Activity Management in Supply Chains, Actors & Tasks
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1 Activity Management in Supply Chains, Actors & Tasks Papadimitriou, Stratos Chlomoudis, Costas Koliousis, Ioannis Department of Maritime Studies University of Piraeus
2 Objectives Activity management of vessels in ports, companies, passengers and freight transport Customs administration Ship management Supply chain management Types of companies, actors in the supply chain. Physical elements of the supply chain (ship, cargo, container, etc
3 Logistics Logistics is the part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements. Source: Council of Supply Chain Management Professionals
4 Supply Chain Management Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. Source: Council of Supply Chain Management Professionals
5 Evolution of Logistics Fragmentation 1960 Evolving Integration 1980 Total Integration Demand Forecasting Purchasing Requirements Planning Production Planning Manufacturing Inventory Materials Management Warehousing Materials Handling Logistics Industrial Packaging Finished Goods Inventory Distribution Planning Order Processing Transportation Customer Service Strategic Planning Physical Distribution Supply Chain Mgmt. Information Technology Marketing Sales Source: Alfred Battaglia
6 Logistics and Supply Chain Management Inclusionist SCM Logistics Evolutionist Intersectionist Logistics SCM Logistics SCM Three different perspectives on the relationship between Logistics and Supply Chain Management. The inclusionist perception is the prevailing one today. Source: Larson and Halldorsson
7 Logistics, International Logistics, and SCM Domestic Suppliers Domestic Customers Logistics Company International Logistics Foreign Suppliers Foreign Customers Supply Chain Management
8 Elements of International Logistics (I) The environment in which international logisticians operate is quite different from the domestic environment. The decisions regarding international transportation are much more complicated than those regarding domestic transportation. The number of intermediaries involved in an international transaction is greater than in a domestic transaction. The inherent risks and hazards of international transportation are much greater.
9 Elements of International Logistics (II) International insurance is much more complex. International means of payment are more complicated. Terms of trade are more complicated. The crossing of borders represents specific challenges.
10 Shipping and Transportation Chain Actors Carrier: an organization that transports a product Shipper: an organization that owns the product, places a transport order and asks for delivery of the product from an origin A to a destination B
11 SHIPPING (Containers) : Type of vessels, containers, vocabulary, Vessels : Mother vessel = vessel used for a main Service. For example from China to France. Worldwide biggest container vessel, CMA CGM Marco Polo is teus capacity ( m3) => 396 m length x 53.6 width Feeder = medium and small size vessels (> teus) used for example to call small ports Ro-Ro RoRo (Roll on / Roll out) = medium and small size vessels used for port without crane. Source: CMA CGM
12 SHIPPING (Containers) : Type of vessels, containers, vocabulary, Containers : Dry = common container without any specific particularities Reefer = Fridge (frozen goods or fresh fruits veggies) Open Top = like the dry but without a rigid top Flatbed = for special cargo (Machineries, Tractors, yachts ) Autotainer = to transport cars Source: CMA CGM
13 SHIPPING (Containers) : Type of vessels, containers, vocabulary, Vocabulary : Booking = the act of reserving space on a vessel and ordering containers for goods that are to be shipped. Shipper = producer or supplier Shipping instructions = the information supplied by the shipper/exporter providing detailed instructions pertaining to the shipment (shipper name, consignee name, commodity, pieces, weight ) Consignee = the person / company to whom goods are shipped (for example a client abroad). Notify = The person designated on a Bill of Lading to whom the Arrival Notice must be sent. Carrier = Shipping Cy Cargo / commodity = Goods, merchandise. Call = stop/halt at a port Routing = itinerary Bill of Lading = A contractual document created by either the shipper or the forwarding agent that describes the particulars of a move, e.g., commodity, number of pieces, weight, origin, destination, etc A Bill of Lading is a required document without which the Carrier cannot ship the cargo. It acts as shipping instructions as well as serving as a contract of carriage for the freight. It also serves as the basis for rating cargo. There are various types of BoL. Combined Transport Bill of lading : Evidences a combined transport movements where the carrier or combined transport operator issuing the Bill undertakes responsibility for the goods from a point or place of receipt to a point or place of deliver. Demurrages = Tariff-generated compensation for delay in removing cargo from a terminal facility after free-time expires. Door-to-Door = Service provided for picking-up cargo at a shipper s place of business and delivering it to the consignee s designated place of business. Source: CMA CGM
14 Vocabulary (cont) FOB = Free On Board : for export, the receiver/consignee will pay the freight at destination. CIF = Cost in Freight : for export, the shipper pays the freight and its charges. IMO / Hazardous cargo = International maritime Organization Class : term used for example for chemicals, paints Intermodal = Refers to the use of multiple modes of transportation to move cargo from the origin to the destination. Packing List = A detailed specification of the packed goods. POL = Port Of Loading (Port of departure) POD = Port Of Discharge (Port at destination) Seal = a device of fastening or locking the doors of the containers, which is usually numbered and which in fact, provides a roof that the container has not been opened since the seal was applied. Source: CMA CGM
15 Main types of Carriers Non-Vessel Operating Common Carrier (NVOCC) NVOCCs don't own and don t operate their own vessels, but they do play the role of carrier, offering the services of other parties, such as rail freighters, air-cargo lines, trucking companies, consolidation warehouses and ocean freighters. NVOCC is a carrier to the shipper and a shipper to the carrier. Despite not actually owning the vessel, an NVOCC is governed by various regulatory schemes Freight Forwarder A freight forwarder is an agent arranging the movement of goods from their domestic origin to a foreign destination. Freight forwarders are not actually carriers but coordinate the movement of cargo by using the services of other parties, including ocean freighters, air-cargo lines, rail freighters and trucking companies
16 Differences Between NVOCC and Freight Forwarder Similar international shipping services - different roles NVOCCs usually own and operate the non-vessel assets (e.g. containers etc) NVOCCs eliminate middle-men Are considered carriers by many regulatory frameworks Freight forwarders may act as either an agent or partner for a NVOCC not vice versa Freight forwarders gather all required documentation for entry to foreign countries from their customers and carriers, amended to comply with foreign regulations, and forwarded to the final destination party for clearance. NVOCCs issue their own bills of lading or air waybills, amending the commercial invoice and packing list from the customer to comply with foreign entry regulations before forwarding the documentation to their foreign agent, who ensures clearance, breakdown of the container and arrangement for delivery to the consignee
17 Nth Party Logistics Service Provider A 3PL (third-party logistics) is: A provider of outsourced logistics services May undertake all logistics related activities May be a single service such as transportation or warehouse storage or it may be a system-wide bundle of services capable of managing the entire supply chain. A company that works with shippers in order to manage another company s logistics operations department. 3PL is the action of outsourcing activities that are related to logistics and distribution. 4PL is a company that: Arranges which coordinates the activities a firm contracts out (outsources) to 3PLs Simply put is an integrator that accumulates resources, capabilities and technologies to run complete supply chain solutions.
18 The Logistics service provision ladder
19 Other important roles Ship Brokers Shipbroking is a financial service Shipbrokers are specialist intermediaries/negotiators (i.e. brokers) between shipowners and charterers who use ships to transport cargo Ship Agents Broadly, a representative of a shipping company Works on the shipping company s behalf Is the local representative Cargo broker Duties similar to those of a shipping agent Books cargo, informs shippers about cargo positin, loading and unloading due times, ensures that the manifest department collects the shipping documents (shipping permits, bills of lading) which are necessary to commence the loading and unloading operations, completes booking lists
20 Responsibilities of shipping agents include: Ensuring a berth for the incoming ship Arranging for the pilot and the tugs if necessary Drawing up the documents for the customs and harbour services Arranging for the necessary ship fresh water / provisions Arranging for the necessary doctor for the crew any medical assistance Arranging for storage bunkers if these are needed Arranging for the necessary repairs Conveying instructions to and from the ship owner Organizing the supply, transport and the handling of the goods Organizing the necessary contacts with the stevedores Collecting freights, cargoes Contacting shippers and the receivers of the goods Arranging insurance issues
21 Port related activities
22 The Main Facilities In Container Terminals Include: Quay Container yard Container freight station Gate facility Interchange area Rail-head
23
24 Container Terminals (Cargo Export Flow) Activities Receipt/delivery operation: Receipt and delivery of cargo or containers by road and rail, Packing and Unpacking, Container inspection and cleaning Container stuffing (if empty) Container yard operation: Storage & interminal movements Quay transfer operation: Load and discharge operations Ship operation: Transfer and securing containers and cargo on ship
25 Main equipment in container ports Empty handler container Reach Staker sreleases_1_73.jsp ng/rolling-equipment/reach-stacker
26 Main equipment in container ports Straddle Carrier Rubber tyred gantry cranes
27 Relevant Vessel Ops Pilotage The use of fixed visual reference on the ground or sea by means of sight or radar Guides ship to quay Port Controls & Port State Control (PSC) The inspection of (foreign) ships for verifying formalities and legalities (the competency of the master and officers on board, ship condition, ship equipment, according to international conventions e.g. SOLAS, MARPOL, STCW, etc.) A tugboat (tug) is a boat that maneuvers vessels by pushing or towing them. Tugs Help vessels move (that should not move themselves like ships in a crowded harbor or a narrow canal or can t move by themselves, such as barges, disabled ships) Some ports require the tugging along with the pilotage Fresh water delivery Electricity Bunkering Ship- chandling (ship stores and supplies like crew's food, ship's maintenance supplies, cleaning compounds, rope, etc) Inspections Waste & Garbage collection
28 Customs
29 IMPORT AND EXPORT PROCEDURES IMPORT When a product is brought into a jurisdiction, especially across a national border, from an external source. The party who brings in the goods is called an importer. An import in the receiving country is an export from the sending country. EXPORT Selling goods and services produced in a country to another country Requires involvement of the customs authorities in both the country of export and the country of import.
30 Export Process Nomination of Port of Loading (POL) - FDWG Nomination of Liner - FDWG Nomination of Haulier - FDWG Expected Time of Arrival (ETA) - PORT Closing Time - PORT MT Container Delivery - HAULIER Loading / Stuffing Process - SHIPPER Laden Container Collection -HAULIER Export Booking FDWG/HAULIER Container arrived at Port - PORT Loading onto Vessel - PORT Sailing
31 EXPORT CYCLE CONTAINER VIA OCEAN START FORWARDING AGENT Documentations ie BL Port / Custom Clearance ie Duties, declaration, cargo scanning Order Processing HAULIER Delivery of MT Container Export documents eg Consignment Note (CN) EMPTY DEPOT OPERATOR MT Container Storage 3PL for Shipping Lines END PORT / TERMINAL OPERATOR Port of Loading / Export Departure HAULIER Collection Laden Container Export Booking SHIPPER / MANUFACTURER Production Loading Cargoes/Goods Source: SHIPPING OPERATION MANAGEMENT, by Dr Mansor Abdul Rahman
32 Import Process Nomination of Port of Discharge (POD) - FDWG Nomination of Liner - SHIPPER Nomination of Haulier - FDWG Expected Time of Arrival (ETA) PORT Port Clearance - FDWG Customs Clearance -FDWG Free Storage Time - PORT Laden Container Delivery - HAULIER Unloading Process - SHIPPER MT Container Collection -HAULIER MT Container Storage MT DEPOT
33 MPORT CYCLE CONTAINER VIA CEAN END FORWARDING AGENT Documentations ie Port / Custom Clearance ie Duties, declaration, cargo scanning Order Processing START MT DEPOT OPERATOR MT Container Storage 3PL for Shipping Lines HAULIER Collection Process Hauling back MT container PORT / TERMINAL OPERATOR Discharging of Import Containers Storage at Yard HAULIER Delivery of Laden Container Import documents eg EIR,Custom Form and Consignment Note (CN) SHIPPER / MANUFACTURER Unloading Container Offloading Cargo/Goods Source: SHIPPING OPERATION MANAGEMENT, by Dr Mansor Abdul Rahman
34 Transhipment Shipping goods or containers to an intermediate destination, and then from there to yet another destination: Change transport mode or means during the journey Consolidation of small shipments into a large shipment Transshipment usually takes place in transport hubs in designated customs areas, thus avoiding the need for customs checks or duties, otherwise a major hindrance for efficient transport.
35 Cargo Consolidation Combining Cargo of many consignees into one lot and then prepare it for shipment Consolidation typically involves the cargo transportation to the stuffing point, stuffing of cargo in container, custom process of shipping documents, and finally repacking if necessary for delivery Reduces costs but increases risks
36 Customs Clearance
37 Duty Determination Duty is the amount of tax paid on an imported good. The amount of duty that an importer has to pay is determined by three factors: The type of goods (their classification) The value of the goods (their valuation) The country from which the goods originated (the rules of origin) The tariff is the rate at which an import is taxed; the rate is dependent on the classification of the goods, as well as their country of origin. The tariff rate is also called the duty rate.
38 The Tariff Schedule of the United States is dense and complicated.
39 The Tariff Schedule of the United States divides countries between Column 1 (NTR) and Column 2 (non NTR). Column 1 is further divided between the General rate and the Special rate granted to countries with which the U.S. has a free-trade agreement.
40 The classification is by H.S number and description.
41 Once classification and country of origin are determined, the tariff rate is easily found. For dials of 35 mm in diameter coming from Switzerland, the tariff is $0.004 per unit % of the invoice value.
42 Other Import Taxes In addition to duty, several countries will collect additional taxes based on the value of the goods. These additional taxes are a way of creating additional revenues from imports. Such taxes challenge the boundaries of the General Agreement on Tariffs and Trade (GATT) and the rules of the World Trade Organization (WTO). The following are some examples of other taxes: Punitive duty Border traffic tax Safeguard tax Temporary protection tax
43 Pre-Shipment Inspections Pre-Shipments Inspections (PSI) are performed by independent companies to determine that the goods shipped are the ones ordered by the importer, in the correct quantity, and sufficiently well packed for an international shipment. PSIs are performed at the point of departure of the goods destined to be exported. PSIs are non-tariff barriers when they become too frequent and cumbersome. Indonesia and Thailand require that all imports be subject to Pre-Shipment Inspections.
44 Customs Clearance Process Entry Clearance Liquidated Entry Protest (if necessary)
45 Customs Clearance Process Entry The process by which an importer notifies Customs it has imported a product. Clearance The term used to signify that the goods have been imported into a country, duty has been paid, and they have been released by Customs. Liquidated Entry An entry that has been successfully reviewed by Customs authorities and for which duty has been paid. Protest The formal request by an importer to have Customs reconsider the classification of a good, its valuation, or the determination of its country of origin.
46 Required Documentation At the minimum, the following three documents are required by every country to make an entry: A form designated for entry (specific to the importing country) A Certificate of Origin to ascertain the country of origin A Commercial Invoice with enough information to determine value and classification However, certain goods require much greater documentation. It is very important to have good invoices. The importer (and Customs) determines the classification of the goods and the dutiable amount from the invoice submitted by the exporter.
47 Customs Clearance Process Required Markings All products must have the marking Made in [name of country] or Product of [name of country]. Merchandise Visas For products whose importation is limited by quotas, and particularly for textile products, a bilateral monitoring system has been implemented by the importing and exporting countries. These types of goods require a special visa to be allowed in the importing country.
48 Customs Brokers Customs Broker An independent firm, representing the importer, and that has acquired the knowledge and experience required to make import entries efficiently and to deal with Customs effectively. Customs Bond Customs require the importer or the Customs broker to post a bond. A bond is either a sum of money deposited with Customs, from which any unpaid duty can be withdrawn, or an insurance policy with a surety company that acts as a guarantor of the importer or the Customs broker, and which it would be required to pay if the duty were not paid on time.
49 End of Session Thank you for your attention! Q&A
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