SHIPPING INTERMEDIARIES - revealthought.weebly.comrevealthought.weebly.com/.../3/2/...intermediaries.pdf · 4PL Service Provider Covers the entire supply chain of the customer. Collaboration

SHIPPING INTERMEDIARIES

Shipping Intermediaries

• CHA’s • Freight Forwarders

• Road Transporters

• Rail Transporters

• Warehousing Corporations

• Shipping Lines

• Port Authorities

• Custom & Central Excise Department

• Municipal Corporations


CHA’s • Individual or Company licensed to clear Export & Import

cargoes through customs

• Additional services rendered

• Space booking

• Providing freight rates

• Preparation of documents

• Authorisation to conduct custom clearance on behalf of exporter / importer

• Liabilities on account of user

• Reliability important


CHA’s - Charges

• Basic Fee for customs clearance [Per 20’ / 40’] • CMC charges

• Documentation charges

• Port charges / Statutory charges [Actual basis – receipted]

• % of value of goods [Normally for Imports]


Freight Forwarders & Consolidators

Functions

• Preparation of documents

• Quoting freight rates to Shipper

• Space booking with S/Line

• Releasing B/L from S/Line

• Transportation

• Delivery at destination

• Other services

• Packing

• Custom Clearance

• Container Stuffing

• Insurance



• Local FF

• Aegis Logistics

• AFL Limited

• All Cargo Global Logistics Ltd

• Om Logistics Ltd

• Safe Express Pvt. Ltd

• Sical Logistics Ltd

• Total Logistics

• TVS Logistics Services Ltd



• International FF

• Kuehne + Nagel

• DB Schenker Logistics

• Panalpina World Transport

• UPS Supply Chain Solutions

• Expeditors

• Nippon Express


Third Party Logistics [3PL]


Why Outsourcing

• To focus on core competencies

• Resource constraints

• Cost-saving resulting from better management

• Cross pollination of better available practices

• Wider geographical coverage

• Reduction in risk and liability

• Extend superior customer service

• Source of process improvement


Logistic Activities Outsourced

• Warehousing and warehouse management

• Transportation and freight management

• Freight payment and audit

• Inventory management

• Customs clearance

• Material handling

• Packaging

Logistics Evolution

Outsourcing

Warehousing, transportation, Inventory, order processing

Self-reliant

Organization performing all logistics operation

3 party logistics

In-house logistics

4 party logistics

Alliance with

3 PL service provider IT organization IT/Logistics consultant

3PL Service Provider

• Wholesalers: The stand-alone operators, who extend only one type of service in which they have an expertise, such as:

Warehousing

Transportation

Customs clearance

Packing

Equipment suppliers

IT support

• Integrators: One who provides entire logistics services and offers logistics solutions to customer’s logistics problem.

3PL Advantages

• Reduction in risk and liabilities

• Value-added service to the customers

• Source of process improvement

• Wider market coverage

• Speed to market

Value -added Services – 3PL Service Providers

• Cross docking

• Customs clearance

• Reverse logistics

• Assembly or mixing

• Freight consolidation

• Special packaging and labelling

• Logistics audits

• Stock financing

Logistics

Fourth Party Logistics [4PL]

Logistics

Fourth Party Logistics [4PL]

Term coined by “Anderson Consulting Company”

“4PL assembles and manages the resources, capabilities and technology of its own organization with those of complimentary service providers to deliver a comprehensive supply chain solution.”


• Covers the entire supply chain of the customer.

• Collaboration between two or more 3PL service providers on the

resources sharing basis to extend logistic solution to a common

customer.

• Alliances to be led by integrator with IT-based and not asset-

based service provider.

• Flexible arrangement.


• Example:

• FMCG Indian manufacturer operating in Indian & overseas markets

• Logistics handled by different 3PL firms in different geographical areas

• Single central information system instead of different systems in different areas by each 3PL firm


• Example:

• Hewlett Packard (HP) appointed Circle International (CI) as their 4PL partner in Asia Pacific Region

• CI – central hub Singapore

• CI buys and stocks HP’s inventory requirement in the region

• Network of warehouse hubs spread across the countries in the region take care of distribution

• The local HP office in the country draws its inventory requirement by buying from the CI local hub

• HP does not block its funds in inventory

4PL Advantages

• Reduced logistics cost

• Better Inventory Management

• Concentration on core competencies

• Release of management capacities

• Reduced assets

• Economies of scale

• Increase of process quality

• Access to latest technologies

• Increase Shareholder Value

Service Provider Selection

Proposal evaluation and selection

• Credentials

• Logistics infrastructure

• Experience and customer base

• Technology

• Cost of service

• Reliability

• Government liaison

Logistics Industry in India - Challenges

Increase in Export & Import volumes post liberalisation

Exports – 2,03,571 Cr (2000-01) to 11,42,922 Cr (2010-11)

Imports – 2,30,873 Cr (2000-01) to 16,83,467 Cr (2010-11)

Logistics Industry in India - Challenges

Inadequate infrastructure

Complex rules & regulations

Complex documentation

Corruption

Unethical business practices adopted by shippers

Inadequate use of IT

Documents

SHIPPING INTERMEDIARIES - revealthought.weebly.comrevealthought.weebly.com/.../3/2/...intermediaries.pdf · 4PL Service Provider Covers the entire supply chain of the customer. Collaboration