Sea Port Formalities for Exportation

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Export Transport Logistics Cost
By Mr Manoj Aglawe, BSc., MBA, PGDFT
Ocean and surface transport costs are excessive and create a major barrier to foreign market. Transport infrastructure, such as ports, ICDs, CFSs, etc., plays an essential role in facilitation international trade, constituting as they do the main interface between ocean transport and surface transport. The level of infrastructure development and the quality of services are major factors in the cost of transportation. The major component of export transport logistics cost are:

i. Labour charges for handling, stowing etc
ii. Road transport charges
iii. ICD charges
iv. CFS charges
v. Port Terminal Handling charges
vi. Clearing charges
vii. Consolidation charges
viii. Liner freight
This article will serve as a guideline to work out export transport logistics costs associated with export of containerized shipment. An export transport logistics cost estimate do not include the following: i. On carriage charges payable at destinations port

ii. Transport insurance
iii. Duties and taxes
iv. Storage and demurrage charges.
Containerised Shipment
Basically, shipments are classified into two broad categories, bulk shipment and small shipment. Bulk shipment is further divided into two, liquid bulk, e.g. POL, chemicals, edible oil etc. and dry bulk e.g. ore, food grain, fertilizer etc. Small shipment is further divided into two, Containerised shipment and non- Containerised shipment (break-bulk or general cargo). To cater to the movement of these shipments, shipping companies provide two types of services, tramp shipping and liner shipping. Tramp shipping provides services on demand and carries bulk shipment (liquid and dry bulk), between nominated ports. Transportation charges, i.e. freight is based on supply and demand situation for the ship in the market. In contrast, liner shipping provides schedule service to advertised ports, on different selected trade routes in the world. Liner shipping carries containerized shipment and non- Containerised shipment (break bulk or general cargo). Liner shipping carries small shipment, received from N-number of exporter in various ports and deliver to N-number of importer located in various ports. Liner shipping receives the shipment, irrespective of characteristics, volume, weight and quantity of cargo. Freight rates are fixed and made known to traders in advance, this enables them to quote prices on CIF basis or as per Incoterm 2000. Containerised shipment is further divided into less than container load (LCL) and full container load (FCL). Movement of containerized shipment

Generally, an exporter based in hinterland, irrespective of distance from the servicing gateway port, prefers to move cargo by road to CFS (a transit facility where he stuffs cargo in containers and containers are transported to port for loading on board the ship).Some preferred to move cargo in container under ‘factory stuffed’ facility by road.In both LCL/FCL and factory stuffed, cargo moves through the CFS (Container Freight Station), a transit facility, before entering in port premises for loading on board the ship. A) Following are the steps involved in the movement of shipment by road and stuffing of shipment in container is done at CFS, port: 1. Transfer of cargo into truck

2. Storage of cargo in truck
3. Road (truck) journey
4. Breaking out of cargo from truck
5. Transfer of cargo from truck to storage point/shed/yard in CFS 6. Unpacking for customs examination
7. Repacking for customs examination
8. Consolidation of cargo according to destination
9. Stuffing of cargo in the container
10. Locking and sealing of container
11. Loading of container on truck
12. Transportation of loaded container to container yard in port 13. Unloading of container in container yard in port
14. Stacking of container tin container yard in port
15. Loading of container on truck to...
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