History

Modern container shipping celebrated its 50th anniversary in 2006. Almost from the first voyage, use of this method of transport for goods grew steadily and in just five decades, containerships would carry about 60% of the value of goods shipped via sea. The idea of using some type of shipping container was not completely novel. Boxes similar to modern containers had been used for combined rail- and horse-drawn transport in England as early as 1792. The US government used small standardsized containers during the Second World War, which proved a means of quickly and efficiently unloading and distributing supplies. However, in 1955, Malcom P. McLean, a trucking entrepreneur from North Carolina, USA, bought a steamship company with the idea of transporting entire truck trailers with their cargo still inside. He realized it would be much simpler and quicker to have one container that could be lifted from a vehicle directly on to a ship without first having to unload its contents. His ideas were based on the theory that efficiency could be vastly improved through a system of "intermodalism", in which the same container, with the same cargo, can be transported with minimum interruption via different transport modes during its journey. Containers could be moved seamlessly between ships, trucks and trains. This would simplify the whole logistical process and, eventually, implementing this idea led to a revolution in cargo transportation and international trade over the next 50 years

Meaning & Defination

Containerization (or containerisation) is a system of intermodal freight transport using standard intermodal containers as prescribed by the International Organization for Standardization (ISO). These can be loaded and sealed intact onto container ships, railroad cars, cargo planes, and semi-trailer trucks. The introduction of containers resulted in vast improvements in port handling efficiency, thus lowering costs and helping lower freight charges and, in turn, boosting trade flows. Most goods can be shipped by container. Containerization has its origins in early coal mining regions in England and Germany from the late 1700s on. The global standardization of containers and

container handling equipment was an important innovation in 20th century logistics. By the 1830s, railroads on several continents were carrying containers that could be transferred to other modes of transport. Originally used for shipping coal on and off barges, 'loose boxes' were used to containerize coal from the late 1780s, on places like the Bridgewater Canal. By the 1840s, iron boxes were in use as well as wooden ones. The early 1900s saw the adoption of closed container boxes designed for movement between road and rail.

A GLOBAL VIEW OF CONTAINERIZATION

It is difficult to imagine globalization taking place without the assistance provided the freight container .The container has been called the box that makes the world go round. When it was introduced no one could have imagined how quickly the ocean freight business would have evolved thanks to the container. Asia particularly China serves as the worlds manufacturing hub sepatarated by the sea to the major consumption markets of Europe and the USA. This is the basic reason for which the container market s of growing three times as fast as the world economy .These steel boxes have become the building blocks of the new global economy. The invention is relative young .About 50 years ago s on 25th April 1950 the first container ship called ideal X owned by a man named Malcolm Maclean set sail from port Newark, New Jersey enroute to taxes. On board there were 58 trailers. In order to save upon labor and time required to load ships, the Americans came up with the idea of loading full trailer on a ship was introduced years earlier when he was a trucker. The trailer became the container. Maclean later founded the Sea land Shipping company which was subsequently acquired by the Maersk group in 1990.Another American called George Sharpe invented the cellular design of the ship. These boxes can carry just about anything from frozen beef from South America, LCD monitors from Hongkong, to shoes and toys from China. There was a growing demand in the western countries for the goods Manufactured in Asian countries. This demand was met by transporting them cheaply in Containers to the consumers by sea. This ever increasing demand led to economies of scale being realized in manufacturing and transportation sectors. Hence the global throughput rose consistently over the past decade which can be seen in the table given below.

LOGISTICS & SUPPLY CHANING

At present 9 billion cartons of general merchandise move down the supply chain every year connecting the manufactures of array of goods and consumers. It is a method of coordinating suppliers, retailers and customers resulting in value creation. Globalization is enabled by supply chaining which further as places where cheap and skilled labor was available. This fact can be explained further as the more these supply chains grow the more they force the adoption of common standards between companies the more points of friction are eliminated and efforts of one company get adopted by the other. Consumers today are enjoying benefits of more and more variety at lower and lower prices of products as never before in the history of mankind. This has been enabled largely by containerization. The success and growth of retail giants like Wal-Mart has largely been due to the recognition of the importance of logistics and to the improvement of their Supply chain strategies. Information technology and digital communications also play a major role in the Supply chain. It helps in understanding the tastes of consumers which is converted into design, manufacture, transport and supply of the desired products. It contributes to lowering of inventory levels and reducing carrying costs and thus freeing expensive capital. It is a very transparent process which identifies and eliminates inefficiency everywhere. Cost cutting is the major driver of supply chain efficiency and leads to the employment of new technologies in the attempt of reducing labor costs eliminating errors and speeding up the entire process. Once the containerized cargo lands at the gateway ports it is transported by rail, road and waterways to hinterland warehouses/distributions centers. The containers are stripped and the cargo is stored in these warehouses distribution centers and is subsequently transported in assorted lot sizes to the wholesalers and retailers. Time is of essence in this entire process .All the parties involved endeavor to minimize the time factor during which the goods are in their possession. This gave rise to just in time concept of inventory levels. This result in

compressing the time when the goods leave the factory premise of the manufacturer till the time tie s sold to the final consumer which in turn offers a competitive edge to the manufacturer. This would not have been possible without the advantages offered by economies of containerization.

OFFSHORING
In 1977 the Chinese leader Deng Xiao Ping put China on the road to capitalism by declaring that to get rich is glorious. When China opened its tightly closed economy, companies of the West saw it as a huge new market for their products as China had a population in excess of billion people. Some companies set up shop in China to sell their wares. But because China at that time was not a member of WTO it was able to raise barriers restriction penetration into its markets. Soon these companies realized their folly and to make the best of the bad situation they decided to commence manufacturing activities in China in order to exploit advantages offered by low wage skilled worker pool of China. This concept was accepted gladly by the communist leadership of China. Once the process began in a range of industries from consumer electronics to eyeglass frames to auto parts, rest of the companies not wishing to be left out joined the bandwagon. BY joining WTO in 2011 China assured the foreign companies of protection by International law and standard Business practices. This greatly enhanced Chinas Attractiveness as a manufacturing platform. Under WTO rules Beijing agreed to treat non Chinese firms in the same way as local firms thus opening its own markets to foreign companies. Bureaucracy was also reduced in the effort to facilitate trade. The advantage of China lies with its low wage workers and its eagerness to grow. The huge population with its purchasing power has converted China in to a burgeoning Consumer market. China has more than 160 cities with a population in excess of one million. China is today considered a threat, customer and opportunity all at the same time by the nations of the west. The more attractive China makes itself for global off shoring the more it spurs on other low wage nations of Asia like Malaysia, Thailand, South Korea and Vietnam .While the developed nations of Asia like Japan, Taiwan, South Korea and Singapore strive harder to retain their competitive advantage they already have. This makes the entire region a dynamic growth area which intensely competes with each other to attract global business by offering best tax breads educational incentives and subsidies apart from their cheap labor. China has also improved its brand equity by absorbing latest technology and modem management techniques required to improve its productivity. The resulting loss of jobs has been compensated by the rising service sector.

BENEFIT OF CONTAINERIZATION
Time and costs are interrelated in the investments of all modes of transport. Each asset has its own cost depending on capital and revenue and hence higher profits (UNESCAP Rept No 73). Thus with a view to saving cost and tome, cargoes/goods are consolidated and converted into as beg a unit as possible. The developed countries of the west preferred this system thereby increasing productivity by displacing expensive labor. Further as unit load becomes bigger, mechanization becomes imperative involving capital investment. The container serves this purpose perfectly whereby bigger units of cargoes can be stored and carried in one go. The container can be classified by raw material (from which it is constructed) or by its size. Currently the maximum numbers of containers are made of steel and Aluminum the international standards organization after conducting a detailed Study of standardized the size of containers to 20 and 40 in length, 8 in breadth and 81/2 /91/2 in height. The internal volume of a Twenty foot equivalent unit (teu) is 33M Containers were also classified by use for example general cargo which does not require temperature control was called dry cargo container, while the thermal container designed to carry cargoes requiring temperature control is usually made of steel and aluminum with polystyrene foam insulation. This container was further classified into refrigerated, insulated and ventilated types. The third category of containers are classified under the broad heading of special Containers like open top bulk ,tank, open side, flat racks, car and pen containers to Carry different types of cargoes like grain, cement, liquids, over sized machinery, cars and live stock .The most important aspect of containerization is the suitability for door to door service that is shipment can be made, complete in all respects from the shippers premises in one country to the consignees premises in another country under a single contract, freight and document which covers transport by all modes like rail, road, ship, inland waterways and airways. This is termed as Multi Modal of Inter Modal transport.

CONTAINERIZATION IN INDIA
Ironically containerization was introduced for the first time in Indian domestic market way back in 1966 by the Indian railways to provide door to door service to their customers and attract cargo from roadways. They used containers with a 5 ton payload. However the international Marine container failed to become popular right up to the late 1980 which in turn affected international trade growth. Hence the necessary infrastructure required for multi modal transport was never created till it was almost too late. It was only in 1987 that the Government of India realized the importance of containerization and stated constructing a satellite port at Bombay which commenced operations in 1988 and was christened the Jawaharlal Nehru Port after the first Prime Minister of India. Subsequently a Corporation was created by the Indian railways for inland haulage of containers by tail called CONCOR which constructed the first ICD at Tughlakabad in New Delhi. India acquired its first cellular shop in 1948 with a capacity of 400 TEUs. The first Container was handled at Cochin in 1979 carried by a vessel owned by American President Lines which also commenced a scheduled service from Bombay followed by several other foreign companies. The shippers and consignees also responded positively to this new development and forced the government to make heavy Investments in the infrastructure for growth of containerization in India. Containerization has since grown substantially. India ports handled a total of 1,052,000 TEUs in 1993 while it handled 4,637,000 TEUs in 2005 a significant growth of 400% in 12 years.

AN OVERVIEW OF INDIAN FOREIGN TRADE

The Indian exports can be classified into three groups as follows: 1. Products like Jewelry, Software, Electronics, Agro products, Processed foods, Medicines and Personal products. 2. Products like Diamond, Leather products, Garments, Engineering goods and Automobile components. 3. Products like Tea, Coffee Jute etc. With the diversification of Indias export base the share of manufacturing and processed goods is increasing. Except for jute and Tea most of the other products are exported from the ports of JNPT and Mundra. While non bulky but valuable products like polished diamonds, jewelry and cut flowers are exported by air mainly from Mumbai. The Indian imports mainly comprise of crude oil and petroleum oil products, Sophisticated electronics, high tech engineering capital goods, chemicals, Pol products , edible oil, Newsprint etc. most of these goods are destined for consumption in the Northern states or western states. A very small percentage is consumed in central or eastern India. The southern states are served mainly by the Chennai port with little help from Visakhapatnam, Kochi and Tuticoin.

HINTERLAND DEVELOPMENT
The full potential of containerization cannot be realized without hinterland development. This requires large investments along with subsidized pricing structure to enable the containers to reach the cargo generating locations cheaply. In India fair quantity the containers to reach the cargo generated in the northern states of Punjab , Haryana and Uttar Pradesh which are located far away from the gateway ports of JNPT. Hence the first Internal container depot was created in Delhi followed by depots in Panipat, Ludhiana, Moradabad, Agra and Moga and a corporation was created by the Government of India called Container corporation of India Ltd to connect these ICDs to containers. Subsequently CONCO also started constructing ICDs and CFSs in other parts of India and at present operates 60 ICD and CFSs all over the country. ICDs ate interfaces between connecting modes of transportation and offer a total package of activities to handle export and import containers and general cargo flows between road rail and waterways in a cost effective manner with intermediate storage thrown in, along with some value addition services like consolidation of cargo, grading, sorting, packaging, custom examination etc. The ICDs also provide container repair and cleaning facilities.

ROLE OF CONTAINERS

MULTIMODAL

TRANSPORTATION

OF

With the advent of containerization in India, Indian customs became an important entity in the transportation chain and new systems and procedures had to be put in place and constantly fine tuned to adapt with the frequently changing scenario. Ascustoms duties on export/import goods are a major source of revenue for the Government of India the procedures instituted had to prevent revenue leakage on one hand while not becoming cumbersome to hinder trade growth on the other hand.At this point one these objectives. The custom procedures can be broadly divided in tothree areas: a) Export cargo procedures, b) Import cargo proceduresc) Transhipment cargo procedures. a) Export cargo procedures: The exporters need to file five copies of shipping bills in hard and soft format giving necessary details at the ICD along with the container number and the port of loading. The cargo is examined and the duty is assessed by the custom officials present in the ICD who then permit the cargo to be stuffed in to the designated container and permit its inland transportation to the gateway port. A copy of the shipping bills is retained by the custom authorities a the ICD itself while handing over remaining copies to the exporter. The exporter also has to fill and submit along with the shipping bill a GR form in triplicate indicating the value of export cargo. The authenticity of the value stated is also verified by the customs who then forward this form to the Reserve Bank Of India to ensure receipt of remittance of the value of good s exported. On the container reaching the gateway port the shipping bills are endorsed by the port custom authorities and are then handed over to the respective shipping lines, permitting loading of the containers to the vessels. As and when the container is loaded on to the vessel the shipping line prepares and submits an Export manifest in hard and soft format giving all details to the port customs who after verifying the details stated in the manifest subsequently inform the ICD customs of the loading details of the said container. The GR form is then endorsed by the ICD custom authorities and returned to the exporter to enable him to submit the same documents to the banks and obtain his dues presenting the letter of credit given to him by the consignee.

In order to promote exports the Government of India has waived exciseduty levied on the goods manufactured within the country and exported. The exporter on submitting the proof of goods exported to the excise department is reimbursed the duty paid by him earlier. The Government of India has also exempted income tax on foreign remittances to enhance its foreign currency reserves and ensure inward remittances of value of cargo exported from the country. a) Import of cargo Procedures: Prior to the physical arrival of imported cargo the importer needs to obtain permission from Reserve Bank Of India to import and remit the necessary foreign currently abroad to the shipper . On obtaining such permission the physical shipment of cargo in a container is effected by loading the container on a vessel owned / operated by a specific shipping line it then becomes the responsibility of the shipping line to submit an Import document giving necessary details with the custom authorities who will then allow that the containers is unloaded from the vessel at a specified port of discharge. Depending on the contract of affreightment between the shipper and the shipping line evidenced by the bill of lading the importer or his agent or the shipping line container to be transported by rail or road to the ICD located closest to the factory /warehouse of the importer . The movement of containers from the gateway port to the interior is a special facility. The shipping line or the transporters need to execute a suitable bond undertaking to bear the custom duty liability on shortages that may occur during the transit. On reaching the respective ICD the shipping line submits the container along with the necessary documents and the transshipment permit to the ICD custom authorities who after verifying the integrity of the seals affixed on the doors of the container allow the destuffing of the cargo. The cargo is either destuffed or warehoused in the ICD itself or is destuffed in the presence of the custom officials and loaded on to a truck trailer or is restuffed in to the same container which is then loaded on to a truck trailer for onward transport to the factory /warehouse premises of the importer. The ICD customs ensure the receipt of the cargo according to what is mentioned in the import document filed and transshipment permit that has been filed by the shipping line.

a) Procedure for Transshipment containers: Transshipment means shifting of cargo from one vessel to another vessel for transport to the final destination. If the cargo discharged in the country is not meant for consumption within the country then such cargoes do not attract customs duty .Some of the Indian ports also serve as the gateway ports for land locked countries like Nepal and Bhutan. They also service to some extent the international trade of Bangladesh where the mainline operators do not call. In the case of transshipment a transshipment permit is prepared and submitted by the shipping line to the custom authorities who then allow such containers to be discharged at a specific port either to be loaded on to another vessel for onward transportation to its final destination or on to truck trailer or railway wagon for inland transportation. In such cases a transit bond needs to be furnished by the transporter to the tune of 300% of the CIF value. The ports of Kandla, Chennai, Kochi and Haldia handle fair quantity of such transshipment cargoes.

ROLE OF GLOBAL MULTIMODAL OPERATORS

India shipping companies are relatively small both in terms of vessel s and in terms of cargo transported with the sole exception of the state owned the shipping corporation of India it is a strange fact that in spite of a lot of encouragement and assistance provided by the Government of India , Indian shipping companies carry less than 5% of the total Indian container trade amounting to approximately five million TEUs. Almost the entire containerized foreign trade of India is handled by foreign shipping companies like Maetsk, Mediterranean shipping company .Evergreen, NYK, MOL, H apag Lloyd and APL to name a few. These shipping lines have been operating in India through their agents for the past 35-40 years. It was only in the1990 after the institution of the economic reforms process that these companies established Indian subsidiary companies registered in India. In the process they not only served the India foreign trade but they have also managed to control completely the Indian ma It was again a foreign company namely , P & O ports followed up by obtaining another terminal at JNPT and Pipavav. With the opening of the rail container transport sector almost 14 foreign companies have been awarded licenses to transport containers by rail thus ending the monopoly of CONCOR. Some of the foreign shipping companies notably Maersk and APL have also entered the warehousing and distribution sectors by opening their own ICDs at JNPT and New Delhi. At present these foreign shipping companies are offering total logistics solutions to the Indian industry by way of their expertise and experience gathered globally over the years it is very unlikely that an Indian shipping company will challenge their position in the near foreseeable future as they neither have necessary resources nor the expertise .

RAIL AND ROAD TRANSPORATION

Inland transportation of containers is the biggest challenge faced bymulti Operators in India . Presently about 40% of the containers are moved by railways with the remaining percentage by roadways with no usage of inland waterways .Indian Railways was the legacy of the British Raj created over 150 years ago with regards to the roadways one can stretch the period back to the 13th century or even earlier when the rules like Ashoka and Sher Shah Suri created the Grand Trunk road stretching right across the breadth of India. But the modern roadways were only by the Government of India after Independent. These road and rail networks were created when containerization and globalization were at their starts hence it is not surprising that they are unable now to cope up with the strain deriving from containerization global cargo. Any improvements will the strain deriving from large investments which the Goverment of India is unable to do due to financial constraints. On the other hand the private sector is keen to provide financing to infrastructure investment provided the Government guarantees them normal returns. India Railways began operation in India in 1853 just 15 years after the steam engine was invented in Great Britain. It was slowely extended to all parts of India especially in those areas where the British ruled directly like Bombay the United Provience Central India, Bengal and Madras. This was done with the as much as 80-85% of the existing rail infrastructure was created by the British in pre-independence India which was subsequently modemized and increased after independence. Today Indian Railways have excellent coverage in with almost all parts of the country. It carries both passengers and freight in a cost effective manner the Railways subsidize certain classed of both passenger and freight traffic by charging higher rates to other classes which they can bear to pay. In addition to this as it is entirely owned by the Government of India it has complete monopoly on rail movement and owns huge real estate assets which it can use as it desires. They primary motive of the Railways is not profit but to provide service it employs almost two million people and owns huge tracks of prime land all over the country. The Indian Railways have also spawned commercial set ups like Reitel in the telecommunications sector Indian Rail Tourism and Catering Service in the hospitality sector and Rites in the Engineering Consultancy sector to exploit new opportunities arising in these fields.

RAIL TRANSPORTATION OF CONTAINERS

India Railways first started container transportation in January 1966to provide door to integrated intermodal service. The containers with a pay load of just 5tons were loaded and sealed in consignors godowns and delivered to consignees godowns using both rail and road transport. It resulted in reducing risk of loss, damage and pilferage apart from saving on packing costs. This service was essentially meant for the domestic market and this experience helped them subsequently to provide multimodal transportation o f ISO containers. The railways transported the containers by rail for CONCOR at below market price allowing CONCOR to make profits which were reinvested in setting up ICDs and CFSs on railway owned lands leased to CONCOR . By refusing transport containers by rail for any other organization the Indian Railways thus made CONCOR a monopoly While accepting containers for rail transportation from various shipping lines CONCOR in turn issued a Rail Receipt on behalf of India Railways which is a negotiable document. The shipping line in turn issues a combined transport document or Bill of Landing to the consignor. The RR is also known as Inward Way Bill . CONCOR has submitted a bond to the customs as a security against revenue leakage and for allowing them to transport containers to and from the gateway ports to the hinterland. On arrival of the containers at their destination as the case may be the respective shipping lines surrender their IWBs are covered under the Indian Railways Goods transportation Act whereby the liability of CONCOR is limited to Rs. 50/-per kg or actual value of goods whichever is lower. However due to the high demand and several infrastructural bottlenecks mostly the absence of dedicated freight corridor reserved for container traffic the Indian Railways are unable to provide pre-fixed scheduled service by means of which the containers from ICDs can directly be connected to the sailings of specific ships from gateway ports, nor can they guarantee fixed transit times. Another problem faced by the shipping lines is the lack of movement of imports to certain ICDs like Amingaon and Motadabad where only exports atare generated. Hence empty containers have to be noved free of cost to these locations. In such cases CONCOR stuffs these ISO containers owned by the shipping lines with

domestic cargo and earns freight while charging the line a discounted rate maintaining it advantages for the line to reposition the empty boxes. The design of the container flat cars is also being altered to allow them to carry heavier payloads at high speeds and wherever possible containers would be transported in double stacks. This experiment was successfully conducted between ICD Jaipur and the gateway port of Pipavac. Another problem in hinterland transportation by railways is that the Indian railway network presents technical discontinuities. Certain routes have a smaller gauge of 1.65 meters that is used throughout the country. These to be routed over longer routes. The structure of numerous overhead bridges as well as rail bridges also needs to be altered to enable movement of heavy loads at high speeds. This also applies to railway tunnels. Several trunk routes are electrified while the rest ate still dependent on diesel locomotives. This also results in slowing down smooth operation as the electric locomotives have greater power than the diesel operated locomotive and can pull heavier loads at greater speeds.

ROLE OF CONCOR
With the advent of containerization in India a separate corporation under the Indian railways was created as an autonomous public sector undertaking on 1st March 1988 with the basic objective to provide multi modal transport logistics in a cost effective and efficient manner in order to facilitate the nations foreign trade. In 1994 it transported 0.36 million TEUs and grew at a rate of 15.1% and presently transports over 2.2 milion TEUs per annum and till recently had a total monopoly control over rail movement of containers. CONCOR has also set up bonded warehouses at various ICDs where import cargoes are stored under custom bond and is cleared on part basis by the importer on payment of custom duty. CONCOR also transports Petroleum Oil and other liquid bulk products in its own tank containers in the domestic market along with other general cargoes. CONCOR has also entered into several joint ventures with shipping lines state warehousing corporations and Terminal Operators to offer Multi Model Logistics and consultancy services . They have an excellent vendor development program whereby they have financed their own vendors to buy expensive handling equipment and the loan amounts deducted in monthly installments from their bills. This has lead to creation of committed and loyal vendors. CONCOR has also completely outsourced the road transportation activity which has enabled them to concentrate on its core rail transport activity and consolidating its status as a market leader as multi modal logistics operator. CONCOR has recently entered in to another joint venture with Hindustan Aeronautics ltd to offer air cargo transportation services. An Air cargo Terminal at Nasik in Maharashtra has been taken over which would be converted in to an Air cargo Hub and is expected to commence operations in December 2006. CONCOR plans to extend the coverage of its services countrywide by building additional terminals it has invested in modern information technology systems to provide information in real time to its customers it is also beginning to provide third party logistics services and has plans to ser up Distriparks , Freight and Trade Development centers to offer total logistics solutions. As stated earlier CONCOR faces a high demand for movement of for movement of containers and due to unavailability of sufficient flat cars the demand be satisfied promptly. This resulted in many shipping lines being dissatisfied with

the service of CONCOR . As a consequence the government decided recently to end the monopoly of CONCOR in the transportation of containers by tail and to grant access to the container rail transportation to other commercial organizations with the necessary experience and financial standing. In addition a feasibility study has been conducted on the construction of a dedicated freight corridor between Delhi and Mumbai and the equity stake of the government of india in CONCOR would be partially sold to raise necessary resources for construction of the freight corridor. The last major problem faced in rail transportation of containers is non availability of sufficient container handling equipment at the ICDs and CFSs as they ate nor only capital intensive but are also expensive and difficult to maintain. As such overhead gantry cranes are not manufactured in India and have to imported. These cranes become economically viable only if sufficient volume is generated at the ICD/CFS . This result in increase of turn around time consumed to discharge and load a train at the ICDs and CFSs at various location thus result in dilution of volumes available for handling at the location.

ROAD TRANSPORTATION OF CONTAINERS

Presently in spite of several shortcoming and bottlenecks is the roadway system continues to carry over 57% of the total container traffic and continues to grow at

a rate of 11.4% which is not a desirable situation at all for several reasons. The first reason is that India roadways are just not capable of with standing the heavy demand placed on them. This results in congestion and mounting expenses as it is the Indian roads are in a poor condition and rapidly deteriorating when heavy loads are placed on them. Secondly Indian roads traverse through hills and mountain passes and cross several bridges built over rivers, streams and creeks . This requires the truck trailers to have sufficient horsepower engines and well maintained trailer systems to carry heavy loads efficiently over long distances. Unfortunately this is not the case in India, thus resulting in breakdowns and long congestions and heavy expenditure apart from population and health hazards. Thus neither the roads network nor the truck trailers are capable handling container transport . Thirdly India roads are not priced correctly. A few toll roads have developed recently but the experiment is yet to prove successful. It remains to be seen whether the revenue generated can provide sufficient returns on the capital invested and whether it can be used for maintaining the roads. A massive road development programs connecting the four Metro has been undertaken with the help of private sector but is unlikely to be completed within the scheduled tine period and the earmarked budget . Whether this road network assits in easing the unbeatable strain placed upon the roadways system as a whole remains to be seen. Furthermore whether this road network would be priced efficiently is also an Important question otherwise in no time the entire system would disintegrate in to pieces. Though economically priced the Railways have not been able to attract freight from the road network mainly due to insufficient connectivity and its failure to maintain scheduled transit times apart insufficient supply of container wagons and poor customer service . Though most of the ICDs and CFSs ate connected by rail network yet the dependency on road transport has not been reduced . The custom authorities too ate quicker reluctant to permit usage of roadways for inland transportation of containers due to risk of risk of pilferage and smuggling with the advent of terrorism this risk has increased manifold. Yet due to lack of other alternatives they have permitted some movement of containers with surprise checks in between the transit. Another hindrance in seamless movement of containers is the Octroi tax which is a tax imposed by local municipal authorities especially where inter-state

movement is concerned it impedes smooth movement of goods and adds to delays and expenses. The need for abolition of Octroi has been emphasized by several committees and Trade Associations . The central Government of India responded by abolishing Octroi in Delhi and union territories. the state governments have been urged to abolish octroi and finding alternate sources of revenue to compensate the loss. But the major opposition comes form the municipalities and local governing bodies for whom it is a major source of income. Another problem requiring attention is the need to rationalize the Motor vehicle tax structure and reduced multiplicity by centralized tax collection. The national and zonal permit scheme was formulated with the single point taxation as its major objective with simplified procedures however this scheme is yet to be implemented the usage of multi axle vehicles also needs to be encouraged which can result in fuel efficiency and increase in load carrying capacity of the vehicles especially of heavy containers it also exerts lesser stress on the road network . It is pertinent to note that one of the most important causes of road damage is improper axle load of trucks . In order to achieve this objectives the Motor vehicle tax structure needs to be rationalized which is currently based upon the number of axies Last but not the least is the need to highlight private sector participation because the government just does not have the necessary resource to achive the stated objectives . There is a wide scope in both rail and road networks for the participation of the private sector. But the Government should recognize the need for making the opportunities sufficiently attractive to entice the private sector in investing their funds as well as their expertise in building and operating such projects.

 $,5&$5*2


Air cargo service has become more attractive to shippers as aircraft capacity, frequency of lifts, handling facilities and the number of locations serviced have

been increased. Air cargo losses can be controlled with the shipper as the key figure in effective loss control. Recognition of the hazards involved, packing cargo to survive the toughest leg of the journey and prudent selection of transportation services will assist the shipper in realizing successful loss-free delivery of his or her goods. Inadequate packing and improper marking of cargo are the leading causes of air cargo losses. It is in these areas where the shipper can effectively influence the sound arrival of goods.

7+($,5&$5*2(195,20(17+$=$5'6


In The Aircraft Acceleration/Deceleration-Fore-and-aft pressures are exerted on cargo during takeoff and landing. Compression forces are exerted during rough landings. Turbulence-Rough or "bumpy" flight conditions subject cargo to rapid alternating vertical movements, imposing heavier pressure one moment, and almost weightless conditions the next. Altitude-As altitude increases, atmospheric pressure decreases, subjecting liquid cargo toleakage hazards and pressurized cargo to increased internal pressure. Temperature- Aircraft cargo compartment temperatures normally range between 30F and 70F(-1C and 21C). However, cargo aboard an aircraft parked in freezing or very hot weather will be subjected to unusual cold or heat conditions. Cargo Compartments - The main cargo compartments of air freighters are normally well equipped for adequate stowage. Passenger aircraft belly compartments, however, are often loaded with limited cargo restraint equipment permit-ting the possibility of movement during flight and inviting damage from adjacent cargo. In Terminals Handling - Many larger terminals are equipped with conveyor systems and mechanical cargo handling gear, permitting rapid and safe movement within the terminal. Manual handling involves the stacking of cargo on pallets and in containers. In smaller terminal facilities, it is the rule. Overcrowded conditions contribute to handling damage as cargo may be stacked above recommended heights or re-positioned frequently. Storage - Modern terminals provide segregated security areas for high value cargo, and some have cold storage (reefer) facilities for perishables.

Terminals not so equipped are subject to increased theft, pilferage and deterioration loss hazards. Overcrowded conditions may also require storage of some cargo outdoors, exposing it to the elements. Ramps - Cargo is exposed to the weather while enroute to loading ramps. If cargo transfer carts, pallets and containers are not adequately covered (tarped), water damage may result. High-value cargo is particularly susceptible to theft when not in the aircraft or the terminal. Security- Security-conscious carriers provide maximum physical measures to protect cargo from theft or pilferage. Examples include restricting working areas to employees, applying modern locking and alarm devices and enforcing strict cargo documentation procedures. When these measures are not enforced, cargo security is jeopardized. Dangerous Goods - Only trained personnel should handle this cargo. Consult appropriate publications for guidance such as the ICAO Technical Instructions For The Safe Transport of Dangerous Goods by Air or IATA Dangerous Goods Regulations. Reduces the number of individual pieces of cargo that must be handled in terminals. Provides for most efficient use of cubic capacity of the aircraft. Permits use of mechanical handling systems and equipment to best advantage. Speeds loading and unloading of aircraft. Minimizes exposure of cargo to weather, theft, pilferage and handling damage while in custody of the carrier.

Air Cargo Containers Fall into Four Basic Categories



1. Air Cargo Pallets Designed for use with conveyor systems in terminals and in aircraft. The low-profile flat pallet is equipped with fittings for securing the pallet firmly to the main deck of an all-cargo aircraft. Cargo is normally secured to the pallet by use of cargo nets, tightened over cargo by the application of tensioned straps. 2. Contoured Air Cargo Containers Contoured, semi-structural covers called Type "A" are used to provide protection for cargo and keep cargo within safe dimensions for loading in aircraft. These containers may have one side (front) open, with cargo secured by nets or have metal or fiberglass removable doors, which are capable of being sealed

3. Lower Deck Containers Developed for use in the lower deck cargo spaces of high-capacity aircraft, they are fully structured and completely enclosed. Cargo is loaded into the container, which may be equipped with shelves for accommodation of small or irregularly shaped cargo. The container doors of metal, fabric or a combination of both are closed and sealed. Containers are locked directly into air-craft restraint systems without need for nets or tie- downs. Provide dunnage or shelving to prevent crushing of cargo at recessed end of lower deck container. 4. Box-Type Containers Developed in standard sizes to facilitate establishment of uniform shipping rates, they are used to consolidate shipments. Box-type containers are often used by freight forwarders to consolidate shipper's cargo into one easily handled and rated unit. These containers are constructed of wood, fiberglass, plywood, fiberboard, metal or combinations of these materials. Air/Land Containers- Introduction of the 747-class freighter has permitted adding an air dimension to the intermodal container. Lightweight 20- and 40-foot containers permit land and air transportation without rehandling or reloading. AND DELIVERY OF YOUR CARGO! This is the most effective means of reducing expo-sure to loss. Preparing Cargo For Air Shipment/ Pack For The Toughest Leg Of The Journey: Trucking to air terminal, handling in terminals, stowing in aircraft, in flight, unloading aircraft, transfer to terminals, truck transport to consignee. Cargo Should Be Packed To Withstand: Stacking up to 8 feet high, pressure from adjacent cargo, crushing action of tie-down straps, manual handling, exposure to the elements. Unitise, Palletize, Containerize To: Minimize manual handling, reduce incidents of lost or stray items, limit exposure to theft and pilferage, and minimize stowage damage. Provide water-protective coverings, which will accompany pallet and unit loads on entire journey.

Liquid Cargo Do not fill containers completelyProvide expansion space to compensate for temperature and/or pressure variations. Be sure all caps, valves and seals are tightly closed. Put orientation marks (arrows) on all sides of package. Large, Heavy or Awkward Cargo Check with carrier to determine allowable aircraft floor weight concentrations. Provide skids for ease of mechanical handling. Check dimensions to be sure cargo will pass through aircraft loading doors. Provide adequate locations for application of tie-down straps. Water Damage Protection Pack cargo in wooden crates with waterproof paper or polyethylene liners. Line non-impregnated fiberboard boxes with waterproof paper or polyethylene. Large items can be shrouded with polyethylene sheeting. Be sure there are drain holes in the base of the crate. Use desiccants (moisture absorbent materials) in conjunction with waterproof barrier wrapping when packing moisture sensitive items. Use shrink wrap, stretch wrap or plastic shrouds on unit and pallet loads.


Perishable Cargo Provide adequate package ventilation where required. Furnish appropriate instructions i.e., carrying temperatures and handling requirements, to carriers. Use direct flights where possible. Delivery and pick-up should be closely timed with aircraft departure and arrival. Marking Avoid marks and advertising that reveal contents are of a valuable or desirable nature. Apply appropriate coded identification marks to at least three sides of item. Use international handling

symbols. Include handling instructions in both English and the language of the country of destination. Use indelible inks and water-proof labels.

AIR CARGO CONTAINERIZATION



Shippers can realize savings and minimize cargo loss by containerizing their air cargo shipments. Airlines encourage use of containers by providing special tariffs for containerized FAK (Freight- All-Kinds) shipments on many routes. Certain commodities are excluded from air cargo FAK special rates. Consult with your carrier or forwarder for specifics on excluded items and on articles prohibited by lATA's Dangerous Goods Regulations. Air carriers prefer containerized shipments for a number of reasons:
 

CONTAINERIZED CARGO
LOSS CONTROLCONTAINERIZED CARGO The use of intermodal containers for the transport of a great variety of cargo has become increasingly popular in recent years. Intermodalism a concept that embraces the movement and transfer of standardized cargo containers by sea, air and surface has greatly reduced cargo handling, particularly in Door-to-Door shipments. Development of specialized containers with a wide range of types, sizes and configurations permits containerization of most cargo.

INTERMODAL VARIATIONS
The popular intermodal container, adapt-able to carriage by truck chassis, railcar, barge and oceangoing vessel, is the most common form of containerization. The considerations governing preparation and stowage of the cargo in these containers are no less applicable to other methods of cargo transport. Trailer-on-Flatcar (TOFC) "Piggy-backing" highway trailers on container chassis that can be carried on specially equipped rail flatcars. Container-on-a-Flatcar (COFC) A carriage of intermodal containers detached from their highway chassis and "boggie" on rail flatcars. Two recent developments in the rail movement of containers/trailers on flat cars have been introduced into the domestic (U.S.) market. Double Stack Train This service involves a series of containers/trailers, stacked 2 high on specially designed rail cars. Linking the major trading corridors, this system is designed to provide smoother rides than their surface competition, either truck, conventional flatcar or alternative rail equipment. In addition, a number of technical features enable high-speed transit with a minimum of shock and vibration to cargo through the dampening of slack, sway and vertical acceleration forces. To date, this method of transportation has demonstrated substantial reduction of damage and increased efficiency Trailer-RailThis new piggyback sys-tem will allow railroads to handle the full range of increasing diversity of trailer lengths over shorter hauls. The full system is composed of the following 3 components.

 The Trailer-Rail terminal, a bare-bones rail yard consisting of a track, parking area, driveway and ramp for handling the trailer on and off the railcars. The Tractor-Railer, a lightweight highway tractor, equipped with retractable steel railroad wheels that can both load and un-load trailers in the rail yard and pull a Trailer-Railer and train on the rails. The Trailer-Railer, the central part of the system, a short, four-wheeled car of skeletal design, with a drop deck platform that connects the front end of one trailer and the rear of another. The entire loading cycle involves a tractor trailer driver backing a trailer into the drop deck of the railcar, "jackknifing" the trailer parallel with the track and positioning the trailer landing gear adjacent to a loading stanchion located at the side of the track. This stanchion is manually rotated across the track beneath the trailer landing pads. The driver then activates the hydraulic lift wheel of the tractor to lower the trailer until the landing gear rests on the stanchion. The next rail car is now able to be rolled into place. Containerization and double stacking have led to increased use of land-bridging, i.e., ocean shipments from the Far East to West Coast ports and then transporting the cargo to inland markets via rail or truck. In Europe this concept is termed Microbridge or IPI (Interior Point Intermodal). SEA-AIR The growing practice of routing cargo by both sea and air within a single journey has been somewhat obscured by the Double-Stack and other land-bridge developments. No longer stymied by incompatible equipment and scheduling, the ocean to air transshipment is now able to marry the low cost of ocean shipping with the timely convenience of air freight. Examples of this trade pattern include a sea-air leg originating in Japan and moving to North America's West Coast via ship. From there cargo is transferred to air freighter or combination passengercargo plane for the flight to Europe. Other routes involving traffic to/ through South America and the Middle East have also been active. One of the problems inherent in this transportation hybrid is the increased exposure to loss and damage during cargo transfer between the two modes. Some shippers have resorted to shipping loaded air cargo containers inside 20- and 40-foot long intermodal units for the sea transit.

Air Cargo Containerization The unique aspects of cargo carriage via air and the application of Containerization to this transport mode are treated separately in this booklet. (See Air Cargo discussion.) CONTAINERSERVICES Door-to-Door (House-to-House) The greatest benefits of Containerization are realized when the shipper uses the container to carry goods directly from his or her premises to his or her customer's location. Perhaps the only time the container will be opened while enroute is for Customers inspection. Reduced susceptibility to pilferage and theft, elimination of multiple handling of individual items of cargo and the least possible exposure to the elements are all attractive features of Doorto-Door service. In utilizing this type of service, the shipper accepts the additional responsibility' of ensuring that cargo is properly stowed and secured in the container, precluding damage to the cargo, container or transport vehicle. The tendency to reduce packing protection of cargo destined for Door-to-Door container shipment must be resisted. The ocean leg of the voyage will still subject the cargo to severe motion stresses, considerably greater in force than during highway or rail movement. Reduction of packing protection must be carefully evaluated and implemented only after due consideration of the hazards of ocean transport, including the lifting force at transshipment points. Port-to-Port (Pier-to-Pier) When cargo volume does not provide for a full container load (less than container load or LCL) or when the shipper or consignee does not have the facilities to load or un-load the containerized cargo at his premises, he or she can utilize the services of forwarders, consolidators or the carrier to stow the goods in containers at the port of departure. This service is less attractive than Door-to-Door service. Since the cargo is not in a container for the entire journey, it is subject to the same degree of exposure to weather, handling and stow-age damage and theft/pilferage as break-bulk cargo. MAXIMUM EXPORT PACKING STANDARDS ARE REQUIRED WHEN SHIPPING PORT-TO-PORT, Door-to-Port Combinations of Door-to-Door and Port-to-Port service are

possible, depending on the desires of the ship-per and the facilities available. While these combinations are more advantageous than Port-to-Port service, the cargo will still be exposed to the hazards of theft, weather and additional handling during part of the journey. AS IN PORT-TO-PORT SERVICE, THE CARGO MUST BE PACKED TO THE HIGHEST EXPORT STANDARDS. LCL (Less Than Container Load) On LCL shipments, the shipper can still load goods into a container, but the container will be delivered to a consolidation point at the pier where other shippers' goods will also be stowed in the container. What this means is that the smaller, low- volume exporter can still have cargo containerized, although this is not as desirable as a sealed House-to-House container. SELECTING THE RIGHT CONTAINER Consultation with the carrier will permit selection of the type and size container most suitable for the cargo. Many types and sizes are available to the shipper. The most common is the dry cargo container that may be used for a great variety of general cargo. Specialized containers should be used for goods or commodities requiring special environments. Particular attention must be given to the container weight limitations so as not to overload. Cargo Containers 1. End Loading, Fully Enclosed The basic intermodal container with end doors, suitable for general cargo not requiring environmental control while enroute. 2. Side Loading, Fully Enclosed Equipped with side doors for use in stowing and discharge of cargo where it is not practical to use end doors, as when the container must remain on a railcar while cargo is placed in or removed from the container.

3. Open TopUsed for carriage of heavy, bulky or awkward items where loading or discharge of the cargo through end or side doors is not practical. Most open top containers are equipped with fabric covers and are often termed "soft" or "rag" top containers. Some open top versions are fitted with removable hatch-type panel covers or detachable full metal roof. 4. VentilatedEquipped with ventilating ports on ends or sides, and used for heat generating cargo or cargo requiring protection from condensation (sweat) damage. Versions with powered air-circulating fans are available. Vents are normally fitted with baffles to prevent entry of sea or rain water. 5. InsulatedFor cargo that should not be exposed to rapid or sudden temperature changes. Available in ventilated or non-ventilated versions. Some carriers provide containers with heating systems for special applications. 6. RefrigeratedInsulated and equipped with a built-in refrigeration sys-tem, powered by direct electrical connection or by diesel or gasoline generator. It is used primarily for foods or other commodities requiring a temperature con-trolled environment. 7. Liquid BulkTank-type containers for carriage of liquids. Some have been designed to high level specifications for carriage of certain hazardous materials. 8. Dry BulkDesigned for carriage of bulk cargo such as dry chemicals and grains. 9. Flat RackAvailable in a variety of sizes and models, the flat racks are used for lumber, mill products, large, heavy, bulky items, machinery and vehicles. Some are equipped with removable sides. 10. Auto Used for carriage of vehicles and available in enclosed or open versions. 11. Livestock Configured for the nature of livestock carried; containers are

available for transporting poultry, cattle and other livestock. Also, transport boxes can be loaded onto flats. 12. Controlled Atmosphere-These systems carry a cylinder of liquid nitrogen and carbon dioxide. Through computer-based controls, the atmosphere within the container can be maintained at present levels to meet requirements of commodity carried. Used mainly in the transport of produce to extend the post-harvest and storage life. 13. High Cubethese containers are used for high volume/low weight cargo and can greatly increase the cubic area available for cargo stowage. High cube containers are in heights to 9.5 feet and to lengths of a maximum of 48 feet. 14. Garmentwith special tie downs and internal ceiling fittings, this container can handle hanging garments.

CERTIFICATION OF INTERMODAL CONTAINERS The International Convention for Safe Containers (ICSC), effective September 61977, made certain structural requirements mandatory for containers moving in international l trade. Under the Convention, approved units are issued safety plates that are affixed to the container at the time of manufacture. In addition, ACEP (Approved Continuous Examination Programs) or periodic examinations of containers in accordance with procedures prescribed or approved by signatory governments are required. The owner or operator must maintain the container in safe condition. A number of independent firms pro-vide testing and inspection services for intermodal container operators. Certification of adequacy of construction occurs prior to delivery of the new container to the carrier and periodic inspections must be performed beginning five (5) years after manufacture. Maximum periodic examination interval is 30 months. The shipper should look for the safety plate and ACEP or examination decal to determine that the container(s) supplied for his use have met adequate construction and maintenance standards. Presence of the safety plate and examination decal is not, however, a guarantee

that the container is presently free from defects, as damage may have occurred since the last certification inspection. The shipper must take a personal inspection of the container before use to be absolutely certain that it is in condition to adequately protect his goods. An understanding of the hazards to which a container may be exposed (as depicted in the two illustrations on pg 69) is essential. This knowledge will permit intelligent inspection of the container and also provide the background necessary for adequate preparation and stowage of the cargo. INSPECTING THE INTERMODAL CONTAINER With the advent of Containerization, it was anticipated that cargo damages would be greatly reduced. This has been realized; however, it is largely dependent upon the structural integrity of the container. The following checklist will assist you in inspecting me container to be sure it will properly protect your cargo. Containers that leak or have inherent defects that endanger the cargo or pose a safety hazard to personnel must be rejected. The interior must be free from splinters, snags, dents or bulges. These may interfere with loading. Serious defects indicate the container is structurally unsound. Watertight Integrity"Light" tests whereby you enter the container, have the doors closed and look for light entry via the roof, side and door panels and deck are a must. Also, previous patches and re-pairs must be checked to ensure they are watertight. Hose (water) or smoke tests are alternative methods of discovery. FittingsCargo tie-down cleats or rings should be in good condition and well anchored. If ventilation openings are present, be sure that they have not been blocked off, and that they are equipped with baffles to prevent rain or sea water entry. Cleanliness Free of residue from previous cargo particularly odors that may taint your goods. Also, check the container for nails or protruding fastenings that might puncture

cargo package orintlatable dunnage. The exterior must be free from dents, bulges or other damages; all may interfere with handling. Doors Be sure doors can be securely locked and sealed: Check that door gaskets are in good condition and watertight when closed. Inspect door hardware closely If bolts or nuts can be easily removed from the outside with simple tools, it means that the container can be opened without breaking the seal or lockan attractive invitation to the pilferer.

FittingsA quick look at the lifting fittings at each corner of the container will reveal those that are obviously damaged or unsafe. Check the fittings that secure the container to the trailer chassis; they should all be in working order and in use. Covers/Hatch PanelsIf an open-top container, be sure that the fabric cover supplied with the container is in good condition and can be properly secured. Check hatch panels for close watertight fit. The following is a partial checklist of typical types of damage. Front Front Paneldented, torn, holed or punctured. PatchesLoose, not of same material as panel, not sealed or riveted with waterproof Customs- approved rivets, poor welds, not primed or painted. Top RailBent, cut, crushed or fractured. Comer PostsBent, broken, cut, gashed or distorted. Upper and Lower Corner Fittings and AttachmentsFractured or distorted fitting, cracked attachment welds. rivetsloose or missing. Weldsimproperly made, not primed or painted. Sides PanelsDented, torn, holed or punctured.

Corner PostsBent, broken, cut, gashed or distorted. Upper and Lower Corner Fittings and AttachmentsFractured or distorted fittings, cracked attachment welds. Door HoldbacksDamaged or missing.

Rear DoorsDifficulty in opening and/or closing. Door Panels (Metal or other) Torn, cut, holed or punctured. Door Locking Bars (Rods) Seized, bent, broken or twisted. Door Locking Bar CamsBent or broken. Door Handle and Retainers Broken, bent or missing. Door Cam Lock Retainers (Keepers) Bent or broken. Door HingesBroken, torn, twisted, binding or seized. Door Seals (Gasket and attachments) Cut, torn or loose. Door Header Roof PanelPunctured, dented or distorted. Upper Comer Fittings and AttachmentsFractured or distorted fittings, cracked attachment welds. Corner Protection Plate (where provided)Punctured, dented or distorted. Under Structure Cross Members and Attachments Crushed, cut, bent, distorted or broken loose from bottom side rails or floor. Tunnel Recess (if any)Cut, dented, distorted or cracked weld attachments. Forklift Pockets (if any)Cut, dented, distorted, bottom straps broken or bent. Interior Roof SheetPunctured, dented or distorted. Roof Bows (if any)Bent, cut or broken loose from roof. FloorTorn, gouged, broken, shrunken, warped, stained excessively. SidesDented, torn, holed or punctured.

Logistic Track (side walls or floor) Torn, loose, bent, missing or cracked welds. Liners (where provided)Torn, punctured, gouged, pulled loose, stained excessively. Cut, broken, distorted or dented. Door SillCut, fractured or distorted. Anti-Rack Device (if any)Bent, cut, damaged or broken. Rain GutterBent, broken or crushed. Chassis TiresProper inflation, adequate tread depth, damages such as cuts, breaks or separated recap. Twist LocksTwist lock and lock handles are in good operating order. Landing GearCheck the pads, crank, crank handle and braces for defective areas. Lights and ReflectorsCheck for proper working order.

INDIA SHIPPING INDUSTRY

India is strategically located close to the trans pacific and Europe- Far East liner shipping routes and the intra Asia North South trade lanes almost all global shipping lines have their presence in India to exploit the growing market opportunities and derive advantage of the strategic location. the national shipping line shipping corporation of India (scI) has one of the largest fleets in the world .Indian officers and seamen are employed globally .Several training institutes for officers and Seamen have the been set up by the Government as well as by Shipping companies .In addition to this the Government has promoted several ship building and repair yards to promote growth of the shipping industry. In Indian classroom society called The Indian Register of shipping was also set up to help the trade. India also has one of the biggest ship breaking facilities in the word located at Alang in the state of Gujarat on the west coast. It must be acknowledged that the shipping industry in india has always been fully liberalized with no restriction on the entry of private sector companies .On the contrary every possible effort has been made to help the privet sector to progress in this industry by the government both financially and fiscally (Hariharan.k.v.dr-2002).several policy changes were legislated towards achieving this objective. Presently Indian shipping industry comprises of a few large and medium size shipping companies dominated by state owned shipping corporation of india and a host of private player. On the eve of independence Indian shipping comprised of only 60 vessels with gross tonnage of 0.192 million tons which has grown to 612 vessels with gross tonnage of 7.9 million tones in 2005 . This is well short of the proposed growth target of million gross tons . This has resulted in the national flag carriers loosing market share to foreign shipping companies. This has been in spite of the Government providing all possible incentives like reserving Government cargo for Indian vessels and providing cheap capital as well as tax waivers. However it must be stated that policy changes in relaxation of cabotage laws did affect the industry adversely. Yet these measures did little to increase the role of the national shipping industry and revive the recessionary trends . In addition to this the industry on its own has not been able to attract equity capital from the market. One of the major reasons for this difficulty is non receipt of tax benefits available to export oriented

industries this is so despite the fact that not only the shipping industry earns foreign exchange for the nation but also saves foreign exchange which would have been payable to foreign carriers to summarize it can be said the Indian shipping industry has not been able to exploit the opportunities accorded by the policies of liberalization of the Government of India. In the recent past the government had also proposed to sell a majority stake of its holdingsin the shipping corporation of India which eventually was shelved due to political opposition and unattractive offers.

Presently the Indian liner shipping trade is dominated by host of foreign carriers notably Maersk, Meditermean shipping company Evergreen , American President lines and China ocean shipping company who have formed Indian subdidiaries . Various alliances and consortiums have been formed by the companies with others to exploit the Indian shipping market some of these companies have also managed to obtain long term contracts to manage port terminals, warehousing complexes and transport containers by rail from the gateway ports to hinterland destinations.

OVERVIEW OF MULTIMODAL INFRASTRUCTURE IN INDIA

Though India kilometers of navigable waterways large cargo vessels are unable to use them due to insufficient draught. Furthermore as these rivers are extensively used for irrigation and electricity generation the capacity for cargo transportation is several restricted even further the inland waterways authority of India was set up in 1984 to develop maintain and administer the waterways while the central inland water transport corporation was set up to undertake freight transport. However less than 1% of the domestic cargo is moved via this node which the policy makes wish to improve upon ( Narayan Rangraj .)

The multimodal transportation of goods act was enacted in 1933 by the government of India with an objective to facilitate the movement of goods from any location within the country to any place outside India . It allows the road, rail, inland waterways deep sea and non vessel owning container to register as multimodal transport document which replaced the earlier combined transport document as a basic document which would be treated as a negotiable instrument for documentary credit by the Banks . Presently there are about the 190 registered multimodal transport operators.

CONSTRAINTS FOR GROWTH OF MULTIMODAL TRANSPORATATION

A 1995 United States Department of transportation study had described a Model for analyzing and evaluating constraints of multimodal transportation which were Divided into Operational , Institutional, Regulatory , Financial and Infrastructure sectors. An attempt will be made in this thesis to apply the same parameters of the model in Indian context.

A) REGULATORY CONSTRAINT
The focus of this particular constraint is the lacunae in the multimodal Transportation of goods act enacted in 1993 which are as follows: a. The Air Freight operators are excluded from this Act b. The MTO license needs to be renewed annually. c. Higher liabilities for the operator. Apart from the above mentioned problems there are a variety of minor issues rendering the MTGA ineffective and hence only few MTOs the MTD which lacks credibility amongst foreign buyers of Indian goods.

B) OPERATIONAL CONSTRAINTS
This constraint highlights the absence of modern equipment, bad infrastructure and reliable transport services from the gateway ports to hinterland destinations which result inexpensive delays and higher costs of land leg logistics resulting in loss of competitive edge of Indian products due to unpopularity o the MTD the operators continue to issue mode specific document like the Bill of Landing for the sea leg and lorry or railway receipts for the land leg of transport however these

separate documents do not provide a legal regime for uniform liability nor are they negotiable. Hence most of the Indian exports move on FOB basis. The coastal and short sea shipping network is conspicuous by its absence . The vessels are old and poorly equipped in spite of demand the growth of coastal shipping is restricted due to inadequate finance and poor returns the attitude of the custom authorities is also not very helpful as they are more enthusiastic to curb smuggling and revenue leakage the custom procedures are crying for over haul on urgent basis. There is also dire need to streamline documentation procedures . Development of coastal Shipping will relieve stress from the congested road networks.

C) INSTITUTIONAL CONSTRAINTS
It is well known that Indian bureaucracy is very rigid and reluctant to give up controls, the regulations and laws are cumbersome which add to delays and expenses there are several central ministries regulating the transport sector with over lapping powers in addition to state and local government bodies adding their bit to the chaos .

D) INFRASTRAUCTURAL CONSTRAINTS
There is urgent need tor developing the national roads highway networks conversion of narrow gauge rail tracks and dredge the inland waterways . the capacity of the major and minor ports need to be increased as well . Presently India does not possess a single deep draught nodal hub like Salalah of Singapore all Indian exports and imports are transshipped from Colombo , Singapore which adds to the costs and delays. This problem is expected to aggravate further with the introduction of Suez and Mallacca max vessels with larger capacity in near future there just are not any terminals which can handle such vessels it results in increment of cycle tome of Indian cargoes rendering them uncompetitve in global

supply chain . The Indian ports are operating beyond the it capacity and need to develop urgently by attracting private investment . The container traffic has grown many folds in the past two decades and is expected to grow by at least 10% per annum to 600 million tones by end of the current financial year .

e) FINANCIAL CONSTRAINTS India has been a socialist country with a welfare state . This results in subsidized
pricing of infrastructure in addition to this the tax base of India is very narrow hence revenue generation is not satisfactory . Furthermore due to centralized planning model industrial growth is stifled the agriculture sector is hampered by dependency on annual monsoon rainfall and lack of irrigation and satisfactory pricing mechanisms all these factors place heavy financial constraints on the state to further aggravate the problem infrastructure development receives low priority. The only solution out of this quagmire is to allow investment to invest in infrastructure development, permitting a reasonable rate o return. They is no doubt that India has the necessary potential in transportation and logistics management, but it is unrealized due to lack of proper direction the policies too lack vision and foresight and the attitude of the government appear to be lackadaisical the basic multimodal motto of Dont stop the government appear more like a mirage in the India cont.

INDIAN ECONOMY CONTAINERISATION

&

GROWTH

OF

OVERVIEW OF INDIAN ECONOMY

Economy from all over the world have conducted studies of various aspects the Indian Economy and have envisaged India becoming an economic powerhouse in the next two decades along with China. For over a century the United states have been the largest economy in the world. However since the onset of the globalization in the 1990s there has been a shift in the focus from United States and western Europe to Asia and Far East. The western European countries have seen the decline in global GDP share by5% followed by United States and Japan with a decline of 1% each. This slack as been made up by the rising share of India and China in the manufacturing . Industries and service sectors . It has been forecast that the share of united states in the world GDP will become the third pole in the global economy after united states and China by 2025 . By the India economy will be almost 60% the size of the economy .

THE MAIN SECTOR OF INDIA ECONOMY

Agriculture

Just above 60% of the population depends for its subsistence on agriculture which is extremely vulnerable to the vagaries of South West Monsoon. Hence it displays an impressive growth performance of 9.1 % in 2003-04 and fails to 1.1% in the following year due to deficient rainfall. India is not only one of the top leading products of several agricultural products but also has the maximum livestock cattle it also has the privilege of having highest quantity of land under irrigation. In spite of these impressive figures the contribution of Indian agriculture sector has seem a steady decline in the past twenty yrs from a high of 35 % in 1984 to a low of 19 % in2004 accompanied by a growth spate of suicides by Indian farmers. There are several reasons for this statement ranging from poor rainfall, lack of investment in agriculture, government policies designed to check inflation and rising food prices to global agriculture production and highly subsidized farming sector of the developed countries. Several solutions to this problem have been suggested by experts and economies like giving higher priority to livestock, horticulture ,cultivation and organic farming and inland fisheries. The government of India as well as the private sector has indeed started taking keen interest in rural infrastructure development and instituting legislative reforms in areas like greater outlays for irrigation ,water conservation ,crop insurance and availability of cheap capital for agriculture while acceleration in agriculture growth to 7-8 % is not beyond imagination by it will be possible to achieve such sustainable growth only if necessary measures ate taken on an emergency basis.

y Manufacturing & Industry The fall in contribution of agricultural sector to the Gross Domestic Product of India was not compensated by the industrial and manufacturing sectors. Their

share has remained practically unchanged for the past twenty yrs at about 6-7% .the growth was aided by rising contribution of mining and electrical power generation. The textile. Industry is the largest in terms of providing employment and as created 12 million new jobs with the Automobile industry has demonstrated the inherent strengths of Indian labor and is one of the two sunrise industries ,the other being pharmaceuticals. Indias WTO involvement in the past decade has encouraged the growth of pharmaceutical industry . Apart from manufacturing of drugs the industry has been in the forefront of Research & Development of generic drugs it will grow at a greater speed once intellectual property protection laws are implemented eamestly. India then could be a global hub for Research & Development based clinical research. The growth of industries and manufacturing sectors can be accelerated further by improvement of infrastructure particularly power generation , labor reforms and simplifying procedures for foreign direct investments. It will not only help in growth of GDP but will also assist in employment generation. y Services

The service sector has displayed consistent growth pattern since 1995 and almost all sub sectors like banking , healthcare , insurance, hospitality, air transportation, media and the most important of all telecommunications and information technology have contributed to a vast extent to the growth of the Indian economy in the past decade. This sector as compensated for the decline in the contribution of the agriculture sector in the countrys GDP from 39 % in1984 to 53.3% in 2005 . it has resulted in cities like Bangalore , Pune and Hyderabad finding place in the global map. Several India companies like Tata Consultancy Services, Infosys and Wipro have become household names due to their remarkable performance in the IT sector. Through this sector has contributed hugely to the Indian economy its performance in the area of employment generation has not been a impressive.

FACTORS INFLUENCING GROWTHOF CONTAINERIZATION

An analysis of the growth of international trade and GDP shows that growth rate of trade is greater than the growth rate of GDP for longer periods of tome .One of the reasons for the difference is low costs of transport . Other reasons are vertical disintegration of production activities adding extra links to supply base. This impact is greater in general cargo flows leading to economies of scale The factors determining the increase of container through put concem the development of : 1. 2. 3. 4. 5. Economic activity . Container penetration. Trade intensity. Shipping systems . Port completition.

A statistical relation was measured between GDP and throughput. In such a case only the first three of the above mentioned factors play a role with developments in trade intensity having maximum impact .

ADJUSTED GROWTH FORECAST

The above forecast model however ignore the fact that elasticity will not necessarily remain as high as it is a present. As economy develops the foreign trade might reach a saturation point where the law of diminishing returns will kick in at a certain stage .the elasticity ration will stagnate for a while before slopping downwards gradually. The reasons for such a statement are numerous some of which are enumerated below: 1. The GDP growth in developed country does not depend upon transportation to such a large extent a it does presently .this is because as the country that of service sector rises .this trend is already exhibited by the Indian Economy. 2. The growth in traffic causes congestions and delays . in addition to this the Limitation of land available for infrastructure development it constrains capacity. Such capacity increase will lead to a rise in costs. 3. This rise in costs will lead to the products loosing their competitive edge. It will result in other region manufacturing similar products at lower costs.

THE FUTURE OF CONTAINERIZATION: PERSPECTIVES FROM MARITIME AND INLAND FREIGHT DISTRIBUTION
As containerization enters its peak growth years, its potential future developments over maritime and inland freight transport systems are being questioned. A series of issues can either further accelerate the adoption of containerization worldwide or, alternatively, could impose an upper limit to the extraordinary contribution that containers have implied for logistics systems and global commodity chains. These mainly include macro-economic, technical/operational and governance factors. Future containerization will be largely determined by interactions within and between four domains ranging from a functional to a spatial perspective. The logistical domain involves the functional organization of transport chains and their integration in supply chains. The transport domain involves the operation of transport services and intermodal operations. The infrastructural domain involves the provision and management of basic infrastructure for both links and nodes in the transport system. The locational domain relates to the geographical location of nodes and sites in the economic space and forms a basic element for their intrinsic accessibility in terms of centrality or intermediacy. It is underlined that the future of containerization will dominantly be shaped by inland transport systems. Keywords: Freight Transportation, Intermodal, Transmodal, Maritime, Inland, Containerization.

I NTRODUCTION
The past transformations brought by containerization bring the question about to what extent the container will continue to do so in the foreseeable future. For maritime containerized transport there is still a strong emphasis on economies of scale and the setting of shipping networks where pendulum services are interlinked with offshore terminals to improve market coverage as well as the

frequency of services. For inland containerized transport, three issues are of particular relevance. One is port regionalization (Notteboom and Rodrigue, 2005) which implies a more efficient maritime / land interface, particularly with the usage of inland freight terminals with direct connections to the port through rail or barge services. A second concerns a new generation of inland terminals that will improve the productivity, efficiency and throughput of inland distribution. A third one involves the container itself in terms of new specification and more advanced forms of management. The purpose of this article is to identify the macro-economic, technical/operational and governance factors that are likely to shape containerization in the next fifty years. It must first be acknowledged that an attempt at forecasting future trends is prone to inaccuracies in terms of the potential rate and duration of the growth process. Still, a few scenarios can be envisioned. Logistics will continue to put soft managerial and time based pressures on containerization but will underline a wide variety of strategies related to specific supply chains. While infrastructure investments will remain fundamental, maintaining and improving the velocity of freight in light of expected additional growth is likely to incite technical innovations at terminals, the reconsideration of container sizes and maritime shipping networks. In light of these various changes, it is worth considering the future geographies of containerization that are likely to be set.

F ORECASTING FUTURE (CONTAINERIZED ) F REIGHT T RENDS L INEAR T HINKING & NON -L INEAR P ROCESSES
Assessing future containerized freight trends in terms of volume and technology used for intermodal operations commands caution. Predictions and forecasting are often an exercise in futility, yet this exercise is constantly repeated even if it is systematically wrong. Behind the apparent rigor of many forecasting methods is often revealed a blatant oversight of the economic and technological reality of innovations and business cycles. Even more hazardous is the linear thinking often associated with extrapolations that involve non-linear systems. In many cases, the future is often seen as an extrapolation and a multiplication of existing trends and technologies. The paradigm shifts brought by new technologies and new economic conditions are not considered for the very good reason that they cannot be anticipated in full. Under such circumstances, forecasting commonly fails to be accurate and can be more a factor of misallocation of resources than a sound planning tool. One of the most fundamental errors made when trying to forecast is to assume that economic systems behave like physical systems, implying that the level of prediction associated with physical systems can be replicated to economic systems. This mainly entails that the behavior is assumed to be constant and replicable to other contexts. While a retroaction in a physical system is often expected and predicted, a retroaction in an economic system often comes as a complete surprise (law of unintended consequences). This observation implies that the application of System Dynamics in an economic or logistics context would require utmost care. For instance, long term predictions either overestimate, underestimate or completely miss the point as they typically fail to capture paradigm shifts or structural shocks in the system. An ex-post evaluation of past forecasts on container throughput evolution in ports learns that even the most advanced prediction models combining both quantitative and qualitative variables typically seriously underestimated the actual container growth in the last ten years or so.

For example, Coeck et al (1996) point to an underestimation of future container traffic in the European gateway ports of Antwerp and Rotterdam of at least 30% in a time span of about ten years.

T HE C HALLENGES OF F ORECASTING F REIGHT T RANSPORTATION

Trying to assess future freight transportation trends involves estimating concomitantly the volume, the networks set in place but also the routing of this containerized freight. Among the most important factor behind the difficulty to assess freight transportation lies in the macro-economic conditions of the global economy. Growth in GDP, industrial output and external (overseas) trade commonly feature as explanatory variables in forecasting models on maritime container flows. In the last decade or so, this has raised two fundamental issues. First of all, the net explanatory power of macro-economic variables is getting weaker. Second, the predictions on future container flows are increasingly hampered by the volatile nature of the macro-economic environment and the effects of turmoil in the financial markets on the asset economy. The impact of China on the global economy and on trade flows has been substantial and yet the extent of its impacts has been systematically underestimated. Now that the China effect has been compounded into forecasting models, it becomes likely that future trends will be overestimated. Comparative advantages are shifting rapidly, leading to de-industrialization in North America and Europe, relocation and the re- industrialization of Pacific Asia. Trade flows have consequently become dislocated, creating an array of challenges for the freight transport industry (e.g. empty travel and inbound delays at gateways). As the global re-organization of production, distribution and consumption is taking place, the relation between economic growth and growth of containerization is increasingly a dislocated one. The container system has become more than just a means to connect production to consumption centers, it is increasingly being associated with complex logistics networks supporting global production networks or GPN (Coe et al, 2004 and Henderson et al., 2002). The container transport system is entwined with the distribution patterns of valueadded creation within logistics networks. This has given rise to the routing of containers via intermediate places along land and maritime corridors. This development is exemplified by the

emergence of container transshipment hubs in proximity of the main shipping lanes and the multiplication of inland terminal facilities supporting the creation of logistics zones. The renewed logistics organization has not only led to a surge in world container port volumes (cf. via the insertion of hubs), it has also given rise to the development of strong logistics regions, sometimes in places with a weak macro-economic profile. Since freight transport companies are private entities that are profit seeking, they have a substantial flexibility in the allocation of their activities, which makes forecasting difficult since global business decision and various market strategies are concerned. The current trend involve taking control of several segments of the supply chain in order to reduce costs and risks, capture added value and insure a reliability of distribution. As such, freight transport companies decide which routes, modes and terminals their freight is going to take. There is an emerging role of multinational corporations (DP World, APM Terminals, Hutchison Port Holdings and PSA to name but a few) that are able to establish their own dedicated infrastructure networks, notably in terms of global port operators (Notteboom, 2002 and Olivier and Slack, 2006). In light of vertical integration strategies, shipping lines have entered the container handling market via the development of dedicated terminals at major load centers (Cariou, 2003). Both global terminal operators and carrier- operated terminals challenge conventional public policy dominantly based on infrastructure provision.

Freight transport markets are themselves very segmented, a reflection of the variety of economic sectors they service. There is a range of commodities, transport modes and stakeholders, each representing a specific but interdependent element of global commodity chains. An emerging dichotomy concerns cost-based versus time-based freight distribution systems, which favors a segmentation of the commodity chains servicing them. The segmentation also concerns the function of terminals. Classical economic geography associates transport terminals in general and seaports in particular with a break-of-bulk function (e.g. Dicken and Lloyd, 1990). With containerization, the terminal has adopted the role as a break-ofcontainer-cargo location (Kuipers and Eenhuizen,

2004). The recent years have seen an impressive diversification of the value-added activities related to transport, ranging from negotiated rates, inventory, transfer and supply chain management. For instance, integrators have emerged with the goal to mitigate and lessen supply chain costs for their clients in an intricate structure of bids and contracts with transporters, terminal operators and distributors. Variations in the cost structure of an element of the transport value chain thus have a greater chance to be mitigated. Value added activities also have a higher propensity to migrate along the supply chain and take place at locations that are deemed more suitable from a cost, but also from a taxation standpoint. Thus, segmentation in migration of added value activities are complex processes to consider in forecasting containerized freight trends.

G ROWTH S CENARIOS : R EACHING P EAK G ROWTH AND M ATURITY

As containerization is heading towards of phase of maturity, it is worth considering the volume of containerized traffic this would entail. As previously discussed, providing such an answer is very hazardous in light of the wide variety of issues involved, ranging from technological developments, the decision making process of freight operators to macro economic considerations. The fundamental assumption is based on the replication of the logistical curve which assumes phases of introduction, growth and maturity, a pattern well known in the business and product life cycle theories. Looking at the history of transportation reveals that transport technology has consistently followed such a behavior (Ausubel e al., 1998), which can be inferred to containerization. Four major phases are considered (Figure 1): Adoption: Mainly involved the early adoption of containerization by ports and maritime shipping companies. An arbitrary starting point is 1966 with the first transatlantic container services (or 1965 with the adoption of standard container sizes and lashing systems) until 1992 when the world container traffic reached 100 million TEUs. During that period a global containerized transportation system was gradually set in place. Acceleration. The early 1990s clearly marked a phase of acceleration of containerization, particularly with the entry of China in the global sphere of production. This implied a growth of the volume of containerized traffic, which grew by a factor of three in a mere decade, as well as a fast diffusion of containerization in regions that were previously under- serviced. Meanwhile, an entirely new geography of container port terminals emerged with new facilities built to service emerging manufacturing clusters as well as to strengthen existing gateways. A new centrality, particularly in terms of production and a new intermediacy, particularly in terms of gateways and offshore hubs, was being put in place. Peak growth. Coupled with a massive phase of globalization and the usage of containerization to support commodity chains, growth is currently reaching its maximal momentum. This places intense pressures on transport infrastructures to

cope with this growth, which is also exacerbated by the emergence of strong imbalances in container shipping. Although peak growth appears to be the golden era of containerization, it is also plagued with capacity problems, externalities such as congestion and the potential of over investment due to expectations about future volumes. Maturity. Implies that containerization has completed its diffusion, both geographically (within global markets) and functionally (within commodity chains). Under such circumstances, growth (or decline) is mainly the outcome of changes in the level of economic activity. In 2008 worldwide port container throughput is expected to reach about 535 million TEU. Two possible scenarios about the development of containerization in the subsequent phase of maturity can be inferred: The first scenario entails an ongoing growth of international trade at a rate similar to what took place in the last decade. It is a simply extrapolation of past growth trends. Peak growth would end around 2010 and be followed by a maturation of containerization. This would imply intensive deregulation in ownership, particularly over inland transportation, with further consolidation as well as rapid terminal development, at least doubling the capacity of most existing ports. This scenario, which assumes the doubling of container traffic between 2005 and 2015, raises serious questions concerning the amount of intermodal and modal infrastructures that would need to be brought online and the tremendous stress these volumes would have on inland transport systems and on the environment. The low range scenario, a divergence, would entail a significant global recession where North American and European consumption suffers a setback. It is also linked with protectionism (particularly towards China) and higher energy prices. Although it tends to reflect a very negative economic environment, it could also take place in a context where the comparative advantages behind the push towards globalization that have prevailed until recently, are much less valid. Thus, a restructuring of manufacturing towards a more regional base can take place with lesser average distances involved for commodity chains.

Future containerization will be largely determined by interactions within and between four inter-related layers ranging from a functional to a spatial perspective (figure 2). The logistical layer involves the functional organization of transport chains and their integration in supply chains. The transport layer involves the operation of transport services (links) and intermodal and transmodal operations (nodes). The infrastructural layer involves the provision and management of basic infrastructure for both links and nodes in the transport system. The locational layer relates to the geographical location of nodes and sites in the economic space and forms a basic element for their intrinsic accessibility in terms of centrality or intermediacy.

L OGISTICS : S OFT P RESSURES ON C ONTAINERIZATION

Logistics represents the softest element, but also the most fundamental, behind future containerized transportation. It is the most flexible and subject to rapid adaptation reflecting market changes. Since it concerns a wide array of activities, ranging from production planning to warehousing, logistical integration forces the resolution of many constraints in containerized freight distribution. Many of these involve time based components, including frequency, reliability and punctuality, which would not have been possible to mitigate at a global level without containerization. As such, the container is increasingly seen concomitantly as a load, transport, logistical and production unit. The outcome is a segmentation of the market in terms of logistical requirements and the setting of niche markets in containerization. The integration of supply chains may convey a greater role to transport terminals as active buffers (negotiators) in supply chains.

L OGISTICAL C HARACTERISTICS OF GOODS

The mix of structural logistics factors related to containerized goods will determine the future development of the global container transport system, regional disparity in transport flows and with it the service requirements on transport operations serving specific routes (transportation level). As such, the logistics characteristics of goods will have an impact on operational decisions related to issues such as shipment scale, frequency and velocity and the associated infrastructural level. The main characteristics and their expected impacts are: The average value density of containerized cargo expressed in value per cubic meter is expected to further increase, primarily on secondary routes. A similar development is expected with respect to the packing density (the number of boxes per cubic meter). The increase in value and packing density triggers an ever stronger focus on minimizing time costs and minimizing handling costs of a large number of small packages. The delivery frequency is expected to increase as manufacturers and retailers seek to achieve even greater economies linked with low levels of inventory as well as time based distribution. This will come as a paradox between pressures towards economies of scale and high frequency shipments. For instance, larger container sizes, such as 48 or 53 footers, are preferred by shippers since they require less handling per TEU, while they may not necessarily be the right load unit for manufacturers abiding to JIT strategies. Thus, for long distance trade of final products to consumption markets where frequency is less an issue, the largest container size possible is preferred while for short distance movements such as between clustered production units a smaller load unit may be required. Country-specific products or packaging requirements are likely to show a remarkable flexibility. While this function traditionally took place near final markets, depending on the structure of production (centralized vs. multiple vertically integrated suppliers) and on the products type, it could move directly to the manufacturer or to intermediate locations. Conventionally, market specific packaging was performed at port of entry locations. Standardization and the setting of economic blocks, particularly for

Europe, have expanded this range to a major continental gateway. This could pose a challenge to the development of logistical activities in import oriented regions such as Western Europe and North America. The share of transport costs in total distribution costs will continue to rise due to a convergence of growing congestion, longer transport distances within supply chains as well as higher energy costs. The share of distribution costs in total production costs is determined by factors such as the future balance between global sourcing strategies and more local sourcing and the continued attractiveness of low cost countries in global supply chains. Technological and commercial dynamism related to the containerized products is likely to increase. As the average shelf life (life cycle) of a vast array of containerized products is shrinking, more pressure is exerted on logistics structures in terms of high reliability, high responsiveness, short lead times and a high degree of flexibility. This might push a shift towards more decentralized logistics structures, but foremost towards more agile distribution networks offering a range of alternative routing possibilities tailored to the needs of the individual product batches and channeled through a complex network of supranational and regional distribution centers, cross-docking facilities and rapid fulfillment centers. The distribution focus will increasingly be measured in service requirements, instead of low costs. Each individual product has a certain attribute with respect to these characteristics. The mix of these characteristics play a major role in the configuration of distribution networks both in terms of locations as well as functional divisions (e.g. where to do value-adding logistical activities). Next to logistics characteristics of products, also organizational factors will play a role for the future. The balance in market power between the different actors within the supply chain is of prime importance. When the power relation is dominated by the customer and the uncertainty of demand is high, the logistics structure will focus on responsiveness and flexibility. When the uncertainty of demand is low and the power relation is dominated by suppliers, the dominant logistics requirement is reliability and centralization of supply.

F UTURE C ONTAINER S IZES

Logistics also place pressures on containerization as a transport and management unit. The initial container sizes were the 20 footer and the 40 footer, which were agreed upon in the 1960s and became ISO standards. Initially, the 20 footer was the most used. However, as containerization became widely adopted in the 1990s, shippers switched to larger container sizes, notably the 40 footer as less transshipment movements per TEU were required. Since the current container dimensions were designed about 40 years ago, the changing operational environment has made the existing standard unsatisfactory in many ways. Economies of scale are obviously pushing towards the largest container possible as it implies for inland carriers little additional costs. For instance, carrying a 40 footer or a 53 footer container on rail mostly involves the same transshipment and capacity usage and thus the same rate. As a result, in many gateways along the North American West Coast, an active transloading function is taking place where the contents of three maritime containers of 40 foot are transshipped into two domestic containers of 53 foot. The standardization issue is also drawing attention in Europe. The widespread use of Europallets (dimensions 80cm to 120cm) instead of ISO pallets (100cm to 120cm) on the European mainland has given rise to the deployment of pallet-wide containers with an inner width of 2.44m instead of the standard 2.34m. In order to further optimize unit loads, the European Union is supporting the development of the European Intermodal Loading Unit (EILU) with a capacity of 33 Europallets and a length of 13.2m compared to respectively 24 Europallets and 12.044m for a standard TEU. It is 18% smaller than the American 53 foot standard. The rationale behind this standard is to allow two European pallets to be placed in containers side by side. For European manufacturers and freight forwarders the existing ISO containers are based on North American pallet dimensions. While the new dimensions would still meet clearances for road and rail transport in Europe as well as abroad, the EILU is being strongly opposed by maritime shipping lines, because they have huge accumulated investments in current equipment and new ships under construction are optimized for current ISO container sizes. Since containers have useful lives of about 15 years, intermodal carriers are reluctant to adopt any new

standard because of prior commitments in capital investment in modal and intermodal infrastructures. There are thus pressures to change container specifications, mainly in terms of length, width and height. A variety of container sizes adds up to the logistical problems of allocating containers to specific slots on a ship. Port operators are in the same situation with capital investments in intermodal infrastructure. The eminent danger of divergence in container size would complicate the smooth transition of cargo from the maritime leg to landside logistics. Thus, fifty years of containerization has imposed operational standards that cannot be easily discarded. Larger sizes confer economies of scale in loading, handling and unloading, which are preferred for long distance shipping as well as by customers shipping large batches of containerized commodities, but weight restrictions make the 20 footer suitable for ponderous goods such as grain. The same ship capacity would take in theory twice as much time to be transshipped if 20 footers where used instead of 40 footers. There is thus an evident rationale to use the largest container size possible, but the containerization of commodities will likely ensure that the 20 foot standard remains. Hi cube containers have also been put in use, notably since they do not require different handling equipment or road clearance. They are one feet higher (9'6") than the standard 8'6" height and a 40 footer hicube container provides about 12% more carrying capacity volume-wise than its standard counterpart. Most North American double stack rail corridors can handle two stacked hi-cube containers, creating an additional multiplying effect in terms of total capacity per rail car. In Europe, the single stack limitations are improved with the usage of high cube containers. The 53 feet hi-cube container is solely a domestic container used in the United States. It has achieved preponderance within the trucking and rail industries as it represents the largest load permissible on the Interstate highway system. Since China has an underdeveloped inland freight distribution system, the tremendous capital investments that have been accumulated in terms of intermodal transportation are likely to set the tone for the future direction of containerization. Already, China manufactures most of the 53 footers and since

that the China/United States trade relation is the most important containerized trade relation in the world, the 53 foot standard is quite a possibility but at least a decade away. Meanwhile, containerization will have to cope with its existing limitations in container size.

C ONTAINERIZED T RANSMODAL O PERATIONS

Even if containerization has led to notable productivity improvements, particularly at maritime terminals, containers moving inland are subject to several undue delays. Although empirical evidence is hard to come by, a container being moved long distance by rail and road within the United States could spend as much as half the transit time immobile. Such delays are partially the outcome of capacity constraints but more importantly of inefficient intermodal and transmodal operations. Particularly, transmodal within the components of a same mode operations represent a field where substantial benefits could be realized in inland freight distribution. Because of market and ownership fragmentations that characterize large freight markets such as North America a transmodal movement is often required.

L OCATIONS : F UTURE G EOGRAPHIES OF C ONTAINERIZATION

The logistical pressures, the transportation networks and the infrastructures form a tangible reality in the locations they take place. A new geography of containerization has emerged and considers functional divisions in space in terms of origins, destinations and intermediate locations. Many terminal facilities are running out of options for their sites which has forced new geographical considerations and new forms of valorization within the locational layer. This valorization is particularly linked with the emergence of major gateways and hubs at intermediate locations. An intermediate location can imply a location near the main maritime routes such as for offshore hubs or near production and consumption centers such as for gateway ports. For gateway ports, a good location is a necessary condition for attaining a high intrinsic accessibility to a vast hinterland, which often builds upon the centrality of the port region.

C ONTAINERIZATION AND INTERMIDATRY

The standard break-bulk intermediacy is being replaced by an intermediacy defined by offshore terminals. The conventional geography of container ports has been modified by the setting of offshore terminals at new locations where the overall efficiency of maritime shipping networks is improved as containers can be transshipped at intermediate locations. These new locations have many locational advantages such as being at the intersection of major long distance shipping routes. The matter then becomes to select a port site in reasonable proximity, having sufficient depth, available land and favorable regulatory and labor regimes. Since most of them were established recently, offshore hubs are in full consideration (and often the only one) of the requirements of containerized maritime shipping as opposed to traditional ports for which containerization represented an adaptation. The insertion of an offshore hub within existing networks usually takes a hub-and-spoke or a relay structure. With a hub-andspoke structure, the offshore hub provides an interface between regional and global shipping networks by acting as a point of collection and transshipment. With a relay structure, the offshore hub acts as an interchange between long distance corridors, which fits circum-hemispheric distribution strategies.

C IRCUM -H EMISPHERIC D ISTRIBUTION

As containerization reach a phase of maturity, the setting of a global containerized highway involving continuity between inland and maritime transport systems is expected (Figure 7). For the northern hemisphere where the bulk of the economic activity takes place, this would involve three major rings or circulation; the equatorial ring, the middle ring and the arctic ring. The equatorial ring can be perceived as a conveyor belt where high capacity and high frequency containerships are assigned and would interface with the middle ring at specific high throughput offshore hubs. The widening of the Panama Canal will improve the operational efficiency of the system, placing it on par with the capacity of the Suez Canal. Under such circumstances, the setting of true bi-directional and high frequency round-the-world services could finally take place. The most important, the middle ring, is composed of two large continental rail land bridges (North American and Eurasian) linked by transatlantic and transpacific connectors. It will require a full fledged maritime / land interface with major gateways and corridors. The arctic ring is problematic as a full ring of circulation, but specific maritime bridges could be established (e.g. Narvik - Churchill), which would complement the middle ring.

C ONCLUSION
As containerization enters its peak growth years, various processes and trends are either accelerating the adoption of containerization worldwide or, alternatively, could impose an upper limit to the extraordinary contribution of containers to freight distribution and globalization. Below are several questions that remain to be answered.

A G ROWING D IVIDE BETWEEN S EA - BASED L AND - BASED O PERATIONS?

Containerization is confronted with a growing tension between a massification at sea and an atomization on land. Growing vessel size has led to the massification of unit cargo at sea. On terminals and at the landside, massification makes place for an atomization process whereby each individual container has to find its way to its final destination. Container terminals are feeling the full impact of this growing tension: current vessel handling techniques discharge and load containers one by one (two by two in case of twin lift), leading to long port turnaround time for the ultra large container carriers. A major challenge consists in extending the massification concept as far inland as possible. Postponing the atomization of container batches shifts the container sorting function to the inland and as such eases the pressure on deepsea terminals. High- volume rail and barge corridors including inland terminals play a crucial role in this process. It could be argued that the changes taking place over inland freight distribution are thus likely to be more significant, both in scale and scope, than the changes over containerized maritime transportation. What will take place inland will shape the future of containerization in terms of its potential to further accommodate the growth of international trade. The reason is rather straightforward; because of the first and last miles are taking place inland. Whatever the maritime capacity, this throughput must be assumed by inland freight transport systems.

A M ULTIPLICATION OF ROUTING OPTION

The future is likely to bring a multiplication of container routing options to comply with the demand requirements of local and regional markets and to allow logistics operators to benefit the most from operational factors. This will take the form of the setting of several rings of global circulation, from the circum-equatorial maritime highway supported by an improved Panama Canal to land bridges and their maritime connectors. At the level of regional distribution, several gateways and corridors may be competing to attract traffic by offering their respective mix of cost, time and reliability advantages. This is particularly the advantage that the new container facilities at Prince Rupert along the Canadian West Coast that opened in 2007 are capitalizing on; shorter time services to major inland North American destinations. A multiplication of routing options at sea and on land will make the container system less vulnerable to disruptions, thereby better meeting the reliability and capacity considerations of shippers.

A CONTINUING GLOBAL PATIAL DIVIDE?

The emergence of global commodity chains and the specialization of production have resulted in acute trading imbalances which are reflected in freight flows and the repositioning of empty containers. Will these imbalances and the disruptions they impose of maritime and inland shipping persist? This is unlikely since economic history underlines that highly imbalanced trade structures cannot be maintained for a long period and that eventually a new equilibrium is reached. This is likely to imply a more regional structure of production and distribution.

GENERAL CONCLUSIONS
NECCESSITY TRANSPORT FOR DEVELOPMENT OF MULTI MODAL

INFRASTRUCTURE:
The three most important criterions for success in international trade are price, quality and in time delivery it is not possible to meet these criterion without having a proper logistics and multimodal system, containerization and multimodal transport form an integral part of any logistics and supply chain . Everyday new and innovative methods are discovered and improvisations made in improving the quality of products costs is by lowering inventory levels and introducing just in time concepts. Thus Indian merchandise cannot become competitive without containerization and multi modal transport. As stated earlier the Indian policy makers have realized the importance of containerization and multimodal transport but they face two major constraints while attempting to realize the full attempting to realize the full potential of containerization and multi modal transport. India also needs to develop a suitable logistic system for economical and efficient transportation of goods from the manufacturing centers to the distribution points . It has been estimated that logistics costs including inventory insurance and documentation aggregate to about 20% of the final costs of the products and any inefficiencies and inadequacies have a negative impact one export competitiveness India exports about 21 million tones of general cargo of which 9 million is containerized thus leaving scope for further containerization . The main benefits of containerization can accrue with the setting up of internal container depots and container. However it should be realized that the infrastructure has to be properly priced to enable it to sustain itself on one hand and also to generates reasonable profit on the capital deployed in constructing it at the smer time the infrastructure pricing should also be affordable to the end user .

BIBLIOGRAPY