Logistics management

Module 1

Logistics
Logistics is the part of supply chain management that deals with the efficient forward and reverse
flow of goods, services, and related information from the point of origin to the point of
consumption according to the needs of customers.
Flow of raw materials from the suppliers to the producers and the flow of finished goods to the
consumer.
Logistics Management
Logistics management refers to the acquisition, storage and transportation of inventory from its
origin to its destination. It involves maintaining the inventory, resources and related information,
and getting the goods to the right location at the right time and to the right customer.
Logistics management is the governance of supply chain management functions that helps
organizations plan, manage and implement processes to move and store goods.
Flow of logistics

Supplier raw material production distribution retail consumer

Logistics Mix/ elements / functions

1. Order Placing
A logistics company must complete order processing. Order processing is the first step in logistics.
This may fall under the purview of the company’s commercial department. Before processing
orders within the company, the commercial department makes sure that payment terms and
delivery terms are met.
• Examining the order to see if there are any deviations from the agreed-upon terms or
negotiated terms.
• All information is available, including prices, delivery times, payment methods, and
delivery schedules.
• Ask about the availability of materials in stock.
• Planning and production in the event that there is a shortage.
• Recognize the order and indicate any deviations.
 2. Materials Handling
Material handling is the act or process of moving goods around a warehouse. This involves
managing inventory so that orders can be fulfilled quickly and accurately. Although it may seem
like a simple job, it is crucial and must be done frequently.
3. Warehousing
The warehouse must be located near the distributor or retailer to deliver goods quickly. A branded
product may take longer to arrive than a product with a similar name. Therefore, it makes sense
for a branded company to set up a more convenient warehouse to deliver the products quickly. The
first step for a brand in a new territory is to lease a warehouse. This will allow it to be closer to its
customers and the area.
4. Inventory Management
One of the most important functions of a logistics business is inventory management. It is about
managing sufficient inventory to satisfy client demand while keeping the cost of carrying goods
minimum. It is essentially about balancing the need to provide excellent customer service with
avoiding losing market share.
5. Transport
The logistics company’s most important activity is transportation. It is also one of the most
resource-intensive and revenue-generating logistics segments.
6. Packaging
The logistics company is responsible for cost-effectively packing the product. End customers could
suffer damage to their goods if the proper precautions aren’t taken. This can lead to severe losses
for both logistics companies and end clients.
7. Monitoring
Logistics companies must keep track of inventory management, transportation, warehousing, and
other information. Each site, for example, requires continuous information about its supply status,
future commitments, and replenishment capacities.

Types of Logistics

1. Inbound Logistics
Inbound logistics involves the management of resources that are necessary to make a product or
service of an organisation. It involves managing different suppliers/vendors, inventory, costing,
and transportation. Inbound logistics must ensure the right resources in quantity reach the
organisation at the right time. It is a complex process requiring connecting with various resource
providers to make one final product. Inbound logistics is mainly concerned with the movement of
resources from suppliers to production
2. Outbound Logistics
Outbound logistics refers to delivering the right product at the right time to customers at the best
possible minimum cost. It focuses on the demand side of the supply-demand calculation. Customer
satisfaction is the main objective of outbound logistics. It is concerned with delivering the product
from the distribution centre to the customer. It involves procedures such as order processing,
packaging, and shipping to the destination.
3. Reverse Logistics
Reverse logistics is the process connected with managing product returns and refunds. It is the
movement of the product from customers back to the seller or manufacturer. The products returned
may be received late or not required by the customer, damaged in the delivery process or eligible
for repair, refurbishing, or recycling. Reverse logistics helps organisations properly dispose of
products that can minimise penalties for noncompliance with environmental regulations.
4. Procurement logistics
Procurement logistics is sourcing materials/services required to manufacture a product.
Procurement is the major element in inbound logistics, and the scope depends on the size and
nature of procurement required by an organisation. Procurement logistics aims to control supplies
as per the requirement of the various operational processes of the organisation. It involves
monitoring quantities to be supplied, supply frequency, inventory management, demand
forecasting, quality of service delivery, vendor selection, types of packing required, and mode of
transportation required, among other factors.
5. Manufacturing logistics
Manufacturing logistics refers to the planning, coordination, and service tasks required to carry
out production activities within a manufacturing plant. It is organising and managing the
transportation, storage of materials and finished products within a manufacturing plant. It also
includes determining when to shut down the manufacturing plant for maintenance, managing
inventory levels, and meeting production schedules.
6. Distribution logistics
Distribution logistics, also known as sales logistics or transport logistics, deals with the movement
of goods from manufacturer to customer. Customers can either be final customers or distributors.
This logistics is the driving force behind order fulfilment services. Supply chain management
online courses enable professionals to learn more about the processes and methods to run a lean
and efficient supply chain management.

Supply Chain Management ( SCM)

Supply chain management (SCM) is management of the flow of goods, data, and finances related
to a product or service, from the procurement of raw materials to the delivery of the product at its
final destination.
Supply chain activities span procurement, product lifecycle management, supply chain planning
(including inventory planning and the maintenance of enterprise assets and production lines),
logistics (including transportation and fleet management), and order management. SCM can also
extend to the activities around global trade, such as the management of global suppliers and
multinational production processes.
The five most critical phases of SCM are planning, sourcing, production, distribution, and returns.

Importance of SCM
• Reduced Costs
Supply chain managers are often focused on reducing the costs incurred at all steps within the
supply chain. Improving production processes, relationships with suppliers, and inventory
management are some of the ways that supply chain managers can attempt to further reduce
costs.
• Interconnected Supply Chain
Supply chains can appear like independent strings of a few companies working together to reach
a common goal of delivering products to consumers. However, it is much more complex than that
as the world can easily be viewed as one large supply chain.
• Information Transfer and Communication
Supply chain management (SCM) is a necessity for the foundation of all societies. Effective
communication and information transfer in real-time is a necessity for the foundation of a robust
supply chain. This starts by building strong relationships between all components of the supply
chain and ensuring that communication is easy and that all parties are aligned towards a common
goal.
• Better Customer Service
Effective supply chain management can provide direct improvement to your customer service.
This is because SCM processes will ensure that the correct quantity of the correct items will be
delivered in a timely manner. Having an interconnected network of suppliers and distributors will
reduce delays and improve customer satisfaction.
• Agility
Supply chain management is important to allow organizations to remain agile and be able to handle
any unexpected issue or variability that may occur. By streamlining supply chain processes and
increasing visibility, businesses will be able to diagnose problems and find appropriate solutions
more quickly.
Difference between logistics & SCM
• Logistics are activities in supply chain management. SCM covers a variety of activities,
including production and inventory planning, labor planning, materials and facilities
management, manufacturing and delivering goods and services.
• SCM works toward improving processes to create competitive advantages, while logistics
emphasizes meeting customer needs and expectations.
• Logistics focus on the efficient and cost-effective delivery of goods to the customer.
• Supply chain management controls the development of raw materials into finished goods
that move from the supplier to producer to warehouse to retailers and/or consumers.
• The term logistics originated with the military. .The modern practice of supply chain
management started in the 20th century. .
7R's of Logistics
Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the
Right time, to the Right customer, at the Right price.
1. Right Product
While designing/manufacturing/selecting a product, the organization should look into potential
issues that can arise during transportation. Special packaging requirements, for example, can arise
from the product’s weight or bulk, its shape or its fragility and distance of transportation.
2. Right Customer
Customers are the core component of supply chain processes. The right customer is about finding
the customer and creating an awareness about our product and services. The greatest challenge
involved in this would be to identify the customer to be targeted. The solution to finding the right
customer would be to do a market research.
3. Right Price
Pricing is imperative for the businesses as it is the factor that decides whether it has incurred profit
or loss. The supply chain manager should research market trends and set competitive prices for the
goods and services. They must have an appropriate price value in order to track the company
income and expenses.
4. Right Quantity
Sending right amount of products is also important in logistics. It is the task of the supply chain
managers to find the right quantity of deliverables and to coordinate with the manufacturing and
delivery team to get the right quantity of products delivered to the customers. If we do not meet
the demand of product, we will ultimately loose some chance of making money.
5. Right Condition
The right condition in logistics is about the safe delivery of the proposed product. The quality of
the products should be maintained till the time it reaches the end user or the customer. The
distribution strategy should be such that it is preserving the quality of the product without
increasing the overhead costs. It is the duty of the supply team to ensure that the goods are stored
properly and delivered to the customers in the right condition.
6. Right Time
Time is a crucial factor in logistics. Even if everything else in the process is done accurately the
entire process can fail if the timing is not right. You must have the products on the shelves or in
stock at the right time to cater to the demand if the product demand is not met at the right time it
might be lost to competition. Customer’s satisfaction and long-term relationship are only possible
if the products are delivered to the customers at the right time. It is the task of managers to develop
a tracking system and coordinate with the delivery team to get the items delivered before the
deadline.
7. Right Place
The managers can develop a robust delivery system with location tracking so that both the
customers and the providers can track the exact location of the product and get it delivered to the
right place.

5P's of Logistics

• Product:
The product is the physical product or service offered to the consumer. In the case of physical
products, it also refers to any services or conveniences that are part of the offering. Product
decisions include aspects such as function, appearance, packaging, service, warranty, etc.
• Price:
Pricing decisions should take into account profit margins and the probable pricing response of
competitors. Pricing includes not only the list price, but also discounts, financing, and other options
such as leasing.
• Promotion:
Promotion decisions are those related to communicating and selling to potential consumers. Since
these costs can be large in proportion to the product price, a break-even analysis should be
performed when making promotion decisions. It is useful to know the value of a customer in order
to determine whether additional customers are worth the cost of acquiring them. Promotion
decisions involve advertising, public relations, media types, etc.
 • People:
People decisions are those related to customer service. The function of people to present an
appearance, an attitude, etc
• Place:
Place (or placement) decisions are those associated with channels of distribution that serve as the
means for getting the product to the target customers. The distribution system performs
transactional, logistical, and facilitating functions. Distribution decisions include market coverage,
channel member selection, logistics, and levels of service.

Shippers logistics requirements in trade

The documents necessary to transport an item from one location to another. They’re made up of
applicable records, forms, and certificates that provide information about the item being shipped.
This may include details such as the item description and specification, quantity, price, ship date,
delivery address, and shipping method.
1. Bill of lading
Bill of lading ,or BOL, is a transportation contract between the transportation company or carrier
and the business that’s sending out the package. It helps to confirm the receipt of goods that need
to be shipped and it needs to be signed by an authorized representative from the carrier’s end.
Typically, a BOL must include the following details:Where it’s shipped from Destination, BOL
nnumbe, Details of the carrier/transportation company, Transportation mode, Description of goods
being shipped, Shipment terms.
2.Certificates of origin
Most international shipments require a certificate of origin to declare where the items originated
from. They must be provided in accordance with the rules and regulations of the importing country
and certified by the export country’s consulate office or the chamber of commerce.
Certificates of origin must include the following details:Name and address of the shipper, Name
and address of the buyer, Exporting carrier, Country of manufacture, Number of packages, Date
of export, Item description, Quantity/unit of measure, Weight, Signature from the authorized
personnel.
3.Commercial invoice
The commercial invoice, often generated using an invoice maker, is the proof of sale that must
accompany all international shipments. It can be similar to your proforma invoice but may contain
additional details such as the order number and PO number.
Commercial invoices are very similar to standard invoices but must include other details that will
help with customs clearance. This includes details such as:Detailed information on the buyer and
seller,Information on the freight forwarder, Banking and payment information, Shipping line, Item
description, Quantity, Country of origin, Item value, Total weight, Shipment terms.

4 .Consular Invoice
A consular invoice is a document certifying a shipment of goods and shows information such as
the consignor, consignee, and value of the shipment. Generally, a consular invoice can be obtained
through a consular representative of the destination country and must be certified by the consul of
the country of destination, who will stamp and authorize the invoice.
5.Destination Control Statement (DCS)
The Destination Control Statement is a legal statement required by the Export Administration
Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) stating that the goods
you are exporting are destined to the country indicated in all the shipping documents. It is a
necessary legal boundary clarifying what happens to shipments, and it essentially states that the
buyer isn’t going to take the goods and forward them to another country
6.Dock receipt
A dock receipt is a document issued by a carrier or their agent to acknowledge the receipt of goods
at a specific location, such as a dock or terminal. It serves as temporary evidence of the cargo being
received before it is loaded onto a vessel or other means of transportation. The dock receipt
contains information about the goods, the shipping parties, and the location where the cargo was
received.
The dock receipt is designed to provide the exporter with proof of delivery of the cargo to the
international carrier in good condition. The inland carrier may deliver the goods to a warehouse
company or a warehouse operated by the carrier as arranged by the freight forwarder.
7.Electronic Export Information (EEI)
EEI is the data that must be filed through the Automated Export System (AES) for goods shipped
from the U.S. to a foreign country. The filing includes information about the sender and receiver
of the goods, and about the goods being exported.
8.Export Licenses.
An export license is a government document that authorizes or grants permission to conduct a
specific export transaction (including the export of technology).
9.Export packing list
An export packing list is an itemised list of all of the items within a shipment. You must include
key details about each item such as it’s volume and weight as well as necessary information such
as the consignee’s contact details
 Module 2
Logistics and Documentation
Documentation in the context of logistics refers to the various papers attached or pertaining to
goods requiring transportation and/or transfer of ownership. This includes, but is not limited to,
documents such as bills of lading, commercial invoices, packing lists, and insurance certificates.
Shipping documents are forms that accompany a shipment listing the date shipped, the customer,
the method of shipment, and the quantities and specifications of goods shipped.
Without proper documentation, shipments can be delayed or even denied entry into a country,
resulting in lost time and money for all parties involved.
Consular Invoice
A consular invoice is a document specifying the contents and details of a shipment certified by the
consul of the country the merchandise is being sent to. Customs officials use the invoice to confirm
what’s in the shipment, the number of goods, and the cost—and thus determine the import duty.
Consular invoice is a document certifying a shipment of goods and shows information such as the
consignor, consignee, and value of the shipment. Generally, a consular invoice can be obtained
through a consular representative of the destination country and must be certified by the consul of
the country of destination, who will stamp and authorize the invoice
Commercial Invoice
A commercial invoice is a required document for the export and import clearance process. It is
sometimes used for foreign exchange purposes. In the buyer’s country, it is the document that is
used by their customs officials to assess import duties and taxes.
The seller or the exporter issues commercial invoices to the buyer or the importer.
The invoice acts as proof of sale. It is a document for international trade, as it helps ensure smooth
shipment, legal protection, and financial record-keeping
Certificate of Origin(CO)
A Certificate of Origin or Declaration of Origin (often abbreviated to C/O, CO or DOO) is a
document widely used in international trade transactions which attests that the product listed
therein has met certain criteria to be considered as originating in a particular country.
A certificate of origin / declaration of origin is generally prepared and completed by the exporter
or the manufacturer, and may be subject to official certification by an authorized third party.
It is often submitted to a customs authority of the importing country to justify the product’s
eligibility for entry and/or its entitlement to preferential treatment. Guidelines for issuance of
Certificates of Origin by chambers of commerce globally are issued by the International Chamber
of Commerce.

Combined Certificate of Value and Origin (CCVO)

The document is used to prove the origin and value of goods being exported for customs clearance
purposes.The document serves as both an invoice and a declaration of the items of import. It is the
correct full statement of the actual price paid, or to be paid, for the said goods.
The Combined Certificate of Value & Origin (CCVO), also referred to as the Form C16, is one of
the documents required for import payment under the Destination Inspection (DI) scheme of the
Federal Republic of Nigeria.
Bill of Lading ( B/L)
A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity,
and destination of the goods being carried. A bill of lading is a document of title, a receipt for
shipped goods, and a contract between a carrier and a shipper.
• It is a conclusive receipt,i.e. an acknowledgement that the goods have been loaded;[c] and
• It contains, or evidences,the terms of the contract of carriage; and
• It serves as a document of title to the goods, subject to the rule.
• There are three bills of lading, one for the shipper, one for the consignee, and one for the
banker, but there is no limit to the number of bills of lading issued.
Through bill of lading – A document that covers the shipment of goods from the point of origin
to the final destination.
Straight bill of lading – A document that covers the shipment of goods from the point of origin
to the final destination without any stops in between.
Cargo Manifest or packing list
Cargo manifest is a listing of the goods comprising the cargo (freight) carried by a means of
transport. The cargo manifest describes the particulars of the goods, such as transport documents
numbers, consignors, consignees, marks and numbers, number and kind of packages, descriptions
and quantities of the goods.
A shipping manifest is a document that lists all of the items that are being shipped. The shipper
uses this document to track the items, and the receiver also uses that to verify all of the items were
received. The shipping manifest should include a description, the quantity, the weight, and the
value of each item.
Export Health Certificate
A Export Health Certificate is a document used in export transactions, issued by the governmental
organizations at the countries of origin, to certify that a food shipment is fit for human
consumption, and meets safety standards or other required legislation for exporting.
Import License
Import licensing can be defined as administrative procedures requiring the submission of an
application or other documentation (other than those required for customs purposes) to the relevant
administrative body as a prior condition for importation of goods.
Cargo Insurance Certificate
A document indicating the type and amount of insurance coverage in force on a particular
shipment. Used to assure the consignee that insurance is provided to cover loss of or damage to
the cargo while in transit. In some cases a shipper may issue a document that certified that a
shipment has been insured under a given open policy, and that the certificate represents and takes
the place of such open policy, the provisions of which are controlling.
Export Declaration form
An export declaration is a form that is submitted by an exporter at the port of export. It provides
information about the goods being shipped, including type, number, and value. This information
is used by customs to control exports, in addition to compiling statistical information about a
country’s foreign trade.

Shipping Formalities
Booking shipping space
1.Checking the shipping schedule, estimated time of departure time, booking space one week in
advance.
2.Inform client the sailing time and shipping company name.
3.Check the most suitable shipping line,shipping company and shipping schedule for customer.
4.Assistant customer solving all the issues for shipping schedule. Such as the ETA is become
earlier or later. Or the cargo is lost during Ocean delivery.
5.Assistant customer do unloading while custom clearance.
6.If our customer have complain with shipping company for the cargo damage, assistant customer
dealing with insurance company.
7.Control the internal transport and protect the cargo against damage before loading.
Shipping Formalities (process )
1. Choosing the carrier
Unless the importer specifies a carrier, the exporter is free to choose a shipping company or airline
which offers a competitive rate and can meet the latest date for shipment. Certain importing
countries may prohibit the use of flag vessels of a hostile country and any vessels that would make
a stopover in a hostile country en route to their territory.
2.Worldwide Seaports
Please see Seaports of the World. Some port names may be spelled differently, for example,
Arkhangelsk in the Russian Federation may appear as Archangels.
The letters after the port names in Australia, Canada and the U.S.A. represent the state or province
where the port is located (please see General References---Abbreviations – Provinces, States and
Territories).
3.Checking the Ocean Shipping Schedules
In many countries, the ocean shipping schedules (both outbound and inbound) are published in a
major newspaper. In countries where newspapers do not carry shipping schedules, the exporter
may contact the carrier, customs broker or forwarder for shipping information. The information is
also available from private publishers of shipping schedules.
4.ETD (ETS) and ETA
The term ETD is the estimated or expected time of departure from the port or point of origin; it
applies to all modes of transportation. ETD is shipment on or about.
The term ETS is the estimated or expected time of sailing from the port of origin; it applies to
ocean freight. ETS is sailing on or about.
The term ETA is the estimated or expected time of arrival at the port or point of destination; it
applies to all modes of transportation.
5.Stopover En Route to Destination
When booking a shipping space, it is important to verify whether the vessel will stopover in other
port(s) to unload and load other cargoes en route to the destination. The stopover in certain ports,
particularly congested ones, may extend far beyond the expected time.
6.Verbal Booking of Space and Dead Freight
In many countries, verbal booking of shipping space is accepted, except for dangerous goods.
Sometimes, the space booked is not used and the carrier may levy a charge known as dead freight.
The exporter must inform the customs broker or forwarder who booked the space on his/her behalf
in advance if the space will not be used, so that other shippers may use the space and to avoid
paying the dead freight charge.
7.Dangerous Goods
When shipping dangerous goods, a written application for shipping space is required. If a shipping
order is issued for dangerous goods, it does not mean that the goods will be accepted for loading
on board the vessel. When they arrive at the designated customs delivery (closing) location, the
goods, shipping order and Dangerous Goods Note are submitted to the ship’s master for approval
before customs clearance and loading.

Shipping Conference
Shipping conferences refers to shipping companies that have formed an association to agree on
and set freight rates and passenger fares over different shipping routes. There are different shipping
conferences for different regions of the world.
A shipping conference, also known as a liner conference, is an association of several shipping
companies that follow certain terms and then provide services. It is an arrangement between two
or more than two shipping lines to provide regular service on certain trade routes at uniform freight
rates and common business terms
A shipping conference, Shipping conferences members may agree on such matters as price fixing,
total industry output, market shares, allocation of customers, and the division of profits or
combination of those.
Non conference shipping
Shipping lines that are not members of a conference for a particular route are known as outsiders,
independent lines, or non-conference lines. Also called a steamship conference
Liners which are not members of the conference are termed as non-conference liners. They may
sail off route to make the voyage economical and may cause a delay in touching the destined port
which is the element of Risk associated with it. Not advisable for perishable goods.
Charter shipping
Chartering is the term used to name the renting of a whole ship, in an agreement between a
shipowner and a renting party, in this case known as charterer, intermediated by a freight forwarder
or a shipbroker.
Charter Party
A charterparty (sometimes charter-party) is a maritime contract between a shipowner and a
“charterer” for the hire of either a ship for the carriage of passengers or cargo, or a yacht for
leisure.Charter party is a contract of carriage of cargo in the case of employment of a (charter
boat).
Shipping Storage
Storage is a fee levied on a shipping line by the port authority if their container stays at the port or
terminal beyond the laytime given to clear them. In simplicity, storage is a fee charged on any
container that is not moved from the storage space/terminal when preparing to be loaded onboard
a truck or a vessel.

Ocean Shipping Procedure

1: Importer requests quotes and orders goods
The first step in the shipping process is when an importer (also known as the consignee) orders
goods from a supplier (also known as the consignor).In a usual import, buyers will generally ask
suppliers for a quote when looking at goods to purchase. The quote can often be accompanied by,
or be in the form of, a proforma invoice. A proforma invoice is effectively an invoice that is used
to provide an estimate and can be subject to change.
2: Freight forwarder arranges export
If you are working with an independent forwarder, the agent you have been dealing with will then
contact their overseas partner to arrange the collection of the goods.
The overseas representative will in turn contact the relevant supplier and arrange for the export of
the buyer’s goods. This will involve the preparation of several key documents used in the
international shipping process which are required for customs purposes.
3: Booking of freight
Once the required documentation is in order, the supplier must make a booking for the export
shipment.It is critical for freight to be booked early to avoid disappointment, especially if the goods
are going to be transported in peak shipping season
4: Goods to travel to international depot/port
Once the goods are packed and ready, they will be transported to a depot or port for export.
Depending on the shipping incoterms, this will either be arranged by the supplier or by the
consignee through their freight forwarder. Export clearance can then commence.
5: Goods processed through export customs clearance and placed in transit
Prior to departure, the goods will be processed through export customs clearance. This is where
all documentation is reviewed and checked by government agencies.As mentioned above,
suppliers will typically be required to complete an Export Declaration
6: Goods arrive in buyer’s country for import clearance
Once a buyer’s goods arrive in the country of destination, the goods undergo an import clearance.
Imported goods may be subject to certain taxes, tariffs and/or charges.Depending on the
commodity the goods may also be subject to quarantine inspection on arrival.
7: Goods are transported from the port to the buyer
Once the goods pass through customs and are good to go, they will then be delivered to the buyer
or agreed delivery point. Once, again, the incoterms on the shipment will determine who arranges
this.Depending on the shipment type (air or international sea freight FCL or LCL) a range of
transport options will be available

Common Shipping Terms

❖ Full Container Load (FCL): this is where the shipment of one buyer takes up a full
container;
❖ Lesser Container Load (LCL): where a buyer’s goods don’t take up the whole container
(instead, the goods take up less of the container) and are stored with other buyers’ goods;
❖ Reefer: A reefer is essentially a large fridge used to refrigerate goods while in transit –
reefers are normally used to transport goods like fruits, meat, vegetables, dairy and fish;
❖ Out of Gauge (OOG): also known as break bulk, these are loads that are basically too big
to fit into a container (and usually come with an extra surcharge);
❖ Flat Racks: As opposed to using standard shipping containers, buyers can instead choose
flat racks these are great for goods that do not fit in normal shipping containers (like break
and OOG loads).
❖ CYCY – Container Yard to Container Yard: A container yard is where containers are
stored until they’re loaded on a ship or after they’ve been discharged form a ship.
❖ DM – Demurrage :Demurrage is a fee charged by container lines when an imported
container hasn’t’ been picked up in time.
❖ INCOTERMS – International Commercial Terms: When purchasing and selling goods,
the goods will need to be moved from one location to their destination.
❖ Port Storage : When containers are discharged form a ship they’re moved to a container
yard. The port provides a free period of storage
❖ Rollover: This means your container didn’t make it onto the vessel. This could happen due
to customs problems, overbooking, or vessel omissions.
❖ Stuffing & Stripping: Stuffing is the process of loading a container prior to shipment and
Stripping, the process of unloading a container the it arrives at a port.
❖ COD – Change of Destination : Your goods have been loaded and on their way to their
destination, but for some reason the destination needs to be changed
 ❖ Hook to hook – This term is used by many shipping lines when quoting prices for break-
bulk sea freight. It means that the shipping line’s price includes loading the goods on to the
vessel and unloading the goods at the destination port

Shipping Intermediaries
Party who arranges shipping, warehousing, distribution and other goods movement on behalf of
goods providers and shipping companies.The term third-party logistics, or 3PL, is widely used in
logistics circles as also referred as a Logistics Intermediaries.
Customs Brokers
International trade is regulated through tariffs and trade laws established by the Governments to
control the imports and exports of the country. The Customs Departments have the powers vested
by their Governments to administer the policies and tariffs on all imports and exports into and out
of the country. Customs Clearance Departments are setup in all ports of entry and exit at the
Country’s borders including Airports, Sea Ports and Check Posts at Road. Customs Clearance
involves both physical inspection and value assessment of the goods to check the authenticity.
Customs Broker is a Third Party Service Agency licensed by Customs Department to operate and
represent the Importer. There are many large freight forwarder companies which own and operate
Customs Clearance services for their clients. Customs Broker plays a very crucial role in
representing the Importer with Customs and assumes the responsibility for compliance of all Rules
and Regulations on behalf of the Importer.
Freight Forwarders and Consolidators
The freight forwarder is an individual or firm who renders cargo delivery services.In domestic
(local) freight forwarding, it delivers goods usually from the exporter’s premises to the local
customs in exporting, and the reverse in importing. The customs broker also renders local freight
forwarding for exporters and importers.
The freight consolidator or group age operator is an individual or firm which accepts less than
container load (LCL) shipments from individual shippers, and then combines them for delivery to
the carrier in full container load (FCL) shipment.
Shipping Agents
A shipping agent is a person who deals with the transactions of a ship in every port that the ship
visits or docks. In other words, it is a shipping agent who as a local expert acts as a representative
of the owner of the ship and carries out all essential duties and obligations required by the crew of
the ship.

Customs House Agents

The clearance of goods on Import or Export, including unaccompanied baggage, involves quite a
lot of procedural formalities under Section 46, 47, 50, 51 etc., These formalities have to be
observed by Importer / Exporter / Passenger, as the case may be. But in most cases the Customs
station would be far away and it may not be possible for the Importer / Exporter / Passenger to
attend to such work promptly. Unlike the work related to Central Excise or Income Tax, the
Customs formalities cannot be attended to leisurely, as clearance is allowed only after the
completion of formalities and payment of duty, where due. To meet this situation, a provision for
licensing Custom House Agents, to represent the Importer / Exporter for the clearance work, has
been made in the Customs Act 1962.

Stevedores
A Stevedore is a firm or individual engaged in the loading or unloading of a ship. Loading and
unloading of cargo, stacking or stowing them on-board the ship or on-shore, operating cranes,
derricks and various cargo-handling equipment are among the range of tasks performed by the
stevedore. With the introduction of containerisation, stuffing and de-stuffing of containers and the
related logistical activities are also performed by the stevedores.

Module3
Transportation
Transportation is the operation involved in the actual physical delivery or movement of products
from one place to another. It’s part of the larger system of logistics and considers factors such as
secured item packaging, best delivery route, and the most appropriate mode of transport.
The activities that facilitate the transport of products internationally are a subset of the logistics
industry. The logistics industry concentrates on planning activities that manage product movement,
as well as the necessary data and documentation for cost efficient cross border commerce.

Air Cargo
Air cargo is any property carried or to be carried in an aircraft. Air cargo comprises air freight, air
express and airmail.
Air cargo is another term for air freight. It is the carriage or the transportation of goods through an
air carrier. Transport services via air are the most valuable when it comes to moving express
shipments around the globe and it consists of air mail, air freight and air express.
Advantages of Air Transport:
 ❖ Speed and Efficiency: One of the key advantages of air transport is its unparalleled speed.
Airplanes can cover long distances in a matter of hours, enabling businesses to deliver
goods quickly, especially for time-sensitive orders. This swift transportation option is
particularly beneficial for industries such as e-commerce, pharmaceuticals, and perishable
goods.
❖ Global Reach: Air transport provides extensive global coverage, connecting businesses to
various destinations around the world. It allows companies to expand their customer base
and reach new markets, irrespective of geographical barriers. This enables businesses to
tap into international opportunities and access a broader range of customers.
❖ Reliable Timelines: Air transport operates on fixed schedules, ensuring reliable timelines
for delivery. Airlines maintain strict adherence to departure and arrival times, minimizing
delays and enhancing supply chain efficiency. This reliability is crucial for businesses that
require precise order preparation and fulfillment to meet customer expectations.
❖ Reduced Inventory Holding Costs: The fast transit times offered by air transport help
reduce inventory holding costs. With shorter lead times, businesses can maintain lower
inventory levels while still meeting customer demands. This frees up working capital and
minimizes storage expenses, contributing to overall cost savings.
❖ Enhanced Security: Air transport offers enhanced security measures compared to other
modes of transportation. Airports have stringent security protocols in place to ensure the
safety of cargo, including thorough screening processes and restricted access. This helps
protect valuable and sensitive products during transit, reducing the risk of theft or damage.

Disadvantages of Air Transport

❖ Higher Cost: One of the significant drawbacks of air transport is its higher cost compared
to other modes, such as sea or land transport. Air freight charges are generally higher due
to factors like fuel costs, infrastructure investments, and handling fees. Businesses must
carefully evaluate the cost-benefit analysis of air transport based on their specific needs
and budget.
❖ Limited Capacity: Airplanes have limited cargo space compared to ships or trains. This
limited capacity can pose challenges for businesses dealing with bulky or oversized
shipments. Air transport is best suited for high-value, time-sensitive goods that require
swift delivery, rather than large-volume shipments.
❖ Restrictions on Hazardous Goods: Air transport has strict regulations regarding the
transportation of hazardous goods. Certain hazardous materials or substances may be
prohibited from being transported by air due to safety concerns. Businesses dealing with
such goods need to comply with stringent regulations and find alternative transportation
methods if necessary.
Sea cargo
Also known as sea freight, ocean freight is the transportation of goods through the sea. That’s the
most common way of transporting goods across the world. Goods are loaded on shipping
containers, then loaded on the vessel at the respective port and transported to the port nearest to
the owner.

Advantages of Water Transportation

❖ Economical :Rivers are a self-contained roadway that requires no building or maintenance.
Even yet, the cost of building and maintaining canals is much cheaper if they are utilised
for purposes other than transportation, such as irrigation. Additionally, the cost of operating
water transport seems to be very cheap.
❖ Large Storage Capacity: Ships are the modes of transport that have a higher capacity for
transporting a larger amount of goods. This is particularly true when compared to other
modes of travel such as rail, truck, or aircraft. Water transport enables the transportation of
large and heavy items at a low cost.
❖ Safe Mode Of Transport: Weather delays the departure or arrival of an aeroplane on a
larger number of times, while ships can operate more readily in more complex or
unpredictable situations due to their durability, resistance, and dependability.
❖ Increased Product Diversity and Transportable Materials: Considered one of the most
notable features, we can observe how, in contrast to air transport (where, in several cases,
dangerous or liquid cargo is not permitted), the ability to transport all types of materials is
the only option when it comes to oil, liquids, and dangerous items that aeroplanes cannot
transport. If land transport is capable of loading such items, it cannot convey them through
intercontinental transport.
❖ Environmentally Friendly: Although it produces very little environmental damage, oil
leakage from tanks seems to be the primary issue with this method of transportation at
times. If we want a green world with the fewest CO2 emissions, water transport will win
since it typically has a lower carbon footprint. There is an exception if an oil spill is
included in the comparison.
Disadvantages of Water Transportation
❖ Sluggish and Time-Consuming: Water transport is a highly inefficient kind of transport.
Traveling or transporting things takes a lengthy time. Additionally, rivers are twisting. This
element must also be considered when predicting delivery dates, since the time needed –
particularly across large distances – is often more than that necessary for air/land transport.

❖ Reliability: Although air and land transit are delayed by weather conditions, they
nevertheless outperform water transport in terms of on-time arrival.

While a one to two day delay may not seem excessive, it may have a negative impact on a
company that requires replenishing products or has a client waiting on them, resulting in
lost revenue.
❖ Port Accessibility: In certain instances, ports are unsuitable for receiving cargo ships,
posing logistical difficulties during disembarkation. All ships require ports and
 infrastructures that are appropriate for their requirements and size; yet, in certain nations,
these types of facilities do not exist, resulting in delayed delivery.

❖ Journey Frequency: This may result in delivery delays or diversions; although certain
trips are much more commercial than the others and are often made on a regular basis,
others may take much longer to complete. And boats need more preparation time than
aeroplanes, vehicles, or railroads.

❖ Not Appropriate For Perishable Goods:Water transport is inefficient for delivering

perishable products due to the length of time required to reach the destination.
Carriage of goods by land
The carriage of goods by land is governed by two laws — the Carriage by Road Act, 2007 and the
Railways Act, 1890. According to the Carriage by Road Act, a common carrier can either be an
individual, person or an organization, which carries out the trade of transportation over the land
for the purpose of raising money.
Advantages of Road Transportation
1. Less Capital Outlay: A relatively much lower capital Investment is required in road
transport, compared to other modes of transport such as railways and air transport which
are much costlier. The cost of construction, operation and maintenance of roads is way
cheaper than that of the railways or air transport. Roads construction is a public sector and
primarily a jurisdiction of the Government and Local Authorities. Hence, only a miniscule
amount of revenue is charged for the use of roads.
2. Door to Door Service: The greatest advantage of road transport, that makes it the core
lifeline of the transport industry, is its ability to provide door-to-door, from source to
destination, warehouse-towarehouse, doorstep services. This is something no other mode
of transport can provide. This naturally reduces cartage expense, loading and unloading
expenses, and other associated feeder transport costs.
3. Service in Rural Areas: Road transport is most flexible and adaptable with an outreach
into the most remote areas that are inaccessible by rail, air or water. Hence, road transport
is most suited for carrying goods and people to and from rural areas which are not served
by rail, water or air transport. Hence, transport of cargo between large towns and small
villages is possible only through road transport.
4. Flexible Service: In road transport, routes and timings can be adjusted and changed to suit
individual requirements with ease. This naturally gives road transport a great edge over all
other modes of transport that follow rigid and inflexible time and route schedules.
5. Suitable for Short Distance: Road transport is the only transport that is viable,
economically and otherwise, for short distances. It is way more cost effective and quicker
to cart goods and people over short distances by road. Also, delays in transit of goods, due
intermediate loading and handling, can be avoided as goods can be loaded direct into a
road vehicle and transported straight to their place of destination. In other words,
intermediate handling costs and feeder connectivity costs can be eliminated.
 6. Lesser Risk of Damage in Transit: The risk of damage to goods is considerably lessened
due to the elimination of intermediate loading and handling of goods. Hence, road transport
is most suited for transporting fragile goods like chinaware and glassware, which risk
getting damaged or broken easily during the process of loading and unloading. One time
loading and unloading is the desired format for fragile goods. And road transport is the
ideal transport for this.
7. Saving in Packing Cost: The process of packing in road transport is less complicated and
much less elaborate. Cargo transported by road transport does not require to be over packed
to go through intermediate handling. Hence, less to no major packing is needed. Here again
the packing costs are much lower in road transport than in other modes of transport.
8. Rapid Speed: Road transport is most suited for speedy delivery. Water transport is very
slow. Air and rail transport requires too much documentation and formalities and
packaging. Also booking of the goods, and taking delivery of the goods, in case of railway,
air and water transport, takes up too much time and is very tedious. In contrast road
transport offers a quicker and a much more flexible and hassle free option.
9. Less Cost: Road transport is highly cost effective as compared to other modes of transport.
It requires a much less initial capital investment and also, the cost of operation and
maintenance is also relatively much less. Even though the rates charged by motor transport
companies is a little higher than that charged by the railways, the actual cost in the bigger
picture, falls much less when transporting goods by motor transport. This is because road
transport helps in saving in packaging costs, in the expenses of intermediate handling
charges, and in the feeder connectivity charges.
10. Private Owned Vehicles: A major advantage of road transport is that it allows big business
houses and companies to have their own motor vehicles and initiate their own road services
to market their company products, without much cost of maintenance or headache of
tedious formalities. Hence companies can have their own transport system running, without
encountering any delays, within their own space and time frame. This is an enormous
flexibility and advantage of the road transport.

11. Feeder to other Modes of Transport: No mode of transport other than road transport
offers doorstep services. Hence, whether cargo is transported via air, rail or water, the
movement of goods begins, and ultimately ends by road transport, that picks up cargo from
the source and delivers the goods to the final destination. Road and motor transport are the
feeder connectivity transport to all other modes of transport

Disadvantages of Road Transportation

1. Vulnerable to Season and Weather Impacts: Road transport infrastructure and travel is
vulnerable to weather changes and seasons. For instance, during rains or floods, roads
become unfit and unsafe for use. Hence, motor transport proves to be less reliable than rail
transport, in the event of volatile weather situations.
 2. Accidents and Breakdowns:There is definitely a high risk of accidents and breakdowns
in case of road transport. This makes motor transport not a very predictable or safe option,
as compared to rail transport.
3. Not the Best Option for Long Distance and Heavy Cargo: Road transport is not very
suitable for transporting low priced and heavy cargo over long distances as it proves to be
expensive.
4. Slow Speed:It is understood that road transport is not as fast as air or rail transport. Hence,
slow speed of road transport is a disadvantage and a deterrent.
5. Lack of Organisation and Structure: As an industry, road transport is a much less
organised or structured than its counterpart transport industries, air, rail and water, that are
way more organised and structured. Often, road transport is irregular and undependable.
The rates charged for transportation are also random, unstable and unequal. This lack of
organization and randomness is due to the multiple players and options prevalent in the
road transport industry.
Advantages of rail transport
1. Dependable: The greatest advantage of the railway transport is that it is the most
dependable mode of transport as it is the least affected by weather conditions such as rains,
fog etc. compared to other modes of transport.
2. Better Organised:The rail transport is better organised than any other form of transport.
It has fixed routes and schedules. Its service is more certain, uniform and regular as
compared to other modes of transport.
3. High Speed over Long Distances: Its speed over long distances is more than any other
mode of transport, except airways. Thus, it is the best choice for long distance traffic.
4. Suitable for Bulky and Heavy Goods:Railway transport is economical, quicker and best
suited for carrying heavy and bulky goods over long distances.
5.Cheaper Transport: It is a cheaper mode of transport as compared to other modes of
transport. Most of the working expenses of railways are in the nature of fixed costs. Every increase
in the railway traffic is followed by a decrease in the average cost. Rail transport is economical in
the use of labour also as one driver and one guard are sufficient to carry much more load than the
motor transport.
6. Safety : Railway is the safest form of transport. The chances of accidents and breakdowns
of railways are minimum as compared to other modes of transport. Moreover, the traffic
can be protected from the exposure to sun, rains, snow etc.
7. Larger Capacity:The carrying capacity of the railways is extremely large. Moreover, its
capacity is elastic which can easily be increased by adding more wagons.
8. Public Welfare: It is the largest public undertaking in the country. Railways perform many
public utility services. Their charges are based on ‘charge what the traffic can bear’ principle which
helps the poor. In fact, it is national necessity.
9. Administrative Facilities of Government: Railways provide administrative facilities to the
Government. The defence forces and the public servants drive their mobility primarily from the
railways
10. Employment Opportunities: The railways provide greater employment opportunities for both
skilled and unskilled labour. Over 16 lakh persons are depending upon railways for their livelihood
Disadvantage of rail transport
1. Huge Capital Outlay: The railway requires is large investment of capital. The cost of
construction, maintenance and overhead expenses are very high as compared to other
modes of transport. Moreover, the investments are specific and immobile. In case the traffic
is not sufficient, the investments may mean wastage of huge resources.
2. Lack of Flexibility: Another disadvantage of railway transport is its inflexibility. Its routes
and timings cannot be adjusted to individual requirements.
3. Lack of Door to Door Service: Rail transport cannot provide door to door service as it is
tied to a particular track. Intermediate loading or unloading involves greater cost, more
wear and tear and wastage of time.
4. Monopoly: As railways require huge capital outlay, they may give rise to monopolies and
work against public interest at large. Even if controlled and managed by the government,
lack of competition may breed inefficiency and high costs.
5. Unsuitable for Short Distance and Small Loads: Railway transport is unsuitable and
uneconomical for short distance and small traffic of goods.
6. Booking Formalities:It involves much time and labour in booking and taking delivery of
goods through railways as compared to motor transport.
7. No Rural Service : Because of huge capital requirements and traffic, railways cannot be
operated economically in rural areas. Thus, large rural areas have no railway service even
today. This causes much inconvenience to the people living in rural areas
8. Under-utilised Capacity: The railway must have full load for its ideal and economic
operation. As it has a very large carrying capacity, under-utilisation of its capacity, in most
of the regions, is a great financial problem and loss to the economy.
9. Centralised Administration: Being the public utility service railways have monopoly
position and as such there is centralised administration. Local authorities fail to meet the
personal requirements of the people as compared to roadways.
Containerization
Containerization is a system of intermodal freight transport using intermodal containers (also
called shipping containers, or ISO containers). Containerization, also referred as container stuffing
or container loading, is the process of unitization of cargoes in exports. Containerization is the
predominant form of unitization of export cargoes, as opposed to other systems such as the barge
system.
The containers have standardized dimensions. They can be loaded and unloaded, stacked,
transported efficiently over long distances, and transferred from one mode of transport to
another—container ships, rail transport flatcars, and semi-trailer trucks—without being opened.
The handling system is mechanized so that all handling is done with cranes and special forklift
trucks. All containers are numbered and tracked using computerized systems.

main advantages of containerization are:

• Standardization. The container is a standard transport product that can be handled
anywhere in the world (ISO standard) through specialized modes (ships, trucks, barges,
and wagons), equipment, and terminals. Each container has a unique identification number
and a size type code, allowing to be a unique transport unit that can be managed as such.

• Flexibility. Containers can be used to carry a wide variety of goods such as commodities
(coal, wheat), manufactured goods, cars, and refrigerated (perishable) goods. There are
adapted containers for dry cargo, liquids (oil and chemical products), and refrigerated
cargo. Discarded containers can be recycled and reused for other purposes.

• Costs. Container transportation offers lower transport costs due to the advantages of
standardization. Moving the same amount of break-bulk freight in a container is about 20
times less expensive than conventional means. Containers enable economies of scale at
modes and terminals that were not possible through standard break-bulk handling. The
main cost advantages of containerization are derived from lower intermodal transport costs.

• Velocity. Transshipment operations are minimal and rapid, and ship port turnaround times
have been reduced from 3 weeks to about 24 hours. Because of this transshipment
advantage, transport chains involving containers are faster. Container shipping networks
are well connected and offer a wide range of shipping options. Containerships are also
faster than regular cargo ships and offer a frequency of port calls allowing a constant
velocity.

• Warehousing. The container is its own warehouse, protecting the cargo it contains. This
implies simpler and less expensive packaging for containerized cargoes, particularly
consumption goods. The stacking capacity on ships, trains (double-stacking), and on the
ground (container yards) is a net advantage of containerization. With the proper equipment,
a container yard can increase its stacking density.

• Security and safety. The container contents are unknown to carriers since it can only be
opened at the origin (seller/shipper), at customs, and the destination (buyer). This implies
reduced spoilage and losses (theft).

The main drawbacks of containerization are:

 • Site constraints. Containers are a large consumer of terminal space (mostly for storage),
implying that many intermodal terminals have been relocated to the urban periphery. Draft
issues at the port are emerging with the introduction of larger containerships, particularly
those of the post-Panamax class. A large post-Panamax containership requires a draft of at
least 13 meters.

• Capital intensiveness. Container handling infrastructures and equipment (giant cranes,

warehousing facilities, inland road, rail access) are important capital investments that
require large pools of available capital. This requires the resources of large corporations or
financial institutions. Further, the push towards automation is increasing the capital
intensiveness of intermodal terminals.

• Stacking. The complexity of the arrangement of containers, both on the ground and modes
(containerships and double-stack trains), requires frequent restacking, which incurs
additional costs and time for terminal operators. The larger the load unit or the yard, the
more complex its operational management.

• Repositioning. Because of trade imbalances, many containers are moved empty (20% of
all flows). However, either full or empty, a container takes the same amount of space. The
observed divergence between production and consumption at the global level requires the
repositioning of containerized assets over long distances (transoceanic).

• Theft and losses. High-value goods and a load unit that can forcefully be opened or carried
away (on a truck) implied a level of cargo vulnerability between a terminal and the final
destination. About 1,500 containers are lost at sea each year (fall overboard), mainly
because of bad weather.

• Illicit trade. The container is an instrument used in the illicit trade of goods, drugs, and
weapons, as well as for illegal immigration (rare).

Intermodal Transport
Intermodal shipping refers to moving freight by two or more modes of transportation. By loading
cargo into intermodal containers, shipments can move seamlessly between trucks, trains and cargo
ships.
Intermodal freight transport involves the transportation of freight in an intermodal container or
vehicle, using multiple modes of transportation (e.g., rail, ship, aircraft, and truck), without any
handling of the freight itself when changing modes.
 The method reduces cargo handling, and so improves security, reduces damage and loss, and
allows freight to be transported faster. Reduced costs over road trucking is the key benefit for inter-
continental use. This may be offset by reduced timings for road transport over shorter distances.
In simple terms, intermodal transportation is defined as the movement of cargo from the point of
origin to its destination by several modes of transport where each of these modes have different
carriers responsible, each with its own independent contract.
Advantages of Intermodal transportation:
• Shippers can negotiate lower rates for each transport leg
• Benefit from flexibility and specialized handing of goods at different ports
• Reduce their carbon footprint by choosing environmentally friendly carriers
• More access to equipment, control capacities, and select transit schedules
Multimodal Transport
Multimodal transportation is a combination of at least two or more different modes, such as air,
sea, rail, or road, to move your cargo from one point to another using one single bill of lading for
the entire journey.
Multimodal transportation or multimodal shipping refers to logistics and freight processes that
require multiple modes of transportation. For example, one shipment may involve rail carriers, air
cargo freight, as well as a truck carrier. These are three modes of transport used in combination to
complete a shipment.
Since the movement can often be from country to country. But the contracted carrier issues a
Combined Transport Bill of Lading or a Multimodal Bill of Lading.
Though it includes the various modes and carriers for transportation, it also means the carrier is
fully liable for the entire carriage.
Advantages of multimodal transport:
• Shipment tracking efficiency – continuous monitoring with one transport carrier delivering
from door to door
• Access to remote parts of the world with responsibility and liability assumed by one
transport carrier
• Efficiency in delivery time and management
• Minimal logistics coordination at the expenses of a shipper
Difference blw intermodal & multimodal
• Contract
In multimodal transportation, one agreement covers the entire shipment journey, and in intermodal
transport, there is a separate contract for each mode of transportation. Intermodal permits the
shipper to select which contractors will deal with their cargo, while in the case of multimodal
transport, MTO gets to pick the contractor.
 • Responsibility of goods
In multimodal transportation, one carrier takes sole responsibility. It ensures door-to-door delivery,
even if multiple carriers are used on the journey. In intermodal transport, the burden of goods is
distributed among all participants involved in the transportation of goods. As a result,
accountability shifts from creating difficulty to upholding stringent quality control. Finding the
offender in cases of damaged products also becomes exceptionally challenging.
• Flexibility
Intermodal transportation allows the carrier contractor to choose the most appropriate
transportation mode. The mode choice in a multimodal transportation system depends entirely on
the service provider.
• Cost of transportation
Intermodal transportation deals with a new agreement for each mode of transportation, which
increases the overall fee of shipment for the contractor. In the case of a multimodal transportation
system, the initial cost of availing of such a service is high. Still, the overall package for the
consumer may be more cost-efficient than intermodal. Also, multimodal transportation gives better
routing efficiency than intermodal transportation.
• Rules and regulations
In the shipment of goods within a country, one need not worry about the government rules and
regulations, be it intermodal or multimodal transportation. If the point of origin and destination are
in two different countries in that scenario, shipment companies are required to create a contract
covering both governments’ rules and regulations. Since it has fewer complicated rules and
regulations, dealing with international transport is the ideal option. Additionally, several countries
need more infrastructure for multimodal transportation.
• Claims
In intermodal transportation, the carrier provides a bill of lading at each node, which shifts the
responsibility of the cargo to the next service provider. Therefore, the process can become
complicated during cargo claimants and get tangled in numerous conditions. However, in the case
of multimodal transportation, one contract is valid, and the service provider is entitled to
compensation in unfavourable circumstances.

• Documentation and Insurance

For multimodal transportation, generally, one bundle of documents is drawn up for all goods;
however, in the case of intermodal, several different documents are required for all participants
responsible for the carriage of products. Single umbrella insurance covers every mode of
transportation in the case of multimodal transportation when it comes to insurance. As we know,
intermodal transport requires a new contract for each leg of the journey, which increases the overall
cost of operation.
• Speed vs Cost
Both options are considered efficient when it comes to speed. However, multimodal transportation
is the best when commuters put more emphasis on speed than the cost of transportation. Intermodal
transport is cost-efficient, but planning a cost-efficient and fast route can take a lot of time and
effort. In the case of intermodal transportation, cost-effectiveness comes before speed.

Freight
In the supply chain, basic freight refers to the transportation charges associated with moving goods
from one location to another. The meaning of FREIGHT is the compensation paid for the
transportation of goods
A freight rate (historically and in ship chartering simply freight is a price at which a certain cargo
is delivered from one point to another. The price depends on the form of the cargo, the mode of
transport (truck, ship, train, aircraft), the weight of the cargo, and the distance to the delivery
destination. Many shipping services, especially air carriers, use dimensional weight for calculating
the price, which takes into account both weight and volume of the cargo.

Fapctors affecting freight cost

• Fuel Costs
Freight rates are closely related to fuel costs. When fuel prices increase, vessel owners either take
some losses or hike prices as ships become more expensive to operate. Losses will then be passed
to merchants and consumers, either in the form of a fuel component or indirectly.
• Supply and Demand
Freight rates also depend on demand, i.e. the volume of cargo that is ordered and shipped. If
demand is high and capacity limited, vessel owners may choose to offer space at a premium. Also,
for some types of cargo seasonality is an important factor. Fruits, vegetables, and grain that are
shipped during a certain period of the year will have higher freight rates.
• Distance to Destination
Distance or intended destination is also a factor that affects shipping rates. As a rule, the longer
the journey to the post of arrival, the higher the freight rates. In addition, if you ship cargo to an
isolated or remote location that is difficult to reach, rates are likely to be high. If your destination
is close to a major port or carrier’s hub, shipping costs will be lower.
• Service Charges
Port service charges and terminal fees affect shipping rates. Depending on your destination, you
may have to pay:
➢ Freight dues
➢ Pilotage, berth, canal, anchorage, lighthouse, and sanitation dues
➢ Customs duties
➢ Tugboat and dock fees
➢ Tonnage dues

• Type and Amount of Cargo

If your freight is difficult to ship, such as dangerous or oversized cargo, freight rates will be higher.
When shipping dangerous goods which require special storage, shipping, and handling, you will
be charged higher rates due to the need for special containers, skilled manpower, etc. You may
also have to pay demurrage and detention (D&D) and port storage charges
• Geopolitical Risks
Rough governments and the dangers of pirate attacks tend to push prices up along some routes.
Such routes which are vulnerable to piracy include the Strait of Bosporus, Bab el-Mandeb Strait,
Hormuz Strait, and surprisingly, the Suez Canal. These routes are considered riskier due to the
presence of terrorist sects and maritime pirates which is why vessel owners have to pay higher
insurance premiums.

Freight Management
Freight management is the process of overseeing and managing the delivery of goods. Freight
management is the entire process of managing freight movements transport. It ensures that
products get to their destinations efficiently.
Freight management is the process of efficiently and strategically moving freight across a network
from its point of origin to its desired destination using various modes of transportation,
intermediaries, and technologies.Freight management is a part of the logistics process, which
covers the whole supply chain operation from warehousing to supplier relationships and inventory
control.
Factors
• Carrier selection. If you’re using a third-party carrier, you need to pick the right one,
establishing rates, terms, and expectations.
• Route optimization. Find the most efficient route and choose the transport mode(s),
assigning vehicles, drivers, and balancing the load. This is important for the owned fleet as
your carrier will choose the best routes for you.
 • Documentation and regulations management. This includes preparing the appropriate
paperwork, insurance management, and ensuring the government compliance of goods and
transportation.
• Tracking and tracing shipments. This involves ensuring freight visibility and
transparency. A carrier usually provides vehicle tracking but you can also track each
package and container individually.
• Data collection and analytics. Gain insights from collected data and optimize the shipping
process.

Just - In- Time (JIT)

Just-in-time (JIT) is a smart approach to manufacturing and storing products. The method involves
producing and delivering goods only when needed.It is an inventory management method used for
reducing time within the production unit. In addition, JIT helps to increase efficiency and reduce
waste by ordering materials only when needed.
The four steps in the JIT (Just-in-Time) process include sourcing, production, delivery, and
continuous improvement. These steps involve efficient procurement, synchronized production,
timely delivery, and ongoing optimization to eliminate waste and enhance productivity.
Benefits of JIT (Just in Time )
• More cost-efficient production.
• Continuous quality improvement.
• Waste Elimination.
• Improve productivity.
• Improve supplier relationships.
• Improve storage space used.
• Reduce costs associated with storage.
• Reduce manufacturing time.
The main principles of JIT are called the Five Zeros:
• Zero Stock. At every step of the production process, products must arrive at just the right
moment of utilization. Otherwise, the resulting “waiting”, or even excess, inventory
becomes an immobilized asset, which absorbs company capital with no added value.
• Zero Delay. To increase flexibility, each step in the process should take the least amount
of time possible. Waiting for any product, part or information from any source must be
kept at a minimum.
• Zero Failure. All machines should ideally operate continuously with controlled
performance. Breakdowns cause delays and result in additional costs, which can be
minimized by implementing preventive maintenance on equipment with regular checks to
avoid unexpected issues.
 • Zero Defect. Part defects can require extra corrective processing or even result in
scrapping the part altogether, which is a loss of all material and invested efforts, or even
worse—client returns and damage to a company’s reputation. The Six-Sigma approach can
help with the goal of getting it “Right the First Time”.
• Zero Paper. Bureaucratic procedures and steps obviously weigh down manufacturing and
production processes. Fortunately, with modern digitalization tools, data collection can be
automated for increasing the efficiency of any administrative tasks.

Outsourcing of transportation and logistics services

Outsourcing logistics is when a company uses an external provider (aka a third-party) to handle
various supply chain functions. These can include a mix of shipping, storing, packing and/or
delivering a company’s physical goods, from raw materials all the way to the finished product.
Logistics outsourcing is when a company hires a third-party provider to manage various parts of
their supply chain operations.
First-Party Logistics: 1PL
First-party logistics (1PL) are the simplest of all shipping methods. 1PL means that the producer
supplies their product themselves, essentially becoming the producer, supplier, shipper, and
receiver of a good. Many retailers fall under this category. For example, a business that produces
t-shirts, ships them to their stores, then sells the shirts at their store is a 1PL.
Second-Party Logistics :2PL
One shortcoming of 1PL logistics is that the supplier must use their own transportation. For larger
businesses, this could mean owning and managing an entire fleet of trucks, planes, and ships. To
avoid the cost of having to run their own fleet, businesses often bring in a second party to ship for
them. For a fee, businesses can avoid the huge cost of keeping every step of the shipping process
in-house. This is an example of second-party logistics (2PL).
A 2PL is any business that focuses on transportation. Some great examples of 2PLs are UPS and
FedEx, two shipping businesses. A business could produce a good, sell the product online, and
ship it to the customer via UPS.
Third-Party Logistics :3 PL
In order to avoid 2PL inefficiencies, businesses often choose to bring in a third-party logistics
(3PL) partner. 3PLs provide complex logistics services to keep supply chains running smoothly.
In a 3PL partnership, the business maintains control and management over the supply chain while
the 3PL finds ways to improve the supply chain. Think of this as outsourcing logistics.
Amazon is a prime example of a 3PL. Merchants can create their goods and sell them online. After
that, Amazon takes care of the rest, including shipping, warehousing, and reverse logistics.
Fourth-Party Logistics: 4PL
Fourth-party logistics (4PL) is similar to 3PL, but it takes things a step further. If you choose to
use a 4PL provider, you’ll be surrendering control of your entire supply chain and letting the 4PL
take over.4PL partners also work on your behalf with other businesses. They may notice that a
store you’re supplying products to is running low, and then negotiate a larger contract for you to
produce and provide more. 4PL providers also manage supply chains for other businesses, and by
pooling all their resources together, can reduce shipping and warehousing costs even further.
Fifth-Party Logistics: 5PL
While most businesses won’t make use of fifth-party logistics (5PL), it is worth knowing what
they do.Going beyond 4PLs, 5PLs manage every step of the supply chain, from production to
delivery. The goal is to create the most efficient supply chain possible by making each individual
step as efficient as it can be. Because of the size and scope of this PL partner, 5PLs are only going
to be the best option for some niche industries.

Multimodal transport in India

Multimodal transport is the movement of good from point A to point B using different modes of
transport by a single transport operator.The Multimodal Transportation of Goods Act, 1993
(MMTG) provides for the regulation of Multimodal Transportation of Goods from any place in
India to any place outside India involving two or more modes of Transport on the basis of a single
Multimodal Transport Contract.
Multimodal Transport Operators (MTO)
A multimodal transport operator is a person or an organization who engages in the transportation
of goods using multiple modes of transportation under the multimodal transport contract.
A multimodal transport operator is one who handles the transport of cargo from its origin to the
final destination by different modes of transport. The cargo that is transported thus will usually go
under a single transport contract or bill of lading.
MTO registration in India refers to the process of registering a company with the Indian
government as a Multimodal Transport Operator (MTO). They can include shipping lines, freight
forwarders, and Non-Vessel Operating Common Carrier Operators (NVOCC) who issue bills of
lading on their behalf.
Currently, there are more than 15 Private Freight Train Operators (PFTOs) in India with major
companies such as Hind Terminals, DP World, Adani Logistics, CWC all moving their own trains.
Indian Railways has also allowed PFTOs to run their own Private Freight Terminals (PFTs),
✓ IRC group is an end to end multimodal integrated logistics company. IRC group
multimodal facility combines Sea, Air, Road and Rail shipping services for providing
doorstep delivery and increased savings on every shipment. We are MTO registered
multimodal transport operator by combining sea, air and road transportation shipping
services we further aid you in minimizing destination warehouse rent charges.
 ✓ MG Logistics Private Limited is a fast-growing international freight forwarding company
registered in India. We have started our operations in 2009 and have been established as a
well-known logistics service provider in India. We offer professional and cost effective
logistics solutions to companies across the globe.
✓ Darcl is one of India’s foremost end to end Transport and Logistics Companies, performing
diligently with an expertise evolved over last two decades.
✓ Gati, founded in 1989, is India’s pioneer in Express Distribution and supply chain
solutions, with a strong presence in Asia Pacific region and SAARC countries, along with
an extensive network across
✓ V-Trans India Ltd. Provides single window logistics solution to our clients, through our
hard freight V-Trans division, our express V-Xpress division, and our logistics V-Logis
division
Integrated logistics
Integrated logistics is a business management model that is increasingly used to accelerate product
delivery and improve customer service. In this model, all departments, processes and resources are
aligned to work in perfect sync and operate as one cohesive unit.
An integrated logistics system has five key components. These are planning: materials handling,
warehousing and storage, utilization and packaging, inventory management, transportation, and
control and knowledge.
Integrated logistics coordinates the entire supply chain activities including raw material sourcing
and transportation, inventory management, warehousing, packing and dispatch, shipping of
products, and last-mile fulfilment as well as reverse logistics.
Therefore, the integrated logistics architecture on the one hand provides for the correct
management of warehouses, transport and materials. On the other hand, it integrates with different
functions of the business process. For example:

Production function
✓ Production planning
✓ Optimisation of material supply flows
✓ Organisation of storage areas
✓ Material handling systems
Supply function
✓ Selection and control of suppliers
✓ Purchasing planning
Marketing function
✓ Correct definition of services
✓ Packaging design
 ✓ Marketing campaigns design

Module 4
Ware housing
Warehousing is the process of storing physical inventory for sale or distribution. Warehouses are
used by all different types of businesses that need to temporarily store products in bulk before
either shipping them to other locations or individually to end consumers.
Warehousing is a process of storing goods in a warehouse for the purpose of distribution, sale, or
manufacturing. Warehouses are used for storing goods for an extended period of time and are
typically equipped with storage areas, loading docks, conveyors, and other material-handling
equipment.
The functions of warehousing include proper warehouse setup, receiving goods efficiently, storing
temperature-sensitive products correctly, picking and packing in a streamlined way, and
monitoring warehouse

Warehouse Management System (WMS)

A warehouse management system (WMS) is a set of policies and processes intended to organise
the work of a warehouse or distribution centre, and ensure that such a facility can operate
efficiently and meet its objectives.
Warehouse management system is software that helps companies manage and control daily
warehouse operations, from the moment goods and materials enter a distribution or fulfillment
center until the moment they leave.
A warehouse management system (WMS) consists of software and processes that allow
organizations to control and administer warehouse operations from the time goods or materials
enter a warehouse until they move out.
Warehouses sit at the center of manufacturing and supply chain operations because they hold all
of the material used or produced in those processes, from raw materials to finished goods. The
purpose of a WMS is to help ensure that goods and materials move through warehouses in the
most efficient and cost-effective way.
A WMS handles many functions that enable these movements, including inventory tracking,
picking, receiving and putawayi. A WMS also provides visibility into an organization’s inventory
at any time and location, whether in a facility or in transit.
logistics.processes

Receiving Putaway Storage Picking Packing Shipping

✓ Receiving
Receiving is one of the most important processes in warehousing. It involves a lot of activity, and
any disruption in this step can have an impact throughout the entire operation. First, the goods
received are checked with the supplier’s packing document. Then the goods are inspected for
damage. If there is any physical damage, a thorough investigation of all of the goods in the
shipment is carried out. After inspection, the goods are taken to the putaway area.
✓ Put away
Put away is the process of moving the goods from the receiving area to the place where they will
be stored. This process involves calculating the resource and space requirements for each item.
Goods that are similar to each other are usually stored together so that they can be located and
distributed easily. The operators handling the putaway process confirm that the correct storage
location has been found and place the goods into their assigned slot before confirming the
completion of the process.
✓ Storage
Storage is the warehouse process in which goods are placed into their most appropriate storage
space. When done properly, the storage process fully maximizes the available space in your
warehouse and increases labor efficiency.
✓ Picking
Picking consists of collecting articles according to a customer’s order before shipping them.
Picking uses a huge amount of resources and usually takes 60% or more of the warehouse’s staff
to perform the process. This means that it has a significant influence on your supply chain’s
productivity.
✓ Packing
Packing consists of combining all the items in a sales order together and getting it ready for
shipment. This process involves packing the items in a suitable container, weighing the packed
order, printing relevant labels, and selecting the right courier service to complete your delivery.
✓ Shipping
Shipping is the process of dispatching your orders to their respective customers. The shipped goods
are packed early to avoid cluttering in the staging areas which will lead to late deliveries and
confusion. The process is aligned with the carrier pick up times.

Benefits of Warehousing
1. Production support
One of the ways to reduce your lead times is through consistent and timely production support.
Warehouse facilities have warehousing space and transport logistics expertise, enabling you to
safely store your inventory until you require it. When the time comes when you need your
inventory, your merchandise can be delivered where you need it.

2. Opportunity to expand
When you are not restricted by the need to store all your inventory, materials or components at
your manufacturing facility, you can focus on your core business which is producing your
products. When you outsource your storage to a warehouse, your business can use its existing
space for product development and process involvement.
3. Minimise business risk
When your goods are stored in a warehouse, they are insured at the risk of the warehouse owner.
Keeping your inventory at an off-site warehouse will minimise inventory loss from issues such as
damage, theft, fire, etc. These risks are transferred to the warehouse.
4.Control Over Products
Keeping all of your product stock in a warehouse space allows you to maintain control over it.
You can leverage inventory control, get rid of outdated products, and pack orders in a centralized
location
5.Improved Workflow
Using warehouse logistics to manage orders improves the workflow of your entire facility. By
monitoring your operations over a specific period of time, you can quickly uncover
inconsistencies. This enables you to dedicate time and attention to resolving any such issues.
6.Faster Shipping and Delivery
Packing your products up in the same warehouse space they were received in allows shipping and
distribution to effortlessly handle their part. Customers expect fast turnarounds, and by eliminating
lag time, you’re likely to win repeat business.
 ✓ Reduce costs for inventory storage, space, and equipment
✓ Reduce inventory carry costs and interest for products and insurance
✓ Improve accuracy and availability of inventory
✓ Temperature and environmentally controlled environment for storing goods
✓ Reduce shipping and transportation costs
✓ Effectively manage increased sales and order fulfillment tasks

Types of ware houses

1. Public Warehouse
A public warehouse is a warehouse owned by governmental entities that are available to private
sector companies. These types of warehouses can be rented out for business or personal use. Public
warehouses are an especially attractive option for business owners that might need to only store
inventory for a short amount of time as other warehouse options might be more expensive. Public
warehouses are commonly used by new or growing businesses, such as e-commerce companies
and startups, due to their affordability versus a private warehouse.
2. Private Warehouse
Another popular warehouse option is a private warehouse, oftentimes referred to as proprietary
warehousing. While a public warehouse is owned by a government body or a third-party, private
warehouses are owned by a company division. If a business is interested in a private warehouse
they will need to make a large upfront investment to secure the building, facilities management,
and general maintenance and upkeep. Private warehouses are a popular option for wholesalers,
distributors, and manufacturers. While a private warehouse is a more expensive option than a
public warehouse, they offer business owners more overall control of their inventory management.
3. Smart Warehouse
An increasingly popular warehouse option is a smart warehouse, which is a warehouse where the
storage and fulfillment processes are automated with AI, such as robots and drones. The AI is
responsible for packing, weighing, transporting, and storing raw materials, with many incoming
orders being automated to be fulfilled immediately. Smart warehouses have been a go-to option
for large e-commerce companies such as Amazon that seek to make their order fulfillment and
inventory management a more accurate and expedited process.
4. Cooperative Warehouse
A cooperative warehouse is a warehouse owned by multiple organizations or businesses. These
companies tend to work closely together and access to the cooperative warehouse can save money
for both companies. Cooperative warehouses are especially common among farmers or wineries,
as these businesses can easily store their products in a mutual space. Both businesses that utilize a
cooperative warehouse can reduce their spending for inventory storage, increasing all of the co-op
member’s profits in the long run.
 5. Consolidated Warehouse
Consolidated warehouses are warehouses that collect small shipments from numerous different
suppliers into one geographical location to combine them into a bigger, thus more economical,
shipping load to one area. The grouping together of these smaller shipments is an attractive feature
for companies that might not have a very large amount of inventory, such as new companies or
startups. The only caveat of this warehouse type is that these shipments will need to be intended
for only one area, which might be restrictive for companies trying to expand.

6. Bonded Warehouse
A bonded warehouse is a type of warehouse that stores imported goods before customs duties are
completed and paid for the products. Customs clearance can be an extensive process, and bonded
warehouses provide a safe space for these goods in the meantime. Government bodies provide
businesses a bond to rent the space to ensure the business doesn’t suffer from any loss of profits
once products are ordered. These features of bonded warehouses can be attractive for importers
that might need short-term or long-term storage for items that would usually be restricted.
7. Government Warehouse
A government warehouse is owned by the government that is available for either public or private
businesses to use. Government warehouses are often seen as a more ideal option than public
warehouses as they tend to have increased security, which might be a necessity for certain products
or goods. While the increased security of the facility is an appealing option, government
warehouses tend to involve an intense application and extensive paperwork to store products in
those facilities. Another drawback of government warehouses occurs in the case of a business
failing to pay their rent, as the government can easily dispose of inventory to recover that rent.
8. Cold Storage Warehouse
A cold storage warehouse is a warehouse used for the storage of temperature-sensitive products.
Cold storage warehousing might include an entire building or even a specific portion of a
warehouse that can accommodate these goods. Cold storage warehouses have regulated
environmental conditions to ensure inventory is safe and no losses are suffered before goods are
delivered. While cold storage warehouses seem like any other warehouse from the outside, they
have vastly different inner workings to provide a safe space for these goods.
9. On-Demand Warehouse
With the increase in online commerce, on-demand warehousing has only become more popular.
On-demand warehousing, or on-demand storage, is warehousing provided to businesses that need
to connect to companies with an excess of warehousing space. Since the company utilizing the
warehouse might not need the extra space, on-demand warehousing provides an attractive option
to businesses that might need storage for temporary or seasonal needs for the warehouse. Similar
to cooperative warehouses, on-demand warehouses are great for merchants that are willing to
combine their inventory needs.
 10. Distribution Centers
Distribution centers are built around the premise of taking large quantities of inventory in for the
purpose of moving it out to retailers and merchants relatively quickly. Products move within a
distribution center much more than a typical warehouse. Distribution centers are different from
fulfillment centers, as fulfillment centers are typically used by third-party logistic companies rather
than businesses or companies. Products stored in a distribution center are moved around quickly
within a supply chain. Distribution centers are paramount to the connection between suppliers and
customers and are not simply for inventory storage but rather distribution, order fulfillment, and
shipment preparation.
Warehouse location
Choosing an accurate location for the warehouse is one of the most critical decisions to
make.Warehouse location strategy plays an integral role in helping your supply chain run
smoothly. It also helps in location, tracking movement and position of inventory within the
warehouse’s premises. Warehouse location strategy helps in updating your ERP in a real-time
relationship as well as assisting with the management of staff.

Warehouse location means the location that is most suited for the company that will add up to their
benefit. This location is carefully chosen by taking all the required criteria into context.
✓ Structure and layout of the building
The optimal way to structure, the building is to design it according to the activities that will be
taking place inside the organization. You should always keep in mind that an old building could
not sustain the flow of raw materials. Whereas a newer building can maintain a smooth flow in
carrying materials.
✓ Availability of trained workers
Getting a building at a certain remote location will obviously come at an effective price rate but at
the same finding trained workers in such a place will not only be difficult but also very challenging.
On the other hand, if you think of shifting your whole bunch workforce to a remote location it will
cost a lot of money. Either way, it will lead to an unsustainable failure of the organization.
Therefore, it is advisable to purchase your warehouse in a certain area that can provide you with
an adequate workforce with various skills. This will help you hire workers for all kinds of activities
related to your organization.
✓ Customer base and zoning
While considering this factor you need to determine the intensity of the operations that are going
to be conducted in the organization and what future it holds. If your organization requires light
assembly, then you can ahead with choosing a location with much lesser intensive use. However,
some other factor that can also affect the zoning is noise levels, emissions, and outdoor storage
availability. These elements also target the districts that you will consider for conducting future
operations.
✓ Accessibility to major linkages
After identifying the most suited means of transport for your company, you need to choose the
location of your warehouse accordingly. You need to cross-check whether the location has easy
access to your preferred means of transport. Transportations means are very important when it
comes to business organizations.
✓ Material handling capacities
Another Selection criteria for warehouse location that you need to consider is the material handling
capacity of the location is the availability of staging capacities and handling equipment. For
instance, if a truck is a primary model, then you need to make sure that you have the depressing
docks. You need to identify whether there is a need for internal docks. The highly intensive
distribution will certainly require cross-docks. You need to determine whether the building has
enough storage facilities. This will help you identify the material handling capacity of your
warehouse.
✓ The size of your warehouse
The size of the warehouse is a definite criterion that you will have to consider no matter what. The
whole inventory stock and the flow of the raw materials depends upon this. With these, you can
determine what and how much your inventory you can accommodate in the building. This is also
linked with the material handling capacity. The material handling capacity to some extent depends
upon the size of the warehouse. Your warehouse should be capable enough to accommodate the
required equipment and inventories according to your business needs. For every startup business
or company, it is very essential to determine whether there is enough space for further expansion
in the future. This will save you all the time and money when your business at a high peak of
success. You do not have to worry about the space then if you already have enough room, to begin
with.
✓ Rules and regulations
Before you go on buying the warehouse, you should be aware of all the rules and regulations along
with the legal aspects prevalent in that particular area. Many areas do not allow the storage of
certain items. It is always recommended to avoid the goods that are not allowed to avoid any future
problems. You should abide by the rules and regulations of the area if you want to conduct a hassle-
free and successful business in that particular area.
✓ Taxes and rent rates
The cost has to be a critical criterion when it comes to selecting an accurate location for the
warehouse of the organization. There is a certain hidden cost that negatively influences the cheap
lease rates and therefore the factors relating to cost should always be considered in any aspect of
the business.
 ✓ Market and environmental factors of the locality
Proximity to market, producers, and suppliers that are being served along with environmental
factors of the area should be considered. Any new warehouse that is set up should be close to
important customers, suppliers, and producers. This will decrease the transportation costs, reduce
the lead times considerably, enhance responsiveness, etc. the main factor is to determine who are
the important supply chain personnel and to make the particular supply chain efficient for
Warehouse location planning.

Warehouse Manager

Warehouse managers supervise deliveries of goods into warehouses and ensure products are
accounted for, are stored safely and securely, and are despatched efficiently to customers. They
also manage warehouse staff, which includes ensuring that they are working safely.

Typical duties include:

✓ Processing orders.
✓ Operating mechanical and IT systems.
✓ Operating machinery, such as forklifts and pickers, and ensuring it is in working order.
✓ Liaising with transport companies, suppliers and clients.
✓ Supervising use of specialised storage, such as refrigeration.
✓ Training, supervising and appraising staff.
✓ Maintaining statistical and financial records.
✓ Devising and monitoring rotas for staff.
✓ Ensuring that quality objectives and delivery deadlines are met.
✓ Managing budgets.
✓ Administering stock control.
✓ Keeping health and safety records, and ensuring compliance with health and safety
legislation.
✓ Investigating accidents and troubleshooting problems.
✓ Managing inventory and ensuring accurate stock levels
✓ Developing and implementing warehouse processes and procedures
✓ Organizing and maintaining warehouse layout to optimize space utilization
✓ Supervising and training warehouse workers
✓ Ensuring compliance with safety regulations and best practices
✓ Coordinating with other departments such as procurement and transportation to fulfill
orders
✓ Tracking and analyzing warehouse metrics to identify areas for improvement
✓ Managing the receiving, sorting, packing, and shipping of goods
✓ Implementing changes to improve warehouse efficiency