1-19 1

Freight Forwarding and Freight Forwarding and Shipping Business in Shipping Business in

BangladeshBangladesh

Freight Forwarding and Freight Forwarding and Shipping Business in Shipping Business in

BangladeshBangladesh

Presented by Md Aftab Uddin Presented by Md Aftab Uddin Student ID: DIM002013 012Student ID: DIM002013 012

Course: PGDIMCourse: PGDIMGroup Name: IchamatiGroup Name: Ichamati

Bangladesh Institute of ManagementBangladesh Institute of ManagementDhaka.Dhaka.

1-19 2

Introduction Shipping is one of the world's most old

industry. It is a fundamental element of international and domestic trade. Shipping business has a great impact on economic development. That’s why the economists have been addressed the shipping "demand-driven" business. To learn more about shipping and freight business of our global economy, there must be a good idea of international and domestic trade.

1-19 3

Components of shipmentThe shipping business involves the

physical transport of cargoes from an area of supply to an area of demands. There are three components of a transportation (shipment) system that surrounds it:

• 1. Port or terminal • 2. Media (Land/Sea/Air) Ship, Truck.

Lorry, Train or Air Cargo • 3. Skill manpower

1-19 4

Actors of shipping businessThe shipping business involves a number

of actors to support and facilitate the transport of cargoes. This actors include

• Ship/Aircraft owners • Shipbuilders • Scrap dealers • Terminal operators• Multimodal Transport operators

1-19 5

Closely related to the shipping business

• 1.Shipping agents• 2. Charters• 3. Ship broker • 4. Common Carrier• 5. Non-vessel operating common carrier

(freight forwarder)• 6. Consignor (Shipper)• 7. Consignee (Buyer)

1-19 6

Shipment categories Shipments are typically categorized as household goods,

express, parcel, and freight shipments: Household goods (HHG) include furniture, art and similar

items.

Very small business or personal items like envelopes are considered overnight express or express letter shipments. These shipments are rarely over a few kilograms or pounds

Larger items like small boxes are considered parcels or ground shipments. These shipments are rarely over 50 kg. Parcel shipments rarely travel by air and typically move via road and rail. Parcels represent the majority of business-to-consumer (B2C) shipments

Beyond HHG, express, and parcel shipments, movements are termed freight shipments.

1-19 7

Freight Forwarding Freight forwarding is a service used by

companies that deal in international or multi-national import and export. 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. Some forwarders handle domestic shipments only.

1-19 8

Cargo definition• Cargo (or freight) is goods or produce transported,

generally for commercial gain, by ship or aircraft , although the term is now extended to intermodal train , van or truck. In modern times, containers are used in most long-haul cargo transport.

• 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.

1-19 9

Advantage of using freight forwarding

Advantages of using freight forwarding is that it handles ancillary services that are a part of the international shipping business. Insurance and customs documentation and clearance a freight forwarding service might also provide Non-Vessel Operating Common carrier (NVOCC) documentation, or bills of lading. Warehousing, risk assessment and management, and methods of international payment are also commonly provided to the client. A good freight forwarding service can save the client untold time and potential headaches while providing reliable transportation of products at competitive rates. A freight forwarding service is an asset to almost any company dealing in international transportation of goods

1-19 10

Document transfer fee• International Freight Forwarders, NVOCC's and

customs brokers often charge for transferring documents to another transportation company at destination. This fee is a part of the ocean freight charges, being paid by the importer at the port of discharge in the incoterm FOB (free on board), and by the exporter at the origin in the incoterms CFR (cost and freight) and CIF (cost, insurance and freight).

1-19 11

Transportation types

Seaport terminals handle a wide range of maritime cargo. Automobiles are handled at many ports and are usually carried on

specialized roll-on/roll-off ships.• Break bulk cargo is typically material stacked on pallets and lifted into

and out of the hold of a vessel by craner on the dock or aboard the ship itself. The volume of break bulk cargo has declined dramatically worldwide as containerization has grown. One way to secure break bulk and freight in intermodal containers is by using dunnage bags

• Bulk cargo, such as salt, oil, tallow, and scrap metal, is usually defined as commodities that are neither on pallets nor in containers. Bulk cargoes are not handled as individual pieces, the way heavy-lift and project cargoes are.Aluminna, grain, gypsum, logs, and wood chips, for instance, are bulk cargoes.

• Neo-bulk cargo comprises individual units that are counted as they are loaded and unloaded, in contrast to bulk cargo that is not counted, but that are not containerized.

• Containers (FCL) are the largest and fastest growing cargo category at most ports worldwide. Containerized cargo includes everything from auto parts, machinery and manufacturing components to shoes and toys to frozen meat and seafood.

• Project cargo and the heavy lift cargo include items like manufacturing equipment, air conditioners, factory components, generators, wind turbines, military equipment, and almost any other oversized or overweight cargo which is too big or too heavy to fit into a container.

• LCL (Less container loading) cargo normally arrange by two or more consignee.

1-19 12

Air Cargo • Air cargo, commonly known as air freight, is collected

by firms from shippers and delivered to customers. Aircraft were first used for carrying mail as cargo in 1911. Eventually manufacturers started designing aircraft for other types of freight as well.

• There are many commercial aircraft suitable for carrying cargo Such large aircraft employ quick-loading containers known as unit load devices (ULDs), much like containerized cargo ships. The ULDs are located in the front section of the aircraft.

1-19 13

Road and Train• Many firms, transport all types of cargo by road. Delivering everything

from letters to house to cargo container , these firms offer fast, sometimes same-day, delivery. Trains are capable of transporting large numbers of containers that come from shipping ports.

• Less than truckload (LTL) cargo is the first category of freight shipment, which represents the majority of freight shipments and the majority of business-to-business (B2B) shipments. LTL shipments are also often referred to as motor freight and the carriers involved are referred to as motor carriers.

• Trains are also used for the transportation of steel, wood and coal. • They are used because they can carry a large amount and generally

have a direct route to the destination. • Under the right circumstances, freight transport by rail is more

economic and energy efficient than by road, especially when carried in bulk or over long distances.

1-19 14

Disadvantage of Train The main disadvantage of rail freight is

its lack of flexibility. For this reason, rail has lost much of the freight business to road transport. Rail freight is often subject to transshipment costs, since it must be transferred from one mode of transportation to another

1-19 15

Transport ( Freight system)in Bangladesh

Transport ( Freight system) in Bangladesh is an important part of the nation's economy. Since the liberation of the country, the development of infrastructure within the country has progressed at a rapid pace, and today there is a wide variety of modes of transport by land, water and air. However, there is significant progress still to be made to ensure uniform access to all available transport

Truckload cargo is the first category of freight shipment, which represents the majority of freight shipments and the majority of business-to-business (B2B) shipments. Truck load shipments range from 50 to 7,000 kg (110 to 15,000 lb), being less than 2.5 to 8.5 m (8 ft 2.4 in to 27 ft 10.6 in) the majority of times.

1-19 16

The sea port of the country

• The Chittagong sea port of the country's export and import trade of goods transported in the 92 percent to 70 percent, rest is Mongla sea port which transported container sold.

• The last year at the port is 1.2 millions of container handling . Only 6-7 percent of the national income growth container port in the transport sector than 12 -14 per cent growth.

• Liberal economy and tackling the challenges of globalization as a driving force in Chittagong port for trade work.

• The Customs House is using the port produces about 10 thousand crore for the government revenue.

1-19 17

Air freight

• Air freight shipments are shipments in terms of size and packaging requirements. However, air freight or air cargo shipments typically need to move at much faster speeds than 800 km or 497 mi per day. Air shipments may be booked directly with the carriers, through brokers or with online marketplace services or freight forwarder. While shipments move faster than standard truck load cargo. In 2006-2007 HSJIA handled 69,302 tons of export cargo. With import air cargo of 48,738 tons.

• Air freight market in Bangladesh in general and export in particular has registered a steady healthy growth. The volume of air cargo has now increased to 1, 69,865 ton

• In recent years capacity situation from Bangladesh has witnessed significant improvement due to increase in frequency of foreign airlines and resulted in significant boost of belly hold capacity as well as operation of scheduled freighters by a number of airlines.

• Biman earned Taka 207 crore in 2006-2007; Taka 243.06 crore in 2007-2008; Taka 230.03 in 2008-2009; Taka 258.12 crore in 2009-2010 and Taka 298.02 crore in 2011-2012. The actual revenue earnings in all these years are much higher than the target.

1-19 18

Conclusion • Global demand for freight services as a supply

chain management tool has enormously increased over past decades. This is due to the fact that compared to other forms transport; it takes less time in transporting a shipment. The payoff coming from its reduced transportation time is very big. The existing freight facilities are not at all supportive to promote exports. Not only garments, there exist huge potential of earning huge foreign exchange from export of vegetables, other perishables, medicine, handicrafts, frozen sea-foods and leather and leather products.

1-19 19

The End

Thanks