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GLOBALLOGISTICSMANAGEMENT:THECASEOFABCCEMENT

ABCCEMENTisaFrenchmultinationalandgloballeaderinCementinbuildingmaterialwithastrong
presenceintheeasternpartofIndia
AsapartofourbrownfieldexpansionatJamshedpur,wehadorderedtheVerticalCementgrindingmill
withLoesche,Germany.

Rotarycomponentssuchasdrivegearbox,grindingrollers&tableweremanufacturedatHamburg,
Germany.(Volume625cum&Netweight417tons)

StaticcomponentssuchasMillstand,baseplateweremadeatShanghai,China(Volume433cum
&Netweight150tons)

Somecomponentssuchasseparatorfixedplateetc.,wereoutsourcedbyLoescheinChennai,India.

ThetaskathandwastotransportthematerialsafelyfromLoeschesworksatShanghaiandHamburgto
Jamshedpur,India.
ThemiscellaneousconsignmentfromChennaiwasmuchsimplerandthereforehandledbyusthrougha
localtransporter.
WhenweanalyzedthemodalityofshippingtheconsignmenttoIndia,werealizedthatwedidnothave
muchexpertise/knowhowonthefollowing

Importformalitiesanddocumentation

Indepthknowledgeofthecountriesinvolved.

Knowledgeofthecarriersandroutes

Risksinvolved

Consignmenttrackingandmonitoring

Q.<WHATCOULDABCCEMENTINDIADO?>

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

Therefore,wedecidedtoengageaThirdpartylogisticserviceproviderwhomeetsthefollowing
requirements

PresenceinGermany,China&India

Knowledge/Expertiseonimportformalities,routes,carriers,territories,infrastructurelimitation,
appropriatematerialhandlingtechniquesandmachinery

Crediblepastrecord&experienceinhandlingsimilarconsignment

Resourcesandinfrastructuretohandleajobofthisnature.

HastheITcapabilitytotracktheconsignmentonacontinuousbasisusingGPStechnology.

Afterevaluatingvariousoptions,wefinalizedonM/s.Kuehne+Nagel,whoarebasedoutofGermanyand
havingglobalpresenceinAmericas,Europe,Asiapacific,MiddleeastandAfrica.

Q.HOWWOULDABCCEMENTINDIAPVTLTD.EVALUATETHEPERFORMANCEOFM/s.
Kuehne+Nagel?

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

Followingwerethekeychallengesfacedinthetask.PerformanceoftheThirdpartylogisticproviderwas
evaluatedbasedonthesame.
Safetyofconsignment(Accidents/damagesetc.,)
Securityofconsignment(pilferages,lossofdocumentetc.,)
TimelyshipmenttoJamshedpursite.
Crossborderlegalissues
Repacking/correctionifreqd
Continuousmonitoring/tracking
CoordinationandnetworkingwithmultipleagenciesEquipmentmanufacturerandtheirtransporter,third
partyqualityinspectors,Customs,Carriers,Inlandtransporters.
InlandtransportationEasiestandsafestroute,infrastructurelimitations(Bridges/raillinecrossing/
narrowroads,Congestedandthicklypopulatedareasenroute
Manageenvironmentalissues&liaisonwithcustoms,railways,villagers,highwayauthorities,local
administrationenroute,policeetc.,
Allocationofresponsibilityatvariousstages
Executionoftheactivityatminimumcost

Q.WHATISROUTINGPLANOFABCCEMENTINDIAPVTLTD.?

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

Q.WHATSEAROUTETHECARGOWOULDFOLLOW?

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

GLOBALSEAROUTES
(ROUTEDESCRIPTIONATANNEXURE)

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

SEAROUTEFROMHAMBURGTOMUMBAIPORT

SEAROUTEFROMSHANGHAITOMUMBAIPORT

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

Q.ISTHISTHEBESTROUTING?WHATAREFACTORSFORCHOOSINGAPORT?
INLANDTRANSPORTATIONROUTEFROMMUMBAITOJAMSHEDPUR

Figure:Inlandtransportationroute
(MumbaiPortThaneNasikDhuleBandaraRajnandGaonBhilaiRaipurRaigardhGumla
RanchiJamshedpurJojoberaCementPlant)

Q.CANTHEREBEALTERNATEMODEOFTRANSPORT
ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

Break Bulk Import cargo operation and documentation flow (India)

KUEHNE + NAGEL Projects 2010

Process Steps

Customs Process

Importer

Prealert received from

Origin office.Notice of
shipment sent to
Consignee.

Prealert

Based on the documents submitted by the

carrier's the customs approves the IGM

M Filing and B/E processing

Customs checks the Bill of

Entry advises discrpancy ,if
any.

Arrival of shipment at
destination.

Logistics Service Provider

Sea Freight project & Import Department

Copies of Master B/L ,House B/L.Invoice

and Packing List sent to carrier for filing
of IGM .Carrier files the IGM with customs
prior arrival of shipment at port

The consignee forwards the invoice and pac

to K+ N for filing of Bill of Entry with custom
shipment is under some special licence it i
handed over to K+N.

K+N files prior Bill Of

entry and arranges to
send check list to cnee
for confirmation about
duty amount.After
confirmation from cnee
KN arrnange for
assessment of Bill Of
Entry with customs.

Shipment arrives at destination and

consignee is sent arrival
notice.Delivery Order is picked up
from carrier after paying all charges
and surrendering of the Carrier B/L

Consignee surrenders the

duly endorsed House B/l.

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

Physical examination of cargo

by Customs.Duty figure is
confirmed after completion of
i ti

Delivery of cargo

Once duty is paid the Bill of

Entry is endorsed by customs
and cargo is released..

K+N takes permission from customs to open

pkgs for physical examination of the cargo in
port.

K+N picks the Demand Draft for the duty

from the consignee and pays same to
customs.

K+N pays the port dues if any and gets the

gate pass from port Authorities.K+N arranges
trucking for delivery cargo to consignee
premises.

Consignee arranges for

customs duty payable by
Demand Draft once K+N
confirms the duty figure.

Cargo received by
consignee's at their
premises

K+N raises invoice on the consignee

for the services as per agreement and
sends same to consginee for payment.

Consignee's arrange for

payment of charges as per
K+N invoice.

Upon receipt of all charges from the

consignee's K+N arranges to send the
Original Bill Of Entry to the
consignee's as this is required by
them for disbursement of foreign
exchange

Upon receipt of Original Bill of En

from K+N the consignee's procee
complete their disbursement of
foreign exchange.

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

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CHOICEOFCARRIER

Figure:Inlandtransportcarrierandunloadingplan

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

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CONSIGNMENTTRACKING

Figure:Webbaseddashboardforvesseltracking
WebbaseddashboardforcargotrackingInland

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

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Sample -ABC- CEMENT India Pvt.Ltd - Cargo Tracker Sheet

2nd Lot - Antwerp port to Mumbai port - Total 45 Packages

Actual date
Sr.No.

1
2
3
4
5
6
7

8
9
10
11
12
13

Package No.

19.09.09

3084

RJ01GA-4604 16 Wheelers - Low bed volvo Maharashtra

19.09.09

44,3,25

3085

CG04JA - 6916

Semi Low bed

19.09.09

8,9

3086

MH-06 AQ-2397

19.09.09

3087

19.09.09

13,35,39

3088

19.09.09

26,11,40,5

3089

19.09.09

27,28,12,17

3090

19.09.09

10,29

19.09.09
19.09.09
19.09.09

31,24,21,18,34

19.09.09

42,32,14,16,36

LR NO.

Vehicle numbers

Type of Vehicle

Vehicle Position

of arrival
(At Port)

State

Total Distance from

Distance covered
Mumbai port to Site (Kms) from Port (Kms)

Place

BHUSAWAL

2050 kms (Appx)

600 Kms

Maharashtra

Raipur

2050 kms (Appx)

1150 Kms

Low bed

Maharashtra

MP- MH Border

2050 kms (Appx)

1050Kms

MH 43U-566

Hydrolic Exel

Maharashtra

Aurangabad

2050 kms (Appx)

450 Kms

NL-01D-2629

Semi Low bed

Maharashtra

Pathalgaon

2050 kms (Appx)

1400Kms

NL-01D-1039

Semi Low bed

Maharashtra

Pathalgaon

2050 kms (Appx)

1400 Kms

NL-01D-2669

Semi Low bed

Maharashtra

Pathalgaon

2050 kms (Appx)

1400 Kms

3091

RJ-06G-5247

Low bed

Maharashtra

AKOLA

2050 kms (Appx)

700Kms

2,6,20,33

3092

MH-06AQ-320

Semi Low bed

Maharashtra

Raigarh

2050 kms (Appx)

1300 Kms

30,23,22,19,4

3093

PB-06G-6664

Semi Low bed - 3 Exel

Maharashtra

Raipur

2050 kms (Appx)

1150 Kms

3094

CG-04JB -2074

Semi Low bed - 3 Exel

Maharashtra

Raipur

2050 kms (Appx)

1150 Kms

19.09.09 15,35,38,41,43,45SP1

3095

MH-06K-3520

Semi Low bed

Maharashtra

Bhandara

2050 kms (Appx)

950 Kms

3096

CG/04/JA/4621

Semi Low bed

Maharashtra

Amravati

2050 kms (Appx)

700 Kms

Q.WhatelsecouldbetheMISSTRUCTUREforABCCEMENTPVT.LTD.

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS

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ANNEXURE
Circum Equatorial Route. With the expansion of the Panama Canal expected to
come online in 2014, a relative parity will exist for the first time between the Panama
and Suez canals. In such a setting, maritime shipping companies may elect to
establish circum equatorial routes in both directions with the usage of high capacity
(8,000 to 12,000 TEU) containerships. This high frequency "conveyor belt" could
support a significant share of global east-west freight movements in a cost effective
way. This does not imply a homogeneous service as several different configurations
of ports of call are possible along this route, particularly if a 300 nautical miles
deviation is considered. This enables different circum equatorial network
configurations.
North-South Pendulum Connectors. These connectors reflect existing commercial
relations, namely for raw materials (oil, minerals, agricultural goods), such as South
America / North America, Africa / Europe or Australia / Asia. For container shipping,
they are mostly based on the rationale that there is not enough volume to support
transoceanic services, so cargo is collected / delivered along a latitudinal sequence
of ports. This conventional network will be expanded with transshipment
Opportunities with the circum equatorial route.
Transoceanic Pendulum Connectors. Connect through pendulum services
selected ports of the facades of large oceanic masses. The three main
transoceanic connectors are transpacific, Asia-Europe (through the Indian Ocean)
and transatlantic. The industrialization of Asia (China in particular) has made the
Asia - Europe and the transpacific connectors particularly important.
Growth within the BRIC countries (Brazil, India and China) favors the emergence
of a new connector in the Southern Hemisphere between the east coast of South
America, the Cape of Good Hope and to Southeast Asia.
Transshipment Markets. They connect regional port systems to transoceanic and
circum equatorial routes, mainly through hub-and-spoke services. The relay
function between long distance shipping services performed by those markets is
also significant. The most important are Southeast Asia, the Mediterranean and the
Caribbean. They are referred as markets because the transshipment function can
be substituted to another port. Therefore, a group of ports in a transshipment
market are "bidding" for port calls as this type of traffic is difficult to anchor. The
development of circum equatorial routes is thus likely to expand the opportunities of
transshipment, including interlining between these routes.

ITL,Dr.DSinha,IIFT,KOLKATACAMPUSCASESTUDY:ONLYFORCLASSROOMDISCUSSIONS