Freight Forwarding
Content
Committed To
Excellence
FCL
Concepts
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ent
3• C
Cat
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4• C
1• C
1
Y
/
C
Y
2• C
B
2
3
FCL Jargon Demystified
[To absorb oil
price shocks]
• THC •CAF =
=
Currency
Termina Adjustment Factor
l
[To absorb
Handlin currency
g
fluctuations]
Charge
s
•ISPS
•BAF
=
Bunker
Adjust
ment
Factor
•CFS
=
Container Freight
Station
•CY
=
Container Yard
=
•O
= •D
Origin Destination
FCL Jargon Demystified
•Tare
Weight
=
Weight
of
Empty
Contain
er
•Gross
Weight
=
Weight of Empty
Container +
Weight of Cargo
•Payload
=
Weight of Cargo
that can be
carried
•CBM = Volume
in Cubic Metres
Container Types – 20 Dry
L:
20’
W:
8’
H:
8’6”
Tare:2.1 MT
Vol:
3 3 CBM
Container Types – 40 Dry
L:
W:
H:
Tare:
Vol:
Container Types – 45 High Cube
L:
45’
W:
8’
H:
9’6”
Tare: 4 MT
Vol:
45’ Containers are ALWAYS High
7 6 CBM
Cubes
Container Types – 20 Flat Rack
L : 20’
23:
8’
8:
8’6”
Tare:
2.3 MT
Payload: 22 MT
Container Types – 40 Flat Rack
L : 40’
23:
8’
8:
8’6”
Tare:
5 MT
Payload: 25 MT
Container Types – 40 Flat Bed
L : 40’
23:
8’
Tare:
5 MT
Payload: 39 MT
Container Types – 20 Open Top
L : 20’
23:
8’
8:
8’6”
Tare:
5 MT
Payload: 25 MT
Container Types – 40 Open Top
L : 40’
23:
8’
8:
8’6”
Tare:
5 MT
Payload: 25 MT
Container Types – 20 Reefer
L : 20’
W: 8’
H: 8’6”
Tare:
MT
3
Payload: 21 MT
Reefers need to have 3 parameters set always
Temperature
Humidity
Ventilation
Container Types – 40 Reefer
L : 40’
W: 8’
H: 8’6”
Tare: 3 MT
Payload: 28 MT
Container Types – 45 Reefer
L : 45’
W: 8’
H: 9’6”
Tare: 4 MT
Payload: 36 MT
Container Types – 20 Tanker
L : 45’
W: 8’
H: 8’6”
Tar e:
3 MT
FCL Drivers – Commercial Geography
Ludhiana
•Hosiery and Textiles
•Basmati Rice
•Sports Goods
•Engineering Components
NCR
•Auto Components
•Apparel
•Footwear
•Handicrafts
Himachal
Pradesh
•Apples
•Pharmaceuticals
These are all Export
oriented
FCL Drivers – Commercial Geography
Rajasthan
•Granites and Marbles
•Handicrafts
Gujarat
•Machinery and Ancillaries
•Chemicals
•Pharmaceuticals
FCL Drivers – Commercial Geography
Madhya
Pradesh
•Soyabeans and Derivatives
•Automotive
Components
•Machine
Components
Vidharbha
Region
•Iron & Steel
Materials
•Oranges
FCL Drivers – Commercial Geography
Rajasthan
•Granites and Marbles
•Handicrafts
Gujarat
•Machinery and Ancillaries
•Chemicals
•Pharmaceuticals
FCL Drivers – Commercial Geography
Maharashtr
a
•Automobiles /
Ancillaries
•Machinery / Components
•Sugar
•Apparel
•Pharmaceuticals
•Chemicals
Goa
•Cashew
•Pharmaceuticals
FCL Drivers – Commercial Geography
Andhra Pradesh
•Granites / Marbles / Ceramics
•Pharmaceuticals
•Gherkins
Karnataka
•Mining Ores
•Gherkins
•Auto-components
•Pharmaceuticals
•Coffee
FCL Drivers – Commercial Geography
Tamil Nadu
•Garments / Hosiery
•Automobiles / Ancillaries
•Coffee / Tea
•Spices
Kerala
•Rice
•Spices
•Tea / Coffee
•Rubber
FCL Drivers – Commercial Geography
Indian Imports
•Newsprint / Waste Paper
•Metal Scrap
•Electronics /
Consumer
Durables
•Machinery
•Chemicals
•Wheat
•Plastic Consumables
FCL Drivers – Commercial
Geography
Indian Imports
•Commercial Geography is a key driver in freight pricing
•Seasonality of Demand / Supply of Customers
•Seasonality of Demand / Supply of products in other
geographies
•Availability of Equipment
•Please note that the same commercial geography logic
applies for Rail, Road transportation modes as well
Successful Logistics Managers are adept at
estimating constraints posed by
Commercial Geography!!!
LCL
Concepts
•
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Bc
a e
si a
c n
O
ri F
gi r
n e
C i
h g
a h
r t
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s W
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o
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D u
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ti s
na
ti3• D
on e
Ch ar s
ge t
s u
f
1• D
f
Ti
Hn
Cg
2• P
C
h
a
r
g
e
s
4• F
u
e
l
S
u
r
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h
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g
en
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5• C
a
r6• D
go
oc
Hu
am
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dn
li t
n
L
C
L
c
a
n
o
a
t
i
o
n
F
e
e
s
and
not
Shippi
ng
Lines!
!!
LCL Concepts - Profitability
Buying Price Factors
Freight [FCL] i.e. all payments done for 1
Container and 1 B/L with FCL concepts
Selling Price Factors
All components charged on LCL basis with
additional documents [Typically 1 container has
5 to 7 documents] for individual shippers
So the sum of revenues is far higher than the
buying prices
•The most common pitfall made by many logistics personnel is to
compare the
‘freight’ line item in FCL / LCL model and arrive at a costing figure
•One should always look at the Total Cost Element in either
scenario
•The typical breakeven point for deciding between FCL / LCL is
about 10 CBM
Hazardous Goods – Ocean
transport
1•
Class 1 : Explosives
2•
Class 2 : Gases
3•
Class 3 : Inflammable Liquids
4•
Class 4 : Inflammable Solids
5•
Class 5 : Oxidizing substances & organic
peroxides
6•
Class 6 : Poisonous & infectious substances
7•
Class 7 : Radioactive Substances
8•
Class 8 : Corrosives
9•
Class 9 : Miscellaneous
Hazardous Goods – Class1
(Explosives)
1•
2•
3•
Division 1.1 - Mass Explosion Hazard ( TNT - Trinitrotoluene)
Division 1.2 - Projection Hazard, but not a mass explosion
(Detonating Fuses)
Division 1.3 - Fire Hazard and Minor Blast or projection (Signal
Cartridges)
4•
Division 1.4 - No Significant Hazard (Fireworks)
5•
Division 1.5 - Very intensive with mass explosion
6•
Division 1.6 - Extremely intensive, but not a mass explosion
Hazardous Goods – Class2 (Gases)
1•
2•
3•
Division 2.1 - Flammable gases (Butane)
Division 2.2 - Non-flammable non-toxic gases
(Refrigerants)
Division 2.3 - Toxic gases (Carbon Monoxide)
Hazardous Goods – Class3 (Flammable
Liquids)
1•
2•
Flammable liquid - liquids which give off flammable vapor
at or below 61 degree Celsius
Liquid Desensitized
homogeneous
Explosive
-
liquids
which
form
3•
Liquid mixture to suppress their explosive properties.
4•
For example: UN1204, UN2059, UN3064, UN3343
5•
Packing Group I - Low initial boiling point, 35’C and below.
6•
7•
a
Packing Group II - Flashpoint below 23'C and boiling point
above 35’C
Packing Group III - Flashpoint between 23'C and 61'C, and
boiling point above
35’C
Hazardous Goods – Class4 (Flammable
Solids)
1•
2•
3•
Division 4.1 - Flammable solids e.g. Hay, Cotton & Self-reactive
substances e.g. Azodicarbonamide
Division 4.2 - Pyrophoric substance (solid or liquid), which
ignite within 5 minutes of coming into contact with air e.g.
Phosphorus or self-heating substances e.g. Fishmeal
Division 4.3 - Substances which, in contact with water, emit
flammable gases. Materials, such as Calcium Carbide, Sodium
that are "Dangerous When Wet" because they tend to become
spontaneously flammable or give off dangerous vapors when
exposed to water or moisture. (Obviously, using water on a
blaze involving Division 4.3 materials may actually "add fuel to
the fire”
Hazardous Goods – Class5 (Oxidizing
Agents)
1•
Division 5.1 - Refers to materials known as "oxidizing agent",
which give off oxygen, causing or contributing to the burning
of other materials. E.g. Calcium Hypochlorite
2•
Division 5.2 - Indicates materials called "organic peroxides",
some of which have characteristics similar to explosives or
burn intensely.
Hazardous Goods – Class6 (Oxidizing
Agents)
1•
Division 6.1 - Refers to solids or liquids that are poisonous to humans
E.g. Arsenic and Tear Gas.
2•
Division 6.2 - Identifies "infectious substances”, which may
cause severe or fatal disease.
Hazardous Goods – Class7 (Radioactive
Materials)
1•
Substances that give off radiation spontaneously. Fissile
radioactive materials, including nuclear reactor fuel, are the
most dangerous kind of radioactive material. On the other
hand, some radioactive materials or instruments (such as
certain clocks or electronic devices) give off little radiation.
Hazardous Goods – Class8 (Corrosives)
1•
Solids or liquids that destroy or severely damage skin or cause
rapid corrosion of steel or aluminum. Many acids, such as
Sulfuric Acid, are corrosive to skin or metal, or to both.
Hazardous Goods – Class9
(Miscellaneous)
1•
Materials which may be hazardous in transportation but
do not fall into any of the above Classes. Included in
Class 9 are certain materials, such as "white asbestos",
which threaten the health or comfort of operating
personnel. Also included are environmentally hazardous
substances and wastes, as well as marine pollutants.
Hazardous Goods – Packing / Marking
1•
Packaging:
– Packing group
– Packaging details
2•
Marking, Labeling & Placarding:
– Purpose - Easy identification of cargo in emergency, so that
appropriate action can be taken
– Unless otherwise approved by the IMDG Code
– The Container must be placarded in accordance with IMO
requirement. i.e. IMO Label, Marine Pollutant Mark,
Fumigation Warning Sign
For specialists in Hazardous
Cargo, Hazmat course is
mandatory
Hazardous Goods –
Stowage
from
(min
6
meters, vertical
separation).
1•
2•
Away
from 3•
(min 3
meters
project
ed
vertical 4•
ly).
Separa
ted
Separated by a
hold,
or
minimum
12
meters on deck.
Separated
longitudinally by
an intervening
hold,
or
minimum 24 m.
Putting It
Together
ellence
•Op •The
erat concepts are
ions common for
are logistics
criti departments,
cal logistics
for service
logi
stic providers,
shipping
s
exc lines and
terminals
Key Operations Metrics – Logistics Service
Providers
Container Freight Stations [CFS]
•Export Warehouse
•Import Warehouse
•Buffer Yard
•Reefer Section
•Yard Stuffing
Key Operations Metrics – Logistics Service
Providers
CFS – Export Warehouse
•Cargo Receiving Time
• Volume / Hour
•Trucks / Hour
•Cargo Stuffing Time
• TEUs / Hour
•Container Placement Moves / Stuffing
•Broken Stowage
Key Operations Metrics – Logistics Service
Providers
Empty Containers Area
Moves /
Placement
TEUs / Hour
Cargo Stuffing Bays
Cargo Storage Area
Volume /
Trucks / Hour
Hour
Cargo Receipt Area
Key Operations Metrics – Logistics Service
Providers
CFS – Export Warehouse
•Cargo Storage Area
•Cargo Mix [Dense / Heavy Cargo; Bales, Cartons,
Pallets etc]
•Cargo Dwell Time
•Quantity Accuacy
Key Operations Metrics – Logistics Service
Providers
CFS – Import Warehouse
•Cargo Receiving Time
• TEUs / Hour
•Trailers / Hour
•Cargo De-Stuffing Time
• TEUs / Hour
•Cargo Storage Area
• Dwell Time
Key Operations Metrics – Logistics Service
Providers
CFS – Buffer Yard
•Export Bound
• TEUs / Hour
•Trailers / Hour
•Import Bound
• TEUs / Hour
•Trailers / Hour
•Container Storage Area
• Dwell Time
Key Operations Metrics – Logistics Service
Providers
LCL Operations (Freight Forwarding)
•LCL Export
•Number of TEUs / Week
•Volume Utilization / TEU
•Documents / TEU
Key Operations Metrics – Shipping
Lines
Shipping Operations
•Export
•Number of TEUs / Week [Sorted by Trade
Lanes]
•On-Time Loading Percentage
•Accurate Routing Percentage
•Vessel Utilization
•Turnaround Time / TEU
Key Operations Metrics – Port
Operations
Port Operations
•Vessel Loading / Unloading Operations
•Number of TEUs / Hour
•Moves / Hour [Measured separately for
trailers and
gantry cranes]
•Turnaround Time / Vessel
Incoterms
•
CIF
Cost, Insurance & Freight
All costs upto the point where container will be offloaded at the
port of discharge to be paid by Seller
Risk / Liability of damages until the container lands at final port of
discharge is that of Seller
•
CFR
Cost & Freight
All costs (except insurance) upto the point where container will be
offloaded at the port of discharge to be paid by Seller
Risk / Liability of damages until the container lands at final port of
discharge is that of Seller
Insurance is on Buyer’s Account
Incoterms
• FOB
Free On Board
Seller responsible for costs upto the loading point at the port of
loading
Risk / Liability of damages passes to buyer after the container is
loaded at the port of loading
• FCA
Free Carrier Area(Carrier Designated Area)
Seller responsible for costs to handover cargo at the designated
area specified by the carrier
Risk / Liability of damages passes on to buyer after the cargo
has been handed over at the carrier’s designated area
Incoterms
• Ex-Works
Buyer responsible for all costs from seller’s
premises
Risk / Liability of damages passes to buyer
after the goods have been put away and seller
intimates the carrier about the same
Incoterms
• DDU
Delivery Duty Unpaid
Seller responsible for all costs upto the cargo reaches the buyer’s
designated area except customs clearance at destination, duty,
demurrage at destination
• DDP
Delivery Duty Paid
Seller responsible for all costs upto the cargo reaches the buyer’s
designated area except customs clearance at destination,
demurrage at destination
DDU / DDP Modalities
Mandatory Document Requirements
1• Importer
of DDP)
2• Power
on Record Bond (Buyer in case of DDU & Seller in case
of Attorney to the Logistics Service Provider
(To be given by Buyer in case of DDU & Seller in case of DDP)
• In case of a duty free product, the relevant GSP Certificate (To
be given by Buyer in case of DDU & Seller in case of DDP)
[GSP – Generalized System of Preferences]
• In case of food products, pharmaceuticals, chemicals, the
necessary FDA documents
DDU / DDP Destination Charge
Check-List
1• Mandatory
Port Dues
2• Carrier
Documentation Charges
3• Carrier
THC
4• Customs
House Brokerage Charges
5• Merchandising
6• Inland
Fees
Haulage
7• Fuel
Surcharge
8• FDA
Charges (If applicable)
9• Any
Other Local Charge
10•
Demurrage & Detention Tariff
Airfreight
Concepts
1•
i
g
h
t
d
i
r
e
c
t
Di
re
ct
ex
pr
es
s
se
rv – S
ic
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b
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–
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c
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x
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–
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2•
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Ch
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1•
1−
C
h
a
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e
rs
c
a
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b
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:
2−
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I
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ULD Categories
ULD = Unit Loading Device [equivalent of container in ocean
transport]
A320/A321-Container
Type:
A320
Code:
AKH
Base Dimensions
outside:
156
Height outside:
114
Usable volume:
3.5 m
Dimensions inside:
146
Acceptable for:
A300
200F
4
ULD Categories
LD3-Container AKE/AVE
Type:
Code:
Base Dimensions
outside:
Height outside:
Usable volume:
Dimensions
inside:
Acceptable for:
LD3Cont
ainer
AKE,
AVE
156
x
153
cm
3.8 m³
146 x 144 x
160 cm
A300, A310,
A330, A340,
B747-200F,
B747-400,
B767(DE),
MD11F
163
cm
•LD
= Lower Deck
ULD Categories
Container AMP
Type:
Container AMP
Code:
AMP
Base
Dimensions
outside:
Height outside:
318 x 244 cm
161 cm
Usable volume: 10.5 m³
Dimensions
inside:
Acceptable for:
305 x 223 x 154 cm
A300, A310, A330, A340, B747-200F,
B747400, MD11F
ULD Categories
Container AMP
Type:
Container AMP
Code:
AMP
Base
Dimensions
outside:
Height outside:
318 x 244 cm
161 cm
Usable volume: 10.5 m³
Dimensions
inside:
Acceptable for:
305 x 223 x 154 cm
A300, A310, A330, A340, B747-200F,
B747400, MD11F
ULD Categories
Valuable Cargo Container (AKW)
Type:
Code:
Base Dimensions
outside:
Wert
frac
htCont
aine
r
AKW
Height outside:
Usable volume:
Dimensions inside:
Acceptable for:
156
x
153
cm
114
cm
3.5 m³
146 x 144 x 111
cm
A300, A320,
A321, A330,
A340, B747200F, B747-400,
MD11F
ULD Categories
Triple Horse Container (HMJ)
Type:
Dreier-Pferde-Container*
Code:
HMJ, HMA**
Base
Dimensions
outside:
318 x 244 cm
Height outside:
235 cm
Usable volume:
3.5 m³
Dimensions
inside:
234 x 188 x 232 cm
Acceptable for:
B747-200F, MD11F
NOTE:
1* Closed, with space for attendant.
1* loadable on B747-200F only
ULD Categories
10-ft-Container (AMH, AMJ) c
Type:
10-ft-Container
Code:
Base
Dimensions
outside:
AMH, AMJ
Height outside:
244 cm
Usable volume:
Dimensions
inside:
15 m³
Acceptable for:
318 x 244 cm
306 x 230 x 240 cm
B747-200F (nur Maindeck), MD11F (nur
Maindeck)
ULD Categories
10-ft-Container (AMH, AMJ) c
Type:
10-ft-Container
Code:
Base
Dimensions
outside:
AMH, AMJ
Height outside:
244 cm
Usable volume:
Dimensions
inside:
15 m³
Acceptable for:
318 x 244 cm
306 x 230 x 240 cm
B747-200F (nur Maindeck), MD11F (nur
Maindeck)
ULD
Categories
CAP
ACIT
Y:8
CBM
MAX
LOA
D:
4536
KG
ULD Categories
PALLETP1
CAPACITY: 10.3
CBM
MAX LOAD: 4585 KGS.
Aircraft
Capacities
Data
Source:
www.quan
tas.com/a
u/freight
Cargo Operations - Stowage
Stowage is a Critical Success Factor for
Logistics Operations Trucking / Sea
Freight / Air Freight
Stowage format determines safety and optimal
utilization of space and tonnage in Truck Loads
Bad stowage can lead to transit damage of cargo
Bad stowage can result in damage to cargo / occupational hazard
to labor at destination
Non-optimal stowage leads to higher costs /
revenue leakages
Cargo Operations Stowage
Stowage Determinants
Trucking
Routing of Truck
Number of Transit and Loading / Unloading Halts
Product Mix
Cargo Operations - Stowage
Stowage Determinants
Sea Freight (Logistics Service Provider Perspective)
Product Mix
Packaging Mix [Pallets / Cartons / Bales etc]
Most LCL / Consolidators now take advantage of software
that simulates a loading plan based on cargo / container
dimensions
Cargo Operations - Stowage
Stowage Determinants
Sea Freight (Shipping Line Perspective)
Container Mix [20’ / 40’ etc]
Vessel Routing
Number of Loading / Unloading Points
Container Vessel Stowage operations are done with the
help of IT as the complexity of vessel operations is too
large to be done manually
Cargo Operations - Stowage
Stowage Determinants
Air Freight (Airline Perspective)
Product Mix
Onward Routing from Hub
stations
Logistical Operations - Contraints
Logistics operations have a lot of constraints and need a lot of
planning
Suppose that you have cargo for a 20’ FCL in Talegaon, Maharashtra
to be shipped to
London, UK and you estimate that the cargo will be ready on 5
October 2012
[assume that the container will be stuffed in your factory]
When should you book the container from the shipping line?
th
Logistical Operations - Contraints
Constraints / Operational Challenges
1•Transit
Time for 20’ Empty Container from Shipping Yard to factory
= 1 Day
2•Loading
3•Transit
Time = 0.5 Days
Time for 20’ Full Container from Talegaon to Nhava Sheva
[nearest terminal] = 1 Day
4•Customs
Clearance
documentation]
5•Terminal
6•Weekly
Time
=
1
Day
Entry / Carrier Formalities = 1 Day
Sailing for Europe is every Saturday
[assuming
proper
7•Hence
the container should be booked at least 8 days in
advance!!!
Logistical Operations - Contraints
Suppose that you have cargo for South Korea and Japan
[assume cargo is autocomponents] in Germany. You have a reservation for 10 tons of
cargo from your
airline with a transit point in Singapore.
Identify the operational challenges for planning the loads in
your warehouse
Logistical Operations - Contraints
Constraints / Operational Challenges
1•Transit
Time Warehouse to Airport = 1 Day
2•Customs
3•Transit
Clearance = 0.5 Days
Time Germany Hub to Singapore = 1 Day
4•Connection
Time
•Onward Singapore – Japan = 4 hours
•Onward Singapore – Korea = 2 hours
•Onward Singapore – Japan => Split into 3 passenger aircrafts –
Lower Decks ONLY!
Logistical Operations - Contraints
The challenges in logistics are almost identical to those of
operations at a minimum
and much more most often than not
The more the number of intermediate steps in a logistical operation,
greater the
chances of errors and greater the number of contraints
Excellence
FCL
Concepts
f
Stu
ffin
g
B
Cat
a
eg s
ori i
es c
O
•Fa r
cto i
ry g
Stu i
ffin n
g
C
•D h
ocka
Stu r
g
e
s
1•
O
c
e
a
n
F
r
e
i
g
h
t
2•
B
A
F
/o
Cn
A
FF
/e
Ie
Ss
P
S
3•
O
T
H
C
4•
D
o
c
u
m
e
n
t
a
t
i
S
pm F
ent
3• C
Cat
eg
ori
es
S
4• C
1• C
1
Y
/
C
Y
2• C
B
2
3
FCL Jargon Demystified
[To absorb oil
price shocks]
• THC •CAF =
=
Currency
Termina Adjustment Factor
l
[To absorb
Handlin currency
g
fluctuations]
Charge
s
•ISPS
•BAF
=
Bunker
Adjust
ment
Factor
•CFS
=
Container Freight
Station
•CY
=
Container Yard
=
•O
= •D
Origin Destination
FCL Jargon Demystified
•Tare
Weight
=
Weight
of
Empty
Contain
er
•Gross
Weight
=
Weight of Empty
Container +
Weight of Cargo
•Payload
=
Weight of Cargo
that can be
carried
•CBM = Volume
in Cubic Metres
Container Types – 20 Dry
L:
20’
W:
8’
H:
8’6”
Tare:2.1 MT
Vol:
3 3 CBM
Container Types – 40 Dry
L:
W:
H:
Tare:
Vol:
Container Types – 45 High Cube
L:
45’
W:
8’
H:
9’6”
Tare: 4 MT
Vol:
45’ Containers are ALWAYS High
7 6 CBM
Cubes
Container Types – 20 Flat Rack
L : 20’
23:
8’
8:
8’6”
Tare:
2.3 MT
Payload: 22 MT
Container Types – 40 Flat Rack
L : 40’
23:
8’
8:
8’6”
Tare:
5 MT
Payload: 25 MT
Container Types – 40 Flat Bed
L : 40’
23:
8’
Tare:
5 MT
Payload: 39 MT
Container Types – 20 Open Top
L : 20’
23:
8’
8:
8’6”
Tare:
5 MT
Payload: 25 MT
Container Types – 40 Open Top
L : 40’
23:
8’
8:
8’6”
Tare:
5 MT
Payload: 25 MT
Container Types – 20 Reefer
L : 20’
W: 8’
H: 8’6”
Tare:
MT
3
Payload: 21 MT
Reefers need to have 3 parameters set always
Temperature
Humidity
Ventilation
Container Types – 40 Reefer
L : 40’
W: 8’
H: 8’6”
Tare: 3 MT
Payload: 28 MT
Container Types – 45 Reefer
L : 45’
W: 8’
H: 9’6”
Tare: 4 MT
Payload: 36 MT
Container Types – 20 Tanker
L : 45’
W: 8’
H: 8’6”
Tar e:
3 MT
FCL Drivers – Commercial Geography
Ludhiana
•Hosiery and Textiles
•Basmati Rice
•Sports Goods
•Engineering Components
NCR
•Auto Components
•Apparel
•Footwear
•Handicrafts
Himachal
Pradesh
•Apples
•Pharmaceuticals
These are all Export
oriented
FCL Drivers – Commercial Geography
Rajasthan
•Granites and Marbles
•Handicrafts
Gujarat
•Machinery and Ancillaries
•Chemicals
•Pharmaceuticals
FCL Drivers – Commercial Geography
Madhya
Pradesh
•Soyabeans and Derivatives
•Automotive
Components
•Machine
Components
Vidharbha
Region
•Iron & Steel
Materials
•Oranges
FCL Drivers – Commercial Geography
Rajasthan
•Granites and Marbles
•Handicrafts
Gujarat
•Machinery and Ancillaries
•Chemicals
•Pharmaceuticals
FCL Drivers – Commercial Geography
Maharashtr
a
•Automobiles /
Ancillaries
•Machinery / Components
•Sugar
•Apparel
•Pharmaceuticals
•Chemicals
Goa
•Cashew
•Pharmaceuticals
FCL Drivers – Commercial Geography
Andhra Pradesh
•Granites / Marbles / Ceramics
•Pharmaceuticals
•Gherkins
Karnataka
•Mining Ores
•Gherkins
•Auto-components
•Pharmaceuticals
•Coffee
FCL Drivers – Commercial Geography
Tamil Nadu
•Garments / Hosiery
•Automobiles / Ancillaries
•Coffee / Tea
•Spices
Kerala
•Rice
•Spices
•Tea / Coffee
•Rubber
FCL Drivers – Commercial Geography
Indian Imports
•Newsprint / Waste Paper
•Metal Scrap
•Electronics /
Consumer
Durables
•Machinery
•Chemicals
•Wheat
•Plastic Consumables
FCL Drivers – Commercial
Geography
Indian Imports
•Commercial Geography is a key driver in freight pricing
•Seasonality of Demand / Supply of Customers
•Seasonality of Demand / Supply of products in other
geographies
•Availability of Equipment
•Please note that the same commercial geography logic
applies for Rail, Road transportation modes as well
Successful Logistics Managers are adept at
estimating constraints posed by
Commercial Geography!!!
LCL
Concepts
•
O
Bc
a e
si a
c n
O
ri F
gi r
n e
C i
h g
a h
r t
g
e (
s W
e
i
g
h
t
/
V
o
l
u
m
e
–
h
i
gh e
er r
) )
•
O
T
H
C
•
D
o
c
( u
W m
ei e
gh n
t/t
Vo a
lu t
m i
e o
– n
hi
gh F
e
e
s
o
r
Ba t
si
c D
D u
es e
ti s
na
ti3• D
on e
Ch ar s
ge t
s u
f
1• D
f
Ti
Hn
Cg
2• P
C
h
a
r
g
e
s
4• F
u
e
l
S
u
r
c
h
a
r
g
en
g
5• C
a
r6• D
go
oc
Hu
am
ne
dn
li t
n
L
C
L
c
a
n
o
a
t
i
o
n
F
e
e
s
and
not
Shippi
ng
Lines!
!!
LCL Concepts - Profitability
Buying Price Factors
Freight [FCL] i.e. all payments done for 1
Container and 1 B/L with FCL concepts
Selling Price Factors
All components charged on LCL basis with
additional documents [Typically 1 container has
5 to 7 documents] for individual shippers
So the sum of revenues is far higher than the
buying prices
•The most common pitfall made by many logistics personnel is to
compare the
‘freight’ line item in FCL / LCL model and arrive at a costing figure
•One should always look at the Total Cost Element in either
scenario
•The typical breakeven point for deciding between FCL / LCL is
about 10 CBM
Hazardous Goods – Ocean
transport
1•
Class 1 : Explosives
2•
Class 2 : Gases
3•
Class 3 : Inflammable Liquids
4•
Class 4 : Inflammable Solids
5•
Class 5 : Oxidizing substances & organic
peroxides
6•
Class 6 : Poisonous & infectious substances
7•
Class 7 : Radioactive Substances
8•
Class 8 : Corrosives
9•
Class 9 : Miscellaneous
Hazardous Goods – Class1
(Explosives)
1•
2•
3•
Division 1.1 - Mass Explosion Hazard ( TNT - Trinitrotoluene)
Division 1.2 - Projection Hazard, but not a mass explosion
(Detonating Fuses)
Division 1.3 - Fire Hazard and Minor Blast or projection (Signal
Cartridges)
4•
Division 1.4 - No Significant Hazard (Fireworks)
5•
Division 1.5 - Very intensive with mass explosion
6•
Division 1.6 - Extremely intensive, but not a mass explosion
Hazardous Goods – Class2 (Gases)
1•
2•
3•
Division 2.1 - Flammable gases (Butane)
Division 2.2 - Non-flammable non-toxic gases
(Refrigerants)
Division 2.3 - Toxic gases (Carbon Monoxide)
Hazardous Goods – Class3 (Flammable
Liquids)
1•
2•
Flammable liquid - liquids which give off flammable vapor
at or below 61 degree Celsius
Liquid Desensitized
homogeneous
Explosive
-
liquids
which
form
3•
Liquid mixture to suppress their explosive properties.
4•
For example: UN1204, UN2059, UN3064, UN3343
5•
Packing Group I - Low initial boiling point, 35’C and below.
6•
7•
a
Packing Group II - Flashpoint below 23'C and boiling point
above 35’C
Packing Group III - Flashpoint between 23'C and 61'C, and
boiling point above
35’C
Hazardous Goods – Class4 (Flammable
Solids)
1•
2•
3•
Division 4.1 - Flammable solids e.g. Hay, Cotton & Self-reactive
substances e.g. Azodicarbonamide
Division 4.2 - Pyrophoric substance (solid or liquid), which
ignite within 5 minutes of coming into contact with air e.g.
Phosphorus or self-heating substances e.g. Fishmeal
Division 4.3 - Substances which, in contact with water, emit
flammable gases. Materials, such as Calcium Carbide, Sodium
that are "Dangerous When Wet" because they tend to become
spontaneously flammable or give off dangerous vapors when
exposed to water or moisture. (Obviously, using water on a
blaze involving Division 4.3 materials may actually "add fuel to
the fire”
Hazardous Goods – Class5 (Oxidizing
Agents)
1•
Division 5.1 - Refers to materials known as "oxidizing agent",
which give off oxygen, causing or contributing to the burning
of other materials. E.g. Calcium Hypochlorite
2•
Division 5.2 - Indicates materials called "organic peroxides",
some of which have characteristics similar to explosives or
burn intensely.
Hazardous Goods – Class6 (Oxidizing
Agents)
1•
Division 6.1 - Refers to solids or liquids that are poisonous to humans
E.g. Arsenic and Tear Gas.
2•
Division 6.2 - Identifies "infectious substances”, which may
cause severe or fatal disease.
Hazardous Goods – Class7 (Radioactive
Materials)
1•
Substances that give off radiation spontaneously. Fissile
radioactive materials, including nuclear reactor fuel, are the
most dangerous kind of radioactive material. On the other
hand, some radioactive materials or instruments (such as
certain clocks or electronic devices) give off little radiation.
Hazardous Goods – Class8 (Corrosives)
1•
Solids or liquids that destroy or severely damage skin or cause
rapid corrosion of steel or aluminum. Many acids, such as
Sulfuric Acid, are corrosive to skin or metal, or to both.
Hazardous Goods – Class9
(Miscellaneous)
1•
Materials which may be hazardous in transportation but
do not fall into any of the above Classes. Included in
Class 9 are certain materials, such as "white asbestos",
which threaten the health or comfort of operating
personnel. Also included are environmentally hazardous
substances and wastes, as well as marine pollutants.
Hazardous Goods – Packing / Marking
1•
Packaging:
– Packing group
– Packaging details
2•
Marking, Labeling & Placarding:
– Purpose - Easy identification of cargo in emergency, so that
appropriate action can be taken
– Unless otherwise approved by the IMDG Code
– The Container must be placarded in accordance with IMO
requirement. i.e. IMO Label, Marine Pollutant Mark,
Fumigation Warning Sign
For specialists in Hazardous
Cargo, Hazmat course is
mandatory
Hazardous Goods –
Stowage
from
(min
6
meters, vertical
separation).
1•
2•
Away
from 3•
(min 3
meters
project
ed
vertical 4•
ly).
Separa
ted
Separated by a
hold,
or
minimum
12
meters on deck.
Separated
longitudinally by
an intervening
hold,
or
minimum 24 m.
Putting It
Together
ellence
•Op •The
erat concepts are
ions common for
are logistics
criti departments,
cal logistics
for service
logi
stic providers,
shipping
s
exc lines and
terminals
Key Operations Metrics – Logistics Service
Providers
Container Freight Stations [CFS]
•Export Warehouse
•Import Warehouse
•Buffer Yard
•Reefer Section
•Yard Stuffing
Key Operations Metrics – Logistics Service
Providers
CFS – Export Warehouse
•Cargo Receiving Time
• Volume / Hour
•Trucks / Hour
•Cargo Stuffing Time
• TEUs / Hour
•Container Placement Moves / Stuffing
•Broken Stowage
Key Operations Metrics – Logistics Service
Providers
Empty Containers Area
Moves /
Placement
TEUs / Hour
Cargo Stuffing Bays
Cargo Storage Area
Volume /
Trucks / Hour
Hour
Cargo Receipt Area
Key Operations Metrics – Logistics Service
Providers
CFS – Export Warehouse
•Cargo Storage Area
•Cargo Mix [Dense / Heavy Cargo; Bales, Cartons,
Pallets etc]
•Cargo Dwell Time
•Quantity Accuacy
Key Operations Metrics – Logistics Service
Providers
CFS – Import Warehouse
•Cargo Receiving Time
• TEUs / Hour
•Trailers / Hour
•Cargo De-Stuffing Time
• TEUs / Hour
•Cargo Storage Area
• Dwell Time
Key Operations Metrics – Logistics Service
Providers
CFS – Buffer Yard
•Export Bound
• TEUs / Hour
•Trailers / Hour
•Import Bound
• TEUs / Hour
•Trailers / Hour
•Container Storage Area
• Dwell Time
Key Operations Metrics – Logistics Service
Providers
LCL Operations (Freight Forwarding)
•LCL Export
•Number of TEUs / Week
•Volume Utilization / TEU
•Documents / TEU
Key Operations Metrics – Shipping
Lines
Shipping Operations
•Export
•Number of TEUs / Week [Sorted by Trade
Lanes]
•On-Time Loading Percentage
•Accurate Routing Percentage
•Vessel Utilization
•Turnaround Time / TEU
Key Operations Metrics – Port
Operations
Port Operations
•Vessel Loading / Unloading Operations
•Number of TEUs / Hour
•Moves / Hour [Measured separately for
trailers and
gantry cranes]
•Turnaround Time / Vessel
Incoterms
•
CIF
Cost, Insurance & Freight
All costs upto the point where container will be offloaded at the
port of discharge to be paid by Seller
Risk / Liability of damages until the container lands at final port of
discharge is that of Seller
•
CFR
Cost & Freight
All costs (except insurance) upto the point where container will be
offloaded at the port of discharge to be paid by Seller
Risk / Liability of damages until the container lands at final port of
discharge is that of Seller
Insurance is on Buyer’s Account
Incoterms
• FOB
Free On Board
Seller responsible for costs upto the loading point at the port of
loading
Risk / Liability of damages passes to buyer after the container is
loaded at the port of loading
• FCA
Free Carrier Area(Carrier Designated Area)
Seller responsible for costs to handover cargo at the designated
area specified by the carrier
Risk / Liability of damages passes on to buyer after the cargo
has been handed over at the carrier’s designated area
Incoterms
• Ex-Works
Buyer responsible for all costs from seller’s
premises
Risk / Liability of damages passes to buyer
after the goods have been put away and seller
intimates the carrier about the same
Incoterms
• DDU
Delivery Duty Unpaid
Seller responsible for all costs upto the cargo reaches the buyer’s
designated area except customs clearance at destination, duty,
demurrage at destination
• DDP
Delivery Duty Paid
Seller responsible for all costs upto the cargo reaches the buyer’s
designated area except customs clearance at destination,
demurrage at destination
DDU / DDP Modalities
Mandatory Document Requirements
1• Importer
of DDP)
2• Power
on Record Bond (Buyer in case of DDU & Seller in case
of Attorney to the Logistics Service Provider
(To be given by Buyer in case of DDU & Seller in case of DDP)
• In case of a duty free product, the relevant GSP Certificate (To
be given by Buyer in case of DDU & Seller in case of DDP)
[GSP – Generalized System of Preferences]
• In case of food products, pharmaceuticals, chemicals, the
necessary FDA documents
DDU / DDP Destination Charge
Check-List
1• Mandatory
Port Dues
2• Carrier
Documentation Charges
3• Carrier
THC
4• Customs
House Brokerage Charges
5• Merchandising
6• Inland
Fees
Haulage
7• Fuel
Surcharge
8• FDA
Charges (If applicable)
9• Any
Other Local Charge
10•
Demurrage & Detention Tariff
Airfreight
Concepts
1•
i
g
h
t
d
i
r
e
c
t
Di
re
ct
ex
pr
es
s
se
rv – S
ic
u
e
b
j
–
e
N
c
e
t
x
t
t
o
fl
r
o
u
t
i
n
g
a
v
a
i
l
a
b
i
l
i
t
y
–
A
i
r
o
p
n
o
r
t –
D
o
t
o
o
r
a
t
i
o
r
p
d
o
o
r
o
t
r
t
t
r
r
a
a
n
n
s
s
p
p
o
o
r
r
t
t
a
a
t
t
i
i
o
n
2•
Ti
m
e
d
e
f
ni
te
s
er
vi
c
e
–
M
o
n
e
y
b
a
c
k
g
u
a
r
a
n
t
e
e
–
S
u
b
j
e
c
t
t
o
c
a
r
r
i
e
r
s
s
e
r
v
i
c
e
a
v
a
i
l
a
b
i
l
i
t
y
Ch
ar
te
r
se
rv
ic
e
1•
1−
C
h
a
rt
e
rs
c
a
n
b
e
o
ff
e
r
e
d
a
s
:
2−
3−
F
u
ll
p
l
a
n
e
c
h
a
r
t
e
r
P
a
r
ti
a
l
p
l
a
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e
c
h
a
rt
e
r
4−
S
e
r
v
i
c
e
a
n
d
r
a
t
e
s
w
i
l
l
b
e
d
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s
c
r
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b
e
d
i
n
c
o
n
t
r
a
c
t
2•
A
dd
iti
on
al
s
er
vi
c
e
s:
I
m
p
o
r
t
c
l
e
a
r
a
n
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e
P
i
c
k
u
p
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y
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p
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ci
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l
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a
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a
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-
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E
a
x
r
p
a
S
t
o
r
a
g
e
ULD Categories
ULD = Unit Loading Device [equivalent of container in ocean
transport]
A320/A321-Container
Type:
A320
Code:
AKH
Base Dimensions
outside:
156
Height outside:
114
Usable volume:
3.5 m
Dimensions inside:
146
Acceptable for:
A300
200F
4
ULD Categories
LD3-Container AKE/AVE
Type:
Code:
Base Dimensions
outside:
Height outside:
Usable volume:
Dimensions
inside:
Acceptable for:
LD3Cont
ainer
AKE,
AVE
156
x
153
cm
3.8 m³
146 x 144 x
160 cm
A300, A310,
A330, A340,
B747-200F,
B747-400,
B767(DE),
MD11F
163
cm
•LD
= Lower Deck
ULD Categories
Container AMP
Type:
Container AMP
Code:
AMP
Base
Dimensions
outside:
Height outside:
318 x 244 cm
161 cm
Usable volume: 10.5 m³
Dimensions
inside:
Acceptable for:
305 x 223 x 154 cm
A300, A310, A330, A340, B747-200F,
B747400, MD11F
ULD Categories
Container AMP
Type:
Container AMP
Code:
AMP
Base
Dimensions
outside:
Height outside:
318 x 244 cm
161 cm
Usable volume: 10.5 m³
Dimensions
inside:
Acceptable for:
305 x 223 x 154 cm
A300, A310, A330, A340, B747-200F,
B747400, MD11F
ULD Categories
Valuable Cargo Container (AKW)
Type:
Code:
Base Dimensions
outside:
Wert
frac
htCont
aine
r
AKW
Height outside:
Usable volume:
Dimensions inside:
Acceptable for:
156
x
153
cm
114
cm
3.5 m³
146 x 144 x 111
cm
A300, A320,
A321, A330,
A340, B747200F, B747-400,
MD11F
ULD Categories
Triple Horse Container (HMJ)
Type:
Dreier-Pferde-Container*
Code:
HMJ, HMA**
Base
Dimensions
outside:
318 x 244 cm
Height outside:
235 cm
Usable volume:
3.5 m³
Dimensions
inside:
234 x 188 x 232 cm
Acceptable for:
B747-200F, MD11F
NOTE:
1* Closed, with space for attendant.
1* loadable on B747-200F only
ULD Categories
10-ft-Container (AMH, AMJ) c
Type:
10-ft-Container
Code:
Base
Dimensions
outside:
AMH, AMJ
Height outside:
244 cm
Usable volume:
Dimensions
inside:
15 m³
Acceptable for:
318 x 244 cm
306 x 230 x 240 cm
B747-200F (nur Maindeck), MD11F (nur
Maindeck)
ULD Categories
10-ft-Container (AMH, AMJ) c
Type:
10-ft-Container
Code:
Base
Dimensions
outside:
AMH, AMJ
Height outside:
244 cm
Usable volume:
Dimensions
inside:
15 m³
Acceptable for:
318 x 244 cm
306 x 230 x 240 cm
B747-200F (nur Maindeck), MD11F (nur
Maindeck)
ULD
Categories
CAP
ACIT
Y:8
CBM
MAX
LOA
D:
4536
KG
ULD Categories
PALLETP1
CAPACITY: 10.3
CBM
MAX LOAD: 4585 KGS.
Aircraft
Capacities
Data
Source:
www.quan
tas.com/a
u/freight
Cargo Operations - Stowage
Stowage is a Critical Success Factor for
Logistics Operations Trucking / Sea
Freight / Air Freight
Stowage format determines safety and optimal
utilization of space and tonnage in Truck Loads
Bad stowage can lead to transit damage of cargo
Bad stowage can result in damage to cargo / occupational hazard
to labor at destination
Non-optimal stowage leads to higher costs /
revenue leakages
Cargo Operations Stowage
Stowage Determinants
Trucking
Routing of Truck
Number of Transit and Loading / Unloading Halts
Product Mix
Cargo Operations - Stowage
Stowage Determinants
Sea Freight (Logistics Service Provider Perspective)
Product Mix
Packaging Mix [Pallets / Cartons / Bales etc]
Most LCL / Consolidators now take advantage of software
that simulates a loading plan based on cargo / container
dimensions
Cargo Operations - Stowage
Stowage Determinants
Sea Freight (Shipping Line Perspective)
Container Mix [20’ / 40’ etc]
Vessel Routing
Number of Loading / Unloading Points
Container Vessel Stowage operations are done with the
help of IT as the complexity of vessel operations is too
large to be done manually
Cargo Operations - Stowage
Stowage Determinants
Air Freight (Airline Perspective)
Product Mix
Onward Routing from Hub
stations
Logistical Operations - Contraints
Logistics operations have a lot of constraints and need a lot of
planning
Suppose that you have cargo for a 20’ FCL in Talegaon, Maharashtra
to be shipped to
London, UK and you estimate that the cargo will be ready on 5
October 2012
[assume that the container will be stuffed in your factory]
When should you book the container from the shipping line?
th
Logistical Operations - Contraints
Constraints / Operational Challenges
1•Transit
Time for 20’ Empty Container from Shipping Yard to factory
= 1 Day
2•Loading
3•Transit
Time = 0.5 Days
Time for 20’ Full Container from Talegaon to Nhava Sheva
[nearest terminal] = 1 Day
4•Customs
Clearance
documentation]
5•Terminal
6•Weekly
Time
=
1
Day
Entry / Carrier Formalities = 1 Day
Sailing for Europe is every Saturday
[assuming
proper
7•Hence
the container should be booked at least 8 days in
advance!!!
Logistical Operations - Contraints
Suppose that you have cargo for South Korea and Japan
[assume cargo is autocomponents] in Germany. You have a reservation for 10 tons of
cargo from your
airline with a transit point in Singapore.
Identify the operational challenges for planning the loads in
your warehouse
Logistical Operations - Contraints
Constraints / Operational Challenges
1•Transit
Time Warehouse to Airport = 1 Day
2•Customs
3•Transit
Clearance = 0.5 Days
Time Germany Hub to Singapore = 1 Day
4•Connection
Time
•Onward Singapore – Japan = 4 hours
•Onward Singapore – Korea = 2 hours
•Onward Singapore – Japan => Split into 3 passenger aircrafts –
Lower Decks ONLY!
Logistical Operations - Contraints
The challenges in logistics are almost identical to those of
operations at a minimum
and much more most often than not
The more the number of intermediate steps in a logistical operation,
greater the
chances of errors and greater the number of contraints
