Summer Internship Project 2011

IMPORT OPERATIONS IN AIR AND SEA FREIGHT MANAGEMENT

Submitted in partial fulfillment of PGDM program 2010-12

Submitted by: Name: Mohit Srivastava Roll Number: 45 PGDM 2010-12

Company Guide: Name: Mr. ARVIND GROVER Designation: Deputy Manager AFL DACHSER PVT LTD New Delhi

Faculty Guide: Name: Prof. VILENDER KUMAR Designation: Asst. Professor FIIB New Delhi

ACKNOWLEDGEMENT

It gives me great pleasure in presenting before you the project report on IMPORT OPERATIONS IN AIR FREIGHT MANAGEMENT which I undertook in AFL DACHSER PVT LTD (ADPL) as summer internship for two months. These two months, which I spent in ADPL, was my first corporate experience and it helped me gain knowledge about logistics as a subject and as a trade (including the tricks) of which I have lots more to learn.

I would like to offer my gratitude to Mr. ARVIND GROVER (DEPUTY MANAGER) for giving me this opportunity as an intern in this esteemed organization. Thank You Sir. This dissertation could not have been written without MR. ANAND SRIVASTAVA (MANAGER) my project guide who has never withheld a yes to my demand and senior colleagues who encouraged and challenged me throughout the internship and patiently guided me through the dissertation process, never accepting less than my best efforts. I thank them all. I would be failing to my duties if I dont thank my professors for their constant support and my parents without whose blessings this dissertation wouldnt have been in the shape as it is now.

MOHIT SRIVASTAVA

TABLE OF CONTENTS

Chapter I Executive Summary Chapter II Company Profile Chapter III Introduction to Project Chapter IV Project Work Chapter V Theoretical Concept Chapter VI Project Methodology Chapter VII Data Analysis & Learnings Chapter VIII Conclusion Chapter IX Recommendations Chapter X Bibliography Chapter XI Appendix/ Annexure

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CHAPTER-1 EXECUTIVE SUMMARY

Logistics is a key value adding supply chain activity that plans and controls the flow of materials from suppliers and to customers. Ultimately responsible for customer satisfaction, it is subject to nine trends that extend the scope of logistics operations and offer new technologies to improve operational effectiveness. Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. There are many documents involved in international trade, such as commercial documents, financial documents, transport documents, insurance documents and other international trade related documents. In processing the export consignment, documentation may be executed in up to four contracts: the export sales contract, the contract of carriage, the contract of finance and the contract of cargo insurance. It is therefore important to understand the role of each document and their requirements in the international trade. Understanding and knowledge of these documents as well as various process or stages for air and sea imports is critical for air and sea freight management. As a summer intern work assigned to me in this project was to have delivered. I have learnt different stages and process for air and sea import and what documents are required such as IEC code, Master airway bill, House Airway bill, Copy of Invoice and Elementary Knowledge of Custom Clearance. Understanding of the documents mentioned above as well as the process of air and sea import. For these two objectives the methods followed were: y Learning through reading (To understand documents) y Observation (To understand the air & sea import process) LEARNINGS & CHALLENGES: y y y y Understanding similarity and differences in theory and implementation. Understanding constraints and how to overcome them. Relating practical aspects of the trade to the curriculum contents Learning technical details (Routings of shipping lines and airlines, Geographical details, incoterms, trade lanes)

CHAPTER-2 COMPANY PROFILE

AFL, founded in 1945, has pioneered the Cargo, Logistics and Courier industries in India. AFL Cargo (now AFL Dachser) has been the frontrunner in the Indian cargo industry for last six decades. It has been providing exemplary service in the domain of global logistics. DACHSER founded in 1930, is one of Europe's Leading Logistics companies. Dachser operates in the areas of Air & Sea Logistics, Food Logistics and also offers the infrastructure for Contract Logistics. In addition to this, transport, warehousing and value added services are also offered. With two industry leaders joining forces, the company has the Best of both Worlds. Through the fully integrated network of AFL Dachser, Indian customers now have greater access to global market while the foreign companies are assured of a reliable entry route into the Indian domain.

AFL DACHSER has a widespread local and global network and is a Preferred Global Logistics Solutions Provider for a large number of prestigious Indian and multinational companies. We are represented in over 106 countries via global network consisting of our own branch offices, delegates and strategic alliances with leading global players in Cargo & 5

Logistics management. Our long-standing partnerships give us distinct edge over competition vis--vis our ability to offer you complete freight solutions from Door-todoor delivery to Warehousing and Customs Clearance. Our robust Indian Network of 33 offices coupled with our Global Network of 260 locations, gives us the infrastructure we need to offer sound and sophisticated global logistics services with Enhanced Speed and Efficiency. AFL DACHSER is represented at all International Ports (Indian Gateways) and Airports by its Own offices and personnel. At each location, AFL DACHSER has localized expertise available to handle your needs.

Values:
Team Work 1. We work as a team to achieve our goals. 2. We share & communicate with our co-workers in times of need 3. We share knowledge & information to achieve common targets

Customer Focus 1. We deal fairly & keep our commitments 2. We shall delight out customers, only they provide job security 3. We delight our customers, only they provide job security.

Commitment 1. We genuinely try our best, being self-motivated 2. We take initiative in completing task & communicating 3. We focus on end result & not activities. We are accountable for our actions and their results 4. Our communication is fast, transparent and we listen

Continuous Improvement We shall constantly strive to improve our individual & company's performance

SERVICES:
1. Air Freight Forwarding 2. Ocean Freight Forwarding 3. Logistic's Services 4. Custom Brokers 5. Transport 6. Warehousing / Insurance 7. Consolidation Services 8. Perishable Goods 9. Dangerous Goods 10. Sea / Air Services via Dubai 11. Track & Trace

AFL DACHSER Advantages: Country specific know-how via Own establishments and strong local partners. Extensive Local Network of 29 Owned offices, provides regional proximity to our customers. Seamless integration with Dachser's Global Network of 260 offices, provides AFL Dachser its strong footprint in almost all the continents. 'Uniform Standard of Service' throughout the network and across products. In-house Customs Clearance and consultancy services. Representation at all International Airports and Seaports through own personnel. Sophisticated IT infrastructure to support the robust network.

The best supply chain practices [featured] in Logistics and the Wiley Operations Management Series for Professionals management/customer service processes in a new and integrated way. Logistics/supply-chain management is the synchronized ment trade facilitation systems that ease import/export and freight consolidation, air and ocean freight forwarding The design and realization of four party logistics - Systems, Man providing a differentiated level of customer service, and integration and synchronization skills for an optimally systems. So the operation model of 4PL in e-business can order process, virtual inventory management and logistics tracing. scheduling the resources of ocean freight, air lift, railroad, The Development of International Freight Transport in Europe as a management systems. These do not only include the new business-tobusiness and synchronization of processes leads to reduction of unnecessary buffers in the supply chain. customer service, it affects sustainable freight transport in two ways: modal operations (i.e. more sea freight than airfreight); Intelligent Freight Transportation Systems: Assessment and the ing and automating freight and fleet management operations at the Planning and Operation Systems aim to process this information and to customer service and increased productivity by re-routing vehicles in activities, vehicle synchronization and trans dock transshipment being the operational model. UPS and FedEx Air Hubs: Comparing Louisville and Memphis Cargo Hub We present a case study of the air hub operations at SDF and MEM. More than two-thirds of the U.S. air cargo market is controlled by the U.S.' hub airport managers (and the flight controllers) as the primary customer. Synchronized by a sophisticated system of cameras and lasers that read INDIA

Vision:
To be acknowledged as service provider of world-class global logistics solutions.

Mission:
To provide organizations and individuals the best value in global logistics through    Global & local network Innovative use of technology People who care for your needs

QUALITY POLICY:
AFL DACHSER, are committed to building trust and confidence in our customers. We strive to deliver value to our customers by identifying, understanding and crystallizing their needs, and satisfying them by providing economic, world class solutions, with the full involvement of our all vendors, suppliers and partners. 8

They recognize that our employees are our greatest assets. They strive to empower them, by providing a caring environment and by equipping them with appropriate tools and techniques to enable them achieve continuous improvement of our business processes and motivate them to aim for total service excellence.

Overview:

AFL DACHSER is a motivating force in global freight forwarding. Formed in February 1st 2007, this is a 50:50joint venture between AFL Cargo and DACHSER.

Air Freight

The moment you tie-up with AFL DACHSER, you automatically get an unmatched international advantage. Our seamless integration with our international partners makes exports/imports around the world an effortless affair. Some of our advantages are: Competitive freight rates Capability and expertise in moving perishables, time sensitive & urgent shipments such as periodicals, magazines, books, electronics, serum, apparel, leather goods, light engineering equipment etc. Value Added Services (Group age services, Purchase order follow-up, Pre-alert, Door pick-up / delivery) Experienced in handling exhibition goods and consulate shipments. Expertise in handling Over Dimensional Cargo and Project movements through Charters 9

AFL DACHSER offers End-to-End service options: DTD (Door to Door), DTA (Door to

Airport), ATD (Airport to Door), ATA (Airport to Airport)

Ocean Freight

AFL DACHSER handles shipments on direct/break bulk/consolidation basis through its extensive global network. With decades of experience, we facilitate the entire forwarding process according to your specifications as well as the requirements of the import and export countries. We apply strictly defined quality criteria in the selection of our sea freight carriers. Our extensive global network enables us transport goods in the most efficient and cost-effective manner transferring the ultimate benefit to the customers. Direct consolidation on a weekly basis to UK, US, Italy etc to ensure reliable and fast shipment of goods. Predictable service to enhance inventory control. Best carrier routing options and high sailing frequency. Expertise in handling Over Dimensional Cargo and Project movements through Charters Dealings with premium carriers to ensure optimal lead-time. Single-source Control with escalation to enhance contractual obligations.

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Customs Clearance & Consultancy

We are one of India's most reputed Customs House Agents. We recognize customs clearance as an integral part of inbound and outbound logistics. The Customs Clearance team in AFL DACHSER has an excellent resource of individuals who are well versed with the modus operandi and working knowledge which is required to handle local situations. We have our own CHA licenses at all International Ports and Airports. Representation at all International airports and seaports through own experienced professionals Specialized service offerings to first time importers and exporters, especially related party transactions/ FTA / perishable & JIT etc. Comprehensive guidance on pre-shipment documentation Clearance services for exhibition cargo under ATA Carnet on returnable basis Captive warehousing facilities and other Value Added Services Single Window Response by dedicated customer service executives for key customers Advance filling of custom documents, Registration of Licenses, SVB Bonds, Bonding and Co-Bonding Project Registrations, Project Clearance, STPI/100%EOU/SEZ/Third Party Imports etc. and Project Re-conciliation services.

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Project Cargo

India is becoming a manufacturing hub for the world, requiring specialized handling for over-dimensional and project cargo. AFL DACHSER has already made a foray into the Project Forwarding segment with clients like Reliance Industries, NTPC ALSTOM, ABB, Mauser Corp, Suzlon Energy, Essar Group, Thermax Ltd., Kirloskar Group, Hcc Ltd., Tema India Ltd etc. We deliver fully integrated project management solutions by land, sea and air for the carriage of: Heavy Lift Cargo Abnormal Loads Turnkey Projects Commercial Construction Project AFL DACHSER is One-stop Solutions Provider for all your requirements. Source-to-site management ensuring seamless and efficient process. One Point of Entry enabling efficient management of the entire project process and complete pipeline visibility. Charter Specialist Ships and Aircraft to meet the needs of an individual project. Offers cost effective solutions by combining its considerable buying power and technical skills.

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Industry Data Top 10 Global Logistics Providers March 14, 2011 - The Journal of Commerce 2010 Company Rank DHL Logistics Kuehne & Nagel DB Schenker Logistics CEVA Logistics C.H. Robinson Worldwide Dachser & Co Panalpina 2010 Revenue $ millions $35,208 Base Country

Coverge

Notes Excludes Williams Lea (Corporate Information Solutions) division.

Germany

Global

$19,420

Switzerland Global Excludes asset-based portion of Land Transport .

$18,245** Germany

Global

$9,070

Netherlands Global Total Transportation Segment. Includes full-year effect from the 2009 acquisitions of Walker, ITC and Quality Logistics. Acquired South African partner in December 2010. Acquired Australian partner carrier, Apollo Forwarding Forwarding and Contract Logistics Revenue only. Acquisitions of 5 companies during 2009 and

$7,576

USA

Global

6 7

$7,570 $6,880

Germany

Global

Switzerland Global

DSV

$6,125**

Denmark

Global

13

2010 accounted for 60% of the growth. 9 UPS Supply $6,022 Chain Solutions Expeditors $5,968 International USA Global Forwarding and Logistics segment of Supply Chain & Freight division.

10

USA

Global

Awards & Recognition

ISO Certification: AFL Dachser Management System is certified under Standard ISO 9001: 2008 by Bureau Veritas Certification (India) Private Limited.

IMPEX Award: The award was received for Second Highest Airway Bills received at Ahmedabad airport as Freight Forwarder for year 2006 - 2007. Award Received from Impex Interim and Gujarat State Export Corporation.
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Bonded Trucking: The award was received form Gujarat State Export Corporation for Bonded Trucking Services in year 2004 - 2005.

WORK CULTURE:
"We encourage innovation and strategic leadership." Their unique work culture fosters and encourages creativity, productivity and innovation. Strategy formulation and implementation necessitates the active participation and commitment of staff throughout an organization. We have developed such informal systems that facilitate the involvement from top to bottom in our organization. Their non-hierarchical structure and stimulating work environment promote free flow of information and expertise. They are committed to creating a caring environment where there is mutual trust and respect and where inclusion and diversity are valued.

They respect the rights and dignity of all employees. They believe in recognizing and rewarding exceptional efforts and extraordinary talent. The "Best Overall Performance" awards are given to the most consistent high performing employees across various functions. The "Best Performing Region" and Best Performing Branch awards are given in recognition of the best performing teams. A tribute to excellence and teamwork. At AFL Dachser, we constantly try to craft work environment which is conducive to the growth of our people. We strongly believe that our success is contingent to the success and growth of each of our employees. We imbibe a Learning Culture at AFL Dachser that helps our people develop and expand their skills to take on new challenges & responsibilities on national and international basis.

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CHAPTER-3 INTRODUCTION TO PROJECT

IMPORT OPERATIONS IN AIR FREIGHT & SEA FREIGHT MANAGEMENT

WHAT DOES LOGISTICS MEANS"Logistics plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements" As an important business management concept, you would expect Logistics to have a well-known and agreed-to definition. But it hasnt. To many, its meaning may be as limited as Transportation Management or as broad as what might be called Supply Chain Management. Denalis definition, from the Council of Logistics Management (CLM) is: "Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements". Logistics is an important cost area for most companies. Its costs are estimated to total about 10% of sales. Since Logistics role is to put the "right material in the right place at the right time" it provides much of the Supply Chains value-add. Playing such a pivotal role in the effectiveness of supply chain operations, logistics may impact costs and revenues in other corporate areas that equal or exceed logistics costs themselves. Logistics managements primary focus is on optimizing the delivery of service to customers, by managing complex tradeoffs between customer services, transportation, warehousing and inventory. Some World Class companies have been able to reduce the costs of their logistics operations to 50% of the levels of their competitors. This performance improvement has been achieved by adopting these World Class characteristics: Internal and external integration Daily forecast regeneration with dynamic safety stock Joint Service Agreements with customers and suppliers Direct plant shipping Vendor Managed Inventory Broad scale electronic information exchange between all supply chain participants. Information systems that support paperless, integrated and flexible operations No "special deals"

Ct of
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It is only now, as information technology capabilities have expanded, that these goals are approachable for most companies. Denali has identified nine major trends that are changing the

way logistics managers do their jobs which have helped in exports marketing also. They are described below:

1. Globalization Companies now compete for worldwide markets, no longer satisfied with local markets. As sourcing managers expand their search for the best value, they cast their nets in ever widening patterns and are rewarded with attractive sources in non-traditional locations. Logistics managers must transport those materials to global manufacturing locations and then to worldwide customers, achieving time, place and availability goals. 2. Supply Chain Integration Denali research has shown that logistics management evolves through five stages, each characterized by unique management approaches. World class companies are integrated internally along horizontal processes, and externally with customers and suppliers. Integration is achieved through application of technologies, such as ERP and physical integration of joint management processes such as the current collaborative initiatives. 3. Flexibility and Speed The best supply chains are ultimately the most responsive. They are able to recover quickly from unexpected changes in demand or supply. Internal processes of leading companies are not only integrated, but are focused on their customers need for speed and flexibility in order fulfillment. These goals are achieved by streamlining internal processes, modifying policies and integrating ordering and fulfillment processes with customers. E-commerce trends are also having an impact. Buyers are ordering in smaller quantities and expecting more rapid order turnaround. Logistics managers must provide for these new requirements. On the plus side, the closer the manufacturer is to the consumer, the less impact intermediaries have on inventory buildup and service failure.

4. Track and Trace Capabilities Supply chain exceptions occur unexpectedly. Logistics managers must modify operations to correct them. This requires constant monitoring and adjustment. Most organizations recognize they have insufficient visibility and create safety stocks to protect against the unexpected. Now leading logistics suppliers are providing on-line information on shipment status, in real time. This permits companies equipped to react to the information to make appropriate changes in time to meet service objectives. 17

5. Collaborative Logistics Leading companies are employing similar collaborative approaches to assuring transportation and facility capacity is available to meet changing needs, and to further reduce their acquisition costs. In transportation this means real time information sharing with carriers, to match upcoming requirements with the most effectively positioned equipment. It may also mean sharing of logistics resources (equipment, facilities, systems and relationships) with other companies with complementary shipping characteristics. Companies with these relationships are able to further reduce costs by taking advantage of other companies shipping volumes.

6. Reverse Logistics The Green Movement has caused most companies to rethink product design and logistics to minimize their impact on the environment. In many cases this may extend to disposing of products at the end of their useful life. Large costs are involved for transport, facilities and other services. Logistics managers now must plan the reverse flow of their product from consumer to disposal with the same care as their distribution.

7. Transportation Marketplaces E-Business has parallels in the logistics arena. During the e-business heyday, numerous transportation marketplaces appeared, offering many of the e-procurement capabilities of the other B2B marketplaces; access to an orderly spot market, auctions and contracting. Although many do not survive, there are several who remain, effective.

8. Optimization Technologies Logistics operations have always been a target of optimization efforts. The earliest linear programming solutions found application in transportation planning and warehouse design. Later, optimizers were used to resolve network design questions and more recently, vehicle fleet routing problems. In the past few years a new class of technology focused on optimizing manufacturing and supply chain operations was commercialized. Known as APOs these packages are used to optimize material flows through manufacturing operations, as well as optimally planning transportation operations. Many third party logistics companies use these technologies to plan and manage customer logistics. Finally, a new class of business optimizers has appeared recently. These are called Enterprise Profit Optimizers. Their purpose is to optimize the trade-off between profit and other strategic objectives. The ability to optimize, and to do it quickly, will help companies to improve productivity and return on investment. 18

9. Growth and expansion of 3PL and 4PL services Companies who directly manage formerly internal logistics processes are called third party logistics providers (3PLs). A movement to uesoutsource logistics management began in about 1990, and has grown at a 25% annual rate since. 3PL reven now total over $70 billion. There are now more than 1000 3PL's offering or claiming to offer services in North America. Most 3PLs were formed as a new service line by traditional logistics companies (warehousemen, transportation companies or forwarders) or the "spun-off" logistics organization of successful industrial companies (Kaiser, Dupont and Caterpillar, to name a few). There are, as a result, several industry segments, each offering similar services with features that stem from the parents area of logistics expertise and asset strategies. Customers of 3PLs have decided to use their services for a number of reasons. In fact, most customers justify their choice to outsource for more than one of the following benefits: Concentration on "core competencies" Improved negotiating leverage Access to state-of-the-art technologies Track and trace capabilities Capital for investment in logistics assets and technologies Expert, skilled staff Well-designed and executed processes

CONCLUSION: Logistics is a key value adding supply chain activity that plans and controls the flow of materials from suppliers and to customers. Ultimately responsible for customer satisfaction, it is subject to nine trends that extend the scope of logistics operations and offer new technologies to improve operational effectiveness.

IMPORT IN SEA FREIGHT MANAGEMENT:IMPORT CYCLE1. Filling of sub manifest transshipment permission (SMTP) by shipping line with port customs for movement of ICD containers. 2. Inland haulage of import container to ICD Delhi. 3. Shifting of import container from TKD rail terminal to ICD PPG by CWC. 4. IGM entry at computer center ICD PPG. 19

5. Payment of CWC changes by importer or CHA or shipping line at users office counter. 6. DE stuffing of LCL containers inside the import warehouse. 7. Examination and delivery of FCL cargo from CY. 8. Examination of LCL import cargo and unit of import cargo/container as per customs out of change order

IMPORT IN AIR FREIGHT MANAGEMENT:

Common Import/Export Documents There are many documents involved in international trade, such as commercial documents, financial documents, transport documents, insurance documents and other international trade related documents. In processing the export consignment, documentation may be executed in up to four contracts: the export sales contract, the contract of carriage, the contract of finance and the contract of cargo insurance. It is therefore important to understand the role of each document and their requirements in the international trade.

PRE-SHIPMENT DOCUMENT 1) Party Order Copy: This order copy is sent to the manufacturing unit, along with the other documents. It is received from the buyer containing details regarding product And other instructions. 2) Export Production Order: This document is the order for the production of goods to be exported. It is 20

sent to the related production unit, where the production of the required goods takes ace. 3) Location Packing List This document is sent by production unit, and is prepared as per the requirement of the shipments. It contains Batch No. Manufacturing date, Expiry date, Carton or Drum No. Gross weight, net weight, units per carton and number of cartons. All details of the products required for shipment are in the location packing list. 4) Custom Invoice: It contains details of the products and shipping marks along with the trade and Payments terms, port of discharge and loading, mode of discharge and Scheme applied .it prepares the custom clearance. 5) Custom packing list: It is required by the custom to check the value and rate of the product; this is an important document for effecting shipment of goods. 6) Dispatch Instruction: These are instruction given to the factory to dispatch the product to the Godown. 7) Declaration: Declaration like schemes declarations, Factory-stuffing declarations are required for custom clearance. Others include form SDF etc. 8) GSP (Generalized system of preferences) This form is required by the party of a developed country, to clear the goods from there country custom, which has to be duly attested by the export Inspecting agency of India. Original copy is of green colour.The product code is also mentioned. Basically GSP is prepared to get the concession in the developed country. It is non-contractual instrument by which developed country extend tariff concessions to various developing countries. 9) GR-Form: This document is submitted to RBI showing the value of goods and total foreign exchange earning in the country by the exporter. 21

10) Application of inspection: An application of inspection has to be given to the export inspection agency on the buyers request. Especially to the country where the inspection certificate is needed. 11) Pallet packing list: It describes the No. of pallets, No. of cartons to be kept in the container. 12) Bill of Lading/Airway Bill: It is the format given to CHA giving full description of product as per the party requirement including shipping marks, port of loading, Port of discharge, total gross weight, net weight and tare weight. IT is prepared in order to avoid mistake, while preparing bill of lading or airway bill. 13) Delivery Order: It is issued to CHA for lifting the material from godown to dock. 14) Mates receipt: It is issued by the captain of the vessel, confirming that the goods have been loaded on board. 15) Bill of Lading: It is given by the shipping line once the goods are moved. It contains voyage details, Container No. Vessel name, shipped on board date and freight Charges if pre-paid. 16) Airway Bill: It is issued by related airlines, which is dispatching the goods by air to the port Of destination. 17) ARE-I-Form: This form is submitted to the central exercise before the goods leaves the factory showing the exact value of the goods to be exported which are Subject to excise duty. 18) Performa Invoice: It is a temporary commercial invoice, which is sent by the exporter to the importer, it is also called as the advance bill. It contains the description of 22

goods and other terms and conditions. It is required by the importer.

POST-SHIPMENT DOCUMENT 1) Commercial Invoice: It is prepared for the negotiation with the bank. This is final bill prepared by the exporter after the shipment has been made. It contains all necessary Commercial terms and condition. 2) Covering Letter: This is issued to bank showing list of document to be dispatched to the buyer along with other informations like name of buyer, total value of goods and name of the foreign bank. 3) FEMA Declaration; It is also issued by bank showing total foreign exchange earnings. 4) Letter Of Credit: L/C mode of payment, which is sent by the applicant i.e. buyers bank, stating terms and condition of contract. 5) Bill Of Exchange: It is sent by the exporter to the importer asking to pay the certain amount Specified in the bill of exchange. 6) Declaration: If exporter goods are produced under any scheme Declaration of that Particular goods are also given. 7) Packing List: It is also sent along with the other Document. 8) Certificate of Analysis: It is made if the exporter is exporting pharmaceuticals or any other Product, which has chemical involved. It is to be prepared on the basis of Information gathered on the impact of the exported product in the buyers Country.

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9) Certificate of origin: It is prepared in order to provide information regarding origin of goods, and is Issued by any recognized CHAMBERS OF COMMERCE. 10) Airway bill/ Bill of lading: Airway bill is prepared by the airline company dispatching of goods to the port of destination while bill of lading is prepared by the shipping line dispatching the goods by its own vessel to the port of destination.

AIRWAY BILL:The air waybill---air consignment note or airway bill of lading---serves as a receipt for goods and an evidence of the contract of carriage, but it is not a document of title to the goods. Hence, the AWB is non-negotiable. The goods in the air consignment are consigned directly to the party (the consignee) named in the letter of credit (L/C). Unless the goods are consigned to a third party like the issuing bank, the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor. Therefore, unless a cash payment has been received by the exporter or the buyer's integrity is unquestionable, consigning goods directly to the importer is risky. For air consignment to certain destinations, it is possible to arrange payment on a COD (cash on delivery) basis and consign the goods directly to the importer. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB. In air freight, the exporter (the consignor) often engages a freight forwarder or consolidator to handle the forwarding of goods. The consignor provides a Shipper's Letter of Instructions which authorizes the forwarding agent to sign certain documents (e.g. the AWB) on behalf of the consignor. The AWB must indicate that the goods have been accepted for carriage, and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. The signature or authentication of the carrier must be identified as carrier, and in the case of agent signing or authenticating, the name and the capacity of the carrier on whose behalf the agent signs or authenticates must be indicated.

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CHAPTER-4 PROJECT WORK

The various division of AFL DACHSER is given below, IMPORT !*******************************! ! ! ! ! AIR SEA EXPORT !*******************************! ! ! AIR SEA CUSTOM CLEARANCE for import and export.

1::

2::

3::

CHALLENGES:: Understanding similarity and differences in theory and implementation. Understanding constraints and how to overcome them. Relating practical aspects of the trade to the curriculum contents Learning technical details (Routings of shipping lines and airlines, Geographical details, incoterms, trade lanes)

Topics:: 1: Air Import * Operation & product knowledge * Documentations * Air import cycle 2: Sea Import * Operation & product knowledge * Documentations * Sea Import cycle * Types of container FCL * LCL working 25

* Role of NVOCC. * Role of shipping lines. 3: Sales Tools 4: Elementary knowledge of custom Clearance.

A port is an interface between sea transport and inland transport and as such is considered to bean important sub-system within the total transport system. As a nodal point for exchange of import and export cargoes, the port plays a key role in physical supply and physical distribution management. While the principle function of port is to provide entry and exit for cargoes (and passengers to some extent), other auxiliary but important activities at the ports include customs inspections, warehousing, preparation of cargo for shipment etc. As such, the ports plays a significant role in a countrys economic development and prosperity by providing the necessary infrastructure for handling goods traffic and in the fulfillment of her peoples aspirations towards economic progress and prosperity. The efficiently of ports not only helps in increasing the efficiency of the overall transport system of a country, but also reduces the cost of transporting the goods from one point to another.

PORTS IN INDIA
India, with a vast coastline of about 7517 km. (including the coastlines of Andaman, Nicobar and Lakshadweep Islands) has 12 major ports and 163 intermediates/minor port while the major ports of Calcutta/Haldia, paradip, Vizag, Chennai, Enore and Tuticorin are on the east coast, the rest of the major ports, namely, Cochin, New Managalore, Mormugao, JNPT (Nhava Sheva), Mumbai and Kandla are on the west coast. Development of major ports is constitutionally the responsibility of the Government of India. The Indian Ports Act, 1908 deals with safety of shipping and conservation of ports apart from management and levying of certain charges on vessels, while the Major Port Trust Act, 1963 contains the statutory provisions for the constitution of Port Trust Boards and vesting the administration, control and management of the Major ports in the Boards. So far as intermediate and minor ports are concerned, the operational and administrative responsibility for development of the same rests with the maritime states under whose jurisdiction they fall, although technical assistance wherever necessary is provided by the central Government.

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PORT AS CATALYSIST TO INDIAS FOREIGN TRADE

Indias overseas trade is heavily dependent on ocean transport, as about 95 % of the total trade in terms of volume moves by sea. The major ports as catalyst to his countrys foreign trade play a prominent role as providers of necessary infrastructure for cargo handling. I.e., loading of export cargo in vessels and unloading of import cargo from the vessels. The share of major ports, besides undertaking the cargo handling activity, also provide several other services to ships and shippers. The facilities and services to the ships comprise navigational channels, traffic management (including regulation of movement in channel, pilotage, berthing, communication and towage) dredging, bunkering, repair and dry docking, maintenance of signal stations, provision, fresh water etc. while the services to shippers or cargo include groupage , transit storage bagging, weighing, tallying, marking, packing, sanitary measures, reconditioning, rent of equipment, lighterage, stevedoring and delivery of cargo to the ships side for loading of export cargo and vice-versa in case of unloading of import cargo. So far as the intermediate and minor ports are concerned, they are basically engaged in catering to the requirement of coastal shipping for their limited hinderland. In coastal areas, where rail and convenient roof facilities are lacking, the minor port also facilitates the passenger traffic movements. The contribution of these ports in providing the infrastructural facilities to the requirements of countrys overseas trade is about 12 % and that too for handling of mostly the import cargoes. E.g. fertilizers and food grains, at some ports and thereby reducing the pressure on the major ports.

PORT CAPACITY AND TRAFFIC THROUGH PUT

For handling the traffic, the ports need to have the capacity. The capacity of a port depends largely upon the aggregate capacity of individual berths therein and also the type of cargoes handled. In addition to that the facilities created in terms of handling equipment and for cargo servicing have a great bearing on the capacity of a port. The output of a port is measured in tons per unit time passing through it and is adequately called throughput. Ever since the beginning of planning era, i.e., 1950-51, expansion of port capacity has been an important aspect of development programmes obviously due to increasing volume of traffic. The following table (table 1) gives the trends in ports capacity, traffic throughout and the capacity utilization from 1990-91 onwards. I.e., after the introduction of policy of trade liberalization : Year 1989-90 1990-91 1991-92 1992-93 Capacity 162.8 162.8 169.2 170.2 Traffic Handled 148.4 152.9 157.6 166.6 27 Capicity (%) 91 94 93 98 Utilsation

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

170.2 174.0 181.2 219.5 239.5 254.4 254.4 291.0 291.0 363.0

179.3 197.2 215.3 227.3 251.4 251.7 272.0 281.1 287.5 313.5

105 113 119 104 105 105 107 91 99 86

Source : Indian Ports (Different Volumes), pub. By Indian Ports Association, New Delhi Universally, the ideal norms for capacity utilization are considered to be around 75-80%. In case of Indian ports, the capacity utilization during the last three years has been in the range of 86 % to 99 % per cent. The situation seems to be improving. There are 10 major ports and 139 minor/intermediate ports located on the vast coast line of 5560kms. These ports serve as transshipment points between sea and surface transport and points of entry and exit for import and export trade. The successive plans have sought to build up capacity of the ports to match the growing needs of sea borne trade. Up gradation of existing ports and construction of new ports have been parts of this process. The traffic handled at the major ports increased from 19.2 million tons in 1950-51 to 106.73 million tons in 1984-85. Traffic at Calcutta has leveled off over the years; the increase in recent years, has taken place only at Haldia. Bombay, Kandia and Madras, however, have emerged as the leading ports. The composition of traffic has undergone significant changes. POL and iron ore traffic have registered significant growth during the last 35 years and at present account for 71 per cent of the total traffic handled at major ports. On the other hand, foodgrains traffic, as a consequence of increasing self-reliance, has dwindled. A recent phenomenon is the growing trend of container traffic which is likely to increase substantially in the Seventh Plan. Volume of Traffic at major ports (Million tonnes) Ports 1. Calcutta/Haldia 2. Bombay 3. Madras 4. Cochin 5. Vishakhapatnam 1950-51 7.6 7.0 2.2 1.4 1.0 28 1960-61 9.4 14.3 3.0 2.0 2.8 1979-80 8.56 16.57 9.98 5.46 10.23 1984-85 10.18 25.20 15.00 3.92 12.87

6. Kandia 7. Mormugao 8. Paradip 9. New Mangalore 10. Tuticorin 11. Nheva Sheva (ongoing Project) Total:

1.6 6.4

19.2

39.5

7.27 14.80 2.31 0.90 2.41 78.49

15.75 14.51 2.14 3.38 3.78 106.73

Commodity wise traffic at major ports (In million tonnes) Commodity 195051 POL 3.10 Iron Ore Coal 2.70 Fertilizers 0.30 (including raw materials) Food grains 3.40 Containers General Cargo 9.70 Total: 19.20

196061 10.90 6.30 2.10 0.60

197980 28.78 23.18 2.05 6.36

1984-85 49.73 26.00 4.50 6.00

5.10 14.50 39.50

1.20 16.92 78.49

1.10 3.23 16.17 106.73

Seventh Plan The Seventh Plan projection and the capacity build up required to serve this traffic are set out Commodity wise port capacities and traffic projections (In million tonnes) Commodity Capacity as on Projected traffic Capacity 31.3.85 for VII Plan addition during VII Plan POL 55.25 67.35 16.50 Iron Ore 41.50 26.00 Fertilizers (Including 3.90 12.18* 4.10 raw material) Coal 6.25 10.55* 2.20 29 Capacity as on 31-3-90 71.75 41.50 8.00 8.45

Other break bulk Container Total:

22.35 3.48 132.73

21.65 9.30 147.03

0.10 5.82 28.72

22.45 9.30 161.45

* Figures for fertilizer (including raw material) and coal include cargo handled at specialized fertilizers and coal berths and also such cargo handled at general cargo berths' It will be seen from the table that additional capacity is required for POL and container traffic; for iron ore, however, capacity is more than adequate. Along with capacity build up, another major task would be to provide deeper drafts at selected ports to handle larger ships. The port wise capacity and traffic projections at the end of the Seventh Plan is presented Port Capacities and Traffic (In million tonnes) Port As on 31-3-1985 Traffic 10.18 2.14 12.87 15.00 3.78 3.92 3.38 14.51 25.20 15.75 106.73 Capacity 14.36 4.85 12.70 16.41 5.45 7.11 9.30 16.10 26.25 20.20 132.73 As on 31-31990 Traffic Capacity 15.95 20.11 4.83 6.05 17.76 16.70 16.81 21.37 7.26 6.65 7.80 7.71 3.74 9.55 15.17 16.10 28.60 28.11 23.86 23.20 5.25 5.90 147.03 161.45

Calcutta/Haldia Paradip Vizag Madras Tuticorin Cochin New Mangalore Mormugao Bombay Kandia Nheva Sheva Total:

The capacity of major ports is likely to increase from 132.73 million tonnes at the end of the Sixth Plan to 161.45 million tonnes by the end of the Seventh Plan as against an anticipated traffic of 147 million tonnes. The major increases in capacity will take place at Haldia, Madras, Vishakhapatnam and Nheva Sheva mainly to handle POL, fertilizers and container traffic. .The port capacity at the end of Seventh Plan would generally be adequate to deal with the projected level of traffic. While planning out capacity, bunching of ship arrivals and limited scope for interchangeability of berths between different categories of commodities should be kept in view. Hence at any given point of time, port capacity should contain a margin of reserve beyond normal demand. 30

The following are the broad objectives for the development of ports during the Seventh Plan: 1. Development of infrastructure to match the type and size of vessels as also the volume and types of cargo. 2. Planned modernization of port facilities and use of updated technology. 3. Expansion of facilities to handle at least 50 per cent of the general cargo in containerised form. 4. Deepening of drafts at selected major ports to receive larger vessels. 5. Improvement in productivity of labour and equipment for efficient port operations. 6. Development of selected minor ports as an integral part of the overall port system. Port infrastructure has generally lagged behind fast changing shipping technology, especially in regard to the handling of container traffic. Ports are not only ill equipped but also the cost of container handling at most ports tend to be very high. in the Seventh Plan modernisation of port and cargo handling facilities especially to handle container traffic, will receive priority. The Plan will provide for establishment of container freight stations as well as Inland Container Depots and standardisation of equipment and faclities to facilitate smooth transhipment of containers. The concept of multi-purpose terminals would be adopted to blend modern cargo handling techniques with conventional operations. The development of containerisation will also necessitate rationalisation of container handling charges and tariff structures at major ports. The severe draft limitations at several ports have restricted entry of modern large ships. Deepening of drafts at selected ports to allow large container cellular vessels as well as large tankers and ore vessels would be taken up on a priority basis. The existing levels of output in terms of cargo transferred or handled across berths are relatively low and the port productivity is a matter of major concern. The main reasons for this are the bunching of arrivals of vessels and low labour productivity etc. In the Seventh Plan efforts will be made to reduce the ships' idle time at the berths and the preberthing waiting time. The present norms for utilisation of cargo handling equipment are outmoded and would be updated to set higher productivity standards. Labour productivity at the ports happens to be extremely low and is to be optimised through extensive manpower training to enhance skills and managerial capabilities and integrating dock and port labour to facilitate optimal manpower interchangeability. The labour productivity norms as well as the manning scales will be reviewed from time to time so that labour performances can beJRiproved. Selected minor ports would be developed as satellites to major ports as well as to effectively cater to coastal and sailing vessels and help accelerate regional development. Dredging capacity would be increased by replacement of overaged dredgers with modern larger capacity dredgers and improved utilisation. 31

The concept of providing captive, dedicated berths by the users such as the fertiliser industry, power and coal will also be pursued. Construction and maintenance of such berths by their users is likely to result in more efficient utilisation and throughput. Another area of user investment is the fast growing off shore oil exploration industry and logistic support at oil terminals. The Oil Coordination Committee may invest in providing captive facilities at the ports as well as launches and all weather boats for speedy transportation to oil terminals. The existing outdated and inefficient communication system in ports would be replaced by modern ones. Ports may also take steps to introduce computer based management information system to provide prompt services to vessels for cargo handling, billing operations etc. There is also a need to conduct hydrographic surveys and prepare modern charts to improve port development activities and open up inaccessible areas to deep draft ships. Interface transport links like rail and road would be adequately developed and integrated into a multimodal concept with matching and standardized facilities to allow smooth transshipment and flow of traffic. This is especially necessary in the case of container traffic, where smooth transshipment from exporter to importer is of crucial importance. Appropriate financial measures will be taken to improve the viability of the ports. These include pooling of resources of major ports for optimum development of ports sector, rationalization of port tariff structure to reduce wide inter-port differentials, simplified documentation system, and uniform procedure for auction/sale of impounded cargo as well as uncleared cargo. Due to acute constraint of budgetary resources, nonconventional sources of finance for port development will also be considered. Among other measures, consideration will be given to encourage private capital in appropriate areas of investment, such as ship repair facilities and floating dry docks at major ports, container terminals at selected major ports, construction of berths allowing private investors to operate under the overall control of the port and acquisition or lease of sophisticated equipment. It will be necessary to define the conditions under which private investment is permitted at the ports to enable the use of latest technology under the overall administrative control of the port authorities. Intermediate and Minor Ports Intermediate and minor ports need to be developed as an integrated part of the overall port system in order to increase the port capacity in the country and help accelerate regional development. At present, there are about 139 minor or intermediate ports and the responsibility for their development rests with concerned maritime State Governments. The total traffic handled at minor ports has been declining over the years and is now of the order of about 6.8 million tonnes as against about 11 million tonnes in 1970-71. This decline in traffic, in spite of lower port and wharf age charges is mainly due to various 32

technical difficulties and shortcomings faced by minor ports such as slow response to technological change in shipping and cargo handling, shortfall in coastal traffic, inadequate infrastructure facilities like jetties, warehousing, stacking facilities and insufficient internal surface transport links. There is, therefore, urgent need for the concerned states to provide adequate funds for the development of minor ports so that they can meet the requirements of the hinterland and effectively cater to coastal and sailing vessels, thus to some extent reducing the pressure on major ports.

Dredging Corporation of India (D.C.I.) Dredging is the basic operation in the development and maintenance of ports and harbours and is a continuous process to maintain the requisite depth of water in the approach channels, inner channels and alongside-wharfs. Dredging fleet is becoming overages. More than half of the fleet would be due for replacement during the Seventh Plan. There is also lack of proper repair and maintenance facilities for the fleet. The existing dredging capacity is about 188.50 lakh cubic metres (LM3) as against the requirement of 209 LM3. During the Seventh Plan dredging capacity of 383 LM3 would be required. The main thrust during the Seventh Plan would be on replacement of overaged assets, provision of repair facilities and improvement in utilization and productivity of the dredgers. There should, accordingly be a pooling of dredging equipment owned by various organizations like DCI and the Ports. Seventh Plan Outlay and Programme In the Sixth Plan an outlay of Rs. 575 crores was provided for the Ports Sector. The expenditure, however, was Rs. 626.86 crores. A provision of Rs. 1104.79 crores has been made for the ports sector in the Seventh Plan and detailed sectorial break up is indicated in Annexure 8.3. The continuing schemes of major ports account for Rs. 579 crores including Rs. 402.36 crores for Nheva Sheva Port. The replacement of overaged assets and modernisation of facilities account for another Rs. 185.91 crores, the outlay for addition to capacity being Rs. 189.89 crores. For lighthouses and lightships, a provision of Rs. 30 crores has been made in the Seventh Plan. The programmes contained in the Seventh Plan are focussed on completion of essential on-going schemes, replacement of obsolete cargo handling equipment and floating crafts, modernisation and improvement of port facilities including container handling and addition to capacity in the context of projected traffic and cargo mix.

33

Major Ports The main schemes for Calcutta and Haldia relate to modernisation of port railways and the road network, development of infrastructural facilities in and around the dock areas, expansion of container handling facilities and addition to general cargo capacity. At Bombay, besides expansion of container handling facilities, it is proposed to improve and modernise the marine oil terminals at Butcher Island and Pir Pau as well as the existing Bombay docks. The construction of Nheva Sheva port would involve a plan outlay of Rs. 402.36 crores, and would substantially add to the port capacity. The programme for Madras Port involves completion of the additional oil berth, deepening of the Bharathi Dock and provision of container handling equipment as also an extension to the container berth. At Vishakhapatnam the iron ore handling system would be upgraded to handle larger vessels. At Tuticorin, one more coal jetty would be constructed to meet the requirement of the expansion of Tuticorin Thermal Power Station, while at the New Mangalore Port, an additional general cargo berth will be provided.

Minor Ports During the VII Plan the maritime states and union territories for the development of minor ports have provided an outlay of Rs. 125.63 crores. In the Central Sector, the programme for development of minor ports includes a scheme for development and up gradation of selected minor and intermediate ports. An outlay of Rs. 20 crores is provided for this purpose. Steps will be taken to improve port and harbor facilities including draft and berthing requirements. Dredging Corporation of India An outlay of Rs. 95 crores has been provided for the DCI during the VII Plan mainly for replacement of old assets, acquisition of modern dredgers to meet requirements as well as provision of support equipment and dredger repair facilities. 8.139 The main schemes include replacement of 3 overaged dredgers with modern dredgers of higher capacity, procurement of one additional dredger and 2 small portable dredgers to meet the shortfall in capacity requirements. In addition, support crafts and equipment such as work boats, launches and pumps would also be acquired. The dredger repair complex would be established at Calcutta for carrying out repairs to the dredgers and support craft of the DCI.

34

CHAPTER- 5 THEORETICAL CONCEPT

The International Logistics Chain The Manufacturer: Must manufacture the goods to the specifications of the Importer and do so in a timely manner and to the specifications outlined in the Letter of Credit and Sales/Purchase Orders. Must ensure compliance with governmental export requirements and must obtain an Export license or supply the inputs for this license to be issued. They must also assist the Importer vis-a-vis compliance to their government's Customs' requirements. Responsible for obtaining quota allocations for the goods he is producing, if in fact there is a quota in the country of destination. This could be an area for reform in the APEC economies since the manufacturer must "buy" the quota allocation from the "government or export control agency." This means a "new" manufacturer must buy all or some of another manufacturer's quota which is sold to the "new" manufacturer at a profit by the manufacturer holding the original allocation (there are exceptions to this). The "new" manufacturer must secure this allocation in order to manufacture and ship quota items during a calendar year. May work through or under the control of a Buying Agent who may assume some or all of the technical responsibilities, i.e., banking, export licensing, et al. May make bookings directly with steamship carriers and handle in-country shipping coordination including local trucking/rail to the piers/container yards or may be responsible for working directly with a local Freight Forwarder for documentation or even consolidation, etc. Possible Barriers: The lack of quota or share of the quota which has obvious implications for the Importer. What they obtain under the quota may be too small, and this would have obvious implications and/or complications for the Importer. Late production or partial shipment may be an issue.

35

 Nonconformance to export licensing requirements and/or Letter of Credit requirements is a common experience when dealing with manufacturers overseas. A lack of ocean carrier space and/or equipment based on seasonal aspects of the market would, of course, complicate their ability to move freight forward. The lack of technological support to communicate directly with the steamship carriers, freight forwarders, consolidators, brokers, governmental agencies, and the Importer. The lack of revenue to support the technological advancements needed and to maintained trained staff.

Buying Agents: Not always involved in the process and may be out of the picture if the importer deals directly with the manufacturer and/or through their own foreign buying office. Interfaces directly with the importer of record and/or their foreign buying office or representative. Negotiates the terms of sale, and all particulars including Letter of Credit terms and conditions, etc. If involved, may be responsible for assisting in obtaining quota if applicable, may assistance in the preparation of the Letter of Credit and guarantee Letter of Credit compliance, may be responsible for preparation of the Export license and other documents as required, may handle all communications with the manufacturer, shipping companies, local freight forwarders, truck/rail contacts, etc. and quality control, or may second these functions to either the manufacturer or an intermediary such as a Consolidator, NVOCC (Non Vessel Operator Common Carrier), or Consolidator/NVOCC.

Collects on the Letter of Credit and distributes cash to the manufacturer and others in the country of origin and connected with the transaction.

Possible Barriers: Really the same as those indicated under the Manufacturer, albeit the Buying Agents may themselves be a barrier to a seamless transaction since they are really just brokers to some degree although some are involved in areas such as quality control. 36

 Usually under FOB terms of sale this link is handled by the manufacturer, paid for by them, and then this cost is passed on in the price of the goods. There are, of course, countless exceptions, i.e., if Intermodal is developed in the origin country the steamship carrier will in all probability have tried to involve themselves and may even operate the Intermodal piece. Charges based on weight/cube or on a per unit basis. Possible Barriers: Untimely delivery of containers to the manufacturer and/or untimely delivery of the containers to the steamship piers. Lack of ocean carrier equipment. Lack of space on vessels. Incomplete documents. Congestion on pier delivery day. No ability to interface directly with freight forwarders, consolidators, manufacturers, ocean carriers, etc. Lack of technology to handle communications and documentation. Lack of revenue stream to support technological advances needed to maintain trained staff sufficient to the task.

Local Freight Forwarders: Responsible for the preparation of the document packet to be forwarded to the local authorities, Customs in the foreign country, the banks, and the Importer. May also be responsible for coordinating local truck/rail and may be asked to book space on vessels and have containers dispatched to the manufacturer. Receives a fee for services. Possible Barriers: Untimely and incomplete preparation and forwarding of documents, poor coordination of local truck/rail operators. Lack of space on vessels and lack of equipment for same. 37

 Congestion at the piers on vessel load-out day. Container Freight Station problems with coordination of containers, documentation, etc. Lack of the technology to interface directly with ocean carrier terminals, truckers, brokers, etc.

Consolidator: If involved responsible for receiving freight and issuing the Forwarder's Cargo Receipt (a negotiable document), ensuring the goods received are in good order, that all marks and numbers are complete, that the shipment is staged and ready for loading, that the document package is complete, a booking is made with the steamship carrier and truck/rail arranged to the pier/shipside, and that the importer, manufacturer, buying agent, et al., are informed of all particulars of the receipt of the goods and eventual shipment from the consolidator's facilities. In addition they must supply and distribute all information/documents necessary for compliance with the Letter of Credit and/or sales agreement/P.O.

Possible Barriers: Untimely coordination with steamship carrier and/or truck/rail company. Incomplete or inaccurate preparation of the document package or incomplete distribution of this document packet. Poor communications with the manufacturer, local truck line/rail company, shipping company, banking institution, or importer. Lack of ability to get space bookings in the heavy shipping season: which means they could not get containers dispatched to the manufacturer and/or to their own Container Freight Station. This is largely based on their relationship or lack of same with the shipping company. Lack of the technology to receive, hold, and move cargo and transmit documents to the ocean carriers and Importers, and to communicate with banks, manufacturers, truck and rail lines, etc.

38

Origin Customs: Responsible for issuance of quota, Export License control, document control, coordination with manufacturer, shipping companies, et al. Possible Barriers: Untimely completion of documents by brokers and/or manufacturers, and/or Importers of record. Changes in procedures and staffing restrictions, etc. Lack of technology to transmit documents and information vis-a-vis those documents, lack of experience in handling sophisticated documents packets, and a lack of trained staff to handle all of the above. Lack of funding to improve technology and to maintain a trained staff.

Banking Institutions: Responsible for assisting the manufacturer and importer with all financial documents, with assuring there is compliance to all Letter of Credit terms and conditions, that payment is timely after compliance with LC requirements, etc. is assured, that all documents are forwarded on a timely basis to the importer and/or a designated agent of the Importer so delays at destination are avoided and subsequently payment to the manufacturer/buying agent is also delayed. Possible Barriers: Untimely handling and issuance of documents by origin customs, manufacturer, buying agent, et al. Lack of attention to details of the Letter of Credit. Poor communications with the manufacturer and/or Importers. Slow payment to the manufacturer (this can be most crucial since most manufacturers need cash flow to be very timely, since many are cottage industry level and simply survive order by order). Late or partial shipments by the manufacturer may be a difficulty. Lack of trained staff sufficient to handle the task.

39

Origin Ports (actually applies to Destination Ports as well): Responsible for shore-side operations, maintenance of facilities, development of technology that will enable it to accommodate vessels and operations suitable to its trade, management and administration of all of the above, pricing for its services and/or real estate and/or development, development of connecting linkage for highway/road access and intermodal linkage may even be a responsibility of the Ports dependent on local circumstances. When evaluating Port responsibilities it must be understood that not all Ports are operating Ports and some may have developed or be subject to a strategy that simply calls for land development and nothing more. Possible Barriers: Lack of understanding of their clients' strategies and future needs including operational, infrastructural, technological, administrative, and service needs. Lack of market knowledge regarding trends and overall trade movements for their economy and regional economies, et al. They may also suffer from a lack of professional staff and management, or funding sufficient to keep up with needed improvements on technological basis. Port congestion caused by poor access to Intermodal connectors, rail, etc., or even and direct connections to their National Transportation System. Lack of funding and/or revenue stream to support the technological advancements and to maintain trained staff sufficient to the task.

PROCEDURE FOR HANDING OVER OF CARGO TO AIRPORT AUTHORITY:

As per Section 30 of the Customs Act read with Regulations made there under the person in charge of the conveyance carrying imported goods shall deliver an Import Manifest in duplicate to the Proper Officer. Accordingly the person incharge of the Aircraft or the authorized agent shall file these documents complete in all respects in the prescribed proforma along with the declaration and details in respect of arms, ammunitions, explosives, narcotics, dangerous drugs, gold or silver to the Station Duty Officer (S.D.O.). The S.D.O. will assign the Rotation 40

Number and make entries in the Register. He retains two copies as stipulated and returns the balance to the Airlines Representative, if more number of copies is delivered. As per Section 41 of the Customs Act and the Regulations made under the Customs Act, the person in-charge of a conveyance carrying export goods shall, before the departure of the conveyance, file Export Manifest in duplicate complete in all respects. The Pilot-in-Command or his authorized agent shall duly sign this document. Accordingly, the Pilot-in-Command or his authorized agent will file the Export Manifest in duplicate duly filled in to the S.D.O. prior to the departure of the Aircraft. The S.D.O. after making entries in the E.G.M. Register will assign E.G.M.Number on all copies of the manifest filed and retain two sets of documents and return the balance, if any. As per Section 42 of the Customs Act, no conveyance can leave the Customs Station until the Proper Officer to that effect has given a written order. Accordingly, the acknowledgement on the General declaration filed by the person in-charge of the Aircraft or his authorised representative given by the S.D.O. shall constitute the required clearance in terms of Section 42 of the Customs Act. Accordingly, the S.D.O. will ensure that the requirements of Section 42 have been complied with before giving clearance for the Aircraft. All cargo imported by Aircraft and Export cargo by Air will be escorted by the Import Freight Officer (IFO) / Export Freight Officer (EFO) respectively. These Officers will be posted round the clock by Assistant Commissioner (Air Cargo Complex) concerned. After the cargo is escorted from the Aircraft to the A.C.C., the Escorting Officer will endorse on the copy of the I.G.M. produced by the Airlines bearing I.G.M.No. To the effect that " ------ packages / pallets / containers landed by the flight were escorted from the Aircraft to the ACC" and sign clearly indicating the name, date and time and handover the manifest to the Import Freight Officer in the A.C.C. Before handing over the duly endorsed I.G.M., the Escort Officer will make entries in a separate register maintained by him. The duly endorsed manifest by the Export Officer will be handed over to the I.F.O. to enable him to supervise physical handing over of the cargo to the A.A.I. 41

The concerned Airlines will present four copies of the I.G.M. to the I.F.O. The concerned Airlines will hand over the cargo to the custodian i.e. A.A.I. situated at A.C.C. under the over-all supervision of the I.F.O. stationed at the A.C.C. With necessary endorsements for having handed over and received the cargo by A.A.I., in all the four copies of the manifest, the I.F.O. will forward one copy to A.A.I., one copy he will match with the manifest given by the Escort Officer retained for office record, one copy forwarded to the Import Department and one copy will be to the Airlines. Details regarding the excess landing, short landing and damaged goods will be clearly indicated in all the copies of the manifests and also in the above prescribed register. The Custodian, i.e., A.A.I. will maintain a detailed account of receipts of goods in the register as per the proforma prescribed at Annexure "F. Whenever any lapses or discrepancies are noticed in the handing over of the cargo, the I.F.O. will submit a report to the A.C. (A.C.C.) through his Superintendent for further action. If any of the packages landed are found to have been damaged such packages should be sealed with Airlines seal and weighed and the particulars noted in the manifest before depositing with the Custodian. In the case of such damaged packages which have been sealed and deposited by the Airlines with the Custodian, if a survey is subsequently asked for either by the Airlines or by the Importers the same will be done by the Appraiser of ACC in the presence of the Airlines representative, representative of the A.A.I. and the Importer/Clearing Agents. Thereafter, the import cargo shall be segregated into cargo meant for transshipment and others by the A.A.I. in the presence of Airlines representative and I.F.O. in the cargo Complex. A.A.I. will submit detailed statements of all the imported goods cleared for home consumption, transshipped etc., and those remaining in their custody once in a month to the A.C. (Transshipment) in the A.C.C The I.F.O. will ensure that the import cargo is handed over to A.A.I. as stated above on the same day. The Air Customs Officer (A.C.O.) posted for escort work will ensure that the import cargo landed by the aircraft is taken to the Import enclosure of A.A.I. at A.C.C. by the concerned Airlines on the same day. The route adopted by the van / trolley carrying import cargo from the tarmac will be 42

within the security area and cannot go outside.

If for any reasons airlines are not able to complete the handing over of the Import cargo escorted and brought into A.A, I. import cargo complex on the dame day, the airlines will submit a letter for permission to hand over the cargo on the next working day. All such instances will be brought to the notice of the A.C. (A.C.C.) by the I.F.O. through his Superintendent on the same day during office hours or if that day happens to be a holiday, the next working day. I.F.O. will also endorse all the four copies of the manifests suitably of such delays. Subsequently, when physical handing over is to be made on the next day, airlines will lease with the I.F.O. and complete the process of handing over. I.F.O. supervising this will endorse all the copies (four) of manifests by affixing his signature, name and date. The I.F.O., as is convenient to him, but in any case on the following day of the receipt of the package will verify the register of the Custodian of the Ground Handling Agency to ensure that all the packages landed and covered by thee manifest including the excess landed packages are duly entered in the Register maintained by the Custodian. Barring inadvertent omissions, entries of cargo by the Aircraft, will appear in one place in this register, without intermixture with entries of another aircraft. He will also indicate the serial number of the Register against the entry in the manifest in the Master copy maintained by him. I.F.O. will maintain a register date wise and flight wise.

Cargo received by A.A.I. is cleared in the following manner a. Clearance of the goods filing the Bill of Entry. b. Clearance of the goods for export. c. Transshipment of goods to other destinations in India d. Unaccompanied Baggage cleared at Madras from the

Unaccompanied Baggage centre. The procedure to be followed regarding the goods cleared By filing Kutcha Bill of Entry/direct transshipment etc. are dealt with separately. 43

Non-Vessel Operator Common Carrier (NVOCC):

May also function as a consolidator (see points listed under Consolidator: receives goods and prepares documents). Basically ships cargo under their own rate structure and buys wholesale or low retail and resells space at low retail or better. Usually a non-asset based company. If involved, prepares the Forwarder's Cargo Receipt which substitutes for the Original Bill of Lading in the initial stages of the transaction, creates their own B/L and issues it for banking purposes and Letter of Credit compliance, may arrange local truck/rail and makes the booking and arranges steamship carrier equipment to be dispatched to the manufacturer and/or to their own Container Freight Station. Communicates directly with the Importer, possibly Customs, origin and destination transportation entities, and/or the Importer. Steamship Operator: May be conference (rate agreement) or rate non-conference (non-rate agreement) members and may derive additional income from consolidation, rail/truck operations including Intermodal operations, warehouse/distribution, etc. Obviously an asset based company. Responsible for vessel availability, schedule integrity, space and equipment on the vessels, all landside operations unless seconded to agents (stevedores, husbanding agents, terminal operating companies) and, of course, for all the attendant costs associated with vessel operations. Customer service, documentation, and all other administrative and managerial detail involved with the vessel and shore-side operations. Dependent on their own strategy they may be directly involved in intermodal operations (origin and destination), distribution, etc. They may negotiate directly with rail lines, truck lines, etc. for equipment, space, pricing, service, etc., and along with these may address issues such as congestion, port access, Intermodal connectors, etc.

Possible Barriers: Port congestion.

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 Port access: Intermodal connectors included. Staffing: manpower needs may not be adequately addressed. Lack of technology, i.e., EDI, etc. Lack of schedule integrity. Changes in vessel rotation, vessel size, container size and availability. Lack of coordination with truck and rail entities. Lack of coordination with Governmental agencies, i.e., Customs, Agriculture, Port Authorities, etc. Flag changes. Inconsistent pricing (this usually would be a problem between carriers in a trade rather than a problem internally with a carrier). Lack of a revenue stream to maintain the technology as demanded by the market, and to maintain a staff sufficient to the task.

Destination Customs & Other Governmental Regulatory Agencies: Responsible for enforcement, tariff compliance, collection of duties, assistance to the Importer on what can and cannot be imported and at what duty rates, under what quota requirements, etc. They have a very positive side and if approached properly can be a great asset, and can be quite helpful in the through movement of goods. They are a possible revenue source for and government involved. Possible Barriers: Untimely handling of documents with brokers, forwarders, importers/exporters, steamship operators, et al. Lack of adequate staff to handle the volume and/or the sophisticated level of imports (there are manpower freezes in a number of countries). Lack of proper and adequate assistance to the Importer and manufacturer before exportation/importation takes place. Lack of coordination with origin Customs and other governmental agencies. 45

 Lack of technology for a direct interface between brokers, forwarders, steamship companies, ports and other governmental agencies. Inter-Agency rivalry. Lack of funding sufficient to maintain the technology demanded by the marketplace and by the volume they may be handling, and to maintain a trained staff.

Customhouse Brokers: Responsible for documentation and direct interface with Customs, Agriculture, and other governmental agencies. May possibly deal with rail/truck/distribution facilities, if the Importer so desires. The Customs broker has no carrier responsibility and is not responsible for cargo custody or condition. The customs broker does not take posession of, or even see the cargo. The customs brokers liability is limited. Charges a fee for various services. Possible Barriers: Untimely handling of documents by importer/exporter, freight forwarders, consolidators, ocean carriers, etc. Lack of well-trained staff and also lack of well-trained Customs' staff to interface directly with them. Lack of technology to directly interface with clients, governmental agencies, etc., etc. Lack of sufficient revenue stream to support the maintenance of a trained staff, and the technological development demanded by the market they may be in. Destination Ports: (placed here to keep the sequence somewhat intact) See Comments under Origin Ports above and please note that Barriers are basically the same. Rail Lines/Trucking Companies :- including entities offering Intermodal operations/services, and this group would include all Third Party entities:

Responsible for interface with Customs Brokers, Steamship companies, warehouse/distribution facilities/companies, and in the case of line haul operations may interface with local trucking companies for local distribution.

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 Responsible for scheduling and schedule integrity, equipment availability, equipment control, documentation, line and terminal facilities control and maintenance, technological support for their operations consistent with accepted industry standards for service and operations, i.e., EDI, direct interface with ocean carriers, brokers, etc. Possible Barriers: Lack of equipment to cover normal and peak periods. Poor fleet management, i.e., equipment control. Lack of sufficient direct communications with Importers, shipping companies, Brokers, et al. Lack of staffing sufficient to handle both normal and peak periods, etc. Lack of technology to complete direct interface for documentation, et al. Insufficient revenue stream to support the technological advancements needed, and for the maintenance of staff sufficient to the task.

Destination Warehouse/Distribution Entities:- ( either controlled and/or owned by the Importer or independent of the Importer Possible need to interface with Customs and other government agencies. Responsible for coordination with rail/truck, direct interface with Importer and/or store level personnel, proper storage, adequate inventory and record keeping for all goods received and dispatched/distributed, equipment control and return on a timely basis of rail/truck/ocean carrier equipment, etc. Possible Barriers: Untimely distribution to importer and/or store level. Lack of coordination with rail/truck/ocean carrier. Improper record keeping. Lack of inventory control, inadequate facilities, staffing, and lack of technological development sufficient to handle the clients' needs, including updated computer systems would be an area of continuing concern. Capital to keep up with the increasing demands on the system. 47

Non-Vessel Operating Common Carrier (NVOCC)

Smaller shippers, with less-than-container load (LCL) shipments, can take advantage of the lower costs associated with being a big shipper. Non-vessel operating common carriers (NVOCCs) book space on steamships in large quantities at lower rates and sell space to shippers in smaller amounts. NVOCCs consolidate small shipments into container loads that move under one bill of lading. More favorable rates are passed on to the shipper. Services typically offered by NVOCCs, in addition to customary services provided by freight forwarders, are: . Consolidation of freight, and . Financial liability for goods due to loss or damage during transport. NVOCCs operate as carriers and should be evaluated by applying the same service, price, and delivery standards. NVOCC's years of experience can help you with all your LCL cargo requirements. Ocean export and import LCL consolidated container loads Direct Services to Major Ports Import and Export duty and customs clearance Local and cross-country pick up and delivery Short and long-term in-bond and through-bond storage Complete consular services International Bank Collections and Letters of Credit Marine and Surface cargo insurance Hazardous Goods trained and certified (to international standards) staff Fully computerized operations and administration Worldwide agents & affiliates offering the same full range of services

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CHAPTER-6

PROJECT METHODOLOGY

Document Quotation

Functions An offer to sell goods and should state clearly the price, details of quality, quantity, trade terms, delivery terms, and payment terms. An agreement between the buyer and the seller stipulating every details of the transaction. It is a legally binding document. It is therefore advisable to seek legal advice before signing the contract. An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and importation specifications (weight, size and similar characteristics). This is not issued for demanding payment but may be used when applying for an import license/permit or arranging foreign currency or other funding purposes. It is a formal demand note for payment issued by the exporter to the importer for goods sold under a sales contract. It should give details of the goods sold, payment terms and trade terms. It is also used for the customs clearance of goods and sometimes for foreign exchange purpose by the importer.

Prepared by Exporter

Sales Contract

Exporter and Importer

Pro Forma Invoice

Exporter

Commercial Invoice

Exporter

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Packing List

A list with detailed packing information of the goods shipped.

Exporter

Insurance Policy/ Certificate

An insurance policy is an Insurer or Insurance Agent or insurance document evidencing Insurance Broker insurance has been taken out on the goods shipped, and it gives full details of the insurance coverage. An insurance certificate certifies that the shipment has been insured under a given open policy and is to cover loss of or damage to the cargo while in transit. A certificate to certify the products Accredited Laboratories are conformed to a certain international/national technical standard, such as product quality, safety and specifications, etc. Document issued by the competent Exporter / Inspection Authority country when agricultural or food products are being exported, to certify that they comply with the relevant legislation in the exporter's country and were in good condition at time of inspection, prior to shipment and fit for human consumption. Exporter

Product Testing Certificate

Health Certificate

Phytosanitary Frequently an international Certificate requirement that any consignment of plants or planting materials importing into a country shall be accompanied by a Phytosanitary Certificate issued by the exporting country stating that the consignment is found substantially free from diseases and pests and conforms with the current phytosanitary regulations of the importing country. Application of the certificate in Hong Kong should be made to the Agriculture and Fisheries Department.

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Fumigation Certificate

A pest control certificate issued to certify that the concerned products have been undergone the quarantine and pre-shipment fumigation by the approved fumigation service providers. It is mainly required by the US, Canada, Australia, New Zealand and UK's customs on solid wood packing material from Hong Kong and the Chinese Mainland. An international customs document used to obtain a dutyfree temporary admission for goods such as exhibits for international trade fairs, samples and professional equipment, into the countries that are signatories to the ATA Convention. A document required by some foreign countries, showing shipment information such as consignor, consignee, and value description, etc. Certified by a consular official of the importing country stationed in the foreign country, it is used by the country's customs officials to verify the value, quantity and nature of the shipment

Exporter or Inspection Company

ATA Carnet

Exporter

Consular Invoice

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Document House Bill of Lading (Group age)

Functions A bill of lading issued by a forwarder and, in many cases, not a title document. Shippers choosing to use a house bill of lading, should clarify with the bank whether it is acceptable for letter of credit purpose before the credit is opened. Advantages include less packing, lower insurance premiums, quicker transit, less risk of damage and lower rates than cargo as an individual parcel / consignment. A kind of waybill used for the carriage of goods by air. This serves as a receipt of goods for delivery and states the condition of carriage but is not a title document or transferable/negotiable instrument. An air consignment note issued by an air freight agent to provide the cargo description and records. Again, it is not a title document.

Prepared by Forwarder

Air Waybill (AWB)

Airline

House Air Waybill (HAWB)

Forwarding Agent

Packing List (sometimes as packing note)

A list providing information needed for transportation purpose, such as details of invoice, buyer, consignee, country of origin, vessel/flight date, port/airport of loading, port/airport of discharge, place of delivery, shipping marks / container number, weight / volume of merchandise.

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Document Documentary Credit D/C

Functions A bank instrument began (issuing or opening bank), at the request of the buyer, evidencing the bank's undertaking to the seller to pay a certain sum of money provided that specific requirements set out in the D/C are satisfied. An arrangement between customer and his bank by which the customer may enjoy the convenience of cashing cheques, up to a value. Or a credit set up between the exporter and the importer guaranteeing the exporter will pay the importer a certain amount of money if the contract is not fulfilled. It is also known as performance bond. This is usually found in large transactions, such as crude oil, fertilizers, fishmeal, sugar, urea, etc. An instruction given by an exporter to its banker, which empowers the bank to collect the payment subject to the contract terms on behalf of the exporter.

Prepared by The Issuing Bank upon an application made by the Importer Exporter / Issuing Bank

Standby Credit

Collection Instruction

Exporter

Bill of An unconditional written order, in which the Exchange (B/E) importer addressed to and required by the exporter to or Draft pay on demand or at a future date a certain amount of money to the order of a person or bearer. Trust Receipt (T/R) A document to release a merchandise by a bank to a buyer (the bank still retains title to the merchandise), the buyer, who obtains the goods for processing is obligated to maintain the goods distinct from the remainder of his/her assets and to hold them ready for repossession by the bank. A financial instrument that is negotiable evidencing the obligations of the foreign buyer.

Exporter

Importer

Promissory Note

Importer

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Inland Container Depot (ICD) and Container Freight Station(CFS) in India:-

1.

DEFINITION OF ICD/CFS An Inland Container Depot / Container Freight Station may be defined as :-

A common user facility with public authority status equipped with fixed installations and offering services for handling and temporary storage of import/export laden and empty containers carried under customs control and with Customs and other agencies competent to clear goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export. Transhipment of cargo can also take place from such stations.

2.

DISTINCTION BETWEEN AN ICD & A CFS

Functionally there is no distinction between an ICD/CFS as both are transit facilities, which offer services for containerization of break bulk cargo and vice-versa. These could be served by rail and/ or road transport. An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports. CFS, on the other hand, is an off dock facility located near the servicing ports which helps in decongesting the port by shifting cargo and Customs related activities outside the port area. CFSs are largely expected to deal with break-bulk cargo originating/terminating in the immediate hinterland of a port any may also deal with rail borne traffic to and from inland locations.

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Keeping in view the requirements of Customs Act, and need to introduce clarity in nomenclature, all containers terminal facilities in the hinterland would be designated as " ICDs".

3.

FUNCTIONs OF ICDs/CFSs

The primary functions of ICD/CFS may be summed up as under: a. b. c. d. e. f. g. h. Receipt and dispatch/delivery of cargo. Stuffing and stripping of containers. Transit operations by rail/road to and from serving ports. Customs clearance. Consolidation and desegregation of LCL cargo. Temporary storage of cargo and containers. Reworking of containers. Maintenance and repair of container units.

4.

The operations of the ICDs/CFSs revolve around the following centres of activity:i.) Rail Siding (in case of a rail based terminal)

The place where container trains are received, dispatched and handled in a terminal. Similarly, the containers are loaded on and unloaded from rail wagons at the siding through overhead cranes and / or other lifting equipments. ii) Container Yard Container yard occupies the largest area in the ICD.CFS. It is stacking area were the export containers are aggregated prior to dispatch to port, import containers are stored till Customs clearance and where empties await onward movement. Likewise, some stacking areas are earmarked for keeping special containers such as refrigerated, hazardous, overweight/over-length, etc. iii) Warehouse A covered space/shed where export cargo is received and import cargo stored/delivered; containers are stuffed/stripped or reworked; LCL exports are consolidated and import LCLs are unpacked; and cargo is physically examined by Customs. Export and import consignments are generally 55

handled either at separate areas in a warehouse or in different nominated warehouses/sheds. iv) Gate Complex The gate complex regulates the entry and exists of road vehicles carrying cargo and containers through the terminal. It is place where documentation, security and container inspection procedures are undertaken.

5.

BENEFITS OF ICDs/CFSs The benefits as envisaged from an ICD/CFS are as follows :The main benefits from ICDs/CFSs i) ii) Concentration points for long distance cargoes and its unitisation. Service as a transit facility.

iii) Customs clearance facility available near the centres of production and consumption iv) v) Reduced level of demurrage and pilferage. No Customs required at gateway ports.

vi) Issuance of through bill of lading by shipping lines, hereby resuming full liability of shipments. vii) xi) ix) x) Reduced overall level of empty container movement. Competitive transport cost. Reduced inventory cost. Increased trade flows.

3. The facility has to be economically viable for the management and attractive to users to the railways for full train load movements; to other transport operators; seaports; shipping lines; freight forwarders etc. must have certain minimum amount of traffic. The prospective entrepreneurs are, therefore, strongly advised to study very carefully the viability of the project from the TEU traffic availability point of view.

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In the background of growing international trade, the infrastructure facility may have to precede the actual generation of demand. This is particularly important as such facilities have a long gestation period for being fully operationalised. Though it is not proposed to lay down any minimum TEU figures as part of the criteria for approval of ICDs/CFSs, following are suggested indicative norms:-

For ICD 6,000 TEUs per year (Two way) For CFS 1,000 TEUs per year (Two way)

4. LAND REQUIREMENTS The minimum area requirement for a CFS would be One Hectare and for ICD Four Hectare. However, a proposal could also be considered having less area on consideration of technological upgradation and other peculiar features justifying such a deviation.

5. DESIGN AND LAY-OUT OF ICD/CFS The design and layout should be the most modern state-of-art equipped with mechanical/electrical facilities of international standards. Key to a good lay-out is the smooth flow of containers, cargo and vehicles through the ICD/CFS. The design and lay out should take into account initial volume of business, estimated volume in 10 years horizon and the type of facilities exporters would require. The initial lay out should be capable of adaptation to changing circumstances. The design broadly should encompass features like (rail) siding, container yard, gate house and security features, boundary wall (fencing), roads, pavements, office building and public amenities. The track length and number of tracks should be adequate to handle rakes and for stabling trains where relevant. The perimeter fencing and lighting must meet the standards required by Customs authorities. The gate being the focal point of site security should be properly planned. The administration building is the focal point of production and processing of all documentation relating to handling of cargo and containers and its size will be determined by the needs of potential occupants. Fixed provisions should be made for sanitation facilities and possibly a food service facility. A good communication system and computerization and EDI connectivity is essential. Following Infrastructure should be available at the ICDs/CFSs

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y y y y y y y y

Provision of standard pavement for heavy duty equipment for use in the operational and stacking area of the terminal. In cases where only chassis operation is to be performed, the pavement standard could be limited to that of a highway. Office building for ICD, Customs office and a separate block for user agencies equipped with basic facilities. Warehousing facility, separately for exports and imports and long term storage of bonded cargo. Gate Complex with separate entry and exit. Adequate parking space for vehicles awaiting entry to the terminal. Boundary wall according to standards specified by Customs. Internal roads for service and circulating areas. Electronic weighbridge. Computerized processing of documents with capability of being linked to EDI.

6. EQUIPPING THE ICD/CFS The ICD/CFS would select most modern handling equipment for loading, unloading of containers from rail flats, chassis, their stacking, movement, cargo handling, stuffing/destuffing, etc. Following minimum equipment should be made available at ICDs/CFSs (Reach stacker may not be mandatory: I. Dedicated equipment such as lift truck (front end loader, side loader or reachstacker), straddle carrier, rail mounted yard gantry crane, rubber tyred yard gantry crane, etc. of reputed make and in good working condition (not more than 5 to 8 years old) and equipped with a telescopic spreader for handling the 20 ft and 40 ft boxes. The equipment must have a minimum residual life of 8 years duly certified by the manufacturer or a recognized inspection agency. An additional unit of equipment should be provided when the throughput exceeds 8000 TEUs per annum or its multiples for lift truck based operations. Terminals resorting to purely chassis-based operations do not require dedicated box handling equipment. However, chassis-based operations should be restricted to CFSs proposed to be set up near ports. Small capacity (2 to 5 tonnes) forklifts must be provided for cargo handling operations in all terminals.

II.

III.

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PROCEDURE FOR APPROVAL OF ICD/CFS AND ITS IMPLEMENTATION 1. Proposals for setting up ICD/CFS will be considered and cleared, on merits, by an Inter-Ministerial Committee for ICDs/CFSs, which consists of officials of the Ministries of Commerce, Finance (Department of Revenue), Railways and Shipping. Views of the State Governments as necessary would be obtained. 2. Application 10 copies in enclosed form should be submitted to the Infrastructure Division in the Ministry of Commerce, Udyog Bhavan, New Delhi. Application must be accompanied by 10 copies of feasibility reports mentioned in the guidelines. 3. The applicant should also send a separate copy of the application to the jurisdictional Commissioner of Customs. The Commissioner of Customs will send his comments to the Ministry of Commerce and the Central Board of Excise & Customs (CBEC) within 30 days. In case, the project is planned in a port town, a copy of the proposal should also be sent to the concerned Port Authority who would furnish their comments within 30 days to the Ministry of Surface Transport and the Ministry of Commerce. 4. The applicants are also requested to familiarize with the statutory Custom requirements in relation to Bonding, Transit Bond, Security Insurance and other necessary procedural requirements and cost recovery charges payable before filing the application. 5. On receipt of the proposal, the Ministry of Commerce would take action to obtain the comments from the jurisdictional Commissioner of Customs and other concerned agencies within 30 days. Wherever necessary, a copy of the proposal should also be sent to Zonal Railway Manager, under intimation to the Ministry of Railways One copy of the proposal would also be made available to the IMC Members for advance action. The decision of the IMC would be taken within six weeks of the receipt of the proposal under normal circumstances. 6. On acceptance of a proposal, a Letter of Intent will be issued to the applicant, which will enable it to initiate steps to create infrastructure. 7. The applicant would be required to set up the infrastructure within one year from the date of approval. The Ministry of Commerce may grant an extension of six months keeping in view the justification given by the party. Thereafter, a report would be submitted to IMC to consider extension for a further (final) period of six months. The IMC may consider extension or may submitted to IMC to withdraw the approval granted. 8. The applicant, after receipt of approval, shall send quarterly progress report to Ministry of Commerce. Three formats (given as annexure I to III) for sending the quarterly/ annual report shall have to be submitted to Department of Commerce through electronic mode as well as through hard copy.

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9. After the applicant has put up the required infrastructure, met the security standards of the jurisdictional Commissioner of Customs and provided a bond backed by bank guarantee to the Customs, final clearance and Customs notification will be issued. 10. The approval will be subject to cancellation in the event of any abuse or violation of the conditions of approval. 11. The working of the ICD/CFS will be open to review by the Inter Ministerial Committee.

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CHAPTER-7

DATA ANALYSIS AND FINDINGS

AIRWAY BILL:The air waybill---air consignment note or airway bill of lading---serves as a receipt for goods and an evidence of the contract of carriage, but it is not a document of title to the goods. Hence, the AWB is non-negotiable. The goods in the air consignment are consigned directly to the party (the consignee) named in the letter of credit (L/C). Unless the goods are consigned to a third party like the issuing bank, the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor. Therefore, unless a cash payment has been received by the exporter or the buyer's integrity is unquestionable, consigning goods directly to the importer is risky. For air consignment to certain destinations, it is possible to arrange payment on a COD (cash on delivery) basis and consign the goods directly to the importer. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB. In air freight, the exporter (the consignor) often engages a freight forwarder or consolidator to handle the forwarding of goods. The consignor provides a Shipper's Letter of Instructions which authorizes the forwarding agent to sign certain documents (e.g. the AWB) on behalf of the consignor. The AWB must indicate that the goods have been accepted for carriage, and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. The signature or authentication of the carrier must be identified as carrier, and in the case of agent signing or authenticating, the name and the capacity of the carrier on whose behalf the agent signs or authenticates must be indicated. The AWB is issued usually in set of twelve copies. Copies 1, 2 and 3 of AWB are originals and have the same validity. The originals are usually marked as:

Copy 1 or Original 1 is to be signed by the consignor or its agent. Copy 2 or Original 2, which is to accompany the goods through to the airport of destination, is signed by the carrier and by the consignor or its agent.

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Copy 3 or Original 3 is signed by the carrier, and is handed to the consignor or its agent after the goods have been accepted for carriage. If the letter of credit (L/C) stipulates a full set of originals, the presentation of Copy 3 or Original 3 to the bank will satisfy the requirement. The AWB also operates like a through bill of lading. It can be used in transhipment, that is, unloading and reloading from one aircraft to another aircraft during the course of carriage from the airport of departure to the airport of destination stipulated in the L/C. A set of AWB's issued by the first carrier usually includes a For Second Carrier copy and a For Third Carrier copy, which are used if required in transhipment. The first three digits in the sample Air Waybill represented, for example, by digits '000', identifies the carrier, and constitute part of the air waybill (AWB) number (e.g. 000-12345678). The carrier's agents, such as the freight forwarder, may issue their own house air waybill (HAWB), the format of which may differ from the sample air waybill. The Date of Shipment in Air Freight The issuance date of the air waybill (AWB) is considered to be the date of shipment. If the letter of credit (L/C) calls for an actual date of dispatch, the AWB must indicate a specific notation of the date of dispatch, and the date indicated is considered to be the date of shipment. The expression "Flight/Date [For Carrier Use Only] Flight/Date" on the sample Air Waybill, for example, is not considered as a specific notation of the date of dispatch.

Transhipment Indicated in Air Waybills If the air waybill indicates that transhipment will or may take place, then the transhipment is allowed even if the letter of credit (L/C) prohibits transhipment, provided that the entire carriage is covered by one and the same air waybill.

Split Shipment- The split shipment means that portions of a shipment covered by one air waybill enter the country at different times.

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International Air Transport Association

An IATA Certificate is available to confirm the status of your company as an IATA Accredited Passenger Agent. A model of the certificate is shown below. The actual size will be approx. 29 x 21cm on high-quality paper with a golden trim.

ORDER FORM FOR IATA CERTIFICATE 2005 Full name & address of Agency : ________________________________________________________________________ _______________________ _____________________________________________________________ Country ___________________________ IATA Code__________________________ Tel: _____________________ Fax: ____________________ Email: ____ Agency stamp Name/Title: ____________ Signature: ________ IATA is Simplifying the Business We are challenging ourselves as an industry to find cost reduction possibilities in our industry's complex processes. While today's consumers expect convenience, they are not willing to pay for the complexity that makes it possible. The answer is in simplifying processes and making the most effective use of existing technology. IATA's Role Air transport and IATA have always been leaders in the development and implementation of global standards. IATA's role as a leader of change is to bring all of the parties together with a common vision to develop industry-wide standards. Additionally, working closely with our technology partners, IATA will ensure that all parts of the world have the support necessary not only to keep pace with, but to benefit fully from change. Why simplify the business? Because it will benefit both the industry and the customer by making a more efficient travel experience for everyone. The aim is to improve customer service whilst saving at least US$ 6.5 billion in annual costs. 63 Date: ______________

With that goal, IATA will concentrate its efforts on five core projects: . E-ticketing (ET) . Common Use Self-Service (CUSS) . Bar-Coded Boarding Pass (BCBP) . Radio Frequency ID (RFID) . IATA e-freight Aircraft Operations IATA identifies and develops solutions for industry problems related to flight operations. This includes analysis of flight operations data, formulation and promotion of IATA operational strategies, quality assurance matters and maintenance of the airline operational information exchange. IATA focuses on ensuring a reliable and optimally priced supply of quality jet fuel at airports worldwide. IATA seeks at every turn to oppose taxation of aviation fuel and to ensure that fuel throughput charges are reasonable. The Fuel Action Campaign is one of IATA's initiatives to help its Members lower their fuel costs. Cargo Airfreight represents a significant percentage of international world trade by value, with IATA members carrying more than 34.3 million tonnes of cargo in 2003 alone. Our challenge is to help our Members meet increasingly stringent and diverse national regulations without diminishing the speed and reliability of delivery in a world of just-intime manufacturing. IATA has worked on new requirements to ensure that global cargo security measures are harmonised and operationally manageable. We are also working on new initiatives to make our business more efficient. The best example is e-freight, an integral part of IATA's Simplifying the Business initiative. Finance IATA offers a suite of financial services to the airline industry and associated partners to help them contain costs, improve their cash flow and maximise revenues. These services are enhancing speed and turnaround time of transactions. Most IATA Members are full-service carriers that rely on interlining, global reservation and distribution systems and industry financial processes. IATA is committed to making their activities more efficient while retaining the benefits of the network system.

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IATA - The International Air Transport Association - was founded in Havana, Cuba, in April 1945. It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air services - for the benefit of the world's consumers. The international scheduled air transport industry is now more than 100 times larger than it was in 1945. Few industries can match the dynamism of that growth, which would have been much less spectacular without the standards, practices and procedures developed within IATA. At its founding, IATA had 57 Members from 31 nations, mostly in Europe and North America. Today it has over 270 Members from more than 140 nations in every part of the globe. The modern IATA is the successor to the International Air Traffic Association founded in the Hague in 1919 - the year of the worlds first international scheduled services. Early days The old IATA was able to start small and grow gradually. It was also limited to a European dimension until 1939 when Pan American joined. The post-1945 IATA immediately had to handle worldwide responsibilities with a more systematic organization and a larger infrastructure. This was reflected in the 1945 Articles of Association and a much more precise definition of IATA's aims than had existed before 1939. . To promote safe, regular and economical air transport for the benefit of the peoples of the world, to foster air commerce, and to study the problems connected therewith; . To provide means for collaboration among the air transport enterprises engaged directly or indirectly in international air transport service; . To cooperate with the newly created International Civil Aviation Organization (ICAO the specialized United Nations agency for civil aviation) and other international organizations. The most important tasks of IATA during its earliest days were technical, because safety and reliability are fundamental to airline operations. These require the highest standards in air navigation, airport infrastructure and flight operations. The IATA airlines provided vital input to the work of ICAO, as that organisation drafted its Standards and commended Practices. By 1949, the drafting process was largely complete and reflected in "Annexes" to the Chicago convention, the treaty which still governs the conduct of international civil aviation.

In those early days, ICAO coordinated regional air navigation and support for airports and operational aids in countries which could not themselves afford such services. IATA provided airline input to ICAO and to sessions of the International Telecommunications Union on wavelength allocation. 65

The standardization of documentation and procedures for the smooth functioning of the world air transport network also required a sound legal basis. IATA helped to mesh international conventions, developed through ICAO, with US air transport law which had developed in isolation prior to World War Two. The Association made a vital input to the development of Conditions of Carriage the contract between the customer and the transporting airline. One early item on the legal agenda was revision and modernization of the Warsaw Convention - originally signed in 1929 - on airline liability for passenger injury or death and cargo damage or loss. This work continues.

The first worldwide Traffic Conference was held in Rio de Janeiro in 1947. It reached unanimous agreement on nearly 400 resolutions covering all aspects of air travel. Fare construction rules for multi-sector trips, revenue allocation - pro-rating - rules, baggage allowances, ticket and air waybill design and agency appointment procedures were typical details agreed at this pioneering meeting. Today, that pioneering work is reflected in the currently applicable IATA Resolutions dealing with these and many other subjects. Notable examples are: . The Multilateral Interline Traffic Agreements: These are the basis for the airlines' interline network. Close to 300 airlines have signed them, accepting each others' tickets and air waybills - and thus their passenger and cargo traffic - on a reciprocal basis. . Passenger and Cargo Services Conference Resolutions: These prescribe a variety of standard formats and technical specifications for tickets and air paybills. . Passenger and Cargo Agency Agreements & Sales Agency Rules: These govern the relationships between IATA Member airlines and their accredited agents with regard to passenger and cargo. Debt Settlement between airlines, largely arising from interlining, takes place through the Clearing House, which began operations in January 1947. During its first year, 17 airlines cleared (US) $26 million. By 1994, the Clearing House had 380 participants including non-airlines. The total cleared was (US) $22.8 billion. Typically, almost 90 percent of debts between participants are offset and there is no need for cash transfers.

IMPORT CLEARANCE PROCEDURES

A. Outline of Import Clearance Any person wishing to import goods must declare them to the Director-General of Customs and obtain an import permit after necessary examination of the goods concerned. The formalities start with the lodging of an import declaration and end with issuance of an import permit after the necessary examination and payment of Customs 66

duty and excise tax. In this way, measures are taken to ensure the fulfillment of the requirements for the control of foreign exchange and other regulations concerning the importation of goods. The basic procedure for submitting declaration documents to Customs is explained below. More than 90 percent of import procedures is currently computerized. B. Import Declaration (Customs Law, Articles 67 through 72) (1) Completion and Submission of Import Declarations Declaration must be made by lodging an import (Customs duty payment) declaration describing the quantity and value of goods as well as any other required. This import declaration must be made, in general, after the goods have been taken into a Hozei area or other specially designated zone. However, in the case of specific items which need the approval of the Director-General of Customs, the declaration may be made while they are aboard a ship or barge or before they are taken into a Hozei area. (2) Declarant Import declaration must be made, in principle, by the person who is importing the goods. Usually, a Customs broker files the declaration as a proxy for importers.

(3) Documents to Be Submitted (Customs Law Article 68) An import (Customs duty payment) declaration form (Customs form C-5020) must be prepared in triplicate and submitted to Customs with the following documents: (a) Invoice (b) Bill of lading or Air Waybill (c) The certificate of origin (where a WTO rate is applicable) (d) Generalized system of preferences, certificates of origin (Form A) (where a preferential rate is applicable) (e) Packing lists, freight accounts, insurance certificates, etc. (where deemed necessary); (f) Licenses, certificates, etc. required by laws and regulations other than the Customs Law (when the import of certain goods is restricted under such laws and regulations); (g) Detailed statement on reductions of, or exemption from Customs duty and excise tax (when such reduction or exemption is applicable to the goods); 67

(h) Customs duty payment slips (when goods are dutiable). In principle, Customs requires only those additional documents necessary to ascertain important considerations for permission.

c. Prohibited Articles The following articles are prohibited by law. (a) Opium, other narcotic drugs, equipment for opium smoking, stimulants, and psychotropic substances (excluding those designated by an ordinance of the Ministry of Health, Labour and Welfare); (b) Firearms (pistols, rifles, machine guns, etc.), ammunition (bullets) for such articles, and firearm parts; (c) Counterfeit, altered, or imitation coins, paper money, bank notes, or securities; (d) Books, drawings, carvings, or any other article which harms public security or morals (obscene or immoral materials, such as pornography); (e) Articles which infringe upon rights in patent, utility models, designs, trademarks, copyrights, breeders, and neighboring rights, or layout designs of integrated circuits. d. Verification of Other Laws and Regulations Some imported goods may have a negative effect on Japanese industry, economy, and hygiene, or on public safety and morals. Such goods fall under "import restrictions" as provided by various domestic laws and regulations. In the case of restricted imports for which the importer must have a permit and approval relating to the import of goods under the Customs Law, requirements for inspection or other requisites (hereinafter referred to as a permit and approval) must be met. Therefore, when goods for import require a permit and approval under laws and regulations other than Customs Law (called other laws and regulations), a certificate of application for a permit and approval under other laws and regulations must be submitted (Article 70 of the Customs Law). (1) Foreign Exchange and Foreign Trade Control Law (2) Laws and Regulations Related to Banned Goods
y y y

Law Concerning Wildlife Protection and Hunting Firearms and Swords Possession Control Law Poisonous and Harmful Substance Control Law 68

y y y y y y

Pharmaceutical Affairs Law Fertilizer Control Law Law Concerning Sugar Price Stabilization Explosive Control Law Law Concerning Screening of Chemical Substances and Regulation on their Manufacture, etc. High Pressure Gas Safety Law

(3) Laws and Regulations Concerning Quarantine

y y y y

Food Sanitation Law Plant Quarantine Law Domestic Animal Infectious Control Law Rabies Prevention Law

(4) Laws and Regulations Concerning Narcotics

y y y y

Cannabis Control Law Stimulant Drug Control Law Narcotics and Psychotropics Control Law Opium Law

E. Pre-Arrival Examination System (1) Outline of the Pre-Arrival Examination System Importers are required to declare their imports to Customs after the arrival of the cargoes from foreign countries and bringing them into a Hozei area (Customs Law, Article 67-2). Generally, Customs inspects the content of each import declaration. The inspection starts only after the cargo has been brought into a Hozei area. The pre-arrival examination system was established to flexibly manage these requirements and allow an import permit to be issued immediately after the import declaration as long as physical examination is not required. Under this system, inspection of the content of pre-arrival declarations is conducted before the cargoes are brought into a Hozei area.

(2) Specific Procedures The specific procedures of the pre-arrival examination system are as follows:

(a) Cargoes Covered by the System The pre-arrival examination system can be applied to all types of imported cargo. The cargoes which benefit from the pre-arrival examination system are, needless to say, those in need of quick processing, namely, Those shipments which require speedy clearance due to the nature of the content, such as fresh food 69

Those under strict delivery terms Those with a seasonally limited market, such as Christmas and New Year's articles, etc. Those requiring procedures under other laws and regulations Those requiring extensive examination of import declarations, such as items requiring various documents

b) Documents to Be Submitted A pre-arrival declaration is completed through the submission of a pre-arrival declaration form (a general import [duty payment] declaration form is used for this purpose). Documents to be attached to the pre-arrival declaration form are the same as the documents attached to the declaration [duty payment] form for regular imports.

(c) Customs Office for the Submission of Documents A pre-arrival declaration form should be submitted to the Customs Office which controls the Hozei area where the cargo is expected to be brought in. However, if the DirectorGeneral of Customs approves the submission of a preliminary declaration to another Customs Office, Regional Customs can utilize a different procedure upon consultation with the Customs and Tariff Bureau.

(d) Submission Time A pre-arrival declaration can be made at any time after the bill of lading (Air Waybill in the case of air cargo) related to the pre-arrival declaration is issued, and the foreign exchange rate for the scheduled import declaration date is announced. Current exchange rates to the U.S. dollar, the Sterling pound, and other major foreign currencies are normally announced around Tuesday of the previous week. As soon as the documents to be submitted are ready, and declared items are determined, a pre-arrival declaration can be made as early as 11 days before the arrival of the cargo.

(e) Import Declaration When a cargo is brought into a Hozei area for preliminary declaration and all requirements are met for the import declaration under the Customs Law, such as the completion of the procedures required under other laws and regulations and if the importer informs Customs of the import declaration, Customs can then treat the prearrival declaration as an import declaration. 70

Status as per the Foreign Trade Policy 2005-10 Export House One Star Export House

Trading House

Three Star Export House

Star Trading House

Four Star Export House

Super Star Trading House

Five Star Export House

However, any exporter irrespective of whether he is a status holder or not can apply afresh in Appendix 17 or Appendix 17 A for grant of status or up gradation of his existing status.

Export Promotion Council The major functions of the EPCs are:

(a) To provide commercially useful information and assistance to their members in developing and increasing their exports; (b) To offer professional advice to their members in areas such as technology up gradation, quality and design improvement, Standards and specifications, product development, innovation etc; (c) To organise visits of delegations of its members abroad to explore Overseas market opportunities; (d) To organise participation in trade fairs, exhibitions and buyer-seller Meets in India and abroad; (e) To promote interaction between the exporting community and the Government both at the Central and State levels.

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Glossary of Freight Terms

A AGENT (AGT): The relationship existing between two parties by which one is authorized to transact certain business for the other.

AIR WAYBILL (AWB or MAWB): The document made out by or on behalf of the shipper which, when used, evidences the contract between the shipper and carrier(s) for carriage of goods over routes of the carrier(s). AIR WAYBILL DATA MESSAGE (FWB): Standard CargoIMP message identifier for electronic Master Air Waybill Data - MAWB: It eliminates the need for paper AWB or data re-entry. AIRCRAFT ON GROUND (AOG): Applies to parts needed to return an aircraft to service and have first boarding priority AUTOMATED MANIFEST SYSTEM (AMS): A US Customs & Border Protection Agency system used to notify the details of shipments loaded onto a specific flight. B BOOKING: The allotment in advance of space or weight capacity of goods. C CARGO (CGO): Also referred to as "goods", means any property carried or to be carried on an aircraft, other than mail or other property carried under terms of an international postal convention, baggage or property of the carrier; provided that baggage moving under an air waybill or a shipment record is cargo. CARGO ACCOUNTS SETTLEMENT SYSTEM (CASS): A system of accounting and settling accounts between CASS Airlines and appointed IATA Cargo Agents. CARGO CHARGES CORRECTION ADVICE (CCA): The document used for the notification of changes to the transportation charges and/or the other charges and/or the method of payment. CARGO DECLARATION: Information submitted prior to or on arrival for departure of a means of transport for commercial us that proved the particulars required by Customs relating to cargo brought to or removed from the customs territory. Cargo IMP version of EDIFACT (CargoFACT): Cargo IMP version of UN Electronic 72

Data Interchange for Administration, Commerce and Transport - EDIFACT CARGO INTERCHANGE MESSAGE PROCEDURE (CARGO-IMP): Messaging procedures developed by the member airlines of the ATA and IATA. CARGO MANIFEST: A document listed by AWB numbers loaded on a flight. It is mainly used for customs entry/exit. CARNET: A customs document permitting the holder to send or carry merchandise into certain foreign countries temporarily without paying duties or posting bonds. CARRIAGE: Also referred to as "transportation", means carriage of cargo by air. CARRIER: The transportation carrier issuing the airwaybill and creating the shipment record and all other carriers that carry of undertake to carry the cargo under the airwaybill or shipment record or to perform any other services related to such air carriage. CERTIFICATE OR ORIGIN: A document often required by certain countries which establishes the country of origin of specified goods. COMMERCIAL INVOICE: Shipper's document describing the goods being shipped and their value which must accompany all international and transborder shipments. COMMODITY: Description of goods being shipped. CONDITIONS OF CARRIAGE: The terms and conditions established by a carrier in respect to its carriage. CONDITIONS OF CONTRACT: The terms and conditions shown on the air waybill or with any consent by the shipper that shipment record may be used. CONNECTING CARRIER: A carrier whose service the cargo is to be transferred for onward connecting transportation. CONSIGNEE (CNEE): The person whose name appears on the air waybill or in the shipment record as the party to who the goods are to be delivered by the carrier. CONSIGNMENT: See "Shipment". CONSIGNOR: See "Shipper". CONSOLIDATION LIST MESSAGE (FHL): A standard CargoIMP message identifier used to provide a "Check-list" of House Waybills (HAWB's) associated with a Master Air Waybill (MAWB)

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CUSTOMS: The Government Service which is responsible for the administration of customs law and the collection of duties and taxes. CUSTOMS BROKER: An agent specialized in inbound customs clearance. CUSTOMS CLEARANCE: The accomplishment of the Customs formalities necessary to allow goods to enter the country, to be exported or to be placed under another customers procedure. CUSTOMS CLEARANCE AGENT: A customs broker or other agent of the consignee designated to perform customs clearance services for the consignee.

D DANGEROUS GOODS (DG): Articles or substances which are capable of posing a significant risk to health, safety or to property when transported by air. DESCRIPTION OF GOODS: Plain language description of the nature of the goods sufficient to identify them at the level required for banking, customs, statistical or transport purposes. DESTINATION: The ultimate stopping place according to the contract of carriage. DOCUMENTATION: The required paperwork accompanying a shipment such as airwaybill, Export Declaration, Health Certificates. E EDIFACT: Electronic Data Interchange for Administration, Commerce and Transport. EXPORT PERMIT: A government document authorizing the export of specific goods to designated countries. F FLIGHT NUMBER: The designation of a flight. FORWARDER (FWDR): Appointed by the shipper, and as an agent of the airline, to process and arrange export consignments overseas. FREIGHT STATUS UPDATE (FSU): Standard CargoIMP message identifier used to notify/update interested parties with a (change of) status of a shipment as recorded in the system of the handling party.

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FREIGHT STATUS REQUEST (FSR): Standard CargoIMP message identifier used to request the current status of a nominated shipment. FREIGHT STATUS ANSWER (FSA): A standard CargoIMP message identifier used to reply to a Status Request (FSR) indicating latest status, or statuses, in the movement of the nominated shipment. G GENERAL SALES AGENT (GSA): An agent authorized in a country to handle an airline's export sales/services. GOODS: See "Cargo". GOODS DECLARATION: A statement made in the manner prescribed by the Customs by which person concerned indicate the Customs procedure to be applied to the goods and finish the particulars which the Customs require for its application. GROSS WEIGHT: The weight of a shipment, it's container and packing material. H HEALTH CERTIFICATE: A document signed by a veterinarian attesting to the good health of an animal tendered for shipment. HOUSE AIR WAYBILL (HAWB): Document issued by an international air Freight Forwarder under the terms of their own tariff. I IATA CARGO AGENT: A forwarder/broker who has been approved and is recognized by IATA to receive cargo, issue airway bills and other documents for carriers and collect charges for air shipments. IATA CARRIER: A carrier that is a member of the International Air Transport Association (IATA). IMPORT PERMIT: A document required and issued by some national governments authorizing the importation of goods into their country. IN-BOND TRANSPORTATION: Transporting a transit cargo shipment in bond without clearing customs to the destination. INTERLINE CARRIAGE: The carriage over the routes of two or more air carriers.

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INTERLINE CARRIER: The carriage over the route of two or more air carriers.

INTERNATIONAL FREIGHT FORWARDERS ASSN (FIATA) K KYOTO CONVENTION: International Convention on the simplification and harmonization of customs procedures.
L LETTER OF CREDIT (L/C): A letter from a bank, on behalf of a buyer, addressed to the seller authorizing him or her to draw drafts for a stipulated amount, under specified terms and to provide eventual payment for drafts within a given time. M MASTER AIR WAYBILL (MAWB): The carrier's airbill issued to cover a consolidated shipment tendered by a forwarder or consolidator. MONTREAL PROTOCOL No.4: Protocol to amend the Convention for the Unification of certain rules relating to International Carriage by Air. N NET WEIGHT: The actual weight of an article exclusive of the packaging NOTIFICATION OF ARRIVAL: A written notice sent to the consignee notifying them of a shipment's arrival.

O ORIGIN: Starting point of a shipment. R RECEIVING CARRIER: The carrier receiving the consignment from a carrier, agent or shipper or onward transportation. REROUTING: The route to be followed as altered from that originally specified on the AWB. RESERVATION: See "Booking" 76

ROAD FEEDER SERVICE (RFS): Surface transportation arranged by a carrier to/from his gateway stations to another airport. ROUTING: The route to be followed as originally specified in the AWB or shipment record. S SHIPMENT (SHPT): One or more pieces of goods accepted by the carrier from one shipper at one time and at one address, receipted for in one lot and moving on one airway bill or shipment record to one consignee at one destination address. SHIPPER (SHPR): The person who originates the shipment of goods. Also known as the "consignor".

SHIPPER'S LETTER OF INSTRUCTION (SLI): The document containing instructions by the shipper or shipper's agent for preparing documents and forwarding. SPECIAL DRAWING RIGHT (SDR): A reserve asset used as a unit of account, as defined by the International Monetary Fund (IMF). SPECIAL INSTRUCTIONS: Directions for handling a shipment and/or delivery directions for a shipment. T TARIFF: The published rates, charges and related rules of a carrier. THE AIR CARGO TARIFF (TACT): Rules regulations and rates published for international air shipments. THIRD PARTY: Any person who acts on behalf of another person. THROUGH CARGO: Cargo staying on board at a stopping place en-route for ongoing carrier on the same flight. TRANSFER: Movement of cargo from one carrier to another against transfer manifest. TRANSFER CARGO: Cargo arriving at a point by one carrier and continuing it's journey There from by another carrier. TRANSFER MANIFEST (TRM): The document executed by the transferring carrier 77

upon transfer of interline cargo and endorsed by the receiving carrier as a receipt for the consignment transferred.

TRANSFERRING CARRIER: The participating carrier transferring the consignment to another carrier at a transit point. TRANSSHIPMENT: The unloading of cargo from one flight and loading onto another for onward carriage. TRANSIT: An enroute stopping place where cargo remains on board. TRANSIT CARGO: Cargo arriving at a point and departing by another flight. TRANSPORTATION: See "Carriage".

U ULD CONTROL RECEIPT (UCR): A voucher of transfer ULD signed by transferring and receiving carriers which is used to retrieve ULD and for account settlement of ULD demurrage. UNIT LOAD DEVICE (ULD): A container or pallet used to transport cargo on an aircraft. Valuable Cargo VAL Shipments of high value requiring advance arrangement and special handling.

X Extensible Markup Language (XML): The Extensible Markup Language (XML) is a markup language that provides a platform- and applicationneutral format for describing data.

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CONCLUSION

Logistics is a key value adding supply chain activity that plans and controls the flow of materials from suppliers and to customers. Ultimately responsible for customer satisfaction, it is subject to nine trends that extend the scope of logistics operations and offer new technologies to improve operational effectiveness. Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. I have learnt different stages and process for air and sea import and what documents are required, IEC code, Master airway bill, House Airway bill, copy of invoice and elementary Knowledge of Custom Clearance. There are many documents involved in international trade, such as commercial documents, financial documents, transport documents, insurance documents and other international trade related documents. In processing the export consignment, documentation may be executed in up to four contracts: the export sales contract, the contract of carriage, the contract of finance and the contract of cargo insurance. It is therefore important to understand the role of each document and their requirements in the international trade.

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RECOMMENDATION
In general, trade in goods and services are not restricted in some areas, including imports of strategic goods (e.g. police and military products, radioactive elements, weapons, transportation equipment, chemicals) a license or concession is required. A license is not required to import liquor into Poland, but a license must be obtained to sell liquor. The Ministry of Economy issues import permits and concessions and also regulates quotas. However, other Polish ministries have special jurisdiction over products such as tobacco (Ministry of Agriculture); permits related to air, sea, or road transport (Ministry of Transportation); or natural resources (Ministry of Environmental Protection). U.S. exporters should ascertain whether their product requires import certification before shipping. In most cases, before an issuing Ministry grants import permission on a product, the product must be reviewed and recommended for import into Poland by one or more inspectorates or technical associations, depending on the nature of the product. This can be a costly, lengthy, and confusing process for the U.S. exporter and the Polish importer alike. It is often necessary to submit samples of products or equipment for testing, regardless of the issuance of previous U.S. or international certificates. The presentation of detailed documentation on a product is a must, and all requests by relevant inspection agencies should be strictly adhered to in order to speed up certification procedures. Once an application and supporting materials have been submitted, the inspecting agency will make a positive or negative recommendation for import to the appropriate Polish ministry. When the import of a specific product is approved, further imports of that product are free from additional regulation. Some products, once imported, also require registration. This is particularly true of products that come into contact with or can affect the health of the consumer. In the case of hazardous materials, the importer must receive permission for use of such materials before applying for a concession to import the materials into Poland. Each consignment of meat, meat products and offal must be accompanied by a health certificate issued by USDA's veterinary authorities. U.S. bovine genetics (semen, embryos) can be imported to Poland after receiving a positive opinion from the Polish Federation of Dairy Cattle Breeders. Polish regulations require imported products, including food and agriculture products, to be inspected for compliance with EU and Polish standards. The Polish inspection agency, Centrally Inspektorat Standardyzacji (CIS) is charged with establishing the quality of products offered on the Polish market.

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BIBLIOGRAPHY

 www.afldachser.co.in  Import Canalisation by Dilip K Das  Guide to Export Import Basics  Export/Import Procedures & Documentation by Thomas E. Johnson  www.indiainfoline.com  www.tipsexim.com  www.iata.org  www.airfreight.com  www.logisticsfocus.com  www.eximkey.com

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APPENDIX / ANNEXUURE House Airway Bill:

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