Global trade is dependent 80% on sea route than air route, simply for the fact that air route is far more expensive and is used only in case of light weight cargo, perishable cargo, and priority shipments or in other conditions where shipping would not be possible. Shipping trade is characterized by shipping companies who own vessels and specialize in the transportation of certain types of cargo like General Cargo, Containerized cargo, bulk commodities carriers, oil tankers, gas tankers, OD cargo carriers, etc. As the business processes and business entities in international trade are becoming more complex, it is becoming increasingly difficult to manage all of the activities on one’s own. Logistics service providers are an important factor in the business success of companies engaged in trade activities at national and international level. Logistics intermediaries come in different forms and under different names, but they all have the same goal: to provide help to companies in the transportation, storage, shipment and distribution of goods from the seller to the buyer or the final consumer.

1. By Ravikeerthi Rao & Subramaniam
Part 1
EXPORT LOGISTICS MANAGEMENT

2. SUPPLY CHAIN MANAGEMENT (SCM)
• Supply Chain Management (SCM) is a series of
interconnected activities related to the transformation
and movement of raw material to the finished goods till
it reaches to the end user.
• It is the outcome of the efforts of multiple organizations
that helped in making this chain of activities successful.

3. SUPPLY CHAIN MANAGEMENT (SCM)
For example,
• One Entrepreneur decided to start the Retail business.
• She needs the Merchandise to sell.
• What are the activities involved in buying & selling these
Merchandise?

4. SUPPLY CHAIN MANAGEMENT (SCM)
• The activities may include :

5. SUPPLY CHAIN MANAGEMENT (SCM)
Supply Chain Management

6. SUPPLY CHAIN MANAGEMENT (SCM)
• Above all, the supply chain management involves the
coordination and collaboration with the parties like
suppliers, intermediaries, distributors and customers.
• Logistics Management is a small portion of Supply
Chain Management that deals with the management of
goods in an efficient way.

7. LOGISTICS
• Logistics is the process of :
• planning,
• implementing, and
• controlling procedures
for the efficient and effective transportation and
storage of goods, including
services and related information, from the point of
origin to the point of consumption.

8. TYPES OF TRANSPORTATION
• In the international trade, there are various forms of
transportation that one can use to get their products from
India to wherever the product needs to go.
• These transportation types used are the following:
• Sea freight
• Air freight
• Rail freight
• Road freight
• River freight

9. TYPES OF TRANSPORTATION
• Sea freight and air freight are perhaps the two most
common forms of transportation for getting products
from India to distant markets in Europe, and elsewhere.
• Road and Rail are also important forms of
transportation in order to get the goods from the
incoming port to the final destination (be it a warehouse
or a distribution centre).

10. TYPES OF TRANSPORTATION
• A Liner (freight or cargo or ocean) is a cargo ship
sailing on a regular schedule and offer cargo space for
shippers.
• A tramp ship which does not have a fixed schedule or
published ports of call.
• Tramp ships (also called tramp freighters) trade on an
ad hoc basis depending on whatever cargo is required
to be shipped wherever.

11. DIFFERENCE BETWEEN
FREIGHT AND CARGO
• “Cargo” and “freight” are the terms that are usually
associated with transporting goods.
• “Freight” means a cargo being transported via truck,
train, plane, and ship.
• “Cargo,” on the other hand, is usually used when the
goods are transported via plane or ship.

12. DIFFERENCE BETWEEN
FREIGHT AND CARGO
• However, the “freight” is also the term used for the
payment when the certain goods are transported , while
“cargo” refers to the goods or the products and nothing
else.
• Cargo does not mean the money being charged for the
transport.
• Most cargo being transported can be referred to as
freight.

13. TYPES OF SHIPPING COMPANIES
• There are three types of shipping companies. They are:
• Liner operators - vessels that carry containers, these
sail on fixed dates and to predetermined ports.
• Charter operators - vessels that are utilised for a specific
voyage.
• Tanker and dry bulk operators - vessels that carry bulk
cargo such as oil and grains

14. DIRECT SHIPMENT VS TRANSHIPMENT
Direct shipment
• A direct service from the load port of origin country to
the discharge port of destination.
• Direct shipping happens when a vessel ships the cargo
on one shipping service to its final destination,

15. DIRECT SHIPMENT VS TRANSHIPMENT
• Transshipment or transhipment means - Transfer of a shipment
from one carrier, or more commonly, from one vessel to another
whereas in transit.
• Transshipments are usually made :
• where there is no direct air, land, or sea link between the
consignor's and consignee's countries,
• where the intended port of entry is blocked.
Because transhipment exposes the shipment to a higher
probability of damage or loss, some purchase orders or letters
of credit specifically prohibit it.

16. TRANSHIPMENT
• Purposes of Transshipment :
• To achieve a lower transport cost;
• To hide the identity of the port or country of origin
and legally or illegally achieving new country-of-
origin status for the merchandise; or
• To circumventing the foreign trade policies of the
country-of-origin or the country of destination (for
purposely evading certain trade laws or regulations).

17. Draft (or draught)
• The depth of a ship while in the water.
• Measured as the vertical distance between the
waterline and the lowest edge of the keel.

18. • Indian ports have an average draft ranging from 8m to 12m.
• Bigger ships, that can carry larger quantities of cargo, cannot
call directly (visit the port) due to lack of adequate draft or
depth at the berths and channels.
• In comparison, the draft available at major ports ranges from
12m to 23m, which enables them to handle even new
generation big container vessels and tankers.

19. MOTHER VESSEL VS FEEDER VESSEL
• Literally speaking, a "mother vessel" (an "M.V.") is a
term in oceangoing transport -- basically a seagoing
ship that serves only major ports.
• The word M.V. is usually used in contrast to a "feeder
vessel".

20. MOTHER VESSEL VS FEEDER VESSEL
• Feeders or Feeder vessels are the vessels that pick up shipping
containers from the smaller ports that have less draft & have
vessel length restrictions.
• Feeder vessel is normally small in size compared to Mother
vessel, hence, they can easily navigate the smaller ports.
• Feeder vessels serves between smaller ports and major ports.
• In other words, feeder vessels feeds cargo to Mother vessel
from smaller ports for exports and from major main ports to
smaller ports for imports.

21. TYPES OF CARGO SHIPS
• The following the different types of cargo ships are
used in international trade:
• (https://www.slideshare.net/krunal111/unit-1-categories20of20-cargo)

22. Tankers
• These ships are
designed to carry liquid
cargos such as oil,
petroleum, certain types
of chemicals and other
types of viscous
cargoes (even wine).
TYPES OF CARGO SHIPS

23. Container ships
• Perhaps one of the
most common type of
merchant vessel you
will encounter is the
container ship which
has been specially
designed to carry
containers
TYPES OF CARGO SHIPS

24. Ro-Ro
• So called because they
are roll-on/roll-off ships
where cars and trucks
are driven directly into
the hold of this vessel
across a ramp usually
at the back or stern of
the ship.
TYPES OF CARGO SHIPS

25. TYPES OF CARGO SHIPS
General cargo ships
• These are ships that have holds for carrying general and break-
bulk (non-containerised) cargos and for this reason they may
also be referred to as break-bulk ships.
• These ships are often equipped with their own gantry cranes
and are capable of loading and offloading their cargos
themselves.
• They complement container ships by carrying cargo that won’t fit
a container, as well as cargos that are too small for a full
container load (referred to as less-than full container load or
LCL).

26. TYPES OF CARGO SHIPS

27. Bulk carriers
• As the names suggests,
these types of vessels
are designed to carry
bulky cargos, usually
grains (such as maize)
and ores (such as coal).
TYPES OF CARGO SHIPS

28. Reefer ships
• These are ships designed
to carry perishable cargos
that require refrigeration or
some form of temperature
control such as fruits, meat,
fish, vegetables, dairy
products and other
foodstuffs.
TYPES OF CARGO SHIPS

29. Chemical carriers
• Some chemicals need
to be transported in
specially vessels
specifically designed to
handle the chemical in
question (such as
natural gas).
TYPES OF CARGO SHIPS

30. Lift-on/lift-off or Lo-Lo
ships
• They have their own
gantry or crane on
board, these vessels
can load and discharge
their own cargoes.
TYPES OF CARGO SHIPS

32. TYPES OF CONTAINER
• Dry storage container. ...
• Flat rack container. ...
• Open top container. ...
• Tunnel container. ...
• Open side storage container. ...
• Double doors container. ...
• Refrigerated ISO containers. ...
• Insulated or thermal containers.

33. • The difference between them depends on the type of
goods that will be transported and their particular
characteristics to perform the loading and / or the
transportation.

36. The characteristics of the different containers:
• • Standard: It is a closed container y the most used for general
loads. Its opening is for front and real loading.
• • High cube: : It is a container similar to the standard, but a bit
longer in length.
• • Reefer: It is a refrigerated container.
• • Open top: It is a container with the top open through which
the goods are loaded.
• • Fixed flat rack: container with the sides opened.
• • Collapsible flat rack: It is a container like the fixed flat rack,
but collapsible.
• There are other containers, but for specific types of goods,
such as tanks, vented, for bulks, etc...

37. WAREHOUSE
• A warehouse is a commercial building for storage of
goods.
• Warehouses are used by manufacturers, importers,
exporters, wholesalers, transport businesses, customs, etc.
• They are usually large plain buildings in industrial areas of
cities, towns and villages.

38. TYPES OF WAREHOUSE
• Private Warehousing
• Public Warehousing
• Government Warehouses
• Bonded Warehouses
• Co-operative Warehouses

39. CFS
Container Freight Station (CFS)
• A dedicated port or container terminal area, usually
consisting of one or more sheds or warehouses and
uncovered storage areas where cargo is loaded
(“stuffed”) into or unloaded (“stripped”) from containers
and may be temporarily stored in the sheds or
warehouses.

40. ICD
• ICD means Inland Container Depot situated
at inland points away from sea ports. ICD is a term
used in India in the field of Imports and Export of sea
shipments. ICD is formed to help importers and
exporters to handle their shipments near their place of
location.

41. Bonded warehouse
• A warehouse authorized by customs authorities for
storage of goods on which payment of duties is
deferred until the goods are removed.

42. • The World Trade Organization (WTO) defines “Trade
Procedures” as “activities, practices and formalities
involved in collecting, presenting, communicating and
processing data required for the movement of goods in
international trade”.

43. • Several intermediaries are involved in international
transport operations, and in the next few slides we will
name them and explain their most important functions.

44. CARGO CLEARANCE SERVICES
• When small to large shipment is delivered from one
destination to another, be it national or international
ports, the handling of packages from its source location
to destination location is known as Cargo handling.
• The custom tasks and procedures involved throughout
the process are referred to as Cargo Clearance
Services.

45. SHIPPING LINES
• Regular shipping lines provide small and medium
shippers with regular service
• to different geographical destinations, stopovers
and fixed ports with preset prices and rates,
• that mainly engaged in international cargo
transportation or transportation of general cargos
and containers.

46. SHIPPING LINES
• The shipping line is responsible for the movement of
the cargo from port‐to‐port, organizes each vessel’s
rotation, and operates on strictly commercial terms.
• Some of the more commonly known shipping lines
include Maersk, Seaboard, Seafreight, and
Intermarine.

47. Carrier:
• The person or company responsible for the movement of
goods, by air, sea, road or rail, either by their own means
or outsourced.
• A carrier is a party who contracts with a shipper for the
transport of goods by sea.

48. NON‐VESSEL OPERATING COMMON CARRIERS
(NVOCC)
• A cargo consolidator in ocean trades who buys space from a
carrier and resells it to smaller shippers.
• The NVOCC issues bills of lading, publishes tariffs, and
otherwise conducts itself as an ocean common carrier, except
that it does not provide the actual ocean or intermodal service.
• They performs a similar service as a shipping line, such as
performing consolidation and containerization, etc.
• The major difference is that they do not own vessels.

49. Shipping agent :
• The representative of the ship-owner of the vessel at
port, and who makes all necessary arrangements with
local authorities thereby helping both the ship and the
crew and facilitates supplies as may be required.
• (Here Supplies includes : Fresh water including Drinking water, food stuffs,
fresh fruits & vegetables, groceries and other sundries, fuel, etc.)

50. FREIGHT FORWARDER
• A freight forwarder is an agent for the exporter in
moving cargo to an overseas destination.
• Traditionally freight forwarders dealing with cargo
bookings and contract with a Carrier to move the
goods.

51. FREIGHT FORWARDER
• They have the expertise in ocean freight and air freight
as well as all of the paperwork involved.
• These agents are familiar with the import rules and
regulations of foreign countries, the methods of
shipping, and the documents related to foreign trade.
• Export freight forwarders are licensed by the
International Air Transport Association to handle air
freight and the Federal Maritime Commission to handle
ocean freight.

52. FREIGHT FORWARDER
• Freight forwarders can help exporters prepare price quotes by
advising on :
• freight costs,
• port charges,
• consular fees,
• costs of special documentation,
• insurance costs, and
• their handling fees.
• In short - The forwarder advises his client, on the most effective
and economical way to make the shipments entrusted to him.

53. FREIGHT FORWARDER
• Other services that forwarders may provide in relation
to international transportation of goods are those
logistic services such as storage, handling, packaging,
etc.
• The freight forwarders can reserve the necessary
space on a vessel, aircraft, train, or truck.
• They can even help arrange for warehouse space and
storage of products at destination.

54. FREIGHT FORWARDERS
• Once the cargo arrives at the port, freight forwarders
may make the necessary arrangements with customs
brokers to ensure that the goods comply with customs
export documentation regulations.
• In addition, they may have the goods delivered to the
carrier in time for loading.
• They may also prepare the bill of lading and any
special required documentation.
• After shipment, they forward all documents directly to
the Exporter /customer.

55. FREIGHT FORWARDERS
• Freight forwarders can also make arrangements with
customs brokers overseas to ensure that the goods
comply with customs export documentation regulations.

56. Longshoreman:
• Is the company or person in charge of loading and
unloading the ship as well as of any handling needed.
• Longshoreman is also referred as docker, port worker,
or dock worker.

57. Stevedore
• Individual or firm that employs longshoremen to load
and unload vessels.
Stevedoring charges
• Fees for loading and stowing or unloading a ship.

58. Consignee of goods:
• Person or legal entity designated by the sender to take
charge of the goods and deliver them to the recipient.
• The consignee may be the buyer of the goods, or a
party acting as import agent for the buyer.

59. The receiver
• is the party who takes receipt of the goods from the sea carrier
at the port or place of delivery.
• Some consignees will take direct delivery of goods from
carriers,
• but many consignees in the liner trades employ an agent such
as a freight forwarder to act as a “clearing agent” in the
customs and other formalities of importing the goods, and for
transportation of goods to their ultimate destination.
• When loss or damage to goods is discovered on discharge, it
is often the receiver who notifies the carrier.

60. The notify party
• (a term found in most bills of lading and sea waybills) is
the party who must be informed by the carrier of the
ship’s arrival, so that collection of the goods can be
arranged.
• The notify party may be the consignee or a receiver.

61. CUSTOMS CLEARANCE
• Customs business is limited to those activities involving
transactions related :
• to the entry and admissibility of merchandise;
• its classification and valuation;
• the payment of duties, taxes, or other charges
assessed or collected;
• or the refund, rebate, or drawback thereof.

62. CUSTOMS CLEARANCE
• The Customs clearance work involves :
• preparation and submission of documentations
required to facilitate export (or imports into the
country),
• representing client during customs examination,
assessment,
• payment of duty and co taking delivery of cargo from
customs after clearance along with documents.

63. Customs Agent / customs brokers :
• Normally this is the person authorized by the
Directorate General of Customs to process the
necessary paperwork, and settle the taxes on import
and export operations, before the governmental
authorities.
• A customs house agent (CHA)’s work can also be
handled by Forwarder.

64. CUSTOMS HOUSE AGENT
Customs House Agent
• Cargo Clearance is a very technical and highly
regulated activity (for obvious reasons).
• CHA act as agents of importers/exporters with the
objective of using their expertise in smooth clearance of
cargo at the customs - export and import.

65. CUSTOMS HOUSE AGENT
• Like the Forwarder, the CHA will recommend efficient
means for clearing goods through the red tape of
customs entry rules and regulations

66. CUSTOMS HOUSE AGENT
• Customs Agents prepare the document of Shipping
Bills.
• Preparing shipping bill involves Classification of cargo
under specific classification that is a critical activity in
the entire process.
• CHA is also known as Customhouse Broker in US.

67. • (This PPT has been prepared for internal training purpose)