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SIKKIM MANIPAL UNIVERSITY, DE

Registration No: 1302012256


Student Name: Gaurang Sharma
Subject Name: IB SPECIALIZATION

Course: MBA
LC Code: 00918
Subject Code: C E I M

Q1. What is containerisation? Describe the advantages and disadvantages of


containerization.
Description of containerisation
Advantages and disadvantages of containerization
Ans: Containerization is a system of intermodal freight transport using intermodal
containers (also called shipping containers and ISO containers) made of
weathering steel. The containers have standardized dimensions. They can be loaded
and unloaded, stacked, transported efficiently over long distances, and transferred
from one mode of transport to anothercontainer ships, rail transport flatcars, and
semi-trailer truckswithout being opened. The handling system is completely
mechanized so that all handling is done with cranes and special forklift trucks. All
containers are numbered and tracked using computerized systems.
The system, developed after World War II, dramatically reduced transport costs,
supported the post-war boom in international trade, and was a major element in
globalization. Containerization did away with the manual sorting of most shipments
and the need for warehousing. It displaced many thousands of dock workers who
formerly handled break bulk cargo. Containerization also reduced congestion in
ports, significantly shortened shipping time and reduced losses from damage and
theft
Advantages and Drawbacks of ContainerizationEven if containerization conveys
numerous advantages to freight distribution, it does not come without challenges.
The main advantages of containerization are:

Standardization. Standard transport product that can be handled anywhere


in the world (ISO standard) through specialized modes (ships, trucks, barges
and wagons) and equipment. Each container has an unique identification
number and a size type code.

Flexibility. Can be used to carry a wide variety of goods such as commodities


(coal, wheat), manufactured goods, cars, refrigerated (perishable) goods.
Adapted containers for dry cargo, liquids (oil and chemical products) and
refrigerated cargo. Reuse of discarded containers.

Costs. Lower transport costs due to the advantages of standardization. Low


transport costs; 20 times less than bulk transport. Economies of scale at
modes and terminals.

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Velocity. Transshipment operations are minimal and rapid. Port turnaround


times reduced from 3 weeks to about 24 hours. Containerships are faster than
regular freighter ships, but this advantage is undermined by slow steaming.

Warehousing. The container is its own warehouse; Simpler and less


expensive packaging. Stacking capacity on ships, trains (doublestacking) and
on the ground (container yards).

Security and safety. Contents of the container is unknown to carriers. Can


only be opened at the origin (seller), at customs and at the destination
(buyer). Reduced spoilage and losses (theft).

The main drawbacks of containerization are:

Site constrains. Large consumption of terminal space (mostly for storage);


move to urban periphery. Draft issues with larger containerships. A large postpanamax containerships requires a draft of at least 13 meters.

Capital intensiveness. Container handling infrastructures and equipment


(giant cranes, warehousing facilities, inland road, rail access), are important
capital investments.

Stacking. Complexity of arrangement of containers, both on the ground and


on modes (containerships and double-stack trains). Restacking difficult to
avoid and incur additional costs and time for terminal operators.

Repositioning. Many containers are moved empty (20% of all flows). Either
full or empty, a container takes the same amount of space. Divergence
between production and consumption at the global level requires the
repositioning of containerized assets over long distances (transoceanic).

Theft and losses. High value goods and a load unit that can forcefully
opened or carried (on truck). Vulnerability between terminal and final
destination. About 10,000 containers are lost at sea each year (fall
overboard).

Illicit trade. Instrument used in the illicit trade of goods, drugs and weapons,
as well as for illegal immigration. Concerns about the usage of containers for
terrorism.

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Q2. List out the various export promotion schemes currently available to
exporters. Explain MDA in detail.
a) List of various export promotion schemes
b) Description of MDA
Ans: a) List of various export promotion schemes:
To achieve the objectives laid down under the Foreign Trade Policy 2004-09 and
double Indias percentage share of global merchandise trade by the year 2009, the
government is committed to providing a stimulus to exports through various export
promotion schemes from time to time. Details of the existing Export Promotion
Schemes are as follows:
1. Advance licensing scheme
2. Duty Free Replenishment Certificate (DFRC) scheme
3. Duty drawback scheme
4. Export Promotion Capital Goods (EPCG) scheme
5. Export Oriented Units (EOUs), Electronics Hardware Technology Parks
(EHTPs), Software Technology Parks (STPs) scheme
6. Served from India scheme
7. Target Plus scheme
8. Duty Entitlement Pass Book (DEPB) Scheme
9. Vishesh Krishi Upaj Yojana
The Government has formulated a number of export promotion schemes to support
and promote exports. Except for Duty Drawback Scheme, the policy framework for
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various export promotion schemes is laid down in the Foreign Trade Policy 2004-09,
whereas the procedures governing the schemes are detailed in the Handbook of
Procedures, VoI-I 2004-09. The Department of Revenue has issued notifications to
operationalise the scheme.
The objectives of most schemes are to neutralize the incidences of levies and duties
on inputs used in export products, based on the fundamental principle that duties
and levies should not be exported. Presently, the major schemes are either duty
exemption or duty remission schemes. Duty exemption schemes enable duty-free
import of inputs required for export production. An Advance Licence is issued as a
duty exemption scheme. A Duty Remission Scheme enables post export
replenishment / remission of duty on inputs used in the export product. Duty
remission schemes consist of (a) DFRC; (b) DEPB Scheme and Drawback. DFRC
permits duty-free replenishment of inputs used in the export product. DEPB allows
drawback of import charges on inputs used in the export product. The Drawback
Scheme intends to neutralize the incidence of central taxes paid on inputs used in
the manufacture of export goods.
Besides, there are other schemes in operation which are basically in the nature of
reward schemes to reward high performing exporters. Target Plus, Served from India
and Vishesh Krishi Upaj Yojana are reward schemes. Rewards are given on the
basis of incremental exports / export turnover and such rewards have no linkage
whatsoever with the duties and taxes borne on export goods.
b) Description of MDA:
MDA is an approach to system development, which increases the power of models
in that work. It is model-driven because it provides a means for using models to
direct the course of understanding, design, construction, deployment, operation,
maintenance and modification.
An MDA approach starts with the well-known and long established idea of separating
the specification of the business functionality of a system from the details of the way
that system uses the capabilities of its underlying platform technology to achieve that
functionality. MDA derives its three primary goals from this idea: portability,
interoperability and reusability through architectural separation of concerns.
An MDA approach is independent of development methodologies as well as
technology. This separation of business functionality from computing technology and
methodology preserves a companys core software assets in the constantlychanging world of information technology.MDA provides an approach for, and
enables tools to be provided for:

specifying a system independently of the platform that supports it,


specifying platforms,
choosing a particular platform for the system, and
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transforming the system specification into one for a particular platform.

This is achieved through MDAs extensive use of modeling and abstraction.

Q3. What are the advantages and disadvantages of air freight as compared to
sea freight? Describe Air Way Bill and its use.
Comparison of air and sea freight
Air Way Bill and its use
Ans: Comparison of air and sea freight:
1. Cost
You probably dont have to be told to consider the costs before an undertaking. As a
business person, you consider the bottom line and as an individual, you have a
budget. Naturally, youre going to want to know which will cost you less, air freight or
ocean freight. Typically, you will hear that shipping by ocean is cheaper than shipping
by air.
To make the best decision, it helps to be educated about how carriers charge for
international shipping. Airlines bill you by what is called a chargeable weight.
Chargeable weight is calculated from a combination of the weight and size of a
shipment. Sea carriers charge per container rates for shipping in standard containers
(20 and 40 being the most common sizes). While weight can factor into the price
from sea carriers, their charge tends to be based more on the size of a shipment. If
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you are shipping less than a container load, your price is often determined by cubic
meter. With larger and heavier shipments, it is often much cheaper to ship by sea. As
a shipment gets smaller, the margin between the prices gets smaller and sometimes
air will even end up less expensive.
Shippers should note that there are destination charges to consider. Whether
shipping by air or by sea, there will be customs and destination fees. While the
actual shipment cost of sea freight is usually cheaper than the shipment cost of air
freight, the warehousing fees at seaports are many times more expensive than those
at airports.
2. Speed
When it comes to speed, there is no question that air freight is usually much faster.
Since time is money, this factor could more than make up for a higher cost of flying
cargo. Many sea shipments can take around a month to arrive while an air shipment
takes a day or two. For most business shipping, faster is better. When it comes to
the individual moving a household, it is often good to have the extra time to prepare
for the arrival of household goods in a new country. It should be noted that
technology keeps moving forward in the international shipping world. Ships are
getting faster. Canals have created shorter shipping routes. There are many ocean
freight shipments crossing the oceans and being delivered in as few as 8 days.
3. Reliability
Reliability is something we all look for in people, businesses, products, and services.
How does ocean freight and air freight stack up against each other in this category?
Air freight shipping has a much, much shorter history than ocean freight shipping, yet
air freight tends to win the battle of reliability. Flights get delayed by weather and
other factors, but airlines tend to be very on top of their schedules. Ocean carriers
are notorious for being bad about this. It is not uncommon for ships to be off
schedule. For many, a day or two here or there doesnt hurt; however, for many
businesses, a day or two could have serious cost effects. With airlines, there are
usually daily flights back and forth between major cities around the world. Because
of this, missing a flight doesnt cause much of a delay for a cargo shipment. Ocean
lines tend to have weekly schedules. Missing the cutoff at a seaport means a longer
delay.
4. Environmental Impact
Not everything is about the bottom line and convenience. While the social awareness
of environmental issues can change the way the public looks at a company and
affect its bottom line, we all have a responsibility of taking care of the planet on
which we live. It would seem that ocean freight wins this category. CO2 emissions
are much higher in air freight transport than ocean freight transport. This causes
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cargo shipping by air to have a much larger carbon fingerprint than cargo shipping by
sea. However, considering oil spills and the water ecosystems affected by ocean
freight, gives pause. Perhaps the jury is still out on this final factor.
Air Way Bill and its use:
The air waybill is the most important document issued by a carrier either directly or
through its authorised agent. It is a non-negotiable transport document. It covers
transport of cargo from airport to airport. By accepting a shipment an IATA cargo
agent is acting on behalf of the carrier whose air waybill is issued.
Air waybills have eleven digit numbers which can be used to make bookings, check
the status of delivery, and current position of the shipment. The number consists of:

1. The first three digits are the airline prefix. Each airline has been assigned a
3-digit number by IATA, so from the prefix we know which airline has issued
the document.

2. The next seven digits are the running number/s - one number for each
consignment

3. The last digit is what is called the check digit. It is arrived at in the following
manner:

The seven digit running numbers are divided by 7, by using a long division
calculation. The remainder becomes the check digit. That is why no AWB number
ends with a figure greater than 6. Air waybills are issued in 8 sets of different colours.
The first three copies are classified as originals. The first original, Green in colour, is
the Issuing Carrier's copy. The second, coloured Pink, is the Consignee's Copy. The
third, coloured Blue, is the Shipper's copy. A fourth Brown copy acts as the Delivery
Receipt, or proof of delivery. The other three copies are white.

Q4. Explain the requirement of cushioning materials in export packaging.


Describe the main types of cushioning materials used and their application.
Description of requirement of cushioning materials
Main types of cushioning materials used and their application
Ans: Description of requirement of cushioning materials:
Cushioning materials must in particular fulfill four main requirements:

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Recovery is one of the most important properties of a cushioning material; it
ensures that the package contents continue to be protected even when
repeatedly subjected to similar stresses. If recovery is too low, the braking
distance declines on constant exposure to stress, such that the resultant
kinetic energy can no longer adequately be absorbed and the package
contents may be damaged.
Cushioning materials must be insensitive to climatic conditions, such as
moisture due to elevated relative humidity, direct solar radiation and
extreme variations in temperature and their action must not be impaired by
such exposure.
Especially in the case of package contents which are at risk of corrosion, it
is important that the cushioning materials are not hygroscopic and
consequently do not promote corrosion. They should furthermore not
contain any aggressive constituents (neutral pH), which could contribute
towards corrosion. The cushioning material and package contents should
not interact and possibly impair each other's properties.
Use of the cushioning material should be effective, simple, environmentally
compatible and cost-effective.

Main types of cushioning materials used and their application:


Dynamic Systems manufactures specialty cushion materials that are so versatile,
they can be used for many different types of applications in many different
disciplines. Some of the more common uses of our materials include:
Medical
Dynamic Systems' cushions are used throughout the healthcare industry. SunMate is
often used in wheelchair cushions to distribute weight evenly and alleviate pressure
on ischial tuberosities or coccyx vertebrae. Pudgee is a gel foam used to prevent or
aid the healing process for bed sores and decubitus ulcers. Liquid SunMate Foamin-Place Seating is used to create custom-molded wheelchair inserts for clients with
complex contours and more fixed support requirements.
Aircraft
Laminar, a SunMate-Pudgee combination cushion, provides the ultimate in seating
comfort for those who have to sit long-term. It has excellent vibration and
impact absorption properties. T50E, our firmest SunMate formulation, is often used
as a crash protection or energy absorption layer in ejection seats. Pilot seats are
built with softer layers of SunMate or Pudgee on top of the crash protection layer for
added comfort and support.
Motorcycle
No one is more enthusiastic about SunMate and Pudgee cushion materials than
motorcyclists. They will often retrofit their factory-built saddles with SunMate and
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Pudgee so they can travel in comfort without the fatigue caused by long hours on the
road and prolonged vibrations.
Mining and Heavy Equipment
SunMate and Pudgee cushions have been studied by outside parties and proven to
excel or surpass other cushion materials with their ability to absorb vibrations that
aggravate physiological functions. Ergonomic seating designed SunMate and
Pudgee improves operator comfort and health.
Racing & Sports
SunMate is used in a variety of sports applications. Its excellent performance in
impact testing has qualified it as one of only a few FIA-approved cushion materials
for use in Formula One headrest design. Race car drivers, as well as drivers of a
number of competitive sports vehicles, experience better performance and handling
in addition to knowing they are safer with SunMate.
Equine & Veterinary
SunMate, Pudgee and FIPS are often used with horses and other animals to
improve their quality of life. Liquid SunMate can be used to fashion specially-molded
cushion parts and custom prosthetics for animals with limb injurues. SunMate is a
favorite material for use as saddle shims to balance saddle-fit or as impact absorbing
inserts in saddle pads for horses.
Custom
SunMate, Pudgee, FIPS, and T50E have been used in a myriad of other custom
applications. Due to their unusual texture and other physical and technical
properties, these specialty cushion materials appeal to creative individuals like
architects, industrial designers, innovators and engineers. The special nature of
these materials has also earned them inclusion in exhibitions in some of the most
prestigious museums and galleries in the world.

Q5. You are a merchant exporter. A prospective overseas client has shown
interest in your products. Write a letter making a firm offer mentioning all
relevant facts regarding product features, payment terms, transport details,
insurance, delivery schedules, packaging etc.,? Assume all relevant details
about the product and the client.
Ans: Exporting and importing are two sides of the same coin; both supply
customers with products manufactured outside the country. Exports now account for
over 15% of global GNP and are growing at an annual compound rate in excess of
10%. Export marketing requires a knowledge of the target market, a marketing mix
decision, planning, organisation and control and information systems. Exporting is
often an incremental process, from unsolicited order filling to deliberate export
planning. No doubt few firms will export unless

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Q6. List out the Principal Export Documents along with a brief description of
each of them.
List of Principal Export Documents
Description of Principal Export Documents
Ans: List of Principal Export Documents:
Export procedure describes the documents required for exporting from India. Special
documents may be required depending on the type of product or destination. Certain
export products may require a quality control inspection certificate from the Export
Inspection Agency. Some food and pharmaceutical product may require a health or
sanitary certificate for export.
Shipping Bill/ Bill of Export is the main document required by the Customs Authority
for allowing shipment. Usually the Shipping Bill is of four types and the major
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distinction lies with regard to the goods being subject to certain conditions which are
mentioned below:

Export duty/ cess

Free of duty/ cess

Entitlement of duty drawback

Entitlement of credit of duty under DEPB Scheme

Re-export of imported goods

The following are the export documents required for the processing of the
Shipping Bill:

GR forms (in duplicate) for shipment to all the countries.

4 copies of the packing list mentioning the contents, quantity, gross and net
weight of each package.

4 copies of invoices which contains all relevant particulars like number of


packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of
goods etc.

Contract, L/ C, Purchase Order of the overseas buyer.

AR4 (both original and duplicate) and invoice.

Inspection/ Examination Certificate.

The formats presented for the Shipping Bill are as given below

White Shipping Bill in triplicate for export of duty free of goods.


Green Shipping Bill in quadruplicate for the export of goods which are under
claim for duty drawback.

Yellow Shipping Bill in triplicate for the export of dutiable goods.

Blue Shipping Bill in 7 copies for exports under the DEPB scheme

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EXPORT-RELATED DOCUMENTS
Consular Invoice
Required in some countries, a consular invoice describes the shipment of goods and
shows information such as the consignor, consignee, and value of the shipment. If
required, copies are available from the destination country's embassy or consulate in
the U.S. The cost for this documentation can be significant and should be discussed
with the buyer.
Canadian Customs Invoice
Although not required by regulation, this customs invoice is a preferred document by
Canadian Customs and customs brokers. It is issued in Canadian dollars for dutiable
and taxable exports exceeding $1600 Canadian dollars. Detailed invoice
requirements can be obtained at the Canadian Customs website.
Dock Receipt and Warehouse Receipt
A dock receipt and warehouse receipt are used to transfer accountability when the
export item is moved by the domestic carrier to the port of embarkation and left with
the ship line for export.
Import License
Import licenses are the responsibility of the importer and vary depending upon
destination and product. However, including a copy of an import license with the rest
of your documentation may in some cases help avoid problems with customs in the
destination country.
ISPM 15 (Wood Packaging) Marking
The International Standards for Phytosanitary Measures Guidelines for Regulating
Wood Packaging Material in International Trade (ISPM15) is one of several
International Standards for Phytosanitary Measures adopted by the International
Plant Protection Convention (IPPC). The IPPC is an international treaty to secure
action to prevent the spread and introduction of pests of plants and plant products,
and to promote appropriate measures for their control. The American Lumber
Standard Committee (ALSC) and the National Wooden Pallet and Container
Association (NWPCA) provide phytosanitary certification for wood packaging
materials (WPM). APHIS will issue a phytosanitary certificate for wood package
materials only if WPM are the cargo.
Shippers Letter of Instruction

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The shippers letter of instruction is issued by the exporter to the forwarding agent
and includes shipping instructions for air or ocean shipment.

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