A STUDY ON FCL - TOTAL LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD.

, CHENNAI PROJECT REPORT

Submitted to the SCHOOL OF MANAGEMENT

In partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION By P.LOGANATHAN (Reg. No: 3511010353)

Under the guidance of Mrs.R.SHENBAGAVALLI, Asst. Professor

SRM SCHOOL OF MANAGEMENT SRM UNIVERSITY KATTANKULATHUR 603 203 MAY 2012

SRM School of Management SRM University SRM Nagar, Kattankulathur 603 203, Kancheepuram District, Tamil Nadu.

Bonafide certificate
Certified that this project report titled A STUDY ON FCL - TOTAL LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD., CHENNAI is the Bonafide work of Mr.P.LOGANATHAN, (Reg. No: 3511010353) who carried out the research under my supervision. Certified further, that to the best of my knowledge the work A STUDY ON FCL - TOTAL LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD., CHENNAI reported herein does not form part of any other project report of dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate. Submitted for the viva-voce examination held on -----------------------

---------------------------Mrs.R.SHENBAGAVALLI

----------------------------------Dr.JAYSHREE SURESH

Asst. Professor (Project Guide)

(Dean, MBA)

-----------------------------

External Examiner SRM School of Management SRM University SRM Nagar, Kattankulathur 603 203, Kancheepuram District, Tamil Nadu.

DECLARATION
I hereby declare that the project report entitled A STUDY ON FCL - TOTAL

LOGISTICS IN POTA GLOBAL LOGISTICS (INDIA) PVT. LTD., CHENNAI submitted to SRM School of Management in partial fulfillment of
the requirement for the award of the Degree of Master of Business Administration, is a record of the original research work done under the supervision and guidance of Mrs.R.SHENBAGAVALLI, SRM School of Management, SRM University, Chennai and that it has not formed the basis for the award of any degree / associate ship / fellowship of other similar title to any candidate of any university.

Place: Kattankulathur Date: LOGANATHAN.P

ACKNOWLEDGEMENT
I am conscious of my indebtedness to each and every individual who helped me in many ways in the preparation of this project. At the very outset, I wish to express my hearty gratitude to all those who extended their help, guidance and Suggestion and without their help it was not possible for me to complete this Project Report. I express my deposit and sincere thanks to our respected DEAN Mrs. JAYASHREE SURESH who has given me an opportunity to do this project. My profound gratitude is also due to Mrs.R.SHENBAGAVALLI, faculty guide for their valuable guidance and constant encouragement in successful completion of this project.

I am very much grateful for the co-operation and timely help extended to me by Mr. G. Vidhu Balan, Manager, Sales, Mr. Senthil, Manager - Operations in POTA Global Logistics (India) Pvt. Ltd, Chennai for giving me an opportunity to undergo this project. I thank my parents and friends for their love, affection and support which helped in the successful completion of this work.

 A Study on FCL Total Logistics

TABLE OF CONTENTS

S.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Executive Summary Introduction to the Concept Industry Profile Company Profile Objectives Operational Definitions Role of Shipper Role of CHA

Description

Page 01 02 06 11 15 16 22 23 49 52 78 83 83 74 88 94 95 101 102 103 104 107

Role of Freight Forwarder/Nvocc POTA Global Logistics Departments Role of Liner/Common Carrier Role of Clearing Agent Role of Consignee Role of Bank INCOTERMS Difference Between FCL & LCL Data Analysis & Interpretation Limitations Suggestions Conclusion Abbreviations Bibliography

 A Study on FCL Total Logistics

Executive Summary
In this project the main focus is on FCL (Full Container Load). This study is done in order to understand the whole process of an FCL export and import process. This study emphasizes the role of forwarder/NVOCC in the total logistics of FCL shipments. FCL: Defines the movement of cargo packed by the shipper or shippers agent and unpacked by the consignee or consignees agent. In this type of activity, it is not the Liner / NVOCC operators responsibility for the cargo as long as the ONE TIME SEAL fixed in the container is intact. This is mainly because the shipper undertakes the movement of Empty Container to the Factory Premises or to a CFS / ICD and undertakes the responsibility of all other formalities right from the unloading of cargo till off loading the container at the CY of the port upon completion of customs and other related formalities. In this project the flow chart of the FCL is explained with each supply chain parties role in the movement of cargo from shipper to consignee. Also this study highlights the areas where the FCL differs from LCL i.e. in terms of the logistical issues faced by the company in both type of shipments. A complete difference between FCL & LCL in each step of process is mentioned in this study. Data analysis of the obtained data from the company is done through statistical techniques and inferences are drawn from those analysis.

CHAPTER 1 INTRODUCTION TO CONCEPT

What is logistics?
Logistics is managing and controlling the flow of goods, energy, information and people from source of production to market place at lowest possible cost and in right time. This means in our context if we look at it, in an FCL the logistics involved is from where the container is deployed for the trade and from there the logistics process starts and lasts until the container is reached at the destination and then returned empty at the desired place .This also holds good for LCL. It involves integration of information, transportation, inventory, warehousing, material handling, and packaging .Here information flow between various supply chain parties is important ,then the transportation decisions that are to be made as per customer needs, then the inventory management is important from the equipment providers side so that there is no delay in getting boxes and slots in the carrier . The warehousing part becomes vital from the forwarders point where many consignments are containerized at warehouses or CFSs or ICDs in landlocked places .Sometimes cargo is stuffed into container at the shippers premises itself. Material handling and packaging are very important in stuffing a cargo into the container .Proper handling of cargo increases the safety of cargo adds more space to accommodate more cargo . Also there are customs and other safety aspects that are to be followed while stuffing the cargo and other protocols are also there that is to be followed for overseas destinations.

What is supply chain?

Supply chain integrates the key business process from end user through original suppliers that provides products, services and information that add value for customers. Although when we talk about FCL logistics it is nothing but Export/Import of goods. FCL means FULL CONTAINER LOAD of cargo which is destined to a particular consignee from the shipper. So the supply chain parties mainly involved here (FCL) are Forwarder, Carrier. But the underlying fact is without the shipper and consignee there is no trade going to happen so they also are important supply chain parties, then the transporters, warehouses, customs, CHA and any party involved in the shipment is a partner and information flow is very important for every partner in supply chain.

What is total logistics?

TOTAL LOGISTICS here emphasizes on the FCL shipments and the roles of each partner in the supply chain with core focus on the activities of a FORWARDER of a leading company .Also this study highlights some of the differences with LCL shipments i.e. what are all the process that differs, the marketing, the operation wise etc.

Supply chains involve many groups of trading partners, and logistics is the key to holding them together. Logistics is defined as the process of planning, implementing, and controlling the efficient flow and storage of goods and their related information. As global logistics become more demanding, and as the savings available through supply chain efficiency become more attractive, the outsourcing of procurement, distribution, and return logistics has become a common practice.

There are numerous factors that companies take into consideration when outsourcing and planning their supply chain activities. First, if a firm independently manages its own logistics, it has to divert attention from its core competencies and strengths. However, if the firm outsources some functions, such as warehousing, inventory management, or distribution, it is better equipped to focus on other tasks. It also benefits from having its goods handled, stored, and delivered professionally.

Second, when entering the market in a new geographic area, it is unlikely that a firm will be ware of the intricate details of business management within that region. These include local documentation and procedures that require regional expertise. For a firm to manage these activities from thousands of miles away would prove extremely taxing, and would require continuous updates of activities and IT support. Outsourcing logistics activities gives firms a global reach and helps them take advantage of external market opportunities immediately. FLPs can undertake various logistics tasks in the supply chain and in doing so add value to the product. These tasks usually include the freight forwarders traditional customs clearing and forwarding work, as well as services such as warehousing, distribution, inventory management, co-packing, labeling, repacking, weighing, and quality control. By providing these services, the FLP plays an essential role in domestic and international supply chains. Firms can outsource these tasks to the FLP, saving money and limiting geographic constrictions. The FLP can benefit the firm by reducing turnaround and transport times. In order to survive, FLPs must provide value-added services that comprise a significant portion of the customers total logistics costs. Quality, value-added service is based on consistently providing customers with ever-improving solutions to their supply chain needs. And supply chain participation is not an option for FLPsit has become necessary in an age when there is such limited value in simply facilitating the customs clearance process. Moving freight between supplier and consumer is not enough. It is entirely possible that, in some parts of the world, the freight forwarder as we knew him will be extinct in five to seven years. To survive, the freight forwarder must integrate his services into the entire supply chain system, making his expertise part of an integrated whole. The small forwarder who has not yet discovered a way to add value to the supply chain will be threatened by the entry of other competitors into the market. As major logistics providers, shipping lines and forwarders merge, fewer and fewer customers need a pure forwarder whose capacity is limited to clearing and forwarding tasks. While the freight forwarder is evolving into an FLP who provides value-added services, banks, shipping lines, trucking companies, terminal operators, and consultants are adding logistics services and freight forwarding to their lists of services provided. The primitive forwarder will not be able to compete with these flexible FLPs unless he actively integrates himself into a supply chain.

The difference between a primitive freight forwarder and an FLP is the value added services they provide.

Industrial Profile
Shipping & Logistics Industry

Shipping
Shipping is a global industry and its prospects are closely tied to the level of economic activity in the world. A higher level of economic growth would generally lead to higher demand for industrial raw materials, which in turn will boost imports and exports. The shipping market is cyclical in nature and freight rates generally tend to be volatile. Freight rates and earnings of the shipping companies are primarily a function of demand and supply in the markets. While demand drivers are a function of trade growth and geographical balance of trade (which determines the length of haul required), the supply drivers are a function of new ship building orders as well as scrapping of existing tonnage.

The global shipping industry can be broadly classified into wet bulk (like crude and petroleum products), dry bulk (like iron ore and coal) and liners. Under liners, it has containers, MPP and Ro-Ro types of vessels. There are various benchmarks that determine freight rates for these segments. The prominent amongst them are Baltic Freight Index, Baltic Handymax Index (for dry bulk segment) and World Scale (for tankers).

Key Points
Supply Determined by the addition to shipping capacity Demand Closely related to growth in world wide Barriers to entry Highly capital intensive and adequate cash flows required for funding working capital requirements. Moreover, expertise and technical knowhow are critical factors. Bargaining power of suppliers Diminishing with gradual increase in fleet supply and intense global competition Bargaining power of customers High bargaining power as competition is high in the industry Competition Competition is price based. However, companies with younger fleet command a premium

Financial year11
The effects of the downturn in the aftermath of the financial crisis continued to be felt by the shipping industry in FY11. This was both in the dry bulk and crude carrier segments. Freight rates remained under pressure as demand took a hit. On an average, while crude tanker rates declined by 15% by the end of FY11, dry bulk freight rates were almost flat. The crude and product tanker market experienced its worst period during the first quarter of FY11 (July to August 2010). On the other hand, the dry bulk segment recovered somewhat during this period. This was mainly on the back of high unforeseen demand for stockpiling of dry bulk commodities (like food-grains and metals) from China.

Prospects
In line with the revised higher estimates of global economic growth and upturn in global consumption, the shipping freight rates have posted some improvement in the current year. Anyways, the outcome of the ongoing European crisis as well as impact of the new-building deliveries would be critical for the future direction of shipping rates. While the European crisis is challenging the sustainability of the global economic recovery, thereby regenerating demand side concerns, these are overshadowed by a bigger threat of oversupply for the shipping industry. This looms large in the near future. Out of the existing order books in all the three segments of dry bulk, crude, and product tankers, most of the vessels are due for delivery in 2011 and 2012. This will add to the pressure on freight rates, and would thus impact the profitability of shipping companies. Apart from the Euro zone crisis, another concern for the shipping industry the cooling down of the Chinese economy, which can regenerate demand-side concerns. This combined with the supply-side pressures, may just worsen the outlook for the sector. The increase in Indias refining capacity and a pick-up in oil exploration activity globally will benefit the offshore shipping lines as demand for their services picks up. As a result of the commissioning of large domestic refining capacities, the import of crude is expected to jump in the future. This would benefit shipping majors. Under investment in earlier years, surge in Chinese growth and scrapping of vessels built in 1970s have all created conditions for a strong market for tankers, barring the periods of crises. Further, the gap in charter rates between single hull and double hull vessels is widening as more charterers prefer double hull tonnage and many states impose restrictions on single hull tonnage. In the coming years as single hull will be mandatorily required to be phased out, the demand for double bull tonnage will be strong.

Prospects of growth in the Shipping industry

Marine transport sector contributes over 0.2% to the countrys GDP at constant prices (1999 - 2000 prices). Transport sectors contribution to the GDP has been firming up over the last couple of years, mostly because of the growing economic activities in the country. Shipping industry plays a significant role in the Indian economy. India has 12 major and 187 minor/intermediate ports along its coastline of around 7,517km. The fleet strength at the end of December 2006 was 774 vessels with 8.42m Gross Registered Tonnage (GRT). Ports serve as the gateways to the international trade in India. Major ports in India together have handled 463.84m tonnes of cargo in 2006-07, a growth of 9.51% against the same period of the previous year. The petroleum-oil-lubricants (POL) accounted for 33.38% of the total traffic at major ports during April-March 2007, while iron ore constituted 17.37%, coal 12.98%, container traffic 15.84%, fertilizer 3.04%, and others 17.49%. According to the Planning Commission, Indias shipping fleet strength will be increased up to 15m GRT (as per the 3rd target) by the end of 2011-12, with an estimated investment of US$17.7 billion. The port throughput will increase up to 1,008m tones, growing at a CAGR of 10.96% from 2007-08 to 2011-12.

Logistics
Logistics is defined as the process of planning, implementing and controlling the efficient and effective flow, and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. The primary objective of logistics management is to effectively and efficiently move the supply chain so as to extend the desired level of customer service at the least cost. Thus, logistics management starts with ascertaining customers needs till their fulfilment through product supplies.

Prospects of Growth in the Logistics Industry

In years gone by, the traditional warehousing and logistics facility was located by railroad tracks, a water port, and/or freeways, usually in the least desirable parts of cities or large towns. This stereotype then faded as gigantic, state-of-the-art facilities began to sprout in more rural areas on the outskirts of transportation and population hubs. The World started beginning to see such facilities showing up in even less "traditional" areas. Modern warehouses now are being located in carefully manicured industrial parks that are sprouting as fast as the corn and wheat once did in these open spaces-often in out-of-theway places. Why the emphasis on such locations for logistics companies? Much of it is due to the great flux that the logistics industry has been undergoing in the first three years of the 21st century. Most of these changes are being driven by a growing trend in the manufacturing and retail sectors to form partnerships with companies to which they can outsource non-core logistics competencies-3PL providers. In turn, 3PL providers are continually looking to provide innovative supply chain solutions to customers by focusing on value-added capabilities, differentiating themselves from the competition. They focus on key objectives, such as implementing information technologies, instituting effective management processes, integrating services and technologies globally, and delivering comprehensive solutions that create value for 3PL users and their supply chains. This need to partner with customers and become more integrated into their supply chain processes has created the ancillary need to locate close to these customers. That isn't to say the need for easy access to transportation hubs and different modes of transportation won't continue to be important. But the above shift in business strategy, along with the advances in technology and enhanced communication, has opened the door for logistics facilities to operate effortlessly in a myriad of locations.

Profit warnings, share price pressures, mergers, reorganizations, relocations, disposals, painful layoffs and great geopolitical uncertainties can sweep away even the most comprehensive logistics strategies and thats despite outstanding management over many years. These are exceptionally difficult times and it has never been more important to connect logistics and freight planning to executive board thinking than now. Its easy to lose sight of the bigger picture in the rush to cut infrastructure cost and conserve cash. Hopefully organization succeed in protecting the business, satisfying shareholders and analysts, but what about capacity and flexibility, morale and momentum? Own passion for running the race matters most of all in a downturn, when people are insecure, see only savage cost savings, and loyalty is tested. The corporations future will be dominated by six factors, or faces of a cube, spelling F U T U R E.

COMPANY PROFILE OF POTA GLOBAL LOGISTICS INDIA PVT. LTD.

POTA GLOBAL LOGISTICS

About Us
POTA GLOBAL LOGISTICS is result of synchronization of positive energies between POTA. Australia and Indian counterparts led by team of professionals who have vast experiences in running and supporting supply chains of corporations all across the globe. Across the key members of the management we have over 15 years of experience in all the spheres of the conceptualizing, executing and sustaining an effective logistics management system.

Our Vision
POTA GLOBAL LOGISTICS INDIA PVT LTD is an enterprise to provide our local suppliers and overseas buyers a logistics conduit which has nearly zero defects. Our dedicated presence in origin and destination is a part of our strategy to be in control of the physical movement goods as well as seamless flow of information. Our commitment to our customers is to provide the best possible routes, deliveries at most competitive rates for their inbound and out bound cargo.

Our Presence
POTA GLOBAL LOGISTICS INDIA PVT LTD has offices at Chennai, Bangalore, Mumbai, Cochin, Hyderabad, Tuticorin, Tirupur, Cochin and Coimbatore. Through these offices we cater to the All India exporter and Importer communities requirement of end to end services from various Inland Container Depots (ICD) for FCL, Container Freight Station (CFS) for LCL cargo and the International Airports for the Air traffic. Through our JV Partners we are well represented in the Australia. Though the company is young we already have concrete plans to have offices or representations in all major business areas of the world.

Services Offered By Us
Air Export and Import ( Air Port to Air Port and Door to Door ) Ocean Export and Import ( Sea Port to Sea Port and Door to Door ) Air / Ocean Export and Import Import and Export Groupage Export and Import Custom Clearance ( Air and Ocean ) STP Clearance

Our Resources
Highly trained Manpower who have hands on experience of handling broad spectrum of commodities for export and Import. Own offices, warehouses and intercity transportation facilities Highly automated operations based on state of art IT infrastructure and communication equipments. In house capabilities to initiate organize, handle charters or special requirements.

Features of our capabilities in handling cargo through Sea, Air or Road We offer end to end services and time bound guaranteed Door to Door delivery for your cargo. The cargo can be transported via Air, Sea or Road. We are committed to be at your service 9 AM to 10 PM, Monday to Saturday. In case of urgent shipments we organize and execute shipments under MOT on all holidays. Guidance on government regulations and requirements on Export and Import Preparation of Export and Import documentation and the associated paperwork inclusive of required certificates and endorsements Guidance and execution if required, in case of any special Handling, creation of Packing containers and site supervision. This is inclusive of stuffing and de-stuffing at our or customers warehouse, at ports and at dry ports (ICD) Providing the ideal carrier, based on the requirements to ensure the cargo reaches destination on time at the best possible price. Our rates can match the best in the industry. Adequate storage space in form of Insured warehouses having modern amenities to facilitate measurements, packing and repacking and security to the valuable merchandise. Transportation arrangement for pickup and delivery round the clock Professionals handle the clearance of your documents and goods through the port authority (air/sea) , customs and finally hand over to the carrier in case of export and get released in case of Imports

Well documented procedures for operations which are automated to the extent possible.

Reporting through Fax, Email on the Flight and vessel status till shipment reaches the destination.

Tracking the cargo from Origin to the destination or vice-versa till it reaches its final destination and updating all concerned with the current status.

Delivery of the Post shipment documents to the vendors along with our debit note for the service rendered.

A very well managed service at delivery with a choice of Broker and Deconsolidating agent who ensures the last point delivery.

We Believe: The Customer Is Always Right

Objectives
To study about FCL total logistics To study about each supply chain partners. To study exclusively about freight forwarders/ NVOCCs. To conduct data analysis To compare import and export FCL shipments

To highlight FCL & LCL differences.

OPERATIONAL DEFINITIONS
Flow chart of the FCL
SHIPPER

CHA

FORWARD INCOTERMS ER/NVOCC LINER CLEARING AGENT CONSIGNEE BANK

Export
An export is any goods or commodities, shipped or otherwise transported out of a country, province, and town to another part of the world in a legitimate fashion, typically for use in trade or sale. Export products or services are provided to foreign consumers by domestic producers.

Export Order Processing Proforma to buyer

A pro forma invoice is much the same as a commercial invoice which, when used in international trade, represents the details of an international sale to customs authorities. A pro forma invoice is presented in the place of a commercial invoice when there is no sale between the sender and the importer, or if the terms of the sale between the seller and the buyer are such that a commercial invoice is not yet available at the time of the international shipment. A pro forma invoice is required to state the same facts that the commercial invoice would and the content is prescribed by the governments who are a party to the transaction. This is sent to the buyer in the first step.

Negotiation/order confirmation
The seller and buyer gets into negotiations for the business transactions and then the buyer gives order confirmation to the shipper. The negotiations takes place for the quality of cargo the specifications of cargo, the packing of cargo etc. The responsibilities of the shipper and consignee are also determined by the INCOTERMS. International Commercial Terms is a universally recognized set of definitions of International trade terms, such as FOB, CFR and CIF developed by the International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who

will be responsible for the freight, cargo insurance and other costs and risks. Under the INCOTERMS 2000, the international commercial terms are grouped into E, F, C and D, designated by the first letter of them.

Intimationtofactory
After this it is intimated to the factory so that they can get ready for production of the goods by acquiring raw materials and plan them accordingly for the shipment.

Production
Here the actual production of goods as specified by the buyer. The company should take care that they produce goods as per the requirements of the buyer or else it may be rejected by the buyer and also follow standards as required in production and also in packing of those goods.

Movementofgoods
This is where the producer generally assigns a third party to transport those goods to a warehouse or CFS. After this the goods are then stuffed to a container .But in the case of LCL the forwarder collects from many shippers and brings them to a common warehouse or CFS and performs stuffing. This is done by the forwarder at a specific date of stuffing planning; there is a lack of flexibility in LCL.

Customs processing
All the customs processing are done by the CHA and necessary documents are prepared by them for shipment.

Bank processing
The shipper after receiving the B/L does the bank processing to get money from the buyer. This is generally done through a Letter of Credit transaction.

Incentive claiming
There are various incentive schemes for exports that are provided by the government in order to encourage exports and bring foreign revenue and also for the exporters to be competitive in price in the global trade.

Export-Process flow-at factory-fcl load:

Receipt of intimation from production the material readiness Line choosing- based on transit sensitivity Intimating cha/transporter to move the box to factory. Intimating excise the stuffing plan Loading/inspection/documentation Sealing of the container. Cha files the shipping bill parallel Sealed container go to cfs for customs inspection Customs inspection is completed and goes to container terminal Offloading at container terminal Loading on the feeder vessel Confirmation on mother vessel loading Documents to bank Confirming to customer the eta Incentive claiming.

IMPORTS
Goods, from other countries, that are coming into our country. IMPORT PROCESS

Placementoforder
First the order is placed by the buyer and here the shipper plans accordingly his production schedules. These production schedules are determined before in hand according to the vessel schedules and the buyers choice of getting the goods.

OpeningofL/coradvancepayment
The Importer or the buyer generally opens the letter of credit account at his place and intimates the shipper and he opens account at his place. Sometimes some buyers give advance payments to facilitate shippers in their production.

Movement of goods and intimation by supplier

The goods are transported to the buyer and he is intimated the same.

Receipt of copy/original documents

Generally the shipper transfers the required documents to the buyer so that he can take delivery of the cargo at his place. Depending upon the BL type such as surrendered or seaway bill or released the documents will be sent in original or copy.

Filing of import general manifest by liners

The liners files the import general manifest which contains all the details of all containers that are imported or brought into the territory are mentioned. This is also filed by the forwarders or Nvoccs who becomes the shipper from the liners perspective and these forwarders or Nvoccs help in forwarding the cargo for the actual shippers and clears the cargo for consignees.

Filing of bill of entry

This is a document that is filed with the customs in order to obtain clearance and take delivery of cargo. This is done by the CHA.

Assessment of bill of entry

This is done by the customs authorities in assessing the duties that are to be paid for the imported cargo.

Payment of duty
After assessment the amount of duty that is to be paid for the cargo is paid to the government.

Inspection of the material at cfs/port

The customs authorities inspect the inbound cargo whether the cargo is legal and the cargo is allowed to be imported by the government. They also verify the cargo details as filed in the bill of entry and IGM.

Pass out order

Pass out order is given by the customs to move the cargo to their factories or warehouse etc.

Delivery from cfs/port to factory/warehouse

After the pass out order the container is transported out of the CFS to the factory or warehouse of the buyer or the actual consignee.

ROLE OF SHIPPER
Shipper
Shipper is one who generally exports the cargo but in shipping this term varies at different perspectives. Shipper is one who holds the cargo with him. He may either manufacture the cargo according to the consignees needs, or he may also acquire goods locally from different manufacture and export those products.

ROLE OF CHA
CHA (Customs House Agent)
A Custom House Agent is somebody entitled to act upon a companys behalf on actions involving the import and export of goods. The phrase is most commonly used in India. There such agents must be licensed under section 146 of the Customs Act. The purpose of a custom house agent is to tackle the problem that management of many businesses simply does not have the resources to personally deal with import and export issues. This is a particular concern given that India is traditionally a trading nation. There is also a high degree of bureaucracy in Indian business. The laws governing a custom house agent specifically state that any action they take is treated legally as if it was made by the company itself. In legal terms, the agent is treated as if they were the legal owner of the goods they deal with. One exception to this is that a custom house agent cannot normally be held personally responsible for any duty that is not paid by the company. A custom house agent must be licensed by the local Commissioner of Customs. This is a two stage process, involving an initial temporary license. Application is only open to university graduates with legal employment status and sound finances.

To be eligible to become a custom house agent, a candidate must have experience working in customs-related issues. This experience must be at least a set amount of time. In most cases this is three years, but a commissioner may reduce this to one year if the candidate makes an acceptable case to do so, in writing. Once somebody has a temporary license, they have one year to become a regular license holder. This is done by passing an examination, which is held twice a year. If a candidate has not passed the examination by the end of their first year, they may be granted a sixmonth or one-year extension to allow further attempts. Such extensions are only granted to candidates who can show they have carried out a set level of work during their time as a temporary license holder. Candidates are allowed a maximum of three attempts at passing the examination.

The image part with relationship ID rId16 was not found in the file.

Export procedure

ROLE OF EXPORTER (ASSISTED BY CHA) Procedures to be followed by Exporter

Every exporter should take following initial steps: 1. 2. 3. Obtain BIN (Business Identification Number) from DGFT. It is a PAN based number Open current account with designated bank for credit of duty drawback claims Register licenses / advance license / DEPB etc. at the customs station, if exports are under Export Promotion Schemes Exporter has to submit shipping bill for export by sea or air and Bill of Export for export by road. Goods have to be assessed for duty; even if no duty is payable for most of exports, as Nil Duty assessment is also an assessment.

ROLE OF CHA IN EXPORT PROCESS: EXPORT PROCEDURE: Nostoppageofexportconsignment

Exports are vital for our economy. Any stoppage in export consignment means loss of export orders to the exporter and loss of foreign exchange to the country. Hence, it has been provided that movement of export consignment will not be interrupted and no export consignment shall be withheld for any reason whatsoever. In case of any doubt, customs authorities may ask for an undertaking that the export is on sole responsibility of the exporter.

Entry Outward
The vessel should be granted Entry Outward. Loading can start only after entry outward is granted under (Section 39) of Customs Act. Steamer Agents can file application for entry outwards 14 days in advance so that intending exporters can start submitting Shipping Bills. This ensures that formalities are completed as quickly as possible and loading in ship starts quickly.

Loading with permission

Export goods can be loaded only after Shipping Bill or Bill of Export, duly passed by Customs Officer is handed over by Exporter to the person-in-charge of conveyance. In case of baggage and mail bags, shipping bill is not necessary, but permission of Customs Officer is required (section 40).

Export Manifest
As per section 41, an Export Manifest/Export Report in prescribed form should be submitted before departure. The report is popularly called as Export General Manifest - EGM. The details required are similar to import manifest. Such manifest/report can be amended or supplemented with permission, if there was no fraudulent intention. Such report should be declared as true by the person-in-charge signing the export manifest. This report is not required if the conveyance is carrying only luggage of occupants.

Shipping Bill to be submitted by Exporter

Shipping Bill and Bill of Export Regulations prescribe form of shipping bills. It should be submitted in quadruplicate. If drawback claim is to be made, one additional copy should be submitted. There are five forms: (a) Shipping Bill for export of goods under claim for duty drawback - these should be in Green color (b) Shipping Bill for export of dutiable goods - this should be yellow color

(c) Shipping bill for export of duty free goods - it should be white color (d) Shipping bill for export of duty free goods ex-bond - i.e. from bonded store room - it should be pink color (e) Shipping Bill for export under DEPB scheme - Blue color. The shipping bill form requires details like name of exporter, consignee, Invoice Number, details of packing, description of goods, quantity, FOB Value etc. Appropriate form of shipping bill should be used. Relevant documents i.e. copies of packing list, invoices, export contract, letter of credit etc. are also to be submitted. In case of excisable goods, from ARE-1 prepared at the time of clearance from factory should also be submitted. Customs authorities give serial number to shipping bill, when it is presented.

Excise formalities at the time of Export

If the goods are cleared by manufacturer for export, the goods are accompanied by ARE1 (earlier AR-4). This form should be submitted to customs authorities. The Customs Officer certifies that the goods under this form have indeed been exported. This form has then to be submitted to Maritime Commissioner for obtaining proof of export. The bond executed by Manufacturer-exporter with excise authorities is released only when proof of export is accepted by Maritime Commissioner or Assistant Commissioner, where bond was executed.

Duty drawback formalities

If the exporter intends to claim duty drawback on his exports, he has to follow prescribed procedures and submit necessary papers. The procedures are discussed in the chapter on Export Incentives'. He has to make endorsement of shipping bill that claim for duty drawback is being made. If he fails to do so due to genuine reasons, Commissioner of Customs can grant exemption from this provision. [Provision to rule 12(1) (a) of Duty Drawback Rules].

G R / SDF / SOFTEX Form under FEMA - Reserve Bank of India has prescribed GR / SDF form under FEMA. G R stands for Guaranteed Receipt form, while SDF stands for 'Statutory Declaration Form). SDF form is to be used where shipping bills are processed electronically in customs house, while GR form is used when shipping bills are processed manually in customs house.

Other documents required for export

Exporter also has to prepare other documents like (a) Four copies of Commercial Invoice (b) Four copies of Packing List (c) Certificate of Origin or pre-shipment inspection where required (d) Insurance policy (e) Letter of Credit (f) Declaration of Value (g) Excise ARE-1/ARE-2 form as applicable (h) GR / SDF form prescribed by RBI in duplicate (i) Letter showing BIN Number. RCMC certificate from Export Promotion Council Various Export Promotion Councils have been set up to promote and develop exports. (E.g. Engineering Export Promotion Council, and Apparel Export Promotion Council, etc.) Exporter has to become member of the concerned Export Promotion Council and obtain RCMC - Registration cum membership Certificate.

Check in customs
Document submitted is processed by customs authorities, and following are checked Value and classification of goods under drawback schedule in case of drawback shipping bills Export duty / cess if applicable Advance License shipping bills are checked to ensure that description in invoice and final product specified in Advance License matches. If necessary, samples may be drawn and assessment may be done after visual inspection or testing Exportability of goods under EXIM policy and other laws - Some exports are totally prohibited under various Acts e.g. items restricted or prohibited under Foreign Trade (Regulation) Act; antiques; art treasures; Arms; narcotics etc. Some items like tea, coffee and coir products can be exported only against authorization/license under respective Acts.

Examination of goods before export

After shipping bill is passed by export department, the goods are presented to shed appraiser (exports) in dock for examination. Goods will be examined by examiner. This inspection is necessary (a) to ensure that prohibited goods are not exported (b) goods tally with description and invoice (c) duty drawback, where applicable, is correctly claimed.

Let Export Order by Customs Authorities

Customs Officer will verify the contents and after he is satisfied that goods are not prohibited for exports and that export duty, if applicable is paid, will permit clearance (Section 51) by giving let ship or let export order. GR-1, ARE-1, octroi papers, quota certification for export etc. are also signed. Exporters copy of shipping Bill, GR-1, and ARE-1 etc. duly certified are handed over to exporter or CHA. Drawback claims papers are also processed.

Processing under EDI system

Under EDI system, declarations in prescribed form are to be filed through Service Centre of customs. After verification, shipping bill number is generated by the system, which is endorsed on printed checklist generated for verification of data. Goods are inspected at docks on the basis of printed check list. All documents are submitted to Customs Officer along with checklist. If goods and documents are found in order, let export order is issued. Then two copies of Shipping Bill are generated one customs and other exporters copy. Exporters copy is generated only after EGM (Export General Manifest) is submitted by shipping agent. These are signed by CHA and customs officer and then by Appraiser. SDF, ARE-1, control papers, quota certification for export etc. are also signed. Exporters copy of Shipping Bill, SDF, ARE-1 etc. duly signed are handed over to exporter or CHA.

Conveyance to leave on written order

The vessel or aircraft which has brought imported goods or which carry export goods cannot leave that customs station unless a written order is given by Customs Officer. Such order is given only after (a) export manifest is submitted (b) shipping bills or bills of export, bills of transshipment etc. are submitted (c) duties on stores consumed are paid or payment of the same is secured (d) no penalty is leviable (e) export duty, if applicable, is paid. Such permission is not required if the conveyance is carrying only luggage of occupants.

Other Customs Procedures

Besides the aforesaid procedures, various other procedures have been prescribed. These are mainly to be followed by the person in charge of conveyance.

Boat Notes
If the vessel has to unload only a small cargo, it may not spend time in having berth in the port. If the small cargo is to be sent to shore, it may be loaded in a small boat and sent to shore. As per section 35, such small boat must be accompanied by a Boat Note. Boat Notes Regulations provide that such Boat Notes will be issued by Customs Officer. It will be maintained in duplicate and should be serially numbered. Boat Note should be in prescribed form. In case of export, if small export cargo is to be loaded in ship through small boat, no Boat Note is required if the cargo is accompanied by the Shipping Bill, otherwise, Boat Note is required. Boat Note is also required for transshipment of cargo, i.e. transfer from one ship to another or for re-shipment.

Transit Goods
Section 53 provide that any goods imported in any conveyance will be allowed to remain on the conveyance and to be transited without payment of customs duty, to any place out of India or any customs station. However, all these goods must be mentioned in import manifest or import report submitted by person in charge of conveyance. Such goods should not be prohibited goods under section 11 of Customs Act. [The conveyance may be vehicle, ship or aircraft]. After transit, the goods may go to another customs station. On arrival at customs station, the goods will be liable to customs duty as if it is first importation in India. - Section 55.

Transshipment of Goods
Goods imported in any customs station can be transshipped without payment of duty, u/s 54 of Customs Act. Transshipment means transfer from one conveyance to another. [The conveyance may be vehicle, ship or aircraft]. Such transshipment may be to any major port or airport in India. The goods can be transshipped to any other customs station in India if customs officer is satisfied that the goods are bona fide intended for transshipment to any customs station. The facility is available at all customs ports and Inland Container Depots (ICDs). Goods to be transshipped must be specified in Import Manifest or Import report and a Bill of Transshipment should be submitted to Customs Officer. In case of goods being transshipped under an international treaty or bilateral agreement between Government of India and Government of a foreign country, a Declaration of Transshipment shall be submitted instead of Bill of Transshipment. Such goods should not be prohibited goods under section 11 of Customs Act. The goods should be sealed during transshipment by customs officer. A bond has to be executed for the purpose. After execution of bond, a certificate from customs officer has to be submitted within one month that goods have been properly transferred [Goods Imported (Conditions of Transshipment) Regulations, 1995]. On arrival at customs station, they will be liable to customs duty as if it is first importation in India (Section 55).

Transit and Transshipment

Distinction between transit and transshipment is that in 'transit' goods continue to be on same vessel, while in transshipment, goods are transferred to another vessel / vehicle. Hence, procedures are also different.

Coastal goods
A coastal goods means goods transported from one port in India to another port in India, but does not include imported goods. Thus, a coastal goods means, goods taken by ship from one Indian port to another. No export or import is involved, but control is necessary to ensure that coastal goods are not diverted illegally for export.

Loading of coastal goods

The Consignor should submit bill of coastal goods to Customs Officer (section 93). Form of the bill has been prescribed. These will be loaded by master of vessel only after bill of coastal goods is passed (section 93). Master of Vessel will carry an Advice Book where entries will be made by Customs Officer. This Advice Book has to be presented for inspection of Customs Officers, if called for. After loading, the vessel can leave only after obtaining written order from Customs Officer. As per notification No 15/98-NT dated 27.2.1998, exemption has been granted for delivery of 'Advice Book' at each port of call. However, the 'Advice Book' will have to be submitted for inspection on board of vessel, when called for.

Unloading of coastal goods

Unloading of coastal goods should be done only at Customs Port or coastal port appointed by CBEC under section 7 of Customs Act. On arrival, all bills relating to goods which are to be unloaded will be delivered to Customs Officer. Unloading can be done only after obtaining permission from Customs Officer. Customs Officer can inspect goods and ask for questions and documents relating to goods. Goods will be unloaded at approved place under supervision of Customs Officer.

ROLE OF CHA IN IMPORT Receiving Documents

Usually a job starts with receiving documents from the consignee. The documents include the following

a) Bill of lading
Shipment of the goods usually evidenced in a document called bill of lading. It is defined as a receipt for goods shipped on board on ship, signed by the person or his agent who contracts to carry them, and stating the terms on which the goods were delivered to and received by the ship.

b) Commercial Invoice
An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms.

Flowchartofimportprocess
The image part with relationship ID rId17 was not found in the file.

The buyer has a maximum amount of days to pay these goods and are sometimes offered a discount if paid before.

c) Packing List
Packing list will describes how the cargo is being packed and what contains in a particular packet.
d)

Certificate of Origin
A Certificate of Origin (often abbreviated to CO or COO) is a document used in international trade. It traditionally states from what country the shipped goods originate, but "originate" in a CO does not mean the country the goods are shipped from, but the country where their goods are actually made.

e)

Health Certificate
It is generally applicable for consumable goods, chemicals.

Job Number
Job number is allocated based on air or sea cargo. The following are required to allocate job no 1) Flight/Vessel Number 2) ETA (Estimated Time of Arrival) 3) Description of the cargo 4) Invoice Number & date 5) Bill of lading Number & date 6) No. of Packages & weight 7) Description of the cargo

Customs Station
Imported goods are permitted to be unloaded only at specified places. Similarly, goods can be exported only from specified area. In view of this, definitions of Customs Station are important. Customs area means all area of Customs Station and includes any area where imported goods or export goods are ordinarily kept pending clearance by Customs authorities. Thus, Customs Area could include some area even outside the Customs Station. Customs Station means a) Customs port b) Inland container depot c) Customs airport and d) Land customs station. Section 7 of Customs Act empowers CBEC (Board) to appoint * Customs ports * Customs airports * Places for inland container depots * Coastal ports. These are appointed by issuing a notification. Section 8 authorizes Commissioner of Customs to approve proper places in any customs port, customs airport or costal port for unloading and loading of goods or for any class of goods and specify the limits of customs area. Thus, the place (city / town / village etc.) is approved by CBEC, while exact location within that city / town / village is approved by Commissioner of Customs.

Bill of Entry
A bill of entry is a document filed with customs for the purpose of clearance of export or import cargo. It will have the description of goods which are being imported or exported. The bill of entry is examined by customs officials to confirm that the contents of a shipment conform to the law, and to determine which taxes, tariffs, and restrictions may apply to the shipment. This document must be prepared by the importer or exporter, with many companies hiring a clerk specifically to handle the process of preparing bills of entry. A typical bill of entry includes a description of the goods in the shipment, including details and the quantity of the goods, along with an estimate of their value.

Customs officials reserve the right to inspect the shipment to determine whether or not it is consistent with the bill of entry, and discrepancies can be grounds for legal proceedings. Once a bill of entry has been reviewed and the shipment has been inspected, it can be cleared for sale or transfer. If there is a problem, customs may opt to confiscate the goods. Many nations have specific laws about how bills of entry should be formatted and presented. It is important to have accurate documentation, or goods can be held up in customs. This can cause an inconvenience in some cases, and spoilage or destruction of the goods in others; a shipment of fruit, for example, will not hold up through a lengthy retention by customs while details of the shipment are worked out. Companies keep copies of their bills of entry on record as part of their financial paperwork; they need to be able to track the movement of shipments. These forms are also used by customs officials to track the type of goods being moved over their borders, and in the case of objects with import and export quotas, to make sure that these quotas are not exceeded. This paperwork is also used in the preparation of statistics which are designed to shed light on a nation's economic health and trade balance with other nations.

Types of Bill of Entry

Bills of Entry should be of one of three types. Out of these, two types are for clearance from customs while third is for clearance from warehouse.

Bill of entry for home consumption

This form, called Bill of Entry for Home Consumption, is used when the imported goods are to be cleared on payment of full duty. Home consumption means use within India. It is white colored and hence often called white bill of entry.

Bill of entry for warehousing

If the imported goods are not required immediately, importer may like to store the goods in a warehouse without payment of duty under a bond and then clear from warehouse when required on payment of duty. This will enable him to defer payment of customs duty till goods are actually required by him. This Bill of Entry is printed on yellow paper and often called Yellow Bill of Entry. It is also called Into Bond Bill of Entry as bond is executed for transfer of goods in warehouse without payment of duty.

Bill of entry for ex-bond clearance

The third type is for Ex-Bond clearance. This is used for clearance from the warehouse on payment of duty and is printed on green paper. The goods are classified and value is assessed at the time of clearance from customs port. Thus, value and classification is not required to be determined in this bill of entry. The columns in this bill of entry are similar to other bills of entry. However, declaration by importer is not required as the goods are already assessed.

Rate of duty for clearance from warehouse

It may be noted that rate of duty applicable is as prevalent on date of removal from warehouse. Thus, if rate has changed after goods are cleared from customs port, customs duty as assessed on yellow bill of entry and as paid on green bill of entry will not be same.

IGM
IGM stands for Import General Manifest, is the declaration to be filed by the shipping lines with the designated officer of Customs. Every ship which enters Indian waters with the intention of discharging cargo is statutorily bound to deliver this document under section 30 of the Customs Act. Person in charge of the vessel is required to file this document declaring the truthfulness of contents within 24 hours of the arrival of the vessel. IGM contains the application for entry inward along with the general declaration, cargo declaration and ship stores declaration of particular goods to be unloaded from the cargo. The import manifest in case of vessel or aircraft is required to be submitted prior to arrival of a vessel or aircraft. Import report (in case of vehicle) has to be submitted within 12 hours of arrival at the customs station. If the report / manifest could not be submitted within prescribed time, person-in-charge or any person specified as responsible by a notification is liable to penalty up to Rs 50,000. Such penalty will not be imposed if the excise officer is satisfied that there was sufficient cause for the delay [Section 30(1)]. IGM can be submitted electronically through EDI facility. Normally, the Agents submit the Import Manifest before arrival, so that maximum possible formalities are completed before vessel or aircraft arrives. This also enables importers to file Bill of Entry in advance.

Grant of Entry Inwards by Customs Officer

Unloading of cargo can start only after Customs Officer grants Entry Inwards. Such entry inwards can be granted only when berthing accommodation is granted to a vessel. If there is heavy congestion at port, shipping berth may not be available and in such case, Entry Inwards cannot be granted. This date is highly relevant for determining rate of customs duty applicable.

Mention of BIN on Bill of Entry

A BIN (Business Identification Number) is allotted to each importer and exporter w.e.f. 1.4.2001. It is a 15 digit code based on PAN of Income Tax (PAN is a 10 digit code). [Earlier an IEC (Import Export code) number issued by DGFT was required to be mentioned on Bill of Entry].

Filing of Bill of Entry

Normally, Bill of Entry is filed by CHA on behalf of the importer. Customs work at some ports has been computerized. In that case, the Bill of Entry has to be filed electronically, i.e. through Customs EDI system through computerization of work. Procedure for the same has been prescribed vides Bill of Entry (Electronic Declaration) Regulations, 1995.

Documents to be submitted by Importer

Documents required by customs authorities are required to be submitted to enable them to a) Check the goods b) Decide value and classification of goods and c) To ensure that the import is legally permitted. The documents that are essentially required are (i) (ii) (iii) (iv) (v) (vi) (vii) Invoice Packing List Bill of Lading / Delivery Order GATT declaration form duly filled in Importers / CHAs declaration duly signed Import License or attested photocopy when clearance is under license Letter of Credit / Bank Draft wherever necessary

(viii) Insurance memo or insurance policy

(ix) (x) (xi) (xii) (xiv) (xv)

Industrial License if required Certificate of country of origin, if preferential rate is claimed Technical literature. Test report in case of chemicals Split up of value of spares, components and machinery No commission declaration.

(xiii) Advance License / DEPB in original, where applicable

A declaration in prescribed form about correctness of information should be submitted.

Electronic submission under EDI system

Where EDI system is implemented, formal submission of Bill of Entry is not required, as it is generated in computer system. Importer should submit declaration in electronic format to Service Centre. A signed paper copy of declaration for non-reputability should be submitted. Bill of Entry number is generated by system which is endorsed on printed check list. Original documents are to be submitted only at the stage of examination.

Delivery Order (D/O)

In the mean course of time, a document which is necessary to take the delivery of the cargo from CFS, Warehouse or from the yard which is D/O. D/O is the abbreviation for the term Delivery Order. A delivery Order is a document from a consignor, a shipper, or an owner of freight which orders the release of the transportation of cargo to another party. Usually the written order permits the direct delivery of goods to a warehouseman, carrier or other person who in the course of their ordinary business issues warehouse receipts or bills of lading. According to the Uniform Commercial Code (UCC) a delivery order refers to an "order given by an owner of goods to a person in possession of them (the carrier or warehouseman) directing that person to deliver the goods to a person named in the order."

A Delivery Order which is used for the import of cargo should not to be confused with delivery instructions. Delivery Instructions provides "specific information to the inland carrier concerning the arrangement made by the forwarder to deliver the merchandise to the particular pier or steamship line."

Assessment of Duty and Clearance

The documents submitted by importer are checked and assessed by Customs authorities and then goods are cleared. Section 2(2) defines assessment as follows Assessment includes provisional assessment, reassessment and any order of assessment in which the duty assessed is Nil. Thus, assessment includes Nil assessment.

Enrolling Bill of Entry

Bill of Entry submitted by importer or Customs House Agent is cross-checked with Import Manifest submitted by person in charge of vessel / carrier. It is noted if the description tallies. Noting really means taking down the record by customs officer. This date is relevant for determining rate of customs duty. Serial number is given in the import section. Otherwise, it is returned for clarifications. In case of EDI system, noting is done by the system itself which also generates bill of entry number. Date of presentation of bill of entry is highly relevant and the rate of duty as applicable on this date will be considered for calculating the duty payable. Bill of Entry is accepted only after proper scrutiny viz., import manifest and various declarations given in bill of entry and attached documents like invoice, bill of lading etc. If such documents are not attached, the authorities can refuse to accept the Bill of Entry, and hence submission of such incomplete Bill of Entry cannot be taken as date of presentation of Bill of Entry

Prior Entry of Bill of Entry

After the goods are unloaded, these have to be cleared within stipulated time - usually three working days. If these are not so removed, demurrage is charged by port trust/airport authorities, which is very high. Hence, importer wants to complete as many formalities as possible before ship arrives. Proviso to Section 46(3) of Customs Act allows importer to present bill of entry up to 30 days before expected date of arrival of vessel. In such case, duty will be payable at the rate applicable on the date on which Entry Inward is granted to vessel and not the date of presentation of Bill of Entry, but rate of exchange will be as prevalent on date of submission of bill of entry.

Assessment of Customs duty

Section 17 provides that assessment of goods will be made after Bill of Entry is filed. Date stamp of receipt is put on the Bill of Entry and then it is sent to appraising department either manually or electronically. There are various Appraising groups for different Chapter headings. Each group is under an Assistant/Deputy Commissioner. Group consists of Examiners and Appraisers.

Appraising the goods

Appraiser has to a. Correctly classify the goods b. decide the Value for purpose of Customs duty c. Find out rate of duty applicable as per any exemption notification and d. Verify that goods are not imported in violation of any law.

He can call for any further documents that may be required for assessment. If he is of the opinion that goods have to be examined for appraisal, he will issue an examination order, usually on the reverse of Bill of Entry. If such order is issued, the Bill of Entry is presented to appraising staff at docks / air cargo complexes, where the goods are examined in presence of importers representative. Assessment is finalized after getting the report of examination.

Valuation of goods
As per rule 10 of Customs Valuation Rules, the importer has to file declaration about full 'value' of goods. If the assessing officer has doubts about the truth and accuracy of 'value' as declared, he can ask importer to submit further information, details and documents. If the doubt persists, the assessing officer can reject the value declared by importer [Rule 10A (1) of Customs Valuation Rules]. If the importer requests the assessing officer has to clarify the doubts in the value declared by importer [Rule 10A (2)]. If the value declared by importer is rejected, the assessing officer can value imported goods on other basis e.g. value of identical goods, value of similar goods etc. as provided in Customs Valuation Rules. [This amendment has been made w.e.f. 19.2.98, as per WTO agreement. However, it has been held that burden of proof of under valuation is on department]. Assessing Officer should not arbitrarily reject the declared value and increase the assessable value. He should follow due process of law and issue appealable order.

Approval of assessment
The assessment has to be approved by Assistant Commissioner, if the value is more than Rs one lakh. (In cases covered under fast track clearance for imports, appraiser is also authorized to approve valuation). After the approval, duty payable is typed by a pinpoint typewriter so that it cannot be tampered with. Assessing Officer should sign in full in Bill of Entry followed by his name, preferably by rubber stamp.

EDI assessment
In the EDI system, the cargo declaration is transferred to assessing officer in the groups electronically. Processing is done on the screen itself. All calculations are done by the system itself. If assessing officer needs clarification, he can raise a query. The query is printed at service centre and importer replies through service centre. Facility of teleenquiry about status of documents is provided in major customs stations. Under EDI, normally, documents are inspected only after assessment. After assessment, copy of Bill of Entry is printed at service centre. Final Bill of Entry is printed only after Out of Charge order is given by customs officer.

Amendment to Documents
Importer, exporter or Person In charge has to submit various documents to customs authorities like Bill of Entry, Import Manifest, Export Manifest etc. Sometimes, it may become necessary to amend the document due to various reasons like change in classification, clerical mistake in document, change in unloading / loading plan of vessel etc. In such case, permission to amend these documents has to be obtained from customs authorities [Section 149]. Such permission can be given if there are no fraudulent intentions. In case of bill of entry, shipping bill or bill of export, it can be amended after clearance only on the basis of documentary evidence which was in existence at the time the goods were cleared, warehoused or exported, and not on basis of any subsequent document.

Payment of customs duty

After assessment of duty, necessary duty is paid. Regular importers and Custom House Agents keep current account with Customs department. The duty can be debited to such current account, or it can be paid in cash/DD through TR-6 challan in designated banks

After payment of duty, if goods were already examined, delivery of goods can be taken from custodians (port trust) after paying their dues. If goods were not examined before assessment, these have to be submitted for examination in import shed to the examining staff. After shed appraiser gives out of charge order, delivery of goods can be taken fromcustodian.

First and second system of assessment

There are two systems of assessment. Section 17(2) provides for assessment after examination of goods and section 17(4) provides for assessment on basis of documents, followed by inspection and testing of goods. First appraisement system or 'first check procedure' is followed if the appraiser is not able to make assessment on the basis of documents submitted and deems that inspection is necessary. Goods are examined first and then these are assessed. This method is followed only if assessment is not possible on basis of documents. The importer himself may also request 'first check procedure', if he cannot give all required details regarding description / value of goods. He has to make request for first check examination at the time of filing of Bill of Entry or at data entry stage in case of EDI. He has to give reason for seeking first appraisement. The examination order is recorded on Bill of Entry and then returned to importer / CHA. It is then presented to import shed for examination. The shed appraiser / Dock examiner examines the goods as per examination order and records his findings. If samples are required, they are taken out. In case of EDI system, the report of examination is given in the computer itself. The goods are then assessed to duty by appraiser. In Second Appraisement System or 'second check procedure', which is normally followed, assessment is done on basis of documents and then goods are examined. Such examination is not mandatory. It is done on selective basis on the basis of risk assessment or specific intelligence report. Section 17(4) of Customs Act specifically provides that if initially assessment is done on basis of documents, re-assessment can be done after examination or testing of goods or otherwise, if it is found subsequent to

examination or testing or otherwise, that any statement made on Bill of Entry or any information supplied is not true in respect of matter relevant to assessment of duty. First appraisement is generally carried out in following cases If complete documents are not submitted Goods are to be tested for correct classification Goods are re-imported Goods are damaged or deteriorated and abatement is claimed Goods are abandoned and remission of duty is applied for When goods are provisionally assessed When importer himself requests for examination of goods before payment of duty.

Examination of goods
Examiners carry out physical examination and quantitative checking like weighing, measuring etc. Selected packages are opened and examined on sample basis in Customs Examination Yard. Examination report is prepared by the examiner.

Accelerated Clearance of Imports and Exports Scheme (ACS)

Finance Minister, in his budget speech on 28-2-2003, had announced a self assessment scheme for importers and exporters. As per the scheme, importer will himself determine classification of goods including claim for exemption benefits. Computer System will calculate the duty based on his declaration. Physical inspection of imported goods will be done by risk-assessment and management techniques on a computer based system and not on the orders of customs examining staff. Audit of import documents will not be by existing system of concurrent audit but will be done by post-clearance audit, as prevalent in developed countries.

The scheme is announced through administrative instructions, without making any change in statutory provisions. Hence, the scheme is not same as self removal under Central Excise. Presently, the scheme is introduced on trial basis at Air Customs, Sahar (Mumbai), ICD, New Delhi and Chennai Sea Customs. In case of imports, the scheme will be open to all status holders under EXIM policy, Central and State Government PSUs and other importers who have been importing for at least two years and have filed at least 25 Bills of Entry in preceding year. In case of exports, the scheme will be open to all status holders under EXIM policy, EOU/STP/EHTP units whose goods have been sealed in presence of customs/excise officers, Central and State Government PSUs, manufacturer-exporters who have been exporting for at least two years and have filed at least 25 Shipping Bills in preceding year and bulk exporters. - - Certain sensitive items have been excluded from the provisions. Importer/exporter intending to avail this facility has to make application to Commissioner. The clearances will be subject to post clearance audit.

Provisional Assessment
Section 18 of Customs Act, 1962 provide that provisional assessment can be done in following cases When Customs Officer is satisfied that importer or exporter is unable to produce document or furnish information required for assessment It is deemed necessary to carry out chemical or other tests of goods When importer/exporter has produced all documents, but Customs Officer still deems it necessary to make further enquiry.

In such cases, assessment is done on provisional basis. The importer/exporter has to furnish guarantee/security as required by Customs Officer for payment of difference if any. Goods can be cleared after payment of duty provisionally assessed and after providing the security. After final assessment, difference is paid by importer or refunded to him as the case may be. If the imported goods were warehoused after provisional assessment, the Customs Officer may require importer to execute a bond for twice the difference in duty, if duty finally assessed is higher [section 18(2) (a)]. The bond is called as 'P D Bond' (Provisional Duty Bond). The bond is with security or surety. Bank guarantee can also be given as a security.

Checking of duty drawback / license documents

Documents in respect of Duty Entitlement Pass Book (DEPB), advance license, duty drawback etc. will be checked.

Execution of bond and payment of duty

Once the duty is assessed, the bill of entry is returned to importer. The Bill of Entry should be presented to competent for calculation and pinpointing of the duty. If bond has to be executed, it will be taken in bond section.

Payment of duty
If goods are to be removed to a warehouse, duty payment is not required. The goods can be taken to a warehouse under bond, without payment of duty. However, if goods are to be removed for home consumption, payment of customs duty is required. CHA or the importer can take it for payment of customs duty. Large importers and CHA have P.D. accounts with customs. Duty can be paid either in cash or through P.D. account. P. D. account means provisional duty account. This is a current account, similar to PLA in central excise. The importer or CHA pays lump sum amount in the account and gets credit on the amount paid. He can pay customs duty by debiting the amount in P.D. (Provisional Duty) account. If the importer does not have an account, he can pay duty by cash using TR-6 challan. Of course, payment through PD account is very convenient and quick. The duty should be paid within five working days (i.e. within five days excluding holidays) after the Bill of Entry is returned to the importer for payment of duty [Section 47(2)].

Interest for late payment

If duty is not paid within 5 working days as aforesaid, interest is payable. Such interest can be in between 10% to 36% as may be notified by Central Government. [Section 47(2) of Customs Act, 1962]Interest rate is 15% w.e.f. 13-5-2002. [Notification No. 28/2002-Cus (NT) dated 13-5-2002] Earlier, interest rate was 24% p.a, w.e.f. 1-3-2000, as per notification No. 34/2000-Cus (NT)].

Disposal if goods are not cleared within 30 days

As per section 48 of Customs Act, goods must be cleared within 30 days after unloading. Customs Officer can grant extension. Otherwise, goods can be sold after giving notice to importer. However, animals, perishable goods and hazardous goods can be sold any time - even before 30 days. Arms & ammunition can be sold only with permission of Central Government.

Out of Customs Charge Order

After goods are examined, it is verified that import is not prohibited and after customs duty is paid, Customs Officer will issue Out of Customs Charge order under section 47. Goods can be cleared from customs area only on receipt of such order. This is an adjudicating order within the meaning of Customs Act, even if it is passed by Appraiser and not by Assistant Commissioner.

Demurrageifgoodsnotcleared
Heavydemurrageispayableifgoodsarenotclearedfromportwithinfreedays.

Relevant Date for Rate and Valuation of Customs Duty

Section 15 of Customs Act prescribes that rate of duty and tariff valuation applicable to imported goods shall be the rate and valuation in force at one of the following dates. a) b) c) If the goods are entered for home consumption, the date on which bill of entry is presented In case of warehoused goods, when Bill of Entry for home consumption is presented u/s 68 for clearance from warehouse and In other cases, date of payment of duty.

Concept of territorial waters not relevant

It may be noted that concept of date of entering into territorial waters is not relevant for purposes of determination of rate of customs duty.

Billing & Payment

After all the formalities with the customs are done & the cargo is being delivered to the customer, then it is the final stage of the import process. A proper billing with all expenses incurred has to be sent to the customer and the customer will cross check and will make the payment. With this the process of import clearance is over.

ROLE OF A FREIGHT FORWARDER/NVOCC

Freight Forwarders
A freight forwarder, forwarder, or forwarding agent is a person or company that organizes shipments for individuals or other companies and may also act as a carrier. A forwarder is often not active as a carrier and acts only as an agent, in other words as a third-party (non-asset-based) logistics provider that dispatches shipments via asset-based carriers and that books or otherwise arranges space for these shipments. Carrier types include ships, airplanes, trucks, and railroads. Freight forwarders typically arrange cargo movement to an international destination. Also referred to as international freight forwarders, they have the expertise that allows them to prepare and process the documentation and perform related activities pertaining to international shipments. Some of the typical information reviewed by a freight forwarder is the commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, or transshipment. Much of this information is now processed in a paperless environment.

NVOCCNON CARRIER

VESSEL

OPERATING/OWING

CONTAINER

As the name indicates, NVOCC operators do not own a vessel. Their function is that of principal to the shipper and they ultimately become the customer for a Liner who carries their box. Few of them may have own containers and they will be issuing their own Bill of Lading and they will be having a wide network in the sector they operate. They issue their House Bill of Lading to the Shippers and them upon handing over the container to the Liner, get Liner Bill of Lading. This Original Bill of Lading will be forwarded to the counter party of the NVOCC operator at the destination end and they surrender this to the Liner.

Alternatively, to avoid the delay in sending the original document to the destination end, the same will be surrendered at the load port Liner / agents office itself. The Liner / Agent at the load port will send an electronic message to the discharge port about the surrendering of original bill of lading at the load port and to release the delivery order based on the endorsement of the freight forwarder / NVOCC operator itself. NVOCC Operators issue House-to-House Bill of Lading or Combined Transport Document to the shipper since they undertake the movement from the Shippers ware house and taking the responsibility of reaching the cargo till the buyers warehouse. It is not the same pattern of working for all the operators but in the present days, the amount of significance given to Logistics Providers are of immense importance and this type of functioning is gaining greater acceptance among the shippers as well as buyers since the entire activity is under single point control. Few other operators just function as freight forwarders and their role of play are limited to the extent of contacting the shippers and booking the cargo through a particular Liner. They will have a contracted freight charges with the Liner and depending upon their strength to offer volume of business to a particular line and to a particular sector, they enjoy good discounts on the tariff. When they get the rates based on a committed volume, they hunt around shippers and they book the cargo through them to a Liner wherein they have a better freight charges. The difference in booking the price would be their profit i.e., the difference between the buying rate and the selling rate to the customer. In this case, the bill of lading will directly be given to the customer from the Liner office and there is no involvement of house bill of lading and the related surrendering formalities at the destination counter.

Freight Forwarding Introduction

Freight Forwarding is a vital part of international trade activity. The company will face many difficulties if it does not take into account how the goods will be delivered to the market. The issue of freight forwarding must be considered at an early stage of the development of the export marketing plan as it raises several concerns that need to be

addressed quickly. Not only does the exporter need to understand which INCOTERMS to stipulate and work to, but the method of transport also needs to be considered (see road, rail, sea, air). Packaging is also another factor that needs to be considered, as is insurance. Much of the hassle can be taken out of the exporters hands by using an effective freight forwarder, but as with any supplier care needs to be taken to ensure that the supplier meets the needs of the organization.

Selecting a Freight Forwarder

There are certain criteria to take into consideration when selecting a freight forwarder to undertake export transportation. Keeping costs down will always be one of the most important criteria for any exporting company, so it is important to approach more than one forwarder in the first instance to ascertain the best price. Rates between forwarders always vary because some forwarders specialize in some destinations but not others, so their rates for those areas will invariably be better. Always attempt to find out whether the service to the destination you require is the forwarders own service, or whether they will subcontract the work to another forwarder subcontracted work will usually be more expensive.

Services Provided by a Freight Forwarder

Traditionally, the role of the freight forwarder was simply to undertake transportation on behalf of exporting companies. However, they must now provide a whole range of additional services to keep up with the competition.

1. Export transportation
This is still the key role for most freight forwarders

2. Export Documentation Advice

Forwarders are constantly dealing with export transportation so it is vital for them to keep up to date with documentation requirements for the countries with which they do business. It will be within their own interest to convey any knowledge and advice to existing and potential exporters, so they may obtain the business when transportation is required.

3. Storage
Many forwarders now have their own depots and warehouses as well as offices, and are willing to store goods for exporters for a number of reasons. These may include exporters wanting goods out of their own premises to make room for more stock, but not wanting to actually export the goods yet, so they may use the forwarders warehouse.

4. Order Picking
Some companies, such as mail order companies, may store a large quantity of goods with forwarders, which may be broken down and consolidated into orders as and when they are processed at the companys premises.

POTA Global Logistics Departments:

ORGANIZATION STRUCTURE
The image part with relationship ID rId32 was not found in the file.

Customer service Department

Regularly communicating to the customers and keeping them posted of the present trends and the available schedules and the expected changes enabling the customer to plan for their activity. There is no end to list out few activities to cover under the customer service. It depends upon the expected level of the customer and the affordable limit of the Service Provider. The customer service dept is a co-ordination of all other departments where any job related in communicating to the customer or liaising with the customers for any details or queries or issues are handled by this dept. this dept works as the front end of the company.

Customer enquiry
The customer enquires about the rates and charges that are applicable for the shipment. The customer also gives the details of the cargo such as the no. of packages, type of cargo, weight, dimensions etc. this helps the company to provide details on the no. of teus required and type of container for the shipment. In case of LCL the cbm, stowing details are necessary to the company.

Vessel schedule & Routing

The customer service department responds to the enquiry by sending the vessel schedules such as the ETA, ETD for the POL and POD .They also provide the routings for the shipments, because it may differ from liner to liner .The transit time also will differ from liner to liner, the transshipment port may also differ and rates also. So the customer service department also gives Transshipment Advices , Wherever the liner shipping companies are offering service between long distanced ports, other than the companies that operate direct vessels, essentially there will be a trans shipment of container before it reaching the final destination through a transshipment port. The transshipment advice provided by the forwarder will help the exporter/importer .These information are obtained by the department either from the liner or from his agent.

Customer confirmation
Based on information provided by the customer service dept the shipper decides on the shipment of cargo. He conforms to the customer service on the date of shipment, particular vessel etc. A basic job no. allocation is done by the dept with details such as type of cargo, weight, packages, POL, POD etc.

Stuffing confirmation
When the cargo is moved to the cfs, the cargo is then stuffed to the container with the help of labor and machinery. Then the staff at cfs sends a report to the company on confirming the stuffing, and then that report is forwarded to the customer by the customer service dept. at times the cargo may be stuffed in containers at the factory premises too. The shipper may have their own godown to stuff in containers and these godown are authorized by customs and central excise .but in LCL all cargo are moved to cfs and stuffing is done by the company only. This is a report send with details such as vessel name, voyage no., and container no, shipping bill no., POL & POD.

Tracking
The customer service dept keeps a continuous tracking of the shipment and send due confirmations for the same at once to the customers. The customer service dept sends confirmations for stuffed containers, then the confirmation for onboard confirmation for container that is placed on vessel, then confirmations on transshipment point, then the arrival of container at the POD. The customer service dept also gives details to the customers when they request for particular information about the cargo or container. The department gives the Shipment Status Information with any one of the available information like container number, bill of lading number; the shipment status can be viewed from the website of the liner shipping company. The importer/ consignee agent also can get the information about their shipment sitting in their place at any point of time.

ADVICE ON CARGO ARRIVAL

Though sending of cargo arrival notice to the consignee or importer or any notify party as mentioned in the bill of lading is not legally required to be issued by the forwarder/NVOCC; but in practice most of the them are following the pattern of sending the cargo arrival notice to the party mentioned in the bill of lading as a value added service. Many customers act upon receipt of cargo arrival notice. When the shipment takes place between two ports where the transit time is very less, getting the documents through the banking channel and having the follow-up with the office to get the information takes a lot of time and this may result in a delay in clearing the consignment. To avoid such delay because of not knowing the arrival details and to provide the customer with timely information on arrival of cargo at the port of destination, such cargo arrival notice is sent.

Pod status & D/O

The customer service dept sends information about the arrival of cargo in the port of destination. They also send remainder to the shippers about the containers that are not taken for delivery by the consignee. If d/o is issued for delivery to the consignees that information is also forwarded to the shipper.

OPERATIONS DEPARTMENT

The image part with relationship ID rId33 was not found in the file.

POTA booking
First initially the customer makes a booking to the POTA. This is done by creating a job with the details that are given by the customer. A job no. is allocated for that particular shipment. This job is only used for all future transactions and references.

Liner booking
Then with the details of cargo dimensions, type, packages the agent makes a booking to liner for the container.

Requesting Plot Permission

Once the liner booking is made the liner issues the booking no to the agent with this the agent requests for plot permission i.e., for getting boxes from the liner of the required type, size and specification.

Getting Confirmation from Liner

The liner then gives the Container Release order is like a confirmation receipt for moving the empty container from the plot to the CFS/Warehouse/any placed required by the shipper. Generally container numbers are mentioned in the container release order or they are allotted at the empty container terminal.

Handover to transporter
The obtained document from the liner is forwarded to the transporter to move the container from the empty plot to the specified place by the agent. The transporter may be an in-house transporter may be owned by the forwarder/NVOCC or it may be outsourced to a third party.

Get Empty Container

The transporter will move the empty container to the specified place for stuffing. There the stuffing is undertaken by the transporter/forwarder.

Submit SB to the Liner for EGM filing

A copy of shipping bill which is filed for export is forwarded to liner/NVOCC for filing EGM.

Obtain FORM 13 from liner

This is a document that is given by the liner so that the container after clearance for export in the CFS/factory/warehouse can be moved to the terminal of port premises. The

document is issued only before the arrival of vessel that is bound to take the cargo. The liner in this document mentions the gate opening date and timings and gate cutoff date and timings. All the containers should be brought within this period. The containers can also be brought after this time through SSR (special service request) from the liner.

Check whether container placed on board

Once the containers are brought inside terminal the line takes care of placing it onboard. The liner once places the container they send a confirmation on the same to the customers such as forwarders or nvoccs.

Obtain BL
The bill of lading is issued by the liner once the vessel has sailed. The bill of lading issued by the liner is termed as master bill of lading with which several house bill of ladings are issued to actual shippers by the forwarders/nvoccs.

Obtain MR
Upon verification of the export order given by the customs authorities a document called Mate Receipt will be signed by the Captain or the agent of the shipping line upon loading the cargo / container on the ship. The bill of lading will generally be released by the shipping companies, upon exchange of the Mate Receipt produced by the shipper or his agent. After having loaded the container in their ship, they will have to issue a document called Bill of Lading to their Exporters or their authorized agents.

Inbound Operations Moving Container to CFS

After the IGM is filed by the documentations department and vessel arrives to port, the containers are unloaded from the vessel and it is moved to container yard inside the port. After this the container is moved to the desired CFS for clearance of cargo. The clearance of cargo is handed over to the CHA. After the clearance the cargo is d-stuffed either in CFS itself and transferred on wheels to another vehicle or it is moved to the factory for dstuffing.

Follow Up On Empty Container

Timely follow-up should be made with the customers for delivering empty containers in the respective yard.

Documentation
This team is responsible for obtaining the information about the cargo that is shipped by the exporter as this is required by the Customs & Port Authorities and other regulatory bodies apart from the shipper and the consignee as per their business transaction. The information is shared with the destination agent and relay ports in order to facilitate reporting to the Customs and Port Authorities in the country of importation.

B/L Department
Stuffing report from CFS/Warehouse Stuffing confirmation report to customers Preparation of draft B/L Preparation of original B/L

Stuffing report from CFS/Warehouse

After the cargo is moved in to the CFS it is being stuffed in to the container. Before stuffing, the actual measurements of the cargo are being surveyed by a firm which is authorized by the government. The operations staff of the company fills all those particulars related to cargo, CHA, container no., destination in a pre defined form and the same is sent to the B/L department.

Stuffing Confirmation report to customers

The B/L Department updates all the information in Ifact software to the corresponding job no previously assigned by the customer service department. With this updating the customer service department sends the stuffing confirmation report to the customer.

Preparation of Draft B/L

The B/L department requests the customer to send a draft B/L of the B/L particulars. With these particulars the B/L department prepares a B/L and sends back to customer for verification and authorization by the customer. If the customer finds any discrepancies, they edit and send the corrected B/L to the B/L department.

Preparation of Original B/L

The customer while sending the final draft B/L to the B/L department they also send a confirmation message upon which the original B/L is prepared. Three copies of original B/L is generally issued.

Obtaining original B/L from Liner

Based on the final draft obtained from the customers, the B/L department forwards the same to the liner. The liner again asks for a confirmation from the company for the above mentioned details to issue the master B/L.

Preparation of EGM export general Manifest

It is the process to file such a document with the Local Customs Authorities giving details of the shipment effected i.e., the details of cargo carried by them from the local Port to another. This document contains details of all the containers that are due to be carried by the carrier. Here since the forwarder takes the responsibility of a carrier they file this document and also the Liner also will file the document to the customs that is obtained from various NVOCCs or forwarders.

Releasing Bill Of Lading

The releasing of Bill of Lading to the customer is an important function. Lading has got three important functions: 1. It is a title document 2. It is an evidence of contract of carriage 3. It is a receipt for having received the goods Bill of lading is an important document that transfers the title of goods from the seller to the buyer and hence enough care and caution need to be exercised before releasing such a document by the shipping company. ` It has to be ensured that the customs authorities have authorized the cargo / container to move out of the port through proper endorsement in the shipping bill and other relevant documents. Upon verification of the export order given by the customs authorities a document called Mate Receipt will be signed by the Captain or the agent of the shipping line upon loading the cargo / container on the ship. The bill of lading will generally be released by the shipping companies, upon exchange of the Mate Receipt produced by the shipper or his agent. After having accepted the cargo, they will have to issue a document called Bill of Lading to their Exporters or their authorized agents when the liner issues a master B/L for all the consignments. The Bill of

Bill Of Lading Draft Creation & Final B/L Releasing

The important function of documentation department will be creating a Bill of Lading. The following are the guidelines to prepare a B/L. The Head is responsible for adhering to the procedure laid down by the company, by all his / her department personnel. Upon receipt of copy of Shipping Instruction from the customer, they should check and review the information with their available data. If any clarification is required from Shipper, they should ask for the same. When Shipper requests a destination that is not a port of call of the shipping line, they must decline such requests, or consult the sales or customer service department. The

customer will have to be informed about the port of calls of the liner that the company has advised and the suitable one as accepted by the customer to be finalized. In case of Shipper provides an address of Notify Party who is not located in the same country as the B/L Place of Delivery, they should ensure that Shipper also provides a contact party and address at Final Destination and should be marked in Also Notify Party. Shipper has to provide the piece count for each container, weight, seal number and the department should check all these information. Container number on Shipping Instruction should match the shipment details under relevant booking number. The booking number is recorded on the Shipping Instruction given by the customer generally. Once the details are checked the B/L will be created and saved in draft status. Before the Original Bill of Lading is taken out, the following are checked: Bill type Number of originals and copies Date Parties: The Name of Shipper, The Consignee, Notify Party and Also Notify Party Cargo: Number and type of packages and description of goods In case of Dangerous Cargo - the UN number, Class number and Flash point Equipment: Container number(s) and Seal number(s).

After the complete checking of BL data, the department personnel of the respective location must issue the draft copy along with the proforma invoice to the customer.

Releasing Bill Of Lading

On receiving any change request from the Shipper or Forwarder, the changes should be made and the same be resent to the customer either through mail or by fax. Upon acceptance of the draft by the Shipper / Forwarder the Bills of lading should be made available for final printing. On collection of all the B/L charges from the customer in the prescribed form, they may issue the Original B/L to the customer.

Raising the invoice of customer to the finance department

The documentation department will be getting the advice from the Finance Department about the Rate of Exchange to be adopted. Since the freight amount and other related charges will be in foreign currency, to answer to customer queries and to update them on the amount to be paid by them, the exchange rate adopted by the company should be made known to the documentation personnel.

Sea way B/L

Only one copy B/L released (while import scanned copy of this copy B/L is enough to get delivery order.) The practice of seaway bill is in existence, where the buyer and seller have got a better relationship and the money transfer is not an issue between the parties. known as Document of Title. In the case of Bill of Lading, as we have seen in the earlier session, it has got an important function Before the consignee takes delivery of cargo, the consignee has to surrender the bill of lading with due and proper endorsements. The bill of lading can be obtained from the banker of the importer only upon payment of due amount towards the value of the consignment or in the case of credit arrangements, with a due undertaking to settle the payment on due date. Immediately upon shipment, the exporter has to make arrangements for submission of documents to the importers bank through their bank. The time taken by the exporter to submit the documents to the bank depends upon the conditions laid down in the letter of credit or in the purchase order in case of transactions not covered by a letter of credit. When the distance between the port of loading and the port of discharge is more and the transit time is also more, there will be no much of delay in the importer getting the documents. Whereas in the case of short distanced route, the vessel will report earlier and the documents may come late. In these circumstances, to avoid the delay in getting the consignment, the exporter and importer may prefer using a Seaway Bill. The shipping company, to meet customers request for a speedy release of cargo at destination, issues Sea Way bill. bill transaction is given as below: The generally followed procedure in case of seaway

 Shipping company, upon receiving the request from customer for Sea Waybill, must request the customer to submit the Shipper's Letter of Indemnity, in the prescribed format. During documentation process, they should ensure the following in documentation system: 1. If the freight and related dues are collected from the customer already, Sea Waybill can be issued. 2. Seaway bill can be issued only to straight consignment and not NEGOTIABLE The more important thing in case of releasing seaway bill is that the shipping company informing the other end about the issuance of seaway bill. The all relevant documents of the transaction Shippers request for seaway bill, copy of seaway bill, letter of indemnity and other relevant communications exchanged into between the shipping company and the customer should be kept in the office till the transaction is completely closed i.e., till at the other end the party taking delivery and after taking delivery for a reasonable time. To Order

consignments. Sea Waybill should show proper remark SEA WAYBILL NON

Surrender B/L
Only one Original B/L released and that to submit and they get back the photo copy of that B/L with surrender seal (while import scanned copy of this copy B/L is enough to get delivery order.)

Release of Cargo without Production of OBL

As we have noticed in the Seaway bill, many times based on the situational requirement and relationship maintained between the shipper and consignee, shipper and the shipping company, consignee and shipping company, there may be a situation where the disport office may have to release the cargo in the absence of producing the original bill of

lading. followed.

In such situations, there should be a set of procedure would generally be

To release the cargo to the consignee, disport will ask the shipper to surrender the Original Bill of Lading. When shipper or shippers agent requests for cargo release to consignee at destination without presentation of an Original B/L, a full set of duly endorsed Original B/L by shipper must be surrendered at the load port itself. letter printed on their letterhead. On receipt of such letter from the shippers, the shipping company will send a communication to the discharge port to affect the delivery to the consignee without insisting for the original bill of lading. But before sending such a message, they will ensure that all related charges are collected from the shipper. After receipt of full set of duly endorsed Original B/L, or Shippers letter if Original B/L is not collected, the shipping company will request the shipper to put in writing specifying to whom the cargo should be released to at destination, if shipment is consigned to order. For direct consignment, cargo must be released to the named consignee on the Bills of Lading. The Original B/L together with shippers request letter and other relevant documents will be kept in the office sending such release message for a reasonable period. If the shipper had not collected the OBL, they will have to issue a Cargo Release Request

Switch Bill of Lading

Switch B/L request usually arises when the buyer who is the title holder of the full set of Original B/L re-sells the cargo to an ultimate buyer in a triangular transaction. Due to commercial needs, the original buyer does not wish to disclose to the seller (shipper) the ultimate buyer information and also not to the ultimate buyer the sellers information. When B/L is switched, only the name & address of the shipper, consignee, notify party are allowed to be changed on the new B/L. If Change of Destination is required, they should follow set of guidelines. For Switch B/L change of destination, the original/actual Place of Receipt and Port of Loading must not be changed. Only the new Port of Discharge and/or the Final Destination allowed to be changed on the new B/L.

Purpose and the issuance of Switch Bill of Lading is a commercial practice followed by shipping companies to ensure that the actual buyer and seller are not coming to know about each other and to protect the secrecy of commercial transactions; a merchant trader is using this system of switch bill of lading. When the importance is so high, a shipping company, before issuing an amendment, should take the proper care. The shipping companies generally scrutinize the following. B/L requestors identity as rightful title owner On receipt of customer request for Switch B/L, they must verify the requestors identity as to whether he/she is the title-holder. They should request the customer to surrender the full set of Original B/L duly signed/stamped along with a letter in the customers company letter-head clearly specifying: The B/L number, Request for Switch B/L, The name & address of the new shipper, consignee and notify party Acceptance of additional costs incurred, if any.

Upon receipt of full set of Original B/L, the documentation department personnel must check the endorsement at the back of the B/L is completed, and also ensure that the chain of endorsement is not broken. It should also be ensured that the requestor is the last title-holder, signed and stamped the full set of Original B/L surrendered. If any endorsement is broken, or the requestor being the last title-holder did not sign/stamp the full set of surrendered Original B/L, a request is placed with the customer to complete all endorsement. If the requestor is unable to comply, the shipping company can decline Switch B/L request.

If the loading ports are in other regions, all money receivable in India must follow the guidelines of Management for realizing the payments. If payment is realized and the request / requestor are a genuine one, they can issue a new set of Original B/L from system. All charges incurred and Change of Destination costs if it is involved will be collected before release of the new set of Original B/L to the customer, unless the shipping company has extended some credit facility to the customer. But generally the forwarders provide credit facilities to the shippers. The full set of Original B/L for issuing switch BL, is preserved with copy of new set of Switch B/L in the Switch B/L file kept in the office issuing the same for a reasonable time. Release B/L In this case 3 Original B/L and 3 Copy B/L released (while import all the three original B/L needed to get delivery order.)

Received for Shipment B/L

At the time of Final BL release, if the customer request for Received for Shipment BL, due to date issue based on the Letter of Credit (LC) stipulation or other reason like container shut out, after checking that the container is in the port prior to the BL date and if the shipping bill is handed over by the customer, with the stamp Received for Shipment or the clause as per local requirement in the body of the Original Bill of Lading, Received for Shipment Bill can be released. In normal practice, the shipping instruction is submitted to the shipping company within 2/3 days from the date of vessel sailing. But in cases where if the transit time is within two days so generally the forwarder issues the BL so that the processes that is to be carried out by the shipper can be done as the master bill of lading will be issued much later. Due to circumstances beyond the control of the shipper, there may be some delay in submitting the shipping instructions to the shipping line by the forwarder as the customer would have given the same. The shipping Line can prepare and release the Bill of Lading only upon receipt of the shipping instructions. Any delay in providing the shipping instruction will delay the bill of lading release. In case of late receipt of shipping instruction, generally the follow-up with the Shipper / Agent will be made.

Documents like Non-negotiable B/L, Shipping Instruction and any waiver details will be kept in the office for future references. The process will be in total complete, if there is no request for amendment is received by the shipping Line. But in normal course, a shipper may seek amendments in the bill of lading for various reasons. To list out few of the reasons, the actual consignee might be not in a position to take delivery of cargo and in such circumstances; the shipper could have identified an alternate buyer. In this case, the amendment may be for the change of consignee. After releasing the original bill of lading, the shipper may be asking for a different port of destination based on the request made by the consignee / importer. Had the documents not negotiated with the bank, it becomes essential for the shipper to get an amendment. After negotiating the documents, for the reason mentioned in the beginning, there may be a different system followed by the shipping companies. Instead of amending it on the original bill of lading, a communication be sent from load port to the destination port using email / fax. The amendments may have to be given either on request made by the customer and based on the internal request made by the department because of their mistakes. When an amendment to be issued due to Customers Request, the following need to be checked: There should be a request in writing from the customer, which is the important requirement before proceeding with any amendment. If shipment has arrived at discharge port consult with discharge office whether the amendment can be made and if any additional charges will apply and / or relevant parties will accept changed payment terms. When the amendments can be made and additional charges will apply, the customer must confirm in writing their agreement to pay all additional charges and if required surrender full set of Original bills of lading before changes are processed.

Once the necessary written acceptance is received and full set of Original bills of lading surrendered, subject to payment of any charges, either an amendment be made or another set of Original Bill of Lading be issued. In the absence of full set of Original bills of lading, there should be no issue of any new set of Original bill of lading to customer.

Handling Lost Bill of Lading

In the course of transit, there may be a possibility that the documents sent might get lost. In such events, the consignee should not face losses because of not taking delivery in the absence of Original Bill of Lading. At the same point of time, if the documents are lost before negotiation, the exporter / shipper cannot negotiate the documents and realize the money. To avoid this problem, shipping companies will be in a position to offer some solutions to the parties. The procedure may vary between the companies to companies and the focus is given hereunder on the general areas where the care needs to be taken to protect the interest of the shipping company. The shipper should make a request to the company in writing for issuance of Replacement Bill of Lading against the Lost Original Bill of Lading. Such request should be accompanied with a Letter of Indemnity from the shipper as prescribed by the Shipping Company. The Bond will be executed duly endorsed by the banker to the effect of indemnifying the vessel owner, carrier and their agents for issuing such second set of original bill of lading. Before issuing the second set of original bill of lading, they should check with the discharge port whether the Cargo is released or the delivery order is issued for the cargo against which the second set of original bill of lading is sought for. A communication should be sent to the discharge port about the lost bill of lading. Once the port of discharge confirms that the cargo is not delivered / the delivery order is not released, process for issuing the second set of original bill of lading can be commenced. The second set of original bill of lading should contain a text similar to that mentioned stating SECOND SET OF OBL ISSUED IN PLACE OF LOST B/L or the same. The following will be generally in practice in case of second set of original bill of lading:

Goods are to be delivered against the reissued set of original B/L, provided the goods have not been delivered against the first set of original B/L, which declared lost by shipper.

Had the goods already been delivered against the first set of original bill of lading, the reissued set of original bill of lading will automatically be considered null and void.

In case the first set of original bill of lading presented after the goods have been delivered against this reissued set of original bill of lading, the first issued set of original bill of lading will be considered null and void.

The load port office should send a communication to the port of discharge/destination and concerned parties stating that the cargo be released against the replacement set of Original Bills of Lading. The office that issues the replacement bill of lading will keep the concerned records in their file for a reasonable time. The records will include the Indemnity Bond, Request Letter, OBL copy, and Replacement bill of lading copy, communication sent to discharge port and other relevant communications and documents of the transaction.

Change of Destination
Whenever there is a request from the shipper to change the port of destination, after loading the cargo onboard vessel, the shipping company may accept such request. In case of accepting such requests, the process will start with the letter of request from the shipper asking for such a change of destination. released. The change of destination request along with the details of charges collected will be in record for a reasonable time. Once the letter is received, the additional charges will be collected from the shipper and the bill of lading will be

Import Filing of Import General Manifest

Every shipping company will have to file a document with customs authorities giving details about the shipment and such a document is known as Import General Manifest. This is an important document containing the entire details about the shipment and acts as a controlling document right from the time of arrival of cargo / container in a port till it moves out of charge of a liner. This document generally contains the following information: Name of the shipping line / agent Name of the ship Port where the report is made Nationality of the ship Name of the Master Port of Loading Line No. Bill of Lading Number & Date No & Kind of packages cases, cartons, bales, pieces, etc. Marks & Numbers Gross Weight Description of Goods Names of Consignee / Importer Date of presentation of Bill of Entry Name of Customs House Agent Rotation Number

Most of the relevant information will have to be filled by the Liner / Agent and the document will be filed with Customs Authorities. This document is very essential for the customs authorities to cross verify the information produced by the agents in the bill of entry to keep control on un-cleared cargo by the respective party.

Release / Delivery Order for Inbound Shipments

The consignee / importer / their agents can take delivery of cargo only against the submission of Delivery Order to the concerned custodian of cargo. Before releasing the delivery order, generally the following precautions will be taken by the import department personnel

Ensure Original Bills of Lading presented The respective containers discharged from the vessel and reached the respective CFS / ICD

The freight Invoice is issued to the customer When the Customer or the Customers agent comes to the counter to collect Release / Delivery orders, personnel at the counter must ensure a duly signed & stamped OBL, without broken endorsement.

In case of Telex Release, personnel at the counter verify the copy of the B/L brought by the consignee for Release / Delivery orders, with the telex message details.

If no OBL is presented, Release/Delivery orders must not be issued, except under following conditions: -

Prior arrangement has been made, with confirmed shippers consent for presentation of Letter of Indemnity for Direct consignment, or Letter of Indemnity with Bank Guarantee for TO ORDER consignment.

Load Port / Origin Office have confirmed surrender of full set of OBL at loading end.

Sea Waybill the Customer or the Customers agent must present a copy of the Seaway Bill.

Inbound Documentation Personnel at the counter must verify the OBL or the Sea Waybill, as presented.

Handling of Abandoned Cargo

A Reminder Notice be sent to the Customer, giving details of shipment in the first place, notifying about the un-cleared cargo and inform them to clear the cargo before end of 60 days period. This notice will generally be sent by Registered Post. After sending the notice, if no response is received in a reasonable time, the Import Department will have to inform the Load-port to contact shipper and the Local Import Sales personnel about the situation. If the cargo still remains un-cleared, Customs Department may bring the cargo for auction. To prevent this, the imports department should send reminder notices to the parties mentioned in the bill of lading. Such communication may be effected through Registered Post. Based on the feedback received from the shipper / importer / agents, the process of abandoning may get prolonged. If Customer does not take delivery or respond to the reminder, then they will have to inform Load-port to contact shipper and inform about the situation, and alert them on the Shipper's liability according to the bill of lading terms when cargo is abandoned. The Load-port can request the shipper to settle the outstanding collect charge and demurrage and inform shipper on those amounts. The Imports Division may also check with the shipper to see if they want the cargo to be returned, diverted to another location and / or to change to a new Customer if they prove still hold the ownership of cargo by title and have in possession OB/L issued against shipment unless covered by Sea Waybill or Express B/L. Based on the input from the Origin, if shipper wants cargo to be shipped back to them, and they will pay the outstanding freight / charges as well as the additional freight/charges of the returned shipment, the liner should make arrangements to send back the consignment after collecting necessary charges through the load-port, without

delay and inform the Customer on the decision of shipper to return cargo. The import documentation personnel will do the entire documentation and co-ordination functions. CARGO HELD BY CUSTOMS / GOVERNMENT AUTHORITIES On receiving the letter from the CFS, informing the Inbound documents department about the Customs decision of the auctioning the Cargo, they will contact and send a registered letter to the consignee or the notify party to approach the customs to resolve the issue at the earliest. If the consignee or the notify party is not traceable The liner should inform the load port to get in touch with the shipper and inform them of the situation. They will also inform the Origin of the projected expenses/ cost / delays and decision of the Customs authority. They should handover the below mentioned documents to the Operations team for their further process or for any potential claims: Full correspondence in hard copy Bill of Lading copy Copy of Register Letter sent to Customer Registration copy Copy of reminder Letters sent via fax / email

Marketing Department
Marketing plays an important role in organization. It is the bridge between customer and the company. The important functions of marketing dept as follows: Explaining the services offered by POTA in this Ocean transport business and competitive rate for their services. Geographical area where POTA is strong and best coated with less transit time. Responding for the enquiry of customers, then there with the support of Customer service department. Regular reminder for weekly planning and schedules.

SALES
o Prepare sales plan to meet lure customers to obtain POTA services, this is done for short/long term plans. o Review existing customers and list target customers as per the plans. o The visit customers and inform them of the service patterns, schedules and conditions. o Discuss and understand customers requirement including details like cargo description, packing, special conditions under the order, letter of credit conditions, if any and shipment schedules. o Provide freight rates as per Tariff and associated charges; negotiate freight rates if required in consultation with the pricing desk. o Work closely with the customer and offer the best possible assistance to meet their requirements. o Maximize the time spent on the field to ensure there is a good coverage of the market and maintain a record of business generated. o Maintain constant contact with customers and gain their support to ensure that sufficient business is generated for the company as the company would have entered into service contracts with liners. o Identify new customers while retaining old customers and increase the customer base. o Market intelligence: Provide updates and feedback on market conditions and information about competition activity to the Marketing team above the new trends in the market so that new strategies can be developed to maintain a sustained growth. o Share the outcome of the business meetings with the customers with the rest of the organization like customer service, operation, documentation and finance during weekly meetings or as and when required so that they are aware of the customers requirements.

Accounts
It is the responsibility of the accounts / finance department to co-ordinate with the load port, to get the freight amount and to collect it from the respective consignee or his authorized agent. Generally most of the shipping companies will prepare an invoice and the same is given to the customers with detailed break up of charges need to be paid before releasing the delivery order. This invoice can be collected from the documentation department and upon payment, the finance department makes a stamp in the invoice evidencing collection of payment, verification upon which the delivery order is generated and given to the parties.

Billing to Customers
Before releasing the delivery orders, it has to be ensured that the freight and all other relevant charges are collected. If any other additional charges are to be collected, the customer should be contacted and a confirmation be obtained. confirmation invoice be raised and charges collected. Upon getting the

Freight Collection & Remittance

The shipping companies accept the cargo for shipment between the ports, either after collecting the freight amount well in advance or after completion of the shipment but before releasing the delivery order at the port of destination. Every bill of lading is stamped either Freight Collected or Freight to Pay.

Audit / Internal Administration

Finance department responsibility is to ensure that the statutory compliances are met with and the books of accounts are maintained in a proper way. The co-ordination with the Auditors / Local Administrators on related issues will be the responsibility of the Finance Department. The receivables and payables will have to be very properly maintained for the transactions performed and the remuneration account is updated and reviewed for any balance payment at regularly intervals.

ROLE OF LINERS/COMMON CARRIER

COMMON CARRIER
Common carrier is a carrier who holds himself ready to carry from place to another the goods of any person for a hire or reward. One type of such a carrier is a ship that offers the regular scheduled service is called a cargo Liner. A vessel engaged in transporting goods for reward and offering space to all who wish to take advantage of offer, and then it is called a liner service. A vessel is operating as a common carrier in a regular scheduled route and in regular schedule of time, it is said to be in a Liner Service. Until the demise of Sea Passenger Services in the 1960s, many Liners provided a combined service with Cargo, Passengers and Mail. As the Liner faced few a problems since it happened to have a dual functioning, it got divided into functional types namely The Passenger Ships and Cargo Vessels. While the passenger ships carried limited quantities of mail also, cargo vessels were not allowed to carry passengers. The main requirements to recognize a service, as a Liner Service will have to have the following:

Fixed Schedule
A vessel should have a fixed sailing schedule. If a vessel is expected to be available in a port either for loading or discharge, it has to be made available irrespective of the cargo availability. For example if the ETA of the vessel is made as 01-02-008, the vessel has to call on that particular port as scheduled. Depending upon weather conditions and unexpected technical faults of the ship, the variance of arrival date to a particular port will not affect the basic and basis of liner shipping function, since the delay is beyond the control of the vessel operator.

Every Liner used to give regular advertisement announcing its arrival and departure schedule enabling the merchants as well as their agents to plan for the shipments and to make the cargo available in the port in order to ensure loading of the cargo in the vessel. Any cargo moved towards the port before the window / gate opening of the particular vessel, shall have to wait till the gate is opened enabling the port to receive the cargo / container in the respective yard.

Fixed Route
Fixed Schedule goes with fixed route. A vessel expected to cover various ports will have to have a fixed time schedule to call at the respective port. No deviation from the route will be allowed because of non-availability of cargo at any one of the ports in the trade route fixed already. To summarize, Liners Services sail on scheduled dates, ply on a regular scheduled service between groups of Ports, irrespective of Cargo availability.

Regularity
Liner Service as seen above, it is a Common carrier having fixed trade route and a fixed schedule. With all these, regularity in service is also one of the main characteristics of a Liner Service. Regularity means, operating in a trade route as per schedule and just any one or trial service in the region and calling off the service from the route. Any trial service in a route may be an ad-hoc service and this cannot be recognized as a Liner Service.

LINER
International liner shipping is a sophisticated network of regularly scheduled services that transports goods from anywhere in the world to anywhere in the world at low cost and with greater energy efficiency than any other form of international transportation. Liner shipping is the most efficient mode of transport for goods. Liner is the actual carriers of cargo. This means that they perform the ocean transport of containers. The liner allots slots for freight forwarders/NVOCCs etc. The liners and the freight forwarders generally enter in to the service contracts in various trading routes. In this way the freight forwarders gains slots through these contracts and sell the same to customers with a markup price. The difference in the price earns the profit predominantly for the forwarders with other supplementing charges. First the liner company markets its services to the forwarders, who in turn markets the services of liner with the value added services to the customers that the forwarders are going to provide. As we have already seen, the agents involved at various stages in doing a shipment. Many processes by the forwarders/Nvocc are similar to the liner as both the forwarders/Nvocc and Liner act as carriers. The liners are the ocean carriers. The customers of liner are predominantly the people who establish service contracts with them such as forwarders/Nvocc. The customers of forwarders / Nvocc are the actual shippers or agents of them such as CHA etc.

Standardization of Containers
The General Purpose containers are of standard in size having standard width and height and vary only in length. The length of the containers used in trade generally is of 20; 40 and 45.According to the requirement of cargo, special types of containers are also used.

Booking Request and Confirmation

Before the development of computer system and e-mail bookings, the shipper either directly or through his logistics provider will check with the shipping line for making a booking for transportation of cargo between the load port and disport. A booking request will be manually prepared and sent giving the details of shipment. Shipping company

will confirm separately about the booking to the shipper / their agents. The mailing / couriering the booking request and the line confirming the status itself will take not less than 2/3 days depending upon the distance between the shippers place and the shipping lines office. Now with the development of computer system, the booking can be made ON LINE through the EDI facility available with the Liner. There should be a proper interface between the customer office and the liner office for availing the best possible results. The shipper can send the Booking request, which can be accepted and confirmed by the liner office in few minutes by a mail.

Bill of Lading Information

Earlier the system was such that the manual draft preparation of bill of lading would be checked by the shipper or his agent and upon their confirming the details; original bill of lading will be typed. This was not only a time consuming process but also require lot of paper documents to be kept in the file thus occupying huge space even after completion of shipment. With the EDI facility, the template once created can be saved and only if any corrections / additions / modifications required, the same be done by the shipper / their agents and sent to the liner office. Liner office can prepare the Original Bill of Lading without spending much of time and keeping the templates received from shipper does not require much of space to store. .

Invoicing
Liner office can send in their invoice through system for their services. This ensures that the invoice is reaching the concerned person in the shippers office in time.

Arrival Notice Information

Every shipper would be closely monitoring the arrival status of the cargo. One of the functions of the shipping company is to send cargo arrival notices and transshipment advices. The EDI facility reduces the work load of taking independent notices and produces a set of notices for the data imported through EDI from the load port / transshipment hub. The development of web based updating enables the shipping company to concentrate in their activities rather than answering to customer queries on a regularly basis. Most of the shipping companies update their website wherein the details of shipment are captured from the time of loading till the arrival of cargo in the disport. When the details are getting updated in the web site of the liners, based on the relationship established between the customer and the liner office, through this EDI facility, directly the liner office can reach the arrival information to the customers office.

ROLE OF CLEARING AGENT

Clearing agent means any person who is engaged in providing any service, either directly or indirectly, concerned with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. Once the cargo arrives at the port/ CFS the clearing agent at the consignees place will go with the necessary documents and take delivery of cargo. In order to take delivery of cargo there are many processes that are to be done which is already mentioned in CHA import process and the clearing and forwarders agent.

ROLE OF CONSIGNEE
Party, who is to receive goods, is usually the buyer. One to whom a consignment is made. When the goods consigned to him are his own and they have been ordered to be sent they are at his risk the moment the consignment is made according to his direction; and the persons employed in the transmission of the goods are his agents. When the goods are not his own, if he accept the consignment he is bound to pursue the instructions of the consignor; as if the goods be consigned upon condition that the consignee will accept the consignor's bills, he is bound to accept them. It is usual in bills of lading to state that the goods are to be delivered to the consignee or his assigns, him or them paying freight; in such case the consignee or his assigns, by accepting the goods, by implication become bound to pay the freight. When a person acts publicly as a consignee there is an implied engagement on his part that he will be vigilant in receiving goods consigned to his care, so as to make him responsible for any loss which the owner may sustain in consequence of his neglect.

ROLE OF BANK
The bank plays a vital role in transactions between the shipper and consignee. The bank is involved in order to reduce the risk of uncertainty in getting the payments. This is made possible through letter of credit transactions.

What is Letter of Credit (L/C)?

A letter of credit, often abbreviated as an L/C, and also referred to as a documentary credit, is a document issued by a financial institution which essentially acts as an irrevocable guarantee of payment to a beneficiary. A commercial letter of credit is a contractual agreement between banks, known as the issuing bank, on behalf of one of its customers, authorizing another bank, known as the advising or confirming bank, to make payment to the beneficiary. The issuing bank, on the request of its customer, opens the letter of credit. The issuing bank makes a commitment to honor drawings made under the credit. The beneficiary is normally the provider of goods and/or services.

Characteristics & Types of L/C

Negotiability Revocability Transferability At Sight & Stance

Elements of L/C
Applicant (importer) Beneficiary (exporter) Issuing Bank (importers bank) Advising Bank Confirming Bank Negotiating Bank (usually exporters bank)

A payment undertaking given by a bank (issuing bank) On behalf of a buyer (applicant) To pay a seller (beneficiary) for a given amount of money On presentation of specified documents representing the supply of goods Within specified time limits Documents must confirm to terms and conditions set out in the letter of credit Documents to be presented at a specified place

Types of L/C
1. Irrevocable / Revocable 2. Confirmed / Unconfirmed 3. Revolving L/c 4. Red clause L/c 5. Green clause L/c 6. Back to Back L/c

Step-by-step process
I. Buyer and seller agree to conduct business. The seller wants a letter of credit to guarantee payment. II. III. Buyer applies to his bank for a letter of credit in favor of the seller. Buyer's bank approves the credit risk of the buyer, issues and forwards the credit to its correspondent bank (advising or confirming). The correspondent bank is usually located in the same geographical location as the seller (beneficiary). IV. Advising bank will authenticate the credit and forward the original credit to the seller (beneficiary).

V.

Seller (beneficiary) ships the goods, then verifies and develops the documentary requirements to support the letter of credit. Documentary requirements may vary greatly depending on the perceived risk involved in dealing with a particular company.

VI.

Seller presents the required documents to the negotiating bank to be processed for payment.

VII.

Negotiating bank examines the documents for compliance with the terms and conditions of the letter of credit

VIII.

If the documents are correct, the negotiating bank will claim the funds fm the issuing bank.

IX. X.

Negotiating bank will forward the documents to the issuing bank. Issuing bank will examine the documents for compliance. If they are in order, the issuing bank will debit the buyer's account & remit the money to beneficiarys bank on due date.

XI.

Issuing bank forwards the documents to the buyer.

The price of LCs

The issuer (importer/applicant) pays the LC fee to the bank for opening the L/C, and may in turn charge this on to the beneficiary. Its approximately 0.25% of the L/C amount per quarter It may vary from country to country

Who Governs Letter Of Credit

Letters of credit used in international transactions are governed by the publications of International Chamber of Commerce (ICC) Uniform Customs and Practice for Documentary Credits (UCPDC).

The general provisions and definitions of the International Chamber of Commerce are binding on all parties.

(ICC 600 - UCPDC)

International Chamber of Commerce (ICC)

The International Chamber of Commerce (ICC) is an international organization that works to promote and support global trade and globalization. It serves as an advocate of world business in the global economy, in the interests of economic growth, job creation, and prosperity. ICC has direct access to national governments worldwide through its national committees. The ICC was founded in 1919 to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. The organization's international secretariat established in Paris ICCs activities include mediation, dispute resolution, advocating open trade, advocating market economy systems, combating commercial crime etc.,

INCOTERMS
Incoterms (International Commercial Terms) are a series of international sales terms widely used throughout the world. They define monetary transaction and role responsibilities for both sides of the international trading buyer and seller transaction. The purpose of standardized incoterms is to determine export and import clearance responsibilities, who owns the risk for the condition of the products at each stage in the transport process, and who is responsible for paying for what. Incoterms were first produced in 1936. Since that time expert international trade lawyers and practitioners have made six updates, completing in 2000. Contracts that include incoterms, produced in 2008 or 2009, should abide by the 2000 standard.

Ex-Works (EXW)
The seller delivers when he places the goods at the disposal of the buyer at the seller's premises or another named place (i.e. works, factory, warehouse, etc.,) not cleared for export and not loaded on any collecting vehicle. This term thus represents the minimum obligation for the seller, and the buyer has to bear all costs and risks involved in taking the goods from the seller's premises.

Free Carrier (FCA)

The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. It should be noted that the chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at the seller's premises, the seller is responsible for loading. If delivery occurs at any other place, the seller is not responsible for unloading. This term may be used irrespective of the mode of transport, including multimodal transport. "Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport by rail, road, air, sea, inland waterway or by a combination of such modes. If the buyer nominates a person other than a carrier to

receive the goods, the seller is deemed to have fulfilled his obligation to deliver the goods when they are delivered to that person.

Free Alongside Ship (FAS)

The seller delivers when the goods are placed alongside the vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss or damage of the goods from that moment. The FAS term requires the seller to clear the goods for export.

Free On-Board (FOB)

The seller delivers when the goods pass the ship's call at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term can be used only for sea or inland waterway transport.

Cost and Freight (CFR)

The seller delivers when the goods pass the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer. The CFR term requires the seller to clear the goods for export.

Cost, Insurance & Freight (CIF)

The seller delivers when the goods pass the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination, but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer.

However, with CIF the seller also has to procure marine insurance against the buyers risk of loss of or damage to the goods during the carriage. Consequently, the seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIF term the seller is required to obtain insurance only on minimum coverage. Should the buyer wish to have protection of greater coverage, he would either need to agree as much expressly with the seller or to make his own extra insurance arrangements. The CIF term requires the seller to clear the goods for export. This term can be used only for sea and inland waterway transport. If the parties do not intend to deliver the goods across the ship's rail, the CIP term should be used.

Carriage and Insurance Paid to (CIP)

The seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any additional costs occurring after the goods have been delivered. However, in CIP the seller also has to procure insurance against the buyer's risk of loss of or damage to the goods during the carriage. Consequently, the seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. Should the buyer wish to have the protection of greater cover, he would either need to agree as much expressly with the seller or to make his own extra insurance arrangements.

"Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of transportation by rail, road, air, sea, inland waterway or by a combination of such modes. If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier. The CIP term requires the seller to clear the goods for export.

 Carriage Paid to (CPT)

The seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any other costs occurring after the goods have been so delivered.

Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport, by rail, road, air, sea, inland waterway or by a combination of such modes. If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier, The CPT term requires the seller to clear the goods for export.

Delivered At Frontier (DAF)

The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport not unloaded, cleared for export, but not cleared for import at the named point and place at the frontier, but before the customs border of the adjoining country. The term "frontier" may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term. However, if the parties wish the seller to be responsible for the unloading of the goods from the arriving means of transport and to bear the risks and costs of unloading, this should be made clear by adding explicit wording to this effect in the contract of sale.

Delivered Ex-Ship (DES)

It means that the seller delivers when the goods are placed at the disposal of the buyer on board the ship not cleared for import at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to the named port of destination before discharging. If the parties wish the seller to bear the costs and risks of discharging the goods, then the DEQ term should be used. This term can be used only when the goods are to be delivered by see or Inland waterway or multimodal transport on a vessel in the port of destination.

Delivered Ex-Quay (DEQ)

The seller delivers when the goods are placed at the disposal of the buyer not cleared for import on the quay (wharf) at the named port of destination. The seller has to bear costs and risks involved in bringing the goods to the named port of destination and discharging the goods on the quay (wharf). The DEQ term requires the buyer to clear the goods for import and to pay for all formalities, duties, taxes and other charges upon import. If the parties wish to include in the seller's obligations all or part of the costs payable upon import of the goods this should be made clear by adding explicit wording to this effect in the contract of sale. This term can be used only when the goods are to be delivered by sea or inland waterway or multimodal transport on discharging from a vessel onto the quay (wharf) in the port of destination. However if the parties wish to include in the seller's obligations the risks and costs of the handling of the goods from the quay to another place (warehouse, terminal, transport station, etc.) in or outside the port, the DDU or DDP terms should be used.

Delivered Duty Unpaid (DDU)

The seller delivers the goods to the buyer, not cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller has to bear the costs and risks involved in bringing the goods thereto, other than, where applicable, any "duty" (which term includes the responsibility for and the risks of the carrying out of

customs formalities, and the payment of formalities, customs dudes, taxes and other charges) for import in the country of destination. Such "duty" has to be borne by the buyer as well as any costs and risks caused by his failure to clear the goods for import in time. However, if the parties wish the seller to carry out customs formalities and bear the costs and risks resulting there from as well as some of the costs payable upon import of the goods should be made clear by adding explicit wording to this effect in the contract of sale.

Delivery Duty Paid (DDP)

The seller delivers the goods to the buyer, cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller has to bear all the costs and risks involved in bringing the goods thereto including, where applicable, any "duty (which term includes the responsibility for and the risks of the carrying out of customs formalities and the payment of formalities, customs duties, taxes and other charges) for import in the country of destination. Whilst the EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation. This term should not be used if the seller is unable directly or indirectly to obtain the import license. However, if the parties wish to exclude from the seller's obligations some of the costs payable upon import of the goods (such as valueadded tax: VAT), this should be made clear by adding explicit wording to this effect in the contract of sale. If the parties wish the buyer to bear all risks and costs of the import, the DDU term should be used.

DIFFERENCE BETWEEN FCL AND LCL

Particulars Shipper CHA Forwarder/Nvocc FCL In this only one shipper and one consignee is involved LCL Here many shippers and many consignees are involved There is no change in documentation of CHA in exports and imports for both FCL and LCL. There is no consolidation of The cargo is consolidated cargo. from different shippers as one consignment. The marketing and sales of The marketing and sales of FCL is based on the volume Lcl is the Cbm allotted in of teus handled by the the Teu. company There is flexibility for the Here the shipper should be shipper to stuff cargo as per ready with the cargo as per the consignees specification the forwarders plan to do or based on the vessel that consignment or the schedule , vessel transit consolidator should have time etc. enough space to allot the shipper to ship the cargo. Freight rates are collected Freight rates are collected on per teu basis on the per cbm basis Responsibility with shipper Responsibility with forwarder Prior planning is not Prior planning is a must by required for freight freight forwarder that is forwarder. communicated to shippers Stuffing can be done outside forwarders place. Homogenous cargo Safety of cargo is much higher in FCL Stuffing is done at forwarders place. Heterogeneous cargo Safety of cargo is difficult as different cargo are stuffed

Liner

DATA ANALYSIS AND INTERPRETATION STATISTICAL TOOLS

Co-efficient of Variation
Objective Comparison & Consistency of two distributions The Relative Measure of dispersion based on standard deviation is defined by (S.D/Mean) * 100 In order to decide which of the two distributions is more variable, we compare the coefficient of variation (CV). The distribution with greater CV is set to be more variable. By comparing the CV we can decide which distribution is more variable or more consistent. Here the two available distributions are the export volumes of FCL/LCL TEUs in monthly basis for a year. From this we can infer which of the two distributions volume of TEU is more variable or more consistent

Objective
The objective of using this data is to identify the co-efficient of variation between the export and import FCL shipments for the year 2011.

Manipulations
Mean of Exports: x /12 Mean(x) =1843/12=>153.58 Mean of imports: y / 12 Mean(y) =234 / 12 =>19.5 Standard Deviation(x) = (x^2 / 12 (x/12) ^2) ^0.5 =(329251/12-(153.58)^2)^0.5 =62.04.

MONTH JAN FEB MAR

EXPORT(x) 77 93 155

IMPORT(y) 31 10 8

x^2 5929 8649 24025

y^2 961 100 64

APR MAY JUN JUL AUG SEP OCT NOV DEC Tot Mean SD CV

281 242 224 179 139 109 102 124 118 1843 153.583333 62.0462977 40.3991086

15 16 23 14 21 20 20 22 34 234 19.5 7.354137158 37.71352389

78961 58564 50176 32041 19321 11881 10404 15376 13924 329251

225 256 529 196 441 400 400 484 1156 5212

Standard Deviation(y) = (y^2 / 12 (y/12) ^2) ^0.5 =(5212/12-(19.5)^2)^0.5 =7.35 Co-efficient of variation: (Standard deviation/ mean)*100 Co-efficient of variation(x) = 62.04/153.08=>40.04 Co-efficient of variation(y) = 7.35/19.5=>37.71

INTERPRETATIONS
The export volume is more variable than the import volume or the import volume is more consistent than the export volume.

Time Series Objective

Forecasting & Trend Analysis A time series, as the name indicates, is a set of observations arranged in chronological order. Examples of time series are: The hourly series closing price o shares in stock exchange

 The weekly series attendance in a Public Limited Company The monthly series of steel production The annual series of national income A time series shows that the observed values of the variable fluctuate from time to time. Thus, an analysis of time series involves an examination of the past observations and estimation of future values. The variations in the time series are due to various factors like change in population, consumer tastes, weather conditions, customs and several others. The object of time series analysis is to identify and isolate these factors. These variations of time series are broadly grouped into four types called components of times series. They are 1. Secular trend 2. Seasonal Variation 3. Cyclical Variation 4. Irregular Variation The formula for time series is Y = a + bx where, a = 1/n(y-bx) b = ((x)(y)-nxy)/((x)^2)-nx^2 Here we are going to forecast from the previous year data with respect to exports and imports respectively. The trend analysis graph of exports and imports are inferred by obtaining the trend values.

Time Series of Export Data

x months y exports 1 77 2 93 3 155 4 281 5 242 6 224 7 179 8 139 9 109 10 102 11 124 12 118 Total 1843 y = a + bx b = ((x)(y)-nxy)/((x)^2)-nx^2 b = -2.98951 a = 1/12(y-bx) a = 155.0781 dx -5 -4 -3 -2 -1 0 1 2 3 4 5 6 6 dx^2 25 16 9 4 1 0 1 4 9 16 25 36 146 dx*y -385 -372 -465 -562 -242 0 179 278 327 408 620 708 494 Trend values 170.03 167.04 164.05 161.06 158.07 155.08 152.09 149.1 146.11 143.12 140.13 137.14 1843.02

Interpretations
Decreasing Trend Of Export Volume
The image part with relationship ID rId37 was not found in the file.

Time Series of Import Data

x y months imports 1 2 3 4 5 6 7 8 9 10 11 12 Total y = a + bx b = ((x)(y)-nxy)/((x)^2)-nx^2 b = 0.895104895 a = 1/12(y-bx) a = 19.05244755 31 10 8 15 16 23 14 21 20 20 22 34 234 dx -5 -4 -3 -2 -1 0 1 2 3 4 5 6 6 dx^2 25 16 9 4 1 0 1 4 9 16 25 36 146 dx*y -155 -40 -24 -30 -16 0 14 42 60 80 110 204 245 trend values 14.55 15.45 16.35 17.25 18.15 19.05 19.95 20.85 21.75 22.65 23.55 24.45 234

Interpretations
Increasing Trend of Import data

The image part with relationship ID rId38 was not found in the file.

LIMITATIONS
Lack of responsibility by some operators to handle extraordinary situations leading to claims. Poor maintenance of containers leading to damages and unhappy consignees. Shippers inadequately packing cargo which cannot withstand multiple handling like in transshipment points or involving multimodal transport. Shippers ignoring the packaging requirement at destination, e.g. the WPM (Wood Packaging Material) regulation, AQIS (Australian Quarantine) etc. Shippers not providing the documentation Invoice, Packing List, Declarations, Import Licenses, etc. required for smooth deliveries at destinations. Mis-declaration of hazardous cargoes, declaring wrong weights, leading to accidents and loss of property. Fraudulent exports made to claim export benefits leading to unclaimed cargoes at destination and hence carrier charges remaining unpaid.

SUGGESTIONS
No Loss of control When an Fcl shipment is done the overall logistics movement should be in a coherent manner right from the shipper to the consignee.

No Discontinuity of services Discontinuity of services should not happen to the shipper or consignee by the forwarder as the flow of information should be there within the supply chain partners.

No Differences of opinion There should be a clarity of thought between the supply chain partners in handling the shipment.

Selecting the right forwarder The forwarder should be selected by analyzing the key factors such as cost, quality and service levels.

Conclusion
This study reveals about the logistics process of an FCL shipment that is practically done in a freight forwarding company. The report gives an in depth view on all the supply chain parties who are involved in the movement of cargo either directly or indirectly. The study also highlights how it varies from LCL in certain aspects. As we have seen there are many steps to be followed for completing a shipment with many hindrances that come through the way in completing an assignment. These hindrances are bound to happen in shipping as it is a dynamic industry. It is so dynamic that it depends not only on humans and technology but also on nature. The successful completion of a shipment depends greatly through efficient planning and organizing by competent people. Also the success depends on team effort from all the parties who are involved in the shipment.

Future Growth
To be a logistics winner in the coming years organizations need to use the downturn to reshape for growth, propelled by an unshakeable conviction that the mission is still important, that more prosperous times lie ahead, and that in some way the company infrastructure is helping to build a better kind of services to customers. Logistics is inevitable in the future and essentially the management policy also has a significant role in the future of world. Generally the study is being featured with all aspects of management in Logistics and Freight areas. (Logistics include Transportation, Warehousing, Network Design, Cross docking, and Value Adding). There is lot of scope in improving the infrastructure facilities in the logistics sector as the future of logistics sector is going to significantly contribute to the growth of countrys economy in the near future.

ABBREVATIONS
LCL Less than container Load FCL Full Container Load CFS Container Freight Station ICD Inland Container Depot CHA Customs House Agent IT Information Technology NVOCC Non Vessel Operation Common Carrier BIN Business Identification Number PAN Personal Account Number DGFT Director General of Foreign Trade DGCA Director General of Civil Aviation DEPB Duty Entitlement Pass Book EGM Export General Manifest IGM Import General SB Shipping Bill BE/BOE Bill of Entry RBI Reserve Bank of India ETA Estimated Time of Arrival ETD Estimated Time of Departure B/L Bill of Lading L/C Letter of Credit EDI Electronic Data Interchange CO/COO Country of Origin UCPDC Uniform Customs & Practice for Documentary Credit ICC International Chamber of Commerce DO Delivery Order FEMA Foreign Exchange Management Act FERA Foreign Exchange Regulatory Act

ACS Accelerated Clearance of Export & Import Scheme EOU Export Oriented Unit STP Software Technological Park EXIM Export Import POL Port of Loading POD Port of Departure MR Mate Receipt SSR Special Service Request OBL Original Bill of Lading HBL House Bill of Lading INCOTERMS International Commercial Terms EXW Ex-Works FCA Free Carrier FAS Free Alongside Ship FOB Free On Board CFR Cost & Freight CIF Cost, Insurance & Freight CIP Carriage & Insurance Paid to CPT Carriage Paid to DAF Delivered At Frontier DES Delivered Ex-ship DEQ Delivered Ex-Quay DDU Delivered Duty Unpaid DDP Delivered Duty Paid 3PL 3rd Party Logistics 4PL 4th Party Logistics

BIBLIOGRAPHY
Websites
www.businessreviewindia.in www.indiaprline.com www.firstresearch.com www.alibaba.com www.speedycargo.com www.12manage.com

Magazines
Inbound Logistics Cargo Systems

Books
Elements of Shipping by Alan E Branch Introduction to Logistics Systems Planning and Control by Gianpaolo Ghizni, Gilbert Laporte, Roberto Musmanno.