LOGISTICS MANAGEMENT

UNIT - IV

M. NAGARAJAN
 UNIT IV
Containerization - concept, types, benefits, Types
of carriers - indirect & special carriers, Role of
intermediaries - shipping agents, brokers -
freight management - route planning - Role of
ports, ICDs, CONCOR - Global shipping options.
 Containerization
A container essentially can be called as
equipment utilized to carry goods or
store goods.
Based upon this concept of a container,
we can say that containerization is
technique or a method of distributing
goods in unitized form thereby making
it convenient to evolve or establish an
intermodal transport system which can
be a combination of railways,
 Containerization
The International Organization
has defined freight container as
an article of transport equipment
of a permanent character and accordingly
strong enough for repeated use
specially designed to facilitate the carriage
of goods by one or more modes of transport
without intermediate reloading
fitted with devices permitting its ready
handling
 Benefits of Containerization
It eliminates the need for intermediate
handling.
The absence of intermediate handling
as well as the goods being transported
quickly indicates that there are few
chances for a cargo to get damaged or
pilfered.
Since there is less risk of damage and
pilferage due to containerization,
transporting companies can charge
 Benefits of Containerization
[Contd]
Since the need for intermediate
handling at terminal points such as
ports, is avoided, savings on
labour can be realized.
Since goods are transport in
standardized containers, saving on
packaging materials, labour
required for packing, etc can be
realized.
 Various Types of Containers
1. General Cargo Container:
This container is packed with all general type of
cargo that does not require any specific temperature
control.

Today most of the containers that are in use are

overwhelmingly the general cargo type.
 Various Types of Containers
2. Thermal Container:
These containers are specifically designed to
carry cargo that requires refrigeration or
thermal insulation.
It is covered with a special material that has
low heat transfer such as polystyrene foam.
Thermal containers are further classified in to three types
Refrigerated containers meant for food items
that require cold storage facility. E.g. meat, fish
etc.
Insulated containers for fruit, vegetables etc.
Here dry ice is used as cooling medium.
 Various Types of Containers
3. Dry Cargo Containers:
These containers are in maximum use.
Such containers are very useful when
cargo has to be stuffed in to the
container after the container has been
mounted on to a wagon or a trailer.
4. Flat Container [or] Flat Rack:
These containers have only a strong
base and no side walls.
They are useful when the cargo is of
odd size or when the cargo is very
heavy.
 Various Types of Containers
5. Bulk Containers:
Are basically large sized containers, which
have man holes in them.
Man holes are openings or holes at the top
of the container similar to what we see in
petrol or water tankers.
Such man holes facilitate the loading of
bulk cargo using gravity.

6. Garment Containers:
These containers have hangers built in
 Various Types of Containers
7. Liquid Containers:
These containers are usually made of
stainless steel, they have manholes built in
them.
These manholes are very useful to load or
unload liquid cargo.
We can see such containers in the
transportation of milk.

8. Gas Containers:
These are specialized containers that have
Liquid Container
 Basic Modes of
Transportation
Rail
Road
Water (Domestic /Inland and International)

Pipe Line
Air
Performance Rating of Various Modes

Chapter 9 Management of Business Logistics, 7th Ed. 17

Types of Intermodal Services
 Role of Intermediaries
The shipping industry has traditionally
been replete with intermediaries
performing various important value-add
and critical steps to complete the
transportation cycle.
Traditional intermediaries in the shipping
industry have included
Freight Forwarders,
Customs Brokers,
Insurers of Cargo and Towers,
Ocean Carriers,
 FREIGHT FORWARDERS
Freight Forwarders are traditionally
considered one of the components of
international shipping.
In essence, they that make all
arrangements with the ocean or air
carriers.
Freight forwarders aide international
shipping by processing the
export/import documentation for
international transactions.
 CUSTOM BROKERS
An importer of any product must
receive permission from their
government to allow freight to
terminate in the country of
destination.
Because of the complexity of this
operation, custom brokers work as
agents of the "importer of record" to
facilitate clearing of freight.
 OCEAN CARRIERS
Ocean Carriers crisscross
facilitating the bulk of global trade.
They handle all products from bulk
commodities to finished goods.
Ocean vessels are becoming larger
with some of today's vessels
exceeding the ability to navigate
through the Panama canal.
 NVOCCs
NVOCCs is the abbreviation for Non-
Vessel Operating Common Carrier. In
many countries besides the USA, these
intermediaries are called Ocean
Consolidators.
NVOCC perform the same services as Air
Consolidators by providing a service for
shippers with smaller loads to combine
their freight for shipping in economical
lot sizes.
 LOGISTICS PROVIDERS
Logistics Providers try to put the
entire picture together in a "one
call - do all" concept.
All the services performed by the
intermediaries are covered under the
umbrella of the logistics provider,
with the added benefit of
consolidated logistics information.
Although there is always discussion
 FREIGHT MANAGEMENT COMPANIES
Freight companies are companies that specialize in the moving
(or forwarding") of freight or cargo from one place to another.
These companies are divided into several variant sections.
For example, International Freight Forwarders ship goods
internationally from country to country, and Domestic Freight
Forwarders ship goods within a single country.
There are thousands of freight companies in business
worldwide, many of which are members of certain
organizations.
Such organizations include the IATA (International Air
Transportation Association), TIA (Transport Intermediaries
Association), the BIFA (British International Freight
Association), or the FTA (Freight Transport Association) and
various or other regional organizations.
 Types of Freight
LTL or "Less Than a Truck Load"
Partial Truck Load
TL or "Truck load"
Air Ride Truck Load [or] partial Truck Load
Blanket Wrap [or] Van Move
Air Freight
Expedited Freight Services
Rail - Freight Services by Rail
Special Services - Motorcycle Shipping
Determinants of Carrier Selection

Cost
Transit time and Reliability
Can be a competitive advantage
Lowers customers inventory costs

Capability
Accessibility
Security
ROUTE PLANNING
Vehicle Route Planning Solutions
APPLICATION OF VRP
Route Planning - Complications
An Inland Container Depot [ICD]
/ Container Freight Station [CFS]

A common user facility with public authority status

equipped with fixed installations and offering services
for handling and temporary storage of import/export
laden and empty containers carried under customs
control and with Customs and other agencies
competent to clear goods for home use, warehousing,
temporary admissions, re-export, temporary storage
for onward transit and outright export.
 FUNCTIONS OF ICDs
The primary functions of ICD/CFS include:
Receipt and dispatch/delivery of cargo.
Stuffing and stripping of containers.
Transit operations by rail/road to and from serving ports.
Customs clearance.
Consolidation and desegregation of LCL cargo.
Temporary storage of cargo and containers.
Reworking of containers.
Maintenance and repair of container units.
 Benefits from ICDs/ CFS
Concentration points for long distance cargoes
and its unitisation.
Service as a transit facility.
Customs clearance facility available near the
centres of production and consumption
Reduced level of demurrage and pilferage.
No Customs required at gateway ports.
Issuance of through bill of lading by shipping
lines, hereby resuming full liability of shipments.
Reduced overall level of empty container
movement.
Competitive transport cost.
 CONCOR
Container Corporation of India Ltd (CONCOR) is a
Category-I Mini Ratna Public Sector Undertaking (PSU)
under the Indian Ministry of Railways.

Incorporated in March 1988 under the Companies Act,

CONCOR commenced operations in November 1989
taking over an existing network of seven Inland Container
Depots (ICDs) from Indian Railways.

It now has a network of 61 ICDs/CFSs (Container

Freight Stations) throughout India.
 CONCOR
Indian Railway's strategic initiative to containerize cargo
transport put India on the Intermodal Freight Transport
map for the first time in 1966.

Given India's size, rail transport is often a cheaper option

for all cargo over medium and long distances, especially
if the cost of inter-modal transfers can be reduced.

Seeing that containerized multi-modal door-to-door

transport provided a solution to this problem, in 1966
Indian Railways entered the market for moving door-to-
door domestic cargo in special DSO containers.
 CONCOR
Although the first ISO Container in India had been handled in
Kochi as early as 1973, it was not until 1981 that the first ISO
container was moved inland by Indian Railways to the country's
first ICD at Bangalore, also managed by the Indian Railways.

Expansion of the network to seven ICDs by 1988 saw an increase

in container handling capacity, while along the way a strong view
emerged that there was a need to set up a separate pro-active
organization to promote and manage the growth of
containerization in India.

CONCOR operated three core businesses:

Cargo Carrier;
Terminal Operator and
Warehouse Operator.