Management of Logistics

8/6/2019 Management of Logistics

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MATERIAL HANDLINGMATERIAL HANDLING


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Material handling is the taking care ofMaterial handling is the taking care ofmaterial. The material handling ismaterial. The material handling is

undertaken at every stage of logisticsundertaken at every stage of logisticsactivity and is an integral part of the otheractivity and is an integral part of the otherelements of logistics function. It starts fromelements of logistics function. It starts fromreceiving of the raw material to the sendingreceiving of the raw material to the sending

of finished goods to the customers.of finished goods to the customers.


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Flow chart of movement of materialsFlow chart of movement of materials

in a production unitin a production unit

storage productionunit

storage

Temporarystorage of

Semi-finishedproduct

Finishing work atAnother unit

receipt

transport

vendor

despatch

transport

CustomerDealerWarehouse


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Receipt & DespatchReceipt & Despatch

RECEIPTRECEIPT

Receipt of trucks ,ships, rails etc in a nominated area orReceipt of trucks ,ships, rails etc in a nominated area orlocation.location.

Unloading of individual truck , wagon or ship.Unloading of individual truck , wagon or ship. Storage of the goods unloaded.Storage of the goods unloaded. Weighment of the goods.Weighment of the goods. Sampling of the materials received.Sampling of the materials received.

Documentation for receipt of goods.Documentation for receipt of goods. Documentation for storage of goods.Documentation for storage of goods. Communication to all concerned about the receipt ofCommunication to all concerned about the receipt of

goods.goods.


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DespatchDespatch

Receipt of trucks ,ships, rails etc in a nominatedReceipt of trucks ,ships, rails etc in a nominatedarea or location.area or location.

Weighment of the goods.Weighment of the goods.

loading of individual truck , wagon or ship.loading of individual truck , wagon or ship. Storage of the goods to ensure uninterruptedStorage of the goods to ensure uninterrupted

loading.loading. Sampling of the goods that are loaded.Sampling of the goods that are loaded.

Documentation of despatches, storage,Documentation of despatches, storage,weighment, & samples.weighment, & samples. Communication to all concerned about theCommunication to all concerned about the

despatch of goods.despatch of goods.


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Activities performed under materialActivities performed under materialhandlinghandling

The loading & unloading of trucks, wagonsThe loading & unloading of trucks, wagonsor ships.or ships.

Waiting space for trucks, wagons or ships.Waiting space for trucks, wagons or ships.Adequate storage space.Adequate storage space.

Weighment facilities.Weighment facilities.

Sampling facilities.Sampling facilities.Documentation & communication system.Documentation & communication system.


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Handling MethodsHandling Methods

Type of material to be used.Type of material to be used.

VolumeVolume

If the process not going to be changed overIf the process not going to be changed overtime than automation handling equipmentstime than automation handling equipmentscan be used.can be used.

The handling methods also depends uponThe handling methods also depends upononon labourlabour shortage.shortage.


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ec s or es gn ng a er aec s or es gn ng a er ahandlinghandling

Materials to be handle must be studiedMaterials to be handle must be studied

(solid, liquid gas)(solid, liquid gas)

Quantity to be move.Quantity to be move.Continuous or intermittent movement ofContinuous or intermittent movement of

materialmaterial

Speed at which the material is to be moved.Speed at which the material is to be moved.Characteristics of the building & workingCharacteristics of the building & working

conditioncondition

Replacement of existing equipments orReplacement of existing equipments or


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Principles & Guideline forPrinciples & Guideline forhandling Systemhandling System

All the unnecessary of handling of materialAll the unnecessary of handling of materialto be avoidedto be avoided

The material should be handle in the largestThe material should be handle in the largestpossible load by the quickest means overpossible load by the quickest means overthe shortest route.the shortest route.

Handling to be done with least amount ofHandling to be done with least amount ofdamagedamage

The material must be handled at leastThe material must be handled at leastpossible costpossible cost


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The handling method & equipments mustThe handling method & equipments mustbe of proper standards.be of proper standards.

Automation must include in handlingAutomation must include in handlingprocess.process.

Those methods & equipments should beThose methods & equipments should beused which can perform a variety of tasks.used which can perform a variety of tasks.

The methods and equipments selected mustThe methods and equipments selected mustmake the system safe.make the system safe.


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Ware housingWare housing

Ware houseWare house :It is the location with:It is the location withadequate facilities where volume shipmentsadequate facilities where volume shipmentsare received from the production section,are received from the production section,broken down, reassemble into combination ,broken down, reassemble into combination ,representing a particular order and shippedrepresenting a particular order and shippedto customers location or locations.to customers location or locations.


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Need of the WarehouseNeed of the Warehouse

To ensure the protection against delays &To ensure the protection against delays &

uncertainties in transportationuncertainties in transportation

Eliminating the uncertainties in theEliminating the uncertainties in theavailability of product at desired time andavailability of product at desired time and

place.place.

Providing adjustment between the time ofProviding adjustment between the time of

production & time of use.production & time of use.

Act as a store for goods, receiving surplusAct as a store for goods, receiving surplus

goods when production exceeds demands &goods when production exceeds demands &

releasing them when supply reduces.releasing them when supply reduces.


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Types of warehousesTypes of warehouses

1.1. Private WarehousePrivate Warehouse : a warehouse: a warehouseowned by a company making its own goods.owned by a company making its own goods.

2.2. Public WarehousePublic Warehouse : a ware house may: a ware house maybe operated by another organization,be operated by another organization,including a government agency and onlyincluding a government agency and onlyused by company o certain terms andused by company o certain terms and

conditions .conditions .


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Advantage ofPrivate WarehousesAdvantage ofPrivate Warehouses

Private warehouses offers better control over thePrivate warehouses offers better control over the

movement & storage of the products as required bymovement & storage of the products as required by

management from time to time.management from time to time.

There is less likelihood of errors in the case warehouseThere is less likelihood of errors in the case warehouse

since the companies products are handled by its ownsince the companies products are handled by its own

employersemployers

A special design of warehouse facilities for automatedA special design of warehouse facilities for automated

handling, may lead to a reduction in the handling cost.handling, may lead to a reduction in the handling cost.

This may not be present in public warehouse.This may not be present in public warehouse.

In some location for certain products and material, theIn some location for certain products and material, the

public warehouse may not available, the only, possiblepublic warehouse may not available, the only, possible


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Advantages ofPublic warehousesAdvantages ofPublic warehouses

It is generally less expensiveIt is generally less expensive

They are usually immediately availableThey are usually immediately available

The fixed cost of warehouse are distributedThe fixed cost of warehouse are distributedamong many users, therefore the overallamong many users, therefore the overallcost of warehouses per unit works out to becost of warehouses per unit works out to belower figure.lower figure.

Public warehouses facilities can be given upPublic warehouses facilities can be given upas soon as necessary without any additionalas soon as necessary without any additionalliability on the part of the user.liability on the part of the user.


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Warehouse OperationsWarehouse Operations(Functions)(Functions)

Receiving of goods (Raw material/semiReceiving of goods (Raw material/semi--

finished/finished goods).finished/finished goods).

Indentifying the goods(giving particular numberIndentifying the goods(giving particular numberto the goods).to the goods).

sorting of the goods(to store at particular area).sorting of the goods(to store at particular area).

Holding of the goods( to store at properHolding of the goods( to store at properprotection).protection).

Dispatching of goods.Dispatching of goods.

Preparing records .Preparing records .


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Warehouse LocationWarehouse Location

Market service area.Market service area.

Satisfaction of transport requirements andSatisfaction of transport requirements and

facilities available in the form of rails, roadsfacilities available in the form of rails, roads& vehicles etc.& vehicles etc.

Transportation rates prevailing in the areaTransportation rates prevailing in the areaand distribution cost per unit areaand distribution cost per unit area

Competition from the competitors meansCompetition from the competitors meansthat whether they have warehouses in thethat whether they have warehouses in thesame area or notsame area or not


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Availability of power, water, gas etc. & theirAvailability of power, water, gas etc. & theircostcost

Labor supply labor cost in that areaLabor supply labor cost in that areaReal estate, excise, Govt. taxes, subsides inReal estate, excise, Govt. taxes, subsides in

that areathat area

Potential of further expansion

Potential of further expansion

Attitude of local residents & Govt. towardsAttitude of local residents & Govt. towardsestablishment of warehouse.establishment of warehouse.

Cost of land for warehouse.Cost of land for warehouse.


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Insurance And Claim ProcedureInsurance And Claim Procedure

Insurance is process of making arrangementInsurance is process of making arrangementwith an insurance company for the paymentwith an insurance company for the paymentof sum of money in the event of loss, injuryof sum of money in the event of loss, injuryor accident. Type of Insurance are:or accident. Type of Insurance are:

Insurance against lifeInsurance against life

Insurance against Risks such as fire, loss byInsurance against Risks such as fire, loss byrobbery, strikes and civil commotion.robbery, strikes and civil commotion.

Marine InsuranceMarine Insurance

Insurance against third partiesInsurance against third parties


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Claim ProceduresClaim Procedures

Imported consignmentsImported consignments

Indigenous consignmentsIndigenous consignments


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Marine Insurance PolicyMarine Insurance Policy

A policy is obtained to cover approximateA policy is obtained to cover approximatevalue of a consignment to be received byvalue of a consignment to be received bysea, air and post in a year plus 70% of thesea, air and post in a year plus 70% of thevalue to cover custom duty , freight andvalue to cover custom duty , freight andother overhead expenses.other overhead expenses.


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Monthly statement regarding shipmentMonthly statement regarding shipmentreceipt are send to the insurance with thereceipt are send to the insurance with thefollowing particularsfollowing particulars

Purchase case number and datePurchase case number and date

Number of packagesNumber of packages

The name of vesselThe name of vesselThe port of shipmentThe port of shipment

The sum to be insured in Indian currencyThe sum to be insured in Indian currency


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On receiving the monthly statement, the insuranceOn receiving the monthly statement, the insurancecompany calculates the premium account to becompany calculates the premium account to bepaid and send the bill. On receiving the payment,paid and send the bill. On receiving the payment,

certificate iscertificate is issusedissused indicating that consignmentsindicating that consignmentsare insured.are insured.


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Imported consignmentsImported consignments

Carriers are bound to delivered the goods inCarriers are bound to delivered the goods incondition in which they were tendered forcondition in which they were tendered forcarrigecarrige. They are liable to make the loss or. They are liable to make the loss ordamage occurring while the consignment isdamage occurring while the consignment isunder their custody.under their custody.


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Filling claims with carriersFilling claims with carriers As soon as steamer survey report is obtained, the claimAs soon as steamer survey report is obtained, the claim

for the loss or damage must be preferred, supported byfor the loss or damage must be preferred, supported by

the following documents.the following documents.

Claim bill in triplicate (3 copies).Claim bill in triplicate (3 copies).

Invoice and Packing list.Invoice and Packing list.

Bill of lading.Bill of lading.

steamer survey report .steamer survey report .

landing remark certificate from the Port Trust.landing remark certificate from the Port Trust.

claim is to be settled with in one yearclaim is to be settled with in one year

from the date of arrival of streamer.from the date of arrival of streamer.


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Filling claims with insuranceFilling claims with insurance

companycompany.. If the claim is not settled within the 6 months with theIf the claim is not settled within the 6 months with the

steamer agents then it should be brought in the notice ofsteamer agents then it should be brought in the notice of

insurance company The documents to be sent to theinsurance company The documents to be sent to the

insurance company are :insurance company are :

1. bill of lading1. bill of lading

2. invoice and packing list2. invoice and packing list

3. Correspondence with streamer agents3. Correspondence with streamer agents 4. survey reports4. survey reports


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If the consignment is landed but missing in docks, a claim mustIf the consignment is landed but missing in docks, a claim must

be put against the Port Trust andbe put against the Port Trust andLanded But Missing CertificateLanded But Missing Certificate

should be obtained. The insurance company should be achievedshould be obtained. The insurance company should be achieved

immediately with the following documents:immediately with the following documents:--

Name of the streamerName of the streamer

Bill of lading (their number and date)Bill of lading (their number and date)

No. of packages missing.No. of packages missing.

Marks and numbers.Marks and numbers. Policy numberPolicy number

Invoice valueInvoice value

Date of dischargeDate of discharge


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Claims for packages in soundClaims for packages in sound

conditioncondition If consignment is received in sound condition but ifIf consignment is received in sound condition but ifthere is a shortage then the consignee must immediatelythere is a shortage then the consignee must immediately

refer the matter to the supplier to make proper loss.refer the matter to the supplier to make proper loss.

Such cases should be surveyed if the loss is to be moreSuch cases should be surveyed if the loss is to be morethan Rs.500. As soon as the liability is admitted by thethan Rs.500. As soon as the liability is admitted by the

supplier, the consignee must withdraw the claim putsupplier, the consignee must withdraw the claim put

with the insurance company. Consignee mustwith the insurance company. Consignee must

immediately put a claim with the custom authorities forimmediately put a claim with the custom authorities forthe refund of appropriate custom duty. Claim to be putthe refund of appropriate custom duty. Claim to be put

within six months for refund of appropriate customwithin six months for refund of appropriate custom

duty.duty.


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Claims for air consignmentsClaims for air consignments

Airlines are responsible for the loss andAirlines are responsible for the loss anddamage to the goods under their custodies.damage to the goods under their custodies.The rest of the steps of the claim are sameThe rest of the steps of the claim are sameas of steamer agent.as of steamer agent.


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Claims for postal consignmentsClaims for postal consignments

Claim for the loss should be put within oneClaim for the loss should be put within onemonth from the date of the delivery of themonth from the date of the delivery of theparcel with the postal authorities at theparcel with the postal authorities at thedestination. In case of nondestination. In case of non--receipt of parcel,receipt of parcel,claim should be put within 3 months fromclaim should be put within 3 months fromthe date of booking. The monetary claimthe date of booking. The monetary claim

should be submitted to the insuranceshould be submitted to the insurancecompany with following document:company with following document:--


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Copy of bill of entry.Copy of bill of entry.

Customs examine certificate.Customs examine certificate.

Official stamp of survey fee paid.Official stamp of survey fee paid.

A copy of the bill of lading.A copy of the bill of lading.

Invoice and packing list.Invoice and packing list.

Insurance certificate.Insurance certificate.

Documents showing the exact value of loss.Documents showing the exact value of loss.

Payment of claims is made by IndianPayment of claims is made by Indian

Insurance Companies only in Indian currencyInsurance Companies only in Indian currency..


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Generally the claim against insuranceGenerally the claim against insurancecompany in respect to importedcompany in respect to importedconsignments may beconsignments may be categorisedcategorised asasfollows:follows:

1. claim for damages.1. claim for damages.

2. claim for shortages.2. claim for shortages.

3. claim for short landed consignments.3. claim for short landed consignments.

4. claim for landed but missing4. claim for landed but missingconsignments.consignments.


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Indigenous ConsignmentsIndigenous Consignments

In this ,action has to be initiated in the same way as forIn this ,action has to be initiated in the same way as for

imported consignments. The supporting documents toimported consignments. The supporting documents to

be furnished to the insurance company are:be furnished to the insurance company are:

Invoice .Invoice .

Certificate of the loss obtained from the carrier.Certificate of the loss obtained from the carrier.

Survey report.Survey report.

Official stamps receipt from the surveyors .Official stamps receipt from the surveyors . Insurance particulars such as policy number.Insurance particulars such as policy number.

Documents showing the exact value of loss.Documents showing the exact value of loss.


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In case of the claims with the railways itIn case of the claims with the railways itshould be put within the 6 months from theshould be put within the 6 months from thedate of railway receipt as laid down indate of railway receipt as laid down insection 78 B of Indian Railways Act. If thesection 78 B of Indian Railways Act. If theentire consignment is not receipt at theentire consignment is not receipt at thedestination from over 2 months after thedestination from over 2 months after the

date of booking, the consignee should writedate of booking, the consignee should writeto the railways under whose zone theto the railways under whose zone thedestination station is situated.destination station is situated.


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If the consignment is received in damage orIf the consignment is received in damage orin open condition, the consignee shouldin open condition, the consignee shouldasked for the open delivery assessment toasked for the open delivery assessment tothe Chief Commercial Superintendent of thethe Chief Commercial Superintendent of thedestination railway for the survey. The Chiefdestination railway for the survey. The ChiefCommercial Superintendent will have to giveCommercial Superintendent will have to give

the survey report with the 3 days.the survey report with the 3 days.


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Freight Rate StructureFreight Rate Structure

Freight rates for any mode of transportFreight rates for any mode of transportare based on the following principles:are based on the following principles:

Fixed cost.

Fixed cost.

Variable costVariable cost

Public use (material for public daily use willPublic use (material for public daily use will

be carried at lower rates than others)be carried at lower rates than others)Government policyGovernment policy

Reasonable profitReasonable profit


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The carrier is supposed to examine theThe carrier is supposed to examine theforwarding note and the nature of goodsforwarding note and the nature of goodsoffered foroffered for despatchdespatch , work out the distance, work out the distancehe would have to cover to deliver the goodshe would have to cover to deliver the goodsand quote a freight rate for transport. Ifand quote a freight rate for transport. Ifthis rate and other conditions given bythis rate and other conditions given by

carrier arecarrier are accepatableaccepatable to the owner of theto the owner of thegoods, the forwarding note is accepted bygoods, the forwarding note is accepted bythe carrier and a contract is deemed to havethe carrier and a contract is deemed to havebeen arrived at.been arrived at.


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Goods Consignment NoteGoods Consignment Note : this note is: this note isissued by carrier. It gives the details of theissued by carrier. It gives the details of thegoods accepted forgoods accepted for despatchdespatch , the rate of, the rate oftransport charge, the total freight. It alsotransport charge, the total freight. It alsomentions whether transport charges arementions whether transport charges areprepre--paid or payable at destination. On thepaid or payable at destination. On the

back of this note terms and conditions areback of this note terms and conditions areprinted , taken from Common Carrier Actprinted , taken from Common Carrier Act18801880


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Selection of a CarrierSelection of a Carrier

Constitution of the carrier firm.Constitution of the carrier firm.

Carriers business turnover.Carriers business turnover.

Carriers area of operation.Carriers area of operation.

Carriers branch offices.Carriers branch offices. Number of truck owned by Carrier.Number of truck owned by Carrier.

The name of clients currently served by Carrier.The name of clients currently served by Carrier.

Normal transit time.Normal transit time.

References from other companies.References from other companies.

Expedition with which claims for damages/shortages etc areExpedition with which claims for damages/shortages etc are

settled.settled.

The nature and value of the contracts with other companiesThe nature and value of the contracts with other companies


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Setting Claims with roadSetting Claims with roadtransporttransport

A claim must be filled in writing within 7 days after taking theA claim must be filled in writing within 7 days after taking the

delivery of goods. The claim may be filled with the carrierdelivery of goods. The claim may be filled with the carrier

issuing G.C. note.issuing G.C. note.

In case of nonIn case of non--delivery the claim must be filled within 60 daysdelivery the claim must be filled within 60 days

after a reasonable time for delivery has been closed.after a reasonable time for delivery has been closed.

Suits for the claims must be filled in the appropriate court with inSuits for the claims must be filled in the appropriate court with in

9 months and 1 day from the day a notice in writing is given by9 months and 1 day from the day a notice in writing is given by

the carrier that the claim has been disallowed.the carrier that the claim has been disallowed.

A claim must be filled with in 6 months of booking. No suit liesA claim must be filled with in 6 months of booking. No suit lies

against the carrier in respect of consignment without a claim inagainst the carrier in respect of consignment without a claim in

writing have been filled first.writing have been filled first.


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In deciding the claim for damages, a carrier gets theIn deciding the claim for damages, a carrier gets the

benefits of any insurance that may have been taken bybenefits of any insurance that may have been taken by

the owner of goods.the owner of goods.

The value of goods to be paid is equals to actual valueThe value of goods to be paid is equals to actual valueof the goods or their invoiced value, or that written inof the goods or their invoiced value, or that written in

the dispatch documents.the dispatch documents.

The storage of the goods in Transporters warehouse isThe storage of the goods in Transporters warehouse is

at the owners cost expect when the negligence of theat the owners cost expect when the negligence of the

carrier is proved. The carrier is authorized to recovercarrier is proved. The carrier is authorized to recover

the cost of repairs, expect when the negligence of thethe cost of repairs, expect when the negligence of the

carrier is proved.carrier is proved.


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Freight rate StructureFreight rate Structure(Rail transport)(Rail transport)

1.Class Rates1.Class Rates::-- In this commodities are classified intoIn this commodities are classified into

different classes. The class rates per quintal for certaindifferent classes. The class rates per quintal for certain

distances are fixed These rates are less for the longerdistances are fixed These rates are less for the longer

distances.distances. 2.Special rates2.Special rates::-- These are the subsidy rates for defenseThese are the subsidy rates for defense

material, exist at subsided rates.material, exist at subsided rates.

3.Station to Station rates3.Station to Station rates::-- They are fixed rates toThey are fixed rates to

meet the competition from other sources ofmeet the competition from other sources of

transportation. There is no reduction in the first 150 km.transportation. There is no reduction in the first 150 km.

Also there is no reduction in the rates for petroleum andAlso there is no reduction in the rates for petroleum and

other hydrocarbons oils.other hydrocarbons oils.


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Freight rate StructureFreight rate Structure(Air transport)(Air transport)

General Cargo Rates (GCRGeneral Cargo Rates (GCR):):-- These are the ratesThese are the rates

which are fixed or weightwhich are fixed or weight uptoupto 4545 kgskgs..

Class ratesClass rates ::-- discounted rates for certain classifieddiscounted rates for certain classified

items. E.g. valuable cargo, live animals etc.items. E.g. valuable cargo, live animals etc.

Specify commodity ratesSpecify commodity rates::-- These are the heavilyThese are the heavily

discounted rates applicable directly between two pointsdiscounted rates applicable directly between two points

for e.g. Delhi to Frankfurt , Delhi to Sri Lanka.for e.g. Delhi to Frankfurt , Delhi to Sri Lanka.

Govt. Mandatory RatesGovt. Mandatory Rates::-- These rates offer incentivesThese rates offer incentives

to export of certain commodities. For e.g. Indian Govt.to export of certain commodities. For e.g. Indian Govt.

has directed low rates for the export of leather fromhas directed low rates for the export of leather from

India to various countries in Europe and for USA also.India to various countries in Europe and for USA also.


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Freight rate StructureFreight rate Structure(Sea transport)(Sea transport)

Factors while making tariff structureFactors while making tariff structure

character of cargo.character of cargo.

Volume of cargoVolume of cargoAvailability of cargoAvailability of cargo

Competition from other carriersCompetition from other carriers

distancedistance fix chargesfix charges

InsuranceInsurance

port charges/facilitiesport charges/facilities


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Marking :Marking :

company name .company name .

location to sendlocation to sendquantityquantity

the serial no. of eachthe serial no. of each pacakagepacakage out of totalout of total

number .number .Import/exportImport/export licencelicence number.number.

The country of originThe country of origin


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Freight brokerFreight broker: He furnished the following: He furnished the followingthings:things:--

Name of the shipperName of the shipper

Quantity & description of the cargoQuantity & description of the cargo

Part of shipmentPart of shipment

Port of destinationPort of destinationName of the ship in which he seeks space.Name of the ship in which he seeks space.


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Clearing & forwarding AgentClearing & forwarding Agent::-- TheseThesepersons give assistance in processing thepersons give assistance in processing thecustom documents. They pay EXIM duty oncustom documents. They pay EXIM duty onthe behalf of shipper.the behalf of shipper.


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Bill of ladingBill of lading::-- It includes the following:It includes the following:--

Name of the shipName of the ship

NationalityNationalityShipper's NamesShipper's Names

Marks & No. of packagingMarks & No. of packaging

Description of goodsDescription of goodsWeight of goodsWeight of goods

Freight rates (Total)Freight rates (Total)

Measurement of goods.Measurement of goods.


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Import of goods by SeaImport of goods by Sea

When an import cargo expected, the copy of billWhen an import cargo expected, the copy of bill

of lading, invoice, packing list etc. are receivedof lading, invoice, packing list etc. are received

from the shipper in advance by clearing &from the shipper in advance by clearing &

forwarding agents who process the customforwarding agents who process the custom

document & pay the custom duties and alsodocument & pay the custom duties and also

obtained a delivery order from shippingobtained a delivery order from shipping

company and clears the goods from the postcompany and clears the goods from the postafter paying port charges & delivers the goods toafter paying port charges & delivers the goods to

the importer at the destination.the importer at the destination.


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ClaimsClaims

Under Indian carry of Goods by sea ActUnder Indian carry of Goods by sea Act1925),claims are to be settled in one year1925),claims are to be settled in one yearfrom the date of their landing. The claim forfrom the date of their landing. The claim forthe partial loss or damage or short landingthe partial loss or damage or short landingis given to consignee or to clearing &is given to consignee or to clearing &forwarding agentsforwarding agents in writing,in writing, requesting therequesting the

shipping company for the survey. Theshipping company for the survey. Thesurvey should be done within the three dayssurvey should be done within the three daysof landing.of landing.


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CHARTERINGCHARTERING

A merchant who want so ship large amount,A merchant who want so ship large amount,particularly if in bulk, would charter or hire aparticularly if in bulk, would charter or hire atramp ship. The merchant or organizationtramp ship. The merchant or organizationwho hires the ship is referred to as thewho hires the ship is referred to as thecharterer. The formal contract drawn upcharterer. The formal contract drawn upbetween the ship owner and the charterer isbetween the ship owner and the charterer is

known as the charter party.known as the charter party.


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Kinds of CharterKinds of Charter

Time CharterTime Charter

The ship is chartered as a functioningThe ship is chartered as a functioning

operating unit or a period of time. Theoperating unit or a period of time. Thecharterer pays the hire money and the shipcharterer pays the hire money and the shiptransport cargo wherever the charterertransport cargo wherever the chartererwishes.wishes.

Voyage CharterVoyage Charter

The ship is chartered to carry on specifiedThe ship is chartered to carry on specifiedvoyage between places.voyage between places.


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Demise CharterDemise Charter

Normally a ship owner or prospective shipNormally a ship owner or prospective ship

owner prefer this method. The charterer willowner prefer this method. The charterer willhave to equip the ship with personnel, fuelhave to equip the ship with personnel, fueland other necessaries and operate the ship.and other necessaries and operate the ship.This charter is usually for a long period sayThis charter is usually for a long period say

for about five years or more.for about five years or more.


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Charter PartyCharter Party

After the terms have been agreed upon, theAfter the terms have been agreed upon, thedocuments called the charter party is drawndocuments called the charter party is drawnup. The different types of charter partyup. The different types of charter party

arrangements determine the distribution ofarrangements determine the distribution ofresponsibilities and items of costs betweenresponsibilities and items of costs betweenshipship--owners and charterers.owners and charterers.


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Where hire commencesWhere hire commences

Agreement on charterers right to complainAgreement on charterers right to complainand perhaps remove master or chiefand perhaps remove master or chiefengineer.engineer.

Clauses concerning strikes, war, etc.Clauses concerning strikes, war, etc.

How arbitration should be organized in theHow arbitration should be organized in theevent of a dispute.event of a dispute.

STRUCTURE OF STANDARDSTRUCTURE OF STANDARD


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STRUCTURE OF STANDARDSTRUCTURE OF STANDARDVOYAGE CHARTER FORMVOYAGE CHARTER FORM

Date, name and address of ship owner and charter.Date, name and address of ship owner and charter.

Description of shipDescription of ship name and where' registered,name and where' registered,

capacities, relevant to the cargo in question.capacities, relevant to the cargo in question.

Name of goods to be shipped and in what manner.Name of goods to be shipped and in what manner.Name of loading and discharging ports.Name of loading and discharging ports.

Details of routes to be followed.Details of routes to be followed.

Date, vessel is to arrive at the loading port.Date, vessel is to arrive at the loading port.

The freight rate and currency.The freight rate and currency.

How the problems of strikes, ice congestion in ports,How the problems of strikes, ice congestion in ports,

are to be settled.are to be settled.

Arbitration clause.Arbitration clause.


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LINEAR CONFERENCELINEAR CONFERENCE

A linear conference is a group of two orA linear conference is a group of two ormore vessels operating carriers whichmore vessels operating carriers whichprovides international linear services for theprovides international linear services for the

carriage of cargo on a particular route orcarriage of cargo on a particular route orroutes with in specified geographical limitsroutes with in specified geographical limitson uniform or common freight rates and onon uniform or common freight rates and on

other mutually agreed conditions.other mutually agreed conditions.


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A linear service providesA linear service provides

Regularity of sailings to scheduled ports .Regularity of sailings to scheduled ports .

Stability of freight rates.Stability of freight rates.

Coverage of wide range of ports .Coverage of wide range of ports .Rebates on rates .Rebates on rates .

Uniform rates for all shippers.Uniform rates for all shippers.


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Norms & PracticesNorms & Practices

Deferred Rebate systemDeferred Rebate system ::--(If he is using the(If he is using thevessels of the member lines of the conferencevessels of the member lines of the conferencethen he get the rebates 10% ofthen he get the rebates 10% of

for 3for 3--6 month.6 month.The Dual rate systemThe Dual rate system ::-- If a shipper sign aIf a shipper sign a

contract with conference to protect, They getcontract with conference to protect, They getbereft of rates which are lower than other nonbereft of rates which are lower than other non--

contractors.contractors. Immediate Rebate systemImmediate Rebate system ::-- Contract shipperContract shipper

are given cash or immediate rebate (9.5%) ofare given cash or immediate rebate (9.5%) of

freight on shipment offreight on shipment of their cargo.their cargo.


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CONTAINERCONTAINER

A container is defined as a transport device,A container is defined as a transport device,a case or a tank which carries liquids anda case or a tank which carries liquids andsolids. They are specially designed to permitsolids. They are specially designed to permit

unbroken transport of goods. They areunbroken transport of goods. They areequipped with fittings to enable easyequipped with fittings to enable easyhandling for different transportation modes.handling for different transportation modes.

B i d t i t fB i d t i t f


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Basic product requirement for aBasic product requirement for acontainer arecontainer are

It must have an airtight and water tight outerIt must have an airtight and water tight outershell & flooringshell & flooring

It must have sufficient strength to withstand.It must have sufficient strength to withstand.

It must have internal lining which can be cleanedIt must have internal lining which can be cleanedeasily and does not buckle with temperatureeasily and does not buckle with temperaturechanges.changes.

It should not absorb moisture.It should not absorb moisture. It must have such a construction as allows easyIt must have such a construction as allows easy

circulation of air around the cargo.circulation of air around the cargo.


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Types of containerTypes of container

Conventional enclosed containers.Conventional enclosed containers.

Insulated and ventilated containers.Insulated and ventilated containers.

Refrigerated containers.Refrigerated containers.Open top containers.Open top containers.

Open sided containers.Open sided containers.


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AdvantagesAdvantages

Reduces loss and damage claims.Reduces loss and damage claims.

It gives door to door pick up & delivery service.It gives door to door pick up & delivery service.

It eliminates multiple handling of cargo , for theIt eliminates multiple handling of cargo , for the

container is handled as a unit.container is handled as a unit.

Improvement relating to handling, marketing andImprovement relating to handling, marketing andpattern of packaging is made possible by thepattern of packaging is made possible by thecontainer.container.

Cost of packaging gets reduces.Cost of packaging gets reduces.

Containers can be used as an efficient storageContainers can be used as an efficient storagesystem till the goods are finally used.system till the goods are finally used.


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I t t t t iff dI t t t t iff d


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Interstate tariffs andInterstate tariffs anddocumentationdocumentation

Intra state movement of goods : In IndiaIntra state movement of goods : In Indiawe have a regulated intra state transport.we have a regulated intra state transport.These regulations try to manage theThese regulations try to manage the

transportation system within the state. Alltransportation system within the state. Allthe state authorities are committed tothe state authorities are committed toprovide adequate, well coprovide adequate, well co--ordinatedordinated,,

economical and efficient transportationeconomical and efficient transportationservices to the people of the state. In thisservices to the people of the state. In thisthe regulations may be based on vehiclethe regulations may be based on vehiclesize, rates and routes.size, rates and routes.


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The vehicles in order to transport goods within aThe vehicles in order to transport goods within a

state need to follow the following procedure.state need to follow the following procedure.

Apply to the District Transport Office for permit withApply to the District Transport Office for permit with

the vehicle registration card (Form No. 26) .the vehicle registration card (Form No. 26) .

Clarify the purpose of transport vehicle.Clarify the purpose of transport vehicle.

Deposit form and fees with the district transport office.Deposit form and fees with the district transport office.

DTO will issue the permit under the form 32/33 that isDTO will issue the permit under the form 32/33 that isknown as Temporary Permit.known as Temporary Permit.

Thus the intra state transport requires a permit & that isThus the intra state transport requires a permit & that is

known asknown as Temporary PermitTemporary Permit..


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Temporary Permit (SECTemporary Permit (SEC--87)87)

A regional transport authority and the state transportA regional transport authority and the state transport

authority may without following the procedure as laidauthority may without following the procedure as laid

down in section 80, grants permits to be effective for adown in section 80, grants permits to be effective for a

limited period which, shall not exceed 4 months, tolimited period which, shall not exceed 4 months, toauthorize the use transport vehicles temporary.authorize the use transport vehicles temporary.

For the convenience of passengers on specialFor the convenience of passengers on special

occasions such as religious gatherings.occasions such as religious gatherings.

For the purpose of seasonal business.For the purpose of seasonal business.

To meet a particulars temporary need.To meet a particulars temporary need.


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Provided that the regional transportProvided that the regional transportauthority or state transport authority in caseauthority or state transport authority in caseof goods carriages underof goods carriages under circumtancescircumtances ofof

special nature, a permit for a exceeding 4special nature, a permit for a exceeding 4month but not more than a year.month but not more than a year.


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Inter State movement of goodsInter State movement of goods

It means when we are sending our goods fromIt means when we are sending our goods fromone state to another and for that we require aone state to another and for that we require adocument that is known as National Permit.document that is known as National Permit.

National Permit:National Permit:--It means a permit granted byIt means a permit granted byappropriate authority for carrying the goods fromappropriate authority for carrying the goods fromone state to another.one state to another.

An Application for National Permit (SceAn Application for National Permit (Sce--86):86):--AnAn

application for the grant of National Permit for theapplication for the grant of National Permit for theregistration are submitted to registering authorityregistration are submitted to registering authorityin the following way:in the following way:--

Form Contents and duration ofForm Contents and duration of


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Form Contents and duration ofForm Contents and duration ofAuthorization (SecAuthorization (Sec--87)87)

a) An application for the grant of authorization fora) An application for the grant of authorization for

National Permit shall be made in the formNational Permit shall be made in the form--46 and shall46 and shall

be deposit with a fee ofRs.500 per annum in the formbe deposit with a fee ofRs.500 per annum in the form

of bank draft.of bank draft.

b) Every authorization shall be granted in the formb) Every authorization shall be granted in the form--47.47.

The authority which granted the authorization shallThe authority which granted the authorization shall

inform the state transport authorities concerned , of theinform the state transport authorities concerned , of the

registration number of vehicle, the name and theregistration number of vehicle, the name and theaddress of the permit holder and the period for whichaddress of the permit holder and the period for which

they said authorization is valid.they said authorization is valid.

c) The period of validity of authorization shall notc) The period of validity of authorization shall not

exceed one year at a time.exceed one year at a time.

Age of vehicle for the purpose ofAge of vehicle for the purpose of


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Age of vehicle for the purpose ofAge of vehicle for the purpose ofNational PermitNational Permit

No National permit shall be granted inNo National permit shall be granted inrespect of goods carriage which is morerespect of goods carriage which is morethan 12 years old at any point of time.than 12 years old at any point of time.

No. National permit shall be granted for aNo. National permit shall be granted for amulti axel goods carriage which is moremulti axel goods carriage which is morethan 15 years old at any point of time.than 15 years old at any point of time.

Quarterly return to be filled by a nationalQuarterly return to be filled by a nationalpermit holder in form No. 49 to thepermit holder in form No. 49 to theauthority which granted the national permit.authority which granted the national permit.

Additional conditions for NationalAdditional conditions for National


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Additional conditions for NationalAdditional conditions for NationalPermit (Section 90)Permit (Section 90)

1. The vehicle under national permit shall be painted in dry leaf1. The vehicle under national permit shall be painted in dry leaf

brown color with 30brown color with 30 cmscms board white board and the wordsboard white board and the words

"National Permit" shall be there on the both sides of the vehicle"National Permit" shall be there on the both sides of the vehicle

in bold letters within a circle of 60cm diameter.in bold letters within a circle of 60cm diameter.

2. A board with words "National Permit valid in the states of2. A board with words "National Permit valid in the states of

...................." with blue letters on white back ground shall be...................." with blue letters on white back ground shall be

carried in the front top of such vehicle.carried in the front top of such vehicle.

3. No such vehicle shall carry any goods without a bill of lading.3. No such vehicle shall carry any goods without a bill of lading.

4. The vehicle shall have minimum of 2 drivers and shall be4. The vehicle shall have minimum of 2 drivers and shall beprovided with a seat across its full width behind the driver seatprovided with a seat across its full width behind the driver seat

providing the facility for the spare driver to stretch himself andproviding the facility for the spare driver to stretch himself and

sleep.sleep.


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55. The vehicle must have the following documents and. The vehicle must have the following documents and

shall be produced on demand by an officer, namelyshall be produced on demand by an officer, namely

given below.given below.

Certificate of fitnessCertificate of fitness

Certificate of InsuranceCertificate of Insurance

Certificate ofRegistrationCertificate ofRegistration

National PermitNational Permit TaxationTaxation

6.The vehicle shall be subject to fulfill all local rules or6.The vehicle shall be subject to fulfill all local rules or

restriction as imposed by the State Government.restriction as imposed by the State Government.

Common carrier liabilitiesCommon carrier liabilities


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Common carrier liabilitiesCommon carrier liabilities

Common carrier is liable for all loss orCommon carrier is liable for all loss ordamage to the goods. The common carrierdamage to the goods. The common carrieris liable for loss or damage caused wholly byis liable for loss or damage caused wholly by

the negligence or where the goods arethe negligence or where the goods aredestroyed by accidental fire or when theydestroyed by accidental fire or when theyare stolen from him.are stolen from him.


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ExceptionsExceptions

The following exception are thereThe following exception are there

1.1. The Excepted PerilsThe Excepted Perils

A. the act of God.A. the act of God.B. public enemies(mobs , thieves , strikersB. public enemies(mobs , thieves , strikers

etc.)etc.)

C. inherent vice (the common carrier is notC. inherent vice (the common carrier is notliable for damage or loss to goods which hasliable for damage or loss to goods which hasarisen due to inherent vice in or naturalarisen due to inherent vice in or naturaldeterioration in the goods .deterioration in the goods . eg.animalseg.animals carriedcarried

in the normal way may attack each other)in the normal way may attack each other)


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2.2. Termination of liabilityTermination of liability : when the: when thecommon carrier has brought the goods tocommon carrier has brought the goods tothe destination ,given the consignee or histhe destination ,given the consignee or his

agent notice of arrival and allowed theagent notice of arrival and allowed theconsignee reasonable time in which toconsignee reasonable time in which toremove the goods , his liability as carrierremove the goods , his liability as carrier

ceases.ceases.3.3. Special contractSpecial contract : the common carrier: the common carrier

may limit his liability by special agreementmay limit his liability by special agreementwith the consignor.with the consignor.


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Under the Carrier Act,1865Under the Carrier Act,1865

Goods for the purpose of liability are dividedGoods for the purpose of liability are dividedinto two categories namely:into two categories namely:

1. scheduled goods.1. scheduled goods.

2. non2. non scheduled goodsscheduled goods

Liability in respect of scheduled goods : theyLiability in respect of scheduled goods : theyare usually valuable articles for example,are usually valuable articles for example,gold & silver coins , precious stones , maps ,gold & silver coins , precious stones , maps ,work of art , glass etc.work of art , glass etc.


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Liabilities of RailwaysLiabilities of Railways

the liability of the railway administration asthe liability of the railway administration asa carrier is laid down in chapter VII of thea carrier is laid down in chapter VII of theRailway act. The main provisions areRailway act. The main provisions are

summarized as under:summarized as under:


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Carriage by AirCarriage by Air


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