SEA & AIR LOGISTICS

SUBMITTED BY:-

MOLOY RANJAN ROY

13MT07IND004

DEFINATION

LOGISTICS …………IS “THE

PROCESS

OF PLANNING IMPLEMENTING AND

CONTROLLING THE EFFECTIVE

AND EFFICIENT FLOW AND

STORAGE OF GOODS, SERVICES

AND RELATED

INFORMATION FROM THE POINT

OF ORIGIN TO THE

POINT OF CONSUMPTION FOR THE

PURPOSE OF CONFORMING

TO CUSTOMER REQUIREMEN.

MODES OF LOGISTICS

AIR

SEA

ROAD

RAILWAYS

Other transportation

system such as Ropeways,

pipe line etc.

AIR LOGISTICS SYSTEM

Used wherever fast delivery required

IATA acts as medium fixing the tariff for airlines

Constituents of IATA rate structure-

General cargo rates (GCR)

Specific commodity rates(SCR)

Freight all kind rates(FAK)

Govt. Mandatory rates

Items transported by air

High value products

Perishable products

e.g. short shelf life as cheery, strawberries.

Emergency products

e.g. medical & spare parts for machinery

Live animals

e.g. race horses

Fashion items

e.g. short sales life items

INTERNATIONAL AIR CARGO

The size of the world air cargo market is

estimated at 27million tonnes valued at

$200 billion.

India accounts for meagre 3% of the global

air cargo market

As per an expert estimate, Indian air cargo

industry is going to be double by the year 2020

Major International cargo airports-Mumbai, Chennai, Bangalore, kolkata, Trichy, Hyderabad, Delhi, Coimbatore, Cochin.

DOMESTIC AIR CARGO

Cargo-garments, machinery, components, pharmaceuticals, dyes, chemicals and perishables [fruit, vegetables, flowers, fish and meat].

Major domestic cargo airports –Ahmadabad, Goa, Luck now, Visakhapatnam, Madurai in addition to the above.

25 non-metro airports identified by the Airports Authority of India for further development

INDIAN FUTURE PLAN FOR AIR LOGISTICS

• Investments of USD 5.07 billion over next 5 years in Indian Airport Infrastructure.

•Blue-Dart, the only dedicated freight carrier in domestic sector.

•Air India plans to increase cargo revenue from current 10% to 15-20% in 3yrs.

•Jet Air, Go Air, Kingfisher Airlines charting out plans to play bigger role in Indian domestic air cargo.

•International Airlines-Cathay Pacific and BA increasing cargo capacity to and from India.

Multi-modal International Cargo Hub and Airport at Nagpur

Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) is an airport project for Dr. BabasahebAmbedkar International Airport, Nagpur.

Case study for future plan air logistics

The Government of Maharashtra formed a special purpose entity in the name of Maharashtra Airport Development Company (MADC) for development of MIHAN. The project is financed by multiple Indian banks with total loan amount of INR 3,000 million .The projected target of serving 14 million passengers and handle 0.87 million tones of cargo. The estimated capital cost of the project is INR 2581 crores (by year 2035) and is supposed to generate revenues INR 5280 crores. The project consists of widening and extending the present runway(3200 meters × 45 meters) to (3600 meters × 45 meters) to meet international standards. Also it will have provision for a similar runway (4000 × 60 m) in the future. The airport will have parking space for 50 aircraft at any time with 50additional bays at fringe areas. An airport terminal building in semi-circular shape with conductive weather dynamics will have total area of 3,000,000 sq ft (280,000 m2). Project is also building a separate cargo complex for handling and transferring cargo to-and-fro from airport.

Advantage & disadvantages

ADVANTAGES

Faster

Broad service range

Increasing capabilities

Disadvantage

High cost

Weather condition affect flights

Limitation for heavy products

SEA LOGISTICS

Used for low value to weight ratio products as timber

Offers less cost per ton kilometer for bulky products like iron ore, coal, chemical, petroleum products ,cements etc

Water transportation uses Ships.Two types of shipping service-

Liner (fixed schedule)

Tramp(not fixed)

LINER CONFERENCE

Group of two or more vessel operating carriers providing international liner service for carriage of cargo on defined routes within specified geographical limit on mutually agreed terms & conditions at common freight rates.

Over 360 liners conferences working in world

It has its own constitution & organization setup

Freight rates determined by the committees

Advantages of Liner service

Regularities of sailing to scheduled

Uniform rates for all shippers

Cover wide range of ports

Sometimes give rebates based on loyalty agreements

Stable freight rates

FREIGHT RATES FOR LINER CONFERENCE

1.Conference rate system

2.Loyalty agreements

Conference rate system

Conference determine tariff with its rules & regulation.

Rate fixation is based on characteristics, density,volume,distance, storage, insurancecharges etc

Loyalty agreements

Some rebates offered on Freight rates determined by conference rate system for exclusive patronage of the conference members.

Three rebate system are in practice:

1.Deferred rate system- Given for shipper who utilizes the vessels of member lines of conference for carriage b/w ports receive certain %(~10% )for his freight payment.Rebate is computed for a period called shipment period but paid after deferred period on the condition that shipper has supported conference line during shipment &deferred period.

2.The dual rate system- Shippers who are exclusive patronage with conference get benefit of lower rate than others.

3.Immediate rebate system –Given immediate rebate or cash(~9.5%)for their cargoes.

Tramp shipping

Chartering of ships on an “ad hoc” or special purpose basis.

Tramp ship operate in all parts of world without a fixed shipping route & sailing schedule.

Ships are chartered either in voyage charter or time charter form or demise charter.

Contd…

Voyage charter- ships are charted for specific voyage.eg 10000 ton iron from china to Japan.

Time charter- ships charted for specified period of time. Charterer may employ ship in voyage acc. to his requirements.

Demise charter- Normally opted by a ship owner bcoz he has to equips the ship with fuel, floating personnel & other necessities & operate the ship.

Mode of cargo shipments by ships

General cargo

Containerization- It may be flat or collapsible or open top or tank container or refrigerated or specific designed container.

Tankers

Sea logistics

Advantage-

mass movement of bulk material,

low cost,

large capabilities.

Disadv.-

Suitable for specific items,

Not quicker transit

Bill of lading

It is the carrier’s receipt in ship transport.

It is negotiable & contains- Name of ship, flag of nationality, shipper's name, no. of packages, description of goods, freight rates, net weight, order & notified party.

B/L should be clean, any remark on Mate receipt should be indicated on B/L.

It is prepared at port of shipment.

It is prepared by shipping company.

Bill of lading format

INDIAN SEA LOGISTICS

•India now has the largest merchant shipping fleet among the developing countries

•India ranks 17thin the world in shipping tonnage.

•Indian share of maritime transport services is 1% of world market.

•The container traffic has registered an impressive growth of 15 per cent over the last five years.

INDIAN PORTS

Vast coastline of 7,517 kms

12 major ports and 184 other ports

(minor and intermediate)

95% of Foreign trade by volume &

75% by value.

Tonnage handled increased 16 fold

(in last 50 years) to 453 million Tonnes

Port- Hinterland connectivity- a major issue

Future Investments Profile of Kolkata Port

A well diversified investment programme, costing around Rs.1400 crore, aimed at improvement of infrastructure / capacity augmentation to be funded through internal resources of the Port/Grant-in-Aid by Government of India

1. Public Private Participation in Port Infrastructure

2.Transloading facilities at Sandheads and its vicinity for midstream handling of Dry Bulk cargo

3.Development of berth facilities at Haldia Dock II (Salukkhali)

There is a need for expansion of Haldia Dock Complex at an alternative location on the west bank of river to cater to a higher volume of traffic, primarily, coal, coking coal and iron ore. In this context, development of Haldia Dock � II in the west bank at Salukkhali / Rupnarayanchak was envisaged where the land connectivity is conducive to cargo handling operation. Possession of entire 163 acres of land from State Govt. has been obtained while land for providing railway connectivity is expected to be received from Haldia Development Authority (HDA)/Govt. of West Bengal shortly.

Diamond Harbour Container Terminal

The project site, around 50 km south of KoPT by road, is envisaged at an

indicative cost of around Rs. 1530 crore. The first phase of the project will comprise 900 mtrs. quay length with a design capacity of 1.2 million TEUs, for handling two container ships at a time. Projected container traffic is one million TEUs i.e, 100% rise in container handling is envisaged with the setting up of this container terminal, , some land will be available through reclamation. Revised RFQ for this project has already been published and application due date is 6.2.2013.

Sagar Project for handling Dry Bulk Cargo and Containers at Sagar Island.

For establishing port facilities at Sagar Island including rail-road

connectivity and construction of a rail-cum-road bridge over Muriganga, a feasibility study was entrusted to M/s. RITES Ltd. who have since submitted final report on 31.07.12. The feasibility report highlighted that setting up of a port facility at Sagar Island for handling 13.5m drafted vessel at a cost of Rs. 7851 crore is a viable proposition for handling 54 MMTPA traffic in 2019-20 which will gradually rise to 127.8 MMTPA in 2036-37. In terms of a high level meeting held recently at Kolkata and subsequent site visit, M/s. RITES have already made necessary changes in the final report including the cost estimate as well as implementation schedule and economic analysis.

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