Multimodal Consolidation

Wednesday, March 17, 2010 SHANTANU BHADKAMKAR - ATC 1

SHANTANU BHADKAMKAR

ATC (Clearing & Shipping) P.L.

FORWARDERS’ FUTURE

 What is  Multimodal Transport  Consolidation

•  Examples • Observations

 CHA As MTO - Trends  Strategic Overview


What

does

not

kill

you,

will

only

mak

e yo

u s

tronger

. -

Nei

tze

✘  Negative Freight ✕ High Destination Charges ✕ High Incentives – Rebates … ✕ Exploit or Get Exploited

✘  Power Of Pre-Dated BL ✘  Oligopoly, Monopoly ✘  Simplistic Sub-Contracting


Shantanu Bhadkamkar ATC 4

Right Place

Right Documentation

Good Condition

Right Price

Right Time

Right Tariff

Smooth

Movement Online

Information

  Price of service

 Cost of co-ordination   Consequential cost of time

  Risk of delay and bad service

  Loss of business


Multimodal Transport Operator, is defined as ‘any person who concludes a multimodal transport contract

and acts as a principal, not as an agent on behalf of the consignor or on

behalf of the carriers participating in the multimodal transport operations,

and who assumes responsibility for the performance of the contract’


  Freight integrators are transport service providers who arrange full load, door-to-door transportation by selecting and combining without prejudice the most sustainable and efficient mode(s) of transportation.


 The Freight Forwarder, who consolidates shipments, pays lower price for carriage  The Freight Forwarder's partner, who will receive all goods, will protect his customers' interests

The grouping together of smaller consignments of goods into a large consignment for carriage as a larger unit in order to obtain a reduced rate.

• The Freight Forwarder issues separate Shipment Transport

Documents (FBL/HAWB/MTD) for every consolidated shipment

and obtains a collective one from the performing carrier. On the

collective Shipment Transport Document the Freight Forwarder

who consolidates the parcels is the Shipper, and the consignee is

the Freight forwarder at the destination who de-consolidates

them.

• The carrier has only a look into his BL/AWB.

• The Shipper / Consignee has a FBL/HAWB/MTD.

  Others   Tuticorin & Rest Of India to Zurich & Basel   India to UK DDU

  Own   Cleveland to JNP

  Atlantic   Pacific

  Bhadoi to Dallas   JNP to Atlanta via Charleston


LCL-LCL/20’

• Kolkata • Karachi • Chittagong

ReWorking

• COLOMBO • 40’ • Ocean + Rail

Deconsol

• ZURICH • Basel

FCL - LCL

• Chennai • Mumbai

Deconsol

• ReWorking • Hamburg

Road

• Zurich • Basel • Geneva


FCL-LCL

• Tuticorin

MMT

• Hamburg • By Rail

Deconsol

• Zurich • Basel

Cost Matrix

High THC & Trucking in Hamburg

Costly European

Reworking

Costly European

LTL Trucking


• London • Liverpool • Manchester • Glasgow

DDU/CFS

• Forwarders Warehouse

• Big Terminal Trucker

• Proximity To Consignee

Deconsol

• Felixstowe • Thamesport

UK Port

• JNP CFS • FCL - LCL

Multiple Shipper & Multiple Consignee

Competitive Door To Door Cost


• Bhadoi • Moradabad • Jaipur

Buyers Consol

• JNP • 40’ FCL • Multiple

Shipper

Consolidation • USEC/Gulf • Intermodal

Move

Road / Rail

• Dallas • No Deconsol • 1 Consignee

Door Delivery

LCL - FCL


Cleveland

• LCL - LCL

Long Beach

• $ 130

Singapore

• DO Fees • Rs 10,000

JNP

• 34 DAYS

Cleveland

• LCL - LCL

New York

• $ 120

Dubai

• DO Fees Rs 15,000

JNP

• 45 DAYS


Cleveland

• FCL – LCL

• 20’ – 18 CUM

Single DO

• $ 125 • Extended

Cut Off

JNP

• 30 DAY • DO Fees

Rs 5500

Cleveland

• LCL - LCL

New York

• $ 110 • High

Trucking

JNP

• 36 DAYS • DO Fees

Rs 7,000

Truck Pick up

• USEC • Mid West • South East

• Pick Up costs comparable, though Higher

Charleston

• 40’ FCL –LCL

• Cost $ 45 / CUM

JNP

• DO Fees 3500

• Usual Liner LCL Charges

• 32 Days



  Seamless Movement   Options & Alternatives   Solutions to common & uncommon problems   Bridges Gaps in the Efficiency Voids   Brings efficiency to the movement   Reliability   Makes movement cost effective   Flexible   Acts as Buffer & Moderator   One Stop Shop

  More than one mode of transport Sea * Air * Road * Rail

  Single   Document   Service Provider   Price

  Seamless   Neutral   Optimiser   Tracking   Value Added

UNCTAD/ICC Rules for Multimodal Transport Documents

2.1. Multimodal transport contract (multimodal transport contract) means a single contract for the carriage of goods by at least two different modes of transport. 2.2. Multimodal transport operator (MTO) means any person who concludes a multimodal transport contract and assumes responsibility for the performance thereof as a carrier.

  Domestic Transportation   Both the countries

  Regulatory Authorities   Both the countries & transit if any

  International Transportation   Uni - Modal / Multimodal

  Other Intermediaries   Ports   Banks   Insurance


 30% Of Total Container Traffic Handled By Major Ports Moves Between Gateway Ports And Inland Centres

 More Reliance On Smaller / Feeder Vessels  Higher Cost Of Inland Container Movement, In Comparison To ASEAN

  EXIM Trade On High Growth Path   Global Container Trade Growth About

9% P.A. Over Last Decade, India Matched This

  Indian Ports Container Traffic Forecast •  11 M TEU By 2011-2012 •  42 M TEU By 2021-2022 •  Possibly Higher Growth @ 16-18%

P.A.

  National Maritime Development Programme:   Launched 30.12.2005 Envisage Investment Rs. 1,003 B. (Us$ 22 B.) In

387 Port & Shipping Sector Projects Over 20 Years   Port Sector Investment: Rs. 558 B. (Us$ 12 B.) Over Next 6 Years -

Public Private Partnership Funding

  National Highway Development Program   Mainly Golden Quadrilateral   Other Phases 20,000 kms

  NATIONAL RAIL VIKAS YOJANA   Freight Corridor: Dedicated Rail Corridor Between Delhi & Kolkata

And Delhi & Mumbai - Investment Over Rs 250 B (Us$ 54 B) Delhi-Mumbai


  India’s Geographical Position As a Major Asian Transport and Distribution Hub

  Location for Outsourcing a Range of Activities (Including Manufacturing, IT and Communication Services, Etc)

  Highly Evolved Banking System   India’s Security Focused Banking Regulations

Eyefortransport India Market Report 2007

  Abilities

  Compulsions


  Expert On Customs Law

  Architect Of Transport

  Information Management


 TARRIFS

 RULES & PROCEDURES

 LAWS & REGULATIONS

 RATES

 ROUTES

 STORAGE

 INSURANCE


Overseas Forwarder

DATA CARRIER

CUSTOMS REGULATORY

BODIES

PORTS WAREHOUSES

CARRIER INTERNATIONAL

DOMESTIC

SHIPPER CONSIGNEE

FORWARDER


OLD

  CIF   C&F   FOB   FAS   Under Hook

NEW

  CIP   FCA   DDP   DDU   Ex-Works


Routing - Consignment Basis - FCR - FWR

New Terms Increasing Forwarders

Role

  DTD - DDP/DDU – Delivered Terms   Increased Interplant Movement & Vendor

Managed Inventory   Visibility   Change from ‘Need Based’ to ‘Expectation

Based’ Service Providers   Full Supply Chain Integration - Value Chain

included   Higher Customer Interface   Simultaneous Online Processing &

Information Flow   Servicing at Both the Ends, including

intermediate   Proactive   Post Delivery Services


o  Technologies   Information Management   Full Integration with Customer’s ERP   Middle Ware   RFID, Bar Coding …

o  Security   Domestic   International   Storage, Carriage, Personnel

  Environmental Issues   Implications of Fuel Costs Rise,

particularly Fossil Fuels - Peak Oil


Pricing, Costing,

Forecasting, Feed Back

MIS, Response Management

Concept Selling &

Enhanced Role Of Marketing

Ability To Handle New Unexpected Situations

Dealing With Uncertainty

Global Alliances & Strategic

Networking

Better Management Of Finances

Strategic Global Vision

Quicker Delivery

Lower Cost

Superior Service Range

Flexibility Visibility

3PL

Carriers • Airlines • Shipping Lines • Rail • Truckers • Courier • Post

Infrastructure • Port • CFS • Warehouses • IT

Customers • Buying Agents • Manufacturers • Merchants

Organisors • CHA • IATA • MTO • NVOCC • Liner Agents


CONVERGENCE IN LOGISTICS

CHA CHALLENGES

SIMPLIFICATION

LIBERALISATION

GLOBALISATION

EDI RMS

DIS INTERMEDIATION

DELICENSING

COMPETITION


WHO KNOW WHAT NEXT?

FORWARDERS’ FUTURE

Education

Multimodal Consolidation