Logistics, Trade Administration and Supply Chain

Conventional trucker hauls goods that are in loose form or unitized by pallets but not pre-stowed in containers. Sometimes, the loading and unloading of unpalletized goods on conventional trucks may be carried by the truck driver or his assistant. Types of Goods Any goods can be transported by conventional trucks so long as they are not overweight (more than 12 tonnes per piece), overheight (not specific but to the extent where it does not pose stability problem for the trucks during transportation and is able to pass under structures along its route), overwidth (cargo extend beyond the sides of the vehicle thus causing danger to other road users. Goods are mainly dry and if liquid or in grain form, they should be placed in containers designed for the purpose i.e. drums for liquid or bags for solid grains, conventional goods maybe normal or bonded. Normal goods are transported without special requirements regarding the security and the documentation (customs approval). Bonded goods mus

As haulage operators, the responsibilities of the company are as follows: To accept the request of transport and to ensure all relevant documents, payments, releases and approvals have been obtained. To collect the container from where it is stored (port or depot) and deliver it to the address or destination according to the time stipulated by the hirer. If no date or time is stipulated, the haulier may have it delivered within 48 hours. To ensure the safety of the cargo and container during custody by haulier, his employee or agent assigned. Responsibilities of hirer, user or cargo owners: Responsibilities of either party is stated in the Conditions of Carriage and Tariff usually issued by a haulage operator, which is made available on request by the user or his agent. To receive the cargo in good order, check, seals and accept. To unstuff the container or unload the cargo as soon as possible and if possible within contractual period of 2 hours. To inform the haulier about the readine

Container transportation is currently operated by large companies with investment capitals of not less than $10 million. Most companies invest $5 to $20 million more annually on equipment replacement, maintenance and other additions. Because of this, container haulage companies have to be financially strong and they are usually backed by bigger companies and even public funds. Apart from investment on haulage equipment, maintenance, the container haulage companies also have to invest on depots to part their equipment, repair workshops, staging areas and operations and administrative offices. Operations The haulage of containers begins with the request of transport from the cargo owners or their agents to the container haulage operator. The requirements for requests for transport are as follows: Container/goods have been released by customs which mean they have been submitted for customs duty evaluation and have been cleared. The shipping agent on behalf of their principals has also rel

In Malaysia, container haulier is a regulated service. Only companies obtaining specific approval from the Council of Ministers may operate the container haulage service. The power of the Minister under the Road Transport Act to approve permits and license for container haulage operators are controlled by the Council of Ministers. Today, they are few well known container hauliers namely: Kontena Nasional , MISC Haulage, Diperdana, PKT Logistics, LTS Logistics and Multi Modal. Types of Goods Almost all kinds of cargoes can be transported by containers. These include bulk and liquids. However, consideration on whether to use containers or other forms of transport usually depends on the final cost benefit of the choice. Bulk cargo for example is more economical if transported by specialized bulk carriers. However, the greatest advantage of containerizing goods for transport is in unitizing the goods i.e. instead of transporting loose packages which can be stolen, dropped or damaged, goods

In a move that was widely anticipated, the European Commission imposed heavy fines on eleven air cargo carriers today for price fixing. This was part of a worldwide investigation into air cargo cartel activities, with airlines pleading guilty and paying fines in the US, Canada, Australia, New Zealand and South Korea, and ongoing investigations in those countries and others, including South Africa. Meanwhile the U.S. justice department continues its investigation of freight forwarders guilty of price-fixing. Indeed, they are calling upon shippers to share information on any anticompetitive conduct they may be aware of by calling the Antitrust Division’s National Criminal Enforcement Section. Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million per offense for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those

Goods are usually transported in sequence of events as below. Readiness of the goods for transportation by the owner or supplier and a known destination address of the buyer or recipient. The same owner may also transfer the goods to the other locations belonging to him for value added purposes without involving the sales and purchase transactions. In this case, the owner will be the sender or consignor and the buyer will be the recipient or consignee. The consignor may procure the use of a road transport operator by contacting him direct on a spot market basis or a pre-contractual arrangement, or through intermediary of a broker or transport clearing house. A transport provider should be chosen on the basis of his capability to deliver safely ad timely the goods at a quotation acceptable to the cargo owner or to the party having pay for the services. To fulfill his commitments, the transporter should be the one who has the following criteria: He has the transport equipment or vehicle,

CTPAT offers trade related businesses an opportunity to play an active role in the war against terrorism. By participating in this first worldwide supply chaim security initiative, companies will ensure more secure and expeditious supply chain for their employees, suppliers and customers. Beyond these essential security benefits, the US Customs and Border Protection (CBP) will offer benefits to certain CTPAT member categories, including: a reduced number of CBP inspections (reduced border delay times); priority processing for CBP inspections (front line processing for inspections when possible); assignment of a CTPAT Supply Chain Security Specialist (SCSS) who will work with the company to validate and enhance security throughout the company's international suply chain; potential eligibility for CBP Importer Self-Assessment program (ISA) with an emphasis on self-policing, not CBP audits; eligibility to attend CTPAT supply chain security training seminars. It is clear that security

What is CTPAT? The CTPAT (Customs-Trade Partnership Against Terrorism) is a voluntary United States Customs & Border Protection (CBP) business initiative designed to build cooperative relationships that strengthen overall supply chain and border security. The CTPAT initiative recognizes that CBP can provide the highest level of security to the public and other stakeholders only via close cooperation with the ultimate owners of the supply chain: importers, carriers, brokers, warehouse operators and manufacturers. Through this initiative, CBP is asking businesses to ensure integrity of their security practices and communicate their security guidelines to their business partners within the supply chain. CBP's vision for CTPAT CBP recognizes that a safe and secure supply chain is the most critical part of its work in keeping the US safe. For this reason, CBP is seeking a strong anti-terrorism partnership with the trade community through CTPAT. Trade partners will have a commitment

Objective Basically, the purpose of introducing Section 65A in addition to Section 65 of the Customs Act 1967, is to enable manufacturing process to be carried out in licensed warehouses. Manufacturing operation therein is subjected to minimal customs procedures. It is primarily intended to cater for export oriented industries. The Licensed Manufacturing Warehouse or better known as LMW can be set up speedily and anywhere in the Principal Customs Area without any need to be near to ports of entry unlike the Free Trade Zones established under the Free Zones Act 1990. Industries may thus be induced to be located in rural areas. Raw materials or components directly used in the manufacturing process are exempted from payment of customs duty and sales tax. Location of LMW A company wishing to have LWM facilities should be located in less developed area so as to be in line with the government policy to disperse export oriented and labour intensive industries to less developed areas. However,

Customs Definition Premise granted a license by the Director-General of Customs to store goods liable to customs duties and any other goods as approved by the Director-General of Customs under Section 65 of the Customs Act 1967. The establishment of a warehouse is based on the concept of a central storage and distribution of goods in this country and international trade. Objectives a) To reduce congestion at the port/airport b) To expedite the movement of goods c) To reduce financial liability on importers by allowing a partial payment of customs duty d) To reduce cost and allow importers to import larger quantity e) To encourage entreport trading There are few categories of bonded warehouse in this country which are listed as follows: a) Public Bonded Warehouse b) Private Bonded Warehouse c) Agent Bonded Warehouse d) Inland Clearance Depot e) Pekema Bonded Warehouse Application for License to establish a bonded warehouse: a) Letter of Application b) JKED No. 1 Form c) Application Form

The transportation of goods by road can be divided into its component elements which include some or all of the following: a) the manufacturer or owner of goods (importer, exporter, factory, buyer), b) in-house, transport operator (that is transporting own goods only), c) the for hire transport operators (who are common carriers) which include ... - container haulier - conventional trucker - tanker truck operator, both dry and liquid - other bulk carrier i.e. cement, sand, grain, powder - heavy haulage operator for overweight, overweight and over width cargo - agents or other service procurer or provider (forwarding agent, shipping agent, cargo agent)

Road transport form first and last link of any journey whether it involve pure road movement or a multiple of modes such as air, sea or rail. In fact road transport vehicles can even deliver cargo to areas where roads has not being built yet. For the purpose of trading where goods are exported, road transport form the feeder between the site of production and the ports of exit. For imports too, road transport form the feeder linking the ports, etc to the consignee. With this important role, road transport becomes the catalyst for economic growth. The faster the economy is growing, the bigger is the capacity required to move goods from where they are produced to where they are needed. Any shortage of capacity will result in a slow down of gods flow and finally affect the economic growth. Capacity in terms of road transport is in the total capability to haul in tonnage calculated as the tonnage of various vehicles multiplied by the total vehicle in each category.

Between the end of the production line and the retailer or final buyer, the goods or item undergoes several more value added processes. These values are added due to the movement or transfers of the goods along its chain of events. As each transfer costs money, it also adds to the value of the goods being placing it in a more accessible position for its final buyer. Among elements in the value chain processes are:- a) storage at factory or warehouse, b) loading and stuffing, c) transport by land, d) storage at port, e) documentations and clearance, f) loading onto vessels, g) transit by sea or air to the next port, h) storage at port, i) storage, j) further transport and finally reaching the detail outlet. Each component of the chain described above will incur a cost to the owner of the goods. However, with each additional element and cost increase, the value of the goods also increase. For example, the goods increase in its value if after being manufactured at the factory it is moved

The transportation of good by land forms a crucial link between the producer of goods and the user of goods whether the destination is domestic or overseas. The evolution of land transport infrastructure and equipment has long followed the trading needs of the producer and users over the years. Decisions on where to site a factory for example was dependent on the experience and vision of the entrepreneur who is investing. The road network too has much followed the easiest route regardless of distance. It can also be traced that growth of civilization, towns and cities were in tempo with the developments in the transportation technology. Sitting of communities along river banks slowly changed to more inland sites as land transportation became better developed for transporting large volumes quickly and economically. This has led to the planned development of inland and offwaterway sites for communities and their peripheral services. In more recent times, the decision to site factories ha

Consignments will be accepted for air carriage if such consignments do not violate any national regulations or application laws. In order to determine if a consignment is acceptable for carriage, we must observe the following: Documentation Shipper's Letter of Instruction (SLI) for issuing Airwaybill form A Letter of Instruction with Shipper's Letterhead The Airwaybill Shipper's Declaration of Transport for Dangerous Goods (DG) Shipper's Certificate of Live Animals Commercial Invoice, Customs documentations Certificate of Origin US Government Bill of Lading Health Certificate for Live Animals Death Certificate, Burial Certificate and Embalming Certificate for shipping Human remains via air Export/import or transit license/permits which the carrier is required to present to customs or any other government agencies Independent Surveyor's report confirming items to be exported or their quality, quantity and weight/dimensions Agricultural, Phytosanitory or Fisheries Cer

The following is a list of air cargo terms commonly used in the industry: Advance Charge or Disbursement - A charge paid by a carrier to an agent to another carrier, which the delivery carrier then collects from the consignee. Such charges are usually for agents' forwarding fees and incidental expenses paid out of pocket for account of the shipment by an agent or other carrier. Airline, Delivering - The carrier who delivers the consignment to the consignee or his agent. Airline, Issuing - The airline whose airway bills is issued. Airline, Participating - An airline over whose air routes one or more section of carriage under the air way bill is undertaken or performed. Airway bill - The document made out by or on behalf of the shipper which evidences the contract between the shipper and carrier(s) for carriage of goods over routes of carrier(s). Airway bill Neutral - A standard airway bill without identification of issuing carrier in any form. Air Cargo Aircraft - An aircraft

In addition to the earlier advantages listed, the following additional services are offered by air cargo agents: Door to Door Delivery As there are many landlocked countries, such as Nepal, Laos, Switzerland, Austria, Mali and many more in the former Soviet sub-continent, air transportation has provided new access into these countries for international trade. The air cargo agents also provide door delivery service for those customers that may require them. Arranging Customs Clearance With the Just in Time (JIT) concept, some users prefer that the goods move from the shipper's door to the consignee's door under one contract, thus the need for the air cargo agents to arrange Customs clearance of cargo. Insurance Coverage More and more users of air cargo services are going for a package of services. In view of this, the carriers have always provided for insurance coverage on their own where one may declare a "value for carriage" and then a premium ls levied by the carrie

The transportation charges by air are generally higher than by surface or sea. However, such charges are only part of the long list of all the cost of distribution. Goods will be forwarded by air if this means offers the customers some advantages. The advantages will be the combination of the following: Speed and Frequency The most important factors that a customer will consider are no doubt speed and frequency, especially if he has some urgent shipments. Reliability Owing to the high cost of the airport facilities, these comes a need for maximum utility. As such, the arrival and departure times of flights are highly reliable. Network of Destination and Interline Facilities Nowadays, there are many airlines that have a large network which covers almost the entire world. Airlines also accept each others air waybills and that means the shipper can send his shipment to nearly every destination using the same air waybill. Warehousing Using air cargo, the customer has less need for local wa

Prior to World War Two, the air cargo industry was almost limited to the transportation of air mail and emergency supplies. During the period from 1939 to 1945, a tremendous development took place in response to military requirement. Like the beautiful lotus flower with an ugly looking and dirty root system. Wars have somehow been the mother of invention for many new equipment, machinery and in this case transportation logistics, namely the air transportation. The progress made in aircraft design and conversion of military transport aircraft into civilian purpose led to the growing use and demand for this mode of transportation. The birth of the fan jet engines brought about the birth of the Boeing 707 and the McDonald Douglas DC-8 aircrafts, the forerunners to yet better designed aircrafts to come to uplift greater capacities of cargo by air. As a result, airlines after the end of the war improve their fleets, enlarge their networks and were soon able to provide fast and economical se

The Hague-Visby Rules also extended the application of the Hague Rules. Whilst the Hague Rules apply to all Bills of Lading issued in any contracting state, the Hague-Visby Rules apply to every Bill of Lading relating to the carriage of goods between ports in two different states if: The Bill of Lading is issued in a contracting state, or The carriage is from a contracting state, or The contract shown by the Bill of Lading provided that the rules of convention or legislation of any state giving effect to them are to govern the contract (whatever may be the nationality of the ship, the carrier, the shipper, the consignee or any interested parties). The Protocol also seeks to solve the problem caused by the carriage of goods in containers and pallets. When the goods are packed into carrier's container for his own convenience, each package in the container is treated as one unit for limitation purpose. If the container belongs to the shipper and is packed by him, the limitation questi

The purpose of Hague-Visby Rules was to amend the Hague Rules because of the criticisms that were raise from several quarters. In particular, the rules on limitation of liability per package or similar units were criticized partly because the amount of limitation as too low and partly because technological development such as containerization, use of pallets, etc shown that the existing rules were inadequate. Carrier's Liability The Hague-Visby Rules provided the following: The limitation of liability if carrier at the higher monetary limit of 30 Poincare Francs per kilo of gross weight (since converted to 2 SDRs or Special Drawing Rights under the rules of the International Monetary Fund) or 10,000 Poincare Francs per package or unit (since converted into 666.67 SDRs). Extension of the period of the one year limit fro bringing suit against carrier by mutual agreement between the parties. Action for indemnities against third parties. The Hague-Visby Rules however did not change the

The basic convention is the International Convention for the Unification of Certain Rules Relating to Bill of Lading, dated 28 August 1924, usually called the Hague Rules. The Bill of Lading Convention may apply automatically or by agreement (They are obligatory rules). The Rules are automatic when the agreement of carriage is included in the Bill of Lading. When the Bill of Lading is issued in a contracting country. When transportation of goods into a country which is a signatory to the convention. The Rules are not applicable to live animals and cargo shipped on deck. Damage or loss must occur during the "carriage of goods". Carrier's Responsibilities An important aspect of the Hague Rules is that when the country of shipment has rectified the Rules or passed an Act in conformity with the Rules, the cargo interests are given a minimum protection of a mandatory character i.e. the carrier can accept a wider liability but he cannot contractually reduce it. The carrier is b

Bills of Lading started to be used in Venice, Italy in the 13th century. The merchant on arriving safely at the destination would pay the master money or part of the goods. The master in turn paid the crews. Failure to arrive safely meant nothing was paid since it was an adventure. After 14th century, it was found unnecessary for cargo-owner to travel with his goods. Instead the cargo was delivered to the master and the master would act as an agent on behalf of the cargo owner. Eventually, the master found it necessary to maintain a book where the following information were entered: a) List of Shippers' Consignees b) Nature of Cargo c) Freight To Be Paid The cargo owner however demanded a receipt from the master showing goods received and freight to be paid. The receipt given by the master was the origin of the Bill of Lading and was considered as evidence of the contract of carriage and that the master has to deliver the cargo to the consignee. Between 1880 to 1890, the Internatio

The three international conventions which are directly related to the carriage of goods by sea are as follows:- 1) First international convention on carriage of goods by sea adopted in 1924 is known as The Hague Rules (International Convention for the Unification of certain Rules of Law relating to Bills of Lading). 2) The protocol to amend the Hague Rules to a limited extend which was adopted in 1968 and which entered into force on 23 June 1977: these amendments are known as the Hague-Visby Rules (The protocol to amend the Brussels International Convention for Unification of certain Rules of Law relating to Bills of Lading). 3) A United Nations sponsored convention to replace the Hague/Hague-Visby rules known as Hamburg Rules (The United Nations Convention on the carriage of goods by sea, 1978). This has yet to be enforced.

Landside Stevedoring - cargo handling charges for loading / discharging cargo on / from conventional breakbulk vessels. LCL Service Charge - charge for stuffing and unstuffing LCL (Less than Container Load) cargo into or from a container at the freight station. Equipment Transfer Charge (ETC) - charge for lifting an empty or loaded container onto / from the trailer. Also called Lift-on / Lift-off (LOLO) charge. This charge is applicable on FCL (Full Container Load) containers only. Terminal Handling Charge (THC) - charge for handling (receiving and delivering) FCL containers at the container yard (CY). Waterside Bunker Adjustment Factor (BAF) - surcharge for offsetting changes in fuel prices. Congestion Surcharge - surcharge levied on cargo that are discharge at a port where ships are experiencing delays in turnaround time. Currency Adjustment Factor (CAF) - surcharge for offsetting fluctuations in currency exchange rates of various currencies against the US Dollar. In Asia and Japan t