in the ocean freight does not always
mean packing a container to its full payload or full capacity. For example, an
exporter books a 20' container that is intended for a consignee at FCL flat rate of
US$1,500. If the consignment occupies 500 cu. ft. and weighs 5,000 kgs. Only, the
case is still FCL and the exporter has to pay US$1,500.
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If an exporter intends to pack a container to the full capacity or full payload with
the consignments of two or more consignees for the same destination, the case is
LCL and the carrier will charge the LCL freight rate on each consignment. In the
LCL arrangement, the shipper is required to deliver the cargo to the carrier's
container freight station for containerization, thus there is no guarantee that the two
or more consignments from the same exporter will share the same container. In
some cases, the exporter is allowed to pack the container at their premises in the
LCL arrangement, and then the carrier uses that same container to pack in more
cargo from other shipper(s) to make a full container load at the container freight
station.
Overview about procedures
y Filing of consignment details with Indian customs i.e. bill of entry forimports and bill of export for exports.
y Assessment and scrutiny by customs.y Payment of duty if applicable.y Quality clearance i.e. quarantine, public health, etc.y Customs appraisal of consignment and certification of consignment
worthiness for import export.
y Delivery order or order of exports as the case maybe.y Survey of consignment (optional)
Customs
This section plays a vital part in goods movement. So the company has
allotted separate officials to deal with the customs procedure. They are specialized
in dealing with the various norms that are prescribed by the Indian customs. These
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officials will have regular touch with the officials in order to have smooth flow of
function. They used to classify the procedure incase of export they will file
shipping bill and for import they deal with bill of entry.
Electronic Data Interchange its the latest technology that is being followed by the
organization at all stages EDI will help to ease the work process. Its full details can
be seen documentation department. The company use both EDI and manual filing
this will be based on the situation if the goods need to be moved to CFS in Karur
they will follow the ordinary manual filing and incase if the goods transferred to
port they stick with EDI process.
Difference between freight forwarding and 3PL
A freight forwarder is an agent for the exporter in moving cargo to an
overseas destination. These agents are familiar with the import rules and
regulations of foreign countries, the export regulations of the government, the
methods of shipping, and the documents related to foreign trade.
A third-party logistics provider is a firm that provides outsourced or "third
party" logistics services to companies for part or sometimes all of their supply
chain management function. Third party logistics providers typically specialize in
integrated warehousing and transportation services that can be scaled and
customized to customers needs based on market conditions and the demands and
delivery service requirements for their products and materials.
3PL
AThird-party logistics provider is a firm that provides outsourced or "third
party" logistics services to companies for part, or sometimes all of their supply
chain management functions. Third party logistics providers typically specialize in
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integrated operation, warehousing and transportation services that can be scaled
and customized to customers needs based on market conditions and the demands
and delivery service requirements for their products and materials.
Every export based on company cannot afford much on logistics so this
made emergence of 3PL they assist this export and import transactions by breaking
up the function. This made the corporate to free their logistic burden. These 3pl
offers various types of services. Like all other LCL offers so many services that are
mentioned above. They would perform activities such as, pick and pack,
warehousing, and distribution (business) the most basic functions of logistics and
offer their customers advanced value-added services such as: tracking and tracing,
cross-docking, specific packaging, or providing a unique security system.
Documentation Department
This department holds the major legal activities and it develops all kind of
proof for export or import. The major role is to maintain documents and get filed
with the various alternatives as mentioned by the act. They often have paperwork
today the technology have made some alteration in its function. That is the
invention of EDI in the global trade activity.
EDI
Electronic Data Interchange is simply a set of data definitions that permit
business forms that would have been exchanged using paper in the past, to be
exchanged electronically. This simple set of definitions has spurred a number of
organizations to put in place an operational environment in which the exchange of
electronic business forms substitutes for the exchange of paper forms.
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Electronic data interchange aims at single point collection of data for use by
various agencies participating in a common activity.
This department often keeps in touch with both ends that is shipper and
government officials. It mutually get avail all the info from the exporter and files
the necessary forms and get approval from the concerned custom and government
officials. They also keeps record of the entire process until the consignment
reaches destination once the it reached the final formalities will be made and it will
intimate the exporter. Later it submits the documents that are to be approved from
various officials.
The clearance procedure of goods will differ incase of EDI and non EDI so there
will be lot of steps that are need to be carried out. non EDI system is nothing but
the old paperwork procedure. The clearance procedure have stated below
according to the method
Tracking of information
Any information required for filing the document can received at liners
website or to customer care of the liners. The information such as IGM number,
ETA, vessel name, shipping details etc can be received in above mentioned ways.
Clearance procedure for export
Processing of Shipping Bill - Non-EDI:
Under manual system, shipping bills or, as the case may be, bills of export
are required to be filed in format as prescribed in the Shipping Bill and Bill of
Export (Form) regulations, 1991. The bills of export are being used if clearance of
export goods is taken at the Land Customs Stations. Different forms of shipping
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bill/bill of export have been prescribed for export of duty free goods, export of
dutiable goods and export under drawback etc.
Processing of Shipping Bill - EDI:
Under EDI System, declarations in prescribed format are to be filed through
the Service Centers of Customs. A checklist is generated for verification of data by
the exporter/CHA. After verification, the data is submitted to the System by the
Service Center operator and the System generates a Shipping Bill Number, which
is endorsed on the printed checklist and returned to the exporter/CHA. For export
items which are subject to export cess, the TR-6 challans for cess is printed andgiven by the Service Center to the exporter/CHA immediately after submission of
shipping bill. The cess can be paid on the strength of the challan at the designated
bank. No copy of shipping bill is made available to exporter/CHA at this stage
Documents involved in export
y Shipping Bill / Bill of Exporty Customs Declaration Formy Dispatch Notey Commercial invoicey Consular Invoicey Customs Invoicey Packing Listy Certificate of Inspection
y Certificate of Shipmenty Health/ Veterinary/ Sanitary
Certification
y Certificate of Conditioningy Antiquity Measurementy Shipping Ordery Cart/ Lorry Ticket
Clearance procedure for import
EDI non-EDI system
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y If the goods are cleared throughthe EDI system no formal Bill of
Entry is filed as it is generated in
the computer system, but the
importer is required to file a cargo
declaration having prescribed
particulars required for processing
of the entry for customs clearance.
y Signed invoicey Packing listy Bill of Lading or Delivery
Order/Airway Bill
y GATT declaration form dulyfilled in
y Importers/CHAs declarationy License wherever necessaryy Letter of Credit/Bank
Draft/wherever necessary
y Insurance documenty Import licensey Industrial License, if requiredy Test report in case of chemicalsy Adhoc exemption ordery DEEC Book/DEPB in originaly Catalogue, Technical write up,
Literature in case of machineries,
spares or chemicals as may be
applicable
y Separately split up value ofspares, components machineries
y Certificate of Origin, ifpreferential rate of duty is
claimed
y No Commission declaration
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Accounts Department
This department functions with all kind of fund related activities. This often
keeps record about contract details and the payment that are to be made or
received. The accounts department prepares bills for the clients as per contract
term. They maintain the accounts and makes arrangement for the collection of
dues. The key functions that can be classified are as follows
y Payment follow-upy Dutiesy Bank accounts
Payment follow-up is nothing about the fare that is vested with the particular
consignment. The department will hold various records and it finally prepares the
essential invoice to the exporter this also have record about the transaction cash it
will submit and fulfill the documents on behalf of the exporter and it will present to
the banker in order to claim for the money by the exporter.
Duties is nothing about various taxes that are to be paid by the client while export
or import there are certain duties that are to be paid by the person this duties
depends on the various conditions that is it will change based on the industry and
various duty drawback schemes so its must to have proper idea to process this
section.
Once the certain activities are carried out that is preparing invoice and other bills
the department will forward those essential one to documentation department and
there it will be filed. This department also has function in the staffs salary
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allotment. They hold down all the bank related activities. They also used to record
all the expenses that are made within the organization.
Jotting overall key activities
y researching and planning the most appropriate route for a shipment (takingaccount of the perishable or hazardous nature of the goods, cost, transit
time and security);
y arranging appropriate packing (taking account of climate, terrain, weight,nature of goods and cost), delivery and warehousing of goods at their final
destination;
y negotiating contracts, transportation and handling costs;y obtaining, checking and preparing documentation to meet customs and
insurance requirements, packing specifications, and compliance with
overseas countries' regulations and fiscal regimes;
y offering consolidation services by air, sea and road - ensuring cost-effective and secure solutions to small shippers with insufficient cargo to
utilize their own dedicated units;
y liaising with third parties to move goods (by road, rail, air or sea) inaccordance with customer requirements;
y arranging insurance and assisting the client in the event of a claim;y offering tailored IT solutions and electronic data interchange (EDI)
connections;
y arranging payment of freight and other charges, or collection of paymenton behalf of the client;
y utilizing e-commerce, internet technology and satellite systems to enablereal-time tracking and tracing of goods;
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y arranging air transport for urgent and high-value freight and managing therisk door to door;
y arranging charters for large volume, out-of-gauge or project movements byair and sea;
y acting as broker in customs negotiations worldwide to guide the freightefficiently through complex procedures;
Services offered to its client Overview
The total service that are provide by the organization to its clients are
described below,
Arrangement for local transport
Getting to local warehouse or customs bonded area
Preparing for customs clearance
Stuffing
Leading to vessel
Departure
These are the some facilities that are offered by LCL to its clients in effective these
above mentioned are just a layout not involved with deep sight. The company offer
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lot of unique services which can be observed by going through this report. Below I
have placed the diagrammatic depiction of the process involved in export and
import term
Export activities layout
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Import activities layout
Current Logistics Related Issues
There are several factors that affect logistics. These issues need to be
anticipated, prepared for and taken advantage of for a company to be successful in
todays market. They are
External:
y Globalisationy Technologyy challenging nature of the work forcey Environmental concerns
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Internal:
y Customer service and qualityy Third party networksy Supply chain managementy Changes in management and organization style
Listed below are some of the steps that could be followed to ease the above
mentioned issues:
Performance:
y Better service for customersy Improved productivityy Assess just in time and quick response needs
System structure:
yBetter relationship with vendors, customers and third parties to moreeffectively manage the supply chain
y Better relationship within and across the organization
Technology integration:
y Better information systems that connect functions and organizationsy Combine information and material handling systems for increased efficiency
and effectiveness.
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Third Party Logistics Markets in India
With growing impact of globalization, there is an increasing pressure on
companies to achieve extremely efficient supply chains, which is possible only
through a professional management of the logistics operations. Since the 'third
party logistics providers', the professional logistics service providers can offer such
efficient logistics solutions, more and more companies are adopting 3PL services
in their logistics operations, thus resulting in an impressive growth of 3PL markets.
Prospects for growth in third party logistics (3 PL) market in India looks promising
in view of the improving infrastructure such as highways, ports, bridges and
increasing connectivity. Growth prospects are visible from the fact that total
revenue generated by 3 PL players has surpassed US $1.5 bn in 2008 as against US
$890 mn in 2005.
Asias Next Major Logistics Hotspot India
A Rising Star
Since gaining its independence from Britain in 1947, India has grown up in
the shadow of the Red Dragon. Its population and labor force rank second in the
world to China, and it is fourth globally in terms of GDP purchasing power parity
$3.7 trillion trailing only the United States, China, and Japan.
But as Chinas aggressive economic policies and government control over
infrastructure investment command the attention of global businesses looking for
abundant cheap labor and sourcing opportunities, India is taking a different tact.
The government has been quietly building a foundation for its own economic
revolution with a laissez faire, wait-and-see approach to reform for better or
worse.
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Indias measured strategy reflects its historical and cultural transformation from a
British colony to a republic one that eschewed violent upheaval for passive
reform.
The very colonialism that Mohandas Gandhi resisted so ardently in the 1940s has
paradoxically given India a cultural edge as its global economy evolves. While
Hindi is the countrys official tongue, English has become the language of
commerce and trade.
Many U.S. companies outsource telecommunications and business processes to
India because of its well-educated, English-speaking labor pool. Industry expertsanticipate this trend will continue.
The Place to Be
To meet increasing demand from customers, transportation companies are
also expanding in India. Memphis-based FedEx, for example, began operations in
India in 1984 and 13 years later became the first express company to launch an all-
cargo flight to India. In October 2005, FedEx Express unveiled new service
expansions in India, connecting 4,348 cities and towns across the country to the
world.
As part of this effort, FedEx added five new weekly flights from Delhi westbound,
bringing the total number of weekly flights to 16, and making it the first express
carrier to have two gateways in India Mumbai and Delhi.
India is the place to be, says Creeten. It is a fast-growing, market-driven
economy. As India emerges as an economic superpower, the elements critical for
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success on the global scene will continue to be speed to market, quality, cost, and
efficiency.
In turn, India offers logistics and transportation service providers ample
opportunity to tap into an emerging marketplace. Key customer segments in India
include pharmaceuticals, fashion, gems and jewelry, engineering goods, and
precision tools most of which require special shipping provisions.
The apparel industry, by example, is turning to Indias textile mills for better
quality, higher-value fabric. To meet the distinct needs of Indian garment
exporters, FedEx created its Solutions for the Fashion World offering.
It also provides an International Priority option for valuable goods, which offers
secure custodial control and time-definite, airport-to-door service from India to key
destinations around the world. This type of service is key for apparel
manufacturers and their trendy customers.
Innovation vs. Growing Pains
Global businesses ultimately are attracted to countries that take an
innovative approach to developing the requisite transportation connects and
technology infrastructure necessary to expedite cargo movement. India has a leg up
on competing countries given its pedigree in the business process outsourcing
sector and its English-proficient labor pool.
For many outsourcers and investors, Indias potential as a pivotal link in the global
supply chain far outweighs its current growing pains.