PROJECT ON
‘MARKET POTENTIAL OF FREIGHT FORWARDING BUSINESS,
MASTER OF BUSINESS ADMINISTRATION (MARKETING)
TABLE OF CONTENTS Sr.No.
Topic
Page No.
1
Rational for the study
1-3
2
Objective of the study
4-6
3
Company Profile
7-29
4
Review of literature
30-36
5
Research Methodology
37-47
6
Data analysis and interpretation by
48-54
chart / graphs 7
Findings
55-56
8
Limitations
57-58
9
Suggestion
59-60
10
Bibliography
61-62
11
Annexure
63-68
1
LIST OF TABLES
TABLE NO.
TITLE
PAGE NO.
TABLE 3.1
Our core team
10
TABLE 3.2
Basic Knowledge for Freight forwarding
12
TABLE 3.3
Basic Knowledge for Freight forwarding
13
TABLE 3.4
Container Information
20
TABLE 3.5
Container Information
21
TABLE 3.6
Exim Process
22
TABLE 3.7
Exim process
23
TABLE 4.1
Documents requirement for air / sea freight import
34
TABLE 4.2
Documents requirement for export by air -
35
clearance and forwarding TABLE 4.3
Documents requirement for export by sea - FCL (factory stuffing) - clearance and forwarding
36
TABLE 5.1
Share of in word export
40
TABLE 5.2
India’s Export during last 8 years
41
TABLE 6.1
Data analysis and representation
49
TABLE 6.2
Import Export activity
51
TABLE 6.3
Type of cargo’s deal
52 2
TABLE 6.4
Using FCL or LCL cargo
53
TABLE 6.5
Over all requirments of Exports
54
LIST OF FIGURES
PAGE NO.
FIGURE NO. TITLE FIGURE 3.1
Types of containers-40 19
FIGURE 3.2
Types of containers-20
20
FIGURE 3.3
Customers
24
FIGURE 3.4
Our Major customers
25
FIGURE 5.1
India‟s exports
42
FIGURE 6.1
No of companies
50
FIGURE 6.2
Doing Import Export activity
51
FIGURE 6.3
Type of cargo’s deal
52
FIGURE 6.4
FCL or LCL cargo
53
FIGURE 6.5
Over all requirments of Exports
54
3
CHAPTER 1
RATIONALE FOR THE STUDY
4
RATIONALE FOR THE STUDY Today‟s rapidly changing business environment is creating intense competition among corporations markets are changing faster now than in any other time in history. Product life cycles are shortening and businesses must compete globally. Freight forwarders perform a key role in any trade. The freight forwarder is the architect of the international transport and plays an important role in the growth of the international trade in India by facilitating exporters, shippers, importers, customs/ports authorities etc. The freight forwarding industry will continue to benefit from growth in trade and certain structural advantages over carriers . Value is driven by financial performance is driven strategic position. Strategic position must assessed in a disciplined manner , which examines the discrete and interrelated activities within a forwarder value chain to understand sources of synergy and options to increase value.
The Indian economy is one of the fastest growing in the world, but the boom is not without its stops, starts, and bottlenecks, all of which also make themselves felt in the country‟s freight transport sector. In fact, according a recent study by the Confederation of Indian Industry, the country needs US$330bn in infrastructure investment over the next five years to sustain its economy‟s growth at 8% annually. Inadequate port facilities, poor road infrastructure and frequent power cuts prevent Indian industries from operating efficiently and expanding sales. India needs to increase its spending on infrastructure projects to 8% of the country‟s gross domestic product from 4.6% now. In fact, despite these obstacles, its India Freight Transport Report concludes the country will reach average annual freight traffic growth of 10.2% in the 2007-2011 periods. 5
Strong economic and foreign trade growth is underpinning the freight upturn. In the road freight sector, demand is boosted by door-to-door logistics, the move to higher value/lower bulk shipments, the rising size of the vehicle fleet and the new impetus to improve and extend the network, using private sector highway operators and build-transfer-operate (BOT) schemes. Rail will experience steady but less spectacular growth given the predominance of the state-controlled Indian Railways. All other transport modes should experience faster growth, with international air cargo turnover performing strongly as more private airlines join the market. Sea transport through India‟s major ports will also perform well. A major factor over the next few years driving change will be the rising competitive pressures from cargo operators among India‟s immediate neighbours and main trading partners. For the 2007-2011 forecast period we expect the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 7.7%, versus 7.4% for overall GDP. The total value of transport and communications GDP will rise to US$91.8bn in nominal terms by 2011, representing 7.6% of India‟s GDP. India has an ability to improve the freight forwarding due to his better quality of product. We improve the skill development in labour. To huge investment in research and development . We revise the market strategy for the expending for freight forwarding. Government of India provides better facilities for its freight forwarder. Last few years this seek industry of India we improve the technology for the production of better quality of product. I hope India improve its freight forwarding for its policies.
6
CHAPTER 2
OBJECTIVE OF THE STUDY
TITLE OBJECTIVE OF THE STUDY SCOPE
7
TITLE I have chosen my project title „MARKET POTENTIAL OF FREIGHT
FORWARDING BUSINESS, because this study gives me a wide exposure of areas like Industry awareness, company, competitions, Market position, customer expectations and market demands in Freight Forwarding.
OBJECTIVE OF THE STUDY To analyze the market potential for providing the services related with import export to the customers. To know Import & Export industry very well. To know the requirement of the customers To know the Documentation part. To analyze the current situation of Abhi Impact Logistics To set up brand image of Abhi Impact Logistics in segmented market. To know about market movement To analyze the current services and their application
8
SCOPE The study gives me a wide exposure of areas like Industry awareness, company, competitions, Market position, customer expectations and market demands in Freight Forwarding.
What are the current trends and their application and also scope of improvement in it?
.
It also gives me a deep understanding of the logistics industry about
both domestic as well as foreign market.
9
CHAPTER 3
COMPANY PROFILE INTRODUCTION COMPANY PROFILE OUR CORE TEAM MISSION VISION BASIC KONWLEDGE FOR FREIGHT FORWARDING CONTAINERS INFORMATION EXIM PROCESS CUSTOMERS
OUR SERVICES
10
INTRODUCTION Freight forwarding is a service used by companies that deal in international or multi-national import and export. While the freight forwarder doesn't actually move the freight itself, it acts as an intermediary between the client and various transportation services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden. Freight forwarding services guarantee that products will get to the proper destination by an agreed upon date, and in good condition. The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability. Freight forwarding plays an important role in
facilitating
international trade, fulfilling a number of distinct functions. In basic terms they act on behalf of exporters to buy and manage transportation services. These usually include air or sea freight , as well as land transportation services to move goods from the shipper to the port . Freight forwarding has become an increasingly complex and specialized service in the current context of globalization, tight security regulations and skills shortages.Maintaining a competitive advantage in such an environment requires
11
strategic planning and action, and it‟s going to become more challenging as complexity grows.
COMPANY PROFILE-
Abhi Impact Logistics Solutions Private Limited is incorporated under 'The Companies Act, 1956' & is having corporate office in Pune, India. Our logistics services are at the forefront, offering state-of-the-art 3rd party / 4th party logistics solutions to all customers. Abhi Impact Logistics is structured to provide logistics and supply chain solutions to the growing global industry. Our comprehensive solutions comprises of services like Logistics Consultancy, Warehousing, Transportation, Packaging, International Freight Forwarding, Projects and Reverse Logistics. ABHI IMPACT LOGISTICS SOLUTIONS PVT LTD was established in .7 October 2007.founded by Mr. Jitendra Joshi
12
Our core team
TABLE 3.1
Name
Designation Profile
Mr.
CEO
BE Electronics having over 13 years experience in logistics as
Jitendra
Operation head Dynamic Logistics, (Tata Motors, Ford spare part
Joshi
division) Logistics Country head for Vishay Components & Atlas Copco,.
Mr. V.R.
Logistics
BE Mechanical having over 30 years of experience in logistics as
Fadnavis
Consultant
VP TVS logistics, Divisional head Tata Motors, undertaken various projects in many engg. Industries like Tata, Thermax, Greaves, Escorts. Lead speaker for CII/MCCI seminars
Mr. Pankaj
CFO
Chhajed
BE Civil having undertaken several infrastructure projects in last 7 years in constructing state of the art Warehouses. Currently looking after the proposed 350,000 Sq.Ft. warehouse in Chakan.
Mr.
GM
Logistics expert having over 16 years of experience in defense,
Balkrishna
Operations
3PL & MNCs such as Dynamic Logistics, Vishay Components,
Gawade
Atlas Copco.
Mr. Dhiraj
Director
BE Mechanical having done Masters in Logistics from UK.
Chhajed
Operations
Handled various projects for Tata Motors & Thermax.
13
Mission To provide cost effective, efficient and value added services to our esteemed clients and to establish creative impact on their supply chain management.
Vision To be the world class logistics solution providing company to meet growing demands of global industry.
14
Basic Knowledge for Freight forwarding INCOTERMS Inco terms are ICC's standard definitions of trade terms and are internationally recognized as indispensable evidence of the buyer's and seller's responsibilities for delivery under a sales contract.
TABLE 3.2 EXW
SERVICES
Ex Works
FCA
Free Carrier
FAS
FOB
Free
Free
Alongside Onboard Ship
Vessel
CFR
Cost & Freight
CIF Cost Insurance & Freight
CPT
Carriage Paid To
Warehouse Storage
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Warehouse Labor
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Export Packing
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Loading Charges
Buyer
Seller
Seller
Seller
Seller
Seller
Seller
Inland Freight
Buyer
Seller
Seller
Seller
Seller
Seller
Terminal Charges
Buyer
Buyer
Seller
Seller
Seller
Seller
Seller
Forwarder‟s Fees
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Seller
Loading On Vessel
Buyer
Buyer
Buyer
Seller
Seller
Seller
Seller
Ocean/Air Freight
Buyer
Buyer
Buyer
Buyer
Seller
Seller
Seller
Charges On Arrival At Destination
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
Duty, Taxes & Customs Clearance
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer/ Seller*1
15
Delivery To Destination
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
*1. There are actually two FCA terms:
FCA Seller's Premises where the seller is responsible only for loading the goods and not
responsible
for
inland
freight;
and
FCA Named Place (International Carrier) where the seller is responsible for inland freight.
TABLE 3.3 CIP
DAF
Carriage Delivered
DES
DEQ Delivered
Delivered Ex Quay
DDU
Delivered
Delivered
Insurance
At
Paid To
Frontier
Warehouse Storage
Seller
Seller
Seller
Seller
Seller
Seller
Warehouse Labor
Seller
Seller
Seller
Seller
Seller
Seller
Export Packing
Seller
Seller
Seller
Seller
Seller
Seller
Loading Charges
Seller
Seller
Seller
Seller
Seller
Seller
Inland Freight
Seller
Seller
Seller
Seller
Seller
Seller
Terminal Charges
Seller
Seller
Seller
Seller
Seller
Seller
Forwarder‟s Fees
Seller
Seller
Seller
Seller
Seller
Seller
Loading On Vessel
Seller
Seller
Seller
Seller
Seller
Seller
Ocean/Air Freight
Seller
Seller
Seller
Seller
Seller
Seller
Charges On Arrival At Destination
Seller
Buyer
Buyer
Seller
Seller
Seller
Duty, Taxes & Customs Clearance
Buyer
Buyer
Buyer
Buyer
Buyer
Seller
SERVICES
16
Ex Ship
Duty Unpaid
Duty
DDP
Unpaid
Duty Paid
Delivery To Destination
Buyer
Buyer
Buyer
Buyer
Seller
Seller
The 13 INCOTERMS
What are INCOTERMS? Inco terms are a set of simple three letter codes which represent the different ways international shipments may be organized. They allow sellers and buyers from different cultures and legal systems to decide at what point the ownership and paying for freight, insurance and customs costs transfer from one to the other. Who decides what INCOTERMS mean? The International Chamber of Commerce has set up strict definitions for each incoterm. Choosing a suitable incoterm allows the buyer and seller to negotiate a price best suited to their needs and to be confident that there will be no confusion over who pays the costs. To ensure that the latest version is being used shipping contracts should refer to "INCOTERMS 2000". When should INCOTERMS be used? It is not compulsory to use incoterms. However when things go wrong and disputes arise it is much easier to sort out who is responsible for what if incoterms have been written into the shipping contract. To be safe, incoterms should be decided upon in the negotiation phase of any international purchasing contract. How do INCOTERMS work? Each INCOTERM is a three letter acronym related to where the seller's responsibility ends. They should be written into the purchasing or shipping contracts. Some incoterms require the changeover point to be named. As well as buyer and sellers there are 17
"carriers". They are the people who have a contract to transport the goods by land, sea, air or a combination of modes. A seller will be given a bill of lading, way bill or carrier's receipt, that document can be used to prove that the goods have been taken on by the carrier. There are four groups of INCOTERMS - "E", "F", "C" & "D" Group:E used where the seller does not want to arrange transport. EXW - "Ex-Works" means the seller's only responsibility is to make the goods available at the seller's premises, i.e., the works or factory. The seller is not responsible for loading the goods on the vehicle provided by the buyer unless otherwise agreed. The buyer bears the full costs and risk involved in bringing the goods from there to the desired destination. "Ex works" represents the minimum obligation of the seller.
Group:Fused where the seller can arrange some transport within his/her own country.
FCA - Free Carrier, This term has been designed to meet the requirements of multi-modal transport, such as container or roll-on, roll-off traffic by trailers and ferries. The seller fulfils his/her obligations when the goods are delivered to the custody of the carrier at a named point. If no precise point can be named at the time of the contract of sale, the parties should refer to the place where the carrier should take the goods into its charge. The risk of loss or damage to the goods is transferred from seller to buyer at that time. FAS - Free alongside Ship, requires the seller to deliver the goods alongside the ship on the quay. From that point on, the buyer bears all costs and risks of loss and damage to the
18
goods. F.A.S. requires the buyer to clear the goods for export and pay the cost of loading the goods.
FOB
-
Free
On
Board
vessel,
named
ocean
port
of
shipment.
The goods are placed on board the ship by the seller at a port of shipment named in the sales agreement. The risk of loss of or damage to the goods is transferred to the buyer when the goods pass the ship's rail (i.e., off the dock and placed on the ship). The seller pays the cost of loading the goods. – Group:Cused where the seller can arrange and pay for most of the freight charges up to the foreign country. CFR
-
(or
C&F)
Cost
and
Freight,
Named
ocean
port
of
destination,
requires the seller to pay the costs and freight necessary to bring the goods to the named destination, but the risk of loss or damage to the goods, as well as any cost increases, are transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. Insurance is the buyer's responsibility. CIF
-
Cost,
Insurance
and
Freight,
named
ocean
port
of
destination.
This is CFR with the additional requirement that the seller procure transport insurance against the risk of loss or damage to goods. The seller must contract with the insurer and pay the insurance premium. Insurance is generally important in international shipping because transport companies have restricted liability for loss or damage. CPT
-
freight/Carriage
paid
to,
named
place
or
port
of
destination.
This term means the seller pays the freight for the carriage of the goods to the named destination. The risk of loss or damage to the goods and any cost increases transfers from the seller to the buyer when the goods have been delivered to the custody of the final carrier, and not at the ship's rail. Accordingly, "freight/carriage paid to" can be used for 19
all modes of transportation, including container or roll-on roll-off traffic by trailers and ferries. When the seller is required to furnish a bill of lading, way bill, or carrier receipt, the seller duly fulfils its obligation by presenting such a document issued by the person contracted with for carriage to the main destination. CIP - Carriage and Insurance Paid To named place or port of destination. This term (also abbreviated CIP) is the same as "freight/carriage paid to" but with the additional requirement that the seller has to procure transport insurance against the risk of loss or damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium. Group:Dused where the seller can pay for most of the delivery charges to the destination country. DAF - Delivered at Frontier, named place of destination, by land, not unloaded. This term means that the seller's obligations are fulfilled when the goods have arrived at the frontier but before the customs border of the country named in the sales contract. The term is primarily used when goods are carried by rail or truck. The seller bears the full cost and risk in delivering the goods up to this point, but the buyer must arrange and pay for the goods to clear customs. DES
-
Delivered
Ex-Ship,
named
port
of
destination,
not
unloaded.
This term means the seller makes the goods available to the buyer on board the ship at the destination named in the sales contract. The seller bears the full cost and risk involved in bringing the goods there. The cost of unloading the goods and any customs duties must be paid by the buyer. DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared. This term means the seller has agreed to make the goods available to the buyer on the quay or the wharf at the destination named in the sales contract. The seller bears the full cost and risks in delivering the goods to that point including unloading. There are two 20
variations of ex quay contracts: "ex quay duty paid" and "ex quay duty on buyers account." In the first, the duty is paid by the seller. In the second, the duty also is paid by the seller, but the buyer must reimburse the seller.
DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared. This term Delivered duty paid or under these terms, the seller fulfils his obligation to deliver when the goods have been available to the buyer nucleated for import at the point or place of the named destination. The seller bears all costs and risks involved in bringing the goods to the point or place of named destination. There is no obligation for import clearance.
DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared. This term represents the seller's maximum obligation. The term "DDP." is generally followed by words indicating the buyer's premises. It notes that the seller bears all risks and all costs until the goods are delivered. This term can be used irrespective of the mode of transport. If the parties wish to make clear that the seller is not responsible for certain costs, additional word should be added (for example, "delivered duty paid exclusive of VAT and/or taxes").
21
Figur e 3.1 TYPES OF CONTAINERS – 40’
40' Dry Freight
45' High Cube Dry
40' Open Top
40' Flat Rack
TYPES OF CONTAINERS – 40’
40' Collapsible Flat Rack
40' Platform
40' Reefer
40' High Cube Reefer
22
CONTAINER INFORMATION 40 FT. STANDARD CONTAINER
Dimensions: Overall Internal
Length
Width
Height
40' = 12192 mm
8' = 2438 mm
8' 6" = 2591 mm
39' 5.25" = 12022 mm
7' 5.625" = 2352 mm
7' 10.25" =
2395 mm
7' 8.25" =
7' 5.75" =
2280 mm
Door Opening
2343 mm
Weights: Max. Gross
67200 lbs = 30480 kg
Tare
8600 lbs = 3900 kg
Max. Payload
58600 lbs = 26580 kg
Cube:
2392 cu. ft. = 67.7 m3
TABLE 3.4 TYPES OF CONTAINERS – 20’
Figur e 3.2
20' Open Top
20' Dry Freight
20' Flat Rack
20' Tank
23
TABLE 3.5
CONTAINER INFORMATION 40 FT. "High Cube"
Dimensions: Overall
Internal
Length
Width
Height
40' = 12192 mm
8' = 2438 mm
9' 6" = 2895 mm
39' 3.25" = 12022 mm
7' 8.5" =
8' 10.25" = 2700 mm
Door Opening
2352 mm
7' 5.75" = 2340 mm
Weights: Max. Gross
67200 lbs = 30480 kg
Tare
9150 lbs = 4150 kg
Max. Payload
58050 lbs = 26330 kg
Cube:
2697 cu. ft. = 76.4 m3
24
8' 5.75" =
2585 mm
TABLE 3.6
Exim Process Approach Client for Exim inquiry Inquiry raised by Client for Import/Export (Sea/Air)
Make Entry in Inquiry Register
Request for quote (RFQ) to Suppliers
Supplier to quote at best rates with negotiations
Prepare Comparison Statement for Quotations received from suppliers Select the supplier on the basis of Statement
Prepare Quote for Client and Submit to the Client
Negotiations with Client
Revision
Approved Approval of Quote from Client
Forward the Customer Confirmation to Operation Team.
25
TABLE 3.7 Received Customer Confirmation from AGM Get Shippers Contact Details with Order Confirmation / PO from Client and inform the same to supplier and get overseas agent details
Give our overseas agents details to Shipper as well as client
Get Scan Document from Client / Shipper Get Shipment Pickup Confirmation from Supplier/ Suppliers agent and inform it to client Get Booking status of shipment from Supplier and forward it to client
Get Pre-Alert from Supplier and submit it to Client Get suppliers Bill along with CAN (ensure AILSPL name appears) and submit CAN with AISPL Invoice to Client
Ensure Supplier files B/E and sends the checklist. Forward it to client for approval. Collect the delivery address details from client & gives to supplier.
Upon checklist approval, AILSPL submits the DD details to the client collect the DD and hand it over to supplier.
Follows up with the supplier for customs clearance and delivery.
Collect Octroi amount from the client (if applicable) and follows up with the supplier for confirmation of delivery.
Get set of Bill of Entry/ documents from supplier and forward it to client.
26
CUSTOMERSIMPACT EXPERTISE NETWORK
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.
Figure 3.3
Engineering Automotive FMCG Retail Electronics Perishable Jewellary Agricultural Textile Chemicals Petroleum Fertilizers Pharmaceutical Construction Sports Power Information Technology Telecommunication
27
Our Major customers:
Figure 3.4
-handle the Warehouse
28
Our servicesServices offered by us International freight forwarding Warehouse 3PL &4PL Custom Clearance Transportation Logistics consultancy Value added serviceKitting MIS Reports Procurement Sub Assembly Gas Handling Shrink wrapping
Order management
29
INTERNATIONAL FREIGHT FORWARDING
Air Freight Our airfreight services help you to ship your cargo to almost every destination worldwide. Our specialists have many years of experience in the area of air cargo shipments. And with our good connection with major world wire carriers, we are able to offer the best solution to compete with time, safety, cost and space.
Our focus is on prompt and timely delivery of your shipments along with constant communications so that you are in control of your cargo at all times. Export Cargo Handling Import Cargo Handling Import and Export Cargo Consolidation Door to Door Services
Sea freight Through our network of experienced professionals, strong world shipping connections and extreme flexibility, we are able to specifically respond to whatever your shipping needs may be.
Warehouse Abhi Impact Logistics offers to its client‟s specialized state-of-the-art customized and flexible solutions for warehousing and Inventory management based on JIT and FIFO. Bonded & Non-Bonded Warehousing 30
Cold & Refrigerated Warehousing Industrial Projects and Plant Shifting Carrying and Forwarding Yard Management
3PL&4PL Abhi Impact Logistics Offers to its client's 3PL / 4PL services to manage their various functions in supply chain so that the principal can focus on core competencies and better manage and utilize company assets and resources and optimize inventory and personnel.
Custom Clearance Once the cargo is inside the CFS, the success of each job is in minimizing the turnaround time before the container is physically delivered inside the port premises. Our officials arrange for the customs- related activities thereby saving you the trouble of going through the entire process yourself.
We provide the following services : 1.Guidance for duty benefits as per notifications 2. Customs documentation.
31
3. Carting / receiving goods. 4. Examination of shipments. 5. Customs duty payments.
Transportations As more and more companies are migrating into the global marketplace, they've come to expect a freight forwarding service which is equal to the task of meeting their unique requirements. We are ready to answer that challenge with our vast network of international contacts and expert knowledge of the international freight forwarding.
Milk Run for JIT Sequential pickup & delivery Specialization in handling Import and Export cargo Domestic Transportation
32
CHAPTER 4
REVIEW OF LITERATURE
INTERNATIONAL FREIGHT FORWARDING
FREIGHT FORWARDING
CUSTOM CLEARANCE
TRANSPORTATION-
DOCUMENTS REQUIREMENT FOR AIR / SEA FREIGHT IMPORT
33
INTERNATIONAL FREIGHT FORWARDING INTERNATIONAL FREIGHT FORWARDING
Freight forwarders typically arrange cargo movement to an international destination. Also referred to as international freight forwarders, they have the expertise that allows them to prepare and process the documentation and perform related activities pertaining to international shipments. Some of the typical information reviewed by a freight forwarder is the commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, or transshipment. Much of this information is now processed in a paperless environment. The original function of the forwarder, or speedier, was to arrange for the carriage of his customers' good by contracting with various carriers. His responsibilities included advice on all documentation and customs requirements in the country of destination. His correspondent agent in far-away lands looked after his customers' interests and kept him informed about matters that would affect movement of goods. In modern times the forwarder still carries out those same responsibilities for his client. He still operates either with a corresponding agent overseas or with his own company branchoffice. In many instances, the freight forwarder also acts as a carrier for part of a movement it can happen that in a single transaction the forwarder may be acting either as a carrier (principal) or as an agent for his customer On the first day in my company, I came across the knowledge of Export and Import. To understand well about the condition of the current market, the company management decided to have a marketing research for one week. While doing marketing research, initially we collected / gathered the list of industry in and around Pune and started sending them our company profile via e-mail. At the beginning our focus was to reach at B & C cadre customers who are in need of a perfect logistics service provider. We identified the exact need of such customers through our extensive market research and discussions with our internal team. We found that C & D category customers do not get the up to mark and cost effective services from the reputed Logistics companies or reputed freight forwarders. The main reason identified is the volume of their export or import shipment is very less; as a result the giant players in freight forwarding are seems to have less 34
focus on such clients because they generally look for the / interested in the clients who are having huge activities / more volume of export or import shipments. And hence, identifying this exact need of C & D category customers, I have started targeting these customers because of which these customers would be getting the same excellent service level as “A” category customers get from giant freight forwarders and at the same time my company would also be getting a good business. If more number of customers, more number of shipments. Like-wise, I had started focusing on these customers. I met with many clients and by discussing the queries I got to know the requirement of people and what kind of services is required. I was visiting 5-6 clients everyday and giving company presentation about our services. The queries I collected from client about what kind of services they want, got discussed in evening with impact logistics AGM (Assistant General Manager).
After solving the Queries, I tried to tap the client. As I knew the clients requirement or services they want, accordingly I mailed the competitive Quotes to the clients and kept following up with them till I convert them into business. I with my Project Guide was giving the services to existing clients as well as focusing on new customer. To be a good and “go getter” marketing person in International Freight Forwarding / EXIM field, the person should be well versed / aware of the international trade and activities carried out on day to day basis. While marketing / selling of products of International Freight Forwarding / EXIM, any type / kind of queries or questions are expected from a customer. Similarly there are also few customers who are unaware of the activities but they are in urgent need to export or import their product. In such situation, the marketing & sales person must be in a position to provide a proper and fare guidance to the customer. Below are the basic and important knowledge path ways that not only a marketing & sales person but any person in International Trade / Logistics should be aware of.
35
Freight forwardingA freight forwarder is a third party logistics provider. A third party logistics forwarder dispatches shipments via asset-based carriers and books or otherwise arranges space for those shipments. Carrier types include waterborne vessels, airplanes, trucks or railroads. Freight forwarders typically arrange cargo movement to an international destination. Also referred to as international freight forwarders, they have the expertise that allows them to prepare and process the documentation and perform related activities pertaining to international shipments. Some of the typical information reviewed by a freight forwarder is the commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, or transshipment. Much of this information is now processed in a paperless environment. Custom clearanceIt is a procedural activity which is performed by government personnel. The shipment has to clear all the norms of custom clearance. Custom clearance differs from country to country. Tariff classifications, value declaration, and duty management can increase costs. Customs and security initiatives have imposed new regulations on companies that make it more challenging than ever to trade internationally TransportationIt is the movement of people and goods from one location to another. Transport is performed by various modes, such as air, rail, road, water, cable, pipeline and space. Infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses and seaports.
36
Documents requirement for air / sea freight import Documents
TABLE 4.1
No. of copies
P. O.
1
Shipping Instructions
1
Commercial Invoice
2
Packing List / Packing Slip
2
HAWB / HBL
2
M.S.D.S. (in case of D.G. / Non D.G., chemical products)
2
In case of D.G. : to obtain UN class number from shipper and accordingly make the shipment booking with airline / shipping line
1
Documents
No. of copies
HAWB / HBL
1
Commercial Invoice
1
Packing List / Packing Slip
1
Copy of P. O.
1
Original Certificate of Origin
1
Drawing / Product catalogue / Technical write-up
1
M.S.D.S. (in case of D.G. / Non D.G., chemical products)
1
In case of D.G. : UN class number from shipper.
1
37
TABLE 4.2
Documents requirement for export by air - clearance and forwarding Documents
No. of copies
Shipping Instructions
1
Commercial Invoice
5
Packing List / Packing Slip
5
SDF form
2
ARE1 / ARE4, C. Excise gate pass
2
N Form
4
M.S.D.S. (in case of D.G. / Non D.G., chemical products)
2
In case of D.G. : to obtain UN class number from shipper and accordingly make the shipment booking with airline / shipping line
38
1
TABLE 4.3
Documents requirement for export by sea - FCL (factory stuffing) - clearance and forwarding SDF form
2
ARE1 / ARE4, C. Excise gate pass
4
N Form (if applicable)
2
M.S.D.S. (in case of D.G. / Non D.G., chemical products)
2
C. Excise examination report on back of invoice. (in case of LCL, the same is not required)
5
Packing List / Packing Slip
2
Note : Ensure that customer holds the valid Factory Stuffing Permission for FCL factory stuffed containers Post shipment export documents Original set of Bill of Lading OR sea waybill / AWB (as the case may be)
1
Customs attested Invoice and Packing List
1
Customs attested SDF form
1
Original copy of Shipping Bill
1
Customs attested ARE1 / ARE4
1
EP copy of shipping bill
1
39
CHAPTER 5
RESEARCH METHODOLOGY RESEARCH METHODOLOGY OBJECTIVE` TYPES OF RESEARCH ANALYSIS OF INDIAN TRADE FREIGHT FORWARDING CUSTOM CLEARANCE SHARE OF INDIA IN WORLD EXPORT INDIA’S EXPORT DURING LAST 8 YEARS OBJECTIVE MARKET RESEARCH PRIMARY DATA SECONDARY DATA
40
Research Methodology Meaning of research
Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The advanced learner‟s dictionary of current English lays down the meaning of research as a careful investigation or inquiry especially through search for new facts in any branch of knowledge. Objective` The purpose of research is to discover answers to questions through the application of scientific procedures. Though each research study has its own scientific purpose, we may think of research objectives as falling into a number of following groups: 1. To gain familiarity with a phenomenon or to achieve new insights 2. To portray accurately the characteristics of a particular individual, situation or a group 3. To determine the frequency with which something occurs or with which it is associated with something else.
Types of research Descriptive research Analytical research Applied research Fundamental research Quantitative research Qualitative research
41
The above mentioned are the various types of research which a researcher can apply in order to achieve one desired objective. Therefore to achieve the objectives of my research I have used descriptive research. This is based on proper research design to meet the objectives of the study.
ANALYSIS OF INDIAN TRADE
A review of India‟s foreign trade since the commencement of planning reveals the following important points: 1. Both exports and imports have grown considerably. 2. Except for two years (1972-73) and (1966-77), in all years since 1951 imports were larger than exports. 3. Until about the mid 1980sthe export performance of India was very poor in Comparison with other countries in general; it was very poor even in comparison with several other developing countries. This is clear from the following facts: a) The share of India in the total world exports fell from about 2 per cent in 1950 to 0.4 per cent in 1980. Since the mid eighties, there has, however, been some improvement. In 2002 it was 0.8 per cent and the target set by the Ministry of Commerce is one per cent by 2007. b) India the 13th largest exporter in 1950 but there were 28 countries above India in 2005. This marks a slight improvement over the recent past. c) India‟s merchandise exports as a percentage of GDP had been stagnating around 5 per cent. Although it has improved since the liberalization, it is still very low (little above 13 per cent) even in comparison with many other developing countries.
42
SHARE OF INDIA IN WORLD EXPORT
TABLE 5.1
Year
Share (%)
1950
2.0
1960
1.2
1970
0.7
1980
0.4
1990
0.5
2000
0.7
2006
1.0
2007
1.0
2008
1.0
4) The terms of trade have, on the whole, been favorable to India, although there was deterioration in a number of years. 5) There has been a very significant change in composition of India‟s exports. Manufactured products one account for over three-fourths of the exports as against the dominance of primary commodities in the early period.
6) They have been significant changes in the direction (i.e. the source of imports and destination of exports) of India „s foreign trade.
43
TABLE 5.2
INDIA’S EXPORT DURING LAST 8 YEARS
Years
Export (in millions)
Growth Rate
2000
44560
21.0
2001
43627
-1.6
2002
52719
20.3
2003
63843
21.1
2004
83563
30.8
2005
103091
23.4
2006
115849
26.29
2007
1241600
28.27
2008
On X-Axis 1cm = Year
On Y-Axis 1cm = $20 billion
44
INDIA'S EXPORTS 140 124.6 115.849
120
103.091 100 Export in billions
83.563 80 63.843 60
52.719 44.56 43.827
export ( millions )
40 20 0 2000
1
2
3
4
5
6
7years 8
Figure 5.1 Merchandise export of the country nearly doubled to US$ 124.6 billion in the ending 2007-08 from 63.84$ billion from 2004 an annual compounded growth of 25 per cent compared to 12.73 present in the previous years during 2007-08. ObjectiveOn the first day in my company, I came across the knowledge of Export and Import. To understand well about the condition of the current market, the company management decided to have a marketing research for one week. While doing marketing research, initially we collected / gathered the list of industry in and around Pune and started sending them our company profile via e-mail. At the beginning our focus was to reach at B & C cadre customers who are in need of a perfect logistics service provider. We identified the exact need of such customers through our extensive market research and discussions with our internal team. We found that C & D category customers do not get the up to mark and cost effective services from the reputed Logistics companies or reputed freight forwarders. The main reason identified 45
Is the volume of their export or import shipment is very less; as a result the giant players in freight forwarding are seems to have less focus on such clients because they generally look for the / interested in the clients who are having huge activities / more volume of export or import shipments. And hence, identifying this exact need of C & D category customers, I have started targeting these customers because of which these customers would be getting the same excellent service level as “A” category customers get from giant freight forwarders and at the same time my company would also be getting a good business. If more number of customers, more number of shipments. Like-wise, I had started focusing on these customers. I met with many clients and by discussing the queries I got to know the requirement of people and what kind of services is required. I was visiting 5-6 clients everyday and giving company presentation about our services. The queries I collected from client about what kind of services they want, got discussed in evening with impact logistics AGM (Assistant General Manager).
After solving the Queries, I tried to tap the client. As I knew the clients requirement or services they want, accordingly I mailed the competitive Quotes to the clients and kept following up with them till I convert them into business. I with my Project Guide was giving the services to existing clients as well as focusing on new customer. To be a good and “go getter” marketing person in International Freight Forwarding / EXIM field, the person should be well versed / aware of the international trade and activities carried out on day to day basis. While marketing / selling of products of International Freight Forwarding / EXIM, any type / kind of queries or questions are expected from a customer. Similarly there are also few customers who are unaware of the activities but they are in urgent need to export or import their product. In such situation, the marketing & sales person must be in a position to provide a proper and fare guidance to the customer. Below are the basic and important knowledge path ways that not only a marketing & sales person but any person in International Trade / Logistics should be aware of.
46
Freight forwardingA freight forwarder is a third party logistics provider. A third party logistics forwarder dispatches shipments via asset-based carriers and books or otherwise arranges space for those shipments. Carrier types include waterborne vessels, airplanes, trucks or railroads. Freight forwarders typically arrange cargo movement to an international destination. Also referred to as international freight forwarders, they have the expertise that allows them to prepare and process the documentation and perform related activities pertaining to international shipments. Some of the typical information reviewed by a freight forwarder is the commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, or transshipment. Much of this information is now processed in a paperless environment. Custom clearanceIt is procedural activities which are performed by government personnel. The shipment has to clear all the norms of custom clearance. Custom clearance differs from country to country. Tariff classifications, value declaration, and duty management can increase costs. Customs and security initiatives have imposed new regulations on companies that make it more challenging than ever to trade internationally.
TransportationIt is the movement of people and goods from one location to another. Transport is performed by various modes, such as air, rail, road, water, cable, pipeline and space. Infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses and seaports. 47
Market Research I did work for Business Development through Market Research. Firstly I collected data of companies that are producing goods and doing deal in Import and Export. For collection of data I prepare questionnaire of 3rd party, 4th party, warehouse and freight Forwarding. So that I could know that whom are doing work in this segment.
Then I divide market in segments.
Like:- Type A, Type B, and Type C Type A:- For big industries Type B:- For medium industries Type C:- For small industries After this I search the market that where are situated this type of industries around Pune
City. I got the right way to do work in some MIDC area like Chakan, Aundh, Hadapsar, Hinjewadi, & Wagohli, Kothrud Industrial area, Paud road, Mundwa, M.G. road, Peth area, perengut, pashan, solapur road, pune Mumbai road, shivaji nager, ranger hills.
48
Primary Data MIDC in Pune
1. Chakan
2. Hinjewadi 3. Hadapsar
These are the main industrial area where companies have their industrial plant. In this area 40% companies are belonging to the SSI. They basically produce through import some goods like: 1. Agriculture 2. Manufacturing goods from imported chemicals. 3. Handicrafts 4. Handlooms 5. Gems & jewels 6. Leather & Footwear 7. Bio – technology 8. Engineering products 9. Information Technology 10. Ready made products 55% companies have activity of import and export with mostly by sea.
49
Secondary Data Pune Business & Industries – Categories Agriculture (27) Automotive(43) Chemicals(13) Computers(154) Construction(38) Electrical & Electronic(80) Financial Services(41) Industrial Goods(117) Medical & Hospital(16) Plant & Machinery (83) Scientific Instruments (16) Services (23) Tools & Equipment (29) Transportation & Logistics (12)
50
CHAPTER 6
DATA ANALYSIS AND REPRESENTATION
DATA ANALYSIS AND REPRESENTATION
51
DATA ANALYSIS AND REPRESENTATION Queuing which industry you are coming under?
TABLE 6.1
There are 6 main MIDC are in pune they follows. 1) Chakan
2) Bhosari
3) Hingewadi
4) Hadapsar
5) Pirangut & Pashan
6) Pimpri & Chinchwad .
Industries
No of companies
Agriculture
27
Automotive
43
Chemicals
13
Computers & It
154
Construction
38
Electronics & Electricals
80
Financial services
41
Industrial goods
117
Medical & hospital
16
Plant & Machinery
83
Scientific instrument
16
Services
23
Tools & equipment
29
52
Transportation & logistics
12
Figure 6.1
No of companies
Agriculture
16
Automotive
12
23 29
27
43
Chemicals
13
Computers & It
83
Construction 154
16
Electricals & Electronics Financial Services
117
38 41
Industrial goods Pharmaceutical
80
Plant & Machinery Scientific instrument Services Tools & Euipment Transportation & Logistics
This particular pie chart is showing that Out of 6 MIDC area in pune diffirent categaries company over there.
53
Are you doing Import Export activity?
TABLE 6.2
Exim unit
Non Exim unit
55%
45%
45% Exim Non Exim 55%
Figure 6.2 Pie chart showing that 55% company are dealing Export , Import activities and 45% are not dealing .
54
Which type of cargo‟s deal?
TABLE 6.3
Normal
Perishable
Hazardous
60%
12%
28%
28%
Normal Perishable Hazardous 60% 12%
Figure 6.3 Basicaly chemical industries produces hazardous goods and dooing exim that are 28%. Normal goods are 60% Perishable goods are 12% 55
TABLE 6.4
Using FCL or LCL cargo. ? FCL
LCL
60%
40%
40% FCL LCL 60%
Figure 6.4
60% companies are use FCL (Full Container Load ) these are the large scale companies and seal the containner in company premises. Remaining 40% are mainly SSI unit these are seal in port. 56
TABLE 6.5
Over all requirments of Exports .
Current
Future requirment Not requirment
Own forwarder
12%
18%
requirment 55%
N O o f
c 60% o m 50% p a 40% n i 30%
15%
55%
e s 20%
Series1
10% 12%
0% Current requirment
Future requirment
15%
Not requirment
18%
Own requirment
Figure 6.5 Current requirment of companies 55% Future requirment is 12% Not requirment is 15% Own Forwarder 18% .
57
CHAPTER 7
FINDINGS
58
FINDINGS
From the analysis of the data I collected during the study I present following Findings:
Awareness level about Abhi Impact Logistics Solutions Pvt Ltd among the existing customers is high. Most customers compared Abhi Impact Logistics Solutions Pvt ltd with DHL and secondly with Fed Ex. Satisfaction level of existing customers is satisfactory, however for the future prospects more changes and efforts have to be taken. Location of Abhi Impact Logistics Solutions Pvt Ltd is good as targeted B & C customer. There is almost 50% retention of customers visited the store before as per the analysis. Well awareness Abhi Impact Logistics Solutions Pvt Ltd in customer.
59
CHAPTER 8
LIMITATION OF PROJECT
60
LIMITATION OF PROJECT
There was some limitation during the project.
1. My Business Development scheme was limited to only the customers who are based in Small Industries area. 2. When I was filling the Questionnaire most of customers did not interested to give information to me. 3. Sometime permission was restricted in the company. 4. For filling questionnaire nobody was free without appointment. 5. Some persons did not give answers of some secret questions.
6. Our selection of Industries was random so it can be biased. 7. Difficulty in lack of about functioning proved as a hurdle in our research
61
CHATER 9
SUGGETION
62
SUGGETION From the Internship I found some new techniques that are applicable for better Improvements.
1. Company should establish back office for internal support. 2. Company should start some sales promotional activity for better attraction in
customer‟s memory. 3. Company should focus on the transportation services. 4. Company should focus on B & C type customers for better profit. 5. Company should increase marketing executive team. 6. To concentrate on advertisement. 7.
Above can be done by expanding its expertise network, also by improving quality of services at a competitive price.
8. Also impact should make effort to make aware to customers about new trends in
3pl /4pl also telling them benefit of outsourcing. 9. .Last but not least impact should focus on slowly to big customers so that it can
expand the size of business and can create Brand name in market for itself
63
CHAPTER 10
BIBLEOGRAPHY
64
BIBLEOGRAPHY Reference books 1) International Logistics By Devid Pierre 2) International Trade and Export Management By Francis Cherunilam 3) Export Import Procedures and Documentation Dr.khushpat S.Jain
Referred website
1) www .impact-logistics.in 2) www.indiamart.com 3) www.google.com 4) Wikipedia.com 5) Yahoo.com
65
CHAPTER 11
ANNEXURE Questionnaire-
66
Annexure Questionnaire-
Questionnaire / Sales Report for Freight Forwarding and or customs clearance
Mktg / Sales coordinator's name Date of Visit Company Name Address
Telephone / Mobile Fax E-mail Website Contact Person Designation Mobile No. Person to whom visited Designation Mobile No. Nature of business
67
Imports : If the company has any imports ? If yes, from which countries ? Please specify the ports of loading. What is the mode of transport ? (By air or by sea or both) What are the items that they import ? (material / commodity) What is the volume of imports in terms of number of shipments per month ? (sector / port wise) Please state the sectors / ports here ==> By Air
By Sea
By Air
By Sea
By Air
By Sea
By Air
By Sea
TEU
FEU
TEU
FEU
TEU
FEU
TEU
FEU
By Air
By Sea
By Air
By Sea
By Air
By Sea
By Air
By Sea
If FCL, how many TEU / FEU per month ? (sector / port wise) Please state the sectors / ports here ==>
What is the volume of imports in terms of weight of the shipments per month ? (sector / port wise) Please state the sectors / ports here ==>
Kgs / MT ==> What are the shipping terms ? Who are their current freight forwarders and customs clearing agents (CHA) ?
68
Can AILSPL get an opportunity if AILSPL quotes their best rates and offer best services ? Which filed / area of operation can AILSPL get to handle ? Viz. (1) Freight forwarding, (2) Customs clearance, OR both OR local transport (Mumbai / JNPT to Pune) Mktg / Sales coordinator's views / comments :
If no imports, do the company has any plans of imports ? When ? What will be the volume ? (in terms of no. of shpts and weight per month) Prospective Customer ? ( Yes / No ) Customer's response : Positive, Good, Fair or Negative Customer's willingness (1) to give information about his company, (2) to give an opportunity to AILSPL to start / begin the services.
Positive
Good
Fair
Negative
Positive
Good
Fair
Negative
(Please tick at the appropriate column) Overall impression of the customer about AILSPL & its products / services (Please tick at the appropriate column) Next follow up date
Exports : 69
If the company has any exports ? If yes, to which countries ? What is the mode of transport ? (By air or by sea or both) What are the items that they export ? (material / commodity) What is the volume of exports in terms of number of shipments per month ? (sector / port wise) Please state the sectors / ports here ==> By Air
By Sea
By Air
By Sea
By Air
By Sea
By Air
By Sea
TEU
FEU
TEU
FEU
TEU
FEU
TEU
FEU
By Air
By Sea
By Air
By Sea
By Air
By Sea
By Air
By Sea
If FCL, how many TEU / FEU per month ? (sector / port wise) Please state the sectors / ports here ==>
What is the volume of exports in terms of weight of the shipments per month ? (sector / port wise) Please state the sectors / ports here ==>
Kgs / MT ==> What are the shipping terms ? Pick up from which location ? Who are their current freight forwarders and customs clearing agents (CHA) ? Can AILSPL get an opportunity if AILSPL quotes their best rates and offer best services ?
70
Which filed / area of operation can AILSPL get to handle ? Viz. (1) Freight forwarding, (2) Customs clearance, OR both OR local transport (Pune to Mumbai / JNPT) Mktg / Sales coordinator's views / comments :
What will be the volume ? (in terms of no. of shpts and weight per month) Prospective Customer ? ( Yes / No ) Customer's response : Positive, Good, Fair or Negative Customer's willingness (1) to give information about his company, (2) to give an opportunity to AILSPL to start / begin the services.
Positive
Good
Fair
Negative
Positive
Good
Fair
Negative
(Please tick at the appropriate column) Overall impression of the customer about AILSPL & its products / services (Please tick at the appropriate column) Next follow up date
71
