Roll No.

:180201119; 180201015

Study of Freight Forwarding, 3PL Operations and

Efficiency of LCL Transport vehicles

By

KARTHIKEYAN S HARSHIT MISHRA

180201119 180201015

June, 2019

i
 Study of Freight Forwarding, 3PL Operations and
Efficiency of LCL Transport vehicles

By

KARTHIKEYAN S HARSHIT MISHRA

180201119 180201015

Under the guidance of

Ms. Janet Jacob Dr. Santanu Roy

HR Officer Program Chair, Operations
Freight Systems IMT, Dubai

June, 2019

ii
 Certificate of Approval

The following Summer Project Report titled "Study of Freight Forwarding, 3PL
operations and Efficiency of LCL Transport vehicles" is hereby approved as a
certified study in management carried out and presented in a manner satisfactory to
warrant its acceptance as a prerequisite for the award of Post-Graduate Diploma in
Management for which it has been submitted. It is understood that by this approval
the undersigned do not necessarily endorse or approve any statement made, opinion
expressed or conclusion drawn therein but approve the Summer Project Report only
for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner

2. PG Summer Project Co-coordinator

iii
 Certificate from Summer Project Guides

This is to certify that Mr. Karthikeyan.S and Mr. Harshit Mishra, students of the
Post-Graduate Diploma in Management, has worked under our guidance and
supervision. This Summer Project Report has the requisite standard and to the best of
our knowledge no part of it has been reproduced from any other summer project,
monograph, report or book.

Dr. Santanu Roy Ms. Janet Jacob

Program Chair, Operations HR Officer
IMT, Dubai Freight Systems
Jebel Ali, U.A.E.

Date: Date:

iv
 Abstract

Freight Systems is an International Freight Forwarding Company that was established in the year 1988 with
the motive to provide complete logistics solutions to its customers. It is located in more than 16 countries
worldwide. The Company ventures into providing Logistics Solutions to its Customers. Over the past few
years company is running as third party logistics provider in UAE. Freight Systems has following Verticals
1. Freight Forwarding -: In freight forwarding company operates for following type of cargo
i. Sea Freight
ii. Air Freight
iii. Clearance
iv. Third Party Logistics Solutions
v. Fine Arts Logistics
vi. Perishable Logistics

2. INTEREM -: INTEREM operates as service provider for home relocations in the region.

3. New age software solutions -: It provide Software Package to different Logistics Solution provider.
They developed e-Freight Suite which helps in company to efficiently perform customized operations for
their customers.
Main functions in FSL are Freight forwarding, Relocations (INTEREM), Third Party Logistics and
Providing Software solutions for Freight Forwarders. Operational divisions in FSL are 3PL warehousing,
Sea Freight, Air Freight, Sales, HR, Customer service, NVOCC, Credit control, IT. In FSL, LCL import
shipment is major revenue generator as many consignees will be there for a single container and profit is
obtained from each and every one of them. Along with FCL and LCL shipments, it also deals with Break
bulk shipments.
The company is using e-Freight Suite ERP system which is developed by the team of New Age Software
Solutions. e-Freight Suite is helping organization achieve efficiency in providing greater service to its
customers.

LCL Shipment is major business contributor section revenues in Freight Systems. Freight system’s
excellence lies in providing end to end solutions. For the road transport of shipment Freight Systems is
using Seven Pickup vehicles of which six are being rented on contract from Emirates Transport Company.
There are six vehicles of three ton capacity of which five are from Emirates Transport Company. One
vehicle of seven Ton capacity is being used which is being rented from Emirates Transport Company
(ETS). These Pickup are used for LCL Import, Export as well as for Clearance purposes. The Vehicles are
used such that if possible consolidation is done so that the cost of operation is reduced.

Freight Systems tried to use Software Solutions for the purpose of these scheduling but the person assigned
for these jobs usually are not well aware and fit to work on this software. Hence Freight Systems uses
manual recording and scheduling of the pickup trucks. Manual Scheduling lead to various problems such as
underutilization of the Freight System’s own vehicle. While Observing and studying the process of
recording and scheduling we found out various discrepancies which lead to inefficient operations.
Major findings are
 The 7 Ton vehicle is performing badly in terms of operational efficiency because it is mostly used
for export jobs.
 FSL’s own 3 ton vehicle is performing bad again due to large amount of free trips (exports).
 In all these months analyzed of all 3 ton vehicles 3 vehicles are always over performing which means
they are recovering the losses.
 7 ton vehicle is always underperforming and this issue needs to be addressed.
v
 Acknowledgement

The internship opportunity we had with ‘Freight Systems’ was a great chance for learning and
professional development. Therefore, we consider ourselves very lucky as we were provided with
an opportunity to be a part of it. We are also grateful for having a chance to meet so many
wonderful people and professionals who led us through this internship period.

The accomplishment of this study was made with the help and direction of Dr. Santanu Roy,
who has been always supportive and has helped in solving the confusions. He also guided us
by explaining various principles in freight forwarding and logistics. He is a wonderful person
who has been a great mentor and a support system to us.

We are using this opportunity to express our deepest gratitude and special thanks to the Mr. David
Philips and Mr. Viji John who had allowed us to be part of this internship which is very broadly
structured to make us learn about different aspects of the business.

We express our deepest thanks to Mr. Farok Hanif, Mr. Joseph Dsouza, and Mr. Prasad Gopinath,
Mr. George Michael, Mr. Anil Kumar for taking part in useful decision & giving necessary advices
and guidance and arranged all facilities to make learning easier. We choose this moment to
acknowledge their contribution gratefully.

It is our radiant sentiment to place on record our best regards, deepest sense of gratitude to Mr.
Arun Poduval, Mr. Arun Antony, Mr. Kaushik Nagamalla, Ms. Bhawana Thapa and Mr Hari
Prasanth for their careful and precious guidance for B2B sales which were extremely valuable for
our study both theoretically and practically.

We express our deepest thanks to Mr. Senthil Nathan for placing trust in us and giving us the
opportunity to help understand an operational issue with LCL transport. We would like to
acknowledge your efforts in arranging the resources needed for us in this study about problem and
providing with an analysis of the core problem and come up with suggestions to improve it.

We express our deepest sense of gratitude to Ms. Nikita Figueirado and Ms. Janet Jacob for
crafting this wonderful learning experience. The meeting scheduled for us over the course of last
two months helped immensely in getting deep insights about Freight System’s multidimensional
business. We would also like to thank the office staff who had helped us always and are friendly.

Karthikeyan.S Harshit Mishra

Signature Signature

vivi
 Table of Contents
Page no.

Abstract v
Acknowledgement vi
Table of Contents vii
List of Figures viii
List of Tables ix
List of Abbreviations x

I Introduction 1

II Air Freight 2
2.1 Air Export 2
2.2 Air Import 8

III Sea Freight 9

3.1 Sea Import 10
3.2 Transshipment 10
3.3 Sea Export 10

IV Customs Documents 11

V Third party logistics 12

5.1 Inbound 12
5.2 Outbound 14
5.3 Stock counts 16

VI Sales and Customer service 17

6.1 NVOCC 18

VII e-Freight Suite 20

VIII Study of efficiency of LCL Transport vehicles 21

8.1 Abstract 21
8.2 Objective 22
8.3 Methodology 22
8.4 Analysis 22
8.5 Key findings 23
8.6 Recommendations 25

IX Key Learnings 26

References 27

vii
 List of Figures

Figure No. Description Page

1 Incoterms 2010 9
2 FSL Warehouse 12
3 Life cycle of customers 17
4 Difference between FCL and LCL 21
5 Revenue generated by 7 ton outsourced vehicle 24
6 Revenue generated by 10 ton outsourced vehicle 25

viii
vii
 List of Tables

Table No. Description Page

1 Different segments in FSL 1

2 FSL Truck details 21
3 Month wise vehicle’s profit percentages 23
4 Operational efficiencies of vehicles 24

ix
 List of Abbreviations
3PL – Third Party Logistics
ASN – Advanced Ship Notice
ATA – Agent transfer authority
AWB – Air Way Bill
BL – Bill of Lading
BOE – Bill of Entry
CAN – Container Arrival Notice
CFS – Container Freight Station
CH – Cargo Handler
COO – Country of Origin
CSGF – Customs standard guarantee fee
CTO – Cargo Terminal Operator
CUBF – Customs bond fee for cargo transfer
DNATA – Dubai National Air Transport Association
DO – Delivery Order
FCL – Full Container Loads
FF – Freight forwarder
GHA – Ground Halting Agent
GRN – Goods Received Note
HAWB – House Air Way Bill
HBL – House Bill of Lading
IDG – Instruction for Dispatch of Goods
JAFZA – Jebel Ali Free Zone Area
LCL – Less than Container Loads
LGP – Local goods gate pass
MAWB – Master Air Way Bill
MBL – Master Bill of Lading
MDN – Material discrepancy note
NVOCC – Non-Vessel Operating Common Carrier
OBL – Original Bill of Lading
POD – Proof of Delivery
RFQ – Rate for Quotation
SO – Shipment Order
SOLAS – Safety of Life at Sea
TEU – Twenty-foot Equivalent Unit
THC – Terminal Handling Charges
VGM – Verified Gross Mass

x
 Chapter I
INTRODUCTION

In FSL, LCL import shipment is major revenue generator as many consignees will be there for a single
container and profit is obtained from each and every one of them. Along with FCL and LCL shipments, it
also deals with Break bulk shipments.
Some of the segments in FSL are:

01 – FCL export 22 – Courier import

02 – FCL import 23 – Courier export
03 – Ocean clearance 65 – Handling In
04 – LCL export 66 – Handling Out
05 – LCL import 67 - Storage
12 – Air export 68 – Value added service
13 – Air import 70 – LCL cross country
14 – Air clearance 73 – FCL cross country
V5 – Vanguard logistics import
Table 1: Different segments in FSL

These segments are divided for easy identification of the type of job and for generating reports like % profit
share, revenue generated, No. of bookings, No. of jobs created in the past year, Invoice, etc.
We were assigned to every department of FSL over the course of two months where we were able to learn
about each and every process involved in freight forwarding, 3PL solutions, and warehousing operations.
We were able to get practical knowledge and assisted in the operations. We were also given a project to
analyze and present the findings about how efficient is their LCL transportations which gave more insights
in logistics and supply chain. We will discuss about every department and our learnings from that in the
further chapters.

11
 Chapter II
AIR FREIGHT

Main customers – LG, Mobis (Hyundai, Kia)

Locations –DCV (Cargo village), DWC (Dubai World Central) and Terminal-2 (DAFZA)
Types of AWB
HAWB – House Air Way Bill – Contains Actual shipper and consignee
MAWB – Master Air Way Bill – One agent to another agent (agent has to do custom clearance in both
airport and gives to customer)
In one MAWB many HAWB can be there. HAWB is different for different customer
HS code (Harmonized System) – Used to classify different types of goods in different categories so as to
ease global trade. Each country agrees to classify its tariff and duty according to HS code.

2.1 AIR EXPORT

In FSL Air Export is being facilitated by teams at DWC and Cargo Village. The teams are supported by
Jebel Ali Head office. The work of these teams at DWC and Cargo Village is to help in documentation
process upon receiving instructions from Customer service representative about a particular cargo export.

The Process followed for Air Export are as follows:

Sales Prepare Check

Order Airway Authorization
Bill Letter

Loading & Check

Prepare the Export
Delivering Documents Permissio
n

 Commercial Invoice
 Packing List
 Certificate of Origin
 If LC based Shipment then
LC documents

2
The parties involved in whole transportation chain are as follows:
1. Manufacturer or distribution center as the shipper
2. A freight forwarder to cover ground transportation, arrange for door-to-airport transfers at
origin and airport-to-door deliveries at destination
3. An airline
4. Customs authorities
5. A customs broker when required (this function is usually taken care of by the freight
forwarder)
6. Other relevant authorities when shipping items such as agricultural products, food or
pharmaceuticals
7. A trading company as consignee
Freight Systems provides solution for all the intermediate processes in transportation chain. The solution
for customers are optimized for their specific needs and Freight Systems consider it as their core
competency.

During the process following things need to be taken care of:

1. Packing should be suitable and correct labelling is done.
2. Freight Charges are based on Chargeable weight, derived from the comparison of actual
and volumetric weight, whichever is higher.

Chargeable Weight = (Length*Width*Height*No. of Packages)/6000

AWB for some airlines are kept in stock (Ex. EK). If not mail is sent to airlines for getting AWB or
CALOGI – dnata software is used to get AWB from adhoc stock.
Rates are fixed not unlike passenger flight where price fluctuates. Only if space is available booking is
done.
Examples for some cargo airlines in Dubai – Emirates sky cargo, dnata handles all cargo except Emirates
sky cargo, Cargolux, etc.
Steps involved in Air Freight department in FSL:
Booking No. generated by customer service  Selection of Airlines  AWB is generated either using
stock or CALOGI or through mail  BOE is passed  Exit form is passed  Stickers are printed 
Customs inspection (if needed) is booked  Dock booking  Sending cargo

3
Documents required:
 AWB example

Importer code Agent code Rep card no.

065 3259 3142 /CMN (Casablanca, Morocco)
 Delivery advice contains the following details: AWB no., COO, Value, Payment method,
Description of goods, weight, Volume, quantity, type (Ex. Pkgs, cases), Exit point, and destination.
 HS code form includes: HS code, Description of goods, COO, Pcs, Weight, and Amount
 Commercial invoice
 Dubai customs clearance forms (BOE)

For Emirates Sky cargo FSL have a link with e-Freight. So AWB is generated for EK in the software and
then EDI (electronic data interchange) is done so that details will be directly sent to EK.
In FSL, BOE certification access (i.e., Dubai trade access) is not given to everyone as it is costly for every
user access. So BOE is created by entering all the details and then reference no. is generated and sent to the
concerned person. He will check the details and then apply for digital certificate which costs around
600AED per shipment.
For AWB stock deposit has to be made in airlines. For example, 2,00,000 AED is deposited to get stocks in
EK so that AWB is reduced to 50 AED from 100 AED;
Normal dimensions for wide body flight is 300 x 200 x 157
Freighter can hold till height of 250 cm

For flight booking via EK

Services & Support  Shipping services  My SkyCargo  Make a booking
Enter AWB and make booking. All the process for EK should be completed before 12 hrs.
Emirates Online – Direct flight
Emirates Offline – No direct flight (Ex. Aberdeen)
Different rates for different types of goods. For ex. Standard tariff/hard freight, Fresh, Priority, Pharma,
Wheels, and AOG?
Different slab according to weight - Min, Normal, +45, +100, +250, +500, +1000
For DGR goods 1 AED is charged extra per kg.
DGR requires certification like UN no. and two people per company should be there who has cleared IATA
course which has to be taken every 2 years. Class of goods specifying how dangerous it is has to be pasted
along with UN no. (Total 9 classes)
Weight calculations
[Dimensions in cm]
Volume weight or Chargeable weight = (L * W * H * No. of pieces) / 6000
42
Volume, Cubic meter (CBM) = Vol. weight / 166.67
Gross weight or the vol. weight calculated whichever is higher is taken as chargeable units. Gross weight
should be exact. Chargeable weight we can give anything more than gross or vol. whichever is higher so
that the total cost comes cheaper.
For example,
Destination Male (MLE)
EK charges
Min Normal +45 +100 +250 +500 +1000
142.5 27.4 9.45 9.00 8.15 7.80 7.80
For 2 kg – Using normal Cost = 2*27.4 = 54.8
So minimum is taken 142.5
For 33 kg – Using normal Cost = 33*27.4 = 904
Using +45 Cost = 45*9.45 = 425.25
So +45 slab is taken.

Chargeable weight
Air Freight 1 CBM = 166.67 kg
Sea Freight 1 CBM = 1000 kg

Making AWB in Calogi

DOCK
JOB DETAILS
BOOKING

JOB CREATION EXECUTION

ADHOCK RATE FREIGHT

REQUEST BOOKING

5
Sales  Export sales  Job management
In the Rate enq/Quotation tab
 Enter the shipper details, origin, destination, pieces, weight, dimensions if vol. is unknown, and
nature of goods.
 Check Shipper acceptance and click Save.

In the Job creation tab

 2 types of AWB used in FSL
- Manual – Agent own stock
- Auto – Airline Adhoc stock
 Enter 3 digit prefix in MAWB no.
 Enter consignee address
 In Routing details enter 1st destination and 1st onward destination, whichever applicable
 In other details enter handling information

Ex. 18 PKG ONLY. MARKED AND LABELLED. PLS NOTIFY CNEE UPON ARRVL.
 For Mobis & LG add invoice no. in Additional Information.
 Check I accept and click Save.
 Take IDG printout from IDG preview option.

In Arl Adhoc Rate  Request Adhoc rate (applicable only if AWB is got from dnata)
In Freight booking tab  Request booking
In Execution tab
 Accounting information  accounting code – General; Accounting – Freight prepaid;
 Weight/Volume & other chargesRate – “IATA” or “As Agreed” (if airline has given permission)

 Get Rates and then click OK

Rate/Charge gets changed.
 In Nature of Goods  write whatever is there in description; at last write “NOT RESTRICTED”
(For all non DGR goods; not applicable in DWC)

 Click Save
 Click View to get AWB
In Dock request tab book dock for giving the goods to airline; Select the date and time (peak, off-peak,
normal)
Making AWB in e-Freight suite for EK
After logging in e-Freight suite, eCRM  AIR Export Booking
Press F7 (For blank) 6
Enter the booking no. and then press F8 (for execute)
The details of booking are already entered by customer service.

In booking tab
 Enter ETD, ETA, Flight No., Pack, Pieces, Gross weight.
 Then enter dimensions and press Update.
 Enter today’s date in Cargo received date.

Go to HAWB tab
 Change BC (Business communication) to Yes
 Enter MAWB and Description
 Press Generate Job
 Note down the Job no.

Now the screen is split into two halves. MAWB and HAWB
 If Sub job is there enter in HAWB (second half)
 In MAWB tab first change “Direct” – Yes or No
 If it reaches the consignee directly then Yes and No if it goes through some agent.
 Address can have maximum of 4 lines.
 Calculate and enter the chargeable/Vol. weight whichever is cheaper. If needed go to higher slab if
it is cheaper.
 Delete contents in Note if not needed.

In Party tab  Enter the Shipper’s Address and change the Agent Address if needed.
In others tab  In commodity add “DIMS in CMS” (if it is not mentioned)
In handling info type same as calogi
Enter IATA rate.
In HAWB also change the Vol. Weight

In MAWB Charge tab  Enter the charges incurred.

For example,
Fuel Surcharge = (0.45 or 0.75 or 1.05) * Vol. Weight units
Airway Bill Fee = 50
Handling Fee = (0.15 * Gross weight Unit) or 30 (whichever is greater)
Handling fee for DGR goods is 50
Change Due  Carrier 7
Press F10 (Save)
Right click  Job report  MAWB
Click Generate to get the AWB
Execute EDI to send the data to EK.

If there is HAWB
In MAWB  Direct  No (as it is between agent to agent)
In Others  Handling info Invoice no. should be mentioned.
In MAWB both agents address should be mentioned
In HAWB actual shipper and consignee address should be mentioned.

2.2 AIR IMPORT

 In calogi check GHA shipment status
 Issue DO
 In Dubai trade issue Agent transfer authority
 Issue cargo transfer
 Delivery advice is printed.

For EK their own website is used for DO issue.

Some of the charges:
DO – Airlines; DOI – IATA (4 AED); CUBF – 120 AED; CSGF; DO (for truck loading) – 0.16 *
chargeable weight
Cargo manifest – To check how many HAWB
If freight is prepaid then - Routed – Agent
If freight is to be collected – Routed – Self
Cargo transfer deposit – 10000 AED (which will be refunded later)
Cargo transfer for different location – 120 AED (Ex. DWC); same location – 40 AED (Ex. DCV)
Delivery slip mentions the storage unit in which the cargo is stored and till what time free storage is
available (2 days from start of storage)
Temporary admission like BMW cars which are brought to Dubai for test runs has free storage of only
about 4 hours.

8
 Chapter III
SEA FREIGHT

Focused Trade Lines (FTL) in FSL are USA, UK, Germany, Italy, India, China, and Japan. Charges are
calculated for inland transportation, Freight (Port to Port) and markup is added which is then quoted to
customer.
LCL – One container many customers (Groupage import); One MBL, many HBL, multiple DO;
NOC is provided to consignee to give permission to them for collecting the goods directly from port.
LCL consolidation is done for imports and exports. In order to recover the cost at least a minimum of 8
shipment and 40 CBM is required. Mostly 40’ High cube container is used. Sailing schedule is available in
FSL website which the customers can also check so that they will get an idea of transit time and dates.
7 days can be kept as leeway to connect export and import in case of transshipment. Container storing cost
is high in port so even sometimes empty containers are shipped. Some of transshipment points are Jebel Ali,
Colombo, Singapore, whereas Jeddah, Kuwait, Dammam, Riyadh are all dead end point.

INCO terms (International Commercial terms) – Set of rules which define the responsibilities of sellers and
buyers at each stage of shipment which are agreed in contract. These rules are published by International
Chamber of Commerce (ICC).

Figure 1: Incoterms 2010

9
Incoterms for any mode of transport – EXW, FCA, CPT, CIP, DAT, DAP, DDP.
For Sea and inland waterway transport – FAS, FOB, CFR, CIF.
In Container Freight Station (CFS) stuffing, de-stuffing and transshipment processes are done.

3.1 SEA IMPORT

Cargo manifest GPGI is prepared based on CAN and Packing list.
Once the cargo is arrived  Go to Dubai trade  Mirsal II  Cargo transfer  Enter OBL, HBL, NOC,
Rotation No., FSE no. (Freight System Enterprise)
For tax invoice, Request  DP world payment

In JAFZA region
For FCL – CTO to CH (Same location)
For LCL – CH to CH (Same location)

3.2 TRANSSHIPMENT
Seaport Automation System (SAS) is used for generating BOE
Enter MRN – Movement Reference No.
In Sea manifest  Delivery order
Generate BOE (15 AED for every BOE)

3.3 SEA EXPORT

Cargo stuffing report is prepared from back office for grouping cargo going to same location. After stuffing
 In Dubai trade, Request  Submit LCL consolidation Export
Enter BOE generated previously, Haulier name and code, Add seal
(For local export use Dec No.)

IMCO cargo classification is used for classification of dangerous goods (9 classes)

10
 Chapter IV
CUSTOMS DOCUMENTS

Mirsal II – For custom clearance

Regime type – Import, Export, Transit, Transfer, Temporary admission
Declaration type – Ex. FZ transit in, FZ transit out, Export from local to ROW, Import from ROW to local.
FZ documents
 Delivery advice
 Commercial Invoice/ Packing list
 HS code summary sheet

Bill of Entry copies: Handling Authority, Consignee copy, Consignee claim copy, Customs copy
Charges are based on the type of BOE (Ex. 105 AED)
For creating BOE, the following are needed - General information (ex. Agent no.,); Shipping details;
Invoice details; Payment details;
LGP (Local goods gate pass) is passed for moving goods out of Free Zone.
Duty is paid only once in GCC countries. For going to Dubai mainland – Declaration type – Import to local
from FZ
Duty is collected based on HS code (Ex. 5%, 3%, 1%)
For Regime type – Transfer  Transfer within FZ (Transfer of Ownership since consignee has send by
their own name or has their own agent.

11
 Chapter V
THIRD PARTY LOGISTICS

Figure 2: FSL Warehouse

3PL is a company's use of third-party businesses to outsource elements of its distribution, warehousing, and
fulfillment services. FSL operates 3PL and warehouse under the name LOGEX.

Location – Jebel Ali, DWC

Main customers –
 In Jebel Ali – Derrick solution, Tridonic;
 In DWC – Enoc, Albariq equipments.

DWC warehouse – 40000 pallet positions, 16500 cold storage pallet positions, 2000 sq. m Bulk storage,
1500 sq. m Dedicated Value Added Zone

5.1 INBOUND

 ASN docs are used to make pre-receipts entry for shipments.

 Documents collected from customer – Invoice, Packing list, COO
 Shipment once arrived documents and container seal are checked and offloaded. In case of any
discrepancies the customer is immediately notifies and offloading kept on hold.
 After visual check cargo is offloaded and moved to inbound staging area where it is tallied with the
packing list.
 In case of discrepancies, MDN report is prepared and sent to customer.
12
 SKU is created for new items. Based on put away strategy set for customers, the goods are
palletized and kept in the respective locations based on the location id.
 Tally sheet is used for linking SKU code and pallet id using scanner. Put away sheet is for linking
Pallet id and location id. This practice is followed in DWC but in Jebel Ali warehouse location id
are noted down in put away sheet and updated in the system.
 GRN is generated from the system, verified and sent to the customer.

13
The DWC warehouse is designed for Euro pallets 120 x 80; Jebel Ali warehouse is designed for standard
size 120 x 100;
No. of Aisles = 28; Pallet spaces = 20 x 3 x 10 x 2 x 28 = 33600
Damaged goods are kept in quarantined area. Bin locations are used for loose items like bolt and nut. 100%
inspection of items is done.
Charges are calculated based on per CBM per day. It depends on customer as per contract and storage
location (cold & ambient). Monthly collection is done.

5.2 OUTBOUND
 Shipment Order (SO) or copy of invoice or a delivery instruction received from the customer via
email. EDI can be enabled between the systems. Out bound orders unit price shall not be less than
the inbound price as stipulated by Dubai Customs
 Stock is allocated on FIFO basis. If needed it can be changed.
 Stock shortages if any are conveyed to the customer.
 Pick list is generated and the goods are picked from the respective locations. For Tridonic SAP is
linked to WMS. Hence XML document can be downloaded to generate pick list.
 For JBL deliveries , T/O documents are provided by FSL to the customers forwarder/customer, the
customer / forwarder makes Transfer bill , submit a copy of
 Floor input for billing consisting of time taken, no. of loose pickings, value added services, etc. are
noted for billing customers.
 Commercial invoice is generated after updating no. of packages and weight, through the system and
the same is forwarded to the FSL documentation team for customs documentation.
 BOE and exit forms are generated. For Jebel Ali deliveries, TOO (Transfer of Ownership) is
passed, and for GCC destinations, 5% import duty is added.
 Delivery note is issued mentioning the driver and truck details.
 Shipment delivered to the consignee against signing off a POD.

14
12
 START

Recieve SO (email/EDI)

SO Update in
WMS

Picklist from WMS

Commercial
invoice
Pick Confirmation generated

Packing List Generated

Delivery Note Generated

Invoicing to Shipment Confirmation -

Customer and Stock Out from WMS
ERP update

Shipment notice to
Customer

END
15
5.3 STOCK COUNTS
 A request received from the client via email for conducting the stock count. CUT OFFS- are agreed
for the last receipts and shipment.
 All system transactions are completed one (1) day prior to the physical count and the system is
“frozen”.
 If any cargo received after the CUT OFF, the same will be off loaded, clearly marked and
quarantined, no GRN is issued for such cargo until stock count is completed.
 Efforts must be taken to deliver all picked cargo out of the facility
 lf any shipment not collected till the Cut off, a list of items picked but not shipped extracted from
the system for adjustment while reconciling the system stock against physical stock
 Count sheets are generated by location order or SKU order as required before the count
 Physical count will be made by team consisting customer and FSL personal
 Count sheets are updated clearly by the count team and signed off by both FSL and customer
personal
 Count sheets are updated against the system stock list and a discrepancy sheet is generated
 Discrepancies are recounted and the final discrepancy sheet is shared with the customer
 Discrepancies (if any) are adjusted after the client's permission.
 System is “Unfrozen” now.

Pallet designed can hold a maximum weight of 1 ton. The different types of warehouse vehicles available in
FSL are VNA (Very Narrow Aisle m/c), PPT (Pedestrian Pallet Truck), Reach truck, Fork lift, Hand trolley.
FRESCON is used for Receive and Putaway during inbound and for Pickup, Distribution, Delivery during
outbound. It is also used for pallet enquiry and move pallet. Block by Block storage is followed.

16
 Chapter VI
SALES & CUSTOMER SERVICE

Getting the customer is the first step. It can be done by cold calling which involves in obtaining business
from the customers who have had no previous contact with the sales person. Conversion rate (approx. 35 to
40%) is an important factor and repeated follow ups should be there for converting cold call into a prospect.

Figure 3: Life cycle of customers

The above is the life cycle of customers and it represents the customers at each stage of business. Life cycle
is very short as so many competitors are there to grab the business by offering different value added
services and at attractive prices. Many freight forwarding companies quote the customers. They choose the
forwarders based on the cost and service provided.
There are two types of business – Transactional & Contractual. For credit customers, terms will be set in
contract and credit checks will be done before accepting them.
When I was with the sales team, they took me to meet many customers (Alderly, Marina Retail Cargo,
Concept zone, DSS Steel, Bader Al Mulla Industries, Emirates Wet Wipes FZCO, PFF Group, Al Nimr
Steel, etc.,) who were at different stage of the life cycle. Some cold calls were also done through phone and
personally where sometimes it is difficult to get past reception. Getting name of the person in charge like
logistics head is the key for successful cold call to whom later we can connect with phone/mail.
Every sales person has to bring in profit based on their salary. Here in FSL as a rough estimate they have
kept 20% plus the sales person’s salary as the cost to the company. Four times the cost has to be brought as
profit every month.
Profit to be brought to the company = 4 x (1.2 x Sales person’s salary)
Profit margin for every customer depends on the relationship with them and the number of competitors
trying to obtain that business.

17
Sales support team in Chennai back office assists with the sales team and gets rate for the customer based
on their enquiry and after adding some profit margin, they quote the customer. Once the customer after
negotiation is okay to proceed with the shipment Customer Service does follow up with the customer and
based on the order readiness they arrange for pickup in case of export.
Sales team update their daily visits and customer details in eCRM section of eFreight suite. They have to
map the customers under their name which can be done after receiving enquiry from the customer. From the
Admin Script reports like Enquiry log and Booking detail have to be checked on day to day basis and Call
log report can be checked on weekly basis for follow-ups.
Quote validity should not get expired till the customer ships or else new rate should be quoted to the
customer. Some of the charges in Quotation are as follows
 Freight Charge  Doc Processing fee
 Origin/Destination THC  SOLAS fee
 Container Seal fee  E-Token charges
 BL/AWB fee  Origin/Destination Transport charges
 BOE fee  Customs clearance charges
 DO fee  Liner charges

6.1 NVOCC
Freight forwarder deals directly with the customers whereas NVOCC acts as a carrier without owning a
vessel and sells container space to other small freight forwarders. It signs a contract with shipping lines
guaranteeing to fill certain no. of units of shipments in return for favorable rates. Some of the liners that
FSL has contract are Maersk, Oocl, Gac, Hapag, Wan hai, etc.

18
The process followed in NVOCC export are as follows:
Customer enquiry mail  Send charges & Quotation  Customer negotiation & confirmation  (eFreight)
Fill the enquiry details in Enquiry log  create the quotation which the customer has accepted  Generate
Booking No.  Document processing notification  Cargo collection notification

19
 Chapter VII
e-FREIGHT SUITE
 It is a part of Newage Software and Solutions. It is an Amazon cloud based software and has 4
servers.
 It is sold to different freight forwarders around the globe customized according to their needs. Costs
are charged per user basis.
 Its best feature include every milestones sent via email and clipit feature which uploads the
documents to the job thereby reducing 60% paper cost.
 FRESCON, a part of Newage allows to customers to print the reports like invoice whenever they
need. They can do the booking too on their own.
 Container tracking feature is also available with ocean-insights which gives 144 milestones upon
subscription.
 Since every department is interlinked, it is easy to get reports and analyze like how much enquiries
are converted to booking to job to invoice.
 Frontend is Oracle form and back end is Oracle database (high security)
 To improve GUI they are changing front end to JAVA (Angular JS)

20
 Chapter VIII
STUDY OF EFFICIENCY OF LCL TRANSPORT VEHICLES

Figure 4: Difference between FCL and LCL

8.1 INTRODUCTION
Freight Systems is using 7 Pickup vehicles of which 6 are being outsourced. There are 6 vehicles of 3
ton capacity of which 5 are outsourced. One vehicle of 7 Ton capacity is being used which is being
outsourced. The monthly rent for 3 ton vehicle is 7500 AED and that of 7 ton vehicle is 9500 AED.
These Pickup are used for LCL Import, Export as well as for Clearance purposes. The vehicles are used
such that if possible consolidation is done so that the cost of operation is reduced.

The vehicle details are given below.

Truck Number Truck Type Remark

41252DXB 7 Ton Open Pickup
41249DXB 3 Ton Open Pickup
56933DXB 3 Ton Box Truck
41256DXB 3 Ton Box Truck
41275DXB 3 Ton Box Truck
43183DXB 3 Ton FSL Vehicle
56934DXB 3 Ton Sharjah Vehicle /Box Type

Table 2: FSL truck details

21
8.2 OBJECTIVE
Our objective is to analyze whether the vehicles are underutilized or over utilized based on revenue
generated by the vehicle over a month against the cost spent for outsourcing it. Based on that we have
to present our findings to the company whether outsourcing is efficient or not and whether they have to
outsource more vehicles to support present and future demand.

8.3 METHODOLOGY
We have met the concerned person responsible for arranging transport and observed the whole procedure.
First step was to clean the data and make them presentable for further analysis. We extracted data for past
eight months and did analysis for all the months. We realized that the best way to calculate the efficiency of
utilization is to compare the total cost of vehicle monthly and the total invoice money it is making in the
process. The reason for not choosing number of trips data in because of lack of data suggesting
consolidation in true sense.

Cleaned Chose the

Observed Collected Present
the data method Analyze
the the past our
for further for finding the data
operations data findings
analysis efficiency

8.4 ANALYSIS
 Since these vehicles are used for export purpose also and these trips are Free. The customer is not
charged for the transport. The analysis of the revenue lost in free trips is essential. We have calculated
it for all the months and for all vehicles to get a glimpse of the vehicle preference for export jobs. The
ratio of Revenue lost in free trips to the total cost for a vehicle is termed as free trips percentage.
 As we have concluded in our methodology the best way possible for calculating efficiency is to
compare the revenue and cost a vehicle is making every month. In our analysis we termed it as
Operational Efficiency.
 Profit and Profit Percentage is calculated for each vehicle to know every vehicle’s cost recovery
trends.
 Since in case of higher workload FSL can hire a third party transport also and it is charging the
same rate. We have calculated the total revenue and cost of all outsourced 7 ton and 3 ton vehicle
types.

22
 8.5 KEY FINDINGS
 The below graph gives the data for month wise data for vehicle’s profit percentages

80%

60% 55%
52%

40%
40% 33% 32% 33%
25% 27%
22% 23%
19% 19% 18% 19% 18%
20% 13% 12% 15%
9% 9% 11% 10%
5% 4%
1%
0%
Aug-18 Sep-18 Oct-18
-3% Nov-18 Dec-18 Jan-19 Feb-19 Mar-19-2% Apr-19
-5%
-10% -8%
-20% -13%
-20% -18%

-31% -31%
-40% -34% -34%
-39% -40%-39%
-42%
-45% -42% -42% -45%
-49% -49%
-60% -55% -52%
-58% -58%
-63% -64%
-80% -73% -72%
-82%

-100%
Aug-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
41252 - 7 TON -63% -42% -58% -82% -73% -72% -45% -39%
41249 55% 52% 32% 19% -13% 15% -8% 40%
41256 -10% -45% -64% -55% -34% -42% -58% -49%
41275 -20% 33% 5% -18% 9% 33% 18% 23%
56933 13% -3% 12% 25% 1% -5% 4% 10%
43183 - FSL -49% -31% -39% -31% -42% -34% -40% -52%
56934 - SHJ 22% 19% 9% 18% 11% 19% -2% 27%

41252 - 7 TON 41249 41256 41275 56933 43183 - FSL 56934 - SHJ

Table 3: Month wise vehicle’s profit percentages

 The below is analysis of operational efficiency of all the vehicles. We categorized them into three
categories
 Over Performing (denoted by green)
 Slightly Under Performing (denoted by yellow)
 Underperforming ( denoted by red )

23
 41252 - 43183 - 56934 -
7 TON 41249 41256 41275 56933 FSL SHJ
August 37% 155% 90% 80% 113% 51% 122%
October 58% 152% 55% 133% 97% 69% 119%
2018
November 42% 132% 36% 105% 112% 61% 109%
December 18% 119% 45% 82% 125% 69% 118%
January 27% 87% 66% 109% 101% 58% 111%
February 28% 115% 58% 133% 95% 66% 119%
2019
March 55% 92% 42% 118% 104% 60% 98%
April 61% 140% 51% 123% 110% 48% 127%

Table 4: Operational efficiencies of vehicles

 The 7 Ton vehicle is performing badly in terms of operational efficiency because it is mostly used
for export jobs.
 FSL’s own 3 ton vehicle is performing bad again due to large amount of free trips (exports).
 41256DXB vehicle is also performing badly.
 In all these months analyzed of all 3 ton vehicles 3 vehicles are always over performing which
means they are recovering the losses.
 7 ton vehicle is always underperforming and this issue needs to be addressed.

 Following is the graph showing revenue generated by the 7 ton outsourced vehicle over the period of
time. In this line graph please ignore the month of September as data was not available.

OUTSOURCE 7 TON
Series1 Series2

15000

10000

5000

Figure 5: Revenue generated by 7 ton outsourced vehicle 24

  Following is the bar chart showing revenue made by the outsourcing 10 ton vehicle

Outsource 10 ton

19075

15650 15435
13285 14095

10775 11465

4970

Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19

Figure 6: Revenue generated by 10 ton outsourced vehicle

8.6 RECOMMENDATIONS
 The transportation details and consolidation data can be recorded in the e-Freight suite
which will make future analysis easier and accurate.
 Before the pickup is sent for a particular location as soon as it is asked for via email by
customer service, it can wait for a particular time say 1 hour (depending on the urgency of the job)
because consolidation improves the pickup efficiency and revenue.
 Instead of outsourcing either a 7ton or 10 ton (if its rent is not more than 10.5k) can be
rented which can be used for import jobs, thereby increasing the revenue.
 For other emirates trips which consume more time, outsourced 3 ton vehicle can be used
thereby increasing the no. of trips on the pickups.

25
 Chapter IX
Key Learnings
 Internship at Freight Systems is multidimensional in nature. We are required to observe and analyze the
key functional areas of the Freight Forwarding business. The Structure of Internship was such that we
were required to learn about functions of each functions in their Supply Chain.
 In Air and Sea Freight Operations we learnt Key documentation required to process the customer freight
forwarding Operations. The experience included working on e-Freight Suite and Dubai Government’s
Portal (CALOGI) for processing of Air Freight. The changing demand nature of Freight Service and
service customization for different customers are the challenges faced in this sector.
 In Sea Freight the challenges faced in consolidation process of LCL shipment and efforts to provide the
service customized for every customers were the key learnings. We did a project to identify the
Vehicle’s efficiency for LCL shipments and learnt the complexities in consolidation processes.
 The Operations were supported by Sales and Customer Service team where we learnt the approaches for
B2B sales and varied service demand of different customers. The Customer acquiring and servicing were
the key functional areas during our work with Sales and Customer service team.
 Freight Systems also venture in providing Third Party Logistics services, Carrefour being one of their
former customer. Present customers such as ENOC, Hyundai MOBIS were the key players driving the
growth of Third Party Logistics solutions at Freight Systems.
 Third Party Logistics not only deals with providing service to customers such as ENOC and Hyundai
MOBIS but also to other Logistics company which are facing storage issues. The concept of competitor
in this growing market is changed and now the companies like Freight systems are known as supporting
companies to these large Logistics companies. One of the key challenges Third Party Logistics Services
faced was the loss of business due to vertically integrated warehouse of Carrefour which was one of their
key customers. They are facing challenges in keeping their service level at par with the Industry leaders
and also in acquiring new customers to drive the business growth.
 The Software Solutions division helped us understanding key requirements and processes in developing
and ERP system for this service intensive sectors. The approaches in reducing the service time for a
particular customer by reducing the multiplicative data entry problems and also the software that helped
in storing the documents and changes being done through mail being directly updated in the ERP
(ClipIt).The Reports being generated based on the hierarchy of the employees is one key feature of the
ERP. The solutions became very famous and now this software is now being outsourced to other Freight
Forwarders with modifications according to concerned customer requirements.

26
REFERENCES

 http://www.freightsystems.com/
 https://www.skycargo.com/
 http://www.dubaitrade.ae/
 https://www.calogi.com/
 https://www.logisticsglossary.com/term/chargeable-weight/
 https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-rules-2010/

27