SAMARA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF LOGISTICS AND SUPPLY CHAIN
MANAGEMENT
ASSESSING FACTORS THAT AFFECTING FREIGHT FORWARDING IN
CASE OF SAMARA DRY PORT
A SENIOR ESSAY PROPOSAL SUBMITTED TO THE DEPARTMENT IN PARTIAL
FULFILLMENT FOR THE REQUIREMENT OF BACHELOR OF ART DEGREE IN
LOGISTIC AND SUPPLY CHAIN MANAGEMENT

BY: DAGIM SOLOMON FAYISA

ID: SU1301720

ADVISOR: YUSUF OUMER

DATE:
ACKNOWLEDGMENT
Completion of this project would not have been made possible without the blessing of the
omnipresent god with his mother. I would like to express my gratitude for the perseverance and
wisdom that has been bestowed upon me throughout my life. Secondly I would like to thank my
advisor yusuf oumer whose sincerity and encouragement I will never forget. Mr yusuf has been
my inspiration as I handle all the obstacles in the completion of this proposal. One simply could
not wish for better or friendlier advisor. Last but not least, I would like to thank my parents,
friends and colleagues for their total support. Both emotionally and technical throughout my
proposal. May god bless them abundantly.

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Table of Contents
ACKNOWLEDGMENT................................................................................................................................I
CHAPTER ONE..........................................................................................................................................1
INTRODUCTION.......................................................................................................................................1
1.1 BACKGROUND OF THE STUDY............................................................................................................1
1.2 BACKGROUND OF THE ORGANIZATION.............................................................................................2
1.3 STATEMENT OF THE PROBLEM..........................................................................................................2
1.4 OBJECTIVE OF THE STUDY..................................................................................................................3
1.4.1 GENERAL OBJECTIVES.....................................................................................................................3
1.4.2 SPECIFIC OBJECTIVES......................................................................................................................3
1.5 Research questions............................................................................................................................3
1.6 Scope of the study.............................................................................................................................4
1.7 LIMITATION OF THE STUDY................................................................................................................4
1.8 SIGNIFICANCE OF THE STUDY............................................................................................................5
1.9 Organization of the Study..................................................................................................................6
CHAPTER TWO.........................................................................................................................................7
Literature Review....................................................................................................................................7
2.1 Overview of freight forwarding.........................................................................................................7
2.2 Role of Freight Forwarder..................................................................................................................8
2.3 Freight classification..........................................................................................................................9
Density & Value................................................................................................................................10
Storability..........................................................................................................................................10
Handling............................................................................................................................................10
Liability.............................................................................................................................................11
2.4 Documentation in freight shipments...............................................................................................11
2.5 Basic Transportation Documentation..............................................................................................14
2.6 Presentation of a Bill of Lading to the Bank.....................................................................................18
2.7 Nature of the Cargo.........................................................................................................................18
2.8 Mode of Transport...........................................................................................................................19
2.9 Freight Bill........................................................................................................................................19
CHAPTER THREE.....................................................................................................................................21
RESEARCH METHODLOGY......................................................................................................................21

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 3.1 Background of the study area..........................................................................................................21
3.2 Research design...............................................................................................................................21
3.3 Target population............................................................................................................................21
3.4 Sampling method and technique.....................................................................................................21
3.5 Source of data..................................................................................................................................21
3.6 Procedure of Data Collection...........................................................................................................22
3.7 Data analysis and interpretation method........................................................................................22
3.8 Ethical consideration.......................................................................................................................22
CHAPTER FOUR......................................................................................................................................23
WORK PLAN AND BUDGET BREAKDOWN..............................................................................................23
4.1 WORK PLAN.....................................................................................................................................23
4.2 Budget plan......................................................................................................................................23
References.................................................................................................................................................24

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 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Freight forwarding plays a pivotal role in global trade and logistics, serving as a critical link
between manufacturers, suppliers, carriers, and end customers.

Historical Context: The origins of freight forwarding can be traced back to ancient
civilizations, where merchants facilitated the movement of goods over long distances through
intermediaries and trade networks. Over time, the development of maritime trade routes,
railways, and air transport further expanded the scope and complexity of freight forwarding
operations.

Evolution of Trade: The growth of international trade and globalization in the 20th and 21st
centuries propelled the expansion of the freight forwarding industry. Advancements in
technology, communications, and transportation infrastructure have transformed the way goods
are transported, tracked, and managed across borders, leading to increased demand for freight
forwarding services.

Role and Functions: Freight forwarders act as intermediaries between shippers and carriers,
coordinating the logistics of transporting goods from origin to destination. Their responsibilities
include arranging transportation, handling documentation, customs clearance, cargo insurance,
warehousing, and inventory management. By leveraging their expertise and networks, freight
forwarders streamline supply chains, reduce transit times, and optimize costs for their clients.

Global Trade Dynamics: (M.L, 2017)The dynamics of global trade, including shifts in
manufacturing centers, trade policies, regulatory requirements, and geopolitical tensions,
significantly impact the freight forwarding industry. Freight forwarders must navigate these
complexities and adapt to changing market conditions to effectively serve their clients and
maintain competitiveness.

Technological Innovations: The digitization of logistics processes has revolutionized the freight
forwarding industry, enabling greater visibility, efficiency, and automation throughout the supply
chain. Technologies such as electronic data interchange (EDI), transportation management
systems (TMS), block chain, and artificial intelligence (AI) are reshaping how freight forwarders
manage shipments, track cargo movements, and communicate with stakeholders.

Industry Challenges: Despite
challenges, including capacity
security threats, environmental
pandemics. Addressing these
planning within the industry.
its importance, the freight forwarding industry faces various
constraints, fluctuating freight rates, regulatory compliance,
concerns, and disruptive events such as natural disasters and
challenges requires collaboration, innovation, and strategic
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Future Outlook: The future of freight forwarding is characterized by continued growth, driven
by increasing trade volumes, e-commerce expansion, supply chain optimization, and
technological advancements. However, the industry must remain agile and adaptable to navigate
evolving market dynamics, emerging trends, and disruptive forces shaping the global economy.

In conclusion, freight forwarding is a dynamic and essential component of the global supply
chain, with a rich historical background and a promising future driven by innovation,
globalization, and the ever-changing landscape of international trade. Understanding the
evolution, challenges, and opportunities within the freight forwarding industry is crucial for
stakeholders seeking to optimize their logistics operations and achieve competitive advantage in
the global marketplace.

1.2 BACKGROUND OF THE ORGANIZATION

Dry Port Service Enterprise is a Public Enterprise established in 2007 by the Council of
Ministers Regulation No. 136/2007. The Enterprise is established to develop and operate dry
ports of the country through the multi-modal transport system and is now serving as a point of
departure and destination for the country’s import and export cargoes.

Samara dry port (port code: ETSEM) is a dry port in Ethiopia. Samara port and terminal
established 2010.It is located in afar regional state at Samara city, approximately 592 kilometers
from Addis Ababa and 270 kilometers from Djibouti, which is the main gate of Ethiopia as a
land locked country. The port occupies a total area of 160 hectare land area is used for container
terminal services. The port has the capacity to handle1180 TEU containers at a time and its
annual container handling capacity has reached up to 2378 TEU

1.3 STATEMENT OF THE PROBLEM

Despite the growing importance of dry ports in global logistics networks, there remains a gap in
understanding the specific factors that impact freight forwarding processes within these inland
terminals. Existing Research often focuses on general aspects of dry port operations or examine
specific elements such as infrastructure or customs procedures into the multifaceted factors
affecting freight forwarding activities at dry ports, aiming to provide actionable insights for
stakeholders and policymakers.

The global logistics industry, particularly freight forwarding, plays a pivotal role in facilitating
the movement of goods across borders. However, numerous factors contribute to the
complexities and challenges within this sector. One significant aspect pertains to the dynamic
nature of trade regulations and policies enforced by various countries. These regulations not only
impact the efficiency of freight forwarding operations but also introduce uncertainties and
compliance burdens for logistics providers. Understanding the nuances of regulatory frameworks
and their effects on freight forwarding is imperative for devising effective strategies to navigate
this landscape.

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Another critical factor influencing freight forwarding operations is the state of transportation
infrastructure and logistics networks. Inefficient or outdated infrastructure can lead to delays,
increased costs, and disruptions in supply chains. Moreover, the availability and reliability of
transportation modes, such as road, rail, air, and sea, significantly influence the choice of routes
and the overall effectiveness of freight forwarding services. Addressing infrastructure-related
challenges is essential for enhancing the resilience and competitiveness of freight forwarding
operations in an increasingly interconnected global economy.

Additionally, technological advancements and digitalization are reshaping the landscape of

freight forwarding. From automated tracking systems to block chain-enabled supply chain
visibility solutions, technology offers opportunities to streamline processes, optimize resource
utilization, and improve decision-making in logistics operations. However, the adoption and
integration of these technologies pose challenges such as initial investment costs, interoperability
issues, and cyber security concerns. Exploring the impacts of technology on freight forwarding
and identifying strategies to leverage emerging technologies effectively are crucial for staying
competitive and meeting evolving customer demands in the logistics industry

1.4 OBJECTIVE OF THE STUDY

1.4.1 GENERAL OBJECTIVES

The main objective of the study is assess factors that affecting freight forwarding in samara dry
port

1.4.2 SPECIFIC OBJECTIVES

The specific objective of the research will be
1) To identify infrastructure factors
2) To assess regulatory environment
3) To analyze market dynamics
4) To explore opportunities
5) To identify challenges

1.5 Research questions

1) What are the key factors influencing freight forwarding operations at Samara dry port.
2) How do they impact supply chain efficiency, competitiveness, and sustainability in the
region?

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 3) What challenges and opportunities do freight forwarders face at Samara Dry Port?

1.6 Scope of the study

Geographical Focus: The study will focus specifically on freight forwarding operations at
Samara Dry Port, [specify location], and its surrounding areas.

Timeframe: The study will examine current factors affecting freight forwarding operations, with
a focus on recent trends and developments.

Factors Considered: The study will explore a range of factors influencing freight forwarding
activities, including infrastructure, regulatory environment, market dynamics, and technological
advancements.

Stakeholders: The study will involve various stakeholders, including freight forwarders, port
authorities, customs officials, shippers, carriers, and technology providers.

Limitations: The study may have limitations in terms of data availability, sample size, and
generalizability of findings beyond the specific context of Samara Dry Port.

Recommendations: The study will propose practical recommendations for addressing

challenges, leveraging opportunities, and optimizing freight forwarding operations at Samara
Dry Port.

1.7 LIMITATION OF THE STUDY

In conducting this research paper, the researcher would encounter that the results of the study are
not without observable weakness. In spite of the efforts made. The major causes of limitation
are:

Data Availability: Limited access to data, particularly proprietary or confidential information

from freight forwarding companies, may restrict the depth of analysis and the ability to
generalize findings.

Sample Size: The study's sample size may be constrained by the availability of participants for
surveys, interviews, and case studies, potentially limiting the representativeness of the findings.

Generalizability: The findings of the study may be specific to the context of Samara Dry Port
and may not be directly applicable to other dry ports or freight forwarding operations in different
geographic locations.

Time Constraints: Time constraints may limit the extent of data collection, analysis, and
interpretation, potentially impacting the comprehensiveness and depth of the study.

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Bias: There may be inherent biases in the data collected, such as response bias in surveys or
interviewer bias in interviews, which could affect the accuracy and reliability of the findings.

External Factors: External factors such as changes in market conditions, regulatory

frameworks, or technological advancements during the course of the study may influence the
results and conclusions drawn.

Scope Limitations: The study's scope may be limited to specific aspects of freight forwarding
operations, such as infrastructure, regulatory environment, or market dynamics, while other
relevant factors may not be fully explored.

1.8 SIGNIFICANCE OF THE STUDY

Inform Policy and Decision Making: By identifying key factors influencing freight forwarding
operations at Samara Dry Port, the study can provide valuable insights for policymakers, port
authorities, and stakeholders involved in logistics and trade facilitation. The findings can inform
strategic decisions related to infrastructure development, regulatory reforms, and investment
priorities to enhance supply chain efficiency and competitiveness.

Optimize Freight Forwarding Practices: Understanding the challenges and opportunities faced
by freight forwarders at Samara Dry Port can help identify areas for improvement and
optimization in freight forwarding practices. By addressing operational inefficiencies,
streamlining processes, and leveraging technological innovations, freight forwarders can enhance
their service offerings, reduce costs, and improve customer satisfaction.

Support Economic Development: Samara Dry Port serves as a vital gateway for inland
transportation and trade in the region. By enhancing the efficiency and competitiveness of freight
forwarding operations at the port, the study can contribute to economic development, job
creation, and regional growth by facilitating smoother trade flows, attracting investments, and
stimulating business activity.

Enhance Global Connectivity: As part of the global supply chain network, improvements in
freight forwarding operations at Samara Dry Port can enhance connectivity with international
markets, strengthen trade relationships, and promote cross-border trade. This can lead to
increased trade volumes, expanded market access for businesses, and greater integration into
global value chains.

Drive Innovation and Technological Adoption: By analyzing the impact of technological

advancements on freight forwarding practices, the study can encourage innovation and the
adoption of digital technologies within the industry. This can lead to increased efficiency,
transparency, and resilience in supply chain operations, as well as foster collaboration and
knowledge sharing among industry stakeholders.

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1.9 Organization of the Study
The study was organized in to four chapters. The first chapters deal with background of the
study, background of the organization, statement of the problem, objective of the study,
significance of the study, Scope of the study, and limitation of the study. The second chapter
would elaborate review of related literature. The third chapter would be about research
methodology and design. Then, analysis of data was made on chapter four and finally,
conclusions and recommendations which were given to the company is the last chapter of this
study.

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 CHAPTER TWO

Literature Review

2.1 Overview of freight forwarding

Freight forwarding: is the planning and coordinating of the movement of commodities across
international borders, on behalf of shippers. Freight forwarding consists of strategic logistics
planning and execution for the international movement of goods, on behalf of shippers.
Specifically, a freight forwarder will carry out freight rate negotiations, container tracking,
customs documentation and freight consolidation, among other tasks.

(university, 2015)The demand for freight transportation is usually dependent upon the demand for
a product in another location. Specialization and mass production create a need for market
expansion at more distant locations, which gives rise to increased demand for freight
transportation. In this section, attention is given to the characteristics of that freight
transportation demand.
Derived Demand: The demand for transporting a product from a given location depends on the
existence of demand to consume or use that product in the distant location. Freight is not usually
transported to another location unless there is a need for the product. Thus, the demand for
transportation is generally referred to as a derived demand, as opposed to customer demand for a
product. Sometimes it is also referred to as a secondary demand as opposed to a primary demand.
Derived demand is not unique to transportation since the demand for many raw materials is
dependent upon the demand for the finished products that are produced from these raw materials.
The derived demand characteristics imply that freight transportation would not be effected by
transport carrier actions. As noted previously, this assumption is true for the demand for
transportation at the aggregate level.
For example, if a freight carrier lowers the rate to zero for moving high-tech personal computers
from the United States to a developing nation, this free transportation may not materially change
the demand for personal computers in the developing nation since it is a derived demand. The
demand for personal computers is dependent on the educational level of the citizens, electrical
availability, and the price of the computer itself. However, at the disaggregate level (a single
mode, carrier, or specific traffic lane) the rates charged for the service level provided can
influence the demand for the product and the demand to transport the product. This impact on

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product demand considers the value of the service provided to the user of the product. This
concept is discussed in the next section.
Value of Service: Value of service considers the impact of transportation costs and service on
the demand for the product. Lower transportation costs can cause a shift in demand for
transportation among the modes and the specific carriers.

2.2 Role of Freight Forwarder

The following is a brief breakdown of a day in the life of a forwarder:

Shipment Tracking

Forwarders use a Transportation Management System (TMS) to maintain transparent visibility

throughout each stage of a shipment’s voyage.

Customs Brokerage

This critical piece of forwarding requires special licensure—a customs brokerage license.
Licensed brokers are the only people qualified to manage and submit the extensive
documentation necessary to complete importing/exporting processes.

Warehousing

Some forwarders may have their own warehouses available to harbor shippers’ commodities (or
parts of commodities), but for the most part, the service your forwarder will offer is to arrange
storage at a warehouse owned and operated by a conveniently located affiliate.

Negotiating

Bargaining with carriers for cost-efficient shipping rates is no easy task. The art of this deal
entails appealing to carriers’ interests by balancing the pros and cons of your cargo type, time
flexibility, credit status, space/tonnage requirements, and more.

Cargo Space Scheduling

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Coordination and scheduling of cargo space are the more tangible parts of a forwarder’s skill
set. If you hire a freight forwarder to manage logistics, this is where they’ll have the opportunity
to display their chops. It takes a thoughtful planner to determine whether it is profitable to
consolidate a shipment, to secure timely sailings, and to weigh the feasibility of intermodal
shipping options. Cargo scheduling is the logistics of "Logistics."

Consolidating Freight

Forwarders may have several customers who all need to transport shipments that do not
necessitate the use of an entire container. Freight consolidation for less than container load
(LCL) shipping is a service forwarders provide wherein multiple smaller consignments are all
booked aboard the same container. In these instances, the shipping cost is spread amongst all
participating customers based on the cargo’s space requirements.

Supplying Cargo Insurance

Forwarders can provide you with a cargo insurance policy, also known as freight insurance.
Cargo insurance is intended to reimburse the loss payee in the event that goods are damaged or
stolen in transit.

2.3 Freight classification

Fright classification: It refers to the grouping of thousands of commodities in to a limited
number of classes for rate making. Freight classes are designed to help you get common
standardized freight pricing for your shipment when working with different carriers, warehouses
and brokers. The classification takes in to consideration the characteristics of the product or
commodity that will influence the cost of handling or transport. Product with similar density,
stow ability, handling possible ratings to a manageable size.

The intent of the class rate system is to simplify the process for pricing freight with inherently
different freight characteristics. Rather than have a unique price for each and every commodity,
articles with similar freight characteristics are assigned to common freight ‘classes’. There are 18
classes that a shipped package may fall under with class 50 being the least expensive, to class

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500 as the most expensive. The logic is, the lower the class the lower the price. The governing
publication for the class rate system is the National Motor Freight Classification, which is
reissued annually. The National Motor Freight Classification (NMFC) system is a standardized
method designed to give consumers and value characteristics are grouping together in to a class
there by reducing the wide range of uniform pricing structure when transporting freight.

Classification is assigned based on the following factors:

Density & Value

(globerman, 1986)This includes the weight and dimensions of the freight. Although class 50 is
the cheapest, it is also the heaviest, weighing in at 50 lbs per cubic foot. On the other side of the
spectrum, freight that weighs less than 1 lb per cubic foot would be grouped into freight class
500. These factors are all in relation to the product’s density (weight in proportion to space.)
Keep in mind that the dimensions of your goods must include the size of your freight when
palletized.

Storability

Although the expectation is that most freight should be easy to store on a train, truck, or ship,
some products are more difficult to stow, or they may be regulated by the government. (harcourt,
2002) Hazardous materials, overweight goods, and oddly shaped or fragile pieces will all require
some type of special treatment. Goods which don’t have load-bearing bottoms and ceilings may
receive higher freight classes due to their lack of stack-ability. Freight classification in relation to
the storability of an item will be determined on the difficulty or ease of loading, storing, and
stacking the items.

Handling

Similar to the storability of an item, the ease or difficulty of handling a particular shipment will
determine the class assigned to the freight. Fragility, hazardous properties, government
regulations, odd shapes, or overweight cargo will all rank in higher freight classifications due to
the difficulty of handling the cargo.

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Liability

As the probability of your freight being damaged (or damaging adjacent cargo) increases, so will
the freight classification. If you are shipping fragile, hazardous, or perishable goods, the
probability of cargo being damaged is high. In addition to this, shipping highly valuable goods
such as jewelry or precious metals increases the likelihood of theft or robbery which will cause
for a higher assigned freight class. Regardless of the freight you are shipping, it is always a good
idea to insure your cargo, and to understand your (czinkota, 2002) cargo insurance options.

Freight classifications are based on four characteristics:

 Density: The weight per cubic foot.

 Freight Storability: The length and width based on carrier mode rules.
 Ease of Handling: Evaluation of the care involved in transporting.
 Liability: This includes the freight price per pound, susceptibility to theft, liability to
damage, breakability and perishability.

2.4 Documentation in freight shipments

Document is a formal piece of writing that provides information or acts as a record of events or
arrangements. Documentation is the process of providing detailed written information about
something.

Transportation documentation falls into two categories: shipping and collecting

Shipping Documents- Shipping documents are documents that permit an export cargo to be
moved through customs. Goods Loaded aboard or on a carrier, and shipped to its foreign
destination needs appropriate documents. These documents are:

 Export licenses
 Packing of lading
 Bills of lading and
 Export declarations

Collection Documents – Collection is the procedure whereby a bank collects money for a seller
against a draft drawn on a buyer abroad, usually through a correspondent bank.

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Collection documents are those needed for submission to the importer (in the case of a draft) or
to importer’s bank in the case of an L/C) in order to receive payment. These documents are:

 Commercial invoices
 Consular invoices
 Certificates of origin
 Inspection certificates & Bills of lading
 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.
 Commercial Invoice is a contract and proof of sale issued by the seller to the buyer. This
document describes the goods being sold and details the price, value, and quantity of the
goods. The Commercial Invoice does not indicate ownership or carry a title to the goods.

When endorsed by the shipper, you can use bill of lading for sight draft or for L/C shipments.
Other documents sometimes required for collection are manufacturing and insurance certificates
and dock or warehouse receipts.

The transport document is issued by the “Carrier” whether a shipping line, airline, trucking
company or railroad. They come in various forms and each serves several, but not necessarily all
of the following functions:

1. Receipt for the goods, evidencing loading, dispatch, or taking in charge and indicating the
general condition of the goods received.
2. A contract for carriage between the shipper and the carrier
3. An invoice from the carrier for charges.
4. A negotiable document exchangeable for money, allowing goods to be sold in transit.
5. A document of title representing ownership of the goods, which will only be released by
the shipping company against presentation of a signed original document.
Documents accompany almost every shipment. Probably the most noted document is the bill of
lading.

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  A bill of lading (BL or BoL): is a legal document issued by a carrier (Transportation
Company) to a shipper that details the type, quantity, and destination of the goods being
carried.

Bill of lading has three main purposes. First, it is a document of title to the goods described in
the bill of lading. Second, it is a receipt for the shipped products. Finally, it represents the agreed
terms and conditions for the transportation of the goods.

The bill of lading specifies the terms & conditions of carrier liability and includes all possible
causes of loss or damage except those defined as acts of God. Bill of lading may help reconcile
possible discrepancies or provide evidence of title to the goods. Bills of lading can be endorsed
much like a check. A straight bill of lading is non- negotiable, which means endorsement does
not transfer title of goods. An order- notifies bill of lading is negotiable and a credit instrument
and services as a title to the goods listed in the document. It provides that delivery not be made
unless the original bill of lading is surrendered to the carrier. The usual procedure is for the seller
to send the order- notified bill of lading to a third party, usually a bank or credit institution. Upon
customer payment for the product, the credit institution releases the bill of lading. The buyer then
presents it to the common carrier, who in turn, releases the goods.

An export bill of lading permits the domestic use of export rates, which are sometimes lower
than domestic rates. When a shipment is being exported the use of export rates for domestic
origin or destination line – haul transport might reduce total cost. An export bill of lading also
permits extended time at the port for transfer of freight from a railcar to a ship. Government bills
of lading may be used when the product is owned by the government & allows the use of a rate
which is normally lower than the regular rates.

The bill of lading includes the terms and conditions of transportation that address issues like
carriers liability for loss and damage and reasonable dispatch requirements. Common carriers are
liable for the full value of lost or damaged products unless they can prove one of five exceptions.
The exceptions are:

1. Act of God (e.g., earthquake).

2. Act of public enemy (e.g. military attack ),
3. Act of shipper (e.g., improper packing),

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 4. Act of public authority (e.g., impounded by the police), and
5. Act resulting from the inherent nature of the goods (e.g., rust).
One or more of these exceptions must be solely responsible for the loss or damage or the
common carrier will most likely be found liable for the goods.

A shipper must file a claim for lost or damaged goods. This document represents a claim against
the carrier to recover financial from loss, damage, or unreasonable delay. The shipper must file a
written claim with the carrier within a specified time limit, usually nine months after delivery of
the product. In practice, freight should be inspected immediately upon receipt. Any detected
damage should immediately be brought to the attention of the carrier. When the financial loss is
the result of a lost or unreasonably delayed product, the best approach is to have the shipper and
carrier work together to receive the product.

2.5 Basic Transportation Documentation

(Douglas, 2014)The bill of lading (in ocean transport), way bill or consignment note (in air, road,
and rail transport), receipt (in postal or courier delivery), freight bill and the freight claim are
collectively known as the transport documents. A great deal of transportation administration is
involved in preparation of bills of lading and freight bills. This section focuses on these two
important documents.

A. The Bill of Lading

Nature and particulars

Bill of lading is the key document by which freight moves. It is a legal contract between the
shipper and the carrier for the movement of the designated freight with reasonable dispatch to a
specified destination and for doing it free of damage. Bill of lading is the basic document in the
purchase of transport services. It serves as a transaction receipt by documenting commodities and
quantities shipped. For this reason, accurate description is essential. In case of loss, damage, or
delay, the bill of lading is the basis for freight claims.

The Bill of Lading is ought to contain the name of the consignor (shipper); the name of the

14
consignee (receiver); the name of the master of the ship; the name of the ship and the voyage
number; the place of departure (Port of loading) and destination (Port of discharge); the price of
the freight; the date of loading; the marks and numbers of the things shipped.
According to the commercial code of Ethiopia, three copies of the bill of lading shall be prepared
by the sender and delivered to the carrier together with the goods.

 The first copy shall bear the words: “for the Carrier” and shall be signed by the sender.
 The second copy shall bear the words “for the addressee.” It shall be signed by the
sender and the carrier and shall remain with the goods.
 The third copy shall be signed by the carrier and handed to the sender after the goods
have been accepted by the carrier.
Where more than one parcel is to be carried, the carrier may require the sender to prepare
separate bills of lading. The sender is liable for the accuracy of the statements made in the bill of
lading. The sender also is liable for any damage caused to the carrier or to a person for whom the
carrier is responsible arising out of irregular, inaccurate or incomplete statements in the bill of
lading.

Particulars of the Bill Of Lading:

Bill of lading shall show:

a) The place and date of issue.

b) The place from and to which the goods are to be carried:
c) The name and addresses of the sender, the addressee and the first carrier:
d) The nature, number of pieces, volume or weight of the goods:
e) The distinguishing marks or numbers affixed on the parcel, if any:
f) The condition of the goods and the nature and condition of packing, if any:
g) The cost of transport;
h) The time within which and the route whereby the goods are to be carried.
Bill of lading shall contain a notice informing the sender of the carrier’s limited liability for loss
of or damage to the goods. According to the commercial code, in respect of goods and registered
baggage, the carrier’s liability shall not exceed Eth. Birr 40per Kg. the carrier shall sign the bill
of lading before the goods are loaded.

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Purpose

Bill of lading has the following three purposes:

1. It services as a receipt for goods, subject to the classification and tariffs that were in effect
on the data that the bill of lading was issued. It certifies that the item indicated in the bill of
lading was in apparent good order except as noted in the document. The bill of lading
should be signed by both the shipper and an agent for the carrier.
2. It serves as a contract of carrier and identifies the contracting parties and prescribes the
terms and conditions of their agreement.
3. It serves as documentary evidence of title. Although a negotiable bill of lading does serve as
evidence of tile, in the case of the straight bill of lading the person who has possession may
have title to the goods. Such matters as the terms of sale have influence in establishing title
to the goods covered by the straight bill of lading.
There are variations in bills of lading. The basis for classification may be the user, extent of
transferability, nature of the cargo and the mode of transportation used.
The major ones are:
A. Export bill of lading.
B. Government bill of lading
C. Straight bill of lading.
D. Order bill of lading,
E. Clean bill of lading.
F. Foul bill of lading,
G. Hazmat Emergency Response
H. Airway bill of lading
I. Overland bill of lading, and
J. Ocean (marine) bill of lading.

1. The user

Based on the user, bill of lading may be categorized into two: export bill of lading and
government bill of lading.

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a) An export bill of lading is Transport document permits the exports of domestic product with
domestic export rates. An export bill of lading also permits extended time at the port for
transfer of freight from a railcar to a ship. In many cases the export bill also eliminates the
need for special broker services at port facilities.
b) Government bill of lading transport document used when the product is owned by the
government. A government bill, of lading allows a special rate which is normally lower than
regular rates.
2. Extent of Transferability
Here are two types of bills based on the extent of transferability: Straight and Order bill of
lading.
a. Straight Bill of Lading: It is non- negotiable bills that consign the goods to an importer
or other party named in the document. Once completed, the seller and/ or the seller’s
bank lose title (control) because the goods will be delivered to anyone who can be
identified as the consignee. This bill cannot be traded or sold.
In principle, the named individual or buyer on a bill of lading is the only recipient of goods. A
carrier is responsible for proper delivery according to instructions contained in the document. In
effect, title is transferred with accomplishment of delivery.
b. Order Bill of Lading: it is a negotiable bill; that is, unlike the “straight” bill, it is
presented to the bank for collection. In other words, the “order” bill can be used as
collateral in financing- as documentation to discount or sell a draft. L/C transactions
specify to whom the endorsement is to be made. Typically, they are made” in blank” or
to the order of a third party, a bank, or a broker.
Under the order bill of lading, the goods are consigned to the order of a person. This instrument
may be traded or sold by endorsing the order to a person other than the one specified in the
original bill. A main advantage of being able to change title allows the shipper to obtain payment
for the goods before they reach their destination by endorsing the order bill of lading over to the
shipper’s bank and receiving payment. The shipper’s bank in turn passes the document on to the
consignee’s bank, the consignee, and finally the carrier. The procedure works in much the same
manner as bank drafts filter through the banking system.
An order notified or negotiable bill of lading is a credit instrument. It provides that delivery not
be made unless the original bill of lading is surrendered to the carrier. The usual procedure is for

17
the seller to send the order notified bill of lading to a third party, usually a bank or credit
institution. Upon customer payment for the product, the credit institution releases the bill of
lading. The buyer then presents it to the common carrier, who, in turn, releases the goods. Air
bills of lading are usually “straight” (i.e., non –negotiable). Ocean shipping companies can issue
“straight” or order “bills.

2.6 Presentation of a Bill of Lading to the Bank

In Ethiopia, a letter of credit usually allows for 21 days for document presentation counted from
the date of loading. The shipper must pay the bills within the maximum days of credit
presentation, but on the collect bases, the carrier extends the payment due date by the length of
the transit time

2.7 Nature of the Cargo

What type of product is being shipped? Is it hazardous or non- hazardous? What was the nature
of the product when it was loaded on the ship? Good or damaged? The answers to these
questions will raise the different types of bills reflecting the nature of the goods carried.
a. Clean on Board. To verify shipping performance, the carrier indicates the condition of
the goods upon acceptance. You should prefer to ship on a bill of lading marked “clean
on board. “That statement means that the carrier accepted the cargo and loaded it on
board/the vessel without exception.
b. Foul Bill. A foul indicates an exception- some damage is noted on the bill of lading. If
this is the case, discuss it with your carrier or freight forwarder to make sure you have an
opportunity to exchange any damaged goods and obtain a “clean “bill.
c. Hazmat Emergency Response Bill of Lading
This document is used to ship hazardous materials or a combination of hazardous and
non-hazardous materials on a domestic short- Form Straight Bill of Lading. There is a
column to designate “HM” for the packages containing hazardous materials and a
column for the UN or NA hazardous identification number.

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2.8 Mode of Transport

In addition to the above classification there are three basic types of bill of ladings: Airway bill,
overland bill of Lading and ocean Bill of Lading. This classification is based on the way or
method the goods move, or in other words, the mode used in transpiration.

i/ Airway bill is a non – bill of lading produced in conformance with the international Air
Transport Association’s specifications. The international House Air way bill serves as a contract
between the exporter importer and the air carrier or his agent.

ii/ Overland Bill of Lading

The overland bill of lading provides the required information for the inland movement of goods
by motor carrier (over the highway truck), by rail (on railroad), by rail/ water, or by other
combinations of these modes of transportation. The form itself is a contract of carriage between
the shipper and the carrier.

iii/ Ocean (Marine) Bills of Lading

An ocean bill of lading is a document required for the transportation of goods overseas across
international waters.

2.9 Freight Bill

The bill of lading usually does not contain information about the freight charges: although some
altered or modified forms include these. More frequently, the charges appear on a separate
document commonly termed as a freight bill.
Freight bill represents a carrier’s method of charging for transportation services performed. The
freight bill is derived from information contained in the bill of lading. It may be either prepaid or
collect. A prepaid bill means that transport cost must be paid for by the shipper for the
transportation service, whereas a collect shipment shifts payment responsibility to the buyer.
The freight bill (an invoice of carrier charges) contains, in addition to freight charges, much of
the same information as a bill lading, such as shipment origin and destination, quantity shipped,
product, and the persons involved.
The freight may be prepaid by the shipper or billed collect from the consignee. Payments for rail
service are to be made before delivery except that credit is extended to financially responsible
shipper. Credit terms vary depending on the carrier involved. For example, users of rail services
may by allowed up to 96 hours on carload shipment and up to 120 hours on LCL shipments to
make payment. Motor carriers may present shippers with freight bills within 7 days, and shippers
have 7 days to pay after receiving the bill.

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Transportation agencies can extend credit up to 7 days. Domestic water carriers generally allow
credit to 48 hours and sometimes up to 96 hours.

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 CHAPTER THREE

RESEARCH METHODLOGY

3.1 Background of the study area

Semera (Afar af: Samara) (Ge'ez: ሰመራ) is new town Administration on the Awash–Asseb
highway in north-east Ethiopia, planned to replace Asaita as the capital of the Afar Region.
Located in the Administrative Zone 1, Semera has a latitude and longitude of 11°47′32″N
41°0′31″E. One of the completed buildings is Semera University, Health science College, which
began holding classes in 2007.The 2006 Lonely Planet guide to Ethiopia had this description of
Semera: With its quirky mix of barracks, modern apartment blocks and soulless administrative
buildings, it looks like a microscopic version of Brasilia emerging incongruously in the middle
of the desert – except that it's a completely botched attempt at creating a new town.The 2009
Lonely Planet guide omitted the final phrase following the dash. The 2002 edition of Ethiopia:
the Bradt travel guide described Semera as consisting of "one active filling station (complete
with fridge) and a cluster of modern offices and tall apartment blocks in various states of
construction – all in mad isolation from any existing settlement!"The area is served by Semera
Airport, which has scheduled service to Addis Ababa.

3.2 Research design

The study would be used descriptive research design. The research describing factors that
affecting freight forwarding in semera dry port. In order to analyze and address the problem of
the study and accomplish the objectives of the student researchers conducted on descriptive
study.

3.3 Target population

The target population of this study will be Freight Forwarders, Customs Officials, Logistics
Personnel, Importers and Exporters, Transportation Workers.

3.4 Sampling method and technique

The researcher will used stratified random sampling techniques. The case of using this technique
will employees in samara dry port is grouped in different department then select appropriate
sample from each simple.

3.5 Source of data

It is true that the whole effort of the study will depend on the data that will be collected from
different sources. The student researchers will be focused on two major sources to assess factors
influencing operational efficiency. These are the primary and secondary data from different
category sources. The researchers will use primary source of data by distributing self-
administered questionnaires and the researchers also assessed secondary sources of data
including libraries, books, and internet.

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3.6 Procedure of Data Collection
First the researchers will develop questionnaire and distributes into the target population or
respondents. Questionnaires, both structured (close-ended) questions that require respondents to
choose from a predetermined set of alternatives, so as to allow respondents to replay in their own
word, would be applied.

3.7 Data analysis and interpretation method

Having a data collection from both primary and secondary sources; the researcher are preceded
towards the drawing of conclusion by logical inferences (analysis and interpretation of data). In
this study the researcher will decided to use percentage and tabulation method to analyze data.
Percentage method will be used to compute and get the total picture of data collected from
sample respondents which was served as base for making analysis. Tabulation on the other hand
is used to summarize the data in the form of tables.

3.8 Ethical consideration

In the first place, the department were approved the proposal. In addition, the researcher
followed logical procedures in every stage of data collection process. Based on this the, the
researcher introduced about the purpose of the study then informs consent from the respondents
and responsible officials of the departments covered by the study will obtain to discuss with and
interview them about the subject under the study. Therefore, on the basis of these ethical
principles, efforts were made and confidentiality assured and kept throughout the process of this
research.

CHAPTER FOUR

WORK PLAN AND BUDGET BREAKDOWN

4.1 WORK PLAN

no Activities January February March April

1 Title selection

2 Preparing
proposal

3 Data
collection

4 Data analysis
and
interpretation

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5 Preparation of
final report

6 Final
presentation

4.2 Budget plan

No Item Quantity/unit Cost per unit Total cost

1 Transportation One day 20 500

2 Internet Unlimited package 10 200

3 Printing 50 page 3 150

Total 850

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 References
czinkota, m. r. (2002). internatinal business. 6 edition.

Douglas. (2014). international logistics and transportation. 2nd edition .

globerman, s. (1986). fundamentals of international business management . new jersey.

harcourt, c. (2002). international business. orlando: inc sea harbour drive.

M.L. (2017). Jingan bank and international trade. 5th edition.

university, m. s. (2015). supply chain logistics management. michigan.

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