INTERNATIONAL BUSINESS

2009-04-15T12:51:00.001-07:00

2009-04-15T12:50:00.000-07:00

Custom Search

Introduction

2009-04-15T11:50:00.000-07:00

“Logistics is all about mastermind the science of movement.” The goal of logistics is to achieve a targeted level of customer service at the lowest possible total cost that aims to service the demand created by marketing efforts.

Logistics is one of the oldest and also the newest activities of business management. It involves combining diverse functions and service providers who may be culturally and objectively different.

Logistics is about moving materials, information and funds from one business to another business or consumer. It is an important part of the business economic system and is a major global economic activity. In fact 10-15 per cent of product costs are logistics related. Worldwide, logistics constitutes about $2 trillion a year. For any country, the logistics cost is estimated between 9 and 20 per cent of its GDP.

Globally, transportation sector accounts for around 3 to 5 percent of GDP. Almost 65% of the world trade is done through ocean. this is the same case of India also. The demand for transportation industry is directly proportional to the growth of the economy, mobility of population and other related factors.

Though traditionally, transportation involves physical movement of goods, however, in the new era, it is largely influenced by information and communication technologies with the focus being on knowledge of customer needs and value added services in order to provide maximum benefits to user.

Generally the forwarding function can be divided into the following areas.

1. Documentation
2. Planning and Costing Routes
3. Booking and Coordinating Freight
4. Arranging Ancillary Services (Eg: Warehouse, Packing)
5. Consolidation
6. Paying chares due to Carriers, Ports, Customs etc
7. Customs Requirements
8. Advice
9. Information that helps to prepare Quotations

STATEMENT OF THE PROBLEM

International trade plays a significant role in the economy of our country. Foreign markets now tempt business firms that never much warned about sales beyond their nation’s border. The Logistics industry as such is heavily competitive in nature with all players trying various strategies to gain a hold of the market

The rapidly expanding transport facilities and technological development in transport has grown in a boom stage in the trade and commerce. Shipping agency can have a huge import on the trade of individual countries. The logistics completely developed in a country have a great say on its economic development. This topic is relevant in the context of trade.

The present study has been titled as “A LOGISTICS HIGH PERFORMANCE OF SHIPPING AGENCIES”. Since Logistics service is the important in world wide business. Hence this topic has been chosen.

OBJECTIVES OF THE STUDY

The main objective of the study is to analyze the High Performance of Shipping Agency. The other objectives are:]

1.To study the functioning of Shipping Agency.
2.To study the responsibilities of Customs House Agents.
3.To study about documentation procedure in detail
4.To offer findings and suggestions to improve the High Performance of Shipping Agency.

LIMITATION OF THE STUDY

The study is confined only to a particular Shipping Agency and hence the conclusion must be drawn with due care, when the attempt is made to generalize the result. The results have also been drawn based on the information gathered. Time constraint is another problem faced by the researcher. Data has been collected within permitted time limit.

Review of Literature

2009-04-15T11:48:00.000-07:00

Reviews

Sebastian (2002) has conducted a study on “Problems of Logistics Industry”. He concluded that India’s logistics industry is low in their planning and current professionals in the industry should sharpen their skills on a broad base of key elements of transportation and logistics. Finally he said that, there should be very balanced between solid knowledge and real world application.

Parthiban (2000) has conducted a study on, “Logistics High Performance”. This project represents all the logistics firms. He concluded that comparatively all the logistics firms were doing their job in good and faithful way. He suggests that the logistics firms and agents should accompany with the customers of the concern.

Joseph (2001) has conducted a study on, “Influence of Logistics Firms in International Trade”. He says that every trade is possible only with the help of logistics advisories because those people are very experienced and professionally trained in logistics activity. He concluded that all the logistics firms should facilitate as much as possible to the exporter and importer.

Sabareeswaran (2007) conducted a study on, “Working of Freight Forwarders”. In that he explained the nature, duties and functions of the freight forwarders. They are also called as Mr.5 % because the freight forwarders usually getting the commission only 5 % on the shipment of cargo. Finally he concluded the freight forwarders contribution to logistics business is quite a vital role. Now the modern business cannot function comfortably without the assistance form the freight forwarders.

Eswari (2002) conducted a study on, “Role of Clearing & Forwarding Agents in Business”. She explained the nature and role of the Clearing and Forwarding Agents in detail and the Documentation process is perfectly done by them. She concluded topic by providing the Quality Services to the International Traders.

Manikandan (2003) conducted a study on, “service rendered by Maersk Logistics India Pvt Ltd”. In that study he explained Maersk Logistics company is the worldwide service provider and they also having the own containers and vessels for the international trading activities. He concluded that customers were satisfied with the services provided by the Maersk Logistics Company. But they should provide the essential assistance to the exporter and importer.

Abbreviations and Concepts Used

2009-04-15T11:46:00.000-07:00

CFS - Container Freight Station
LCL - Less than Container Load
FCL - Full Container Load
DGFT - Director General of Foreign Trade
NVOCC - Non-Vessel operating Common carrier
DWT - Dead Weight
MT - Metric Tones
TEU’S - Twenty Equal ant Units
CHA - Customs House Agent
EPC - Export Promotion Council
MPS - Maritime Propositioning Shipment
FCR - Forwarder's Certificate of Receipt

COUNTER PARTY

Counter party is usually the entity with whom one negotiates on a given agreement, and the term can refer to either party or both, depending on context. All trade activities require some sort of counter party.

Specialized

2009-04-15T11:44:00.000-07:00

Area of concentration

Company focuses on the following

Documentation in concurrence with the prevailing EXIM Policy & Export Promotion Schemes for Sea Cargo
Facilitation of container stuffing at approved Container Freight Station
LCL/FCL sea cargo movement in association with multiple steamer agents at the option of the client Pre/post shipment lassoing with customs / DGFT authorities for availing of export-import incentives declared by the government.
Responds practically to each clients individual requirements at every stage of
the service to overcome the exporter or importer stress.
Customs Clearance and Freight Forwarding
Soft handling of Cargo by experienced work force under direct supervision.
Local transportation and also delivery to the hands of exporter or importer.

Services of Shipping Agency

2009-04-15T11:43:00.000-07:00

Shipping Agency is primarily identified as logistics associated service provider involved in rendering services related to export – import. Shipping Agency provides various logistics services, which are of importance and backbone of export and import.

The activities are,

1. Feeder Division
2. Liner Division
3. Warehousing
4. Container Freight Station
5. Freight Forwarding
6. Clearing and Forwarding
7. Documentation

Feeder Division

2009-04-15T11:42:00.000-07:00

Shipping Agency is the Agents for Far Shipping Lines based in Singapore, serving the shipping fraternity as the Common Feeder Carrier. They also handle Vessels and manage slots.

With their Robust and dedicated team of professionals Shipping Agency serve the Shipping Trade, whereby enabling them to connect to the Main Line Vessels anchoring in Colombo. They cater to the needs of the shipper's own container operators.

Shipping Agency also operates a Middle East bound service on through basis from Chennai, which immensely benefits the shipper's own container operators and the same is accepted by all NVOCC operators concerned.

In the ever challenging Market Scenario, they strive to hard to march ahead by providing the highest grade of service to all concern clients.

Liner Division

2009-04-15T11:41:00.000-07:00

Shipping Agency is the Agents Gen Shipping Pacific Pte Ltd., based in Singapore. A Fleet of Seven Multipurpose Ships of 18500 DWT is operational and they are fitted with Heavy Gear to handle up to 120 MT Lifting Capacity.

Shipping Agency can handle any Type / Volume of Cargo ranging from Rough Granite Blocks, Crates, Skids, Bales, and Bundles, either in Packed or in Unpacked Condition. All the Vessels are fitted with TWEEN-DECK to facilitate the handling of Over Dimension Cargo.

CONFERENCE LINER TARIFFS

A liner conference is a group of two or more carriers. It provides liner services for a particular route or routes whether specified geographical limits or common freight rates and on other mutually agreed conditions.

A liner service provides regular sailing to schedule ports of call. Freight rates are stable for relatively long period of time and as such enable slipper to quote prices.

Warehouse

2009-04-15T11:40:00.000-07:00

The warehouse of Shipping Agency is rightly said as Customs Bonded Warehouse. Because the customs officer always in Shipping Agency for inspecting and examine the cargo.

Normally, the warehouse covered 40,000 square feet. Here the general cargo are loaded, unloaded and also do the work of stuffing and de-stuffing activity.

Apart from this general cargo warehouse, the Shipping Agency has Air-Conditional Warehouse. It occupies 18000 square feet. In this air-conditional warehouse, they can maintain -30°C. It is mainly for storage of Perishable Goods like Agricultural Products, Food Stuffs, Medicine and Others.

Containerization

2009-04-15T11:03:00.000-07:00

Containerization is a system of cargo transport using standard containers that can be loaded on container ships, freight train wagons and trucks. There are two standard sizes, one 20feet long and the other twice as long at 40 feet, measured in twenty equivalent units. (TEU). It is important element of the logistics revolution that changed freight handling in the 20th century. Containerization revolutionized cargo shipping. Today, approximately 90% of cargo moves by containers stacked on transport ships. Over 200 million containers per year are now moved between those ports.

CONTAINER FREIGHT STATION (CFS)

The CFS is rightly called “ALL Weather CFS “as its facilities offer complete protection for cargo and containers under all weather conditions. Even in stormy conditions it offers unhindered operations. Customer satisfaction and overall quality and efficiency of service have always been our key focus and have been instrumental in attracting large businesses.

Stuffing and De-stuffing Operations are completed in twenty minutes by a team of skilled and well experienced staff. The management spares no efforts in constantly improving and upgrading its facilities by introducing the latest equipment in cargo / container handling.
Shipping Agency proudly informs you that the Container Freight Station (CFS) is centrally located 15 KMS from the Tuticorin port on the Tuticorin-Tirunelveli highway.

Shipping Agency Salient Features:

•Hi-Tech Infrastructure.
•Total covered area of 38,000 Sq.Ft.
•World Class Seven High Rail Mounted Gantry Crane fitted with 40 Ton
•Weighing Scale.
•Import Container Trailers can be released within 5 Minutes after unloading.
•Modern Ventilated Warehouse equipped with CCTV Cameras & Burglar Alarms.
•Total Area of 6 Acres, Fully Cemented Like Airport.
•Full-fledged Customs Office with EDI connectivity (Leased Line) and backed up by ISDN Lines.
•Equipment Backed Export Stuffing.
•Great savings in freight as with equipment and tight stowage, Shipping Agent stuff more revenue tons of cargo.
•Dock Levelers.
•Round the Clock Security.
•Uninterrupted Power Supply Supported by Standby Generators.
•Well furnished Air Conditioned office rooms with latest Computers,EPABX, E-Mail, Fax, Xerox and other allied facilities.

LIST OF EQUIPMENTS

•TCM Top Lifters - 40 M.T. Capacity - 3 high.
•Kalmar Empty Container Stackers 7 M.T Capacity - 3 High.
•Godrej Forklifts 3 M.T. Capacities.
•Escort Mobile Cranes - 12 M.T Capacities.

Stuffing and De-stuffing Operations are completed in twenty minutes by a team of skilled and well experienced staff. The management spares no efforts in constantly improving and upgrading its facilities by introducing the latest equipment in cargo / container handling.

The CFS is rightly called “ALL Weather CFS “as its facilities offer complete protection for cargo and containers under all weather conditions. Even in stormy conditions it offers unhindered operations. Customer satisfaction and overall quality and efficiency of service have always focused and have been instrumental in attracting large businesses.

SIZE OF CONTAINERS

Presently 20ft and 40ft containers are used predominantly and around 65.70% of world fleet consists of 20ft containers. They are known in short as TEU’S. Most of the containers have width of 8ft and height between 8ft and 91/2ft. Entirely 41 type of containers available for the trading activities.

CLASSIFICATION OF CONTAINERS:

The container can be classified into different category based on the nature of goods. But the following containers are very commonly used by all the shipping agencies. They are,

2BK 20’ BULK CONTAINER
2FB 20’ FLAT BED (FIXED END WALL) CONTAINER
2RS 20’ REEFER CONTAINER (STANDARD HEIGHT)
2SD 20’ STEEL DRY CARGO
2SG 20’ STANDARD GARMENT
2SH 20’ HIGH CUBE
2TK 20’ TANK CANTAINER
4RH 40’ REEFER CONTAINER (HI-CUBE)
4RS 40’ REEFER CONTAINER (HI-STANDARD)
4SD 40’ STEEL DRY CARGO
4SG 40’ STANDARD GARMENT
4SH 40’ HIGH CUBE
4TK 40’ TANK CANTAINER

Freight Forwarders

2009-04-15T11:00:00.000-07:00

The institute of freight forwarders defines the term freight forwarders as a “company involved in the physical of goods on behalf of another company or person.” it must be said immediately that the term freight forwarders in extremely different to define, specific things in various countries.
Sea logistics has been the core area of operations. Shipping Agency philosophy of cultivating long term relationships with the carriers has earned them respect among the carriers and they work closely with them to ensure to deliver value to their customers - required equipment, competitive rates, and scheduled shipping departures. This contribution is to ability to offer the perfect logistics solutions tailor made for each customer.

Shipping Agency is well equipped to handle any volume of cargo and the service commitment remains the same. Shipments that do not fill one full container are handled as LCL or could also be handled by Shipping Agency as consolidated shipments in containers to Europe every week. Wherever the goods can be shipped as FCL same is done.
As a value added service they also handle consolidation for a specific buyer (multiple vendors / suppliers) whereby both cost and transit time is considerably saved for the customer. Generally Shipping Agency having its own CFS, it enables the customer to reduce the cost and time.

Clearing and Forwarding Agents

2009-04-15T10:55:00.000-07:00

The Shipping Agency appoints C&F agents for the process of documentation clearance of shipment. The reservation of the space in ship for shipment of cargo can be made by Shipping Agency with ship brokers by providing documents which is prepared by the C & F Agent with the acceptance of customs authority.

GUIDELINES

The C&F agents guide in practical aspect of documentation preparation of shipping bill getting the consignment checked by the customs officer.

They are deals with the following

Warehousing facility
Regular and consolidation service in India
Booking of shipping space
Arrangement of ship on board
Arrangement for insurance policies with reputed insurance companies both in India and abroad
Preparation and processing of shipping documents
Efficient communication network.

Functions of C&F Agents

2009-04-15T10:46:00.000-07:00

The importer must make use of the service of C&F agents who will relive aim of the necessity of carrying out the various procedure and formalities relating to the goods imported. This is particularly true when the consignee lines a long away from the part of the arrival.The agents thus service as an intermediary who will keep informed of the arrival of the means of transport (shipping craft) receive the goods from the cargo agent (if he is not himself the agent) carrying out the customs formalities and assure responsibility forwarding the goods of the importer on behalf he is working.

In performing the function, the forwarding agencies undertake operations of legal character. He takes delivery on behalf takes out insurance of necessary. He may also store the goods after he has obtained customs clearance.
In receiving the forwarding goods, the agents unlike the carriers, is liable only for his personal faults. For example, he may have forwarded the goods to the consignee in an unsuitable wages on a lorry without a cover. As shown in the flowchart, C&F agents cannot complete the work assigned for him without the help of CHA.

Non Credit Document

Most of the exporters do not send all the documents required by the customs to the C&F agents. As a result, time had to be wasted in getting them because of these the goods do not reach their destination at the right time.

Customs House Agent

2009-04-15T10:31:00.000-07:00

In terms of sec 146 of Indian Customs Act (1966), the central board of Excise and Customs has issued a regulation known as CHA Licensing. In regulation 1984 laying down the condition and procedures are to be followed.

Eligibility

If a person, who desires to become CHA, has to make an application in a prescribed form when such applications are find out by the collector of customs under.

Initially the temporary license is issued with the validity of 2 years.

To be eligible and to make the application, the person should have experienced in the lines for at least 1 year and should have assessed the experience of 1 lakh.

To execute the brand of securities of Rs 25,000. The temporary license can be converted into regular license on his passing a qualifying examination conducted by the customs authority within a period of 2 years.

The regular licensee is issued for 3 years but can be renewed thereafter on payment of a fee for a further period of 3 years.

DOCUMENTATION

2009-04-15T10:28:00.000-07:00

Documentation is one of the most important aspects of overseas trade. It is not an exaggeration to say “paper moves cargo”. To move cargo, document is necessary. For export and import of goods in India, there is a set of procedure for documentation with customs and other authorities, such as Import Export Commercial Document Department, RBI etc. in the documentation system; the required information is created on a set of Standards Forms. The various documents are aligned to one another in such a way that common items of information are in the same relation slots in each document. This enables the preparation of “Master Document” containing all the information common to all the documents from the master documents.

PRINCIPLE EXPORT DOCUMENTATION

 Commercial Invoice
 Packing List
 B/L Combined Transport Document
 Certificate of Inspection / Quality Control
 Certificate of Origin
 Bill of Exchange
 Shipment Advice

COMMERCIAL INVOICE

The Commercial Invoice is a record or evidence of transaction between the exporter and the importer. It is similar to an ordinary sales invoice, except some entries specifically added as it is export-import.
It contains the detailed description of goods consigned. Consignors and consignees name and contract number of order acceptance data of bill of lading. Steaming name, terms of payment, terms of sale, amount of freight and insurance are included within the document.. It should be made in multiple copies to meet the requirement in future.

PACKING LIST

The Packing List is an extension of the commercial invoice; as such it looks like a commercial invoice. Customs uses the packing list as a check-list to verify the outgoing cargo (in exporting) and the incoming cargo (in importing). The importer uses the packing list to check out the imported cargo.
It includes date of packing, invoice number, order number, details of shipping, case number to which the list / note relates such as quality and weight.

Bill of Lading

2009-04-15T10:26:00.000-07:00

Bill of Lading is a document issued by a carrier, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified. This is also known as BOL or B/L.

Contents of Bill of Lading

 Name of the Consignee
 Date and Place of Shipment
 Name and Destination of Vessel
 Description Quantity and Destination of Goods
 Invoice Number
 GR Form

CERTIFICATE OF INSPECTION

The Inspection Certificate---Inspection Report or Report of Findings---is required by some importers and/or importing countries. The export-trader uses such a report in the inspection of goods purchased from a manufacturer. The export-manufacturer also uses such a report in the inspection of its own productions
It is issued by the exporter / inspection agency concerned, certifying that the consignment has been inspected as required under Export (quality control and inspection) Act 1963.

CERTIFICATE OF INSURANCE

It is a document, which gives details of the shipment insured together with a shortened version of the provision of open cover.

CERTIFICATE OF ORIGIN

The Certificate of Origin is a document certifying the country in which the product was manufactured, and in certain cases may include such information as the local material and labors contents of the product.
Certificate of origin from any recognized chamber of commerce, EPC / government department for the nominal fee.

Bill of exchange

2009-04-15T10:19:00.000-07:00

The Bill of Exchange, commonly referred to as the Draft or the Bill, is an unconditional order in writing, signed and addressed by the drawer (the exporter usually) to the drawee (the confirming bank or the issuing bank usually), requiring the drawee to pay the drawer a certain sum of money at sight or at a fixed or determinable future time.
It is also known as draft (sec.5 Negotiable Instrument Act 1881). The Bill of Exchange contains an order from the creditor to the debtor to pay a specified person, the amount mentioned there in.

SHIPMENT ADVICE

It is used to inform the overseas customer about the shipment of goods. There is no particular form of shipment advice.