Committed To ExcellenceFCL Concepts
Stuffing Categories
Factory Stuffing
Dock Stuffing (CFS)
Basic Origin Charges
Ocean Freight
BAF / CAF / ISPS
OTHC
Documentation Fees
Shipment Categories
CY / CY
CFS / CY
CY / CFS
CFS / CFS
Basic Destination Charges
DTHC
Port Dues
Documentation Fees FCL Jargon - Demystified
THC = Terminal Handling Charges
BAF = Bunker Adjustment Factor [To absorb oil price shocks]
CAF = Currency Adjustment Factor [To absorb currency fluctuations]
ISPS
CFS = Container Freight Station
CY = Container Yard
O = Origin
D = DestinationFCL Jargon - Demystified
Tare Weight = Weight of Empty Container
Gross Weight = Weight of Empty Container + Weight of Cargo
Payload= Weight of Cargo that can be carried
CBM= Volume in Cubic MetresContainer Types 20 Dry
L :20
W:8
H:86
Tare:2.1 MT
Vol:33 CBMContainer Types 40 Dry
L :40W:8H:86Tare:3 MTVol:67 CBM
Container Types 45 High Cube
L :45
W:8
H:96
Tare:4 MT
Vol:76 CBM
45 Containers are ALWAYS High CubesContainer Types 20 Flat Rack
L :20
8
86
Tare:2.3 MT
Payload: 22 MTContainer Types 40 Flat Rack
L :40
8
86
Tare:5 MT
Payload: 25 MTContainer Types 40 Flat Bed
L :40
8
Tare:5 MT
Payload: 39 MTContainer Types 20 Open Top
L :20
8
86
Tare:5 MT
Payload: 25 MTContainer Types 40 Open Top
L :40
8
86
Tare:5 MT
Payload: 25 MTContainer Types 20 Reefer
L :20
W:8
H:86
Tare:3 MT
Payload: 21 MT
Reefers need to have 3 parameters set always
Temperature
Humidity
Ventilation
Container Types 40 Reefer
L :40
W:8
H:86
Tare:3 MT
Payload: 28 MTContainer Types 45 Reefer
L :45
W:8
H:96
Tare:4 MT
Payload: 36 MTContainer Types 20 Tanker
L :45
W:8
H:86
Tare:3 MTFCL Drivers Commercial Geography
LudhianaHosiery and TextilesBasmati RiceSports GoodsEngineering Components
NCRAuto ComponentsApparelFootwearHandicrafts
Himachal PradeshApplesPharmaceuticals
These are all Export orientedFCL Drivers Commercial Geography
RajasthanGranites and MarblesHandicrafts
GujaratMachinery and AncillariesChemicalsPharmaceuticalsFCL Drivers Commercial Geography
Madhya PradeshSoyabeans and DerivativesAutomotive ComponentsMachine Components
Vidharbha RegionIron & Steel MaterialsOrangesFCL Drivers Commercial Geography
RajasthanGranites and MarblesHandicrafts
GujaratMachinery and AncillariesChemicalsPharmaceuticalsFCL Drivers Commercial Geography
MaharashtraAutomobiles / AncillariesMachinery / ComponentsSugarApparelPharmaceuticalsChemicals
GoaCashewPharmaceuticalsFCL Drivers Commercial Geography
Andhra PradeshGranites / Marbles / CeramicsPharmaceuticalsGherkins
KarnatakaMining OresGherkinsAuto-componentsPharmaceuticalsCoffeeFCL Drivers Commercial Geography
Tamil NaduGarments / HosieryAutomobiles / AncillariesCoffee / TeaSpices
KeralaRiceSpicesTea / CoffeeRubberFCL Drivers Commercial Geography
Indian ImportsNewsprint / Waste PaperMetal Scrap
Electronics / Consumer DurablesMachineryChemicalsWheatPlastic ConsumablesFCL Drivers Commercial Geography
Indian ImportsCommercial Geography is a key driver in freight pricingSeasonality of Demand / Supply of CustomersSeasonality of Demand / Supply of products in other geographiesAvailability of Equipment
Please note that the same commercial geography logic applies for Rail, Road transportation modes as well
Successful Logistics Managers are adept at estimating constraints posed by Commercial Geography!!!LCL Concepts
Basic Origin Charges
Ocean Freight
(Weight / Volume higher)
OTHC
(Weight / Volume higher)
Documentation Fees
Basic Destination Charges
DTHC
Port Dues
De-stuffing Charges
Fuel Surcharge
Cargo Handling
Documentation Fees
LCL can only by done by Logistics companies and not Shipping Lines!!!LCL Concepts - Profitability
Buying Price Factors
Freight [FCL] i.e. all payments done for 1 Container and 1 B/L with FCL concepts
Selling Price Factors
All components charged on LCL basis with additional documents [Typically 1 container has 5 to 7 documents] for individual shippers
So the sum of revenues is far higher than the buying prices
The most common pitfall made by many logistics personnel is to compare thefreight line item in FCL / LCL model and arrive at a costing figure
One should always look at the Total Cost Element in either scenario
The typical breakeven point for deciding between FCL / LCL is about 10 CBMHazardous Goods Ocean transport
Class 1 : Explosives
Class 2 : Gases
Class 3 : Inflammable Liquids
Class 4 : Inflammable Solids
Class 5 : Oxidizing substances & organic peroxides
Class 6 : Poisonous & infectious substances
Class 7 : Radioactive Substances
Class 8 : Corrosives
Class 9 : Miscellaneous Hazardous Goods Class1 (Explosives)
Division 1.1 - Mass Explosion Hazard ( TNT - Trinitrotoluene)
Division 1.2 - Projection Hazard, but not a mass explosion (Detonating Fuses)
Division 1.3 - Fire Hazard and Minor Blast or projection (Signal Cartridges)
Division 1.4 - No Significant Hazard (Fireworks)
Division 1.5 - Very intensive with mass explosion
Division 1.6 - Extremely intensive, but not a mass explosion Hazardous Goods Class2 (Gases)
Division 2.1 - Flammable gases (Butane)
Division 2.2 - Non-flammable non-toxic gases (Refrigerants)
Division 2.3 - Toxic gases (Carbon Monoxide) Hazardous Goods Class3 (Flammable Liquids)
Flammable liquid - liquids which give off flammable vapor at or below 61 degree Celsius
Liquid Desensitized Explosive - liquids which form a homogeneous
Liquid mixture to suppress their explosive properties.
For example: UN1204, UN2059, UN3064, UN3343
Packing Group I - Low initial boiling point, 35C and below.
Packing Group II - Flashpoint below 23'C and boiling point above 35C
Packing Group III - Flashpoint between 23'C and 61'C, and boiling point above
35C Hazardous Goods Class4 (Flammable Solids)
Division 4.1 - Flammable solids e.g. Hay, Cotton & Self-reactive substances e.g. Azodicarbonamide
Division 4.2 - Pyrophoric substance (solid or liquid), which ignite within 5 minutes of coming into contact with air e.g. Phosphorus or self-heating substances e.g. Fishmeal
Division 4.3 - Substances which, in contact with water, emit flammable gases. Materials, such as Calcium Carbide, Sodium that are "Dangerous When Wet" because they tend to become spontaneously flammable or give off dangerous vapors when exposed to water or moisture. (Obviously, using water on a blaze involving Division 4.3 materials may actually "add fuel to the fire Hazardous Goods Class5 (Oxidizing Agents)
Division 5.1 - Refers to materials known as "oxidizing agent", which give off oxygen, causing or contributing to the burning of other materials. E.g. Calcium Hypochlorite
Division 5.2 - Indicates materials called "organic peroxides", some of which have characteristics similar to explosives or burn intensely. Hazardous Goods Class6 (Oxidizing Agents)
Division 6.1 - Refers to solids or liquids that are poisonous to humans E.g. Arsenic and Tear Gas.
Division 6.2 - Identifies "infectious substances, which may cause severe or fatal disease. Hazardous Goods Class7 (Radioactive Materials)
Substances that give off radiation spontaneously. Fissile radioactive materials, including nuclear reactor fuel, are the most dangerous kind of radioactive material. On the other hand, some radioactive materials or instruments (such as certain clocks or electronic devices) give off little radiation. Hazardous Goods Class8 (Corrosives)
Solids or liquids that destroy or severely damage skin or cause rapid corrosion of steel or aluminum. Many acids, such as Sulfuric Acid, are corrosive to skin or metal, or to both. Hazardous Goods Class9 (Miscellaneous)
Materials which may be hazardous in transportation but do not fall into any of the above Classes. Included in Class 9 are certain materials, such as "white asbestos", which threaten the health or comfort of operating personnel. Also included are environmentally hazardous substances and wastes, as well as marine pollutants. Hazardous Goods Packing / Marking
Packaging:
Packing group
Packaging details
Marking, Labeling & Placarding:
Purpose - Easy identification of cargo in emergency, so that appropriate action can be taken
Unless otherwise approved by the IMDG Code
The Container must be placarded in accordance with IMO requirement. i.e. IMO Label, Marine Pollutant Mark, Fumigation Warning Sign
For specialists in Hazardous Cargo, Hazmat course is mandatoryHazardous Goods Stowage
Away from (min 3 meters projected vertically).
Separated from (min 6 meters, vertical separation).
Separated by a hold, or minimum 12 meters on deck.
Separated longitudinally by an intervening hold, or minimum 24 m. Putting It Together
Operations are critical for logistics excellence
The concepts are common for logistics departments, logistics service
providers, shipping lines and terminalsKey Operations Metrics Logistics Service Providers
Container Freight Stations [CFS]
Export Warehouse
Import Warehouse
Buffer Yard
Reefer Section
Yard StuffingKey Operations Metrics Logistics Service Providers
CFS Export Warehouse
Cargo Receiving Time
Volume / Hour
Trucks / Hour
Cargo Stuffing Time
TEUs / Hour
Container Placement Moves / Stuffing
Broken StowageKey Operations Metrics Logistics Service Providers
Empty Containers Area
Moves /Placement
TEUs / Hour
Cargo Stuffing Bays
Cargo Storage Area
Volume / Hour
Trucks / Hour
Cargo Receipt AreaKey Operations Metrics Logistics Service Providers
CFS Export Warehouse
Cargo Storage Area
Cargo Mix [Dense / Heavy Cargo; Bales, Cartons, Pallets etc]
Cargo Dwell Time
Quantity AccuacyKey Operations Metrics Logistics Service Providers
CFS Import Warehouse
Cargo Receiving Time
TEUs / Hour
Trailers / Hour
Cargo De-Stuffing Time
TEUs / Hour
Cargo Storage Area
Dwell TimeKey Operations Metrics Logistics Service Providers
CFS Buffer Yard
Export Bound
TEUs / Hour
Trailers / Hour
Import Bound
TEUs / Hour
Trailers / Hour
Container Storage Area
Dwell Time
Key Operations Metrics Logistics Service Providers
LCL Operations (Freight Forwarding)
LCL Export
Number of TEUs / Week
Volume Utilization / TEU
Documents / TEUKey Operations Metrics Shipping Lines
Shipping Operations
Export
Number of TEUs / Week [Sorted by Trade Lanes]
On-Time Loading Percentage
Accurate Routing Percentage
Vessel Utilization
Turnaround Time / TEUKey Operations Metrics Port Operations
Port Operations
Vessel Loading / Unloading Operations
Number of TEUs / Hour
Moves / Hour [Measured separately for trailers and
gantry cranes]
Turnaround Time / VesselIncoterms
CIF
Cost, Insurance & Freight
All costs upto the point where container will be offloaded at the port of discharge to be paid by Seller
Risk / Liability of damages until the container lands at final port of discharge is that of Seller
CFRCost & Freight
All costs (except insurance) upto the point where container will be offloaded at the port of discharge to be paid by Seller
Risk / Liability of damages until the container lands at final port of discharge is that of Seller
Insurance is on Buyers AccountIncoterms
FOB
Free On Board
Seller responsible for costs upto the loading point at the port of loading
Risk / Liability of damages passes to buyer after the container is loaded at the port of loading
FCA
Free Carrier Area(Carrier Designated Area)
Seller responsible for costs to handover cargo at the designated area specified by the carrier
Risk / Liability of damages passes on to buyer after the cargo has been handed over at the carriers designated areaIncoterms
Ex-Works
Buyer responsible for all costs from sellers premises
Risk / Liability of damages passes to buyer after the goods have been put away and seller intimates the carrier about the sameIncoterms
DDU
Delivery Duty Unpaid
Seller responsible for all costs upto the cargo reaches the buyers designated area except customs clearance at destination, duty, demurrage at destination
DDP
Delivery Duty Paid
Seller responsible for all costs upto the cargo reaches the buyers designated area except customs clearance at destination, demurrage at destinationDDU / DDP Modalities
Mandatory Document Requirements
Importer on Record Bond (Buyer in case of DDU & Seller in case of DDP)
Power of Attorney to the Logistics Service Provider
(To be given by Buyer in case of DDU & Seller in case of DDP)
In case of a duty free product, the relevant GSP Certificate (To be given by Buyer in case of DDU & Seller in case of DDP)
[GSP Generalized System of Preferences]
In case of food products, pharmaceuticals, chemicals, the necessary FDA documentsDDU / DDP Destination Charge Check-List
Mandatory Port Dues
Carrier Documentation Charges
Carrier THC
Customs House Brokerage Charges
Merchandising Fees
Inland Haulage
Fuel Surcharge
FDA Charges (If applicable)
Any Other Local Charge
Demurrage & Detention Tariff Airfreight Concepts
Direct express service
Next flight direct
Subject to routing availability
Airport to airport transportation
Door to door transportation
Time definite service
Money back guarantee
Subject to carriers service availability Charter service
Charters can be offered as:
Full plane charter
Partial plane charter
Service and rates will be described in contract
Additional services:
-Import clearance
-Pick-up
-Delivery
-Special Handling, e.g. packing, dangerous goods, etc. -Documentation Management -Export clearance
-StorageULD Categories
ULD = Unit Loading Device [equivalent of container in ocean transport]
A320/A321-Container
Type:A320/A321-Container
Code:AKH
Base Dimensions156 x 153 cm
outside:
Height outside:114 cm
Usable volume:3.5 m
Dimensions inside:146 x 144 x 111 cm
Acceptable for:A300, A310, A320, A321, A340, B747-200F, B747-
400, MD11F
ULD Categories
LD3-Container AKE/AVE
Type:
Code:
Base Dimensions outside:
Height outside:
Usable volume:
Dimensions inside:
Acceptable for: LD3-Container
AKE, AVE
156 x 153 cm
163 cm
3.8 m
146 x 144 x 160 cm
A300, A310, A330, A340, B747-200F, B747-400, B767(DE), MD11F
LD = Lower DeckULD Categories
Container AMP
Type:Container AMP
Code:AMP
Base Dimensions318 x 244 cm
outside:
Height outside:161 cm
Usable volume:10.5 m
Dimensions305 x 223 x 154 cm
inside:
Acceptable for:A300, A310, A330, A340, B747-200F, B747-
400, MD11F
ULD Categories
Container AMP
Type:Container AMP
Code:AMP
Base Dimensions318 x 244 cm
outside:
Height outside:161 cm
Usable volume:10.5 m
Dimensions305 x 223 x 154 cm
inside:
Acceptable for:A300, A310, A330, A340, B747-200F, B747-
400, MD11F
ULD Categories
Valuable Cargo Container (AKW)
Type:
Code:
Base Dimensions outside:
Height outside:
Usable volume:
Dimensions inside:
Acceptable for: Wertfracht-Container
AKW
156 x 153 cm
114 cm
3.5 m
146 x 144 x 111 cm
A300, A320, A321, A330, A340, B747-200F, B747-400, MD11FULD Categories
Triple Horse Container (HMJ)
Type:
Dreier-Pferde-Container*
Code:
HMJ, HMA**
Base Dimensions
318 x 244 cm
outside:
Height outside:
235 cm
Usable volume:
3.5 m
Dimensions inside:
234 x 188 x 232 cm
Acceptable for:
B747-200F, MD11F
NOTE:
Closed, with space for attendant.
loadable on B747-200F only ULD Categories
10-ft-Container (AMH, AMJ) c
Type:10-ft-Container
Code:AMH, AMJ
Base Dimensions318 x 244 cm
outside:
Height outside:244 cm
Usable volume:15 m
Dimensions inside:306 x 230 x 240 cm
Acceptable for:B747-200F (nur Maindeck), MD11F (nur Maindeck)
ULD Categories
10-ft-Container (AMH, AMJ) c
Type:10-ft-Container
Code:AMH, AMJ
Base Dimensions318 x 244 cm
outside:
Height outside:244 cm
Usable volume:15 m
Dimensions inside:306 x 230 x 240 cm
Acceptable for:B747-200F (nur Maindeck), MD11F (nur Maindeck)
ULD Categories
CAPACITY : 8 CBM MAX LOAD : 4536KGULD Categories
PALLETP1
CAPACITY: 10.3 CBMMAX LOAD: 4585 KGS.Aircraft Capacities
Data Source: www.quantas.com/au/freightCargo Operations - Stowage
Stowage is a Critical Success Factor for Logistics Operations Trucking / Sea Freight / Air Freight
Stowage format determines safety and optimal utilization of space and tonnage in Truck Loads
Bad stowage can lead to transit damage of cargo
Bad stowage can result in damage to cargo / occupational hazard
to labor at destination
Non-optimal stowage leads to higher costs / revenue leakagesCargo Operations - Stowage
Stowage Determinants
Trucking
Routing of Truck
Number of Transit and Loading / Unloading Halts
Product MixCargo Operations - Stowage
Stowage Determinants
Sea Freight (Logistics Service Provider Perspective)
Product Mix
Packaging Mix [Pallets / Cartons / Bales etc]
Most LCL / Consolidators now take advantage of software that simulates a loading plan based on cargo / container dimensionsCargo Operations - Stowage
Stowage Determinants
Sea Freight (Shipping Line Perspective)
Container Mix [20 / 40 etc]
Vessel Routing
Number of Loading / Unloading Points
Container Vessel Stowage operations are done with the help of IT as the complexity of vessel operations is too large to be done manuallyCargo Operations - Stowage
Stowage Determinants
Air Freight (Airline Perspective)
Product Mix
Onward Routing from Hub stationsLogistical Operations - Contraints
Logistics operations have a lot of constraints and need a lot of planning
Suppose that you have cargo for a 20 FCL in Talegaon, Maharashtra to be shipped to
London, UK and you estimate that the cargo will be ready on 5th October 2012
[assume that the container will be stuffed in your factory]
When should you book the container from the shipping line?Logistical Operations - Contraints
Constraints / Operational Challenges
Transit Time for 20 Empty Container from Shipping Yard to factory = 1 Day
Loading Time = 0.5 Days
Transit Time for 20 Full Container from Talegaon to Nhava Sheva [nearest terminal] = 1 Day
Customs Clearance Time = 1 Day [assuming proper documentation]
Terminal Entry / Carrier Formalities = 1 Day
Weekly Sailing for Europe is every Saturday
Hence the container should be booked at least 8 days in advance!!! Logistical Operations - Contraints
Suppose that you have cargo for South Korea and Japan [assume cargo is auto-
components] in Germany. You have a reservation for 10 tons of cargo from your
airline with a transit point in Singapore.
Identify the operational challenges for planning the loads in your warehouseLogistical Operations - Contraints
Constraints / Operational Challenges
Transit Time Warehouse to Airport = 1 Day
Customs Clearance = 0.5 Days
Transit Time Germany Hub to Singapore = 1 Day
Connection Time
Onward Singapore Japan = 4 hours
Onward Singapore Korea = 2 hours
Onward Singapore Japan => Split into 3 passenger aircrafts Lower Decks ONLY!Logistical Operations - Contraints
The challenges in logistics are almost identical to those of operations at a minimum
and much more most often than not
The more the number of intermediate steps in a logistical operation, greater the
chances of errors and greater the number of contraints
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