Handling of Imported Air Cargo In India

It is really important for every importers and air freight forwarders to manage proper handling of air cargo imported in India. Followings are the important things which have to keep in mind when you are using airways to import in India.

• consignments are arrives and intimation about its arrival is given by airline/break bulk agent by using cargo arrival notice and importar has to obtain the delivery order from airlines.
• Submitting a bill of entry on the electronic data interchange from Customs House Agent (CHA) and finalised bill of entry print out received for payment of duty.
• After payment of duty, the location of cargo is given by Airport Authority of India and goods produced for examination by the customs inspector. Goods are examined by customs. Out of charge is given both on EDI as well as on the hard copy.
• The Airport Authority of India's dues, challan-cum-gate pass are obtained and the payment is made.
• The gate pass is presented for delivery of goods obtained.

These are the process to follow to arrivals of air cargo for clearance. The clearance of cargo is highly skilled process and lots of rules has to followed. these rules and process has to be complete step wise and finally you will get proper clearance of your air cargos.

Careers in Logistics

A webinar was organized by us on YouTube Live. In this webinar we will discuss about different careers in the field of Logistics and also discuss about how it is easy to become an independent logistics professionals. How the short skill development courses of Join Study will help you.
You already know that people are always trying to join IT, Software and other Engineering sectors they also thinking for Product and marketing Management fields. But what are the great chances for career growth in Logistics sector is discussed here in this webinar. Here is a complete video of this webinar for our blog readers and public.

Mandatory Deceleration For Imports In India

There ware a public notification issued by Commissioner of Customs, India on the date of 7th March 2018 and notification no is 33/2018. By this notification it is "Mandatory Deceleration of GSTIN, IEC and E-mail address of importer to be included in the Bill of Lading obtained by Shipper.
This notification will be effective from 1st of April 2018.

It is important for Importer that they have to inform all the related details to their Exporters at abroad to incorporated these information and details in the Bill of Lading issued at the time of booking for the related consignments.

• GSTIN:-GST Identification Number of Importer
• IEC:-Import and Export Code of Importer
• E-mail Id:- Official and Legal E-mail Id of Importer

There are some reasons to be issued this notification. It is due to hazardous waste in the ports. many hazardous and restricted items were imported by the name of some importers and never cleared the consignments. These uncleared consignments with restricted and hazardous attitude are become a dangerous liability and problems for ports and customs authorities. 

To be kill this type of practices the Commissioner of Costumes, India has issued this notification. 

The Growing Importance Of Dry Ports.

The growing importance of dry ports (Inland Intermodal Terminals) in the economic transformation of landlocked nations as well as port countries is widely acknowledge. Dry ports are now becoming the hub of transshipment to inland destinations thereby promoting inter-regional trade and business. More importantly, dry ports are fast becoming the gateway to international markets in facilitating trade, economic growth and development.
In my previous post I have discuss about details of Dry Port (ICD). Hope you will understand properly. Now in this post here is some question for you to solve and check your knowledge. If you have any question then sure ask it on the comment box of this post.

Functions OF A Dry Port (ICD)

The functions and the concept of  Dry Ports are better understood by understanding the function of  a Sea Port. At Sea Port, the import cargo of the region is received by incoming ships, the ship is berthed and unloaded, the cargo is segregated for each consignee and stored awaiting customs clearance and delivery. Similarly the export cargoes from the region are aggregated, costumes and other formalities observed and completed and the goods are finally loaded on the appropriate outward bound vessels.  Other admin and customer facilities with proper transport activities are also done in Sea Port.
The Dry Ports perform similar functions. But they receive import cargoes and dispatch export cargoes from or to Sea Port by proper Unit Rail connected to Sea Port. All documentation is done at Dry Port and transport to and from the Sea Port is organised. You can say "A Dry Port is a port provide all the facilities of a sea port at the place far away from sea port."
You may understand the concept and activities of a Dry Port by this slide shows.

Importance of Trade Volume for planning a Dry Port

Dry ports depends essentially on the external trade traffic of the countries in which they are setup.While planning a dry port, therefore the first consideration would be the trade volumes, both inwards and outwards means imports and exports both. once these are decided, detailed breakdown of import and export volumes in every terms would be most useful parameters to outline the necessary facilities that need to be provide in terms of terminal handling, storage and transport.the next step is that panning team have to determine the commodity and its volume that may move from the dry port. during the course of survey it was found that most governments of land-locked countries bring out annual statistics of external trade in terms of commodities and values.The common problem encounter is the paucity of current data regarding the every aspects of commodities trade which could help establish the requirements of transport, handling and storage at the dry port.

It was learnt that basic document used for these statistics is the custom.

declaration failed at the border or at the check point and this contained the

information on the weight of consignment. There is no other practical difficulties in compiling the

weight of commodities imported and exported.

As in all developing countries, the pattern of trade in the land-locked countries consists

predominantly of exports of primary commodities and semi manufactured goods and import of

finished products.

The important fact to consider will be the separate requirements of commodities and their volumes

both for imports and exports that have to be catered for at the dry port. The facilities and their size

would have to be determined accordingly.

Defense and Limits for Multimodal Transport Operator

Defense and Limits for MTO

-----     The defenses and the limits of the liabilities provided for in this Multimodal transport Document shall apply in action against the Multimodal Transport Operator in respect of loss resulting from loss of or damage to goods; delay in delivery and any consequential loss or damage arising from such delay. 

-----     If any action in respect of loss resulting from loss of, or damage to, the goods or from delay in delivery is brought against the servant or agent of the Multimodal Transport Operator, if such servant or agent proves that the acted within the scope of his employment, or against any other person whose service he makes use for the performance of the Multimodal Transport Contract, if such other person proves that he acted within the performance of the contract, the servant or agent or such other person shall be entitled avail himself of the defenses and limits of liability which the Multimodal Transport Operator is entitled to invoke under this Multimodal Transport Document.

-----     Except as provided for liability of delay, as mentioned below, the aggregate of the amount recoverable from the Multimodal Transport Operator and from a servant or agent or any other person of whose service he makes use of for this performance of the Multimodal Transport Contract shall not exceed the limits of liability provided for in this Multimodal Transport Document.    

Evidentiary Effect of the Multimodal Transport Documents

Evidentiary Effect of the Multimodal Transport Documents :-

1)  The Multimodal Transport Document shall be prima facia evidence of the taking in charge by the Multimodal Transport Operator of goods as described therein.

2)   Proof of contrary by the Multimodal Transport Operator shall not be admissible if the Multimodal Transport Document issued in negotiable form and has been transferred to a third party, including a consignee, who has acted in good faith in reliance on the description of goods there in.

Negotiability and Title of the Goods :-

  By accepting the Multimodal Transport Document the consignor and his transferees agree with the Multimodal Transport Operator that, unless it is marked "non- negotiable" it shall constitute title to the goods and the holder, by endorsement of this Multimodal Transport Document, shall be entitled to  receiver to transfer the goods mentioned in this Multimodal Transport Document.

Size of Container Yard

It will depend upon the optimum number of containers to be store at any given time which is a function of the dwell time (DT) of containers which are separate for imports, exports and empty containers. Normally seven days for import, three days for export and 15 days for empties is considered pragmetic.

Imports = 6400 TEUs/annum or 18 per day.
At 7 days DT for each, the average inventory will be :
   18*7=126 TEUs
exports = 1600 TEU/annum or 5 TUs/day
at 3 days DT for each, average inventory will be
   5*3=15 TEUs
empties = 4800 TEUs/annum or 14 TEUs/day
at 15 days DT, average inventory will be :
   14*15 or 210 TEUs
Daily total average inventory = 126+15+210=351

The total storage capacity of CY should in the case be 351 of which the ground slot will be a fraction of the stake height. While equipment available may be capable to stake five high, full capacity can not be used for operating consideration as containers have to be shuffled for access and if the stake is full, shuffling and access become very difficult. Average staking height should therefore, be taken at 2.5. At this, the reqirement of ground slot will be
    351/2.5=140 .

Systems of Customs Security Arrangements

Customs Security is usually composed of two elements :- 

-----  A requirement for a financial guarantee to be established in the transit country by the party responsible for the transit operation to meet possible claims by the Customs, coupled with

-----  Physical measures taken by the Customs to verify that the goods are eventually re-exported.

Under the TIR guarantee system, each contracting party designated a national guaranteeing assosiation, which undertakes to act as a guarantor for all TIR carnets used for transit on the territory of the country,

Regardless of whether the carnets have been issued by the association itself or by association of other countries which are parties to the TIR Convention.

All these associations form a chain in which members are linked to each other through an International Organization, which is the International Road Transport Union (IRU).

Reference to Customs Security Arrangements in the MT Convention was limited to the following .

-----  A financial guarantee, if required, should be provided to the satisfaction of Customs authorities under regulations in force in the transit country and under International Conventions.

-----  The guarantee should cover import/export duties and taxes chargeable, and in countries where they are covered by guarantees, any penalties due, and

-----  The system of guarantees should be simple, efficient and inexpensive. 

Trade Logistics

Trade Logistics is a chain of series of links and interfaces with potential for value addition. The difference between the revenue earned by a business enterprise and the cost of bought-in materials, services and components, represent the value which a firm adds by the process of production. The value added concept is also important in that it helps in measuring productivity and profitability of an enterprise, its impact on the national economy and keeping in focus the sources of comparative advantage like logistics, marketing, sales and service.

Through optimization which is the essential function of logistics, many nations like new big economic nation India and China, also developed nation like USA and western European nations and Japan have benefited by :-

-----  Selling service rather than remaining content with the price of exporting.

-----  Simplifying documentation, customs clearance and payment formalities.

-----  Offering varied choice of delivery terms.

-----  Increase in the size of export orders.

-----  Harnessing professionals knowledge and expertise to exercising model options, cost and time trade offs.

-----  Proactive rather than reactive approach to international trade logistics.

Logistics plays a significant  role in the developed economies with its importance growing pari pasu with the increase in the share of services as compared to manufacturing .

Period of Responsibility of Carrier

Period of Responsibility for  Liability of Carrier :-

1)  The responsibility of the carrier for the  goods under many convention covers the period during which the career is in charge of the goods at the port of loading, during the carriage and at the port of discharge.

2)  For the purpose of  this article the carrier is deemed to be in charge of the goods.

a)  from the time has taken over the goods from

-----  the shipper or a person acting on his behalf

-----  an authority or other third party to whom, pursuant to law or regulations applicable at the port of loading, the goods must be handed over the shipment.

b)  Until the time has delivered the goods.

-----  by handing over the goods to consignee.

-----  in case where the consignee does not receive the goods from the career by placing them at the disposal of the consignee in accordance with the contract or with the law or with the usage of the particular trade applicable at the port of discharge.

-----  bu handing over the goods to an authority of other third party to whom, pursuant to law or regulations applicable at the port of discharge, the goods must be handed over.

In this article reference to the carrier or to the consignee means in addition to the carrier or consignee the servants or agents respectively of the carrier or the consignee.

Forecasts for Containerisable and Breakbulk Traffic

Traffic Forecasts :-

In traffic forecasting two methods can be resorted to, which as may appear are not mutually exclusive.
These are :-

-----  trend analysis and extrapolation.

-----  trade projections based on economy of the country and are done on the basis of actual economics parameters.

Both methods applied mechanically and in isolation can lead to very unrealistic figures. Normally trade forecasting will start with the trade statistics of the previous years preferably in both value and volume terms.

Port statistics may be helpful in other cases but in the context of LLCs where the serving ocean ports may not have the country-wise exports, this method will not help to allow analysis of trend, a run of figures is needed and the period should be preferably at least as long as the forecasting period.  

The economists approach in trade forecasting would tend to categorize commodities according to their economic properties .

A clear cut distinction has to be made between exports and imports. The export would be divided into agricultural and industrial products, each group being further broken down into main commodities.

Similarly , imports can also be divided according to their economic properties .
Such as :-

-----  Consumer goods.

-----  Intermediate products.

-----  Capital goods.

However as already mentioned, trend extrapolation used for long term forecasting can be extremely misleading. Therefore after acquiring a general idea of growth trends, economic parameters may be introduced to formulate more realistic relationship would be quite different for imports and exports.


 

Lay Time in Shipping

In a voyage charter the time spent by the vessel at the port is, of particular importance to the owner because the freight is fixed only with reference to the quality of cargo carried and any undue detention during which he continues to incur fixed overhead charges such as depreciation, insurance, interest on invested capital, wages etc. would reduce his calculated profit.

An important clause in the charter party is therefore the one stipulating the maximum time to be allowed for the cargo loading and discharging operations, that is Lay Time.

The provisions of the charter party usually state that lay time is to commence at a specific time after notice of readiness has been given.

The cancelling date is applicable to the loading port only and is the absolute last day under the terms of the charter party on which the charterer is obliged to make use of the vessel.

Lay Time may be expressed as the maximum number of days allowed for loading and discharge or as loading/discharge rate like an example 1500 tons/200 tons per day.

Demurrage is the compensation to which the owner is entitled for detention of a vessel beyond the agreed lay time.

The voyage charter party usually provides for payment of dispatch money to the charterer for the time that is thus saved. In other words, dispatch money is opposite to demurrage and is the compensation payable to the charterer for completing loading and discharging faster than stipulated under the charter party.

Time Charter in Shipping

Time Charter in Shipping is usually restored to when the charterer desires to operate a vessel for a period of time without undertaking either the financial commitments of ownership or responsibilities of navigation and management of the vessel.

Point of difference between time charter and voyage charter is the basis of calculating hire or freight . In the case of voyage charter freight is paid on the cargo carried and is directly proportionate to the volume of the cargo. In the case of time charter, the volume of cargo has no relation to the charter hire which is fixed on the basis of carrying capacity of the vessel and is directly proportionate to the period of charter .

Followings are the clauses contained in the time charter party usually related to :-

-----  Description of the vessel name, flag, ownership, class, gross and net registered tonnage, cargo capacity, indicated horse power and speed, bunker consumption, etc.

-----  Rate of cahrter hire and mode of payment.

-----  Charter period and redelivery of the vessel.

-----  The charterer's right to direct the vessel in regard to the voyage it shall perform and the cargo it shall carry.

-----  Allocation of operating cost - The owner has to pay running expenses like wages, provisions, insurance, stores etc. and charterer has to pay other expenses like bunker and waters, port charge , canal passing charge etc.

-----  Owner's indemnity against liability incurred under bill of lading.

-----  Liability for damage to the vessel - while the owner is responsible for maintaining the vessel in an efficient  state during the currency of the charter and has therefore to assume responsibility for any damage sustained in connection with navigation, the charterer is to be responsible for any loss or damage caused to the vessel or owners by improper loading or unloading of goods or any negligent act on the part of the charterer or his servant.

-----  Off-hire or suspension of hire during period of inefficiency of the vessel.

Bare Boat Charter

 


Bare Boat Charter is also known as Demise Charter. This is a type of contract under which the owner provides the service of vessel to the Charterer for a period of time in return for charter hire. For all practical purpose, charterer acts as the owner of the vessel during the period of charter but without undertaking the financial commitments of ownership.

The Bare Boat Charter party commonly used is the standard "Barecon" charter party. The charter party usually contains clauses relating to;

1)  Description of vessel - such as size, speed, fuel consumption, loading capacity etc. on which the performance will be depend.

2)  Survey to be carried out on delivery and re-delivery.

3)  Inventories of stores to be taken on delivery and re-delivery.

4)  Charter period - usually a provision of included giving the charterer the option of extending the validity of the charter by a specified period.

5)  Rate of charter hire and mode of payment. This is usually computed on the deadweight tonnage of the vessel per month and is payable every month in advance.

6)  Maintenance and operation during period of charter - The vessel to be at the disposal and under the complete control of the charterer who will be responsible, for supply of crew officers, stores, provisions, bunkers etc. and for all other items of operational costs including insurance. 

Sometimes, Bare Boat Charter serves as "hire/purchase" contract .

Under such a contract , the owner/seller retains formal ownership and thereby security in the vessel until the full purchase price is paid .

Decision Areas In Warehousing

 


There are two important decisions in Warehousing. Which are as follows :-

A)  Warehousing Location : The following factors influence the location of a warehouse:-

------  Transport facilities available.

------  Transportation cost of serving the market area.

------  Transportation cost of supply to the warehouse.

-----  Product price, customers' expected level of service and the resulting inventory carrying costs.

-----  Exise duties and other taxes assesed in the area.

-----  Labour supply and costs.

-----  Land and construction cost.

-----  Availability of power, water and communication.

-----  Climatic conditions.

-----  Attitude of residents and government towards the establishment of the warehouse.

-----  Potential for future expansion.

-----  Location of warehouse of competitors.

B)  Own versus lease versus use Public Warehouse :-

A warehouse may be privatly used or publically used . If a company makes goods and these are stored exclusively in some warehouse, then such warehouse known as Private warehouse.

A private warehouse may an owned or leased one .

If a warehouse is used on the basis of some terms and conditions by many users, then that warehouse is known as Public warehouse.

Paperless Trading

Paperless trading is done by Electronic Data Interchange (EDI). EDI is a very important Part of Modern Trade and Logistics.  Evolution of data elements that can be transmitted electronically to interchange trading information such as invoice etc. have been part of this development.

Advantage of Paperless Trading :-

------  EDI saves on clerical costs by avoiding re-entering of data. It allows timely and error free transaction information be passed from one computer to another.

-----  By improving information management and data exchange between organizations, EDI promotes introduction of new business strategies such as just in time manufacturing based on zero stock principle.

-----  Providing error free information to the right place at the right time; thus quicker response to orders, shortening of delivery cycle.

-----  Reducing stocks levels and thus increasing availability of working capital.

-----  Quicker and safer processing of invoice brings speedy payments with improving cash flow .

-----  EDI speeds up border control and other official interventions such as costumes clearance of goods .

-----  EDI through computer oriented controls, improves the efficiency of controlling authorities.

-----  Improves costumer service.

The main and very useful help from EDI is that it helps the uniform goods flow when goods are passing from border or carried in any other transit nation which is neither origin nor destination for that good. It simplifies all the customs processes and allow transit the goods without any disturbance. It also simplifies the documentary process, banking and payment solutions.

Traffic Flows

 


-----   Having determined the trade volumes , the immediate exercise would be estimate the traffic flows likely to be materialized at the dry port . This volume obviously would be a percentage of the total trade volumes and would be influenced by many factors having a direct or indirect bearing on such traffic .

-----   To begin with such commodities as crude oil , petroleum, oil and lubricants, dry bulk cargoes like minerals and ores, coal, cement, fertilizers and heavy structural including steel etc.  have to be discounted to the appropriate extent .

-----   The general principal to be followed should be to concentrate on containerisable commodities, and general cargo able to containerization .

-----   This fact is supported by ever increasing conversion of breakbulk general goods traffic into containerized transport and this being the future scenario, provisions of container handling facilities should suffice at the dry ports.

-----   After having obtained the volumes of containerisable commodities, these volumes can be converted into number of containers in terms of Twenty Foot Equivalent Units (TEU) with the help of a conversion table.Where volumes instead of weight are available-29 cubic meters may be taken as equavalant of one TEU.

-----   The traffic flows should then be established in terms of TEUs for export and Import both .

Multimodal Transport and Documentary Credit

 


-----   Science transport is an integral part of global trade , the documents issued by the Carrier while taking charge of the goods in a crucial document. The other documents include commercial invoice, packing list, certificate of origin, certificate of inspection etc.

-----   The Transport Document will depend on the mode of transport like sea, air , land and the agency issuing the document . The most commonly used Transport Document is called Bill of Lading with an endorsement "shipped on Board" signifying that the goods have been physically placed on board on the ship. In the case of Air Transport , the document is called Airway Bill issued by airlines or their authorized agents.

-----   Multimodal Transport implies transport by  two or more then two modes under a single document issued by MTO . This document has involved in response to advances in transport technology through containerization and emergence of non-vessel owning operators. Such operators have evolved their own document called CTD (combined transport document). Which is now widely accepted in developed countries.The person issuing the CTD takes responsibility as a principal of the safe conduct of transport of goods over different mode of transport from the place of receipt of goods to the place of delivery .

Sometimes instead of CTD, a through Bill of Lading may be issued by a shipping line covering the entire transport including transhipment at an intermediate port to another vessel . A CTD can be issued by any person acting on as an MTO . Who could be Shipping Lines, Freight Forwarder, Common Carriers, Terminal Operators or purely Commercial Enterprises .