The evolution of Freight

Forwarding Business

Cargo/
Expedition Expedition Logistics Architect Cargo Supply Chain
VEEM Forwarder
broader Provider Movement Management

WAREHOUSE
SEA SEA 1. Forwarder
Space Domestic Multimodal Planning
Domestic International 2. Logistics
Time
Provider
3. Architect
Cargo Mov

AIR AIR
International Door to door Implementation
Domestic International

Means :
1. Shipping

Warehousing : 2. Airlines
3.Trucks
* Space
One Stop Railway
* Time Controlling
Shopping
* Loading
* Unloading
* Inventory
* Packaging Infrastructure:
* Labelling
1. Seaports
* Telly
2
2. Airports
* Barcoding
3. Terminals
* etc.
 WHAT IS A FREIGHT FORWARDER
Originally - Commission agent

Today - An essential link in International

trade and transport

Definition - No internationally accepted

definition of term "Freight
Forwarder"
3
 SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignor (exporter) (1)
1. Choice of route .
2. Booking of space .
3. Taking delivery of goods and issuance of
relevant documents .
4. Studying the provisions of Letter of
Credit and all Government regulations.
5. Packing. 5
 SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignor (exporter) (2)

6. Warehousing.
7. Weighing and Measurement.
8. Arranging for Insurance.
9. Transport of goods to the port ;
- customs clearance;
- connected documentation formalities;
- delivery of goods to the carriers.
6
 SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignor (exporter) (3)
10. Attending to foreign exchange transactions.
11. Payment of fees and other charges and freight.
12. Obtaining the signed bill of lading.
13. Arranging for transshipment en route.
14. Monitoring of movement of goods to the
consignee .
15. Assisting consignor in pursuing claims.
7
 SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignee (importer) (1)
1. Monitoring of movement of goods.
2. Receiving and checking all relevant
documents.
3. Taking delivery of goods and paying
freight.
4. Arranging customs clearance and paying
duties and fees . 8
 SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignee (importer) (2)
5. Warehousing transshipment en route.
6. Delivering cleared goods to the
consignee.
7. Assisting consignee in pursuing Claims.

9
 SPECIAL
CARGOES
 Project
Cargoes

 Garments

 Exhibitions

10
 RIGHTS,DUTIES&RESPONSIBILITIES
1. Legal Status of a Freight Forwarder
 Varies from country to country depending
on the legal system prevailing in each country.
2. Standard Trading Conditions
 Usually formulated in accordance with
commercial practices or legal system prevailing in
each country. 11
 RIGHTS,DUTIES &
RESPONSIBILITIES (1)
3. The Forwarder as Agent
• Generally accepts liability for
his own faults or the faults of
his employee .
• Exposed to claims from third
parties for any loss or damage
or personal injury that he may
cause to them during his
operations .
• Generally does not accept
Liability for acts or omissions
of third parties.
12
RIGHTS,DUTIES&RESPONSIBILITIES (2)
4. The Forwarder as Principal
 Providing consolidation and multi-modal transport
services .
 Independent contractor who assumes responsibility in
his own name and accepts liability not only for his acts
and omissions but also of those whose services he
engages for the execution of the contract .
 His liabilities to third parties remain the same as when
he is an agent .
 In providing multimodal transportation services, the
standard trading conditions do not generally apply.
13
 RIGHTS,DUTIES &
RESPONSIBILITIES
5. Freedom of contract
In the formulation of standard
trading conditions, freight
forwarders enjoy a significant
amount of freedom of contract.
While providing transport as a
carrier, he avoids strict liability
by stipulating in the standard
trading conditions that he is
not a "common carrier".
14
 RELATIONSHIP WITH
INTERVENING PARTIES

1. Government and other Public Authorities:

 Customs Authority
 Port Authority
 Banks
 Ministry of Health
 Consular Officers
 Import/Export Trade Control Authority
 Transport/Licensing Authority
15
 RELATIONSHIP WITH
INTERVENING PARTIES
2. Private Parties :
a. Carriers and Other Agencies ;
• Ship Owners
• Road Operators
• Railways
• Inland Waterway Operators
b. Warehousemen
c. Insurers
d. Packaging Organization
e. Commercial banks
16
 FREIGHT FORWARDER’S
RELATIONSHIP WITH VARIOUS PARTIES

Government and other public authorities

Port Import/Export Trade Control Customs

Authorities Foreign Exchange Control Authorities
Transport Licensing
Public Health Consular Authorities

Carrier and
Consignor/ other agencies
Consignee Shipowner Road Operator
Railways Inland
Freight Forwarder
Waterway Operators
Warehousemen
Packaging Agencies
Banks
Resource
Cargo Action
Insurers Liability Insurers Through Transport Clubs
17
 SERVICES OF A FREIGHT
FORWARDER
Adviser / Consultant

Packing – Choice of materials used

Routing – Choice of itinerary and means of transport
Insurance – Type of coverage needed for the goods
Customs regulations – Clearing in and outbound
Transportation documentation – Accompanying documents (Carriers)
Letter of Credit stipulation – Banking requirements

Organizer for :

Import export and transit consignments

Consolidations – Group age shipments
Special and heavy transport – Project Cargoes

Imports

Unloading of cargo – from carrier’s means of transport

Breaking bulk of consolidations
Customs clearance

Exports

Pick-up
Packing and Marking
Freight/space booking – with carrier
Delivery to carrier
Issue of transport document – freight escorting documents
Supervising departure
Dispatch advice – to customer
Customs Clearance

Transit

Taking samples
Repacking
Storage in bond (under customs control)
Re – forwarding

18
Packing Order Control Department
 SERVICES OF A FREIGHT
FORWARDER
Freight Forwarding

 Issuance of transport document

 Cargo booking
 Organization of transport

Tariff department Ship chartering/slot

(railways/shipping) charter

Consolidating Order through telex or online

NVOCC – operation communication to receiver

Liner agency De-stuffing and import process

station

Transport insurance Customs clearance or transit on

forwarding

Quality control Warehousing and distribution

Space planning scheduling Local delivery

Warehousing Labeling

Truck services Special services :

Fresh food/hanging garments, etc

Issuance of export documents (data Project cargoes and turnkey projects

processing)

Packing Order control department

19
20
 Payung Hukum GAFEKSI/INFA
 Keputusan Menteri Perhubungan No.
KM.10 Tahun 1998, mengatur Bidang
Usaha Jasa Transportasi.

 Keputusan Menteri Perhubungan No.

KP.4/AU.001/PHB, yang mengukuhkan
Pembentukan GAFEKSI.

 EMKU  AEMPU  1985

 GAVEKSI  INFFA  AEMPU  GAFEKSI
 FIATA
 INFA VISION
To Be Architect of Cargo Movement for
Logistics and Distribution Facing Global
Competition.
The Vision Contains of 4 Dimensions, these
are :
1. SYSTEM DIMENSION
As Architect of Cargo Movement, INFA
member handles cargo for logistics inbound
and outbound for the total production process
both separated and integrated manner.
2. SPACE DIMENSION
As Domestic and International Freight
Forwarder, INFA member have a broad 22

network both for National and International.

3. TIME DIMENSION
As a hard worker INFA member
engage in short, medium and long
term contract (committed to deal)
and treat the TIME as one of the
benchmark of quality services.
4. KNOWLEDGE and TECHNOLOGY
DIMENSION
As a global player INFA member
covers their activities ranging from
design system, MTO, IT, up to SCM. 23
 INFA MISSION
As an association of cargo movement business, the
INFA has the mission as follows :

1. Support the government policies in view of

development of national economy, through
alleviating cargo flows for both National and
International and as National Flag Freight
Forwarder.

2. Develop Freight Forwarding Business as industry

in nature toward the backbone of national cargo
mobility.

3. Under entrepreneurial leadership, enforce the

tasks professionally toward customer
satisfaction, in parallel create the business
profitably. 24
 Persyaratan Perusahaan
Forwarder

1. Organisasi.
2. SDM Profesional.
3. Jaringan.
4. Permodalan.
5. Sistim Komunikasi.
 TYPES of IFF SPECIFIC EXPERTISE

 SHIPPING, AIRCRAFT and  INSPECTION

TRUCKING MANAGEMENT  INCOTERMS (THE
 PORT and AIRPORT INTERNATIONAL
MANAGEMENT CHAMBER OF COMMERCE
COMMISSION ON
 PACKAGING INTERNATIONAL TRADE
 CUSTOMS CLEARANCE PRACTICE)
 WAREHOUSING  COST CALCULATION
 INLAND TRANSPORT  PRICING
 MULTIMODAL TRANSPORT  CONTAINER HANDLING
OPERATION  MARKET FORECASTING
 IMPORT and EXPORT  INVENTORY CONTROL
PROCEDURES
 STEVEDORING
 STORAGE
 SURVEILLANCE
 STUFFING
 WEIGHING
 OCEAN TRANSPORT
 MARKING / LABELLING
 DOCUMENTATION
 CARGO HANDLING
 INSURANCE
 CONTRACTING
 OTHERS 26
 Sumber Penerimaan Freight
Forwarder (1. OUTBOUND)
1. Biaya angkutan (freight/voyage cost).
2. Penanganan di pelabuhan (handling fees).
3. Penjemputan (cortage).
4. Penimbunan (warehousing/storage).
5. Dokumentasi.
6. Pengepakan (packaging).
7. Asuransi (Insurance).
8. Biaya profesional (professional fees).
9. Biaya komunikasi.
 Sumber Penerimaan Freight
Forwarder (2. INBOUND)
1. Biaya angkutan (freight/voyage cost).
2. Penyerahan (cortage).
3. Penimbunan (warehousing/storage).
4. Pengepakan kembali (re-packaging).
5. Break Bulk.
6. Custom Clearance.
7. Collection.
8. Added Value (fashion).
9. Transshipment.
 PATTERN for CARGO HANDLING from
EX WORKS OVERSEAS to IMPORTER’S SITE
in INDONESIA

29
PATTERN for CARGO HANDLING from
FOB OVERSEAS to IMPORTER’S SITE
in INDONESIA

30
PATTERN for CARGO HANDLING from
EX WORKS to CFS / CY OVERSEAS

31
 PATTERN for CARGO HANDLING from
INDONESIA PORT to LOCAL CONSIGNEE

32
33
34
 The Shift of Production Factors
BEFORE : CURRENT :
1. Human Resource Base
a. Professionalism;
1. More dedicated to b. Entrepreneurship;
physical means such c. Global perspective;
as :
d. Knowledge and
warehouses, trucks, Technology base.
vessels, aircrafts,
2. Information System
forklifts, ports, through information
airports, terminals, technology.
etc. 3. Networking.
2. Working Capital 4. Physical Means:
3. Manpower warehouses, trucks,
4. Information System vessels, aircrafts,
(traditional) forklifts, ports,
airports, terminals,
etc.
35
5. Working Capital.
36
37
38
39
40
41
Basic Principles for Business Thought

1. EFFICIENT;

2. EFFECTIVE;

3. CHOICE BETWEEN ALTERNATIVES;

4. ENTREPRENEURSHIP.
42
 TRADITIONAL PRODUCTION FACTORS

Original Factors : Conventional in

character
1. Natural Resources
(Land, Sea, Air)
2. Human Resources
(Labor Force)
Contains :
3. Skill
• Experience;
• Training;
• Education;
4. Capitals
• Tools; Comparative
• Money; Advantages
• Brain ware.
43
 GLOBAL TREND FACTORS :
5. Knowledge and Technology
Base : Inconventional Factors:
a. Productive;
b. Efficient;
c. Sophisticated.
6. Information :
a. Reliable; Contains :
b. Accurate;
c. Relevance & Latest.
7. Time :
a. Punctual/just in time;
b. Fast (speed);
c. Exact.
8. Network to : Competitive
a. Consumers & Producers; Advantages
b. Domestic & International;
c. All sectors of activity 44
 Inconventional Factors:
9. Management for :
a. Inventory;
b. M I S;
c. Etc. Contains :
10. System Development
such as :
a. Logistics and
Distribution;
b. One day services;
c. MTO, etc.
Competitive
Advantages
45
 WAYS to OPTIMIZE PRODUCTIVITY
1. ART of LEADERSHIP :
a. Wisdom;
b. Communicative; 3. PARTNERSHIP :
c. Persuasive; a. Integration;
d. Anticipative. b. Synergy;
c. Alliance;
2. ENTREPRENEURSHIP : d. Merger;
a. Innovative; e. Franchise;
b. Breakthrough; f. Joint Venture &
c. Dare to Take Risk & Others.
Challenge;
d. Product Approach.

46
 Triangular Linkage of The Company

 Old Fashion New Arrival

3C 3C + 1C

1. Corporate/Compani 1. Corporate/Compani
es es
2. Consumers/Custom 2. Consumers/Custom
ers ers
3. Competitors 3. Competitors
4. CHANGES
47
 KEYS OF OPERATIONAL
PERFORMANCES
 FASTER DELIVERY JUST IN TIME;

 CHEAPER COST COMPETITIVE;

 BETTER QUALITY SERVICES;

 SAVER CONTROL QUANTITY &

QUALITY
 MARKETING STRATEGY
of FF BUSINESS
 Consumer Satisfaction Oriented;
 Concentrate on the Core Competence;
 Strategic Alliance with Business Partner in
all segments of activity;
 Win-Win partnership;
 Total Marketing Concept;
 Commercialized of each Logistics and
Distribution tasks;
 Committed to Profitable Business venture.
 KEY SUCCESS OF IFF
BUSINESS
 JUST IN TIME
 ACCURATE
IN TERM OF
VOLUME
 CONSTANT RELIABILITY IMAGE
IN TERM OF
FORM
 COMPETITIVE
COST
 EXCELENT
SERVICES
51
52
 QUALITY OF SERVICE IN TERM OF
MODE
No. Service/Mode Road Rail Sea Lake/ Air
River
1. Comfortability m l vl vl vh
2. Regularity vh m vl vl vl
3. Punctuality h l vl vl vh
4. Capacity l h vh m vl
5. Safety h m h h vh
6. Door to door vh l l vl l
Capability
7. Reliability h h h m vh
 QUALITY OF SERVICE IN TERM OF
MODE (continued)
8. Speed h m vl vl vh
9. Flexibility vh l vl vl vl
10. Energy Eff. l h vh vh vl
11. Availability vh l vl vl l
12. Security vh h h h vh
13. Frequency vh h vl vl l
Notes: vl = very low; vh = very high; m =
moderate
l = low; h = high;
 Multi-Strata Pyramid for Modal Evaluation

Faster Slower

Air
More Cheaper
Costly

Road

Rail

Sea/Waterway

Source: Adapted from Adjadjihoue, 1995.

Business Model: Courier, Freight Forwarder, Shipping, Trucking, Warehouse,
Carrier, Distributor, etc

DT.Jkt. 07/08/08
 Who is Logistics Service Provider?
 CARRIER:
Shipowners (Hanjin, Maersk, Evergreen, Cosco, APL, NOL, dll.), road
transport operator, (Greyhound, Hertz, dll.), aircraft
owners/operators (Fedex, JAL, Northwest, dll), and railways (Santa Fe,
Trans Siberian, PT.KAI, dll.;

 NON-CARRIER:
Port authority (PSA, Port Klang, Laem Chabang, HK Port, Rotterdam, Hamburg,
New York,dll), ferry terminal, airport authority (CIAS, Schipol,
Suwarnabhumi, Sepang Airport, dll., warehousing (YCH, BGR, dll), CFS
(Incheon Port IFT/ICD), depot consolidation (Yeonhwa IFT), customs,
IT (Oracle);

 FREIGHT FORWARDER:
FF as an architect of cargo movement or as a principal,
acting as shipper, consignee, or as his own behalf.
(Panalpina, Danzas, Schenker, Hellman, Exel, MOL, dll.). Whereas DHL, UPS, TNT, Nippon
Express, etc. were originally express delivery service.

Notes: Anybody has capability to conduct integrated logistics services which covers
DT.Jkt. 07/08/08
procurement, inventory, transportation, distribution, warehousing, etc.
 Past Experience, Present Condition, &
Future Challenge of Freight Forwarder
No. SUBJECT PAST PRESENT FUTURE
1981-1990 1991-2000 2001- 
1. Perspective EMKL/KU IFF CTA
2. Activity Segmental Log.&Dist. SCM
3. Business Cost Profit Profit Cntr
Orientation Center Center &Ctmr.Stf.
4. Market Passive, Reactive,
Proactive,
Strategy Individual T. WorkT. Work,
Ctmr.Frnly
5. Operation Conservat. Modern, Advance &
Pattern Nominated Free Hand Integrated
 PAST, PRESENT, FUTURE
(Continued)
No. SUBJECT PAST PRESENT FUTURE
6. Management Bureaucratic Merit Flexible
Orientation System
7. Form of Warehouse, Door to System
Service Land Trans., door,MTO, Design &
Load/Unload One Stop Planning,
Custom Clr. Res.ability SCM, IT.
8. Human Clerical, Welltrained Wellexperc
Resource Technical, Wellexperc Welleducat
Experience Entreprene
urship
 PERCEPTION of CARGO
MOVEMENT FLOWS
 PREVIOUS CONCEPT  EXPEDITION
 TRANSPORTATION  FREIGHT
FORWARDERS  CARGO 
LOGISTICS  focusing solution
within internal organization;

 CURRENT CONCEPT  SUPPLY

CHAIN  is a broader and a long
process from supply of materials up
to distribution of finished products.
 DAFTAR PUSTAKA

1. The Practitioner’s Definitive Guide, Multimodal Transport, Singapore

Logistics Association & International Publishing Pte.Ltd., 2006.
2. Istopo, Capt. MSc., Unimoda dan Multimodal Transport, Angkutan Barang Terpadu Darat, Laut
dan Udara, INFA Institute, 1992.
3. Ronosentono, Idris, Drs., BSc., Pengetahuan Dasar Tata Laksana Freight Forwarding,
Infomedika, 1997.
4. Glass, A.David, Freight Forwarding and Multimodal Transport Contracts, LLP-London-
Singapore, 2004.
5. UN-ESCAP Training Manual on Logistics and Supply Chain Management, UNO, 2007.
6. Operational Aspects on Multimodal Transport Operations, UN-ESCAP, 2006.
7. INFA Institute, Module 13 Basic Freight Forwarding Course on Multimodal Transport
Operations, 2006.
8. UN-ESCAP, Commercial and Legal Aspects of Multimodal Transports, United Nations, 2006.
9. Ministry of Transport, Thailand, The Development of Multimodal Transport and Logistics
Supply Chain Management for Implementation of Action Plan, 2006.
10. Ministry of Transport, Malaysia, Chapter 25 on Logistics, 2006.
11. Prayitno, INFA Instructor, Conventions Relating to Multimodal Transport, 2008.
13. Istopo, Capt. Master Mariner, Freight Forwarder as Architect of Transport & Multimodal
Transport, INFA Institute, 2005.
14. Balitbang, Hasil Survei dalam rangka Kajian Akademis RPP Transportasi Multimoda, 2007.
15. Balitbang, Matriks, Konsep RPP Transportasi Multimoda, 2007.
16. Tas’an, Darmawan, Is Indonesia prepared to carry out Multimodal Transport Operation in the
Global Competition, 2004.