Post on 16-May-2020
SHIPPING INTERMEDIARIES
Shipping Intermediaries
• CHA’s • Freight Forwarders
• Road Transporters
• Rail Transporters
• Warehousing Corporations
• Shipping Lines
• Port Authorities
• Custom & Central Excise Department
• Municipal Corporations
Shipping Intermediaries
CHA’s • Individual or Company licensed to clear Export & Import
cargoes through customs
• Additional services rendered
• Space booking
• Providing freight rates
• Preparation of documents
• Authorisation to conduct custom clearance on behalf of exporter / importer
• Liabilities on account of user
• Reliability important
Shipping Intermediaries
CHA’s - Charges
• Basic Fee for customs clearance [Per 20’ / 40’] • CMC charges
• Documentation charges
• Port charges / Statutory charges [Actual basis – receipted]
• % of value of goods [Normally for Imports]
Shipping Intermediaries
Freight Forwarders & Consolidators
Functions
• Preparation of documents
• Quoting freight rates to Shipper
• Space booking with S/Line
• Releasing B/L from S/Line
• Transportation
• Delivery at destination
• Other services
• Packing
• Custom Clearance
• Container Stuffing
• Insurance
Shipping Intermediaries
Freight Forwarders & Consolidators
• Local FF
• Aegis Logistics
• AFL Limited
• All Cargo Global Logistics Ltd
• Om Logistics Ltd
• Safe Express Pvt. Ltd
• Sical Logistics Ltd
• Total Logistics
• TVS Logistics Services Ltd
Shipping Intermediaries
Freight Forwarders & Consolidators
• International FF
• Kuehne + Nagel
• DB Schenker Logistics
• Panalpina World Transport
• UPS Supply Chain Solutions
• Expeditors
• Nippon Express
Shipping Intermediaries
Third Party Logistics [3PL]
Third Party Logistics [3PL]
Why Outsourcing
• To focus on core competencies
• Resource constraints
• Cost-saving resulting from better management
• Cross pollination of better available practices
• Wider geographical coverage
• Reduction in risk and liability
• Extend superior customer service
• Source of process improvement
Third Party Logistics [3PL]
Logistic Activities Outsourced
• Warehousing and warehouse management
• Transportation and freight management
• Freight payment and audit
• Inventory management
• Customs clearance
• Material handling
• Packaging
Logistics Evolution
Outsourcing
Warehousing, transportation, Inventory, order processing
Self-reliant
Organization performing all logistics operation
3 party logistics
In-house logistics
4 party logistics
Alliance with
3 PL service provider IT organization IT/Logistics consultant
3PL Service Provider
• Wholesalers: The stand-alone operators, who extend only one type of service in which they have an expertise, such as:
Warehousing
Transportation
Customs clearance
Packing
Equipment suppliers
IT support
• Integrators: One who provides entire logistics services and offers logistics solutions to customer’s logistics problem.
3PL Advantages
• Reduction in risk and liabilities
• Value-added service to the customers
• Source of process improvement
• Wider market coverage
• Speed to market
Value -added Services – 3PL Service Providers
• Cross docking
• Customs clearance
• Reverse logistics
• Assembly or mixing
• Freight consolidation
• Special packaging and labelling
• Logistics audits
• Stock financing
Logistics
Fourth Party Logistics [4PL]
Logistics
Fourth Party Logistics [4PL]
Term coined by “Anderson Consulting Company”
“4PL assembles and manages the resources, capabilities and technology of its own organization with those of complimentary service providers to deliver a comprehensive supply chain solution.”
4PL Service Provider
• Covers the entire supply chain of the customer.
• Collaboration between two or more 3PL service providers on the
resources sharing basis to extend logistic solution to a common
customer.
• Alliances to be led by integrator with IT-based and not asset-
based service provider.
• Flexible arrangement.
4PL Service Provider
• Example:
• FMCG Indian manufacturer operating in Indian & overseas markets
• Logistics handled by different 3PL firms in different geographical areas
• Single central information system instead of different systems in different areas by each 3PL firm
4PL Service Provider
• Example:
• Hewlett Packard (HP) appointed Circle International (CI) as their 4PL partner in Asia Pacific Region
• CI – central hub Singapore
• CI buys and stocks HP’s inventory requirement in the region
• Network of warehouse hubs spread across the countries in the region take care of distribution
• The local HP office in the country draws its inventory requirement by buying from the CI local hub
• HP does not block its funds in inventory
4PL Advantages
• Reduced logistics cost
• Better Inventory Management
• Concentration on core competencies
• Release of management capacities
• Reduced assets
• Economies of scale
• Increase of process quality
• Access to latest technologies
• Increase Shareholder Value
Service Provider Selection
Proposal evaluation and selection
• Credentials
• Logistics infrastructure
• Experience and customer base
• Technology
• Cost of service
• Reliability
• Government liaison
Logistics Industry in India - Challenges
Increase in Export & Import volumes post liberalisation
Exports – 2,03,571 Cr (2000-01) to 11,42,922 Cr (2010-11)
Imports – 2,30,873 Cr (2000-01) to 16,83,467 Cr (2010-11)
Logistics Industry in India - Challenges
Inadequate infrastructure
Complex rules & regulations
Complex documentation
Corruption
Unethical business practices adopted by shippers
Inadequate use of IT