kjjjj

PROJECT REPORT ON

“SEA FREIGHT IN LOGISTICS MANAGEMENT”

INDEXParticulars

Introduction of Logistics Management

Shipping

Cargo Vessels Types

Different Types of Ship Size

Terms Of Shipment

Sea Transport

Shipping Documents

3rd Party Logistics & 4th Party Logistics

Ports In India

Customs And Procedures

Multimodal Transport

Marine Insurance

Warehousing and Warehouse Management

Panama Canal

Conclusion

Case Study

Bibliography

SUMMARY The analysis of the situation on the basis of transport logistics, focused

logistics and transport affect the efficiency of our infrastructure, management,

logistics concepts, professionals and other factors discussed in depth, and how to

improve the efficiency of logistics and transport measures and suggestions put

forward in this project. Key words: logistics; transport; efficiency; factor logistics

and transport is the backbone of the entire logistics system, logistics and transport

efficiency is to reduce the total cost of logistics the main way. At present, logistics

market is just out of infancy, but the logistics and transport is still in a low

efficiency for the pending problems, identify the main factors affect the transport

efficiency to make up for its deficiencies, to promote the rapid development of

logistics industry has a positive effect. Logistics sea freight is high transport costs

in total logistics costs account for a second large proportion.

The outcome of studies identified major weaknesses in the field of

Freight Forwarding as follows:

- Inappropriate legal framework;

- Need for strengthening national and sub-regional freight forwarding

associations;

- Too many variations in the structure of companies carrying out freight

forwarding activities;

- Faulty management systems coupled with poor delegation by power;

and

- Lack of professional structures in the industry.

2

To overcome these problems an attempt has been made to highlight activities of

selected sub-regional training institutions that have or could develop courses for

the benefit of the sub-sector.

The proposed module covers thirteen main areas of concern to overcome the

weakness in the field of freight forwarding is as follows:

- Elaboration on duties and responsibilities of the freight forwarder and

its relationship with intervening parties;

- Rights, duties and responsibilities of Multimodal Transport/Freight

Forwarding institutions;

- The art by packaging, marking and handling of special cargoes;

- Principles of carriage of goods by sea;

- Principles of carriage of goods by air;

- Carriage of goods by road and rail;’

- Practices of customs’ activities and port procedures;

- The art of consolidation and intermodal transport

- Freight forwarding documentation practices

- The use of incoterms

- Application of documentary credits;

- Cargo insurance; and

- Liability insurance.

3

INTRODUCTIONWhat do the term “Logistics Management in sea freight means?

The transportation of goods in ships, or goods sent by sea. It simply means

the Logistics is the art and science of managing and controlling the flow of

goods, energy, information and other resources like products, services, and

people, from the source of production to the marketplace. It is difficult to

accomplish any marketing or manufacturing without logistical support. It

involves the integration of information, transportation, inventory, warehousing,

material handling, and packaging. The operating responsibility of logistics is

the geographical repositioning of raw materials, work in process, and finished

inventories where required at the lowest cost possible.

Overview of Logistics The word of logistics originates from the ancient Greek logos (λόγος),

which means “ratio, word, calculation, reason, speech, and oration”.

Logistics as a concept is considered to evolve from the military's need to

supply themselves as they moved from their base to a forward position. In ancient

Greek, Roman and Byzantine empires, there were military officers with the title

‘Logistikas’ who were responsible for financial and supply distribution matters.

The Oxford English dictionary defines logistics as: “The branch of military

science having to do with procuring, maintaining and transporting material,

personnel and facilities.”Another dictionary definition is: "The time related

4

positioning of resources." As such, logistics is commonly seen as a branch of

engineering which creates "people systems" rather than "machine systems".

Military logistics

In military logistics, experts manage how and when to move resources to the

places they are needed. In military science, maintaining one's supply lines while

disrupting those of the enemy is a crucial—some would say the most crucial—

element of military strategy, since an armed force without food, fuel and

ammunition is defenseless.

The Iraq war was a dramatic example of the importance of logistics. It had

become very necessary for the US and its allies to move huge amounts of men,

materials and equipment over great distances. Led by Lieutenant General William

Pagonis, Logistics was successfully used for this movement. The defeats of the

British in the American War of Independence, and the defeat of Rommel in World

War II, have been largely attributed to logistical failure. The historical leaders

Hannibal Barca and Alexander the Great are considered to have been logistical

geniuses.

Logistics Management

Logistics Management is ‘that part of the supply chain which plans,

implements and controls the efficient, effective forward and reverse flow and

storage of goods, services and related information between the point of origin and

the point of consumption in order to meet customers requirements’.

5

Logistics management is applicable to public as well as private sector,

Public sector are government undertaking, government start business with and so

on. Private sector is classified into sectoral segmentation of industry. Ex.

electrical, mechanical, electronics etc.

Business logistics

Logistics as a business concept evolved only in the 1950s. This was

mainly due to the increasing complexity of supplying one's business with materials

and shipping out products in an increasingly globalized supply chain, calling for

experts in the field who are called Supply Chain Logisticians. This can be defined

as having the right item in the right quantity at the right time for the right price and

is the science of process and incorporates all industry sectors. The goal of logistic

work is to manage the fruition of project life cycles, supply chains and resultant

efficiencies.

In business, logistics may have either internal focus(inbound logistics), or

external focus (outbound logistics) covering the flow and storage of materials from

point of origin to point of consumption (see supply chain management). The main

functions of a logistics manager include Inventory Management, purchasing,

transport, warehousing, and the organizing and planning of these activities.

Logistics managers combine a general knowledge of each of these functions so that

there is a coordination of resources in an organization. There are two

fundamentally different forms of logistics. One optimizes a steady flow of material

through a network of transport links and storage nodes. The other coordinates a

sequence of resources to carry out some project. Logistics as a concept is

considered to evolve from the military's need to supply themselves as they moved

from their base to a forward position. In ancient Greek, Roman and Byzantine

6

empires, there were military officers with the title ‘Logistikas’ who were

responsible for financial and supply distribution matters.

Shipping Shipping has multiple meanings. It can be a physical process of

transporting goods and cargo, by land, air, and sea. It also can describe the

movement of objects by ship.

Land or "ground" shipping can be by train or by truck. In air and sea

shipments, ground transportation is often still required to take the product from its

origin to the airport or seaport and then to its destination. Ground transportation is

typically more affordable than air shipments, but more expensive than shipping by

sea.

Shipment of freight by trucks, directly from the shipper to the destination,

is known as a door to door shipment. Vans and trucks make deliveries to sea ports

and air ports where freight is moved in bulk.

Much shipping is done aboard actual ships. An individual nation's fleet and

the people that crew it are referred to its merchant navy or merchant marine.

Merchant shipping is essential to the world economy, carrying 90% of

international trade with 50,000 merchant ships worldwide. The term shipping in

this context originated from the shipping trade of wind power ships, and has come

to refer to the delivery of cargo and parcels of any size above the common mail of

letters and postcards.

Ship transport is watercraft carrying people (passengers) or goods (cargo).

Sea transport has been the largest carrier of freight throughout recorded history.

Although the importance of sea travel for passengers has decreased due to aviation,

7

it is effective for short trips and pleasure cruises. Transport by water is cheaper

than transport by air.

Ship transport can be over any distance by boat, ship, sailboat or barge,

over oceans and lakes, through canals or along rivers. Shipping may be for

commerce, recreation or the military. Virtually any material that can be moved, can

be moved by water, however water transport becomes impractical when material

delivery is highly time-critical. "General cargo" is goods packaged in boxes, cases,

pallets, and barrels. Containerization revolutionized ship transport in the 1960s.

When a cargo is carried in more than one mode, it is intermodal or co-modal.

MERCHANT SHIPPING A nation's shipping fleet (merchant navy, merchant marine, merchant

fleet) consists of the ships operated by civilian crews to transport passengers or

cargo. Professionals are merchant seaman, merchant sailor, and merchant mariner,

or simply seaman, sailor, or mariner. The terms "seaman" or "sailor" may refer to a

member of a country's navy.

8

2005 registration of merchant ships (1,000 gross register tons (GRT) and over)

per country.

According to the 2005 CIA World Fact book, the world total number of

merchant ships of 1,000 Gross Register Tons or over was 30,936. Statistics for

individual countries are available at the List of merchant marine capacity by

country.

Professional mariners A ship's complement can be divided into four categories: the deck department,

the engineering department, the steward's department, and other.

Deck department An able seaman stands iceberg

lookout on the bow of the freighter

USNS Southern Cross during a re-

supply mission to McMurdo Station,

Antarctica; circa 1981.

Officer positions in the deck

department include but not limited

to: Master and his Chief, Second, and

Third officers. The official

classifications for unlicensed

members of the deck department are

Able Seaman and Ordinary Seaman.

9

An able seaman stands iceberg lookout on the bow of the freighter USNS Southern Cross during a re-supply mission

to McMurdo Station, Antarctica circa 1981.

A common deck crew for a ship includes:

(1) Chief Officer/Chief Mate

(1) Second Officer /Second Mate

(1) Third Officer / Third Mate

(1) Boatswain

(2-6) Able Seamen

(0-2) Ordinary Seamen

A deck cadet is person who is carrying out mandatory seatime to achieve their

officer of the watch certificate. Their time onboard is spent learning the operations

and tasks of everyday life on a merchant vessel.

Engineering department A ship's engineering department consists of the members of a ship's

crew that operate and maintain the propulsion and other systems on board the

vessel. Marine Engineering staff also deal with the "Hotel" facilities on board,

notably the sewage, lighting, air conditioning and water systems. They deal with

bulk fuel transfers, and require training in firefighting and first aid, as well as in

dealing with the ship's boats and other nautical tasks- especially with cargo

loading/discharging gear and safety systems, though the specific cargo discharge

function remains the responsibility of deck officers and deck workers. On LPG and

LNG tankers however, a cargo engineer works with the deck department during

cargo operations, as well as being a watch keeping engineer.

A common Engineering crew for a ship includes:

(1) Chief Engineer

10

(1) Second Engineer / First Assistant Engineer

(1) Third Engineer / Second Assistant Engineer

(1-2) Fourth Engineer / Third Assistant Engineer

(0-2) Fifth Engineer / Junior Engineer

(1-3) Oiler (unlicensed qualified rating)

(0-3) Greaser/s (unlicensed qualified rating)

(1-5) Entry-level rating (such as Wiper (occupation), Utility man, etc.)

Many American ships also carry a Qualified Member of the Engine Department.

Other possible positions include Motorman, Machinist, Electrician, Refrigeration

Engineer, and Tanker man. Engine Cadets are trainee engineers who are

completing sea time necessary before they can obtain a watch keeping license.

Steward's department A typical Steward's department for a cargo ship would be composed of a

Chief Steward, a Chief Cook, and a Steward's Assistant. All three positions are

typically filled by unlicensed personnel.

The chief steward directs, instructs, and assigns personnel performing

such functions as preparing and serving meals; cleaning and maintaining officers'

quarters and steward department areas; and receiving, issuing, and inventorying

stores.

On large passenger vessels, the Catering Department is headed by the

Chief Purser and managed by assistant pursers. Although they enjoy the benefits of

having officer rank, they generally progress through the ranks to become pursers.

Under the pursers are the department heads - such as chief cook, head waiter, head

barman etc. They are responsible for the administration of their own areas.

11

The chief steward also plans menus; compiles supply, overtime, and cost

control records. May requisition or purchase stores and equipment. May bake

bread, rolls, cakes, pies, and pastries.

A chief steward's duties may overlap with those of the Steward's

Assistant, the Chief Cook, and other Steward's Department crewmembers.

In the United States Merchant Marine, in order to be occupied as a chief

steward a person has to have a Merchant Mariner's Document issued by the United

States Coast Guard. Because of international conventions and agreements, all chief

cooks who sail internationally are similarly documented by their respective

countries.

Other Departments Staff officer positions on a ship, including Junior Assistant Purser, Senior

Assistant Purser, Purser, Chief Purser, Medical Doctor, Professional Nurse, Marine

Physician Assistant, and Hospital Corpsman, are considered administrative

positions and are therefore regulated by Certificates of Registry issued by the

United States Coast Guard. Pilots are also merchant marine officers and are

licensed by the Coast Guard. Formerly, there was also a radio department, headed

by a chief radio officer and supported by a number of radio officers. Since the

introduction of GMDSS (Satellite communications) and the subsequent

exemptions from carrying radio officers if the vessel is so equipped, this

department has fallen away, although many ships do still carry specialist radio

officers, particularly passenger vessels. Many radio officers became 'electro-

technical officers', and transferred into the engineering department.

Ships and watercraft

12

Ships and other watercraft are used for ship transport. Types can be

distinguished by propulsion, size or cargo type. Recreational or educational craft

still use wind power, while some smaller craft use internal combustion engines to

drive one or more propellers, or in the case of jet boats, an inboard water jet. In

shallow draft areas, such as the Everglades, some craft, such as the hovercraft, are

propelled by large pusher-prop fans.

Cargo vessels types: Until the 20th Century, ships generally, were all-purpose cargo vessels,

with very little specialisation (with the exception of tank vessels which first

appeared in the 1880s). All cargoes were carried in general purpose holds, or on

deck. Modern commercial vessels are designed and built to carry specific cargo

types. The names we give to the various vessel types reflect the type of cargo for

which they are designed and the names we give to the various vessel types reflect

the type of cargo for which they are designed and built to carry. For example, a

"bulk carrier" is specially designed to carry cargo "in bulk" and the hatch cover and

hold design is focused on the carriage of raw dry cargo goods, such as coal, grain,

iron ore and bauxite, which are simply poured into cavernous holds then grabbed

and bulldozed out at the port of discharge.

Tankers carry liquid cargo in tanks the most obvious example is the well-

known oil tanker, but even within this generic type each tanker is specially

designed to carry a particular type of liquid cargo not just crude this generic type,

each tanker is specially designed to carry a particular type of liquid cargo, not just

crude oil. Other liquid cargoes would include petroleum products, chemicals and

yes, even wine! 2 recent hybrid designs of tanker carry Liquefied Natural Gas

(LNG) and Liquefied Petroleum Gas (LPG), both of which need to be kept under

pressure and at low temperature to maintain the cargo in a liquefied state. A further

13

hybrid is the Floating Production, Storage and Offloading unit (FPSO), which is

usually a large tanker (maybe a converted old VLCC, but now brand new

specialized FPSOs are being built) specifically designed for the oil industry,

working offshore where an onshore facility to process and store offshore oil is

deemed impractical.

Bulk carriers, such as the

Sabrina I seen here, are cargo

ships used to transport bulk

cargo items such as ore or

food staples (rice, grain, etc.)

and similar cargo. It can be

recognized by the large box-

like hatches on its deck,

designed to slide outboard for loading. A bulk carrier could be either dry or wet.

Most lakes are too small to accommodate bulk ships, but a large fleet of lake

freighters has been plying the Great Lakes and St. Lawrence Seaway of North

America for over a century.

Container ships are

cargo ships that carry

their entire load in truck-

size containers, in a

technique called

containerization. They

form a common means

of commercial

intermodal freight transport. Informally known as "box boats," they carry the

14

majority of the world's dry cargo. Most container ships are propelled by diesel

engines, and have crews of between 10 and 30 people. They generally have a

large accommodation block at the stern, directly above the engine room.

Tankers are cargo ships

for the transport of fluids,

such as crude oil,

petroleum products,

liquefied petroleum gas,

liquefied natural gas and

chemicals, also vegetable

oils, wine and other food -the tanker sector comprises one third of the world

tonnage.

Reefer ships are cargo

ships typically used to

transport perishable

commodities which

require temperature-

controlled transportation,

mostly fruits, meat, fish,

vegetables, dairy products and other foodstuffs.

Roll-on/roll-off ships,

such as the Chi-

Cheemaun, are cargo

ships designed to carry

wheeled cargo such as

automobiles, trailers or

railway carriages.

15

RORO (or ro/ro) vessels have built-in ramps which allow the cargo to be

efficiently "rolled on" and "rolled off" the vessel when in port. While smaller

ferries that operate across rivers and other short distances still often have built-

in ramps, the term RORO is generally reserved for larger ocean-going vessels.

Coastal trading vessels,

also known as coasters,

are shallow-hulled ships

used for trade between

locations on the same

island or continent. Their

shallow hulls mean that

they can get through reefs

where sea-going ships usually cannot (sea-going ships have a very deep hull for

supplies and trade etc.).

Ferries are a form

of transport,

usually a boat or

ship, but also other

forms, carrying (or

ferrying)

passengers and

sometimes their

vehicles. Ferries

are also used to transport freight (in lorries and sometimes unpowered freight

containers) and even railroad cars. Most ferries operate on regular, frequent,

return services. A foot-passenger ferry with many stops, such as in Venice, is

sometimes called a waterbus or water taxi. Ferries form a part of the public

16

transport systems of many waterside cities and islands, allowing direct transit

between points at a capital cost much lower than bridges or tunnels. Many of

the ferries operating in Northern European waters are ro/ro ships. See the

Herald of Free Enterprise and M/S Estonia disasters.

Cruise ships

are passenger

ships used for

pleasure

voyages, where

the voyage

itself and the

ship's amenities

are considered

an essential part of the experience. Cruising has become a major part of the

tourism industry, with millions of passengers each year as of 2006. The

industry's rapid growth has seen nine or more newly built ships catering to a

North American clientele added every year since 2001, as well as others

servicing European clientele. Smaller markets such as the Asia-Pacific region

are generally serviced by older tonnage displaced by new ships introduced into

the high growth areas. On the Baltic sea this market is served by cruise ferries.

Ocean Liner is a passenger ship designed to transport people from one seaport

to another along regular long-distance maritime routes according to a schedule.

Ocean liners may also carry cargo or mail, and may sometimes be used for

other

17

purposes. Ocean liners are usually strongly built with a high freeboard to

withstand rough seas and adverse conditions encountered in the open ocean,

having large capacities for fuel, food and other consumables on long voyages.

Cable layer is a deep-sea vessel designed and used to lay underwater cables for

telecommunications, electricity, and such. Large superstructure and one or more

spools that feed off the transom distinguish it.

A tugboat is a boat

used to manoeuvre,

primarily by towing

or pushing other

vessels (see

shipping) in

harbours, over the

open sea or through

rivers and canals.

They are also used

to tow barges, disabled ships, or other equipment like towboats.

A dredger

(sometimes also

called a dredge) is

a ship used to

excavate in

shallow seas or

fresh water areas

18

with the purpose of gathering up bottom sediments and disposing of them at a

different location.

A barge is a flat-bottomed

boat, built mainly for river

and canal transport of

heavy goods. Most barges

are not self-propelled and

need to be moved by

tugboats towing or

towboats pushing them.

Barges on canals (towed

by draft animals on an adjacent towpath) contended with the railway in the

early industrial revolution but were outcompeted in the carriage of high value

items due to the higher speed, falling costs, and route flexibility of rail

transport.

A Multi-purpose ship (sometimes called a general cargo ship) is used to

transport a variety of goods from bulk commodities to break bulk and heavy

cargoes. To provide

maximum trading

flexibility they are

usually geared and

modern examples

are fitted for the

carriage of

containers and

grains. Generally

they will have large open holds and twee decks to facilitate the carriage of

19

different cargoes on the same voyage. The crew will be highly competent in the

securing of break bulk cargoes and the ship will be equipped with various

lashings and other equipment for sea fastening.

Ships that fall outside these categories include Semi-submersible heavy-lift

ships or OHGC (Open Hatch General Cargo).

Major ship size includes: Handy max : Traditionally the workhorses of dry bulk, the handy and more

recent handymax types remain popular ships less than 60,000dwt. The

handymax sector operates in a large number of geographically dispersed global

trades, mainly carrying grains and minor bulks including steel products, forest

products and fertilizers. The vessels are well suited for small ports with length

and draft restriction and also lacking transshipment infrastructure. This category

is also used to define small-sized oil tanker.

Panamax: Represents the largest acceptable size to transit the panama canal,

which can be applied to both freighters and tankers; length are restricted to a

maximum of 275 meters, and widths to slightly more than 32 meters. The

average size of such abig ship is about 65,000 dwt. They mainly carry

coal ,grain and lesser extent, minor bulks, including steel product, forest

products and fertilizers.

Capsize: refer to a rather ill-defined standard which have the common

characteristics of being incapable of using the panama or Suez Canal not

necessarily bcoz of their tonnage, but bcoz of their size. These ships serve

deepwater terminals handling raw materials, such as iron ore and coal.

Aframax: A tanker of standard size between 75,000 and 11,5000 dwt. The

largest tanker size in the AFRA (Average freight Rate Assessment) tanker rate

system.

20

Suezmax: This standard, which represents the limitation of Suez Canal, has

evolved. Before 1067, the Suez Canal could only accommodate tanker ship with

maximum of 80,000dwt. The canal was closed between 1967 and 1975 bcoz of

Israel -Arab conflict. Once it reopened in 1975, the suezmax capacity went to

150,000 dwt. An enlargement to enable the canal to accommodate 200,000 dwt

tankers is being considered.

VLCC: Very Large Crude Carriers, 150,000 to 320,000 dwt in size. They offer

good flexibility for using terminals since many can accommodate their draft.

They are used in ports that have depth limitations, mainly around the

Mediterranean, West Africa and the North Sea. They can be ballasted through

the Suez Canal.

ULCC: Ultra Large Crude Carriers, 300000 to 550,000 dwt in size. It is used

for carrying crude oil on long routes. The enormous sizes of these vessels

require custom built terminals.

Terms of shipment:Common trading terms used in shipping goods internationally include:

• Freight on board, or free on board (FOB): The exporter delivers the goods at the

specified location (and on board the vessel). Costs paid by the exporter include

load and lash, including securing cargo not to move in the ships hold, protecting

the cargo from contact with the double bottom to prevent slipping, and protection

against damage from condensation. For example, "FOB Kunming Airport" means

that the exporter delivers the goods to the airport, and pays for the cargo to be

loaded and secured on the plane. The exporter is bound to deliver the goods at his

cost and expense. In this case, the freight and other expenses for outbound traffic

are borne by the importer.

21

• Cost and freight (C&F, CFR, and CNF): Insurance is payable by the importer and

the exporter pays the ocean shipping/air freight costs to the specified location. For

example, C&F Los Angeles (the exporter pays the ocean shipping/air freight costs

to Los Angeles). Many of the shipping carriers (such as UPS, DHL, and FedEx)

offer guarantees on their delivery times. These are known as GSR guarantees or

"guaranteed service refunds"; if the parcels are not delivered on time, the customer

is entitled to a refund.

• Cost, insurance, and freight (CIF): Insurance and freight are all paid by the

exporter to the specified location. For example, at CIF Los Angeles, the exporter

pays the ocean shipping/air freight costs to Los Angeles including the insurance.

• The term "best way" generally implies that the shipper will choose the carrier

who offers the lowest rate (to the shipper) for the shipment. In some cases,

however, other factors, such as better insurance or faster transit time will cause the

shipper to choose an option other than the lowest bidder.

• Agency Fee: Fee payable by a ship-owner or ship operator to a port agent.

• Agent: A person or organization authorized to act for or on behalf of another

person or organization. In the shipping field, an Agent is a corporate body with,

which there is an agreement to perform particular functions on behalf of them at an

agreed payment. An Agent is either a part of a shipping corporation or an

independent body part of a shipping corporation or an independent body.

• Bill of Lading (B/L, plural: Bs/L): A document which evidences a contract of

carriage by sea.

• Break Bulk Cargo: General cargo conventionally stowed as opposed to unitized,

containerized and Roll On-Roll Off cargo.

• Bulk Carrier: Single deck vessel designed to carry homogeneous unpacked dry

cargoes such as grain, iron ore and coal.

22

• Cargo: Goods transported or to be transported, all goods carried on a ship

covered by a B/L.

• Carrier: The party undertaking transport of goods from one point to another

• Claim: A charge made against a carrier for loss, damage or delay.

• Clean Bill of Lading: A Bill of Lading which does not contain any qualification

about the apparent order and A Bill of Lading which does not contain any

qualification about the apparent order and condition of the goods to be transported.

• Consignee: The party such as mentioned in the transport document by whom the

goods, cargo or containers are to be received.

• Consignment: A separate identifiable number of goods (available to be)

transported from one consignor to one consignee via one or more than one modes

of transport and specified in one single transport document.

• Consignor: Shipper

• Container Terminal: Place where loaded and/or empty containers are loaded or

discharged into or from a means of transport.

• Damaged Cargo Report: Written statement concerning established damages to

cargo and/or equipment.

• Dangerous Goods: Goods are to be considered dangerous if the transport of such

goods might cause harm, risk, peril, or other evil to people, environment,

equipment or any property whatsoever.

• Dead freight: Slots paid for but not used.

• Delivery Order: A carrier's delivery order (negotiable document) is used for

splitting a B/L (after surrender) A carrier s delivery order (negotiable document) is

used for splitting a B/L (after surrender) in different parcels and have the same

function as a B/L.

• Export License: Document granting permission to export as detailed within a

specified time.

23

• FTL: Full Truck Load, an indication for a truck transporting cargo directly from

supplier to receiver.

• Free In and Out (FIO): Transport condition denoting that the freight rate excludes

the costs of loading and discharging and, if appropriate, stowage and lashing.

• Freight Invoice: An itemized list of goods shipped and services rendered stating

fees and charges.

• Freight Prepaid: Freight and charges to be paid by the consignor.

• Freight Ton: A unit for freighting cargo according to weight and/or cubic

measurement A unit for freighting cargo according to weight and/or cubic

measurement.

• Full Container Load (FCL): A general reference for identifying container loads of

cargo loaded and/or discharged at merchants' premises.

• Gantry Crane: A crane or hoisting machine mounted on a frame or structure

spanning an intervening space, which often travels on rails.

• Gross Tonnage (GRT): The measure of the overall size of a vessel determined in

accordance with the provisions of the international convention on measurement of

vessels usually expressed in register ton.

• Heavy Lift: Single commodity exceeding the capacity of normal loading

equipment and requiring special equipment and rigging methods for handling.

• House to House Transport: The transport of cargo from the premises of the

consignor to the premises of the consignee The transport of cargo from the

premises of the consignor to the premises of the consignee.

• Insurance Certificate: Proof of an insurance contract

• Intermodal Transport: The movement of goods (containers) in one and the same

loading unit or vehicle which uses successively several modes of transport without

or vehicle which uses successively several modes of transport without handling of

the goods themselves in changing modes.

24

• Less than Container Load (LCL): For operational purposes a LCL (Less than full

container load) container is considered a container in which multiple consignments

or parts thereof are shipped.

• Letter of Indemnity: Written statement in which one party undertakes to

compensate another for the costs and consequences of carrying out a certain act.

The issue of a letter of indemnity is sometimes used for cases when a shipper likes

receiving a clean Bill of Lading while a carrier is not shipper likes receiving a

clean Bill of Lading while a carrier is not allowed to do so. Within P&O Nedlloyd

the issues of letters of indemnity are contrary to the company's instructions.

• Liner in Free Out (LIFO): Transport condition denoting that the freight rate is

inclusive of the sea carriage and the cost of loading, the latter as per the custom of

the port. It excludes the cost of discharging.

• Mate's Receipt: A document signed by the chief officer of a vessel

acknowledging the receipt of a certain consignment on board of that vessel. On this

document, remarks can be made as to the order and condition of the consignment.

• Multimodal Transport: The carriage of goods (containers) by at least two

different modes of transport.

• Negotiable: In terms of documents, 'negotiable' means that e.g. a Bill of Lading is

handed over/transferred in the right manner (viz proper endorsement) to another

person either over/transferred in the right manner (viz. proper endorsement) to

another person either endorsed in blank or endorsed to a person and that person

acquires, by this transfer certain rights vis-? is the goods e.g. is entitled to take

possession of the goods.

• Owner: The legal owner of cargo, equipment or means of transport.

• Particular Average: A fortuitous partial loss to the subject matter insured

proximately caused by an insured peril but which is not a general average loss.

Particular average only relates to damage and/or expenses which are exclusively

25

borne by the owners of a vessel which has sustained damage as a result of e g

heavy weather or by the owners of the cargo which has been damage as a result of

e.g. heavy weather or by the owners of the cargo, which has been damaged in

transit.

• Quotation: Amount stated as the price according to tariff for certain services to be

provided or issued to a customer with specification on conditions for carriage.

• Rate: The price of a transport service.

• Rebate: That part of a transport charge which the carrier agrees to return.

• Roll-on Roll-off (Ro-Ro): System of loading and discharging a vessel whereby

the cargo is driven on System of loading and discharging a vessel whereby the

cargo is driven on and off by means of a ramp.

• Schedule: A timetable including arrival/departure times of ocean- and feeder

vessels and also inland transportation. It refers to named ports in a specific voyage

(journey) within a certain trade indicating the voyage (number's). In general: The

plan of times for starting and/or finishing activities.

• Seaworthiness: Fitness of a vessel to travel in open sea mostly related to a

particular voyage with a particular cargo.

• Shipment: A separately identifiable collection of goods to be carried.

• Shipper: The merchant (person) by whom, in whose name or on whose behalf a

contract of carriage of goods has been concluded with a carrier or any party by

whom, in whose name or on whose behalf the goods are actually delivered to the

carrier in relation to the contract of carriage.

• Tariff: The schedule of rates, charges and related transport conditions.

• Time Sheet: Statement, drawn-up by the ship's agent at the loading and

discharging ports, which details the time worked in loading and discharging the

cargo together with the amount of lay time used.

26

• Voyage: A journey by sea from one port or country to another one or, in case of a

round trip, to the same port.

SEA TRANSPORTDefinition: “Transport goods and commodities by ship Goods is measured in tons

but transport is Transport goods and commodities by ship. Goods is measured in

tons but transport is measured by tons / miles (the weight carried multiplied by the

length of the voyage). The value of a commodity is not its price or its cost but its

utility , can be invariable increased by transport for example, coal which is

underground has no value , but ounce transported to a person freezing in winter it

can have considerable value

Characteristic Of Sea Transport:1. Sea transport is slow – ships carrying raw material (tramp) move at around 13-

14 knots- container ships speed 18-25 knots.

2. Sea transport is cheap because e it can take advantage of economies of scale,

large ships can reduce the cost per unit carried.

3. Sea transport connect land which separated by water.

Pattern of seaborne trade:World seaborne trade increased strongly in 2004, reaching 6.76 billion tons of

loaded goods. The annual growth rate, calculated with the provisional data

available for year 2004, reached 4.3 per cent. Total maritime activities measured in

ton-miles increased to 27,635 billion ton-miles, compared with25, 844 billion ton-

miles in 2003. The world merchant fleet expanded to 895.8 million deadweight

tons (dwt) at the beginning of 2005, a 4.5 per cent increase.

Development of International sea born trade, selected years.

27

YEAR Tanker Cargo Dry Cargo Bulk CargoTotal

(All Cargoes)

1990 1442 1124 448 2566

1995 1871 1833 796 3704

2000 1755 2253 968 4008

2006 2163 9821 1288 5983

2008 2674 4724 1828 7416

1unit - Millions Of Tons

Shipping markets:World seaborne trade in cargo (things to be moved) splits into three markets.

1. The Liner Market: This deals with general cargo which is usually relatively

expensive compared with “bulks” and the liner ships run on scheduled routes with

fixed tariff and condition.

2. The Dry Cargo Tramp Market: Tramps, in shipping terms relates to the way the

ship tramps from place to place where the market drawn it .Tramps carry mainly

ship load of bulk materials , the main commodities or Grain, Coal etc… . The

freight rates and conditions are negotiable as per Charter parties.

3. The Tanker Market: Tankers are specialized trumps being designed to carry

liquids in bulk. The oil trade routes are limited. This market contains 2 main

groups, Large tankers carry the crude oil and smaller carry the refined products.

THE LINERS It started through the last century when steamships appeared and started

offering started scheduled services between ports. They then tended to offer a

28

faster and more highly more highly quality service than the selling ships and

despite their higher freight rate tended to their rate tended to attract shippers

with high value cargo who were prepared to pay extra for speed and predictable

delivery dates. In the sixtieth the conventional general cargo ship was increasingly

replaced by the container ship. Increasingly replaced container. Then

containerization has had effect and it will continue to have on shipping

industry .Container ships have a larger, faster, and a quicker turn around than the

ships they replace. The containers are introduced to reduce the cargo handling cost

introduced cargo cost which has increased for more than any shipping cost and to

increase productivity comparing port time for general cargo ships and container

ships.

LINER FREIGHT RATES Liner freight rates are relate to a tariff of somewhat or some sort .They are, far

less volatile that those in tramp shipping. In many cases that any increases in the

tariff may only take place after period of notice. To overcome short -run variation

in cost such as changes in bunker prices or in rate of as changes exchanges, liner

operators generally resort surcharges typical of which are BAF AND CAF.

LINER CONEFERENCES Conferences are organization of shipping lines operating on particular route.

For example, the Transpacific West Bound Freight Agreement operates on the

route from the US to Far east route and the Indian sub-content. The conferences are

formal agreement between shipping lines on route setting prices and sometimes

pooling profits or revenues, managing capacity, a locating routes and offering

loyalty discounts.

Conferences can be either open or closed to accept new members.

Conferences issue a freight tariff.

29

Conferences may also allocate output among their members by either cargo

quotas or Sailing quotas.

Conferences employ policing agencies to check on adherence to the tariff

Conference Practice.

The conferences set prices, often based on loyalty arrangement they use two

kind of loyalty contracts; The contract rates and differ rebate .The shipper sign

in agreement to deal in exclusively with the conference and in turn receive

discounts on the freight rate .

The conferences response to an entrant by lowering the rate on one of its

vessels to compete with the entrant until entrant lost money and left the market.

In the last decade, the conferences have lost their importance and decline in the

number of the members.

CHARTERING Charterparty A charterparty is a contract of lease of a ship in whole

or in part for a long or short period of time or for a particular voyage. It has been

said that its origin lies in the mediaeval Latin "carta partita" or "charta partita" or

"charta divisa", where an agreement was torn into two pieces and one half was

given to each party. Proof of the whole contract was no doubt difficult if one party

was obstinate - modern methods of photocopying the contract for each party seem

preferable Affreightment is essentially placing a ship at the disposal of another

party, while transport is essentially the carrier taking charge of goods. Hire is the

consideration paid under demise and time charterparties; freight is the

consideration paid under voyage charterparties and bills of lading.

a) Charterparty by demise A Charterparty by demise is a contract by which the

ship- owner places a ship in the hands of the chartered who assumes possession

and control. The consideration paid by the chartered is hire which is payable at

30

specified intervals during the term of the charter. Under a demise Charterparty, the

ship-owner appoints the master and the crew, although they are paid and controlled

by the demise chartered.

A bareboat charter is a demise charter whereby the bareboat chartered names,

pays and controls the master and the crew.

Among the most common forms of demise charter are the "Baltic and

International Maritime Council Standard Bareboat Charter" (Code Name:

"Barecon '89"); and the "BIMCO Standard Charter" (Code Name: "Barecon

2001") forms of BIMCO.

b) Consecutive voyage charter A consecutive voyage charter party is a voyage

Charterparty for a determined number of consecutive voyages.

c) Slot charter - A Charterparty whereby the shipper leases one or more "slots,"

each capable of holding a 20-foot container, aboard a container ship.

d) Space charter it is a contract whereby a capacity of carriage is put at the

disposal of the shipper for the carriage of his goods during a period of time under

particular terms and conditions. Whether it is a contract of

Hire or a contract of carriage or even a contract of agency like a freight forwarders

contract, depends on its terms.

e) Time Charterparty A time Charterparty is a contract whereby the ship-owner

places a fully equipped and manned ship at the disposal of the chartered for a

period of time for a consideration called "hire" payable at specified intervals during

the term of the charter. Among the most common forms of time Charterparty are

the New York Produce Exchange (NYPE) and the Exchange (NYPE) and Baltime.

Main terms

Ships name and other details to identify her

31

Many other detail of the ship including total deadweight grain and bale

cubic ,draft, number of decks hold and hatches, number and lifting capacity of

derricks ,crane etc.

Rate of hire expressed in days or months.

The period in months or years.

Delivery place.

Re-delivery place.

Delivery time ex: not before certain date.

f) Voyage Charterparty: A voyage Charterparty is a contract whereby the ship-

owner places all or part of the carrying capacity of a ship at the disposal of the

charter (the voyage chartered) for the transport of goods agreed upon, on one or

more voyages, for a consideration called "freight" based on the quantity of cargo

carried, and usually payable at the end of the voyage. Among the most commonly

used form is the "Baltic and International Maritime Council Uniform General

Charter form of BIMCO. “

Main Contract term:

Ships name and other details to identify her

name and details

The cargo and the quantity the ship carry

The loading and discharge ports

Rate of freight

"Lay days and canceling" ex: loading not to commence not before a certain date

with charterers having the option to cancel the charter if the ship is later than

the second date.

The rates of loading and discharging

Demurrage and dispatch.

Charter party forum to be used

32

Total commission in involve

SHIPPING DOCUMENTATION

Documentation used in international trade performs a number of separate functions

and these can be divided into and can into the following categories:

instruction; financial; identification; authorization.. In this section we will be

dealing with those documents which are used in international trading activity.

BILL OF LADING FUNCTION

It is evidence that a contract of carriage exists between shipper (exporter) and

ship owner.

It is a receipt for goods, showing prima facie that they have been received into

the charge of a carrier.

It is a document of title which allows title to the goods to be transferred by

endorsement and delivery of the bill of lading.

Main details to be incorporated in the bill of lading Name and address of the shipper

The name of the vessel name of the

description of cargo, including identifying marks, numbers and types of

packages, types contents, gross weights and volume;

port of shipment

port of discharge

details of freight, including whether it is to be "prepaid" (at port of dispatch) or

"payable at destination" (freight collect);

Consignor's name and address which may be that of the buyer. Alternatively

bills of lading may be made out to show "to order" in the consignee box or "to

the order of..."

33

Notify party's name and address - often an agent acting on behalf of the

consignee at the port of destination. However, the consignor's details may be

entered in the "Notify party" consignor details be entered box where "order"

bills of lading are applicable

Terms of sale

The date on which the goods are received for shipment or date on which goods

are shipment or shipped on board the named vessel

Number of original bills issued

Signature of shipping line or its appointed agent.

Principal notations on bills of lading:Clean bills and Claused bills:

A "clean" bill of lading is one in which no notation is shown on the

document relating to cargo having been received by the line or shipped in any

other than good condition and correct n any than good and quantity. Thus,

standard printed bills of lading usually bear the wording "Shipped (or received for

shipment) in apparent good order and condition". If no clause to the contrary is

entered, the bills are said to be clean. In the case where the cargo is noted to be

wet, damaged or otherwise in doubtful condition or quantity, bills of lading will be

issued "claused" (or "dirty"), showing the defect in the cargo. It follows that if

goods are the cargo. It allows are shipped under a claused bill, consignees

may reject them or, alternatively, banks may not accept such bills of lading for

payment purposes.

Received bills and shipped bills:

As has already been said above, a bill of lading constitutes a receipt for

goods receipt goods delivered into the charge of a shipping line. Thus the

standard wording on a printed bill of standard printed lading may state

"Received for shipment..." and will be signed and dated by the line or its will or

34

agents. Although this shows that the goods have moved out of the exporter's charge

into that of the carrier, it does not show that actual shipment has taken place.

Through bills of lading:

The "through" bill of lading concept allows door-to-door shipments to be

covered by a bill of lading. This became necessary following the development of

containerization. Thus, this type of bill may cover ocean shipment, plus inland

transport by other modes.

Combined transport bills of lading:

Similar to a through bill of lading, the combined transport bill of lading

allows for the contract of bill the carriage to be covered by a single document and a

clearly defined single set of conditions of carriage to include the use of road and/or

rail shipment at either end of the sea leg. This document will, when issued, extend

the carrier's liability as set out in the carrier as set in the combined transport bill of

lading to the other transport modes. Freight forwarders operating as non-vessel

owning carriers (NVOCS) will most issue this type of document.

Group age and house bills of lading:

The concept of groupage - combining a number of individual consignments

into a complete container load for shipment - has been developed over many years

by freight forwarders operating services between two inland points in different

countries working in conjunction with an overseas office or partner. An ocean bill

of lading for a container load of group age is issued by the shipping lines showing

the sending forwarder as the shipper and the receiving forwarder as the consignee.

The forwarder thereafter issues his own house bills to individual exporters. These

house bills become the controlling document for the release of the cargo at

destination and enable the exporter, if required, to negotiate these with his

customer in return for payment of the goods.

35

It is important to note that a "house" bill of lading does not have the same

status as an ocean bill issued by a shipping line as it is not a document of title, in

the same sense of the word, as an ocean bill. However, it is capable of negotiation,

and is often acceptable to banks for letter of credit purposes when this has been

stipulated in the credit at the time it is opened.

Negotiation of bills of lading:

The bill of lading is a negotiable document which allows title to goods to be

transferred by endorsement and delivery. This facility gives one or other parties to

the transaction control over title to the goods and for this reason letters of credit

often stipulate certain types of bill of lading in order for this control to be

exercised. Three basic types of endorsement are possible:

1. Endorsement by consignee:

In this case the bill of lading is completed as below:

Shipper box in bill of lading: Actual shipper (exporter)

Consignee box in bill of lading: Actual consignee (buyer)

Notify box in bill of lading: Consignee's agent at port of arrival.

Completion of the bill of lading in this manner allows either the bill allows

consignee to present himself in person to the line to take delivery of the goods

or to endorse the bill of lading on the reverse side to allow his agent to do so

and to deliver the goods to him. Thus the consignee exercises control over who

takes the goods in charge at the destination port.

2. "To order" bills of lading

Bills of lading made out "to order" are completed as below:

Shipper box in bill of lading: Actual shipper (exporter)

Consignee box in bill of lading: "To order"

36

Notify box in bill of lading: Actual consignee (buyer)

In this instance, the shipper must stamp and sign the bill of shipper must stamp

sign the lading in order for title to the goods to be transferred to the

consignee. Thus the bill of lading is useless to the consignee without this

endorsement. This is a useful safeguard against bills being accidentally

transmitted to buyers directly. Clearly, should this happen the buyer would not

be able to take delivery of the goods and the bill of lading would have to be

returned to the shipper for endorsement and presentation to the bank. Bills

shipper or and bank Bills of lading completed in this manner are also said to be

"To order blank endorsed".

3. To order of (bank)

In this case, the bill of lading is completed as follows:

Shipper box in bill of lading Actual shipper (exporter)

Consignee box in bill of lading To the order of (bank)

Notify box in bill of lading True consignee (buyer)

The bank is the party which carries out the endorsement in this instance and

which, therefore, exercises control over the goods. Thus, if the bank wishes to

ensure that the buyer has actually paid for the goods before he takes delivery,

the bank may goods before he takes the endorse the bill of lading when

payment is made.

Sea waybills: Sea waybills offer a non-negotiable alternative to the bill of lading.

Generally speaking, they embody the Hague-Visby Rules. With a few exceptions

they are not negotiable and are, therefore, not usable as a means of transferring title

to goods. A freight forwarder might use them to control groupage cargo. The sea

waybill can thus be sent forward with the goods allowing the consignee to take

37

immediate delivery. The legal protection offered to the shipper under a sea waybill

is thought by some to be inferior to that offered under a bill of lading. However,

being a relative new innovation, there has been insufficient time to test them in

law.

Letter of guarantee:

Letter of guarantee: A written undertaking, or letter of indemnity, usually

provided by a bank, promising to hold the carrier harmless, up to a certain sum, for

claims that may arise from the delivery of goods to a particular person who is

unable to surrender the original bills of lading in return for the goods.

Letter of indemnity: Letter of indemnity: A written undertaking by a shipper to indemnify a carrier

for any liability which any which the carrier may incur for having issued a clean

bill of lading when, in fact, the goods received were not as stated on the bill of

lading .Such a letter is usually a central document in a fraud, whereby the shipper

and carrier knowingly misrepresent to third parties the actual order and condition

of the goods at the and of the at the time of shipment or the bad order of the

packing, or whereby they issue duplicate bills of lading to replace lost or stolen

originals. Letters of indemnity or stolen originals should not be condoned by courts

and are generally held ineffective as against third parties.

MARITIME GEOGRAPHY Definition: Studying seas and costal area which you have to find your way

round to pickup and deliver your cargoes.

The distances in shipping are always given in nautical miles which equal to

1852 meters. Latitude and Longitude: Latitude Is used for measuring how far

North or South and Longitude how far east and west. Time is also Is function of

38

Longitude this for every 15° you move east you advance your watch one hour and

vice versa for westerly movement

Weather

Ports

Water depth and tides

Time zone

LOGISTICAL MOVEMENT BY SEA THROUGHOUT THE

WORLDOceanic masses and rivers are the two major components of maritime circulation.

Oceanic masses account for 71% of the terrestrial surface. The four major oceans

relevant to maritime circulation are: the Pacific (165 millions square km), the

Atlantic (82 million square km), Indian (73 million square km) and the

Mediterranean (2.5 million square (2 km).

39

Third Party Logistics

In-house Logistics Department

Shipper

Transportation

IT support Warehousing

Others

In-house Operation

Outsourced Operation

3PL

Shipper

Shipper

Shipper

Transportation

Warehousing

IT support

SC integration

Others

3PL (Third Party Logistics)-

“Third-party Logistics is simply the use of an outside company to perform

all or part of the firm’s materials management and product distribution function.”

-- Simchi-Levi (2000)

“A relationship between a shipper and third party which, compared with the basic

services, has more customized offerings, encompasses a broad number of service

40

functions and is characterized by a long-term, more mutually beneficial

relationship” -- Murphy & Poist (1998)

Characteristics of 3PL:o Perform outsourced logistics activitieso Process management / Multiple activities

o More customized services

o Mutually beneficial and risk-sharing relationship

o Long-term commitments (1~ 3 years).

Why is it needed?Advantages :

o Cost reduction.

o Focus on core competency.

o Improved efficiency, service and flexibility.

o Industry-specific application.

– “build-to-order” systems and e-merchants

Disadvantages:

41

o Loss of control.

o Impact on in-house workforce.

How is a 3PL Differentiated from a Transportation Provider?

Transportation provider gets product from point A to point B

Could be considered a 3PL

Just one function of logistics

3PL provider assists in multiple functions.

Successful Implementation of 3PL

Why you want to select the right provider the first time

Only about 65% of companies believe their provider is doing a

“good” job.

55% of logistics outsourcing contracts end in 3-5 years

The source had a list of 14 key tips for success, but we are going to

focus on the 5 most important issues.

1) Have an outsourcing strategy.

Know what your outsourcing strategy is. It needs to be well thought out and

measured against in house solutions and capabilities.

SWOT analysis. As a company you should understand the strengths,

weaknesses, opportunities and threats of outsourcing logistics, rather than

keeping them in house.

2) Do your homework.

Do a comprehensive study: Clearly document advantages, challenges, costs

and benefits.

42

Current State -- Market Size

34.239.6

46.0

54.0

1997 1998 1999 2000

Document expectations: Set down expectations in clear terms and include

current costs.

Make a site visit to the 3PL, and talk with its existing customer.

3) Measure and review performance

Have a efficient and accurate measurement system: Qualitative measures

that focus on effectiveness and quantitative measures that focus on efficient

utilization.

Have an efficient costing system: This will help you to understand the costs

involved in outsourcing.

“Are we making money doing this?”

4) Create an Implementation Strategy

Create a project plan road map: Be clear who does what, create a project

management team with members from both organizations and review

progress vs. planned milestones.

5) Nurture the Relationship: Both Parties must nurture the relationship to make

outsourcing successful. Create mutual trust, respect and a sense of integrity.

A third-party logistics provider (3PL) Provides outsourced or 'third party'

logistics services to companies for part or sometimes all of their supply chain

management functions. Well known 3PLs include DHL, Wincanton, Norbert-

Dentressangle, CEVA & NYK Logistics

A fourth-party logistics provider (4PL) is an independent, singularly

accountable, non-asset based integrator who will assemble the resources,

capabilities and technology of its own organization and other organizations,

43

including 3PLs, to design, build and run comprehensive supply chain solutions for

clients.

4PL (4 th party logistics)

Manage and direct the activities of multiple 3PLs, serving as an integrator

Refinement on the idea of 3PLs

4PLs are not asset based like 3PLs

Assembles and manages the resources, capabilities, and technology of its

own organization and other organizations to design, build and run

comprehensive supply chain solutions.

Transways Express 4PL

One stop transport and logistics supplier.

44

Work with suppliers and customers.

PORTS IN INDIA India has a long coastline, spanning 7600 kilometers, forming one of the

biggest peninsulas in the world. It is serviced by 13 major ports (12 government

and 1 corporate) and 187 notified minor and intermediate ports. The latest addition

to major ports is Port Blair on June 2010, the 13th port in the country.

Major ports handled over 74% of all cargo traffic in 2007. However, the

words "major", "intermediate" and "minor", do not have a strict association with

the traffic volumes served by these ports. As an example, Mundra Port, a newly

developed minor port in the state of Gujarat registered cargo traffic of around 28.8

45

million tonnes per annum during the financial year of 2008, which is higher than

that of many major ports.

The classification of Indian ports into major, minor and intermediate has

an administrative significance. Indian government has a federal structure, and

according to its constitution, maritime transport falls under the "concurrent list", to

be administered by both the Central and the State governments. While the Central

Shipping Ministry administer the major ports, the minor and intermediate ports are

administered by the relevant departments or ministries in the nine coastal states—

West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa,

Maharashtra and Gujarat. Several of these 187 minor and intermediate ports are

merely "notified"; little or no cargo handling actually takes place. These ports have

been identified by the respective governments to be developed, in a phased

manner, a good proportion of them involving public–private partnership.

Cargo handling is projected to grow at 7.7% until 2013-14. Some 60% of

India’s container traffic is handled by the Mumbai Port and Jawaharlal Nehru Port

Trust in Navi Mumbai.

MAJOR PORTS IN INDIA There are also 7 shipyards under the control of the central government

of India, 2 shipyards controlled by state governments, and 19 privately owned

shipyards. The major ports handled 423.4 million tons of cargo for the financial

year 2005-2006, with Vishakhapatnam, Kochi, Kolkata Port, Chennai Port and

Kandla carrying the greatest tonnage. Major ports can collectively handle 400+

million tons of cargo annually, and port operations have improved since the mid-

1990s. All major ports, except one (Ennore Port), are government administered,

46

but private-sector participation in ports has increased. The brief information of

some major ports In India is as follows:

1. CHENNAI PORT Chennai Port formerly known as Madras Port, is the second largest

port of India, behind the Mumbai Port, and the largest port in the Bay of Bengal.

Being the third oldest port among the 12 major ports of India, it is over 125 years

old, although maritime trade started way back in 1639 on the sea shore. It is an

artificial and all-weather port with wet docks. It was a major travel port before

becoming a major container port. It is a substantial reason for the economic growth

of Tamil Nadu, especially for the manufacturing boom in South India, and has

contributed in no small measure to the development of the city. It is due of the

existence of the port that the city of Chennai became known as the Gateway of

South India. The port with 3 docks, 24 berths and draft ranging from 12 to 16.5 m

(39 to 54.1 ft) has become a hub port for containers, cars and project cargo in the

east coast of India.

Location and geography

Chennai Port lies on a flat coastal plain known as the Eastern Coastal

Plains on the east coast of the Indian peninsula known as the Coromandel Coast in

the Bay of Bengal. The port is situated on the thermal equator and is also coastal,

which prevents extreme variation in seasonal temperature. The climate is tropical,

specifically tropical wet and dry, and for most of the year, the weather is hot and

humid, with temperatures ranging from a maximum of 42°C in May to a minimum

of 18°C in January. The annual rainfall in the region is about 1250 mm, and the

spring tides are up to 1.2 m (3 ft 11 in).

Chennai Port

Location

47

Country India

Location Chennai (Madras)

Details

Opened 1881

Operated by Chennai Port Trust

Owned by Chennai Port Trust, Ministry of Shipping, Government of India

Type of harbor Coastal breakwater, artificial, large seaport

Size of harbor 169.97 ha (420.0 acres)

Land area 237.54 ha (587.0 acres)

Size 407.51 ha (1,007.0 acres)

Available berths 26

Employees 8,000 (2004)

Chairman Atulya Misra

Main trades

Automobiles, motorcycles and general industrial cargo including

iron ore, granite, coal, fertilizers, petroleum products, and containers

Major exports: Iron ore, leather, cotton textiles

Major imports: Wheat, raw cotton, machinery.

World Port

Index Number49450

Website http://www.chennaiport.gov.in/

48

Port layout and infrastructure

Chennai port was the second smallest in the country measured by surface area,

encompassing only 274 hectares. Chennai port area is divided into north, central

and south zones and fishing harbors Dr. Ambedkar Dock, Satabt Jawahar Dock,

and Bharathi Dock along with the container terminal, and draft ranging from 12–

16.5 m (39–54.1 ft). Jawahar Dock has 6 berths, Bharathi Dock has 3 berths (for

oil and iron ore), the container terminal has 3 berths and the moorings has 1 berth.

The berths can handle containers as well as liquid and dry bulk and breakbulk

cargoes.

Terminals

Chennai Container Terminal: Chennai Container Terminal (CCT) is the first

container terminal in Chennai port built in 1983. The container terminal was

privatized in 2001 and is operated by DP World since 30 November 2001 with a

49

Type Nos. Area

(sq.m)

Covered

  Warehouses 12 65,686

  Transit sheds 8 36,000

  Covered area

for FCI 6 43,450

  Container

freight stations 2 12,600

Region Water spread Land areaNo. of

berths

Inner harbour 218 acres 413 acres 16

Outer harbour 200 acres 100 acres 7

Total 418 acres 513 acres 23

capacity of 1.2 million TEUs. CCT is managed under a 30 year build-operate-

transfer agreement set up with the Chennai Port Trust of the Government of India.

The terminal is capable of handling fifth generation vessels up to 6,400 TEU and

has direct services to China, West Africa, Europe and the United States. Chennai

International Terminal. Chennai International Terminal Pvt Ltd (CITPL) is the

second container terminal that started operations from June 22, 2009. The build-

operate-transfer facility, built at a cost of about US$110 million, is a joint venture

between PSA International and Chennai-based Sical Logistics Ltd.

Ro-Ro car terminal

Dubbed the Detroit of Asia, Chennai is base to several international car makers,

namely, Ford Motor Co., Hyundai Motor Co., Nissan Motor Co., Renault SA,

Daimler AG and BMW AG. Car export (mainly Hyundai) increased by 80.25 per

cent to touch 2, 48,697 during 2008-09 as against 1,37,971 in the previous year.

The port handled 65 car carriers compared with 40 in the previous year. In 2009,

the port shipped nearly 274,000 cars, 10 per cent more than the previous year. The

port is now the number one ro-ro car terminal in the country. After Hyundai, the

ports have started attracting global manufacturers like Mahindra, Toyota, and Ford.

Ford has decided to move exports to Chennai Port by 2010.

Hyundai Motor India is coming up with a first-of-its-kind dedicated

automobile terminal at the Chennai port. The Chennai port facility is expected to

be on the lines of its Ulsan Port, from where it exports half of Korea's 1,500,000

vehicles annually. The export terminal at the Chennai port would cater to its total

50

Export target of 300,000

cars, which would be 50 per

cent of its total production

by 2009-10.

Cruise terminal

The Chennai Port Trust has

already in place a cruise

terminal. On an average,

seven to eight cruise vessels

dock in the port each year.

The country's first cruise

ship, AMET Majesty, is

registered in Chennai and is

set to start from Chennai on

8 June 2011.

In 2007, a fully

automated, round-the-clock

helpline for providing

information on the ships

berthed and waiting, the

scale of rates and facilities

available at the port, the first of its kind in the country, was established. In the

same year, the Indian government agreed to lift restrictions on concessionary Sri

Lankan tea and apparel exports at the port.

On 11 May 2011, the Madras High Court directed the Shipping Secretary that only

clean cargo such as containers and cars be allotted to the port for handling from 1

51

Cargo-Handling EquipmentsTotal

Units

Locos (diesel) Chittaranjan 8

BHEL loco 10

Diesel/electric loco 2

Mobile cranes 12

Fork lift trucks 55

Floating crane 1

Electrical forklift trucks 24

Pay loaders 7

Shore electric cranes 25

Transfer cranes 10

Tractor head 34

Container quay cranes (35.5T/40T

capacity)4

Top lift trucks (25T and 35T capacity) 5

Trailers 32

Crawler-mounted cranes 3

Empty container handler 1

Reach stackers 3

10T/3T FLT 7

October 2011. The port is one of the six ports in India through which drugs are

permitted to be imported, which is handled by the Central Drugs Standard Control

Organization (CDSCO), the other ports being Kolkata, Mumbai, Nhava Sheva,

Kochi and Kandla ports.

As of 2011, cargo movement to the port is increasing by 21 per cent.

Single Operator Container Terminal

On 16 February 2005, Dubai Ports World announced that it has

formally signed an agreement with the Copt to construct, develop and operate an

International Container Transshipment Terminal (ICTT) – An India Gateway

Terminal – at Vallarpadam.

Approval for the agreement was given by the Cabinet Committee of

Economic Affairs of the Government of India, Ministry of Finance and meanwhile,

the DP World will manage and subsequently transfer its operations at the Rajiv

Gandhi Container Terminal in Cochin Port to the new terminal upon its

completion. Vallarpadam Terminal is the largest single operator container terminal

in India and the first in the country to operate in a special economic zone. The

terminal makes Kochi a key centre in the shipping world reducing India’s

dependence on foreign ports to handle transshipment.

• In the first phase there will be 600 m Quay length and a draft of more than 15 m,

when the terminal may handle 1 million TEU containers annually by the end of

2012.

• In the second phase the capacity will be enhanced to 3 million TEU's by the end

of 2014.

• In the third phase the terminal may handle even up to 5.5 million TEU's.

The total cost of the project is estimated at 3200 crore.

2. Visakhapatnam Port.

52

Visakhapatnam is a major sea port on the south east coast of India.

According to the history, the city was named after the god of Valor, Visakha.

Visakhapatnam port Situated on the east coast of India, Visakhapatnam serves as

the gateway for waterways for the state of Andhra Pradesh. Visakhapatnam has

one of the country's largest ports and its oldest shipyard on the eastern coast of

India. It is a land-locked harbour as it is connected to the sea by a channel cut

through solid rock and sand. The shipbuilding yard situated at Visakhapatnam is

the largest in India. Situated on Chennai - Kolkota corridor, the city is also a hub of

on-ground traffic. The Gangavaram Sea Port is India's deepest sea port. In

December 2010, Coal India agreed a deal that would allow an additional berth to

be built at the port.

Gangavaram Port, located in Andhra Pradesh, is India's deepest port.

Inaugurated in July 2009, it has a depth of 21m. It is managed by Gangavaram Port

Ltd., a special-purpose company floated by Mr. DVS Raju, who serves as its

Chairman and Managing Director. The company is owned by the DVS Raju Group

(59%), global Private Equity firm Warburg Pincus (30%) and the Andhra Pradesh

Government (11%).

Country India

Location Andhra Pradesh

Details

Opened July 2009

Owned by Gangavaram Port Ltd.

Size 2,800 acres (11 km2)

Statistics

Website www.Gangavaram.comHistory of Gangavaram Port

53

Construction of the port began in December 2005, and commercial operations

commenced in August 2008. The port was formally inaugurated in July 2009, by

the Andhra Pradesh Chief Minister Y S Rajasekhara Reddy. Fishermen in the

Gangavaram and Dibbapalem villages, who were directly affected by the

construction of the port, demanded construction of an alternative jetty and a relief

and rehabilitation package. The DVS Raju group invested Rs. 1,850 crore in the

development of the port. Gangavaram Port Ltd. has taken a loan of Rs. 1,170 crore

from a consortium of 13 banks, including the State Bank of India, to fund the

Phase I development.

Comparisons with the Vizag port

The first client of the Gangavaram Port Ltd. is the Rashtriya Ispat Nigam Ltd.,

which runs the Vizag Steel Plant, and earlier used the Vizag port. The Gangavaram

Port Ltd. plans to build conveyors for taking imported raw materials directly to the

Vizag Steel plant, in order to reduce the railway transportation costs.

The Union Government of India, which owns the Vizag port, had

proposed a joint venture between the Vizag port and the private operator of the

Gangavaram port to make sure that the Vizag port's business remains unaffected.

However, this proposal was rejected by the then Andhra Pradesh Chief Minister,

N. Chandrababu Naidu.

DVS Raju, while talking to reporters during the port's inauguration

ceremony, insisted that it would be "complementary in nature" to the Vizag port,

and not a competitor.

The Gangavaram port is capable of handling Super Cape size vessels of

up to 200,000 DWT. The State Government plans to construct a Rs. 21-crore four-

lane flyover to the Gangavaram port.

3. Ennore Port.

54

Ennore Port

Location

Country India

Location Ennore, Chennai

Details

Opened 2001

Operated by Ennore Port Limited

Owned by Ennore Port Limited

Type of harbor Seaport (Artificial)

Available berths 4

Employees 86

Chairman cum Managing Director

S. Velumani

Capacity 16.00 million tonnes (2008-09)

Main tradesThermal coal, iron ore, LNG, POL, chemical and other liquids, crude and other bulk and rock mineral products

Statistics

Annual cargo tonnage 11.01 million (2010-11)

Annual revenue 1666.5 million (2010-11)

Net income 706.4 million (2010-11)

Vessels handled 294 (2010-11)

Website http://www.ennoreport.gov.in/

Ennore Port, located on the Coromandel Coast about 24 km north of

Chennai Port, Chennai, it is the 12th major port of India, and the first port in India

which is a public company. The Ennore Port is the only corporatised major port

and is registered as a company. The Centre holds a stake of about 68 per cent in the

Ennore Port and the remaining 32 per cent is held by the Chennai Port Trust. The

port has been able to attract an investment of 26,000 million by private

entrepreneurs on various terminals and harbour craft. Ennore Port, designed as

Asia’s energy port, has only 86 employees. Hailed as a landmark port, it is the first

55

corporatized port in India. Envisaged being a satellite port to decongest and

improve the environmental quality at the bustling Chennai Port, Ennore Port is

evolving itself into a full-fledged port with the capacity to handle a wide range of

products. With a permissible draught of 13.5 m, the port handled a total volume of

11.01 million tonnes in 2010-11, up by 2.86 per cent from the previous year.

History

Ennore Port was originally conceived as a satellite port to the Chennai Port,

primarily to handle thermal coal to meet the requirement of Tamil Nadu Electricity

Board (TNEB) and was endowed with large chunks of land (about 2,000 acres).

The scope was expanded taking into account subsequent developments such as the

plan of Government of Tamil Nadu to set up a 1,880 mW LNG power project in

association with a private consortium, a large petrochemical park and a naphtha

cracker plant. Ennore Port was commissioned by the then Prime Minister of India

on 1 February 2001. The port was set up under the Companies Act, keeping it

outside the scope of the Tariff Authority for Major Ports, the tariff regulator for 11

of the 12 ports owned by the Indian government. The port was declared as a major

port under the Indian Ports Act, 1908 in March 1999 and incorporated as the

Ennore Port Limited under the Companies Act, 1956 in October 1999. Commercial

operations commenced with Handymax geared vessels for unloading of thermal

coal on 22 June 2001. With the deployment of self-unloading and gearless vessels

of 65,000/77,000 DWT, full-fledged operations were started in December 2002.

Operations Commissioned in 2001 and operating on a landlord port concept, it is

outsourcing all services required for operation and maintenance, and new terminals

are being developed with the participation of the private sector. During the year of

56

2010-11, it handled a total cargo of 11.01 million tons. The port has effectively

taken over all the ore movement from the Chennai Port. By 2016, the port is

expected to have the capacity to handle over 80 million tons of cargo and its coal-

handling capacity is expected to be about 43 million tons. The port is equipped to

handle 16 million tonnes of coal per year from its two dedicated coal berths

manned by TNEB, while its third berth promoted by Chettinad International Coal

Terminal, is a common user facility that can handle 8 million tonnes per annum.

Cargo handled by Ennore Port (in million tonnes)

Commodity 2007-08 2008-09

Thermal coal 9.05 9.71

Iron ore 2.19 1.11

Petroleum, oil and lubricants (POL)

(including STS)0.32 0.68

Total 11.56 11.50

According to the Maritime Agenda 2010-20, the port traffic is projected to

increase to 67.44 million tonnes in 2016-17 and 71.54 million tonnes in 2019-

20.Against this projected traffic growth, the port's capacity is expected to increase

from the existing 16 million tonnes (as on March 31, 2010) to 73 million tonnes in

2016-17. The target set for the port for 2010-11 is 13.20 million tonnes against a

target of 12.45 million tonnes during the previous fiscal. During 2010-11, the port

handled a total of 294 vessels, including 184 dry bulk, 87 liquid bulk, 22 break

bulk and 1 container vessels against 273 vessels in 2009-10, registering a 7.69%

increase.

Car exports took place through the port for the first time in 2010-11. A total

of 54,264 cars were exported through the port by Renault Nissan Automotive India

Pvt. Ltd.

57

Terminals:

The Chettinad International Coal Terminal (CICTL), the private terminal at

the port capable of handling Panamax ships, commenced operations in January

2011 and is targeting to handle nearly 5 million tonnes of coal/coke by current

financial year ending March 31, 2012. The terminal was completed with

equipments and conveyor systems, yard and evacuations systems with capacity to

handle 8 million tonnes of coal/coke annually at project outlay of about 4,000

million.

The Ennore Container Terminal (ECT), also known as the Bay of Bengal Gateway

Terminal, will have an eventual planned annual capacity of 2.4 million TEUs. The

construction is expected to begin by end of 2011 at a cost of £207 million,

allowing the first ships to be handled in 2013. The terminal for 6,000-to-

8,000 TEU vessels will have a quay length of 1,000 m with 15 m water depth at the

berths and will be able to handle three container vessels of up to 8,000 TEUs

simultaneously.

Development works:

The Planning Commission has approved a rail connectivity for Ennore Port to

the coal, iron and container terminals. There is a US$230-million expansion for the

port in progress. An iron ore terminal is currently in the process of construction by

PSA Sical. The terminal will have a capacity for 12 million tonnes of cargo per

year, expandable to 15/20 million tonnes per year. Facilities include a jetty, ship

loader, mechanized handling system with conveyor, storage, and a wagon

unloading system. The port is expanding its cargo handling capacity to 87 million

tonnes a year in the next 5 years as mandated by the Union Government, according

to a press release from Ennore Port Ltd.

58

With the inauguration of three new terminals to handle non-TNEB coal, iron ore

and cars in 2010, the installed capacity of the port had doubled from 15 million

tonnes to 30 million tonnes.

A 1,700-million capital dredging project was commenced at the port on 26

February 2011.

Rail link:

Rail connectivity project works to link coal and iron ore stackyards with Athipattu

station on the Chennai–Vijayawada mainline is under the implementation at a cost

of 516 million.

Connectivity:

The highway authority is implementing a project for construction of 30.1 km

(18.7 mi) segment of Chennai-Ennore Port connectivity. Announced by the Tamil

Nadu Government in 1998, the cost of the Chennai-Ennore Port Road Connectivity

project, earlier called Ennore-Manali Road Improvement Project, has escalated by

four times to 6,000 million. The project is to enable free flow of truck traffic from

and to the Chennai port in North Chennai. The Ennore Port handles over 5,000

containers a day and trucks need to take this Ennore-Manali road for entry and exit

to the port. The project is still in the "tendering" stage—previous tenders were

cancelled for various reasons.

The project will commence in January 2011 and will be completed in 2 years.

The Union Government has decided to lay a 21.1-kilometre (13.1 mi)-long 4-laned

national highway (port corridor) connecting Ennore with Thacchur at a cost of

3,740 million.

4. HAZIRA PORT:

59

India: HaziraLocation of HaziraCountry in Gujrat and India

State Gujarat

District(s) Surat

Nearest city Surat

Civic agencyHazira Area Development Authority

Population• Density

67,829 (2009)• 404 /km2 (1,046 /sq mi)

Time zone IST (UTC+05:30)

Area• Elevation

168   km 2  (65 sq mi)• 2 meters (6.6 ft)

Codes• Pin code • 394230• Telephone • +0261• Vehicle • GJ-5

Transport

Hazira is 300 kilometers north of Mumbai, 21 kilometers from Surat city and 31

kilometers from Udhana. Access is via NH-6 and NH-8. A new coastal highway

connecting Hazira with Navsari which will reduce the commute time has been

60

planned. The project to broaden NH-6 from four to six lanes is under construction

with the National Highways Authority of India (NHAI).

Port: Hazira Port is a joint-venture between Shell Gas B.V. and Total Gaz

Electricite Holdings of France. Shell holds 74% in the venture, with Total holding

the remainder .

Hazira is a Port Town and a transshipment port in the Surat district in the

state of Gujarat in southwestern India.

Hazira is one of the major ports of India and most important element of Region. It

is also known as the industrial hub of India. The town is located on the bank of the

Tapti River, eight kilometers’ from the Arabian Sea. It is a centre for health

tourism due to its natural springs, and also home to major industrial and shipping

facilities like Essar Group of Industries, Shell, Larsen & Toubro & Reliance.

5. Kandla Port:

61

Country India

State Gujarat

District(s) Kutch

Area• Elevation • 3 metres (9.8 ft)

Codes• Vehicle • GJ-12

Kandla is a seaport in

Kutch District of Gujarat state in

western India. Located on the Gulf

of Kutch, it is one of major ports

on west coast. Kandla was

constructed in the 1950s as the

chief seaport serving western

India, after the partition of India from Pakistan left the port of Karachi in Pakistan.

After Indian independence in the late 1940s, the new government selected the Port

of Kandla as a promising outlet to the Arabian Sea. When the Port of Karachi was

lost to Pakistan, maritime trade in the area shifted to the Port of Mumbai (formerly

Bombay). The Port of Kandla Special Economic Zone (KASEZ) was the first

special economic zone to be established in India and in Asia. Established in 1965,

the Port of Kandla SEZ is the biggest multiple-product SEZ in the country.

Covering over 310 hectares, the special economic zone is just nine kilometers from

the Port of Kandla. Today, the Port of Kandla is India's hub for exporting grains

and importing oil. This self-sufficient port is one of the highest-earning ports in the

country. Major imports entering the Port of Kandla are petroleum, chemicals, and

iron and steel machinery, but it also handles salt, textiles, and grain.

62

Facilities:

• Total Custom Bonded Port

Area inside the custom fencing

is 185 hectares. An additional

76.5 hectares is being

developed shortly.

• Eleven Dry Cargo Berths in

straight quay line in sheltered

creek with a

totallengthof1987meters.

• Six Oil jetties.

• Total Custom Bonded Port

Area inside the custom fencing is 185 hectares. An additional 76.5 hectares is

being developed shortly.

• Loading/Unloading facilities for barges available for stream handling.

• Seventy licensed private Barges available at competitive rates.

• Adequate storage capacities in both Dry and Liquid Areas.

• Well Developed Road Network directly connecting to National Highway and

Railway Network connecting to the Broad Gauge Train Routes which is further

being upgraded.

Cyclone of 1998:

A tropical cyclone hit the port in 1998. The official death toll was 1,000

but locals in the area believed it was closer to 10,000. Most of the casualties came

from illegal immigrant workers in the port itself and poor shanty towns in the

region. Although the cyclone was tracked by the Indian government for 3-4 nights

no effort was made to warn port employees this catastrophe shows a failure of

government and business ethics and a complete disregard for the life of the poor.

63

6. Port of Kolkata The Port of Kolkata is a riverine port

in the city of Kolkata, India. It is the oldest

operating port in India, having originally been

constructed by the British East India Company.

The Port has two distinct dock systems -

Kolkata Docks at Kolkata and a deep water

dock at Haldia Dock Complex, Haldia.

In the 19th century Kolkata Port was

the premier port in British India. After

independence its importance decreased

because of factors including the Partition of Bengal (1947), reduction in size of the

port hinterland and economic stagnation in eastern India. In the 21st century due to

the east Indian economic recovery and infrastructure improvements, the port grew

swiftly to become the nation's third largest container port. It was one of India's

fastest growing ports in 2004-05.

History:

View of the Calcutta Port

in 1852

Kolkata Port was set up

by the British East India

Company after the

company received trading

rights from the Mughal

emperor Aurangzeb.

64

Following the shift of power from the company to the British crown, a port

commission was set up in 1870. After the independence, the Commissioners for

the Port of Kolkata was in responsibility of the port till January 1975 when Major

Port Trusts Act, 1963, came into force.

Kolkata Dock System (KDS):

It is situated on the left bank of the Hooghly River at 22° 32' 53" N, 88° 18' 5" E

— about 203 km (126 miles) upstream from the sea. The pilotage station is at

Gasper/ Saugor roads, 145 Kilometers to the south of the KDS (around 58 km from

the sea). The system consists of:

Kidderpore Docks (K.P. Docks) : 18 Berths, 6 Buoys / Moorings and 3 Dry

Docks

Netaji Subhas Docks (N.S. Docks): 10 Berths, 2 Buoys / Moorings and 2

Dry Docks

Budge Budge River Moorings : 6 Petroleum Wharves

Anchorages: Diamond Harbour — 1. Saugor Road 2. Sand heads

Apart from this, there are around 80 major riverine jetties, and many minor jetties,

and a large number of ship breaking berths.

Haldia dock complex (HDC):

It is situated at 22°02' N, 88°06 E — 60 kilometers away from the pilotage

station. The complex consists of:

Impounded Dock. System with 12 Berths

3 Oil Jetties in the River

3 Barge Jetties in the River for handling Oil carried by Barges.

Haldia Anchorage for LASH vessels

All the docks are impounded dock systems with locks from river

65

7. Port of Cochin

Location

Country India

Location Kochi

Details

Opened May 26, 1928

Operated by Cochin Port Trust and Dubai Ports World

Owned by Ministry of Shipping, Government of India

Available berths

9 berths in Ernakulam Wharf and 4 berths in Mattancherry Wharf

Wharfs 2

Chairman Shri N. Ramachandran, IPS

Statistics

Annual container volume

2,89,817 TEU (2009)

Value of cargo 17.43 million tonnes

Website CochinPort.com

The office of the Cochin Port Trust in Willingdon Island

The Port of Kochi

(officially the Cochin

Port) is a major port on

the Arabian Sea - Indian

Ocean sea-route and is

one of the largest ports in

India. The port lies on

two islands in the Lake of

Kochi namely the

Willingdon Island and

66

Vallarpadam, towards the Fort Kochi river-mouth opening onto the Arabian Sea.

The Vallarpadam International Container Trans-shipment Terminal (ICTT), a part

of the Cochin Port, is the largest container trans-shipment facility in India.

The port is governed by the Cochin Port Trust, a Government of India

establishment. The modern port was established in 1926 and has now completed 86

years of active service.

The Kochi Port is one among a line of maritime-related facilities based in

the port-city of Kochi, the others being, the Cochin Shipyard, the largest ship-

building as well as maintenance facility in India, the SPM (Single Point Mooring

facility) of the Kochi Refineries - an offshore crude carrier mooring facility, and

the Kochi Marina.

History:

The Cochin port was formed naturally due the great floods of Periyar in

1341 AD, which choked the Muziris port (Kodungallur), one of the greatest ports

in ancient world. Ever since the choking of Muziris, Cochin became one of the

major ports with extensive trading relations Romans, Greeks and Arabs, all lured

by the traditional spice wealth of the state. The traditional port was located near

Mattancherry (which still continues as Mattancherry Wharf).

The construction of the dredger `Lord Willingdon' was completed in 1925.

It arrived at Cochin in May 1926. It was estimated that the dredger had to be put to

use for at least 20 hours a day for the next two years. . The dredged sand was used

to create a new island to house Cochin Port and other trade related establishments.

Around 3.2 km² of land was reclaimed during the dredging process. The strong

determination of Sir Bristow and his team, finally paid success, when large steam

ship SS Padma, sailed into sailing from newly constructed inner harbour of Kochi.

Speaking to the BBC on that day, Bristow proudly proclaimed his achievements at

the Kochi port with the following words: I live on a large Island made from the

67

bottom of the sea. It is called Willingdon Island, after the present Viceroy of India.

From the upper floor of my house, I look down on the finest harbour in the East.

In 1932, the Maritime Board of British India declared Port of Cochin as a

major port. The port was opened to all vessels up to 30 feet draught. During the

World War-2, the port was taken over by Royal Navy to accommodate several

military cruisers and war ships. The port was returned to civil authorities on May

19, 1945. After Independence, the port was taken over by Government of India. In

1964, the administration of the Port got vested in a Board of Trustees under the

Major Port Trusts Act. The port was listed as one among 12 major ports of India.

Organizational structure:

Cochin Port Trust is an Autonomous Body under Govt.of India and is

managed by Board of Trustees constituted by the Government of India. The Board

is headed by the Chairman who acts as the Chief Executive Officer. The Govt.of

India may from time to time nominate the trustees in the Board representing

various interests. Chairman is assisted by the Deputy Chairman who in turn is

assisted by Department Heads and officials of the following departments

functioning in the Port.

a) General Administration Department.

b) Traffic Department.

c) Accounts Department.

d) Marine Department.

e) Civil Engineering Department.

f) Mechanical Engineering Department.

g) Medical Department

Navigational channel:

68

The entrance to Port is through the Cochin Gut between the peninsular

headland Vypeen and Fort Cochin. The port limits extend up to the entire

backwaters and the connecting creeks and channels. The approach channel up to

the Cochin Gut, is about 1000 meters long with a designed width of 200 meters

and maintained dredged depth of 13.8 meters (now dredging for 18 meters for

ICTT).

Infrastructure facilities:

A draft of 38 ft. is maintained in the Ernakulam channel along with

berthing facilities, which

enables the Port to bring in

larger vessels to the Port. In

the Mattancherry channel a

draft of 30 ft. is maintained. The Port provides

round the clock pilotage to

ships subject to certain

restrictions on the size and

draft of the vessels. There is

an efficient network of

railways, roads, waterways

and airways, connecting the

Port with the hinterland

centers spread over the State

of Kerala, Tamilnadu and

Karnataka. The International Container Trans-shipment Terminal (ICTT) of the Kochi Port

8. Nhava Sheva:

69

A Container ship at Nhava Sheva Port

Nhava Sheva is the 6th largest port and largest container port in India.

The main goods exported are cotton shirts, knitted t-shirts, sporting goods, carpets,

other textile articles, such as embroidery machines, boneless meat, and

medicaments.The main imports are chemicals, machinery, plastics, electrical

machinery, vegetable oils and aluminum and other non-ferrous metals. It has

access to neighbouring Mumbai and to the hinterland of Maharashtra, Madhya

Pradesh, Gujarat, Karnataka, and most of North India. It is located south east of

Mumbai The port was developed to relieve pressure of the port of Bombay

(Mumbai) in Bombay proper and was commissioned on May 26, 1989. It has three

terminals: JNPCT, NSICT and GTI (Gateway Terminal of India). NSICT is India’s

70

first privately managed container terminal. It is run by Dubai Ports World.

Currently it is managed under a Build-Operate-Transfer agreement set up with the

Jawaharlal Nehru Port Trust (JNPT) of the Government of India.

Location

Country India

Details

Operated by Jawaharlal Nehru Port Trust

Owned by Government of India

Statistics

Annual cargo tonnage

Bulk: 7.88 million tons (2010-11)[2]

Container: 56.43 million tons (2010-11)

Annual container volume

4.27 million TEU (2010-11)

Website jnport.gov.in

Jawaharlal Nehru Port Trust: Jawaharlal Nehru Port is a port in Maharashtra, India that borders the

Arabian Sea. The sea port is named after the first Prime Minister of India,

Jawaharlal Nehru. It was inaugurated by the late Prime Minister of India Shri.

Rajiv Gandhi in the year 1989. This is a Satellite Port which reserves 80% of its

port for greenery.

Jawaharlal Nehru Port was planned for construction in the year 1965. During this

period India has a huge deficit of food grains. So this port was planned for

importing food grains. By the time Jn port was inaugurated it started to export food

grain as the country had surplus food supply. Later as a development process the

port started container terminal. By the year 2003 JNPT Bulk Terminal was totally

scrapped.

The port is run by the Jawaharlal Nehru Port Trust, an organization entrusted

with the operations of the large shipping port in Navi Mumbai, India and

71

controlled by the Central Government of India. JN Port follows the Tariff

Authority of Major Port. The port lies on the mainland, opposite the city of

Mumbai across the Thane Creek. It is well connected to major highways and rail

networks in India. The closest suburban railheads are CBD Belapur and Panvel.

Facilities:

The JNPT Container Terminal is operated by JNPT. It has a quay length of

680 meters (2,230 ft) with 3 berths. It can handle up to 15.6 million tons of cargo.

[6] NSICT was India’s first privately managed container terminal.The Gateway

Terminal (GTI) has been leased to a consortium of APM Terminals and the

Container Corporation of India. It started operations in 2006.The BPCL Terminal

is leased to a joint-venture between Bharat Petroleum and Indian Oil. It mostly

handles crude imports and refined petroleum products exports at its 2 berths. The

port is well connected by rail and road to neighbouring Mumbai and to the rest of

India.

Traffic: Major exports from Nhava Sheva are textiles, sporting goods, carpets, textile

machinery, boneless meat, chemicals and pharmaceuticals. The main imports are

chemicals, machinery, plastics, electrical machinery, vegetable oils and aluminum

and other non-ferrous metals. The port handles cargo traffic mostly originating

from or destined for Maharashtra, Madhya Pradesh, Gujarat, Karnataka, as well as

most of North India.

Recent developments: In 2000 there were 102 shipping companies operating in India, of which five

were privately owned and based in India and one was owned by the government

(Shipping Corporation of India). In 2000 there were 639 government-owned ships,

including 91 oil tankers, 79 dry cargo bulk carriers, and 10 cellular container

72

vessels. Indian-flagged vessels carried about 15 percent of overseas cargo at Indian

ports for financial year 2003.

The Port Pipavav in Saurashtra handled by APM terminals; developed by

AFCONS is one of the most efficient Ports functioning in India.

Port of Dhamara in Odisha (Orissa) to be inaugurated in August 2010 and will

be the deepest port (18 meter deep) of India... There are another 5 ports offing in

Odisha.

Name

Cargo Handled (2010) '000 tonnes

 % Increase (over 2009)

Vessel Traffic (2009–10)

 % Increase (over 2008-09)

Container Traffic (2009–10)

 % Increase (over 2008-09)

Kolkata (Kolkata Dock System & Haldia Dock Complex)

46,295 -14.61% 3,462 07.50% 502 17.01%

Paradip 57,011 22.84% 1,531 -0.32% 4 100.00%Visakhapatnam 65,501 2.49% 2,406 2.51% 98 13.65%Chennai 61,057 6.20% 2,131 2.5% 1,216 6.38%Tuticorin 23,787 8.07% 1,414 -7.21% 440 0.22%Cochin 17,429 14.45% 872 15.19% 290 11.11%New Mangalore Port 35,528 -3.17% 1,186 0.16% 31 6.89%Mormugao 48,847 17.19% 465 6.89% 17 21.42%Mumbai 54,543 5.14% 1,639 1.67% 58 -36.95%J.N.P.T. 60,746 6.03% 3,096 4.13% 4,062 2.78%Ennore (corporate) 10,703 -6.93% 273 9.2% -- --Kandla 79,521 10.10% 2,776 10.29% 147 6.52%All Indian Ports 560,968 5.74% 21,251 02.82% 6,865 4.25%

9. Tuticorin Port TrustTuticorin Port

Location

Country India

73

Location Tuticorin, Tamil Nadu

Details

Owned by Tuticorin Port Trust, Ministry of Shipping, Government of India

Type of harbor Medium seaport (Artificial)

Size of harbor 960 acres (388.8 hectares)

Land area 2150 acres (870.75 hectares)

Employees 1,162 (2009-10)

Main trades

Industrial coal, copper concentrate, fertilizer, timber logs, iron oreMajor imports: Coal, cement, finished fertilizers, raw fertilizer materials, rock phosphate, petroleum products, petroleum coke, and edible oilsMajor exports: General cargo, building materials, liquid cargoes, sugar, granite, limonite ore

Statistics

Annual cargo tonnage

23.787 million tonnes (2009-10)

Annual container volume

4,67,752 (81,68,603 tonnes) (2010-2011)

Tuticorin Port is one of the 12 major ports in India. It was declared to

be a major port on 11 July 1974. It is second-largest port in Tamil Nadu and

fourth-largest container terminal in India after Kochi International Container

Transshipment Terminal, Jawaharlal Nehru Port (Mumbai) and Chennai Port.

Tuticorin Port is an artificial port. This is the third international port in Tamil Nadu

and its second all-weather port. All Tuticorin Port’s traffic handling has crossed 10

million tons from April 1 to September 13, 2008, registering a growth rate of 12.08

per cent, surpassing the corresponding previous year handling of 8.96 million tons.

It has services to USA, China, Europe, Sri Lanka and Mediterranean countries.

History:

Tuticorin has been a centre for maritime trade and pearl fishery for more

than a century. The natural harbour with a rich hinterland, activated the

74

development of the Port, initially with wooden piers and iron screw pile pier and

connections to the railways. Tuticorin was declared as a minor anchorage port in

1868. Since then there have been various developments over the years.

To cope

with the increasing

trade through

Tuticorin, the

Government of India

sanctioned the

construction of an all-

weather port at

Tuticorin, which

brings the second

largest revenue to

India. On July 11, 1974, the newly constructed Tuticorin Port was declared as the

10th major port. On 1 April 1979, the erstwhile Tuticorin minor Port and the newly

constructed Tuticorin major port were merged and the Tuticorin Port Trust was

constituted under the Major Port Trusts Act of 1963.

Operations: Tuticorin Port is an artificial deep-sea harbour formed with rubble

mound-type parallel breakwaters projecting into the sea for about 4 km. (The north

breakwater is 4098.66 meters long; the south breakwater is 3873.37 metres long

and the distance between the breakwaters is 1275 metres). The port was designed

and executed entirely through indigenous efforts. The harbour basin extends to

about 400 hectares of protected water area and is served by an approach channel of

2400 metres length and 183 metres width.

75

Due to its strategic location in the southern peninsula and assured round-the-

clock operations, the port has been the nerve centre of economic activity in south

Tamil Nadu. The port currently handles seven per cent of the total container traffic

in India and is an important reason for investment in the southern districts of Tamil

Nadu. The port is badly in need of expansion to handle the increase in traffic. The

port has been upgraded to handle vessels longer than 245 m. The advantages of

deploying bigger vessels are that the existing restriction on booking can be

eliminated and the transshipment at Colombo port can be reduced. The Tuticorin

port has the potential to be an international container transshipment hub given its

unique geographical location. Activity at the port has grown at a rate of 17 per cent

per year over the last five years. A large portion of the operations in the port has

been privatized, including handling at the first container terminal by PSA Sical. A

second container terminal has been approved for this port. Tuticorin port is

becoming a gateway for South India to the US, Europe and the Mediterranean

following direct sailings to these regions. Of the total exports from the port, 25 per

cent were to Europe, 20 per cent to the US, 20 per cent to East Asia including

China, 15 per cent to Colombo, 10 per cent to West Asia and the remainder to the

Mediterranean.

A naval base is to be set up under the ambit of Eastern Naval Command

to strengthen the surveillance in the Gulf of Mannar and to safeguard any possible

aggression in the region. Tuticorin Port Trust officials expressed their willingness

to allot a 24-acre (97,000 m2) plot on the ‘port estate’ area for the establishment of

the Naval Base.

The port is also helping increase the tourism in the region. A new ferry has been

commenced between Tuticorin and Colombo.

International service

76

Tuticorin is the only port in South India to provide a direct weekly container

service to the United States. The transit time to the United States is 22 days.

There are regular weekly direct services to Europe (transit time 17 days),

China (transit time 10 days) and Red Sea Ports (transit time 8 days).

CUSTOMS AND PORT PROCEDURESCustoms clearance in the import-export trade is one of the traditional functions of

a freight forwarder. Indeed, in developing countries many freight forwarders are

still restricting their activities to customs clearance at the ports.

The legal status of the freight forwarder in his relationship with the customs

authorities, on the one hand, and his customers, on the other, varies from country

to country. In many countries, the forwarder acting as customs house agent is

required to obtain a license from the Government and such a license is issued only

when he establishes his professional competence by passing prescribed

examinations. He may also be required to furnish security or bond for the proper

performance of his functions, which may be forfeited in the event of any

irregularity or misconduct on his part. In some countries, however, no license or

qualifications are required for doing customs clearance work.

As customs agents are authorized by the Government to attend to the

customs formalities in respect of goods to be imported or exported, they are

required to ensure that the customers, interests are safeguarded. They are expected

to process quickly the various documents and formalities so that their customers do

not miss shipping opportunities in the export trade and do not have to pay

demurrage and other charges on account of delays in the clearance of imports. To

their customers, they also have a responsibility to ensure proper valuation of the

goods and their appropriate classification, so as to avoid any incorrect levy of

duties that may subsequently lead to prolonged correspondence involving a lot of

77

time and money. In the performance of their functions, therefore, the customs

agents have a dual responsibility to protect the interests of both their customers and

the customs authorities.

MULTIMODAL TRANSPORTIntroduction:

During 2004, total estimated 100 million TEUs Shipments of containerized cargoes

has been moved world estimated TEUs Shipments cargoes been worldwide.

The world fleet of fully cellular container ships continued to expand substantially

in 2004 in terms of both number of ships and their TEU capacity; by the beginning

of 2005 there were 3,206 ships with a total capacity of 7,165,352 TEUs, an

increase of 5 per cent in the number of ships and 11.3 per cent in TEU capacity

over the previous year, Ship sizes also continued to increase. Containerized

cargoes are packed ounce at the factory door than at every change in transport

mode, thereby reducing direct cost as well as the ship time at the port.

Multimodal transport: The containerization of cargo allowed cargoes to be easily

and safely transferred from one mode of transport to another. Merchants and their

agents physical involvement in the carriage of goods was reduced to handing them

over at the point of departure and ensuring someone would receive them at the

destination.

The constituent elements of a multimodal carriage of goods are thus:

contract between consignor and multimodal transport operator

Whereby the multimodal transport operator agrees to arrange.

and accept responsibility for

the transport of the consignors goods from X place to Y place

by more than one mode of transport

78

With the right to subcontract some or all of the legs of carriage to another

carrier.

Difference between modes of transport.

No. Features Air Road Rail Ocean Pipeline

1. Value

&Volume

High

Value/low

volume

Medium

Value/medium

Volume.

Medium

Value/High

Value

High

Value/High

Volume

High

Value/High

Volume

2. Speed And

Delivery

high Good Low Low Very High

3. Cost Very High High Medium

Low

Low Highest

4. Frequency Average High Low Very Low Highest

5. Flexibility Average Average High Very High Limited

6. Access Average Very High High Limited High

7. Commodities Emergency

Items, High

perishable

goods, Very

Unique

Medicines

Consumer

Goods,

Perishable like

Milk, Fruits,

Vegetable, etc.

Steel.

Coal,

Cement,

Steel,

Petroleum

Liquid

Products.

Ore (Steel,

Aluminum,

Copper),

Oil, Plants,

Equipments

and

machinery,

Food Grains

Gases and

Petroleum

Liquid

Products.

THE APPLICABLE LAW

79

The law with regard multimodal transport, it has to be demonstrated what law

actually governs this type of carriage. Relating to:

1. The loss or damage of goods carried or which ought to have been carried in a

ship

2. The carriage of goods in a ship, or any agreement for or relating to such

carriage or relating to such carriage

3. Any container and any agreement relating to any container.

Different modes of carriage are governed by different laws. A multimodal

contract of carriage will thus often be subject to different regimes of liability.

For example carriage by road from Vienna to Hamburg and by sea to London

will be subject to the Hague Visby Rules for the sea carriage and the CMR

Convention for the road carriage. Liability depends on whether the leg during

which the damage occurred can be identified. The provisions of these Rules

also form the basis of many combined transport bills of lading in use today.

The Rules divide liability according to whether the place of damage is known or

unknown. If the place of loss is known then the applicable mandatory carriage

regime applies. If there is no mandatory carriage regime, or the place of lloss iis

unknown, then the system of liability contained in the Rules is used. This

system of liability is drawn from the Hague Visby Rules.

THE WAY FORWARD :

80

The ultimate goal of the carriage of goods is the promotion of trade by

allowing business the opportunity to get its products to any market on the planet at

a reasonable price. Multimodal’s seeks to achieve that goal by reducing the

consignors'/consignees' (merchants') risk in transporting their goods. This is

achieved, firstly by minimizing the chance of the cargo being physically damaged

and secondly by reducing the chance that the merchant will be unable to recover in

the case where cargo is damaged through the fault of the carrier.

The reduction of the risk of cargoes being physically damaged is achieved by

packing the goods in a strong steel container and by standardizing the vessels,

vehicles and cranes which handle these containers.

In the event that the cargo is actually damaged, the merchants' risk is reduced in

that he can look to a single person, the multimodal transport operator, to make

good his loss. In this respect the multimodal transport contract was a giant leap

forward for merchants allowing complete control over who accepts

responsibility for the safe carriage of cargo.(88) This single contractual carrier

(MTO) responsibility significantly reduces a merchants risk of having to

recover from a company with no assets, or from having to recover in an

inconvenient jurisdiction.

MARINE INSURANCE

81

Marine insurance A broad term including ocean and inland marine insurance.

The Nationwide Marine Insurance Definition, published by the National

Association of Insurance Commissioners, includes imports, exports, domestic

shipments, means of communications, and personal and of communications,

personal commercial property floaters as marine insurance.

Ocean marine insurance:

Coverage for these types of ocean

transportation exposures: ships or

Hulls; goods or cargo; earnings (such

as freight, passage money,

Commissions, or profit); and liability

(known as protection and or profit);

This insurance may be purchased by

the vessel owner or any party

interested in or responsible for

insurable property by reason of

maritime perils.

Transportation insurance:

Insurance that covers merchandise or goods in the course of transit by air, rail,

truck, barge or ship from a starting location to a final destination.

Door-to-door coverage:

Transit insurance that covers a shipment of merchandise from the original point of

manufacture to its final destination.

Marine insurance provides coverage against four types of losses corresponding

to the four major classes of ocean marine insurance.

Hull & Machinery Insurance covers ship-owners either on basis of

82

voyage policy or a time policy against total loss (actual or constructive), damage to

the ship in particular average and general average sacrifice, expenses to prevent

loss by way of sue and labor charges, salvage charges and general average

contributions and against collision liability (either three fourths or four fourths)

and expenses associated with claims.

The cover is against ordinary risks (perils of the sea and other named perils) or

against the named perils in the war and strike clauses.

BASIC COVERAGE:

Hull and Machinery including Liability

Disbursements

Increase Value

Managers' Commission

Chartered Freight

Charter Hire

Insurance Premiums

Return Premium

Protection and Indemnity: P&I coverage is essentially liability insurance that

protect the ship-owner for the loss of income that would have been earned upon

completion of the voyage.

BASIC COVERAGE :

Personal injuries to third parties, passengers, crew, stevedores, persons on another

ship, personal injuries arising out of carriage of cargo or containers, repatriation

and substitution of crew, loss of effects, shipwreck unemployment indemnity,

stowaways and refugees and life salvage;

Navigational and operating claims such as collisions (either one fourth or four

83

fourths), damages to fixed and floating objects, pollution, wash damage,

towage, liability under contracts for hire of cranes, wreck removal and

quarantine;

Cargo claims including collision liability to cargo carried in an entered ship and

general average and salvage;

Miscellaneous liabilities which include fines and confiscation, inquiring

expenses, expenses arising from interference by local authorities and costs of

sue and labor.

Marine Cargo Insurance: Aims to indemnify the Assured from losses or physical damages occurred

to the goods during the insured voyage as mentioned in the certificate of insurance

and provided said losses or damages are covered by the insurance conditions as

agreed between the Assured and Underwriters and consigned in the insurance

contract.

BASIC COVERAGE :

(1) Total or Constructive Total Loss of the whole consignment hereby insured

caused in the course of transit by natural calamities--heavy weather, lightning,

tsunami, earthquake and flood. In case a constructive total loss is claimed for, the

Insured shall abandon to the company the damaged goods and all his rights and

title pertaining thereto. The goods on each lighter to or from the seagoing vessel be

deemed a separate risk.

be deemed separate risk

"Constructive Total Loss" refers to the loss where an actual total loss appears to be

unavoidable or the cost to be incurred in recovering or reconditioning the goods

together with the forwarding cost to the destination named in the policy would

exceed their value on arrival.

84

(2) Total or Partial Loss caused by accidents-the carrying conveyance being

grounded, stranded, and sunk or in collision with floating ice or other objects as

fire or explosion.

(3) Partial loss of the insured goods attributable to heavy weather, lightning and/or

tsunami, where the conveyance has been grounded,, stranded,, sunk or burnt ,

irrespective of whether the event or events took place before or after such

accidents.

(4) Partial or total loss consequent on falling of entire package or packages into

sea during loading, transshipment or discharge.

(5) Reasonable cost incurred by the Insured in salvaging the goods or averting or

minimizing a loss recoverable under the policy, provided that such cost shall not

exceed the sum Insured of the consignment so saved.

(6) Losses attributable to discharge of the insured goods at a port of distress

following a sea peril as well as special charges arising from loading, warehousing

and forwarding of the goods at an intermediate and port of call or refuge.

(7) Sacrifice in and Contribution to General Average and Salvage charges.

(8)Such proportion of losses sustained by the ship-owners as is to be proportion of

losses sustained ship reimbursed by the cargo owner under the Contract of

Affreightment "Both to Blame Collision" clause.

Freight insurance: When a vessel is lost this coverage indemnifies the ship-

owner for the loss of income that would have been earned at the end of the voyage.

The following proper information required to obtain insurance quotation:

Cargo description and if hazardous

Quantity and packaging

Loading port and destination

Ocean vessel (including date of build, flag and size).

85

Value of the goods being shipped.

Expected date of shipment.

Cargo Claims Documents:

Insurance Certificate or Policy

Bill of Lading

Shipper's Invoice

Invoice

Packing List

Survey Report

Ship's Short-landing/Discrepancy Certificate(s).

Copies of correspondence exchanged with the Carrier.

GENERAL AVERAGE:

Average: A term in marine insurance referring to a loss. A particular average is a

partial loss.

Particular Average: A fortuitous partial loss to the subject matter insured

proximately caused by an insured peril but which is not a general average loss.

Particular average only relates to damage and/or expenses which are exclusively

borne by the owners of a vessel which has sustained damage as a result of e.g.

heavy weather or by the owners of the cargo, which has been damaged in transit.

General Average Abbreviation: G/A Intentional act or sacrifice which is carried

out to safeguard vessel and cargo. When a vessel is in danger, the master has the

right to sacrifice property and/or to incur reasonable expenditure. Measures taken

for the sole benefit of any particular interest are not considered general average.

A legal principle which traces its origins in ancient maritime law, general average

is still part of the admiralty law of most countries. General average requires three

86

elements which are clearly stated by Mr. Justice Grier in Barnard v. Adams:

"1st. A common danger: a danger in which vessel, cargo and crew all

participate; a danger imminent and apparently 'inevitable,' except by voluntarily

incurring the loss of a portion of the whole to save the remainder.

"2nd. there must be a voluntary jettison, jactus, or casting away, of some must

be portion of the joint concern for the purpose of avoiding this imminent peril,

periculi imminentis evitandi causa, or, in other words, a transfer of the peril

from the whole to a particular portion of the whole.

“3rd. This attempt to avoid the imminent common peril must be successful".

General average bond :

A bond prepared by the general average adjuster binding the owner of the goods to

pay a proportion of the general average.

CUSTOMER'S NEED

87

Warehousing and Warehouse Management Warehousing is the storage of goods for profit. The physical location,

88

the warehouse, is a storage facility that receives goods and products for the

eventual distribution to consumers or other businesses. A warehouse is also called

a distribution center. Warehouse management is the process of coordinating the

incoming goods, the subsequent storage and tracking of the goods, and finally, the

distribution of the goods to their proper destinations.

History: Warehousing's roots go back to the creation of granaries to store food,

which was historically available for purchase during times of famine. As European

explorers began to create shipping-trade routes with other nations, warehouses

grew in importance for the storage of products and commodities from afar. Ports

were the major location for warehouses.

World War II impacted warehousing in several ways, including the need

to increase the size of warehouses and the need for more mechanized methods of

storing and retrieving the products and materials. As mass production grew

throughout manufacturing, the needs of efficient and effective warehousing

capabilities grew with it.

Modern Issues: The warehouse industry found itself recovering from a recession at the

start of the twenty-first century, partially brought on by the hype of the dot-com

bubble and the excess production created after it burst. It also coped with new

methods of distribution, such as just-in-time (JIT) manufacturing—where

warehousing is unnecessary because products are shipped directly to customers.

Warehousing companies are now striving to become more than simply

storage facilities. They are transforming themselves into "third-party logistics

providers" or "3PLs" that provide a wide array of services and functions. In

89

addition to packing and staging pallets, contemporary warehousing facilities offer

light manufacturing, call centers, labeling, and other non-storage options.

Warehouse Functions: Warehousing is a key component of the overall business supply chain.

The supply chain consists of the facilities and distribution options for the

procurement of materials from manufacturer to customer and all points in between.

It includes the production of materials into components and finished products and

then the distribution to customers.

Warehouse function includes:

The storage of goods to permit managing product flow or to accommodate

longer production runs.

Serving as a mixing point where products from different suppliers are mixed

and then distributed to fulfill customer orders;

A sales branch and customer service location;

A source of supplies for production;

A staging area for final packaging or finishing.

Warehouse Operations: Warehouses are operated in several ways. Public warehousing

involves the client paying a standard fee for the storage of merchandise. Private

warehousing is storage and operations controlled completely by a single

manufacturer. Leased warehousing is an option for more stable inventory. Contract

warehousing clients pay fees regardless of whether they are using the space or not;

the space is always there for them to use, however. According to Overview of

Warehousing in North America, contract warehousing accounts for more than 60

percent of the U.S. commercial market.

A warehouse stands empty without some form of product. Delivery of goods

90

and materials takes place either by truck, rail, or boat on a dock or loading area.

The goods are received, processed, and then sent into the warehouse for storage.

The storage of goods has been the primary function for warehouses.

Once the goods have been received from the manufacturer and/or shipper, they are

compactly stored to maximize space within the facility. Products are placed on

pallets, which allow for more consistent stacking and moving within the facility.

Contract and public warehouses receive goods and products from a

multitude of manufacturers and shippers. A crucial aspect of warehouse

management is inventory control. Inventory control is the ability to locate and

track a given product within the warehouse to facilitate quick selection and loading

for order fulfillment. It is also the process of maintaining sufficient amounts of

product to meet customer demands, while at the same time balancing the expense

of keeping product in storage. Perpetual, annual, physical, and cycle counting are

all methods of keeping track of inventory.

Order picking is the process of selecting products to fulfill an order. There are

several types of picking methods:

Discrete or pick-by-order: Specific products are selected on a per order basis.

Batch or pick-by-article: Multiples of a product are selected to fulfill multiple

orders. The products are sorted in the staging area and combined with other

products to fulfill the orders.

Wave: Involves gathering products based on specific routing or shipping

criteria.

Reverse-order: Used when part of an order is held to be combined with another

order.

Reverse-order picking is related to cross-docking, another function of warehouses.

Cross-docking is a direct flow of goods from receiving to shipping, with little if

any storage. Cross-docking is contingent on the timely delivery of products,

91

accurate management on the loading dock, and effective ordering by the customer.

Warehousing is also involved in the packaging and labeling of a

product as it moves through the facility. Proper packaging is necessary for

effective storage and to guard against damage. Labeling, or tagging, is an

important element of the packaging. Proper labeling improves the ability to

identify, track, store, and select the correct product for order fulfillment.

Once the product has been selected, or picked, it is brought to a

staging area for final processing and shipment. The loading dock is a hub of

activity as products are arriving for storage and being staged for distribution.

Effective management of this area is crucial for warehouse success. It is here that

cross-docking takes place.

The final stage of warehousing is the transportation facet of delivering

and shipping goods.

Warehouse Management: In the past warehouse management was very paper-intensive in its

coordination of a multitude of activities. This has changed with the introduction of

warehouse management system software.

Warehouse management systems (WMS) assist managers in tracking

products throughout the entire storage and distribution process. These systems span

from simple computer automation systems to high-end, feature-rich management

programs that improve order picking, facilitate better dock logistics, and monitor

inventory management.

Trends: According to a Warehousing Management survey, competition in

warehousing has become extremely tight because businesses seek warehouse firms

with extremely thin margins. Companies are succeeding by remaining flexible and

92

investing in technology. The main issues or trends in warehousing include radio

frequency identification (RFID), transportation management systems, pick-to-light

technology, and voice-activated receiving and packaging.

Voice-activated receiving and packaging allows for warehouse personnel to

speak requests into the WMS, thus speeding the entire process. Transportation

management systems provide an advanced level of detail on goods prior to their

arrival and also provide a more specific time of delivery. RFID has dramatically

improved the ability to effectively manage inventory and track the location of

specific goods within the warehouse. Pick-to-light technology improves order

picking along warehouse conveyor belts by monitoring and identifying products

for specific shipments.

A significant trend is the continuing growth of 3PL providers as companies

try to cut costs and management issues by outsourcing their warehouse and

distribution functions. An outcome of increased 3PL activity is a wave of mergers

that are consolidating the industry. Customer demands for one-stop shopping and

new technologies are a driving force behind this consolidation.

Warehousing is a mature industry seeking methods to maximize profits and

striving to add services to compete for customers. The warehousing industry is a

key component of the supply chain and will likely remain so as long as there are

manufacturers and consumers.

PANAMA CANAL

93

Panama Canal is a 77-kilometre (48 mi) ship canal in

Panama that joins the Atlantic Ocean and the Pacific Ocean and is a key conduit

for international maritime trade. Built from 1904 to 1914, annual traffic has risen

from about 1,000 ships in the canal's early days to 14,702 vessels in 2008,

measuring a total 309.6 million Panama Canal/Universal Measurement System

(PC/UMS) tons. In total over 815,000 vessels have passed through the canal. It has

been named one of the seven modern wonders of the world by the American

Society of Civil Engineers.

One of the largest and most difficult engineering projects ever undertaken;

the canal had an enormous impact on shipping between the two oceans, replacing

the long and treacherous route via either the Strait of Magellan or Cape Horn at the

southernmost tip of South America. A ship sailing from New York to San

Francisco via the canal travels 9,500 km (5,900 mi), well under half the 22,500 km

(14,000 mi) route around Cape Horn.

The concept of a canal in Panama dates to the early 16th century. The first

attempt to construct a canal began in 1880 under French leadership, but was

abandoned after 21,900 workers died, largely from disease (particularly malaria

and yellow fever) and landslides. The United States launched a second effort,

incurring a further 5,600 deaths but succeeding in opening the canal in 1914.

The maximum size of vessel that can use the canal is known as Panamax.

A Panamax cargo ship typically has a DWT of 65,000-80,000 tonnes, but its actual

cargo is restricted to about 52,500 tonnes because of draft restrictions in the canal.

[5] The longest ship ever to transit was the San Juan Prospector, now Marcona

Prospector, an ore-bulk-oil carrier that is 973 ft (296.57 m) long, with a beam of

106 ft (32.31 m)

Layout:

94

USS Missouri passes through the canal in 1945

The canal consists of artificial

lakes, several improved and

artificial channels, and three

sets of locks. An additional

artificial lake, Alajuela Lake

(known during the American

era as Madden Lake), acts as a

reservoir for the canal. The

layout of the canal as seen by a

ship passing from the Pacific

end to the Atlantic is as

follows:

From the buoyed

entrance channel in the

Gulf of Panama (Pacific

side), ships travel 13.2 km (8.2 mi) up the channel to the Miraflores locks,

passing under the Bridge of the Americas.

The two-stage Miraflores lock system, including the approach wall, is 1.7

km (1.1 mi) long, with a total lift of 16.5 meters (54 ft) at mid-tide.

The artificial Miraflores Lake is the next stage, 1.7 km (1.1 mi) long, and

16.5 meters (54 ft) above sea level.

The single-stage Pedro Miguel lock, which is 1.4 km (0.87 mi) long, is the

last part of the ascent with a lift of 9.5 meters (31 ft) up to the main level of

the canal.

The Gaillard (Culebra) Cut slices 12.6 km (7.8 mi) through the continental

divide at an altitude of 26 meters (85 ft), and passes under the Centennial

95

Bridge.

The Chagres River (Río Chagres), a natural waterway enhanced by the

damming of Lake Gatún, runs west about 8.5 km (5.3 mi), merging into

Lake Gatun.

Gatun Lake, an artificial lake formed by the building of the Gatun Dam,

carries vessels 24.2 km (15.0 mi) across the isthmus.

The Gatún locks, a three-stage flight of locks 1.9 km (1.2 mi) long, drop

ships back down to sea level.

A 3.2 km (2.0 mi) channel forms the approach to the locks from the Atlantic

side

Limón Bay (Bahía Limón), a huge natural harbour, provides an anchorage

for some ships awaiting passage, and runs 8.7 km (5.4 mi) to the outer

breakwater.

Thus, the total length of the canal is 77.1 km (47.9 mi)..

Lock size: Miter lock gate at Gatún

The size of the locks determines the

maximum size of ships allowed passage.

Because of the importance of the canal to

international trade, many ships are built to

the maximum size allowed. These are

known as Panamax vessels.

Initially the locks at Gatun had been

designed to be 28.5 meters (94 ft) wide. In

1908 the United States Navy requested that

width be increased to at least 36 meters

96

(118 ft) which would allow the passage of U.S. naval ships. Eventually a

compromise was made and the locks were built 33.53 meters (110.0 ft) wide. Each

lock is 320 meters (1,050 ft) long with the walls ranging in thickness from 15

meters (49 ft) at the base to 3 meters (9.8 ft) at the top. The central wall between

the parallel locks at Gatún is 18 meters (59 ft) thick and stands in excess of 24

meters (79 ft) high. The steel lock gates measure an average of 2 meters (6.6 ft)

thick, 19.5 meters (64 ft) wide and 20 meters (66 ft) high.

Tolls:

Tolls for the canal are decided by the Panama Canal Authority and are based

on vessel type, size, and the type of cargo carried.

For container ships, the toll is assessed per the ship's capacity expressed in

twenty-foot equivalent units or TEUs. One TEU is the size of a container

measuring 20 feet (6.1 m) by 8 feet (2.44 m) by 8.5 feet (2.6 m). Effective May 1,

2009, this toll is US$72.00 per TEU. A Panamax container ship may carry up to

4,400 TEU. The toll is calculated differently for passenger ships and for container

ships carrying no cargo (“in ballast”). As of May 1, 2009, the ballast rate is

US$57.60 per TEU.

Passenger vessels in excess of 30,000 tons (PC/UMS), known popularly as

cruise ships, pay a rate based on the number of berths, that is, the number of

passengers that can be accommodated in permanent beds. The per-berth charge is

currently $92 for unoccupied berths and $115 for occupied berths. Started in 2007,

this charge has greatly increased tolls for such vessels. Passenger vessels of less

than 30,000 tons or with less than 33 tons per passenger are charged on the same

"per-ton" schedule as freighters.

97

Ship Passing through Panama Canal

Small vessels up to 583 PC/UMS net tons when carrying passengers or cargo, or

up to 735 PC/UMS net tons when in ballast, or up to 1,048 fully loaded

displacement tons, are assessed minimum tolls based upon their length overall,

according to the following :

Length of vessel Toll

Up to 15.240 meters (50 ft) US$1,300

More than 15.240 meters (50 ft) up to 24.384 meters (80 ft US$1,400

More than 24.384 meters (80 ft) up to 30.480 meters (100 ft) US$1,500

More than 30.480 meters (100 ft) US$2,400

98

The most expensive regular toll for canal passage to date was charged on May 16,

2008 to the Disney Magic, which paid US$331,200. The least expensive toll was

36 cents to American adventurer Richard Halliburton, who swam the canal in

1928. The average toll is around US$54,000. The highest fee for priority passage

charged through the Transit Slot Auction System was US$220,300, paid on August

24, 2006 by the Panamax tanker Erikoussa, bypassing a 90-ship queue waiting for

the end of maintenance works on the Gatun locks, thus avoiding a seven-day delay.

The normal fee would have been just US$13,430.

99

CONCLUSION Logistical management in today’s globalised economy has

become more competitive because WTO (World Trade Organization) & GATT

(General Agreement On Trade and Tariff) regulation was diluted since 1994. This

has effected logistical movement by sea globally. Which has affected public sector

and the complications have also increased policies related to taxation. Moreover,

India’s logistics and transport costs also have been high. According to the Chinese

Federation of Logistics and Purchasing, the logistics of the operation of the 2004

National accounts statistics, in 2004, the national logistics costs for the 29 114

billion, the total cost of logistics for 21.3% of GDP, compared to the average level

of developed countries 1 times higher, of which 55.8 billion for 16 transport costs,

logistics costs accounted for 56.9%. At present, many commercial enterprises and

more than U.S. commercial enterprises to spend up to 40% to 50% of the cost for

logistics and transport. In 2007, Italian investigative bodies "Asian Observer"

organizations, a survey shows that China is the world's logistics and transport one

of the highest cost, every year on the use of funds in the logistics and transport up

to 2 000 billion, twice the United States. 2. Logistics and transport time is long,

low liquidity, according to statistics, in recent years with the logistics of

manufacturing enterprises accounted for about 90% of the time. The production

accounts for only about 10%. Longer result in transport turnover rate of low

liquidity, working capital turnover rate of distribution of state-owned industrial

enterprises from 1.2 to 2.3 range of state-owned commercial enterprises, the

United States an average of 15 to 20, some large multinational companies can to

achieve 30.3. Logistics and transport business operations level is not high at

present the majority of logistics and transport companies in India are from the

traditional warehousing and transportation enterprises transition from the

100

management level, the technical strength and range of services not yet on the

improvement of the quality.

Through his project, we can see some of Logistics Industry and the

developed countries, the overall high cost and low efficiency. To solve this

problem, we must first affect the efficiency of logistics and transport analysis of

the factors. Second, the impact factor of the efficiency of logistics and transport 1.

Infrastructure in recent years, government has invested heavily in infrastructure,

especially in central and western areas of infrastructure not only requires a lot of

money and takes a long time, so our infrastructure is still lagging behind needs of

economic development, especially in the transport logistics by sea industry. At

present, the most common mode of transport road, again is rail, sea and air

transport. Road transport costs are generally higher than that of railway transport,

sea transport, but road transport is still the priority for many transportation

companies. This is because road transport can control the shipping time and

flexibility, while maximizing the delivery of goods, protection of the state.

Currently, sea transportation is often used in import and export trade as a mode of

transport. But the sea is not suitable for time-sensitive goods and finished goods

transport, it is suitable for bulk cargo, the goods to be transported long distances,

but it still needs more complete infrastructure, or in this way is difficult to

effectively play a role. Hence for the logistical movement of goods by sea ways we

need huge investments and very large capital.

101

BIBLIOGRAPHY

www.google.com

www.managementparadise.com

www.wikipedia.com

http://accuracybook.com/glossary.htm

http://www.inboundlogistics.com/3pl/awards.shtml

Shipping course- by Indian logistics group of shipping and transport.

http://www.redprairie.com/Industry%20Solutions/Third%20Party

%20Logistics.aspx

http://logistics.about.com/od/thirdparty/a/uc041805.htm

Economic and Social Commission for Asia and the Pacific (1990) “Manual on

Freight Forwarding”

United Nations Development Programme and Economic Commission for

Africa (1991) “Strategies for Human Resource and Institutional Development in

Transport and Communications in Sub-Saharan Africa”

United Nations Conference for Trade and Development (UNCTAD) (1996),

“Multimodal Transport Handbook for Officials and Practitioners”

Bandari College (2010), “Diploma Course in Freight Forwarding”

102