Multimodal Consolidation

FORWARDERS’ FUTURE

SHANTANU BHADKAMKAR

ATC (Clearing & Shipping) P.L.

Wednesday, March 17,
2010 SHANTANU BHADKAMKAR - ATC 1

What does not kill you, will only make

 What is
you stronger. - Neitze

 Multimodal Transport
 Consolidation
•  Examples
•  Observations
 CHA As MTO - Trends
 Strategic Overview


✘  Negative Freight
✕ High Destination Charges
✕ High Incentives – Rebates …
✕ Exploit or Get Exploited
✘  Power Of Pre-Dated BL
✘  Oligopoly, Monopoly

✘  Simplistic Sub-Contracting

Right Place

Right Tariff Right Documentation

Smooth Online
Movement Information

Right Time Good Condition

Right Price
Shantanu Bhadkamkar ATC 4

  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


Cost
FCL - LCL Deconsol Road Matrix
• Chennai • ReWorking • Zurich
• Mumbai • Hamburg • Basel High THC &
• Geneva Trucking in
Hamburg
LCL-LCL/20’ ReWorking Deconsol

• Kolkata • COLOMBO • ZURICH Costly
• Karachi • 40’ • Basel
• Chittagong • Ocean + Rail
European
Reworking
FCL-LCL MMT Deconsol
Costly
• Tuticorin • Hamburg • Zurich European
• By Rail • Basel LTL Trucking

Multiple Shipper
& Multiple UK Port Deconsol DDU/CFS
Consignee

• JNP CFS • Felixstowe • Forwarders • London
• FCL - LCL • Thamesport Warehouse • Liverpool
• Big Terminal • Manchester
Trucker • Glasgow
• Proximity To
Consignee

Competitive Door To Door Cost


Door
Consolidation
• Bhadoi • USEC/Gulf
Delivery
• Moradabad • JNP • Intermodal • Dallas
• Jaipur • 40’ FCL Move • No Deconsol
• Multiple • 1 Consignee
Buyers Shipper
Road / Rail
Consol

LCL - FCL


Cleveland New York Dubai JNP

• LCL - • $ 120 • DO • 45
LCL Fees Rs DAYS
15,000

Cleveland Long Beach Singapore JNP

• LCL - • $ 130 • DO Fees • 34 DAYS
LCL • Rs 10,000


Cleveland New York JNP

• LCL - • $ 110 • 36 DAYS
LCL • High • DO Fees
Trucking Rs 7,000

Cleveland Single DO JNP

• FCL – • $ 125 • 30 DAY
LCL • Extended • DO Fees
• 20’ – 18 Cut Off Rs 5500
CUM

Truck Pick up Charleston JNP

• USEC • 40’ FCL – • DO Fees
• Mid West LCL 3500
• South East • Cost $ 45 / • Usual Liner
• Pick Up CUM LCL
costs Charges
comparable, • 32 Days
though
Higher


  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 UNCTAD/ICC Rules for Multimodal
  Price Transport Documents

  Seamless 2.1. Multimodal transport contract
(multimodal transport contract) means a single
  Neutral contract for the carriage of goods by at least two
different modes of transport.
  Optimiser 2.2. Multimodal transport operator (MTO)
means any person who concludes a multimodal
  Tracking transport contract and assumes responsibility for
  Value Added 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

Eyefortransport India Market Report 2007

  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


  Abilities
  Compulsions


  Expert On
Customs Law
  Architect Of
Transport
  Information
Management


 TARRIFS
 RULES & PROCEDURES
 LAWS & REGULATIONS
 RATES
 ROUTES
 STORAGE
 INSURANCE

SHIPPER
CONSIGNEE
Overseas
CARRIER
Forwarder INTERNATIONAL
DOMESTIC

FORWARDER
DATA PORTS
CARRIER WAREHOUSES

REGULATORY
CUSTOMS
BODIES


OLD NEW
New Terms
Increasing   CIF   CIP
Forwarders   C&F   FCA
Role   FOB   DDP
  FAS   DDU
  Under Hook   Ex-Works

Routing - Consignment Basis - FCR - FWR


  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, MIS, Response
Forecasting, Management
Quicker Lower Feed Back
Delivery Cost
Concept Ability To
Selling & Handle New
Enhanced Role Unexpected
Of Marketing Situations
Superior
Range
Service
Global
Dealing With Alliances &
Uncertainty Strategic
Networking

Flexibility Visibility
Better
Strategic
Management
Global Vision
Of Finances

Infrastructure Customers
• Port • Buying Agents
• CFS • Manufacturers
• Warehouses • Merchants
• IT

Carriers Organisors
• Airlines • CHA
• Shipping Lines • IATA
• Rail • MTO
• Truckers • NVOCC
• Courier • Liner Agents

3PL
• Post

CONVERGENCE IN LOGISTICS


EDI RMS

DIS
GLOBALISATION
INTERMEDIATION

LIBERALISATION DELICENSING

SIMPLIFICATION
CHA COMPETITION
CHALLENGES

WHO KNOW WHAT NEXT?


Multimodal Consolidation

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