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Industry Profile

The Indian express industry is set for sizzling growth, despite rising usage of facilities like short messaging services or multimedia message services. Several large-sized corporate and multinational express players are keen on acquiring controlling stake in some of established Indian courier companies. India's express industry is expected to register a growth of at least 20 per cent per annum during the next five years and more than double its size by 2012.Opening of banking, insurance, retail, aviation and telecom sectors and their penetration to smaller cities would be the major growth driver. The size of India's courier industry currently stands at around Rs 7,100 crore (Rs 71 billion) and is estimated to have grown at a CAGR of around 33 per cent over the past decade. At its current estimated size, the courier industry is larger than the tea industry and close to the size of paper and shipping industries in India. The industry ranks amongst the fastest growing segments of the Indian economy and over the next five years, it is expected to register a growth rate higher than of industries such as retail, banking, financial, chemical and automobiles. The industry is highly fragmented with more than 2500 express players and a few large sized players account more than half of the industry revenues. The industry contributes more than Rs 1000 crore (Rs 10 billion) to the government revenues by way of service tax, income tax and other levies and it offers employment opportunity to about a million people. The organized part of the express industry in India is 65 per cent of the total market. "Organized sector in the domestic market is little less than 50 per cent. The unorganized and semi organized segments, which consist largely of regional and intra-city service providers account for the rest.

Amongst domestic players Blue Dart, DTDC, First Flight and Overnite Express are leading express services companies in India while UPS, FedEx, DHL and TNT are leading international player’s presence in the country. These industry players earn about 52 per cent of its revenues from document parcels. Challenges faced by the industry include matching upto the rising expectations of the customer, expanding the network to reach hitherto uncovered areas, containing rising fuel and freight costs and retention of manpower. Need for private express players: While the domestic courier industry in India is booming at a 25% annual growth rate, the amount of mail handled by India's largest 'courier firm', the India Post, the government-run postal service, has shrunk by a whopping 50% over the past five years. There aren't any better examples to capture the collapse of government-controlled institutions at a time when the Indian economic growth is being praised around the world. Also the Speed Post, which is supposed to be one of the fastest and best services of the Indian Post, is under major criticism from the people.

DHL & its competitor strategy: DHL, with its bold yellow and red corporate colors, initiated a major marketing campaign about two years ago with the pitch, “Competition. Great for you. Bad for them.” While some advertisers shy away from attacking their rivals by name, DHL did exactly that. Some television ads showed DHL drivers and trucks outmaneuvering FedEx and UPS. Obviously, DHL believed acknowledging its two larger competitors created an opportunity for the upstart brand to be seen as a credible third member of the pack. DHL has moved into the next phase of its branding campaign with current advertising that focuses on superior customer service.

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DHL & its competitors inception in the Indian market : All the foreign companies — UPS, FedEx, TNT and DHL — initially entered the Indian market through alliances with Indian players, hoping to leverage the strong distribution network of their domestic partners. DHL tied up with AFL, Fedex with Blue Dart, UPS with Elbee, and TNT with Skypak. Both Elbee and Skypak were strong domestic players and leveraged their networks to garner business for their foreign partners. With the changing market, players who had previously concentrated only on the small packages started delivering packages of up to 25 kg across countries. The industry became technology-savvy and streamlined its operations using e-tracking. As the market grew, competition intensified and business changed, the existing ties floundered and the foreign companies forged new ties and looked for new acquisitions, even as they announced major investment and expansion plans. DHL, the world’s leading express and logistics company, offers express and logistics services in India. In 2004, it acquired a majority stake in Blue Dart Express Limited, South Asia’s largest integrated air express, courier and logistics company, for Rs 720 crore by buying the stakes of the founding shareholders of Blue Dart and Schroder Capital Partners. While DHL Express offers international express services, Blue Dart caters to the domestic market. Blue Dart’s operations are supported by a fleet of five Boeing 737 freighters and 3,429 ground vehicles. In 2004-05, Blue Dart handled 42.02 million shipments in India and 0.53 million shipments internationally. “India is one of the fastest growing markets for DHL Express in the Asia Pacific region.. In September 2006, the Netherlands based TNT Express, which was the first multinational brand in India to offer both international and domestic services using an integrated air and road network, acquired Speedage Express Cargo Services, a division of Mumbai-based ARC India Ltd, for Rs 200 crore as part of its strategic 3

objective to become the leading provider of express deliveries in India. TNT is going to investing 100 million euro ($121 million) in the Indian market over the next five years. In 2002 Federal Express, which began operations in India in 1984 and 13 years later became the first express company to launch an all-cargo flight to India, parted ways with Blue Dart, with which it had an agreement since 1984, and formed a new association with little-known Prakash Airfreight. In July 2007 Federal Express made an unsuccessful bid to acquire Safe Express, a home grown company that was started by Pawan Jain in 1995 and has grown to be one of the largest logistics companies in India, which has over 3,000 vehicles, 3 million sq ft of warehouse space and delivers over 2.5 million packages a month. As the domestic players seek to expand they have attracted the interest of private equity funds. Anil Ambani’s Reliance Private Equity, a division of the listed Reliance Capital, has acquired a 44 per cent stake in DTDC Courier and Cargo Ltd, a large Bangalore-based courier and express player, for Rs 65 crore. First Flight, India’s second largest courier company, which handles over 85 million consignments through its network of 700 offices, is looking to garner investment of over Rs 100 crore from private equity firms. It plans to invest these in setting up 14 warehouses in key cities and acquire larger aircraft. Elbee Express, which offers an integrated express service network for the distribution of consignments, documents, parcels and commercial goods covering 11,600 locations in 1,645 cities and 643 towns in India, has invested significant resources in state-of-the-art customer service centers and staff training, to ensure high and efficient service levels.

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Conclusion There are many risks and obstacles for companies attempting to enter the market — the industry suffers from congestion, fragmentation, over-regulation, a weak transport network, inadequate infrastructure, complex tax laws and insufficient technological aids — but all this hasn’t prevented a host of logistics operators from establishing a growing presence in the market.

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The DHL brand was further strengthened by Deutsche Post World Net's acquisition of Exel in December 2005. it had around 111. the rapid delivery of documents and shipments by airplane.With this concept. In 1969. By the end of 2002. DHL. The company expanded westward from Hawaii into the Far East and Pacific Rim. DHL was 100% owned by Deutsche Post World Net. The founders began to personally ship papers by airplane from San Francisco to Honolulu. Deutsche Post World Net became the major shareholder in DHL. By 1988. the three partners took another small step that would have a profound impact on the way the world does business. Larry Hillblom and Robert Lynn. then the Middle East. In 2003. The DHL Network continued to grow at an incredible pace. Exel primarily offers transport and logistics solutions for key customers. Deutsche Post World Net consolidated all of its express and logistics activities into one single brand. At the beginning of 2002. beginning customs clearance of the ship's cargo before the actual arrival of the ship and dramatically reducing waiting time in the harbour. Africa and Europe. Adrian Dalsey.000 employees in 135 countries. 6 .000 employees. just months after the world had marvelled at Neil Armstrong's first steps on the moon. DHL was already present in 170 countries and had 16. To name a few: Exel: at the time Deutsche Post World Net acquired Exel in December 2005. a new industry was born: international air express.Company Profile DHL is the first letters of the last names of the three company founders. The DHL expertise is pooled from a number of companies acquired by Deutsche Post World Net.

DHL is the global market leader in international express. DHL Freight covers the former DHL's non-documents and non-parcels business as well as the former Danzas Euro cargo road transport business.with more highly experienced professionals at more locations in more countries than any other provider. The new DHL brand architecture With the acqusition of Exel plc in December 2005. It is also the world's number 1 in ocean freight and contract logistics. To cover all of customer service needs. DHL goal is to build strong. Deutsche Post World Net (currently known as Deutsche Post DHL) further strengthened its logistics power. As a result. across all operations. overland transport and air freight. DHL move goods by road. rail and a combination of the two.from express document shipping to supply chain management. DHL is now operating with two new logistics brands: DHL Supply Chain and DHL Global Forwarding. DHL offers a full range of customised solutions . 7 . DHL operates under five specialist divisions DHL Freight DHL Freight offers international and national transport solutions for part and full load in Europe. Logistics DHL is the global leader in logistics . long-term partnerships with customers by providing world class services.

price 8 . DHL Global Mail Global Mail offers comprehensive international mail services and provides outstanding expertise in international direct marketing services and publication solutions. DHL offer top-flight value-added services such as finishing. DHL Express is the result of the consolidation of the former DHL Worldwide Express business and the Deutsche Post Euro Express parcels business and offers Same Day. Express. With DHL. technology/aerospace. DHL Global Forwarding DHL Global Forwarding is the market leader in air and ocean freight and a project logistics services provider operating worldwide. global logistics tasks: DHL Supply Chain provides customer with customized. co-packing. DHL Supply chain Regardless of whether customer operate in the healthcare. DHL can handle all of complex. customer can rely on one company for all their express shipment needs .whether local or global.000 destinations worldwide. giving an excellent market position and providing customers with a unique service dimension worldwide.DHL Express DHL Express is the perfect partner for all worldwide express and parcel needs. Parcel and Freight services.000 offices and more than 120. As well as core procurement logistics. A range of value-added services rounds off the product and service portfolio. automotive/industrial or retail/consumer/fashion sectors. DHL Network covers over 4. warehousing and sales logistics operations. IT-based solutions along the entire supply chain. DHL provide the following option to their customer for the service they are looking for.

Supply Chain model 9 . aftermarket activities involve the maintenance and repair. It typically starts by sourcing raw materials or semi-finished goods. globally. or the return and recycling. billing.0 .by offering the most comprehensive suite of services and becoming the only genuine one-stop source for logistics solutions. wholesalers or direct to consumers' homes or business premises.0). A supply chain is the flow of goods.all the way to sales promotion and financial services.labelling. Diagram 1. Supply chain planning optimises overall flows and inventories. of products at the end of their life. information and finance. which are scheduled and transported into factories to be made into finished products (see Diagram 1. order processing . These then pass through warehouses or distribution centres and are delivered to retailers. Finally. DHL goal is nothing less than to transform the logistics industry and to deliver beyond customers' expectations wherever and whenever they need . by balancing resources with demand at all stages.

cancellations or messages. Gateway. Booking: Booking is the standardized process of accepting and processing shipment pick-up requests. Export: 10 . Outbound: Outbound is the standardized process of preparing shipments for onward transportation to the next or final destination by the local Service Centers. Operations and Hub. Dispatch: Dispatch is the standardized process of allocating and submitting pick-up requests to couriers and communicating any pick-up changes. They are Courier. Pick-up: Pick-up is the standardized process of accepting shipments for carriage (including packaging and paperwork) from customers.TSP: Shipment Movement Process Booking Dispatch Pick Up O/Bound Export Transfer Import I/Bound Delivery Four main functional teams of DHL staff are involved during these 9 stages to capture the various checkpoints which provide information on a shipment’s status.changes and cancellations from customers.

Transfer: Transfer is the standardized process for Break-bulk. Delivery: Delivery is the standardized process oftransferring the custody of shipments to consignees or the nominees. Inbound: Inbound is the standardized process of sorting ahipments to delivery routes at the local Service Center.trans-shipment and/or reconsolidating shipments and handling units at an intermediate point in the network.Export is the standardized process for consolidating international shipments to a moment. 11 . Courier Couriers have direct contact with our customers and therefore their interaction with our customers is either during the pick-up of a shipment or during the delivery of a shipment. Import: Import is the standardized process for clearing international shipments for Inbound or to Bond management(for shipments not cleared on arrival at destination).lodging shipments with handling agents/carriers and advising destination of flight information.

the courier scans the shipment to capture the PU – Shipment Pickup checkpoint. the courier enters the OK – Delivery checkpoint that reports the successful delivery of a shipment. The courier may capture other checkpoints for events that are variations to the generic shipment movement process flow. Courier Checkpoint List Checkpoint BA – Bad Address Description Reports that a delivery cannot be completed without better address information CA – Closed on Arrival Reports that a receiver’s business premises were closed and delivery could not be completed CM – Customer Moved Reports that the receiver is no longer at the delivery address shown on the AWB DD – Delivered Damaged Reports that the receiver has accepted delivery of a shipment but considers the shipment damaged or contents missing at time of delivery ND – Not Delivered Reports that a shipment was with a delivery courier 12 .As soon as a shipment is picked up from the customer. All checkpoints that may be captured by a courier are listed in the table below. When a shipment is ready for delivery. the courier scans the shipment to capture the WC – With Delivering Courier checkpoint. This reports that a shipment has been allocated to a delivery route and a delivery attempt will be made. Upon the successful delivery of a shipment.

but with one or more shipment pieces unavailable at the time of delivery PU – Shipment Pick-up Reports the physical receipt of a shipment from the shipper RD – Refused Delivery Reports that the receiver has refused to accept delivery of the shipment RT – Returned to Consignor SI – Security Inspection Reports that a shipment is being returned for a specific reason to the shipper or DHL origin Reports that all pieces of a shipment have been inspected by DHL for security purposes WC – With Delivering Courier Reports that a shipment has been allocated to a delivery route and that a delivery attempt will soon be made. (Delivery details are expected on the same day as the shipment is reported out for delivery) 13 .Courier Checkpoint List Checkpoint Description but delivery has not been attempted or completed and where no other service incident applies NH – Not Home Reports that no one was available or authorised to accept the shipment at the time delivery was attempted to the receiver’s private address or temporary accommodation (hotel) OK – Delivery PD – Partial Delivery Reports the successful delivery of a shipment Reports that a delivery has been made and signed for.

Operations Checkpoint List Checkpoint AD – Agreed Delivery Description Reports that a shipment has arrived at the destination Service Centre and is awaiting it’s expected and scheduled delivery date AR – Arrival in Delivery Facility BA – Bad Address CA – Closed on Arrival Reports the arrival of a shipment at the destination delivery facility Reports that a delivery cannot be completed without better address information Reports that a receiver’s business premises were closed and delivery could not be completed CC – Awaiting Consignee Collection CO . a batch of shipments in a container). The checkpoints to be captured during this phase of the shipment movement process in Operations are listed in the table below. Checkpoint capture in these facilities may be at individual shipment level or at a handling unit level (eg.Transport Collect Reports that the shipment is awaiting receiver collection at a DHL location as per customer request Reports that a shipment is to be billed Transport 14 . for delivery after having completed import procedures.Operations Operations are facilities where shipments are prepared for export or.

Operations Checkpoint List Checkpoint Description Collect and to indicate the billing amount for the shipment CS – Closed Shipment Reports that a shipment is missing after all standard efforts have been made to locate it CU – Confirmed Uplift Reports that the handling unit/shipment uplift by a movement operator has been confirmed to DHL. This may or may not affect the Service Commitment for each shipment DI – Customer Duty and Tax Invoice DF – Depart Facility Reports that an invoice has been created for duty/tax/Transport collect charges for a shipment Reports the departure of a shipment from the control of a DHL facility DM – Damaged Reports damage to all or part of the shipment or packaging. May or may not result in a service failure DS – Destroyed/Disposal Reports that a shipment has been destroyed under instructions or as part of standard procedures FD – Forwarded to Third Party Delivery AgentDelivery Details Expected HI – Lodged into held Inventory Control HO – Lodged out of held Inventory Control Reports the hand over of a shipment to a third party delivery agent when DHL has contracted for delivery details to be returned by the agent Reports that a shipment has been lodged into the held inventory control section Reports that a shipment’s “held in inventory” status has been resolved and the shipment is ready to be taken out for further processing HP – Held for Payment Reports that a shipment is on hold at a DHL facility pending payment of any applicable fees. and that delivery has not as yet been attempted 15 .

despite the correct destination service area code present on both the Airwaybill and the package OH – On Hold Reports that the progress of a shipment has been suspended. shipment or product label MD – Missed Delivery Cycle MS – Missort Reports that a shipment has missed the current courier delivery cycle Reports that a shipment has been incorrectly sorted. and that the shipment is being held securely at a DHL facility until progress can continue OK – Delivery PL – Processed at Location RT – Returned to Consignor RW – Reweigh Reports the successful delivery of a shipment Reports the outbound processing or transfer of a shipment and its location Reports that a shipment is being returned for a specific reason to the shipper or DHL origin Reports that a piece has been reweighed during the outbound process SC – Service Changed Reports that a change in service has been made to a shipment in transit SI – Security Inspection Reports that all pieces of a shipment have been inspected by DHL for security purposes SM – Scheduled for Movement SS – Stopped Shipment Reports that a shipment is now scheduled to move on a specified date and time Reports that a shipment’s progress has been stopped 16 .Operations Checkpoint List Checkpoint IA – Image Available Description Reports that images of shipment paperwork have been made available to the network MC – Miscode Reports that a shipment has been received at a DHL Facility with an incorrect service area code shown on the Airwaybill.

Operations Checkpoint List Checkpoint Description by an official government authority and that the shipment will not be delivered or returned to DHL ST – Shipment Intercept Reports that a special handling instruction has been raised against a shipment TP – Forwarded to Third Party-No Delivery Details Expected Reports that a third party will deliver a shipment. No delivery details are expected 17 .

Many of the procedures at Gateway involve a third party such as customs. The checkpoints to be captured by Gateway are listed in the table below. Gateway Checkpoint List Checkpoint AF – Arrived Facility Description Reports the arrival of a shipment at a DHL transit facility BL – Bond Location Identifies the exact physical storage location of the shipment in the bond facility BN – Customer Broker Notified Reports that the customer’s broker has been contacted to arrange for the clearance of the shipment BR – Cleared and Delivered by Customer’s Broker CD – Controllable Clearance Delay Reports the transfer of responsibility for a shipment and related documentation to a customer nominated broker Reports that a shipment’s progress has been delayed because import. other government regulatory authorities. export or transit clearanceprocessing requirements cannot be completed due to a reason that has been agreed to be within DHL’s 18 . airlines and airport ground-handling agents.Gateway Gateway is the DHL facility that processes shipments through import and export procedures.

May or may not result in a service failure DS – Destroyed/Disposal Reports that a shipment has been destroyed under instructions or as part of standard procedures ES – Entry Submitted Reports that a completed customs entry has been submitted to Customs for processing HI – Lodged into held Inventory Control HO – Lodged out of held Inventory Control Reports that a shipment has been lodged into the held inventory control section Reports that a shipment’s “held in inventory” status has been resolved and the shipment is ready to be taken out for further processing HP – Held for Payment Reports that a shipment is on hold at a DHL facility pending payment of any applicable fees. This may or may not affect the Service Commitment for each shipment DF – Depart Facility Reports the departure of a shipment from the control of a DHL facility DI – Customer Duty and Tax Invoice DM – Damaged Reports that an invoice has been created for duty/tax/Transport collect charges for a shipment Reports damage to all or part of the shipment or packaging.Gateway Checkpoint List Checkpoint Description control CR – Clearance Release CS – Closed Shipment Reports a shipment’s release from clearance processing or from a bonded area Reports that a shipment is missing after all standard efforts have been made to locate it CU – Confirmed Uplift Reports that the handling unit/shipment uplift by a movement operator has been confirmed to DHL. and that delivery has not as yet been attempted 19 .

and that the shipment is being held securely at a DHL facility until progress can continue PL – Processed at Location RR – Response Received Reports the outbound processing or transfer of a shipment and its location Reports that Customs has provided or updated a status for a house airwaybill entry which has been submitted to Customs for processing RT – Returned to Consignor SC – Service Changed Reports that a shipment is being returned for a specific reason to the shipper or DHL origin Reports that a change in service has been made to a shipment in transit SI – Security Inspection Reports that all pieces of a shipment have been inspected by DHL for security purposes SM – Scheduled for Movement SS – Stopped Shipment Reports that a shipment is now scheduled to move on a specified date and time Reports that a shipment’s progress has been stopped 20 .Gateway Checkpoint List Checkpoint IC – In Clearance Processing MC – Miscode Description Reports that a declarable shipment is under routine clearance processing Reports that a shipment has been received at a DHL Facility with an incorrect service area code shown on the Airwaybill. despite the correct destination service area code present on both the Airwaybill and the package NA – Not Arrived Reports that a pre-alerted WPX shipment has not physically arrived on the advised linehaul movement OH – On Hold Reports that the progress of a shipment has been suspended. shipment or product label MS – Missort Reports that a shipment has been incorrectly sorted.

Many of the procedures at the Hub involve a third party such as airlines and airport ground handling agents. This may or may not affect the Service Commitment for each individual shipment UD – Uncontrollable Clearance Delay Reports that a shipment’s progress has been delayed because import. Hub Checkpoint List Checkpoint AF – Arrived Facility Description Reports the arrival of a shipment at a DHL transit 21 .Gateway Checkpoint List Checkpoint Description by an official government authority and that the shipment will not be delivered or returned to DHL ST – Shipment Intercept Reports that a special handling instruction has been raised against a shipment TD – Transport Delay Reports that a delay has occurred to a handling unit during transport between two DHL facilities. shipments are received on behalf of a Gateway. The checkpoints to be captured by the Hub are listed in the table below. export or transit clearanceprocessing requirements cannot be completed due to a reason that has been agreed to be outside of DHL’s control Hub The Hub is the facility where shipments are consolidated for loading onto departure flights or.

shipment or product label MS – Missort Reports that a shipment has been incorrectly sorted. May or may not result in a service failure DS – Destroyed/Disposal Reports that a shipment has been destroyed under instructions or as part of standard procedures MC – Miscode Reports that a shipment has been received at a DHL Facility with an incorrect service area code shown on the Airwaybill. and that the shipment is being held securely at a DHL facility until progress can continue PL – Processed at Location Reports the outbound processing or transfer of a shipment and its location 22 . This may or may not affect the Service Commitment for each shipment DF – Depart Facility Reports the departure of a shipment from the control of a DHL facility DM – Damaged Reports damage to all or part of the shipment or packaging. despite the correct destination service area code present on both the Airwaybill and the package OH – On Hold Reports that the progress of a shipment has been suspended.Hub Checkpoint List Checkpoint Description facility CS – Closed Shipment Reports that a shipment is missing after all standard efforts have been made to locate it CU – Confirmed Uplift Reports that the handling unit/shipment uplift by a movement operator has been confirmed to DHL.

Hub Checkpoint List Checkpoint RT – Returned to Consignor SC – Service Changed Description Reports that a shipment is being returned for a specific reason to the shipper or DHL origin Reports that a change in service has been made to a shipment in transit SI – Security Inspection Reports that all pieces of a shipment have been inspected by DHL for security purposes SM – Scheduled for Movement Reports that a shipment is now scheduled to move on a specified date and time 23 .

This may or may not affect the Service Commitment for each individual shipment Research Objective and Its Background 24 .Hub Checkpoint List Checkpoint SS – Stopped Shipment Description Reports that a shipment’s progress has been stopped by an official government authority and that the shipment will not be delivered or returned to DHL ST – Shipment Intercept Reports that a special handling instruction has been raised against a shipment TD – Transport Delay Reports that a delay has occurred to a handling unit during transport between two DHL facilities.

many queries were raised regarding various technicalities and documents of the shipment. To find out the possible reasons causing such problems. shipment has to get the approval of customs inorder to clear the shipment on a particular duty.One of the major reason for the above problem was of improper documents submitted by DHL to the Mumbai customs.and suggest recommendations for the same. When the shipment arrived at the consignee country.Research Background: Clearance process is an important activity in the express company. In the express company clearance process involve the submission of the required paper work to the customs concerning to a particular shipment arrived (import) at the customs or the shipment that need to be sent to other country (export). To identify the Non-Value added activities in the respective teams. To suggest recommendations 25 • • .the Bond Rate(number of Shipment remain unclear from customs) of DHL increased.Due to this reason. To study the Documents preparation process carried out by respective teams.In the process of clearance from the Mumbai customs. Research Objective: • • • To study the clearance process.In DHL shipment documents are submitted by Clearance support agents(CSA) along with the help of Skyline team and Clear on Arrival team(COA). The project given to me was to identify the Non-Value added activities in process of each team and the time they take for submittting documents of each shipment. So it is important to understand clearance process followed in an organization and what are the activities involved in it.

NCG(Network control group). For understanding the clearance process & to improve the process. DHL express is divided into separate departments or parts like COB(Clearance on board). so information was collected from each department. More emphasis was given on Primary Method of data collection. An activity related to information from different departments with each other was better understood from the IT Department. CSA(Clearance support agent).Research Methodology DHL express is divided into separate departments or parts like COA(Clearance on Arrival). BOE (Bill of entry) filling. BOE (Bill of entry) filling. The clearance process is undertaken by all of the above teams. the information was collected from the employees of each department. Operations & Warehouse. • • • As there are various departments in the express unit. both Primary as well as Secondary data collection methods were adopted. Primary Data Collection Method: • • The Primary Data was collected by personal interaction with responsible employees and through field work. NCG(Network control group). The entire custom clearance process was understood with the help of the custom officials in the courier department. Operations & Warehouse. Every department is important to accomplish activities. CSA(Clearance support agent). 26 .

• PC DOC another software was used to get the print of the original DDR. software named Importing Accounting System (IAS) was used. Companies’ websites provided information mainly on services offered. From websites. The software IAS helped to give every minute detail like the procedures. date and time of each procedure carried on the shipment from the time it was booked at its origin to the time it was delivered to customer. Gone through the software Special Clearance Module(SCM) inorder to study the status of current and past shipment details. • 27 . In order to understand the core reasons causing the problems.Secondary Data Collection Method: • • For Secondary Data Collection websites were used. From Customs websites information on customs rules and regulations was collected. a rough idea regarding services offered and their management was studied. • • • • • Also websites of Customs and of courier companies were used for the data collection. But the actual information was collected through the employee of the various departments. Financial Reports of the last three months of the company was studied to understand the problems in the billing process of the company.

they are regulated by the law of that country. Natural Laws – Protect nature and the environment International laws – Eg.CUSTOMS CLEARANCE PROCESS Customs basic Whenever any good(s) enter or leave a country. Narcotics. Why are goods regulated? • • • • Safeguard industry – Safeguard domestic market from foreign competition. Illicit Films. In India. WTO Due to these regulations. Religious grounds. thereby restricting unwanted competition Prevention of Illegal and Illicit commodities– Drugs. goods crossing over international boundaries are regulated Import or Export of Goods is regulated by whom: - • • Director General of Foreign Trade (DGFT) under the Ministry of Commerce and Trade (MoC&T) Central Board of Excise and Customs (CBEC) under the Ministry of Finance (MoF) 28 . Smuggling. Custom Regulations are governed by the Indian Customs Act 1962.

World Trade Organisation (WTO) and General Agreement for Trade and Tariffs (GATT) Regulatory Bodies: Ministry of Commerce & Trade: Is responsible for the country‘s external trade and related matters connected with it. in particular the Export Imports (EXIM) Policy of the country also known as Foreign Trade Policy. issue of Advance Release Orders and other matters specified in the import-export Policy & Procedures (EXIM policy). The DGFT is responsible for implementing policies laid down by the Ministry of Commerce and Trade. grant of import-export Licenses. Central Board of Excise and Customs (CBEC): Central Board of Excise and Customs (CBEC) is a part of the Department of Revenue under the Ministry of Finance. Central 29 . The DGFT is responsible for actually framing the various laws to promote trade as well as safeguard the industry. prevention of smuggling and administration of matters relating to Customs. It announces the budget in every financial year depending upon which.• • Allied Laws & Regulations of other related Government Departments / Ministries. duties and taxes change every financial year. Director General of Foreign Trade (DGFT): Is primarily responsible for the issuance of import-export Code numbers. It deals with the tasks of formulation of policy concerning levy and collection of Customs and Central Excise duties. Ministry of Finance: Has overall responsibility of Customs rule regulation and procedure. It formulates policies in the sphere of foreign trade.

4) If it comes under the purview of the free policy. commercial & business interests & combating economic & commercial fraud Protecting Domestic Industry Collection of duties & taxes & compliance to fiscal & statistical regulations Regulating trade with other countries in applying national rule. 3) The commodity is then classified according to the ITC code. The CBEC implements the policies relating to customs and excise laid down by the Ministry of Fina Scope of the customs: Objectives of Customs Department: • • • • • • • Protection of national economic. that will not be cleared by Customs and the action will be taken as per that law). Canalized. (Eg: If a drug is prohibited under a certain act. The broad process is as follows:1) The authorities ensure that the various laws are being abided.Excise and Narcotics to the extent under CBEC's purview. 30 . Restricted. and Free). are being followed. particularly in drugs & other threats to society Check and oversee the laws that have been framed by the GOI and the DGFT. Process for clearance followed by Custom Authorities: When goods enter the country. Facilitating trade with other countries Combating illicit trafficking. 2) The commodity is also checked according to the policy it falls under (Prohibited. the Custom Authorities will follow regulatory clearance procedures to oversee the entry of the goods and for calculation of the duty. then the allied laws are checked.

without physical checking of the goods. it is called the ‘Tariff Schedule’. etc. metals. machinery. Classification of Goods: 1) The basic reason for classification is for understanding the nature of the goods. It is required that such goods which enter the international trade are grouped into exclusive similar categories / class of goods [chemicals. textiles.] and enumerated on the basis of well defined criteria. 3) The sub division and enumeration of all goods entering International trade along with well defined rules of interpretation. As the tariff is normally a part of the Tariff Act in a country. There are various methods of classifying the goods: According to the Policy: • • • Prohibited goods Restricted goods Canalized goods 31 . 4) Governments utilizes the nomenclature as the basis for prescribing appropriate duty on goods imported / exported.5) The duty is calculated based on the type of commodity as per the ITC classification 6) The commodity is cleared by the customs after ensuring duty payment. 2) Goods that enter international trade are not charged to a single rate of customs duty by the importing / exporting country. form what is normally termed as the nomenclature of goods. in a country. The nomenclature combined with the duty rates is called the Tariff.

Courier Mode • For regulating such imports and exports. Any goods not within Courier Mode regulations go under the Cargo Mode.free goods Dimensions: No Dimension limit Two Modes of clearance: 1. Authorized couriers (Such as DHL) can clear the shipment • Import:Except for certain excluded categories.00.000 Goods: Samples (<INR 25000) Gifts (<INR 50000) Dimensions: <=118x88x120 cm Cargo Mode Weight: No weight Limit Value: No value Limit Goods:Commercial & Non commercial Shipments. the Government has framed the Courier Imports and Exports (Clearance) Regulations. Modes of Clearance Modes Courier Mode Weight: <70 kgs. • Export:All goods are allowed to be exported though courier mode. • Courier mode can have 1 BOE for 10 shipments. Value: <INR 1. all goods are allowed to be imported through the courier mode.• Free goods According to the nature of the commodity this is done through the ITC (International Tariff Code) which is a 8 digit harmonization code. 1998. except for certain excluded categories. 32 .

000/. Paperwork required for Customs Clearance: 1) Commercial Invoice 2) AWB (Airway Bill)/ Shipping Bill 3) Catalogue or Write up 4) BOE (Bill of Entry) 5) Packing List 6) Any duty exemption certificates 33 . • Import:Goods be imported through cargo are (a) animals and plants. DEPB. (b) perishables. gold or silver in any form. such as Drawback.2. 29 and 38 of the Customs Tariff. (d) precious and semi precious stones. EPCG etc. Other exclusions form courier mode include goods where the value of the consignment is above Rs. DEEC. (c) publications containing maps depicting incorrect boundaries of India. Cargo Mode • Cargo mode requires a separate formal BOE for each shipment. Only the CHA can clear the shipment.25.and transaction in foreign exchange is involved. and (e) chemicals falling within Chapters 28. • Export:Goods to be exported through cargo mode are those which attract any duty on exports or those exported under export promotion schemes.

7) GATT Declaration 8) IEC (Import Export Code) 9) Purchase Order Copy 10)Authorization letter Clearance Process Followed by DHL DHL follows Global Standard Clearance Process which consists of 5 stages as follows: DATA ADMINISTRATION CLASSIFICATION CLEARANCE SUPPORT BROKER REVIEW DECLARATION 34 .

1) Data Administration DATA CLEANSING • • • • • • • Shipment Movement Ensure shipment information is complete and accurate Full names & addresses Check against registered names / addresses (where required) Commercial Ensure commercial information is complete & accurate Accurate reflection of commercial invoice Multi line information is required • DATA CLEANSING PROCESS • Do data cleansing from the Customs Alert – do not wait for WPX alert • • • • Retrieve documents from Clear in the Air (CIA) Check for accuracy in ALL key fields Complete ALL multi-line information After Data Cleansing. the data should be 100% accurate including details of ALL line items • Classifier and / or Broker should not need to refer to images CLEARANCE AGENTS are responsible for Data Administration 35 .

• If a shipment record is not available (example over-landed shipments). correct the data elements in the shipment records to ensure that the data elements in the records are in accordance to the approved format and structure acceptable to the regulatory agencies and systems. collation. the DAA will ensure that multi-commodities in a shipment are recorded in the shipment record. the DAA will assist to create an initial shipment record 36 . including CIA images. The tasks of the DAA include: • Validate and if needed. The DAA will verify the actual number of shipment commodities from the commercial documents available in the shipment. • Verify and if needed. The DAA also assists with general administrative duties related to customs clearance such as the printing. correct the shipment details in the shipment record to ensure that the information in the shipment records are in accordance to the information available in commercial documents provided by the customer and/or customer instructions available in DHL’s Customer Database Records Note: In relation to the task stated above. and Customer Database Records).The Data Administration Agents (DAA) are responsible for preparing shipment records (or files) for customs clearance entry by ensuring that the information available in the shipment record reflects the available data to DHL (in DHL systems. distribution and filing of customs clearance-related documentation ( facility size relative ).

g.(or file) for the over-landed shipment using the commercial documents available on the physical shipment • Assist in administrative duties within the clearance department such as the printing. Calculate duty/tax Check compliance forProhibited & Restricted Commodities Update Categarization CLASSIFIERS are responsible for Classification The Classification Agents (CA) are responsible for classifying the commodities in a shipment in accordance to the national tariff tables. • Perform co-ordination duties within the clearance department as assigned by the duty supervisor. between the clearance department and NCG. collation and distribution of the required customs documentation needed for lodgment of a customs entry.g. and determining a preliminary assessment of the duties and taxes payable for shipments imported/exported through DHL Express. or warehouse operations or the accounting department ) and/or external agencies (e. and/or between the clearance department and other DHL departments (e. • Perform filing and archiving of customs documents for shipments that have been cleared by DHL ( facility size relative ). between Customs and the DHL clearance department) 2) Classification • • • • • • Auto Classification Manual Classification Goods can be manually classified by Classifier. 37 .

g. The CSA will facilitate the clearance of DHL shipments by communicating with customers the clearance requirements and 38 . and (3) Applicable customer instructions recorded in the Customer Instruction Database Records. taking into consideration: (1) Country of origin for preferential treatment. and determining the corresponding duty and tax rates. countervailing or anti-dumping taxes). • Compute a preliminary assessment on the duty and taxes payable to the external agencies (including any additional taxes e. and fees or charges payable to DHL 3) Clearance Support • • • • • • Contact DHL Origins Contact Destination Customers Permit and licence handling Contact Regulatory Authorities Other Special Handling Third party broker handover CLEARANCE SUPPORT AGENTS are responsible for Clearance Support The Clearance Support Agents (CSA) will act as the “voice” of the clearance department to external parties. (2) Concessions or Exemptions applicable to the shipment commodity or importer/exporter.The tasks of the CA include: • Determine the shipment value in accordance to the local valuation guidelines provided by the local authorities • Determine and classify the shipment commodities in accordance to the national tariff classifications tables available.

any discrepancies preventing the successful clearance of these shipments. He/She will coordinate with the customer to obtain the necessary shipment information and documents for the clearance department to successfully clear the shipments through the regulatory agencies when the existing information or documents are insufficient to permit successful clearance of the shipments. • Review the “Shipment in Bond” inventory report to ensure that these shipments are worked on a daily basis. • Maintenance of the customer instructions and customer general information databases to ensure that the databases are up to date and accurate 4) Broker Review • • • • Review and finalise declaration prior to lodgement Risk management based Final categorisation Create appropriate declaration 39 . The tasks of the CSA include: • Contact DHL customers (both origin and destination) for clearance-related shipment information or documents when the existing documents or information available are not sufficient for DHL to clear the shipments • Provide customer with duty and tax advice notification and to seek payment approval from these customers when the duty and tax amounts payable exceeds DHL’s payment limits • Collate the clearance documents and coordinate handover of these documents to the assigned broker for BTO shipments.

and that the regulatory compliance requirements of the governmental agencies and customer instructions have been satisfied. Product and Commodity Databases) . the information in the shipment record is reasonably accurate and complete. the Broker will ensure that the entry is performed in a timely manner in accordance to DHL performance standards (e. COA and BOS) and that both the regulatory compliance requirements and the instructions of customers (if any) are met. approve and submit a shipment declaration for the shipment after satisfying himself that the preliminary assessment performed by the Classification Agent is in order. exported or transshipped through DHL. In lodging this entry.g. including approving any additions 40 . • Ensure that the duty and tax payment approvals are obtained before submission of the customs declaration • Approve and submit the cargo manifest to the appropriate agencies in accordance to the local requirements • Maintenance of the tariff databases (National. The tasks of the Broker include: • Ensure the timely submission of customs entries in order to attain the clearance performance standards set for the location • Validate.• Assemble supporting paperwork The Broker is responsible for lodging customs entries for shipments that are imported.

to these databases. • Provide technical advice on customs related matters to customers (internal and external). and ensure that compliance is maintained 5) Declaration • • • • • Lodge declaration with Customs Various declaration types Obtain clearance status Pay Customs Update other systems e.g. Finance. including solutions design inputs for new DHL products • Assist in the preparation of clearance-related reports as assigned by the Customs Clearance Supervisor or Manager • Provide assistance as when required in regulatory audits performed on DHL customs clearance operations • Assist as required by clearance management to prepare for TSP certification. Shipment Movement BROKERS are responsible for Broker Review and Declaration 41 . to ensure that the databases are up to date and accurate.

my project comes under Classification and Clearance Support.there are 2 different teams known as Clear on Board(COB) and Clearance Support Agents(CSA).Thus. 42 .Under this. the purpose of each stage is as follows In the above 5 stages.

00 hrs Update ECE Detention Shipments Shipments Download images of AWB and Invoice through CIA Print BOE Attach BOE to images Update ICD and CPF in ECE Prepare BOE for assessment 43 .Clear on Board(COB) COB Clearance Prior Clearance Formal Clearance Hold/Detained Hold Shipments Prior Clearance • • • • • • • Data is received at 14.

• • • Assessment of BOE Duty payment preparation Re updatation in ECE Shipments on Hold and Detained Shipments Any shipments left after prior clearance ie they are not cleared. follow the hold shipment process 1. Hold Shipments • • • • • Prepare BOE for assessment Update ICD and CPF in ECE Assessment of BOE Detention (Warehouse deposit) Duty preparation Any shipments left after Hold shipment process ie they are not cleared. follow the detained shipments clearance process 2. Detention Clearances • • • • Examination Assessment Duty Preparation Clearance (Gate pass) Formal Clearance 44 .

The CSA facilitates the clearance of shipments by communicating with customers the clearance requirements and any discrepancies preventing the successful clearance of these shipments. to obtain the necessary shipment information and documents for the clearance department to successfully clear the shipments through the regulatory agencies when the 45 . Purpose The objective of the document is to give an understanding of the working of the CSA and the functions and activities performed by them.For Formal Clearance. 1200. all documents are handed over to the Broker for Broker Clearance for which DHL levies a charge of Rs. They coordinate with the customer. Clearance Support Agents Introduction This document deals with the Clearance Support Group Agents (CSA) who form an integral part of the Clearance Department as they communicate and co-ordinate with DHL customers. Basic Definitions • Clearance Support Group Agents (CSA) are those that act as the voice of the clearance department to external parties.

These calls are made everyday. Overview of Activities performed by CSA • Clearance related shipment information CSA contact the customers at both. is not sufficient to clear the shipments. 46 . • Seek payment approval They provide the customer with duty notification and seek payment approval from these customers when the duty and tax amounts payable exceed DHL payment limits. • Repeated Reminders They send reminders and make repeated calls to the customer when shipments are held by customs due to insufficient paperwork or due to non-payment of a large duty amount. the origin and destination for any kind of clearance-related shipment information or documents when the existing documents or information available. which contain the details of the various shipments that are held by the customs due to various reasons. till the customer reverts and completes the necessary formalities or till such time as NCG receives the message so as to abandon the shipment. • Detention Receipts (DR) are receipts. which exceeds DHL payment limits.existing information or documents are insufficient to permit successful clearance of the shipments.

• BTO shipments Collate the clearance documents and coordinate handover of these documents with the assigned broker for BTO shipments. • Maintain database They maintain databases of customer instructions and customer general information to ensure that the databases are up to date and accurate 47 . • Shipment in Bond Review the “Shipment in Bond” inventory report to ensure that these shipments are worked on a daily basis.

certain issues were found out in the process In COB Team • • • • • Improper Checking of CPF Approximate entry of Freight details Putting shipment on Hold Lack of cooperation between COA team member and CSA Arguments on CTH details among themselves In CSA Team • • • • • Lack of time management Number of calls are made to the consignee for asking required documents Lack of co-ordination between CSA and clearance team on field Arguments between CSA and Skyline team member on BoE CSA's don’t pick up consignees calls or incoming calls .Issues Identified After Studying the complete Process of Import Clearance.

In case of regular BoE. Updating the database of customer consistently can be useful in long run. pressure is increasing on CSA's and because of this. Team should set some target calls per day and based on that each CSA should be given average of 50 calls per day. About 3-4 hours of her time can be saved by doing this. Sufficient backup must be available in case of hardware failure such as if a printer is not functioning. In order to bridge the gap between the two. Communication gap between NCG and delivery team causes release of shipments duty free even if they bear duty due to delay in the billing. or updating others regarding the status of their BoE. the first process before billing can be the identification and segregation of dutiable goods and separating them from non dutiable ones. the other must be used. there should 1 person in a team to whom all the information about the BoE should be given and all the other people should approach him for any queries rather then disturbing others. Technical Suggestions 1. team leader should distribute the the files to his team. this will help CSA to know who is preparing which BoE. she can utilized this time in preparing regular BoE and folders can be prepared by the people who make folders for regular BoE. the effectiveness of calls are going low. and for those files Skyline team leader should be a link between CSA and his team members. Due to large number of calls. . 2. This way they will concentrate on only these number of calls and inturn effectiveness will improve. A lady preparing Cargo BoE spend her half of the time in preparing folders.RECOMMENDATIONS Majority of their time gets utilized in explaining.

• .3. Maintaining the centralize database of the paper work required for the various type of shipment can be useful in the long run LIMITATIONS • As DHL counter present at the airport is the Customs controlled area it was difficult to get much information regarding rules and regulations which were largely • The relevant literature review on the billing process in DHL was not available. Primary data was collected only through interviews and observations and not by collecting first hand data through questionnaires.

I’m sure substantial progress can be made. If the above described points are allowed and followed (as a test drive). Some attention and carefulness is required to detect the problem at an early stage to eliminate it.CONCLUSION • • • • • The suggestions made above for the improvement of the process are feasible and can be applied with ease. The method described above does not require any substantial costs. . The study done can be useful as a part of a large level project for the overall improvement.

Examining officer.aspx Interviews Mr. Customs.com/act-regulations/customs-act-1962.psbedi.high.com/Exim/Guides/How-ToImport/Ch_19_Custom_Clearance_of_Imported_Goods. Mr. . Sanjay Matre.com/logisticsinfo_enter.dhl. Deputy Commissioner.htm http://www.dhl.co.infodriveindia.html http://exim.BIBLIOGRAPHY Websites http://www. Santosh Shelar.high.co. C S Mishra.in/publish/in/en/about/divisions. Mr.indiamart. Customs.in/publish/in/en/about/history.html http://www. Customs.html http://www. Appraiser.