UNIT -5

MARKETING LOGISTICS SYSTEM:

Logistics is a military term that refers to the management of various activities like transportation,
inventory, warehousing right from the stage of processing the raw materials by the manufacturer to
convert it into finished goods till they are made available to the customer for use. While logistics
management helps to optimize the flow of material within the organization, supply chain
management crosses the boundaries of organization extending material flow integration upwards to
suppliers and also descending down to customers. Logistics basically represents two primary product
movements, (i) Physical supply, concerned with supply of raw materials, component parts, and
other related supplies necessary for the manufacturing process. This comes under the purchase function
(Materials Management) and (ii) Physical distribution, concerned with delivering the finished product to
customers and the middlemen. This comes under the marketing management that is also called as
Marketing Logistics.

Marketing logistics is the process of delivering the finished goods to the intermediaries as well
as customers. An efficient delivery system helps to reduce the costs, improve customer service, and
minimize time that finally helps to gain customer loyalty. A physical distribution system involves various
tasks (as given in the table below) that interact with each other and play an important role in the overall
performance of the logistics system.

Marketing logistics in a business process to ensure an efficient is flow of finished goods, services
and product information to the distributor, retailer and end customer. Marketing logistics is an important
business parameter which entails finished goods' inventory management, packaging, transportation,
distribution, waste management and reverse logistics.

International marketing is becoming more important to companies as the world shifts from distinct
national markets to linked global markets. Globalization brings homogenization of consumer needs,
liberalization of trade, and competitive advantages of operating in global markets. Companies are forced
to think and act globally in order to survive in such a dynamic environment. All these elements have a
deep impact on the development and the positioning of companies on international marketplaces where
competition is cruel. Furthermore, another significant change concerns the customers since they are more
demanding in term of quality, lead time and order fulfilment. In this context, firms must be more and
more flexible and reactive to anticipate and to adapt to such changes. This quest for flexibility and
reactivity affects the conception and the management of firms and more generally their logistic systems
and contributes to the development of partnership relations, to the emergence of mergers or strategic
alliances between companies. As a result, a firm can no longer be considered as an isolated entity but as a
component of a wider supply network. International Firms have begun to implement various strategies in
order to remain competitive in world market. Logistics is one of the key areas in the process of
international marketing as the delivery of goods to the buyer is as important as any other activity in
business and marketing. Quite often, the most crucial part in International trade is the timely delivery of
goods at a reasonable cost by the exporter to the importer. In fact, the prospective buyer may be willing to
pay even higher price for timely supplies. The emergence of logistics as an integrative activity, with the
movement of raw materials from their sources of supply to the production line and ending with the
movement of finished goods to the customer has gained special importance. Earlier on, all the functions
comprising logistics were not viewed as components of a single system. But, with emergence of logistic
as an important part of corporate strategy due to certain developments in the field of international
marketing has gained special significance. Before discussing the various aspects of logistics, let us look at
its definition:

According to Council of logistics management:

―Logistics is the process of planning, implementing and controlling the efficient, effective flow and
storage of goods, services and related information from point of origin to point of consumption for the
purpose of conforming the customer requirement‖.

This definition clearly points out the inherent nature of logistics and it conveys that Logistics is concerned
with getting products and services where they are needed whenever they are desired. In trade Logistics
has been performed since the3 beginning of civilization: it‟s hardly new. However implementing best
practice of logistics has become one of the most exciting and challenging operational areas of business
and public sector management. Logistics is unique, it never stops! Logistics is happening around the
globe 24 hours a days Seven days a week during fifty-two weeks a year. Few areas of business involve
the complexity or span the geography typical of logistics.

I - CONCEPT OF INTERNATIONAL MARKETING LOGISTICS

Word, ‟Logistics‟ is derived from French word „loger‟, which means art of war pertaining to movement
and supply of armies. Basically a military concept, it is now commonly applied to marketing
management. Fighting a war requires the setting of an object, and to achieve this objective meticulous
planning is needed so that the troops are properly deployed and the supply line consisting, interalia,
weaponary, food, medical assistance, etc. is maintained. Similarly, the plan should be each that there is a
minimum loss of men and material while, at the same time, it is capable of being altered if the need arises.
As in the case of fighting a war in the battle-field, the marketing managers also need a suitable logistics
plan that is capable of satisfying the company objective of meeting profitably the demand of the targeted
customers.

From the point of view of management, marketing logistics or physical distribution has been described as
„planning, implementing and controlling the process of physical flows of materials and final products
from the point of origin to the point of use in order to meet customer‟s needs at a profit. As a concept it
means the art of managing the flow of raw materials and finished goods from the source of supply to their
users. In other words, primarily it involves efficient management of goods from the end of product line to
the consumers and in some cases, include the movement of raw materials from the source of supply to
the beginning of the production line. These activities include transportation warehousing, inventory
control, order processing and information monitoring. These activities are considered primary to the
effective management of logistics because they either contribute most to the total cost of logistics or they
are essential to effective completion of the logistics task. However, the firms must carry out these
activities as essential part of providing customer with the goods and services they desire.

ii) - SIGNIFIGANCE OF MARKETING LOGISTICS

The important of a logistics systems lies in the fact that it leads to ultimate consummation of the sales
contract. The buyer is not interested in the promises of the seller that he can supply goods at competitive
price but that he actually does so. Delivery according to the contract is essential to fulfilling the
commercial and legal requirements. In the event of failure to comply with the stipulated supply of period,
the seller may not only get his sale amount back, but may also be legally penalized, if the sales contract so
specifies. There is no doubt that better delivery schedule is a good promotional strategy when buyers are
reluctant to invest in warehousing and keeping higher level of inventories. Similarly, better and/or timely
delivery helps in getting repeat orders through creation of goodwill for the supplier. Thus, as effective
logistics system contributes immensely to the achievements of the business and marketing objectives of a
firm. It creates time and place utilities in the products and thereby helps in maximizing the value
satisfaction to consumers. By ensuring quick deliveries in minimum time and cost, it relieves the
customers of5 holding excess inventories. It also brings down the cost of carrying inventory, material
handling, transportation and other related activities of distribution. In nutshell, an efficient system of
physical distribution/logistics has a great potential for improving customer service and reducing costs.

Logistics has gained importance due to the following trends

n inventory philosophy

chains or mass merchandise with large demands & very sophisticated

logistics services, by pass traditional channel & distribution.

As a result of these developments, the decision maker has a number of choices to work out the most ideal
marketing logistics system. Essentially, this system implies that people at all levels of management think
and act in terms of integrated capabilities and adoption of a total approach to achieve pre-determined
logistics objectives. Logistics is also important on the global scale. Efficient logistics systems

throughout the world economy are a basis for trade and a high standard of living for all of us. Lands, as
well as the people who occupy them, are not equally productive. That is, one region often has an
advantage over all others in some production specialty. An efficient logistics system allows a
geographical region to exploit its inherent advantage by specializing its productive efforts in those
products in which it has been an advantage by specializing its productive to other regions. The system
allows the products‟ landed cost (production plus logistics cost) and quality to be competitive with those
form any other region. Common examples of this specialization have been Japan‟s electronics industry,
the agricultural, computer and aircrafts industries of United States and various countries dominance in
supplying raw materials such as oil, gold, bauxite, and chromium. Further more Logistics has gained
importance in the international marketing with the following reasons:

1. Transform in the customers attitude towards the total cost approach rather than direct cost approach

2. Technological advancement in the fields of information processing and communication.

3. Technological development in transportation and material handling.

4. Companies are centralizing production to gain economies of scale.

5. Most of the MNC organizations are restructuring their production facilities on a global basis.

6. In many industries, the value added by manufacturing is declining as the cost of materials and
distribution climbs.

7. High volume data processing and transmission is revolutionizing logistics control systems.

8. With the advancement of new technologies, managers can now update sales and inventory planning
faster and more frequently, and factories can respond with more flexibility to volatile market conditions.

9. Product life cycles are contracting. Companies that have gone all out to slash costs by turning to large
scale batch production regularly find themselves saddled with obsolete stocks and are unable to keep pace
with competitors‟ new-product introductions.

10. Product lines are proliferating. More and more product line variety is needed to satisfy the growing
range of customer tastes and requirements, and stock levels in both field and factory inevitably rise.

11. The balance of power in distribution chain is shifting from the manufacturers to the trader.

iii) - OBJECTIVES OF MARKETTING LOGISTICS

The General objectives of the logistics can be summarized as:

1. Cost reduction

2. Capital reduction

3. Service improvement

The specific objective of an ideal logistics system is to ensure the flow of supply to the buyer, the:
 ht condition

This implies that a firm will aim at having a logistics system which maximizes the customer service and
minimizes the distribution cost. However, one8 can approximate the reality by defining the objective of
logistics system as achieving a desired level of customer service i.e., the degree of delivery support given
by the seller to the buyer. Thus, logistics management starts with as curtaining customer need till its
fulfillment through product supplies and, during this process of supplies, it considers all aspects of
performance which include arranging the inputs, manufacturing the goods and the physical distribution of
the products. However, there are some definite objectives to be achieved through a proper logistics
system. These can be described as follows:

1. Improving customer service:

As we know, the marketing concept assumes that the sure way to maximize profits in the long run is
through maximizing the customer satisfaction. As such, an important objective of all marketing efforts,
including the physical distribution activities, is to improve the customer service. An efficient management
of physical distribution can help in improving the level of customer service by developing an effective
system of warehousing, quick and economic transportation, all maintaining optimum level of inventory.
But, as discussed earlier, the level of service directly affects the cost of physical distribution. Therefore,
while deciding the level of service, a careful analysis of the customers‟ wants and the policies of the
competitors is necessary. The customers may be interested in several things like timely delivery, careful
handling of merchandise, reliability of inventory, economy in operations, and so on. However, the relative
importance of these factors in the minds of customers may vary. Hence, an effort should be made to
ascertain whether they value timely delivery or economy in transportation, and so on. One the relative
weights are known, an analysis of what the competitors are offering in this regard should also be made.
This, together with an estimate about the cost of providing a particular level of customer service, would
help in deciding the level of customer service.9

2. Rapid Response:

Rapid response is concerned with a firm's ability to satisfy customer service requirements in a timely
manner. Information technology has increased the capability to postpone logistical operations to the latest
possible time and then accomplish rapid delivery of required inventory. The result is elimination of

excessive inventories traditionally stocked in anticipation of customer requirements. Rapid response

capability shifts operational emphasis from an anticipatory posture based on forecasting and inventory
stocking to responding to customer requirements on a shipment-to-shipment basis. Because inventory is
typically not moved in a time-based system until customer requirements are known and performance is
committed, little tolerance exists for operational deficiencies

3. Reduce total distribution costs:

Another most commonly stated objective is to minimize the cost of physical distribution of the products.
As explained earlier, the cost of physical distribution consists of various elements such as transportation,
warehousing and inventory maintenance, and any reduction in the cost of one element may result in an
increase in the cost of the other elements. Thus, the objective of the firm should be to reduce the total cost
of distribution and not just the cost incurred on any one element. For this purpose, the total cost of
alternative distribution systems should be analyzed and the one which has the minimum total distribution
cost should be selected.

4. Generating additional sales:

Another important objective of the physical distribution/logistics system in a firm is to generate additional
sales. A firm can attract additional customers by offering better services at lowest prices. For example, by
decentralizing its warehousing operations or by using economic and efficient modes of transportation, a
firm can10 achieve larger market share. Also by avoiding the out-of-stock situation, the loss of loyal
customers can be arrested.

5. Creating time and place utilities:

The logistical system also aims at creating time and place utilities to the products. Unless the products are
physically moved from the place of their origin to the place where they are required for consumption, they
do not serve any purpose to the users. Similarly, the products have to be made available at the time they
are needed for consumption. Both these purposes can be achieved by increasing the number of
warehouses located at places from where the goods can be delivered quickly and where sufficient stocks
are maintained so as to meet the emergency demands of the customers. Moreover, a quicker mode of
transport should be selected to move the products from one place to another in the shortest possible time.
Thus, time and place utilities can be created in the products through an efficient system of physical
distribution.

6. Price stabilization:

Logistics also aim at achieving stabilization in the prices of the products. It can be achieved by regulating
the flow of the products to the market through a judicious use of available transport facilities and
compatible warehouse operations. For example, in the case of industries such as cotton textile, there are
heavy fluctuations in the supply of raw materials. In such cases if the market forces are allowed to operate
freely, the raw material would be very cheap during harvesting season and very dear during off season.
By stocking the raw material during the period of excess supply (harvest season) and made available
during the periods of short supply, the prices can be stabilized.

7. Quality improvement:

The long-term objective of the logistical system is to seek continuous quality improvement. Total quality
management (TQM) has become a major commitment throughout all facets of industry. Overall
commitment to TQM is one of the major11 forces contributing to the logistical renaissance. If a product
becomes defective or if service promises are not kept, little, if any, value is added by the logistics.
Logistical costs, once expended, cannot be reversed. In fact, when quality fails, the logistical performance
typically needs to be reversed and then repeated. Logistics itself must perform to demanding quality
standards. The management challenge of achieving zero defect logistical performance is magnified by the
fact that logistical operations typically must be performed across a vast geographical area at all times of
the day and night. The quality challenge is magnified by the fact that most logistical work is performed
out of a supervisor's vision. Reworking a customer's order as a result of incorrect shipment or in-transit
damage is far more costly than performing it right the first time. Logistics is a prime part of developing
and maintaining continuous TQM improvement.

8. Life-Cycle support:

A good logistical system helps to support the life cycle. Few items are sold without some guarantee that
the product will perform as advertised over a specified period. In some situations. the normal value-added
inventory flow toward customers must be reversed. Product recall is a critical competency resulting from
increasingly rigid quality standards, product expiration dating and responsibility for hazardous
consequences. Return logistics requirements also result from the increasing number of laws prohibiting
disposal and encouraging recycling of beverage containers and packaging materials. The most significant
aspect of reverse logistical operations is the need for maximum control when a potential health liability
exists (i.e.. a contaminated product). In this sense, a recall program is similar to a strategy of maximum
customer service that must be executed regardless of cost. Firestone classical response to the tyre crisis is
an example of turning adversity into advantage. The operational requirements of reverse logistics range
from lowest total cost, such as returning bottles for recycling, to maximum performance solutions for12
critical recalls. The important point is that sound logistical strategy cannot be formulated without careful
review of reverse logistical requirements.

9. Movement consolidation:

As the logistical system aims at cost reduction through integration, consolidation One of the most
significant logistical costs is transportation. Transportation cost is directly related to. the type of product,
size of shipment, and distance. Many Logistical systems that feature premium service depend on high-
speed, smallshipment transportation. Premium transportation is typically high-cost. To reduce
transportation cost.. it is desirable to achieve movement consolidation. As a general rule, the larger the
overall shipment and the longer the distance it is transported, the lower the transportation cost per unit.
This requires innovative programs to group small shipments for consolidated movement. Such programs
must be facilitated by working arrangements that transcend the overall supply chain.

iv) - SCOPE OF THE MARKETING LOGISTICS

The development of interest in logistics after industrial revolution and world war II contributed to the
growth in scope of logistical activities. The following areas are the major scope of logistics:

nventory Control
 Movement to Customer

Elements of Logistic Management

Logistics as a set of activities of linking the producers and consumers has good many functional elements.
Professor Benjamin S. Blanchard in his title. LOGISTICS, ENGINEERING AND MANAGEMENT has
given a beautiful account of each which is worthwhile to go through.

These elements are:

1. Logistics and Maintenance Support Planning:

Interactive planning, organisation and management activities are necessary to ensure that logistics
requirements for any given program are properly coordinated and implemented. Initial planning and
analysis lead to the establishment of requirements for logistics and the overall support of the system
throughout its life cycle. Maintenance planning for those activities related to the reverse flow convinces
with the definition of maintenance concept and continues through supportability analysis to the ultimate
development of a maintenance plan. A comprehensive logistics plan needs to be implemented through the
establishment and control functions to ensure that the plan is properly carried out.

2. Logistics Maintenance and Support Personnel:

The personal required to perform unique logistics and system maintenance activities are covered in this
category. Such activities include the initial provision and procurement of items of support, production
related logistics functions, the installation and checkout of the system and its elements at the user‘s
operational sites customer service functions, the sustaining support of the system throughout its planned
period of use, and those functions required for the retirement and recycling or disposal of material.
Personnel at all levels of maintenance mobile teams, and operation or maintenance at special test facilities
and calibration laboratories are included. It is important to include only those who can be directly
attributed to the support of that system in evaluation of a particular system.

3. Training and Training Support:

This category includes all personnel, equipment, facilities data or documentation and associated resources
necessary for the training of operational and maintenance personnel to include both initial and
replenishment or replacement training. Training equipment say simulators, mock-ups, special devices,
training manuals and computer resources Software are developed and utilized as necessary to support the
day-to-day-site training, distance education of a more formal nature.

4. Supply Support—Spares or repair parts and associated inventories:

This elements covers all spares say, repairable units, assemblies, modules and the like, repair parts say,
non-repairable pasts or components, Censurable, liquids, lubricants, gases disposable items special
supplies, and related inventories needed to maintain the prime mission related equipment computers and
software, test and support equipment, transportation and handling equipment, training equipment,
communications equipment and facilities or utilities. Spares or repair parts are required throughout the
system operational share and in support of the retirement and recycling or disposal of system components.

5. Computer Resources:

This category covers all computers, associated software connecting components, net works, and interfaces
necessary to support the day-to-day flow of information for all logistics functions, scheduled and
unscheduled maintenance activities and special monitoring and reporting requirements such as those
pertaining to CAD/CAM/CAS data the implementation of condition monitoring programs and in support
of system diagnostic capabilities.

6. Technical data, Reports and Documentation:

Technical data may include system installation and check out procedures operating and maintenance
instructions inspection and calibration procedures, overhaul instruction, facilities data, system
modification‘s engineering data such as specifications, drawings, materials and parts list,
CAD/CAM/CAS data, special reports Logistics provisioning and procurement data, Supplier data, system
operational and maintenance data, and supporting data bases. Included in this category is the on-going
and interactive process of data collection, analysis and reporting covering the system throughout its life-
cycle,

7. Maintenance and Support Facilities and Utilities:

This category covers all special facilities that are unique and are required to support logistics activities, to
include storage buildings and warehouses and maintenance facilities at all levels. Physical plant, portable
buildings, mobile vans, personnel housing structures, intermediate level maintenance shops, calibration
laboratories and special repair shops such as depots, overhaul material suppliers are considered. Capital
equipment and utilities heat, power, energy requirements, environmental controls, communications, safety
and security provisions and the like are generally included as the part of facilities.

8. Packaging, Handling, Storage or ware housing and Transportation:

This category logistics includes all materials, equipment special provisions, containers both resistible and
disposable and supplies necessary to support the packages, safety and preservation, storage, handling and
or transportation of the prime mission related elements of the system, personnel spares and repair parts,
test and support equipment technical data, computer resources and mobile facilities. Covered in this group
are the initial and sustaining transportation requirements for the distribution of materials and for the
maintenance and support activities throughout the system life cycle. The primary modes of
transportation—air, highways, pipelines railways and water ways and intermodal, truck, rail, truck,
waters, rail, water, truck, air and the like are considered.

9. Test, Measurement, Handling and Support Equipment:

This category includes all tools, condition monitoring equipment, diagnostic and checkout equipment,
special test equipment, metrology and calibration equipment, maintenance fixtures and stands and special
handling equipment required to support operational and maintenance functions through-out the forward
and reverse flows, Test and support equipment requirements at each level of maintenance must be
considered as well as the overall traceability of test requirement or measures to a secondary standard, a
transfer standard and finally to a primary standard.

10. Logistic Information:

This refers to the resources necessary to ensure that an effective and efficient logistics information flow is
provided throughout and to the organizations responsible for all the activities that come within its focus.
This flow includes the necessary, communication links among the customer, producer or prime
contractor, sub-contractors, sup- priors and supporting maintenance organisations. It is but essential that
the proper type and amount of information be provided to the appropriate organisational elements, in
proper formats and in a reliable and timely manner with the necessary security provisions included.
EXPORT MANAGEMENT

Concept of export management

Export business is prevalent around the globe and in recent times it has grown at much faster rate due to
globalisation process. Export means transaction of products and services from one nation to other
following legal rules for trade purposes. Export goods are given to international end users by domestic
producers. Export management is the use of managerial process to the serviceable area of exports. It is
basically associated with export activities and type of management that brings harmonization and
incorporation of an export business. Export management is concerned with export orders and accomplish
objectives to successfully complete in time as per the requirements given by the overseas buyers. The
main purpose of export management is to secure export orders and to make certain for timely delivery of
goods as per agreed norms of quality and other specifications including terms and conditions agreed to
between the exporter and the importer.

The nature of export management

Export management can be appraised with reference to functional area of export and the administrative
process involved in export management.

Categorization of Export

The export can be grouped into many sections such as Merchandise Exports, Services Exports, Project
Exports, and Deemed Exports.

A merchandise export is related with the export of physical goods, for example, readymade garments,
engineering goods, furniture, and works of art. Service Exports denotes to the export of goods that don't
exist in physical form, that is, professional, technical or general services. Examples of the exports would
include export of computer software, architectural, entertainment or technical consultancy services.
Project export means to develop a project by a business firm in a different nation. It is viewed as
systematically evolved work plan devised to achieve a specific objective within a specific period of time.
Deemed Exports refer to those transactions by the recipient of the goods in which the goods are made in
India. The necessary condition is that such goods are manufactured in India. This category of export has
been introduced by the Export Import Policy of the Government of India. Some of the examples of goods
that are considered as Deemed Exports, as given in Export-Import Policy (2002-07) are supply of goods
against duty free licenses, Supply of goods to projects financed by multilateral or bilateral agencies/Funds
notified by the Department of Economic Affairs, Ministry of Finance, Government of India and supply of
goods to the power, oil and gas including refineries.

EXPORT MANAGEMENT

FUNCTION OF EXPORT MANAGER

Export manager has important role in managing business for international orders. They must be
competent to perform export business. The conventional management structures with functional
classification such as purchases, marketing, finance, accounts, administration, cannot make certain
efficiency in export management through all stages in the export phases. Therefore, export manager is
needed to successfully conduct export business operation. The basic role of an export manager is to bring
about synchronization and integration of the export transaction from within the established management
structures and concerned external agencies to guarantee timely delivery of goods as per the specifications
of purchaser. The export manager is accountable for the successful completing of the order in terms of
time, cost and technical performance. He must provide the guidance necessary to connect the people and
groups from dissimilar departments working on the export order, into one team in a managerial
organisation and provide the drive necessary to complete the task on time and within cost. He must have
good understanding of the techniques applied in export planning, financial management, inventory
management, merchandising, risk management, foreign exchange operations, exchange control,
negotiation with banks information systems, communication, personnel management and industrial
relations, co-ordination and control. The efficiency of export manager will depend upon the extent of
authority delegated to him by the senior management.

PROCESS OF EXPORT MANAGEMENT

When it is decides to develop export business, the primary function is to make good plan to secure an
export order. After confirming the order to the consumer, it is necessary to develop an organization
structure for it and form competent team of personnel for its implementation. Export Manager has great
responsibility to manage all operation in timely manner. The success of the export order depends, on his
efficient management and handling of export orders. He must maintain liaison with the importer, prepare
plans for its implementation and issue necessary executive instructions to the export employees. He has
also to develop an information system so that there is continuous flow of information on the progress of
the order. In case, if progress is not satisfactory and some tasks are not performed as per prescribed
schedules, export manager has duty to evaluate the variances and tasks suitable corrective measures, if
necessary, for the purpose and ultimately submit report on the progress of work to the top management.
The major functions of the export manager in managing orders are: procurement of export order, planning
for export order execution, direction for exports, export order execution, importer liaison, export order
evaluation, reprogramming, reporting on export order execution.

DEVELOPMENT OF EXPORT STRATEGIES

Once a detailed market analysis has been completed, company should develop a method of market entry.
The indirect methods of market entry usually need less marketing investment, but company could lose
considerable control over the marketing process. Direct exporting may require huge capital investment in
marketing, but there is more control over export strategies. Corporate presence is a choice for companies
with successful test marketing. In Direct Exporting, Company or individual can access directly to
customers and sell them products in foreign markets by establishing an export department within your
organization. Selling through company's sales department creates a chance to establish healthy
relationship with the abroad market and buyer. In addition to selling directly to the market, company can
penetrate and may also choose to use an export manager to handle other parts of the world. In fact, in
some countries, it is not necessary to sell directly to the end-user; company must use a local agent or
representative. Other direct exporting options are Manufacturer's Representative or Sales Agents. They
are the persons who are responsible for closing the sale and taking orders on a commission basis. They do
not take financial responsibility or collect payment for the goods sold, and they assume no risk or
responsibility for the product. Foreign Distributor/Importer is another option for exporting who buys the
product and is always responsible for payment of the export item. They presume financial risk and
generally provide support and service for the product. Distributors often buy to fill their own inventories
and typically carry a range of non-competitive, but complementary products. Overseas Retailers are also
involved in exporting products.

Indirect Exporting is preferable for complex task and also cover the risk of direct exporting. An Export
Management Company functions as an "off-site" export sales department, representing company's product
along with a variety of non-competitive manufacturers. The Export Management Company searches for
business for company and usually provides the array of services like it performs market research and
develops a marketing strategy, locates new and utilizes existing foreign distributors or sales
representatives, to put your product into the foreign market, functions as an overseas distribution channel
or wholesaler, takes title to the goods and operates on a commission basis. Another indirect exporting
option is through Export Trading Company which is analogous to Export Management Companies. The
ETC is more likely to take title to the product and pay directly, but like an EMC, they can also act as an
export department. Usually, there is less responsibility on the part of the ETC towards the supplier and
they tend to be demand driven and transaction oriented. Licensing offers a small business the advantages
of rapid entry into foreign markets as well as reducing the capital requirements to establish manufacturing
facilities overseas. Other option is Franchise agreements that tend to give the franchiser more control over
marketing, since it is the company's reputation and existing market relationship that adds value to the
product. Agreements with foreign manufacturers to produce company product, as opposed to exporting to
the overseas region is known as contract manufacturing. It is an easy foreign market entry method when
your manufacturer is already producing company product for the domestic market.

BENEFITS OF EXPORTING

Main benefit of export is the possession which is specific to the firms' international experience, asset and
capacity of the exporter to offer distinct product or low cost product with in the values chain. An
assortment of investment risk and market potential is recognized as the site benefit of the particular
market combination. Some companies have lower level of ownership advantage therefore they may not
enter into the foreign markets. In case a company's products and company's ownership equipped with the
international advantage and ownership advantage, the entry can be made through low risk model. Another
benefit is that low investment is needed in exporting of goods than the other modes of international trade
and development. In export of products, the managers perform the various operational control however it
does not have the option over the control of marketing activities of the company. The consumer of
exported goods is far away from the exporter though the different intermediaries can manage the risk.

Problems and issues in export management

Major barriers of export management include language, high risk, government control, difference in laws,
difficulty in payment, custom duty, and lack of information. Other problems of export management are
evil effects of foreign trade, economic dependence, disadvantage of agriculture country, international
rivalry. Researchers said that there is high risk in foreign trade instead of internal business because goods
are transported to other countries through sea, air in which there is environmental threat and products may
be damaged from poor climate, rocks etc. Usually international trade is under governmental control and
licence is must for doing international trade. In export, management, there are differing law in each
country therefore traders have to face many problems in conducting business. Export management
become difficult when information flow is not smooth. It is very difficult to assess the financial position
of businessman located in other country. It is observed that developed nations get advantage through
export business but developing countries may suffer loss as they cannot manufacture goods at rapid rate
and managerial process is also not very smooth. Another problem is dependency on other country for raw
material and if imports are stopped due to some reasons, country has to suffer a lot in terms of finance.
Export management is not smooth due to low labour productivity, less technological advancement and
laziness.

Export Management

In order to reduce issues of export trade, it is suggested that traders must know various language for good
conversation. Export managers must have knowledge of exchange rates. They must modernize the
process of foreign trade and standardize the products. In addition to this there are some major
disadvantages highlighted in the export of goods such as financial management, communication
technology improvements, and customer demand and management mistakes. To reduce the risk of
transaction process of exporting the goods and exchange rate fluctuation, it is necessary to have more
capacity for managing the financials for coping up the efforts. Presently, customers can directly
communicate with the suppliers with the aid of communication technology which has improved the way
of purchasing goods. It leads more clearness in transaction and purchasing of goods and vendors are
responsible for following the real time demand for submitting the transaction details.

It is summarized that exporting is common way for manufacturers to do business in foreign market.
Success of export management requires the enthusiastic, honest and positive support of all the functional
managers in the organisations. Good export management gets the export order completed within the time
and as per the budget allocated for particular project.

Operating systems in shipping industry

Liner Service

The name liners have been derived from the word ‗Line Voyages‘ which means a voyage or trip that
follows a set schedule and route. The ships that move shipments across the routes are called liners,
following strict routes, and schedules and delivering on time under all circumstances unless there is a
delay caused by natural events. These liner ships not only carry shipments through containers but provide
other services also from RORO services, bulk cargo service to breakbulk service. Liner Service – is a
service that operates within a schedule and has a fixed port rotation with published dates of calls at the
advertised ports. A liner service generally fulfills the schedule unless in cases where a call at one of the
ports has been unduly delayed due to natural or man-made causes. There are many types of liner services
are available:

 Independent service
 Conference service
 Consortia service
 Alliance service

Tramp Service

A tramp service, also called a tramper is a service that is even available at a short notice, so it does not
follow any strict schedule or routes. With tramp service, goods can be on and offloaded at any port.
Trampers are also used to carry bulk cargo, apart from usual cargoes. A Tramp Service or tramper, on the
other hand, is a ship that has no fixed routing or itinerary or schedule and is available at short notice (or
fixture) to load any cargo from any port to any port.

Example : A ship that arrives at Durban from Korea to discharge cargo might carry some other cargo
from Durban to the Oakland in the West Coast of USA which is in an entirely different direction.. From
Oakland, it could carry some cargo to Bremerhaven..

Difference between Liner service and Tramp Service

Liner Service Tramp Service

Liner service follows a fixed route and schedule as well as the
destination.
The liner owners follow pre-defined rules, terms, and
conditions related to the carriage and delivery of the cargo.
The liners have modern equipment through which loading
and unloading can be faster.
The freight rates are fixed
The liner ship is huge enough with many facilities to carry
even refrigerated items. They can carry a variety of goods. As Tramps are a little smaller and can carry
the liner has many cabins and compartments, it has the
capability to contain consignments from multiple shippers
and can place them accordingly.
Tramp service does not have a fixed
schedule or route and is even available at a
short notice. It is less expensive and even
has the capability to fit in ships with lesser
speed.
There are no such conditions for tramp
services.
Trampers generally do not take a huge
load, they prefer to transport one or two
shippers‘ consignments and limit their
loading and loading to a lesser number of
ports.
The freight rates are negotiable
only simple and uniform cargo in larger
quantities. It can carry only one kind of
specific goods at a time.

Now you know the difference between liner and tramper, so next time you connect to a freight forwarder,
you will be able to convey your requirement more clearly. In case, you would like to move a large cargo
to the consignee, with a strict schedule and at regular intervals, you can choose a liner; otherwise, you can
easily opt for tramper or tramp service for a random consignment and negotiate the price accordingly.

Freight Forwarding & Role of a Freight Forwarder

A freight forwarder is an important link in the chain of international trade. In this guide, we have
explained his role in logistics of an Export Business, and how an exporter can choose a freight forwarder
who is suitable for his needs.

Freight Forwarder - Meaning

In simple terms, a freight forwarder is an agent responsible for the movement of goods on behalf of the
cargo owner. This responsibility can start from the time the goods are picked up from the seller until they
are delivered at the buyer‘s specified location.
The duties and responsibilities of a freight forwarder are often carried out by a clearing and forwarding
(C&F) agent. In other instances, exporters may hire a separate clearing agent for meeting regulatory
requirements or prefer freight forwarding companies. The roles and responsibilities of a freight
forwarding agent can be quite versatile and crucial to international trade. That said, even the freight
forwarding activity involves several important functions.

FREIGHT FORWARDING

An exporter may need a freight forwarder to make some vital decisions during the movement of the
goods. Here are some inputs to help you in understanding the role of the freight forwarder.

 A Freight forwarder can offer expert advice to the exporter on various logistics-related expenses
(such as freight expenses, port expenses, consular fees, documentation costs, insurance fees, cost
of merchandise, custom clearance and charges) incurred during the process of exports.
 They consider the perishable nature of the goods, transit cost, time, and safety of the goods to
suggest the best possible route for the shipment to the exporter.
 They arrange the booking of cargo space on ship, plane, train, or truck.
 They coordinate the insurance of the goods and do the necessary follow-up in case of an accident.
 They oversee the transportation of the cargo and its packing and loading into the carrier.

The freight forwarder can act as a common carrier and prepare documents such as the bill of lading,
airway bill, etc. They can liaise with overseas customs agents to ensure that the goods and documents
comply with local customs regulations. They can also track the real-time transit of the goods and
troubleshoot if required.

Using their international network, freight forwarders can also advise exporters on legislation affecting
international trade, political situation and unrest, and other factors that may affect the movement of goods.
Given this suite of services, having the right freight forwarder can give a big boost to your export trade.

FREIGHT BROKER

What is a Freight Broker?

A freight broker is a person or an organisation that assists shippers in moving shipments from the point of
origin to their destinations by employing the service of carrier companies. In essence, the freight broker
helps the shipper to find carriers for the transportation of goods. Apart from organising carriers for
shipper, the freight broker is responsible in facilitating the delivery of goods to their destination; provides
updates about the status of the shipment.

Freight Broker Responsibilities:

 Generating leads and attracting new prospects, and developing a sales pipeline.

 Identifying and selecting reputable and safe carriers for freight services.

 Providing customers with shipping quotes.

 Booking orders with carriers.

 Assisting to prepare carriers for loads.

  Tracking status of loads.

 Collaborating with shippers, carriers and dispatchers to manage scheduled collections and drop-
offs.

 Keeping accurate records of relevant activities.

 Updating customers on the status of shipments, and assisting with other inquiries.

 Maintaining current knowledge of market trends in transportation marketplace.

STEVEDORES

A stevedore is a professional in charge of cargo operations: loading, distributing and transporting cargo
and other dockside functions. They are responsible for loading and unloading a ship's cargo. These
workers unload cargo and transport it to and from other ships or to a different location within the port.

It is an occupation which involves the cargo operations i.e. loading and unloading of cargoes on ships. It
also includes the other various dockside functions. The people engaged in this occupation are known as
stevedores in UK & Europe. However, in the United States and other areas are referred to as
longshoremen. At present, in countries such as Dubai, Singapore etc. where stevedoring is a
commonplace and where all the cargo passes through domestic and international ports is usually handled
is known as Freight Station or Freight Terminal. In this scenario, the stevedores do need heavy
machinery, such as tractor, trailers, cranes and forklifters, etc. If on the other hand the some other related
work is performed manually where use of machinery is not required such as labour or clerical work. The
businesses which specialize in loading and unloading vessels are referred to as stevedoring companies.

SHIPPING AGENT

Shipping agent is the designated person or agency held responsible for handling shipments and cargo, and
the general interests of its customers, at ports and harbors worldwide, on behalf of ship owners, managers,
and charterers. In some parts of the world, these agents are referred to as port agents or cargo brokers.
There are several categories of shipping agents such as: port agents, liner agents, and own agencies, each
rendering specific services depending on the shipping company they represent. In other words, a ship
agent is any person or company that carries out the functions of an agent. They can be in business as a
ship agent, or they perform such functions as an adjunct to, or conjunction with, other activities such as
ship owning or operating, providing cargo handling or similar.

Shipping agents will usually take care of all the regular routine tasks of a shipping company quickly and
efficiently. They ensure that essential supplies, crew transfers, customs documentation, and waste
declarations are all arranged with the port authorities without delay. Quite often, they also provide the
shipping company with updates and reports on activities at the destination port so that shipping
companies have real-time information available to them while goods are in transit.

Responsibilities of Shipping Agents Include:

 Ensuring a berth for the incoming ship

 Drawing up the documents for the customs and harbor services
  Arranging for the necessary ship fresh water / provisions
 Arranging for a doctor in case the crew needs medical assistance
 Arranging for storage bunkers if these are needed
 Arranging for necessary repairs
 Conveying instructions to and from the ship owner
 Organizing the supply, transport and the handling of the goods
 Organizing the necessary contacts with the stevedores
 Collecting freights, cargoes
 Contacting shippers and the receivers of the goods

PORTS FOR SHIPS

A port can be defined as a harbour or an area that is able to provide shelter to numerous boats and vessels
(transferring people or cargo), and can also allow constant or periodic transaction of shipment.

In layman‘s language, a port is a place to facilitate loading as well as unloading of vessels. Technically
speaking it is a convergence point between freight circulation domains. Ports are the inhibitors which
begin the social and economic growth of a region by not only allowing trade but also by serving a hub for
social activities. These days, most of the ports (especially seaports) are well-equipped with specialized
fixtures such as forklifts and gantry cranes to facilitate regular dealings of cargo.

Ports can of great significance to a nation, as it promotes the commercial welfare and the trade scenario.
Ports can also be of military importance, as they are used to keep the warships before moving out to the
battle scene. Ports are also a major source of employment as a large number of workers are employed at
the ports.

Port Facilities

The port can be a natural establishment or artificial construction, which provides a place for the loading
and unloading of cargo. Ports can be for large seagoing ships and also for inland waterways such as rivers
and lakes. The depth of the ports plays a vital role in allowing various types of ships to enter and dock at
the port. But nowadays along with its basic purpose, a port is equipped with certain other amenities and
facilities. Different types of ports are equipped with different port facilities.

Some common port facilities provided by the most common sorts of ports throughout the world are as
follows:

a) Special Warehouse: This is available on all the ports, for storing the shipment and for maintaining
regular stock.

b) Port Reception: Reception has details of all the shipment scheduled and moreover it is a guide for the
port facilities.

c) Other facilities: Some other essential facilities are also available at seaports namely hotels, restaurants,
restrooms and eateries for the port visitors. Some of the ports are provided with medical facilities to the
people present there, if there is no hospital in the vicinity it becomes obligatory for the port to provide
with primary medical services.

d) Fishing facilities: Fishing ports allow its customer with fishing aids and amenities at the port.
e) Warm water facility: A greater revenue-generating warm water port provides warm water even in
frosting winters.

f) Loading and Unloading Facility: It is the mandatory part of every port to allow loading and unloading
of freight as well as people in a ship.

g) Infrastructure and Equipment’s: A port has piers, basins, stacking or storage areas, warehouses to
store various ferry equipment. Each port is equipped with essential equipment for e.g. hauling
equipment‘s, draggers, cranes, trucks, loaders, etc.

h) Workshop: All the bigger and significant ports provide the facility of vessel workshop. It is the place
where one can get spare parts and accessories of a vessel. Also, the vessels which have gone out of order
are repaired and catered in the workshop.

PORT AUTHORITY

The Port Authority of any country is a government or semi-government public authority which builds,
maintains and operates critical transportation and trade assets at the seaports.

In short, the seaport authority facilitates the management of millions of people working on the harbour
and maintains or supervise vessel movement. The London Port Authority was the first port authority. It
came into action in the year 1908.

Port Authority controls, legalizes and manages all the port and marine services, facilities and activities
within the concerned country waters, it also includes management of vessel traffic, improvisation of
navigational safety, and facilitation of security and environmental management at the port.

TYPES OF PORTS

Considering a variety of factors such as location, depth, purpose, and ship sizes, ports are classified into
various types. Some of the main types are as follows:

Inland Ports

Inland ports are ports built on comparatively smaller water bodies such as rivers or lakes. They can either
be for cargo purpose or for passengers or for both. Conventionally Inland Ports are constructed or
naturally maintained ports at the coastline of small waterways like lake, river or estuaries and rarely seen
at sea coasts too. Some of these inland ports can have access to the sea with the help of a canal system. As
such ports are built on inland waterways they usually behave like normal seaports but are not able to
allow deep draft ship traffic. Some of the inland ports can be also be specifically made for recreational
purpose allowing only small-sized vessels or can be used just for ferrying people and fishing activities.

Inland ports are known for their quality to function in a smooth manner, unlike the clogged seaports.
These ports can also sometimes be referred to as dry ports, and are similar to active intermodal hubs. The
inland port at Montreal is the biggest of its kind. Inland ports are conventionally maintained for
quenching the needs of stocking and dispatching of cargo but sometimes these are also made open to
passengers too. These are shallower than seaports so they don‘t allow deep docking, but only docking to
ferries is allowed at inland ports. Inland transport services are used to connect these inland ports
(generally called rail or road terminal) through marine terminals. For e.g. St. Lawrence Seaway is an
important inland port.

Intermodal transportation and tanker ships are on their peak in the international market due to the
development of Inland ports which are also referred to as Inland freight distribution ports, which are a hub
for inland waterway trades mainly due to their congestion-free space availability and adequate capacity.
Inland terminal is the key connector for trading expeditions between two regions, not only for inbound
traffic but also in serving outbound traffic. This port also has to handle various concerned logistic
activities. Important functions of Inland ports are summarized below as:

 There should be well-established distribution centres for freight distribution

 Inland port Depots should be made available for ensuring proper storage of hulks and containers
which can be later used in different voyages
 There should be well established logistic department to handle all logistics activities as well as to
maintain inventory records
 There should be a proper warehouse to house spare parts of cargo and other machinery involved
in the loading of cargo.

Fishing Ports

Fishing ports are mainly related to the commercial sphere as they participate in fishing. The fishing
activities can also be treated as a mode of recreation. The existence of a fishing port entirely relies upon
the availability of fishes in that region of the ocean. A fishing port can be an inland port or a seaport.

Often, fishing ports are marketable port which is generally used for recreational purposes or aesthetics.
These are the ports which allow controlled and disciplined fishing to their customers. These are the
highest revenue-generating ports when properly operational. Unlike other types of ports, the fishing port
has an operational loophole that is this port is operational when there are fish available in the port area or
locality. In the scarcity of fish in the vicinity these ports become uneconomical. Also, fishing ports
require more maintenance works as compared to other ports so many are on the verge of closing. These
are the ports with smaller depth because of the draught of the fishing vessel is limited to a short depth. A
fishing port comprises:

 Hangers: These are the special area employed for the preservation of goods and products. Also,
it houses the production as well as a storage area which produce and store necessary food or other
items for the fish.
 Supply post: This is an important part of a fishing port and is responsible for satiating the fuel
needs and freshwater demand by the ship.
 Operation and Administration building: This the main building in which plans are made for
the voyage and fishing and management for all legal as well as health issues.
 Premises: It is the building which houses the deals in fish that is either purchase of fish or sale of
fish.

Warm Water Ports

These are the ports in which the water is maintained at warmer temperature. The biggest advantage where
a warm water port is concerned, is that the water does not freeze during the frosty winters. Therefore, it is
free to operate all year round without a temporary shutdown during the freezing time. Such ports help to a
great extent to boost the economy of the nation. These ports have a significant role in the economic
growth of the region where these are located.
Two such major revenue-generating ports are Valdez port of Alaska and Vostochny port of Russia. The
main reasons for which warm water ports are considered important and due to which important developed
countries of the world quest for establishing and acquiring more warm water ports are as follows:

i) It allows trade throughout the year, because in chilling winter when other ports deny their services,
warm-water port is still operational and reach the import-export demand of the nation.

ii) These warm water ports made inland waterway trading possible in countries like Ethiopia.

iii) These are the main reason for the expansion of an empire around the globe.

A few notable examples may include Ukraine‘s Odessa, Russia‘s Vostochny Port and Murmansk Port,
Japan‘s Kushiro and Alaska‘s Valdez.

Dry Ports

Dry ports are defined as inland terminals that can be interconnected with a seaport via road or rail
transportation facilities, and they usually act as centres of multimodal logistics. A dry port proves useful
in the trade of importing and exporting cargo and can help to lessen the inevitable congestion at a nearby
seaport. Its functions are quite similar to that of a seaport, with the only difference that is not situated near
the coastline. These are specifically employed for transhipment of cargo to inland destinations. It is a
trans-shipment port which is connected to a seaport and manages intermittent operation like billing and
managing co-ordination between importer and exporters.

These ports serve the same purpose as the veins do in our body because these are used to connect
importers and exporters from remote areas who cannot access to seaports for trading or other purposes. In
India alone, there are nearly 300 to 330 dry ports and certainly, more are under development. A dry port
consists of all the necessary machinery to handle the constant clearance of shipment, like proper cargo-
instrumentations, rail sidings, storehouses, and even container yards.

Sea Ports

Seaports are the most common types of ports around the world which are used for commercial shipping
activities These ports are built on a sea location and enable the accommodation of both small and large
vessels. Numerous seaports are situated along the coastline and actively handle the ongoing cargo
transactions. A seaport can be further categorized as a cargo port or cruise port. Some of the oldest
seaports are still used for recreational and fishing purpose.

Special warehouses are also constructed to store the shipment and to maintain the regular stocking. Added
facilities such as hotels, restaurants, port reception facilities, restrooms and eateries can also be made
available to rouse the interest of the people visiting the port. Seaports form some of the biggest
and busiest ports in the world. Seaports are the most common type of ports and a major part of water
transportation. These are further classified into three categories namely: Cruise Port; Port of call and
Cargo port. These all are briefed as under:

i) Cruise Home Ports

This type of port specializes in dealing with the activities of cruise ships and provide the platform for the
passengers to enter and disembark the cruises at the beginning and the end of the journeys, respectively.
A cruise home port is also capable of providing the essential provisions required for a luxurious cruise
voyage. The supplying may vary from fuel resources to fresh drinking water, wines, foods etc.

A typical cruise home port is always congested and is buzzing with people boarding or leaving the
cruises. These are the busiest sort of ports due to continuous boarding; loading; unloading activities. Also,
all the formalities and arrangements for a safe voyage through cruises is pre-planned and executed by the
port authority at the port. In South Florida, Miami ports are considered as the modern cruise capital of the
world. Also, Port Everglades and San Juan port of Florida and Puerto Rico respectively are also
considered significant for their destination holiday cruises.

Some of the popular cruise homeports include Florida‘s Port of Miami and Port Everglades, and Puerto
Rico‘s Port of San Juan.

ii) Port of call: Also known as the mid-way port, Port of call is somewhere midway on ship‘s travel plan
to accept fuel supply and stocking or unloading cargo.

Port of Call is a type of port which is paid a brief visit by a ship on the voyage. It is also used for
carrying out essential repair works. Many passengers can also leave the vessel at a ―port of call‖.

It serves as a stopover port, in between the home ports of a particular vessel.

iii) Cargo Ports

As the name suggests, these ports act according to the cargo it manages and the amenities available differ
from one port to the other. These are the special ports to handle cargo only. These ports are also known as
―bulk ports‖, ―break bulk ports‖ or ―container ports‖.

The cargo ports involve many mechanical techniques to load or unload the shipment. A cargo port may be
designed to deal with single, as well as multiple types of products.

Items such as liquid fuels, chemicals, food grains, timber, machines and motorcars, are transported to
various places, employing the adeptness of a cargo port. Deep water ports are sometimes used along with
those cargo ports which do not have sufficient depth to allow big ships. Cargo like wood, liquid chemicals
or fuel, food grains, automobiles, etc. are handled by Bulk ports whereas containerized cargo or cargo in
containers is handled by the Container ports. Sometimes a third category is also added in this series which
is all-in-one port this sort of port not only handle specific cargoes but can manage all sorts of cargoes on a
single port.

Numerous operating terminals branch out from individual bulk ports and are assigned to maintain the
various kinds of ship ladings. Stevedores are the companies which act as terminal operators and preside
over the actions of the diverse operating terminals.

Difference Between Ports and Terminals

Ports are strategic geographical locations which are situated at the edge of ocean, seas, rivers, or lakes.
These locations are then developed to inculcate facilities for loading and unloading of cargo ships. The
facilities provided for a port depends on the purpose for which the port is being used.
Whereas a terminal is referred to as the set of facilities at a port where loading and unloading of
cargo/container take place. Terminals are named on the basis of the type of cargo that can be handled by
them. Some of the most common types of terminals are container terminal, bulk cargo terminal, LNG
terminal etc.

CONTAINERIZATION IN SHIPPING

Shippers looking to reduce cargo handling, increase security and cut costs often turn to containerization,
the practice of consolidating multiple cargo shipments in a standardized ocean container for transport as a
single unit. Containerization is the practice of carrying goods in containers of uniform shape and size for
shipping. Almost anything can be stored in a container, but they are particularly useful for the transport of
manufactured goods. It is a method of distribution of goods using containers. The use of containers has,
indeed, facilitated carriage of goods. Exporters need not go to the seaport for export of goods. Instead, the
goods can be sent to Inland Container Depot/Container Freight Station for sending goods to the
destination.

TYPES OF SHIPPING CONTAINERS

Most common types of shipping containers are:

1. General purpose container (also known as dry container)

2. Flat rack container
3. Open top container
4. Double door container
5. High cube container
6. Open side container
7. ISO Reefer container
8. Insulated container
9. Half-height container
10. ISO tank container
11. Swap body container

GENERAL PURPOSE CONTAINERS

A general-purpose container is also known as a "dry container". These shipping containers are fully
enclosed, protected from the elements and weatherproof, with a rigid roof, sidewalls and floor. Dry
containers are by far the most common type of container, and as such are used to load most types of
normal cargo. In addition, general-purpose containers can have adaptations such as liner bags or flexi-
tanks for shipping certain types of liquid bulk cargo or dry bulk cargo.

FLAT RACK CONTAINERS

This simple storage container has collapsible sides that can be folded to make a flat rack. The end walls
are stable enough to allow cargo securing, so they are ideal for shipping goods that are oversized, such as
heavy machinery, vehicles on tracks, big reels and construction materials. Some 40' flat rack shipping
containers are suitable to carry as much as 45 metric tons of cargo!

OPEN TOP CONTAINERS

An open top shipping container has a convertible top that can be completely removed. This is suitable for
cargo that is over-height and cannot be easily loaded through the door, such as tall machinery or other
heavy / bulky finished products whose handling and loading can only be performed with a crane or rolling
bridge. Open top containers have lashing rings installed to the upper and lower side rails and corner posts
to secure cargo, and are available in 20‘ and 40‘.

DOUBLE DOOR CONTAINERS

With doors on both ends of the shipping container, this container type is also known as a "tunnel
container". Double door containers are extremely helpful for quickly loading and unloading goods, and
they make an even wider room for goods such as steel and iron. Both sets of doors have the same locking
assembling and weather tight seals to keep cargo protected from the elements.

HIGH CUBE CONTAINERS

High cube shipping containers are similar in structure to general purpose containers, but taller by about 1
foot. These containers come in sizes 40' and sometimes 45', and are used in cases where a slightly bigger
volume capacity is required. Most high cube containers have a recess in the floor at the front end to centre
the container on so-called gooseneck chassis, which allows it to lie lower and be of taller construction.

OPEN SIDE CONTAINERS

Open side containers are very similar to regular, general purpose shipping containers, the only difference
being that the doors can open completely on the side too. This feature provides much wider room and
access, which makes loading and unloading materials easy. Open side shipping containers generally come
in 20' and 40', and they provide adequate room for extra-large items that can't fit through the regular
doors.

ISO REEFER CONTAINERS

An ISO shipping container is used for the shipment of temperature-sensitive, perishable cargo such as
meats, fruits and vegetables. This container type relies on external power to keep the temperature
regulated.

INSULATED CONTAINERS

Like the ISO Reefer container, an insulated or thermal container has a regulated temperature control that
allows them to withstand a higher temperature. They are equipped with electrical compliance (mechanical
compressor) to cool or heat the air within the container. Insulated containers are typically constructed of a
vacuum flask, similar to a "thermos" bottle. As such, they are most suitable for long-distance
transportation of products such as foods, pharmaceuticals, organs, blood, biological materials and
chemicals.

HALF-HEIGHT CONTAINERS

Half-height shipping containers are designed for transporting bulk cargo that is heavy and dense. These
are good for transporting goods such as coal and stones, so they are perfect for use in the mining industry.
Half-height containers have a low centre of gravity so they can better handle heavier loads than taller
containers, making them versatile and they're robust enough to withstand the rough industrial
environment. Half-height containers are also easy for loading and unloading.

ISO TANK CONTAINERS

Tank containers, or tankers, are made of strong steel or other anti-corrosive materials for the
transportation and long-life protection of liquid materials. A tank container must be at least 80% full to
prevent dangerous surging of liquids in transit, but it must also not be over 95% full or there would not be
sufficient room for thermal expansion.

SWAP BODY CONTAINERS

Swap bodies are exchangeable containers used for road and rail. They are commonly used in Europe.
Swap bodies have a convertible top, which makes them suitable for shipping a range of goods. Because
swap bodies do not have upper corner fittings and are not stackable, they are restricted to land-based
transportation only.

ADVANTAGES AND DRAWBACKS OF CONTAINERIZATION

Even if containerization conveys numerous advantages to freight distribution, it does not come without
challenges. The main advantages of containerization are:

 Standardization. The container is a standard transport product that can be handled anywhere in
the world (ISO standard) through specialized modes (ships, trucks, barges, and wagons),
equipment, and terminals. Each container has a unique identification number and a size type code
allowing to be a unique transport unit that can be managed as such.
 Flexibility. Containers can be used to carry a wide variety of goods such as commodities (coal,
wheat), manufactured goods, cars, and refrigerated (perishable) goods. There are adapted
containers for dry cargo, liquids (oil and chemical products), and refrigerated cargo. Discarded
containers can be recycled and reused for other purposes.
 Costs. Container transportation offers lower transport costs due to the advantages of
standardization. Moving the same amount of break-bulk freight in a container is about 20 times
less expensive than conventional means. Containers enable economies of scale at modes and
terminals that were not possible through standard break-bulk handling. The main cost advantages
of containerization are derived from lower intermodal transport costs.
 Velocity. Transshipment operations are minimal and rapid, and ship port turnaround times have
been reduced from 3 weeks to about 24 hours. Because of this transshipment advantage, transport
chains involved containers are faster. Container shipping networks are well connected and offer a
wide range of shipping options. Containerships are also faster than regular cargo ships and
offering a freqency of port calls allowing a constrant velocity.
 Warehousing. The container is its own warehouse, protecting the cargo it contains. This implies
simpler and less expensive packaging for containerized cargoes, particularly consumption goods.
The stacking capacity on ships, trains (double-stacking), and on the ground (container yards) is a
net advantage of containerization. With the proper equipment, a container yard can increase its
stacking density.
 Security and safety. The container contents are unknown to carriers since it can only be opened
at the origin (seller/shipper), at customs, and the destination (buyer). This implies reduced
spoilage and losses (theft).

The main drawbacks of containerization are:

  Site constraints. Containers are a large consumer of terminal space (mostly for storage),
implying that many intermodal terminals have been relocated to the urban periphery. Draft issues
at the port are emerging with the introduction of larger containerships, particularly those of the
post-Panamax class. A large post-Panamax containership requires a draft of at least 13 meters.
 Capital intensiveness. Container handling infrastructures and equipment (giant cranes,
warehousing facilities, inland road, rail access) are important capital investments that require
large pools of available capital. This requires the resources of large corporations or financial
institutions. Further, the push towards automation is increasing the capital intensiveness of
intermodal terminals.
 Stacking. The complexity of the arrangement of containers, both on the ground and modes
(containerships and double-stack trains), requires frequent restacking, which incurs additional
costs and time for terminal operators. The larger the load unit or the yard, the more complex its
operational management.
 Repositioning. Because of trade imbalances, many containers are moved empty (20% of all
flows). However, either full or empty, a container takes the same amount of space. The observed
divergence between production and consumption at the global level requires the repositioning of
containerized assets over long distances (transoceanic).
 Theft and losses. High-value goods and a load unit that can forcefully be opened or carried away
(on a truck) implied a level of cargo vulnerability between a terminal and the final destination.
About 1,500 containers are lost at sea each year (fall overboard), mainly because of bad weather.
 Illicit trade. The container is an instrument used in the illicit trade of goods, drugs, and weapons,
as well as for illegal immigration (rare).

ADVANTAGES AND DISADVANTAGES OF AIR TRANSPORT FOR INTERNATIONAL

TRADE

Air transport offers numerous advantages for international trade, depending on your requirements.
Advantages of air transport for international trade
The benefits of air transport are increasingly significant in terms of access, time savings, economic
benefits and safety. The transportation of goods by air offers many advantages to the exporter. Some of
them are as follows:
(i) It provides fast means of delivering goods.
(ii) It links almost all countries of the world. Aircrafts are not tied to the surface and have the ability to fly
above terrestrial obstacles.
(iii) It is a convenient means of transporting perishables and fragile goods.
(iv) It is suitable for transporting goods of high value.
(v) The risks associated with deterioration and obsolescence of goods is reduced.
(vi) It provides regular and punctual services.
(vii) The losses due to rough handling, breakage and pilferage are reduced to the minimum.
(viii) The insurance premium in the case of air transport is lower as compared to sea transport, in view of
reduced level of risks.
(ix) The warehousing costs are reduced to minimum.
High Speed
It is the fastest mode of transport and therefore suitable for carriage of goods over a long distance. It
require less time.
Quick Service
Air transport provides comfortable, efficient and quick transport services. It is regarded as best mode of
transport for transporting perishable goods.
No Infrastructure Investment
Air transport does not give emphasis on construction of tracks like railways. As no capital investment in
surface track is needed, it is a less costly mode of transport.
Easy Access
Air transport is regarded as the only means of transport in those areas which are not easily accessible to
other modes of transport. It is therefore accessible to all areas regardless the obstruction of land.
No Physical Barrier
Air transport is free from physical barriers because it follows the shortest and direct routes where seas,
mountains and forests do not obstruct.
Natural Route
Aircrafts travels to any place without any natural obstacles or barriers because the custom formalities are
compiled very quickly. It avoids delay in obtaining clearance.
National defence
It plays a significant role in the national defense of the country because modern wars are conducted with
the help of aero planes. Airways has a upper hand a destroying the enemy in a short period.

DISADVANTAGES OF AIR TRANSPORT FOR INTERNATIONAL TRADE

There are some disadvantages of transporting your goods by air, including:

i) Cost of operating airlines is very high and so freight cost is very high as compared to sea transport.
(ii) It is difficult to carry bulky, awkwardly shaped goods.
(iii) Very risky in case of accident.
(iv) It is controlled by climatic conditions; thus bad weather leads to uncertainty in its time table.
Risky
Air transport is the most risky form of transport because a minor accident may put a substantial loss to the
goods, passengers and the crew. The chances of accidents are greater in comparison to other modes of
transport.
Very Costly
Air transport is considered costlier as compare to other mode of transport. The operating cost of aero-
planes are higher and it involves a great deal of expenditure on the construction of aerodromes and
aircraft. Because of this reason the fare of air transport are high that common people can‘t afford it.
Small Carrying Capacity
The aircrafts have small carrying capacity and therefore these are not suitable for carrying bulky and
cheaper goods. The load capacity cannot be increased as it is found in case of rails.
Unreliable
Air transport is unreliable as it depends of the weather forecast. Normally if the weather is not certain the
flight may got delayed.
Huge Investment
Air transport requires huge investment for construction and maintenance of aerodromes. It also requires
trained, experienced and skilled personnel which involves a substantial investment.