CONTAINERISATION

AND
MULTIMODAL TRANSPORT

23MBL213

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 Multimodal Transport
Liners: types
Tramps
Specialized Vessels –
Road transport vehicle –
Road Transport Weight and Measurement
Rail Transport Vehicle and Equipment –
Module 4 Air -Transport –
Ports - LCL - FCL - NVOCC –
Freight forwarders –
Consolidator –
ICD - CFS-
Free Trade Area - SEZ –
Factors affecting mode and route choice

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 Unit-IV

Multimodal Transport

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Introduction to Multimodal
Transport
• Multimodal transport refers to the use of different
modes of transportation (e.g., road, rail, sea, and air)
under a single contract to move goods from origin to
destination.
• It enhances efficiency and reduces delays and costs.
• A single operator, typically a freight forwarder, takes
responsibility for the entire shipment journey.

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 Liners
• Liners are ships
• regular shipping service, as opposed to a one-time or occasional shipping service
• fixed routes
• published schedules and fares
• They may offer discounts for certain types of cargo or for certain routes.
• International water carriers
• transport goods on a regular basis, such as manufacturers or retailers.
• liner service has several vessels.
• The vessels in a liner service are usually owned by the shipping company
• operated under charter by another company.
• used to transport containers, bulk cargo, and general cargo.
• used to transport cars and other vehicles.
• operate on a “roll-on/roll-off” basis
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6
 Liners
• Liners are ships that ply fixed routes on published schedules.
• Liner service is an international water carrier that plies fixed routes
on published schedules.
• A typical liner service has a number of vessels, each sailing on a
different day of the week, and calling at a number of ports along
the route.
• The vessels in a liner service are usually owned by the shipping
company operating the service but may be operated under charter
by another company.
• Liner services are typically used to transport containers, bulk
cargo, and general cargo.
• They may also be used to transport cars and other vehicles.
• Some liner services operate on a “roll-on/roll-off” basis, which
means that vehicles can be driven on and off the vessel at the
ports of call. 7
Cont..
• Liner services typically have published schedules and
fares, and they may offer discounts for certain types of
cargo or for certain routes.
• Liner services are a type of regular shipping service, as
opposed to a one-time or occasional shipping service.
• They are often used by businesses that need to
transport goods on a regular basis, such as
manufacturers or retailers.

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 Liner Service – The Scheduled
Solution
• A Liner Service operates on a set schedule with fixed port rotations and
published dates for calls at advertised ports.
• This predictability is crucial for businesses that rely on timely and
regular shipments.
• A liner service usually fulfills the schedule unless in cases where a call
at one of the ports has been unduly delayed due to natural or artificial
causes or the carrier is forced to impose blank sailings to ensure
schedule reliability.
• A typical example is the UK/NWC continent container service of MSC,
which maintains a weekly schedule calling at South African ports like
Durban, Cape Town, and Port Elizabeth, and carrying cargo to UK/NWC
ports such as London Gateway, Antwerp, and Rotterdam.
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LINER TYPES
• Independent Services.
• Consortium / Alliance Services.
• Direct Services.
• Feeder Services.

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1. Independent Services.
• The service operated by a single-liner shipping company in a particular
trade route, competing with other liners or consortia operating in the same
trade route.
• The characteristics of these services are:
• Deployment of own vessels.
• a single operator, more number of vessels required for meeting frequency.
• Independent freight rates.
• No sharing of resources and infrastructure, hence operating costs are higher.
• Flexible and independent sailing schedules
• https://logisticallyyours.wordpress.com/2013/04/25/types-of-liner-services/
• Evergreen Shipping : Colombo – Genoa – Taranto – Valencia.
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• Advantages
• Assist to build owner identity and brand name.
• pricing is independent the freight rates are flexible and customer-
oriented, which helps to build volumes.
• More flexible sailing schedules.
• Keeps confidentiality.
• Disadvantages
• No collective bargaining for berthing, port / terminal tariff, etc.
• No sharing of resources, which increases the operational cost.
• The unitisation of space in the ship may be lesser.
• Lesser sailing frequency.
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2. Consortium / Alliance Services
• Consortia is a group of shipping lines, who agree to rationalize sailing in a
particular trade route and carry each other’s containers.
• In 1992, liner shipping was in distress, where many liners wanted to offer a
global service network to their customers.
• Investment requirements was huge and not affordable to many lines.
• At the time many like-minded carriers came up with the idea of forming a
strategy alliance with other international carriers to establish a global service
network.
• The world’s first global alliance came into existence in 1994.
• 1992-93 transpacific trade saw solid, double-digit cargo growth in Asia
trades.
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CONT….
• Major trans – pacific carriers looked at this growth as a great future,
at the same time they were being offered highly concessionary terms
from shipyards looking to fill their order books.
• Many transpacific shipping lines decided to acquire new vessels.
• 1996 – 97 saw a dramatic increase in new container capacity in the
Pacific, when the cargo demand was beginning to level off.
• Looking at the benefits of consortium and the drop in cargo volumes,
the majority of carriers followed the suit, favoring similar alliances.
• A major advantage of the consortium is that the carrier continues to
deal with its loyal customers and maintain its corporate identity.

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Advantages
• Consortia address the rationalisation of (1) freight rates amongst consortia
members(2) container shipping services & operations by sharing all resources.
• Improvement in the quality of service, better sailing frequency& better transit
time.
• Appropriate joint use of vessel fleets.
• Reduce operating costs such as feeder / port / terminal costs.
• Maintain corporate identity while using the fleets of other carriers.
• Maintain fair competitive conditions among its members.
• Greater sales coverage.
• Through the sharing of vessel space, terminals and equipment, participating
shipping companies can achieve cost reduction derived from economics of
scale.
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3. DIRECT VS TRANSHIPMENT
SERVICES.
• An independent or alliance shipping line operating services from
one port to another port or group of ports, without transhipping is
called direct service.
• Advantages
• No transhipment costs.
• Containers reach destination swiftly.
• No problem of roll–over at transhipment ports.
• Disadvantage
• Need more vessel deployment.
• Utilisation of space may not be adequate.
• Port coverage may be lesser
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4. Feeder service
• A feeder vessel normally used for carriage of export containers from small
market ports to hub ports and vice versa.
• At the hub port mainline vessel loads these containers and transports to final
destination
• Many mainline carriers shuttle their own shortsea feeders between hub
ports and smaller ports, to move their containers quickly to the final
destination.
• A 3rd party common carrier feeder vessel allocates slot space to many
users who book the slot with such an operator.
• Such 3rd party feeder vessel is a neutral operator and may not have any direct
competition with its users as they do not offer space or freight to the end user.
• Many carriers book slots with such operators on a ‘block slot’ basis, where they
have to pay the feeder operators ‘used or unused basis’.
• Main line operators, NVOCCS, and freight forwarders are their users.
• These feeder operators charge their users on the basis of slot usage.
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• Advantages of 3rd party feeder services:
• 1.The operating costs and resources shared by many users.
• 2.The user needs to pay only for the slot used hence
there is no pressure on individual users for filling the vessel.
• 3.Better frequency & transit of vessels.
• 4.Healthy relationship of user and operator as the
service is neutral.
• Disadvantage of 3rd Party services:
• 1. No competitive advantage for carriers on sailing.
• 2. Can carry cargo only to the extent of their slot allocation.
• 3. May not be able to comply their service contract requirements.
• 4. No control over slot costs.

• Example of Captive feeder:-•MSC Service Chennai-Colombo 18

Independent Services vs. Consortium
Liner
• 1. Independent Services: Independent Services
services are operated by a single shipping company that owns and
manages the vessels without collaborating with other carriers.
• Operational Control: Since only one company manages the operations, independent liners have complete
control over schedules, pricing, and service quality, allowing them to implement unique strategies to cater
to specific customer needs.
• Flexibility: Independent operators can adapt routes and schedules based on demand fluctuations or
market conditions, offering potential advantages in responsiveness.
• Limitations: These companies often have limited network reach and economies of scale, making them
potentially less cost-effective than consortium services, especially on long-haul or highly competitive
routes.
• 2. Consortium Liner Services: Consortium liner services are operated by a group of shipping companies
that pool resources (such as vessels, space, and routes) to provide shared services on agreed routes.
• Cost Efficiency: By sharing assets and resources, consortiums achieve economies of scale, reducing
operational costs for each participating company and offering competitive rates to customers.
• Network and Capacity: Consortium services can offer an extensive network and higher frequency of
service, as they combine the fleets of multiple carriers to cover more ports and larger volumes of cargo.
• Challenges: Since multiple companies are involved, consortiums can face challenges in maintaining
consistent service standards and coordinating schedules, which might limit flexibility compared to
independent services. 19
The most commonly known services offered
by liners are as below:
• End-to-end service
• Round The Word Service
• Pendulum Service
• Hub & Spoke Service

• The Liner Operator has a choice to select any one type of

service option or combination of more than one type.

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END TO END SERVICE
• This is a direct shipping service where goods are transported
from the origin port to the destination port without any
intermediate stops.
• It provides a straight forward and efficient service, ideal for long-
distance shipping with minimal handling of goods.
• Example: A shipment of electronics from Shanghai, China, is
directly transported to Los Angeles, USA, without any transfers
in between.

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ROUND THE WORD SERVICE (RTW)
• This is an alternative to the end to end service.
• The ship never turns round, it just keeps sailing until it completes a
circumnavigation and returns to its starting point
• i.e., the ship will not have to report the ports through which she has
traveled for loading the cargo.
• In this service, ships follow a circular route around the globe,
stopping at multiple ports on different continents.
• It allows goods to be picked up or dropped off at various locations
along the way.
• Example: A ship starts in Singapore, moves to Europe, continues to the
US, and returns to Asia, offering global trade connections.
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PENDULUM SERVICE
• This service operates like a pendulum, moving back and forth
between two regions (e.g., Asia and Europe) with several port
stops in each region.
• It allows efficient back-and-forth trade between major trading
areas.
• Example: A liner moves between Asia (Shanghai, Hong Kong)
and Europe (Rotterdam, Hamburg), making regular port calls at
both ends.

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HUB & SPOKE
• In this service, large vessels transport goods to a central "hub"
port, where smaller vessels (spokes) then distribute the goods
to smaller ports.
• It helps in efficiently managing global trade.
• Example: A large ship carries containers to the Port of
Singapore (hub), and smaller ships distribute the containers to
ports in Southeast Asia.

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Summary
• Liner service which operates a regular route, on a regular basis.
• The ports, which are called by a vessel operating on a liner
service route, and the schedule call dates are known ahead of
time and often publicly available.
• A Liner service is generally characterized by:
• A set schedule and route (ports of call)
• Mainly used for containerized and standard size goods
• Cargo is booked on a specific route and voyage
• Vessels are typically container vessels, general purpose vessels
or RO/RO (roll on, roll off) vessels.

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 Tramps
The tramp ship is one that is hired like a taxi or leased auto.
That is, it is a bulk or tank ship that is hired on a voyage or time basis.
• Tramp Service – The Flexible Friend
• Tramp Service, or tramper is a service or trade that does not
operate on a fixed schedule or route.
• Tramp vessels are sometimes available at short notice to load
various cargoes from any port to any port.
• This flexibility makes them ideal for transporting bulk, breakbulk or
project cargoes that do not adhere to regular shipping schedules.
• For example, a tramp vessel might arrive in Durban from Korea to
discharge cargo and then take on new cargo to Oakland on the
West Coast of the USA. From Oakland, it could transport goods to
Germany, demonstrating its ability to traverse various routes
based on cargo availability. 26
Cont…
• tramp shipping services, which are less frequent and less
predictable.
• Tramp shipping services typically do not have published
schedules or fares, and they may not operate on fixed routes.
• Tramp vessels may be owned by the shipping company operating
the service, or they may be chartered from another company.
• Tramp shipping services are typically used to transport bulk cargo,
such as coal or iron ore.
• They may also be used to transport general cargo, containers, and
cars.
• Tramp vessels may be used on a “roll-on/roll-off” basis, or they may
be loaded and unloaded using cranes.
• Transport goods on an irregular basis, such as construction
companies or mining companies.
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TRAMP
• trampers – do not operate on a regular route or schedule and are
made available for clients who will charter – or part-charter (with
other clients) – the vessel for a specific journey or a specific
duration.
• A TRAMP service is generally characterized by:
• No set schedule or route (ports of call).
• Mainly used for bulk cargo (iron ore, coal, grain, oil…) and
oversized goods.
• Vessel is chartered on a full or partial basis and route is set in
function of charterers.
• Vessels are typically general purpose vessels, bulk carriers,
tankers and some RO/RO vessels
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29
DIFFERENCES
• https://www.youtube.com/watch?v=vrzwLPz5vzI
• https://logisticselearning.com/liner-versus-tramp/ (NOTES)

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 Specialized Vessels
• Specialized vessels are ships that are designed for a specific purpose,
or have a wide variety of functions.
• Types,
• Features, and
• Examples

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 1. Oil Tanker
(Crude Oil and
Product
Tankers)
• Large ships designed for transporting crude oil and petroleum products.
• Examples:
• ULCC (Ultra Large Crude Carrier): These massive tankers can carry over 320,000 DWT
(deadweight tonnage), used for high-volume transport between continents, especially for
long voyages.
• VLCC (Very Large Crude Carrier): A bit smaller than ULCCs, with capacities ranging from
200,000 to 320,000 DWT, frequently used in the Middle East–Asia route.
• Suezmax Tanker: Named for its capability to pass through the Suez Canal, with a capacity of
up to 200,000 DWT.
• Aframax Tanker: Medium-sized vessels, ideal for short to medium distances with a capacity of
around 80,000 to 120,000 DWT.
• Panamax Tanker: Designed to fit the original Panama Canal, carrying about 50,000 to 80,000
DWT.
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• Transporting crude oil from oil-producing nations to refineries worldwide.
2. Product Carrier

• Smaller tankers designed to carry refined petroleum products like

gasoline, kerosene, and diesel.
• Example: Handysize and Medium Range (MR) vessels, typically with
capacities of 10,000 to 60,000 DWT.
• Transport refined products from refineries to various global
destinations.

• https://www.youtube.com/watch?app=desktop&v=0kCsMUuVgRo
• (Difference between Oil tanker and product carrier)
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 3. Parcel Tanker

• A specialized tanker used to carry various liquid

bulk cargoes.
• Examples: Frequently used for chemicals or
edible oils, transporting several types of cargo in
separate compartments.
• Ideal for transporting diverse liquid products that
require strict segregation.

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 4. FPSO/FSO and FSU (Floating Production,
Storage, and Offloading; Floating Storage
Unit)
• Offshore vessels that extract, process, and store oil/gas and are
anchored at oil fields.
• Examples: FSUs store oil until it’s offloaded to tankers, whereas FPSOs
process and store oil.
• Used in offshore oil and gas fields, particularly in remote or deep-sea
locations.
• https://www.youtube.com/watch?v=RjRvd04pges
• https://www.youtube.com/watch?v=a4VTecrLxBw

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5. Bulk Carrier (Dry Bulk Cargo)
• Ships designed for transporting large quantities of unpacked
commodities, like grains, coal, and iron ore.
• Examples:
• Capesize: Larger carriers that cannot pass through the Panama Canal.
• Panamax: Designed to fit through the Panama Canal, carrying various bulk
cargoes.
• Bulk cargo transport for commodities across continents.

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6. Combi Carrier
• Multi-purpose vessels capable of transporting both liquid and dry bulk
cargo.
• Applications: Used by companies needing versatile shipping solutions,
often in remote or hard-to-reach areas.

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 7. Container Vessel

• Ships designed to carry containerized cargo in

standard 20 or 40-foot containers.
• Examples: Maersk Triple E class with capacities
of 18,000 TEU (Twenty-foot Equivalent Unit).
• Moving various goods in containers, typically for
international trade.

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 8. Fruit Carrier

• Specialized vessels equipped with refrigeration systems to transport

perishable fruits.
• Used for seasonal fruit export, often from tropical regions to colder
climates.
• https://www.youtube.com/watch?v=J8Kj8WXWB9I

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9. Gas Tanker
• Ships designed to transport liquefied gases
such as LNG (Liquefied Natural Gas) and LPG
(Liquefied Petroleum Gas).
• Examples: LNG tankers with advanced
insulation to keep gas in liquid form.
• Transport of LNG from producer nations like
Qatar to consumer markets in Asia and
Europe.
• https://www.youtube.com/watch?v=hl2LDTyTc
Sk
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10. Platform Supply Vessel (PSV)

• Offshore vessels supporting oil rigs by

transporting supplies and personnel.
• Essential in oil extraction, especially in
remote offshore fields.

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11. Chemical Carrier
•Tankers built to transport chemicals, often
equipped with specialized coatings.
•Transportation of hazardous chemicals under
strict regulations.
•Type 1
•Type 2
•Type 3
•https://www.youtube.com/watch?v=KPD5cCli
FAY

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 Road transport vehicle
• Road transport plays a crucial role in logistics, • Container Trucks
providing flexibility, door-to-door service, and
efficient connectivity between production, • Mini Trucks (Pickup Trucks)
warehousing, and retail points. • Livestock Transport Vehicles
• Light Commercial Vehicles (LCVs)
• Car Carriers
• Medium-Duty Trucks
• Dump Trucks
• Heavy-Duty Trucks (HDTs)
• Refrigerated Trucks (Reefers) • Armored Trucks
• Flatbed Trucks • Tow Trucks
• Tank Trucks (Tanker Trucks) • Hazardous Material Transport
• Container Trucks Trucks (Hazmat)
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• 1. Light Commercial Vehicles (LCVs) • 2. Medium-Duty Trucks
• Small-sized vehicles with a carrying • Vehicles with a carrying capacity of
capacity of up to 3.5 tons, ideal for around 4 to 10 tons, used for
short-distance and urban logistics. medium-range transport.
• Examples: • Examples:
• Tata Ace and Mahindra Bolero Pik-Up • Tata 407 in India, versatile for
in India, commonly used for urban regional goods transport.
delivery of goods. • Isuzu NPR and Hino 300 Series, known
• Ford Transit in the U.S. and Europe, for reliability in regional deliveries.
frequently used for package deliveries
and e-commerce fulfillment.
• Frequently used in regional logistics,
supplying smaller retailers, and for
• Transporting goods in cities and FMCG (Fast-Moving Consumer
towns where narrow roads and Goods) deliveries across towns.
higher traffic density make larger
vehicles less practical.
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• 3. Heavy-Duty Trucks (HDTs) • 4. Refrigerated Trucks (Reefers)
• Large trucks designed to carry heavy • Equipped with temperature-
loads over long distances, typically controlled compartments to
with a capacity of over 10 tons. transport perishable goods.
• Examples: • Examples:
• Ashok Leyland U-Truck in India, widely • Carrier Transicold and Thermo King
used for intercity and long-haul trucks, which maintain a consistent
transport. temperature for frozen and chilled
• Freightliner Cascadia and Volvo FH products.
Series in the U.S. and Europe, popular
for transporting heavy cargo across• Transporting dairy products,
states or countries. pharmaceuticals, seafood, meat,
• Moving bulk goods, such as and other temperature-sensitive
construction materials, agricultural goods.
produce, and large retail inventory.
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• 5. Flatbed Trucks • 6. Tank Trucks (Tanker Trucks)
• Trucks with a flat, open bed and no • Specialized trucks with cylindrical
sides or roof, allowing easy loading tanks for transporting liquids or
and unloading. gases.
• Examples: • Examples:
• Tata LPT in India, used for • BharatBenz Tanker in India, often
construction materials and used for petroleum distribution.
machinery. • Kenworth T680 in the U.S., used for
• Peterbilt 389 in the U.S., commonly transporting chemicals, gasoline, and
seen hauling oversized loads. other hazardous liquids.
• Transporting heavy machinery, • Moving fuel, chemicals, liquid
building materials, pipes, and foods, and potable water.
irregularly shaped cargo. Compliance with safety regulations
is critical due to the hazardous
nature of many tank truck cargoes.
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 Tata 407
Ashok Leyland U-Truck
Tata Ace and Mahindra Bolero

Tata LPT
BharatBenz Tanker
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Carrier Transicold and Thermo King trucks
• 7. Container Trucks • 8. Mini Trucks (Pickup Trucks)
• Trucks that carry shipping • Smaller trucks with open or
containers on trailers, allowing for enclosed beds, suitable for small
intermodal transport. loads.
• Examples: • Examples:
• Volvo FH 460 in India, popular for • Maruti Suzuki Super Carry in India,
moving containers between ports and popular with small businesses for
inland destinations. local deliveries.
• Scania R450 in Europe, facilitating • Ford F-150 in the U.S., often used for
intermodal transport from ports to personal transport and small business
warehouses. purposes.
• Ideal for long-haul transportation of • Local, light-duty deliveries for
goods, allowing seamless transition smaller goods or services.
between sea, rail, and road.

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• 9. Car Carriers • 10. Dump Trucks
• Multi-level trucks designed to • Trucks with an open-box bed at the
transport several cars at once. back, which can be tilted for easy
• Examples: unloading.
• Double-decked trailers, frequently • Examples:
used by car manufacturers and • Tata Prima in India, commonly used
dealers. for construction and mining.
• Used in automotive supply chains to • Mack Granite in the U.S., well-suited
transport new vehicles to for heavy-duty material transport.
showrooms or warehouses. • Transport of sand, gravel,
demolition waste, and construction
materials.

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• 11. Hazardous Material Transport • 12. Armored Trucks
Trucks (Hazmat) • Heavily protected trucks designed
• Specialized vehicles designed for to transport valuable items like
the safe transportation of currency or high-value goods.
hazardous materials. • Examples:
• Examples: • Used by banks and security
• Trucks with designated labeling and companies to move cash, jewelry, or
safety features to comply with
regulations for hazardous goods
sensitive documents.
transport. • Transport of valuables, offering
• Used to move chemicals, enhanced security against theft.
biohazardous materials, and other
regulated hazardous goods.

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Volvo FH 460
Maruti Suzuki Super Carry Double-decked trailers

Hazardous Material Transport Trucks Armored Trucks

Tata Prima
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Road Transport Weight and
Measurement
• Road transport weight and measurement are critical for planning and
optimizing logistics, ensuring efficient cargo handling, regulatory
compliance, and cost-effectiveness.
• 1. Gross Vehicle Weight (GVW)
• The total weight of the vehicle and its maximum permissible cargo load.
• Calculation: GVW = Vehicle Weight + Payload (maximum load allowed).
• Used to comply with legal limits; e.g., trucks in the EU have a maximum
GVW of 44 tons for general road usage. Exceeding this can lead to fines or
vehicle impoundment.

52
• 2. Tare Weight
• The empty weight of the vehicle (without cargo).
• Use in Logistics: Essential for calculating the net payload by subtracting the
tare weight from the GVW.
• If a truck has a GVW of 16 tons and a tare weight of 6 tons, it can carry up to
10 tons of cargo.
• 3. Payload Capacity
• The maximum weight of cargo a vehicle can legally carry.
• Importance: Directly impacts fuel efficiency and cost. Overloading can
damage infrastructure and reduce vehicle lifespan.
• Example: Light commercial vehicles (LCVs) may have a payload capacity
between 1-2 tons, while heavy-duty trucks can carry up to 20 tons.
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• 4. Dimensions and Space Utilization
• Length, Width, and Height: Vital for optimizing cargo arrangement and
ensuring the vehicle fits within the standard road transport limits.
• Volume Measurement: Volume (cubic meters) is crucial for calculating
capacity for goods that are voluminous but lightweight, such as furniture or
textiles.
• Example: Standard 40-ft trailers offer about 80 cubic meters of space; useful
for bulk goods.
• 5. Load Factor and Utilization Rate
• Load Factor: The ratio of payload weight to the maximum load a vehicle can
carry. It indicates efficiency in space utilization.
• Utilization Rate: Measured as the proportion of the vehicle’s cargo volume or
weight capacity that’s actually used.
• Example: If a vehicle with a capacity of 20 tons is carrying 15 tons, its load
factor is 75%, showing space for optimization. 54
Rail Transport Vehicle and
Equipment
• Rail transport vehicles, equipment, and infrastructure are essential in
long-distance, bulk, and intermodal transport. Railways support a high
cargo capacity and provide an efficient mode for moving heavy loads
over long distances.
• Locomotives
• Freight Cars/Wagons
• Intermodal Cars
• High-Capacity Bulk Freight Wagons
• Maintenance and Auxiliary Equipment
• Automatic Couplers and Brakes
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• 1. Locomotives • 2. Freight Cars/Wagons
• Description: The engines that power • Description: Designed for transporting
trains, either through diesel or various types of cargo. Different types
electric engines. serve specific cargo requirements.
• Types and Examples:
• Types:
• Boxcars: Enclosed wagons used for
• Diesel Locomotives: Common in general cargo like manufactured goods.
regions without extensive Example: Standard 50-ft boxcar.
electrification; suitable for long • Flatcars: Open wagons for oversized cargo
distances and heavy loads. like machinery, vehicles, or construction
• Electric Locomotives: Faster and more equipment.
environmentally friendly, often used in • Tank Cars: Cylindrical tanks for
Europe and parts of Asia. transporting liquids, gases, and chemicals.
• Example: The WAG-12B in India is a • Each type serves diverse industries,
high-powered electric locomotive from manufacturing to agriculture and
used for freight, capable of hauling chemicals.
up to 6,000 tons. 56
• 3. Intermodal Cars • 4. High-Capacity Bulk Freight
• Specialized flatcars designed to carry Wagons
containers for intermodal (truck-to- • Specialized for bulk commodities,
rail) transport. • Open-topped for transporting heavy
• Ideal for containerized goods, bulk goods like scrap metal or coal.
allowing smooth transition between • Used in sectors like mining and
sea, road, and rail. agriculture, allowing transportation
of large volumes at low cost.
•.

57
• 5. Maintenance and Auxiliary • 6. Automatic Couplers and Brakes
Equipment • Critical for connecting and
• Includes equipment for maintaining disconnecting freight cars and
railway infrastructure, such as ensuring safety.
ballast regulators and track • Improves train stability, safety, and
inspection cars. load distribution.
• Types:
• Ballast Regulators: Machines that
level and shape the ballast (gravel) •.
under tracks.
• Track Inspection Cars: Vehicles
equipped with cameras and sensors to
detect track defects.
• Essential for safety and efficient
railway operations, keeping the
tracks in optimal condition. 58
AIR TRANSPORT
• Air transport is vital in logistics for moving high-value, time-sensitive,
and long-distance cargo. Although costly, air transport offers
advantages in speed and efficiency, especially in global trade.
• Cargo Aircraft
• Passenger Aircraft with Cargo Hold
• Charter Flights
• Specialized Cargo Aircraft

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• 1. Cargo Aircraft • 2. Passenger Aircraft with Cargo
• These aircraft are exclusively designed for Hold
freight, with modifications such as wider doors,
reinforced floors, and optimized cargo spaces • While primarily designed for
to facilitate efficient loading and unloading. passenger transport, these aircraft
• Capable of carrying oversized cargo, such as also carry cargo in their belly hold.
aircraft engines or industrial machinery.
• Boeing 777: Known for significant
• Small Freighters: Ideal for smaller, high-priority
cargo capacity in its belly hold, even
parcels and packages. on passenger flights.
• Examples: • Airbus A320: Common for short-haul
• Boeing 747 Freighter: A wide-body aircraft capable routes with some cargo space for
of carrying approximately 140 metric tons, smaller items.
frequently used in long-haul freight.
• Antonov An-225: Known for carrying extremely • Utilized by airlines for additional
oversized cargo, such as heavy machinery, tanks,
and industrial equipment.
revenue, offering an efficient way to
• Commonly used by major freight carriers like
move smaller loads or
FedEx, UPS, and DHL for international supplementary cargo on passenger
shipments. flights. 60
• 3. Charter Flights • 4. Specialized Cargo Aircraft
• Flights that can be hired on-demand, • Designed to carry unique, oversized,
often used for special cargo or perishable goods with specific
requirements or emergency requirements.
deliveries.
• A small aircraft ideal for quick • Embraer E190: Used for transporting
deliveries of medical supplies or pharmaceuticals due to its
emergency cargo over short distances. temperature-controlled cargo hold.
• Frequently used for time-sensitive • Often used in industries requiring
shipments, such as pharmaceuticals, temperature control, large
organs for transplants, or emergency component assembly, or
relief supplies. transporting fragile goods like
electronics.

61
Features of Air Transport
Vehicles
• Speed: Air transport is the fastest mode for long-distance freight,
making it ideal for urgent goods.
• High-Cost Efficiency for Lightweight and High-Value Goods: While air
transport is generally more expensive, it provides excellent cost-
efficiency for high-value or perishable goods.
• Global Reach: Air cargo links regions and countries that may lack
other transport infrastructure, facilitating international trade.
• Security: Air freight generally has higher security standards,
minimizing the risk of damage or theft.

62
MEASUREMENT
• Measurement and Load Capacity
• Air cargo is often measured based on weight and volume, as well as
specific requirements of the cargo itself.
• Weight: Measured in kilograms or metric tons.
• Most airlines calculate costs based on the greater of the cargo’s
actual weight or dimensional (volumetric) weight.
• Example: A shipment of electronics weighing 300 kg may have a volumetric
weight calculation to ensure the shipment occupies its appropriate volume.
• Volume: Measured in cubic meters, volume is critical for cargo that
may be light but voluminous, like textiles or plastic products.
• Example: An airplane may carry only 70% of its weight capacity if the cargo
volume limits are reached.
63
• Unit Load Devices (ULDs): Standardized containers or pallets used for
loading cargo onto aircraft.
• LD3 Containers: Widely used for smaller cargo; fits within the curved shape of the
aircraft.
• Load Capacity: Defined by aircraft type. Wide-body freighters can
carry larger loads than narrow-body aircraft.
• Example: A Boeing 747F can carry around 140 metric tons of cargo, while an
Airbus A320 can manage around 20 metric tons in its cargo hold.

64
 Ports
• Ports are essential nodes in the global supply chain, facilitating the movement of goods via maritime transport. They serve as
interfaces between land and sea, supporting import, export, and domestic distribution activities. Ports are critical for enabling
global trade, especially for countries with extensive coastlines and significant import-export activities.
• Key Functions of Ports
1. Cargo Handling
1. Description: Loading and unloading of cargo from vessels, including containers, bulk goods, and general cargo.
2. Example: The Port of Singapore has specialized cranes for quick container handling, enabling high throughput.
2. Warehousing and Storage
1. Description: Ports provide warehousing facilities for short-term storage and staging of goods.
2. Example: The Port of Los Angeles offers bonded warehouses for temporarily storing imported goods before customs clearance.
3. Customs and Security
1. Description: Ports serve as secure facilities for customs inspections and regulatory compliance, ensuring the legality of goods entering and
leaving a country.
2. Example: The Port of Rotterdam in the Netherlands has sophisticated scanning equipment for rapid customs checks.
4. Transshipment Hubs
1. Description: Some ports serve as transshipment hubs, where cargo is transferred from one vessel to another for further distribution.
2. Example: Dubai’s Jebel Ali Port is a major transshipment hub in the Middle East, connecting Asia, Europe, and Africa.
5. Intermodal Connectivity
1. Description: Ports act as hubs for transferring goods between different transport modes, such as rail, road, and air.
2. Example: The Port of Hamburg in Germany has direct rail links, allowing seamless transitions between sea and land transport.
65
 LCL (Less than Container Load)
• LCL is a shipping arrangement where a single container is shared by multiple shippers. This
option is commonly used by businesses that need to transport small quantities of goods,
which do not require a full container.
• Features and Benefits
1.Cost-Efficiency for Small Loads
1. Description: LCL allows shippers to pay only for the space they use, making it cost-effective for small
shipments.
2. Example: A small business shipping only a few pallets of merchandise internationally can choose LCL,
reducing shipping costs.
2.Ideal for Small to Medium Enterprises (SMEs)
1. Description: LCL is widely used by SMEs that do not have large enough shipments to fill a container.
2. Example: A fashion retailer importing a few racks of clothing from China may opt for LCL to avoid paying
for a full container.
3. 3. LCL shipments may have slightly longer transit times due to the additional time needed for
consolidation and deconsolidation.
4. Example: An LCL shipment from Europe to North America may take an extra two days compared to 66 an
FCL shipment.
FCL (Full Container Load)
• FCL is a shipment arrangement where an entire container is used exclusively by one shipper. This
method is suitable for larger shipments that can fill or almost fill a container.
• Features and Benefits
1. Cost-Efficiency for Large Loads
1. Description: FCL becomes cost-effective for shipments that can utilize most of the container’s space.
2. Example: A large electronics company shipping full loads of TV sets from Taiwan to the U.S. would use FCL for better
rates.
2. Faster Transit Times
1. Description: Since FCL shipments don’t require consolidation or deconsolidation, they often have quicker transit
times.
2. Example: An FCL shipment from India to Australia may clear customs and be delivered faster than an LCL shipment.
3. Greater Control and Security
1. Description: With FCL, only one shipper’s goods occupy the container, reducing the risk of damage and loss.
2. Example: A food exporter sending delicate or perishable items will often prefer FCL to ensure product integrity.
4. Ideal for Seasonal or High-Demand Goods
1. Description: FCL is suitable for businesses with large volumes, such as seasonal products or high-demand goods.
67
2. Example: A toy manufacturer shipping a full container of products in preparation for the holiday season.
NVOCC (Non-Vessel Operating Common Carrier)
• NVOCCs are intermediaries that do not own or operate their own vessels but act as carriers by consolidating shipments and
managing logistics on behalf of shippers. They issue their own bills of lading and contract with vessel operators to transport cargo.
• Features and Functions
1. Consolidation Services
1. Description: NVOCCs combine smaller shipments from multiple shippers into full container loads, helping reduce shipping costs.
2. Example: A U.S.-based NVOCC consolidates several shipments from small exporters in Vietnam into one container destined for Los Angeles.
2. Issuing Bills of Lading (B/L)
1. Description: NVOCCs issue their own house bills of lading, which are recognized as valid shipping documents.
2. Example: A furniture exporter uses the NVOCC’s bill of lading as a receipt for goods shipped to Europe.
3. Container Leasing
1. Description: NVOCCs often lease containers, allowing them to offer flexible solutions for various cargo needs.
2. Example: An NVOCC leases a refrigerated container for a client shipping perishable goods from Chile to the U.S.
4. Global Reach and Flexibility
1. Description: NVOCCs have a global network, enabling them to provide shipping options across various trade lanes.
2. Example: A U.K.-based NVOCC arranges shipments for clients across Asia, Africa, and the Americas, offering a range of services from standard
LCL to specialized cargo handling.
5. Intermodal Solutions
1. Description: Many NVOCCs provide intermodal solutions, allowing seamless transfer of goods across sea, rail, and road.
2. Example: An NVOCC arranges an LCL shipment from India to Europe, with door-to-door service that includes both sea and rail transport within
Europe.

68
Shipping Line
• A Shipping Line is a company that owns and operates ships
and is responsible for transporting goods across international
waters.
• Shipping Lines manage the movement of goods via sea from
one port to another.
• They maintain and manage vessels and have control over
routes, schedules, and handling of goods on their ships.
• They typically handle only sea transportation and often do
not provide end-to-end services for the entire supply chain.
69
• Monday- Jebel Ali
• Tuesday- Cochin
• Wednesday- Colombo
• Thursday- Chennai FIXED ROUTE & SCHEDULE
• Friday- Colombo
• Saturday- Cochin
• Sunday- Jebel Ali
• Monday- Jebel Ali (start)
70
Example
• Maersk Line is one of the world’s largest shipping
lines.
• If a business needs to ship bulk cargo from Mumbai,
India, to Hamburg, Germany, Maersk can book the
cargo on one of its vessels, handling the sea leg of the
journey.
• However, it may not manage inland transport or any
other logistics needs beyond the port-to-port service.
71
Freight Forwarder
• A Freight Forwarder acts as a logistics service provider that
arranges the transport of goods on behalf of the shipper.
• They coordinate with various carriers, including shipping
lines, trucking companies, and airlines, to ensure door-to-
door delivery.
• Freight forwarders do not own vessels but instead work with
multiple carriers to offer a complete transportation
package, including multimodal transport, customs clearance,
documentation, warehousing, and insurance.

72
Cont..
• A freight forwarder is a company or an agent that organizes the
transportation and logistics of goods on behalf of shippers.
• Freight forwarders act as intermediaries between the shipper and
transportation services, handling the complex processes involved in
international and domestic shipping.
• They are experts in logistics, making the shipping process smoother,
more cost-effective, and compliant with international trade
regulations.

73
• Shippers- customs clearance- Freight booking- Liaising- Customs Clearance- Warehousing- Factory
74
Example
• DHL Global Forwarding is a leading freight forwarder.
• If a company wants to send machinery from New
Delhi to New York, DHL would arrange sea or air
freight with a carrier (e.g., Maersk or UPS), coordinate
customs clearance, and manage inland transportation
from the departure warehouse to the final delivery
location in New York.

75
76
Freight forwarding
• Freight forwarding is the coordination and shipment of goods from
one place to another via a single or multiple carriers via air, marine,
rail or highway.
• The importance of freight forwarding for global trade was recognized
in Canada in 1948 with the establishment of the Canadian
International Freight Forwarders Association (CIFFA).
• CIFFA recognized that forwarding freight, whether by land, marine,
rail or air requires coordination, regulation and agreed-upon best
practices to ensure that goods flow in a timely and proficient manner
across borders, over seas, and throughout the world.

77
Role of Freight Forwarders

• Intermediary between Shipper and Carrier

• Streamlining the Shipping Process
• Expertise in Customs and Compliance

78
Role of Freight Forwarders

• Intermediary between Shipper and Carrier

• Streamlining the Shipping Process
• Expertise in Customs and Compliance

79
Role of Freight Forwarders

• Intermediary between Shipper and Carrier

• Streamlining the Shipping Process
• Expertise in Customs and Compliance

80
Key Services Provided by
Freight Forwarders
• A. Documentation Handling
• They manage all necessary shipping documents, including bills of
lading, commercial invoices, export declarations, and certificates of
origin.
• B. Freight Consolidation
• Freight forwarders consolidate smaller shipments from multiple
shippers into one larger load to reduce costs for each shipper.
• C. Warehousing and Storage Solutions
• Freight forwarders offer warehousing options at various points in
the supply chain, including storage, packaging, and inventory
management.
81
Key Services Provided by
Freight Forwarders
• D: Insurance: Freight forwarders provide cargo insurance to protect
against potential risks such as theft, loss, or damage during transit.
• E. Multi-modal Transport Arrangement
• They arrange various modes of transport (sea, air, rail, and road) to
provide a seamless end-to-end logistics solution.
• F. Customs Brokerage
• Many freight forwarders offer customs brokerage services, handling
customs documentation and clearance on behalf of the shipper.

82
Advantages of Using a Freight
Forwarder
1. Cost Efficiency
Freight forwarders negotiate better rates due to high volumes and
partnerships with carriers, reducing transportation costs for shippers.
2. Logistical Expertise and Efficiency
Their expertise simplifies complex logistics, making shipping faster and
more predictable.
3. Risk Management
• Freight forwarders help minimize the risks associated with global
shipping by managing insurance, security, and regulatory compliance.
4. Time-Saving
• Freight forwarders handle the coordination and documentation,
allowing shippers to focus on core business activities. 83
Processes in Freight Forwarding
1.Booking Cargo Space
Freight forwarders negotiate and book space with carriers (airlines, shipping lines, or trucking
companies) to meet specific cargo requirements.
2. Documentation and Compliance
Preparing shipping documents, including export licenses and letters of credit, to ensure that
shipments comply with destination country requirements.
3. Loading and Packaging
Coordinating with warehouses for loading goods onto containers or trucks, with special
attention to packaging, labeling, and securing cargo.
4. Customs Clearance and Inspection
Ensuring timely customs clearance at both origin and destination points, often through the
freight forwarder’s customs brokerage service.
5. Final Delivery (Last Mile)
Arranging final delivery to the customer or end destination, including handling the necessary
84
unloading, inspection, and warehousing as needed.
Types of freight forwarding
• Air Freight Forwarding,
• Sea Freight Forwarding,
• Road Freight Forwarding,
• Rail Freight Forwarding,
• Multi-modal Freight Forwarding, and
• Customs Brokers.

85
Air freight forwarding
• Air freight forwarding involves the shipment of goods via air.
• It is one of the fastest modes of transportation, making it ideal for
cargoes of small dimensions, high value, time-sensitive or perishable.
• Two methods of air freighting your goods are direct and deferred
services.
• 1. A direct flight: freight is loaded on a scheduled flight from the
airport of origin to the final destination.
• 2. deferred service: goods are carried from the point of origin to
another country, where the cargo is off-loaded and then reloaded
onto a flight scheduled for its final destination.

86
Sea freight forwarding
• Sea freight forwarding involves the transportation of goods via ocean
vessels.
• It is economical to ship large quantities of goods over long distances.
• Full Container Load (FCL) the container is packed by one supplier to
one consignee.
• Less than Container Load (LCL): shipment doesn’t fill a container; a
consolidator will group cargoes for various consignees into a Full
Container Load.

87
• Road Freight Forwarding
Road freight forwarding involves transportation by trucks, primarily used for
domestic shipments or cross-border transport within a continent.
• Benefits: Flexible and suitable for short-to-medium distances, allowing door-to-
door delivery.
• Example: Transporting consumer goods from a warehouse to a retail store within
a country or across neighboring countries in Europe.
• 4. Rail Freight Forwarding
• Description: Rail freight forwarding uses railroads for transporting goods, mainly
within countries or across regions connected by rail infrastructure.
• Benefits: Cost-effective for heavy and bulk items over long distances and eco-
friendly compared to road transport.
• Example: Automobiles or coal shipped over long distances within a continent,
like from one end of the U.S. to the other.
88
Consolidators

• A consolidator in logistics is a company or agent that combines

smaller shipments from multiple shippers into a single larger
shipment.
• By consolidating goods, they maximize the use of available container
space, reduce shipping costs for individual shippers, and make the
logistics process more efficient.
• Consolidation is primarily used in Less-than-Container Load (LCL)
shipments, Less-than-Truckload (LTL) transport, and air cargo to
reduce costs and improve efficiency.

89
 Role of Consolidators in the
Supply Chain
• Combining Smaller Shipments
• Cost Efficiency
• Streamlining Logistics Operations
• Reducing Carbon Footprint

90
Types of Consolidators

• A. Ocean Freight Consolidators

• B. Air Freight Consolidators
• C. Truck Freight Consolidators (LTL)

91
Services Provided by
Consolidators
• A. Cargo Consolidation and Packing
• B. Documentation and Compliance
• C. Customs Brokerage
• D. Tracking and Monitoring

92
Process of Freight Consolidation
• Step 1: Collection and Sorting
• Step 2: Packaging and Labeling
• Step 3: Preparing Documentation
• Step 4: Transport and Tracking
• Step 5: Deconsolidation

93
Process of Freight Consolidation
• Step 1: Collection and Sorting
• Consolidators collect goods from various shippers, typically at a consolidation center, and sort them based on destination and type.
• Example: A consolidator in Shenzhen receives shipments from multiple suppliers and sorts them according to their final destinations in North
America.
• Step 2: Packaging and Labeling
• Shipments are securely packaged to maximize space, with labels to identify each shipper’s cargo.
• Example: A consolidator packages and labels different products (e.g., electronics and textiles) separately within a single container bound for
Europe.
• Step 3: Preparing Documentation
• Required documentation, such as bills of lading and customs forms, is prepared for customs and import/export compliance.
• Example: Before shipping, the consolidator prepares a single bill of lading listing all shippers and manages customs paperwork for entry into the
EU.
• Step 4: Transport and Tracking
• The consolidated shipment is transported to the destination. Throughout the process, tracking information is shared with shippers.
• Example: A consolidator provides real-time tracking to a fashion retailer in London, detailing the progress of their shipment from China.
• Step 5: Deconsolidation
• Upon arrival, the consolidator deconsolidates the shipment, separating goods for individual delivery to each consignee.
• Example: A container arriving in New York is deconsolidated by a U.S.-based consolidator, distributing individual shipments to various customers
across the country.

94
Advantages of Using
Consolidators
• Cost Savings
• Reduced Shipping Frequency
• Enhanced Service Flexibility
• Compliance and Risk Reduction

95
Advantages of Using
Consolidators
• Cost Savings
• Consolidation reduces shipping costs by filling up available space, lowering the cost per unit of cargo for individual shippers.
• Example: A small artisan business exporting handicrafts can affordably ship products to Europe by consolidating with other
exporters.
• Reduced Shipping Frequency
• Consolidation reduces the frequency of shipments by maximizing container usage, helping avoid delays caused by
underfilled loads.
• Example: An electronics supplier uses a consolidator to reduce the number of shipments to the U.S., consolidating orders
from multiple manufacturers.
• Enhanced Service Flexibility
• Consolidators can arrange multi-modal transport, offering flexible solutions for last-mile delivery and cross-border logistics.
• Example: A consolidator arranges for a truck to transport a consolidated shipment from a port to inland locations in the
U.S.
• Compliance and Risk Reduction
• Professional consolidators help ensure that shipments comply with international standards, reducing the risk of penalties
or delays.
• Example: A pharmaceutical company shipping small quantities of medical supplies consolidates shipments through a
reliable consolidator to ensure compliance with FDA import requirements.
96
Examples of Consolidators in
Action
• A. Consolidation for Small Businesses
• Example: Etsy sellers in Japan use a consolidator to combine smaller packages of hand-crafted
items into one container for distribution in North America, making export affordable.
• B. Consolidation for Seasonal Retail
• Example: Fashion brands in Europe ship new seasonal lines to the U.S. using a consolidator
who organizes shipments for multiple retailers, reducing costs and ensuring on-time delivery.
• C. Cold Chain Consolidation for Perishables
• Example: Multiple seafood exporters from Canada consolidate shipments to Asia in
refrigerated containers, lowering costs and maintaining product quality during transport.
• D. Consolidation for E-commerce and Fulfillment
• Example: Amazon sellers in Asia use consolidators to ship their products to North America,
where they are deconsolidated and distributed to various Amazon fulfillment centers.

97
 Multimodal Transport
Liners: types
Tramps
Specialized Vessels –
Road transport vehicle –
Road Transport Weight and Measurement
Rail Transport Vehicle and Equipment –
Module 4 Air -Transport –
Ports - LCL - FCL - NVOCC –
Freight forwarders –
Consolidator –
ICD - CFS-
Free Trade Area - SEZ –
Factors affecting mode and route choice

98
 Inland Container Depots (ICD) and
Container Freight Stations (CFS)
• CFS (Container Freight Station): A CFS, or Container
Freight Station, is a facility where cargo is consolidated or
deconsolidated.
• It's a warehouse near a port where goods are packed into
or unpacked from containers for further transportation.
• CFS facilities play a role in the efficient handling and
sorting of cargo.
• . CFSs are typically used for handling Less-than-Container Load (LCL)
shipments and are essential for shippers who need to consolidate
smaller shipments before sending them out.

99
Key Functions - CFS
• Cargo Handling: CFS facilities handle the loading and unloading of
cargo from containers, ensuring efficient movement of goods.
• Consolidation: CFSs consolidate shipments from multiple shippers
into a single container, reducing costs for smaller businesses.
• Deconsolidation: They deconsolidate containers arriving from
overseas, allowing individual shipments to be distributed to
various local customers.
• Customs Clearance: Like ICDs, CFSs often facilitate customs
procedures, allowing for quick clearance of cargo before delivery
to final destinations.
100
Examples
• Example 1: A CFS in Mumbai manages LCL shipments from various
exporters. Smaller shipments of textiles, electronics, and handicrafts
are consolidated into a single container for export, minimizing costs
for each exporter.
• Example 2: A CFS near the Port of Kolkata, where it receives full
containers from international shipping routes. The CFS deconsolidates
the cargo, enabling individual deliveries to local retailers and
distributors.

101
Inland Container Depots (ICD)
• An ICD, or Inland Container Depot, is an inland
facility connected to a port, designed for the
handling and temporary storage of containers.
• ICDs are strategically located away from
seaports
• It helps streamline the movement of containers
between ports and the hinterland.
• They are equipped with handling equipment and
infrastructure to manage containerized cargo efficiently.
102
Key Functions- ICD
• Storage: ICDs provide storage facilities for containers, allowing for
temporary holding of goods before further distribution.
• Customs Clearance: They serve as points for customs inspections and
clearance, enabling shippers to manage documentation and
compliance without traveling to the port.
• Transloading: ICDs enable the transfer of cargo between different
modes of transport (e.g., from rail to truck), facilitating multi-modal
logistics.
• Consolidation and Deconsolidation: They play a role in consolidating
smaller shipments from various suppliers into a full container or
deconsolidating larger shipments into smaller deliveries.
103
Examples
• Example 1: An ICD in Delhi facilitates the movement of goods
from the Port of Mumbai to inland areas. Importers can store
containers at the ICD, complete customs clearance, and
arrange for local distribution to warehouses.
• Example 2: A logistics company in India uses an ICD in
Chennai to manage imports of electronics. They consolidate
smaller shipments from various manufacturers, process
customs clearance at the ICD, and then transport the goods
to their distribution centers across the region.
104
105
Benefits of ICDs and CFSs
• Cost Efficiency: Both ICDs and CFSs reduce shipping costs by allowing
consolidation of smaller shipments, which lowers the overall cost per
unit.
• Improved Logistics: They streamline the logistics process, making it
easier for businesses to manage inventory and distribution.
• Faster Customs Clearance: Facilities for customs inspection and
clearance help speed up the overall shipping process, reducing delays
in the supply chain.
• Accessibility: They provide strategic locations for businesses,
enhancing access to transportation networks and markets.
106
Challenges in ICDs and CFSs
• Congestion: High volumes of cargo can lead to congestion in
both ICDs and CFSs, delaying processing times.
• Infrastructure Limitations: Limited infrastructure at some
ICDs or CFSs may hinder efficient operations, especially
during peak periods.
• Regulatory Compliance: Navigating customs regulations and
compliance requirements can be complex and may pose
challenges for operators and shippers.

107
 Free Trade Areas (FTAs) and
Special Economic Zones (SEZs)
• Free Trade Areas (FTAs) and Special Economic Zones
(SEZs) are critical tools in promoting trade and
fostering economic growth by reducing trade barriers
and creating favorable business environments.
• Their significance is particularly evident in how they
attract foreign direct investment (FDI), promote
exports, generate employment, and spur regional
development.
108
Free Trade Areas (FTAs)
• FTAs are agreements between two or more countries to
reduce or eliminate tariffs, quotas, and other trade
restrictions on goods and services traded among them.
• Easier access to larger markets
• reducing the cost of imports and exports,
• FTAs enhance trade efficiency and encourage competition,
• more affordable goods for consumers and
• increased innovation among companies.
109
 EXAMPLE
• The North American Free Trade Agreement (NAFTA), replaced by the
United States-Mexico-Canada Agreement (USMCA), has significantly
boosted trade volumes among the U.S., Canada, and Mexico.
• It facilitated the integration of supply chains across these countries,
allowing businesses to access cheaper inputs and broader markets, which
has resulted in increased competitiveness on a global scale.
• The European Union (EU) operates as a large free trade area among its
member states, eliminating customs duties and restrictions on internal
trade.
• This integration has made the EU one of the largest trading blocs globally,
enabling member countries to specialize in goods and services where they
hold a competitive advantage, thus boosting regional productivity and
economic growth. 110
Cont..
• FTAs are agreements between countries that aim to reduce or
eliminate tariffs, quotas, and other trade restrictions on goods and
services exchanged within the area.
• For example, the Association of Southeast Asian Nations (ASEAN) Free
Trade Area has been transformative for Southeast Asia.
• ASEAN’s FTA has lowered tariffs, simplified trade rules, and enhanced
regional connectivity.
• Companies operating within ASEAN benefit from lower production
costs and improved access to a large regional market.
• In the context of logistics, this translates to smoother supply chains
and more predictable lead times, which are crucial for maintaining
competitiveness in global markets. 111
Special Economic Zones (SEZs)
• SEZs are designated areas within a country where the business and
trade laws differ from the rest of the country.
• These zones offer incentives such as tax breaks, simplified customs
procedures, and relaxed labour laws to attract foreign investment,
encourage exports, and develop local industries.
• SEZs play a unique role in economic development by fostering
industrial growth, creating job opportunities, and stimulating regional
economies.

112
Example
• China's SEZs, such as Shenzhen, have been instrumental in its economic
transformation. Established in the 1980s, these zones attracted foreign
investment, enabled technology transfers, and transformed local economies.
Shenzhen evolved from a small fishing town to a global manufacturing and
tech hub, contributing significantly to China’s GDP and establishing it as a
global manufacturing leader.
• In India, SEZs like the Gujarat International Finance Tec-City (GIFT City) and
those in Tamil Nadu have become centers for high-tech manufacturing and
service industries, particularly in IT and electronics. These zones have helped
India become a major player in the global IT and outsourcing sectors by
creating specialized clusters that promote skill development and economic
diversification.
113
cont..
• From a logistics perspective, FTAs and SEZs play a crucial role in
enhancing supply chain efficiency.
• FTAs reduce trade barriers across borders, leading to smoother and
more predictable logistics processes, which are essential for global
supply chains.
• SEZs often have advanced infrastructure and logistics facilities tailored
for export-oriented industries, offering logistics firms opportunities to
operate more efficiently and tap into regional growth areas.

114
FACTORS AFFECTING MODE &TRADE
ROUTE SELECTION
• 1. Cost
• 2. Transit Time and Speed
• 3. Reliability and Consistency
• 4. Cargo Characteristics
• 5. Distance and Geography
• 6. Infrastructure and Accessibility
• 8. Security and Risk Factors
• 9. Customer Requirements and Service Levels
• 10. The relation between cargo transit time and route
• 11. Commodity and value
• 12. Environmental, economic and political factors affecting modal choice
115
 FACTORS AFFECTING MODE
SELECTION &TRADE ROUTE
• Cost
• Transportation Cost: Different modes come with varying costs. Air freight, for instance, is
faster but more expensive than ocean or rail transport, making it suitable only for high-value
or time-sensitive goods.
• Handling and Packaging Costs: Some modes require more durable packaging or specialized
handling, which can increase costs. For instance, goods transported by sea may require extra
packaging for protection against moisture.
• Route-Specific Costs: Some routes may have additional fees or tariffs, such as tolls, fuel
surcharges, or port fees, which can affect the total cost.
• 2. Transit Time and Speed
• Urgency of Delivery: When time is critical, air transport is often the preferred mode due to its
speed. Road transport can also offer faster delivery over shorter distances.
• Lead Time Flexibility: If the goods are not urgently needed, companies may opt for slower but
cheaper options like sea or rail transport to save on costs.
116
 FACTORS AFFECTING MODE
SELECTION &TRADE ROUTE
• Cost
• 2. Transit Time and Speed
• 3. Reliability and Consistency
• 4. Cargo Characteristics
• 5. Distance and Geography
• 6. Infrastructure and Accessibility
• 8. Security and Risk Factors
• 9. Customer Requirements and Service Levels

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 FACTORS AFFECTING MODE
SELECTION &TRADE ROUTE
• 3. Reliability and Consistency
• Predictability of Arrival: Some modes, such as air and road, tend to be more predictable and are
less affected by weather or congestion compared to sea transport, which can face delays at ports.
• Frequency of Service: Regular, frequent service schedules can make certain modes or routes
more attractive. For instance, established sea routes with high-frequency services between major
ports ensure that goods are consistently shipped.
• 4. Cargo Characteristics
• Type of Goods: Perishable goods may require faster modes like air or refrigerated containers on
road/rail, while bulk commodities are more suited to sea or rail.
• Size, Weight, and Volume: Large, heavy, or high-volume shipments may be better suited to sea or
rail due to their capacity to handle large loads more economically.
• Special Handling Requirements: Fragile, hazardous, or temperature-sensitive items may need
specific handling, which can dictate the choice of mode and route. For example, hazardous
materials might require routes with specialized equipment or routes with fewer populated areas.
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 FACTORS AFFECTING MODE
SELECTION &TRADE ROUTE
• Cost
• 2. Transit Time and Speed
• 3. Reliability and Consistency
• 4. Cargo Characteristics
• 5. Distance and Geography
• 6. Infrastructure and Accessibility
• 8. Security and Risk Factors
• 9. Customer Requirements and Service Levels

119
• 5. Distance and Geography
• Route Geography: The physical distance and geographical conditions between the origin
and destination affect the choice. For instance, sea transport is often preferred for
intercontinental shipments, while road is ideal for short domestic routes.
• Intermodal Availability: The presence of intermodal hubs and connections can influence
the choice of route, particularly when multiple modes (e.g., road to rail) are needed for
cost-efficiency or faster service.
• 6. Infrastructure and Accessibility
• Infrastructure Quality: Poor infrastructure, such as underdeveloped roads or limited port
facilities, can impact the efficiency of a route, making certain modes less viable.
• Accessibility: Certain locations might only be accessible via specific modes. Remote areas,
for example, may rely solely on road transport, while island destinations may require air
or sea.
120
 FACTORS AFFECTING MODE
SELECTION &TRADE ROUTE
• 1. Cost
• 2. Transit Time and Speed
• 3. Reliability and Consistency
• 4. Cargo Characteristics
• 5. Distance and Geography
• 6. Infrastructure and Accessibility
• 8. Security and Risk Factors
• 9. Customer Requirements and Service Levels

121
• 7. Regulations and Customs
• Trade Regulations: Restrictions, tariffs, and documentation requirements for international
shipping can affect both mode and route choice.
• Customs Efficiency: Some countries have more efficient customs processes, which can impact
transit time and cost, making certain routes more attractive.
• Environmental Regulations: Increasingly, environmental laws and emission limits can influence
the choice of mode. Rail and sea modes are generally more eco-friendly compared to road and
air.
• 8. Security and Risk Factors
• Safety and Security of Goods: Risk of theft, damage, or other security issues may influence the
choice of route or mode, with some goods requiring more secure options.
• Political and Economic Stability: Political tensions or economic instability in a region can make
certain routes or modes less viable.
• 9. Customer Requirements and Service Levels
• Customer Expectations: Meeting specific delivery timelines, tracking capabilities, and handling
requirements often depends on the choice of mode and route.
• Special Service Needs: Some clients may require flexible arrangements, like just-in-time (JIT)
delivery, which influences both the speed and choice of route.
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PORT & DRY
• Dry:"Dry" in the context of shipping usually refers to
"dry containers." Dry containers are standard shipping
containers designed for the transportation of general
cargo. They are not equipped to handle temperature-
sensitive or perishable goods. Dry containers are the
most common type used for a wide range of products.
• Ports:Ports are facilities where ships can dock to load
and unload cargo. They serve as crucial hubs in the
transportation network, connecting land and sea
transport. Ports have various terminals for different
types of cargo, and they handle the transfer of goods
between ships and other modes of transportation. 123
• Discuss the role of NVOCCs, freight forwarders, and consolidators in
managing global supply chains. How do they contribute to the
efficiency of shipping operations?
• Analyze the significance of Free Trade Areas (FTAs) and Special
Economic Zones (SEZs) in promoting trade and economic growth.
Provide examples to support your answer.

124
• Yard:In the shipping context, a "yard" typically refers to
a container yard. This is an area, often adjacent to a
port or terminal, where containers are stored and
managed. Container yards provide temporary storage
for containers before or after transportation.
• Port Terminal:A port terminal is a specific area within
a port dedicated to handling a particular type of cargo
or a specific function. For example, there might be
separate terminals for containers, bulk cargo, or
passenger ships. Each terminal is equipped with the
necessary facilities and equipment for efficient cargo
handling. 125