Indian Logistics Market

The Indian logistics market is characterised not only by the large global Third Party Logistics (3PL), but also by many Indian companies. Some of these players have expanded in India via foreign investment, and others are shipping companies involved in shipping related activities diversified into logistics.

Also many Indian 3PLs have entered into a partnership with established foreign operators. These improvements, facilitating growth in overseas trade, are particularly helping the development of private companies operating in the shipping logistics sector, many of which are making their own investment in facilities as they gear up to support capacity expansion.

The continuing high growth of India’s logistics industry is matched by significant challenges for the Government in improving India’s inadequate transport infrastructure.

IT in logistics sector

With global players entering the Indian market, the logistics industry is facing a challenge on the execution front of benchmarking with global standards. Given the current service scope of the logistics sector and the level of transition it has to go through, information technology is going to be the enabling factor making this transition possible. The major hurdle is more in awareness and adoption. It requires a change in mindset, where logistics players stop looking at IT as a cost centre and see it as a differentiator that will help in improving efficiency and gain more leverage with the customers.

IT is being used at a very basic application level – warehousing, trucking, customs clearance, freight forwarding etc. India is yet to reach a level where logistics players start thinking of using IT in the end-to-end visibility and planning to benchmark and improve the efficiencies.

About Indian container market

What is 3PL and 4PL

Third Party Logistics (3PL) provider handles all or most of freight of the organizations including the management of information by the third party, freeing the company from day to day interaction with carriers, and having to oversee hundreds or thousands of shipment. New and cheaper information flow resulting from internet enabled solutions, will lead not only achieving immediate cost reductions in operations but also to enormous productivity gains over the next few years.

The tracking and control of movement of goods drive freight optimization and asset utilization. The options are : increased trailer utilisation, combining full truckload shipments, consolidation, aggregation of smaller buyers. Purchase asset based transportation is becoming increasingly a commodity.To put simply, 3PL refers to the outsourcing of a logistics function. It could be the use of a transportation carrier, a warehouse, or a third party freight manager to perform all or part of a company’s production distribution functions.

The principle reasons of for this function are as under:
• Globalization of sourcing, manufacturing and distribution leading to an increase in the complexity of material movement
• Competition that has forced companies towards more responsiveness and a reduction in inventories. An increased need for small but frequent shipments with 100 percent reliability, requiring core competence in logistics management.
• Resource constraints that require companies to concentrate only on their core manufacturing or new product development activities.

4PL

Fourth Party Logistics is an integrator that assembles the resources, capabilities, and technology of its own organization and other organizations to design, supply chain solutions of their supply chain management function. A 4PL uses a 3PL to supply service to customers, owning only computer systems and intellectual.

It has been argued that a 4PL is the same thing as a "Non Asset-Based 3PL".

Functions

• Freight Negotiations with 3PLs
• Freight Contract Management
• Transport Billing
• Continuous Improvement Programs
• Management of Service Providers
• IT Solutions
• Risk Management and Insurance
• Cash-flow Management.

What is SISCARGA

The Brazilian Government has decided to unify the current manifest reporting system, “Merchante” (for imports) and “Siscomex” (for exports) into a new and unique system called “SISCOMEX CARGA”.

The system will serve to control and audit Brazilian cargoes loaded, trans-shipped or discharged on any vessel.

Below is a summary of the main requirements of “SISCARGA”:

* Exports from Brazil (Shipping Instruction cutoff is 72 working hours before the vessel’s arrival at the port of loading):

* Full shippers' name and address, related to company filled in Shipper' bill of lading section;

* Shipper's CNPJ or CPF (Federal Revenue - Tax payers Register Number for companies or individuals, respectively), as per the section "Shipper" in the bill of lading, under status "active" in Custom House Bureau;

* Merchandise to be measured in cubic meters (m³) and specified in packaging (if pallets, cases, big bags, etc);

* Merchandise gross weight in kilos (container tare to be excluded);

* Cargo NCM (International Harmonized Tariff Code), 4 (four) first digits (position) or optionally 8 (eight) digits (complete sub-item code), for each merchandise item stuffed into the container;

* It is imperative that the information inserted in the "DRAFT" is accurate, once SISCARGA does not permit any data alteration after its register in the system. Should any correction after data transmission be necessary, same will be subjected to penalties per bill of lading.

Note: As regards the export cargo manifests, they must be filed with Customs up to 8 hours (without fail) before vessel's arrival in each calling port.

* For the import cargoes, transfer, transshipment or containers in transit, coming from overseas, it is mandatory that all bills of lading issued by respective agents from origin contain the following information:

* Full consignee and notify name/address, as per corresponding fields in bills of lading sections;

* Consignee and notify CNPJ or CPF (Federal Revenue Register Number for companies or individuals, respectively), as per the respective bill of lading fields, under status "active" in the Customs House Bureau registers. Whenever the consignee is a foreigner, the identification will be made by means of complete full style;

* To order" BL is acceptable though,shippper have to inform the actual shipper by the time mentioned above.

* Merchandise to be measured in cubic meters (m³) and specified in packaging (crates, pallets, cases, big bags, etc);

About "10+2"

CBP Issues Proposed Rule Requiring Additional Cargo Information

Washington — U.S. Customs and Border Protection (CBP) has published on January 2, 2008 a Notice of Proposed Rulemaking (NPRM) requiring importers and carriers to electronically submit additional information on cargo before it is brought into the United States by vessel. The Security Filing, also known as “10+2,” is another step in the Department of Homeland Security’s (DHS) strategy to better assess and identify high-risk shipments to prevent terrorist weapons and materials from entering the United States.

“The Security Filing will improve CBP’s ability to target high-risk cargo by identifying actual cargo movements and improving the accuracy of cargo descriptions,” said CBP Commissioner W. Ralph Basham. “It will also improve our ability to facilitate lawful international trade by identifying low-risk shipments much earlier in the supply chain.”

This initiative strengthens cargo security by making CBP screening more efficient and effective. CBP has implemented a comprehensive, multi-layered cargo security strategy designed to enhance national security while protecting the economic vitality of the United States. These efforts include the 24-hour Manifest Rule, Container Security Initiative, Customs-Trade Partnership Against Terrorism, Non-Intrusive Inspection Techniques, Automated Targeting System, the Secure Freight Initiative, and the National Targeting Center.

The proposed regulation will require carriers to submit “10+2” additional pieces of information in order to enhance the security of the maritime environment. The additional information includes: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S; and (2) container status messages, which report container movements and changes in status (e.g., empty or full)

In addition, the NPRM also requires importers to submit an “Importer Security Filing” containing the following 10 data elements:

* Manufacturer (or supplier) name and address

* Seller (or owner) name and address

* Buyer (or owner) name and address

* Ship-to name and address

* Container stuffing location

* Consolidator (stuffer) name and address

* Importer of record number/foreign trade zone applicant identification number

* Consignee number(s)

* Country of origin, and

* Commodity Harmonized Tariff Schedule number

Currently, CBP relies primarily on carrier manifest information to perform advance targeting prior to vessel loading. Internal and external reviews have concluded that more complete advance shipment data would produce more accurate and effective cargo risk assessments. This way resources can be focused on true threats and legitimate cargo can speed through the system as quickly as possible.

The proposed regulation is intended to satisfy provisions outlined in the Security and Accountability for Every Port Act of 2006, which require the submission of additional data elements for improved high-risk targeting.

U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.

What is Logistics

"Logistics means having the right thing, at the right place, at the right time."

It has many definitions, some of them are

Logistics - Logistics is defined as a business planning framework for the management of material, service, information and capital flows. It includes the increasingly complex information, communication and control systems required in today's business environment.

Logistics - The procurement, maintenance, distribution, and replacement of personnel and materiel

Logistics – The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements." Note that this definition includes inbound, outbound, internal, and external movements, and return of materials for environmental purposes

Logsitcs - Logistics is the delivery of the required goods, at required place, at required time, in required state and to the required person efficiently ………

In Brief

A widespread idea prevails that logistics is 'movement of goods'. That is a narrow concept. Logistics is much more and much wider than mere physical handling of goods. Logistics involves several other functions such as purchasing, plant location, plant layout, etc., and even the disposal of wastes. It covers astonishingly varied professional disciplines. They are:

* Facility location

* Planning

* Forecasting and order management

* Transportation: the mode and the route

* Inventory management: all inventories

* Warehousing

* Protective packaging

* Information: maintenance and flow

Importance

Logistics is the one important function in business today. No marketing, manufacturing or project execution can succeed without logistics support. For companies, 10 per cent to 35 per cent of gross sales are logistics cost, depending on business, geography and weight/value ratio. Logistics is comparatively a new term, but not the operation. Logistics has existed since the beginning of civilisation. Raw material and finished products had always to be moved, though on a small scale. Things began changing with the advance in transportation. Population began moving from rural to urban areas and to business centres. No longer did people live near production centres, nor did production take place near residence centres. The geographical distance between the production point and consumption point increased. And logistics gained importance.

Another factor has come into play recently. Since the early 1990's, the business scene has changed. The globalization, the free market and the competition has required that the customer gets the right material, at the right time, at the right point and in the right condition… at the lowest cost.

Generals have understood the importance of logistics since early days, but the business has learnt it fairly recently. And the logistics capability gives an edge to the business.

RevLog

Another dimension to logistics is 'Reverse Logistics' (RevLog).

Goods return from the consumer point to the original supply point, for various reasons. Bad delivery, over-supply, damage, expiry, failing inspection tests at the customer point, goods unsold etc., are some instances where the material traverses back. That is Reverse Logistics. The material that has to come back to the original point, or to the original supplier, has also to be handled effectively and efficiently. Maintain a 'RevLog system'. That will give more edge.

Future

Economic development in Asia has gained increasing attention around the world and has had an enormous impact on the growth of its logistics market.