Certificate in Export Import Management

CERTIFICATE IN EXPORT IMPORT MANAGEMENT IB SPECIALIZATION

Note: Assignment (60 marks) must be written within 6-8 pages. Answer all questions. Kindly
note that answers for 10 marks questions should be approximately 400 words. Each
question is
followed by evaluation scheme.
1 What is containerisation? Describe the advantages and disadvantages of
containerization.
Description of containerisation
Advantages and disadvantages of containerization
ANS:
Containerization
A container essentially can be called as equipment utilized to carry goods or store goods.
Based upon this concept of a container, we can say that containerization is technique or a
method of distributing goods in unitized form thereby making it convenient to evolve or
establish an intermodal transport system which can be a combination of railways, roadways,
waterways or airways. Containers are usually standard sized and are referred to 20 ft.
containers, 40 ft. containers etc.
The international organization has defined freight container as and article of transport
equipment

of a permanent character and accordingly strong enough for repeated use

specially designed to facilitate the carriage of goods by one or more modes of

transport without intermediate reloading

fitted with devices permitting its ready handling

so designed as to be easy to fill and empty

Having an internal volume of 1 m3 or more.

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

Standardization. Standard transport product that can be handled anywhere in the

world (ISO standard) through specialized modes (ships, trucks, barges and wagons) and
equipment. Each container has an unique identification number and a size type code.

Flexibility. Can be used to carry a wide variety of goods such as commodities (coal,
wheat), manufactured goods, cars, refrigerated (perishable) goods. Adapted containers for
dry cargo, liquids (oil and chemical products) and refrigerated cargo. Reuse of discarded
containers.

Costs. Lower transport costs due to the advantages of standardization. Low transport
costs; 20 times less than bulk transport. Economies of scale at modes and terminals.

Velocity. Transshipment operations are minimal and rapid. Port turnaround times
reduced from 3 weeks to about 24 hours. Containerships are faster than regular freighter
ships, but this advantage is undermined by slow steaming.

Warehousing. The container is its own warehouse; Simpler and less expensive
packaging. Stacking capacity on ships, trains (doublestacking) and on the ground (container
yards).

Security and safety. Contents of the container is unknown to carriers. Can only be
opened at the origin (seller), at customs and at the destination (buyer). Reduced spoilage
and losses (theft).
The main drawbacks of containerization are:

Site constrains. Large consumption of terminal space (mostly for storage); move to
urban periphery. Draft issues with larger containerships. A large post-panamax
containerships requires a draft of at least 13 meters.

Capital intensiveness. Container handling infrastructures and equipment (giant

cranes, warehousing facilities, inland road, rail access), are important capital investments.

Stacking. Complexity of arrangement of containers, both on the ground and on

modes (containerships and double-stack trains). Restacking difficult to avoid and incur
additional costs and time for terminal operators.

Repositioning. Many containers are moved empty (20% of all flows). Either full or
empty, a container takes the same amount of space. Divergence between production and
consumption at the global level requires the repositioning of containerized assets over long
distances (transoceanic).

Theft and losses. High value goods and a load unit that can forcefully opened or
carried (on truck). Vulnerability between terminal and final destination. About 10,000
containers are lost at sea each year (fall overboard).

Illicit trade. Instrument used in the illicit trade of goods, drugs and weapons, as well
as for illegal immigration. Concerns about the usage of containers for terrorism.

2 List out the various export promotion schemes currently available to exporters.
Explain MDA in detail.
a) List of various export promotion schemes
b) Description of MDA
ANS:
To achieve the objectives laid down under the Foreign Trade Policy 2004-09 and double
Indias percentage share of global merchandise trade by the year 2009, the government is
committed to providing a stimulus to exports through various export promotion schemes
from time to time. Details of the existing Export Promotion Schemes are as follows:

1.

Advance licensing scheme

2.

Duty Free Replenishment Certificate (DFRC) scheme

3.

Duty drawback scheme

4.

Export Promotion Capital Goods (EPCG) scheme

5.

Export Oriented Units (EOUs), Electronics Hardware Technology Parks

(EHTPs), Software Technology Parks (STPs) scheme

6.

Served from India scheme

7.

Target Plus scheme

8.

Duty Entitlement Pass Book (DEPB) Scheme

9.

Vishesh Krishi Upaj Yojana

Market Development Assistance (MDA) Scheme

Export promotion continues to be a major thrust area for the Government. In view of
the prevailing macro economic situation with emphasis on exports and to facilitate
various measures being undertaken to stimulate and diversify the countrys export
trade, Marketing Development Assistance (MDA) Scheme is under operation through
the Department of Commerce to support the under mentioned activities: (i) Assist
exporters for export promotion activities abroad (ii) Assist Export Promotion Councils
(EPCs) to undertake export promotion activities for their product(s) and commodities
(iii) Assist approved organizations/trade bodies in undertaking exclusive nonrecurring
innovative activities connected with export promotion efforts for their members
(iv)Assist Focus export promotion programmes in specific regions abroad like FOCUS
(LAC), Focus (Africa), Focus (CIS) and Focus (ASEAN + 2) programmes. (v) Residual
essential activities connected with marketing promotion efforts abroad.
1. Export Promotion continues to be a major thrust area for the Government. In view of
the prevailing macro economic situation with emphasis on exports and to facilitate
various measures being undertaken to stimulate and diversify the country's export
trade, Marketing Development Assistance (MDA) Scheme is under operation through
the Department of Commerce to support the under mentioned activities:
2. (i) Assist exporters for export promotion activities abroad
3. (ii) Assist Export Promotion Councils(EPCs) to undertake export promotion activities
for their product(s) and commodities ;
4. (iii)
Assist approved organization/trade bodies in undertaking exclusive
nonrecurring innovative activities connected with export promotion efforts for their
members ;
5. (iv)
Assist Focus export promotion programmes in specific regions abroad like
FOCUS (LAC), Focus (Africa), Focus (CIS) and Focus (ASEAN +2) programmes ; and
6. (v) Residual essential activities connected with marketing promotion efforts abroad.

7.

Exporting companies with an f.o.b. value of exports upto Rs. 15.00 crore in the
preceding year will be eligible for MDA assistance for participation in EPC etc. led
Trade Delegations/ BSMs/Trade Fairs/ Exhibitions.
8. Under Reverse trade visits for prominent delegates and Buyers (one person from
each organization) for participation in buyer cum Seller meets, exhibitions etc. in
India from the Focus Area Regions, exhibitions etc. in India, the foreign delegates/
buyer/journalists would be assisted in meeting their return air travel expenses in
economy excursion class upto the entry point in India. This would, however, be
subject to financing only the well planned participations wherein the potential of the
incoming delegate(s)/buyer(s)/journalist(s) have been screened by the concerned EPC
and territorial division.

3 What are the advantages and disadvantages of air freight as compared to sea
freight?
Describe Air Way Bill and its use.
Comparison of air and sea freight
Air Way Bill and its use
ANS:
When it comes to shipping your items for international move you have two options: shipping
by air or shipping by sea.
Air Freight is the quickest method and is usually reserved for your essential items like
clothing and small shipments you'll need promptly when you arrive.
To determine cost and shipping options visit the company's website for online quotes, rules
and regulations. Be sure you've calculated the dimensions of your packages and the
weight. Air shipment rates vary depending on the volume and weight and each company will
have a different policies regarding shipments.
Benefits of Air Freight

Speed: Clearly, air travel is one of the fastest ways to travel hence your items will
arrive faster and in a more timely manner than any other method.

Safety: Shipping on the ground provides opportunities for things to get lost or
damaged along the way. when shipping your goods by ground, they'll most likely be
transferred to different trucks and stored in a warehouse before it arrives at its
destination. This won't happen with air freight.

Less Damage: In addition to your packages being more secure when they're
shipped by air, there's less handling of the packages overall. You or your movers pack
up your items, they are placed in the air cargo area flown to their destination and
then picked up or delivered to you. Less hands will mean less damage overall.

Less Pit-Stops: There's a clear route from Point A to Point B when your items are
shipped by air. Planes can't make pit stops mid-flight to make transfers of items and
they won't have to travel from port to port to make deliveries along the way.

Disadvantages of Air Freight

Cost: Just as if you were going to buy a plane ticket for a trip, you'll expect to pay
more for a plane ticket than a train ticket or by driving yourself. Fuel costs, fees and
service demands all lead to higher prices for air freight.

Size Limits: Because your items are being shipped via plane, there are going to be
weight restrictions and limited space. You may only be able to ship certain items
because of those limits so you'll need to make sure that you plan accordingly.

Ocean Freight
Ocean freight is a less expensive method of shipping your goods internationally, but there is
a longer transit time. There are three methods of ocean freight shipping:

Lift Vans: for small amounts of household goods, around one or two rooms of
furniture.

Exclusive Containers: a sealed steel container for larger shipments

Shared Containers: an economical option for shipments too small to fill an entire
container, your items are consolidated with other shipments.

Although it does offer a longer transit time than air freight, it is still a safe means of
transporting your goods at a reasonable cost, which in turn makes it the preferred shipping
method for many customers.
Benefits of Ocean Freight

Cost: Compared to air freight, ocean freight services often don't cost much. By
opting for ocean freight shipping, you can save money making it more feasible to
stay within your moving budget. Depending on which option you choose and how
much you'll actually be shipping, ocean freight is generally the preferred method of
shipping internationally.

More Time: Because ocean freight offers longer transit time, you have more time to
prepare your new home for the delivery of your items. However, ocean freight
services aren't what they used to be, with technology constantly evolving, the travel
times are decreasing.

Ideal for Heavy Items: If you're going to be moving an entire house worth of items,
ocean freight is going to be your best option because of their size they are able to
carry larger quantities of items.

Environmentally Friendly: While this may not be at the top of your list when
choosing a shipping method the fact still stands that ocean freight is the more ecofriendly option.

Disadvantages of Ocean Freight

Time: One of the biggest disadvantages to using ocean freight is the time it takes to
receive your items. The speed of ocean shipping pales in comparison to the
convenience of overnight air freight, but as stated previously, with technology
advancing constantly, time gaps are shrinking.

Safety: Ocean freighters are constantly under threat of being attacked and boarded
by pirates. The pirates generally steal the cargo ships' contents, which often include
products that companies are waiting for and may also include your personal items.
The danger of crew members and passengers (if any) is always something to
consider when choosing your shipping method.

Contact International Sea & Air Shipping for more information about preparing and planning
for your upcoming international move.
Air Way Bill and its use
Type of bill of lading that serves as a (1) receipt of goods by an airline (carrier) and (2) as
a contract of carriage between the shipper and the carrier. It includes (a)conditions of
carriage that define (among other terms and conditions)
the carrier's limits of liability and claims procedures, (b) a description of the goods, and (c)
applicable charges. The airline industry has adopted a standard format for AWB which is
used throughout the world for both domestic and international traffic. Unlike a bill of lading,
an AWB is a non-negotiable instrument, does not specify on which flight the shipment will be
sent, or when it will reach its destination. See also forwarder's air waybill. Also called airbill
or air consignment note.
4 Explain the requirement of cushioning materials in export packaging. Describe
the main types of cushioning materials used and their application.
Description of requirement of cushioning materials
Main types of cushioning materials used and their application
ANS:
Package cushioning is used to help protect fragile items during shipment. It is common for
a transport package to be dropped, kicked, and impacted: These events may produce
potentially damaging shocks. Transportation vibration from conveyors, trucks, railroads, or

aircraft can also damage some items. Shock and vibration are controlled by cushioning so
that the chance of product damage is greatly reduced.
Cushioning is usually inside a shipping container such as a corrugated box. It is designed to
deform or crush to help keep levels of shock and vibration below levels that may damage
the product inside the box. Depending on the specific situation, package cushioning can
often be between 50 and 75 millimeters (two to three inches) thick.
Internal packaging materials (sometimes the same ones used for cushioning) are also used
for functions other than cushioning. Some are used just to immobilize the products in the
box and to block them in place. Others are just used to fill a void and do not have a
cushioning function.
When designing packaging, the choice of cushioning may depend on many factors:

effective protection of product from shock and vibration

whether cushioning is resilient (performs for multiple impacts)

resistance to creep cushion deformation under static load

material costs

labor costs, productivity

effects of temperature,[1] humidity, and air pressure on cushioning

cleanliness of cushioning (dust, insects, etc.)

effect on size of external shipping container

environmental and recycling issues

sensitivity of product to static electricity.

Description of various kinds of cushioning materials

Airbags
Airbags consist of an elastic film which is inflated with air. When at rest, only the static load
generated by the weight of the package contents bears upon the cushioning. When dynamic

loads occur, these are absorbed by compression of the cushion.

The quantity of inflation air may be varied in accordance with the particular properties and
requirements of the package contents. Airbags are commercially available in various sizes
and designs, ranging from spheres, standard cushions to corner and edge cushioning and
tubular cushioning.
Airbags are mainly used in containers and railroad freight cars and only rarely in trucks.
Bubble films
Bubble films function in essentially the same way as airbags. They consist of two plastic
films, one of which is completely flat and the other has small, round indentations, which,
once the two films have been heat sealed together, contain the necessary air. Bubble films
are mainly used inside packaging containers. The advantages and disadvantages are the
same as for airbags.
Rubberized fiber cushioning
Rubberized fiber cushioning provides high quality protection for demanding items. This
cushioning is made from animal hair or coconut fiber, which is cleaned, converted into
nonwoven mats, coated with rubber and vulcanized to form solidly bonded sheets.
Rubberized fiber cushioning is relatively insensitive to the effects of moisture and high or low
temperatures and exhibits very good recovery even on long-term exposure to loads.
Plastic foam cushioning materials
Plastic foam cushioning materials are mainly made from polystyrene (PS), polyurethane (PU)
and polyethylene (PE). Plastic foams are available in flexible, semirigid and rigid forms. Their
cushioning characteristics are determined not only by their specific weight but also by their
cell structure. The particular characteristics of the various starting materials are briefly
described below.
Polystyrene (PS):
PS is a somewhat soft, elastic foamed plastic with closed cells containing the air required to
provide resilience. Recovery is, however, rather limited.
PS is not itself hygroscopic and thus remains fully functional on exposure to moisture. It
should be noted, however, that, due to its structure (enclosed capillaries), PS cushioning
material nevertheless has a certain tendency to absorb or release water vapor. Appropriate
action must accordingly be taken to protect package contents which are at risk of corrosion.
PS cushioning material is produced both as relatively large moldings, such as cushioning
frames, edge or corner pads, and as a loose fill cushioning material, known as PS chips.
When large moldings are used, the cushioning area often has to be reduced as the static
area loads of the package contents are not sufficient to ensure effective cushioning.
Polyurethane (PU):
Polyurethanes are produced in flexible, semirigid and rigid forms with an open cell structure.

It is primarily flexible and semirigid grades of polyurethane which are used in packaging
applications.
The shock absorbing properties of PU foams increase with foam hardness, while recovery
and elasticity decline.
Especially on repeated exposure to identical stresses, this characteristic may cause
problems with an excessively rigid grade of foam as there is a continual decline in recovery.
Polyurethane foams are produced as relatively large moldings, generally by direct foaming
around the item to be packaged. If this is not feasible, the moldings may also be prefoamed.
One disadvantage of PU foams is their relatively complex production process. Their ideal
application is thus not for mass-produced items, but instead for packaging and cushioning
constantly differing items.
Polyethylene (PE):
Like polystyrenes, polyethylene foams are closed-cell products. They exhibit excellent
cushioning characteristics, which are comparable with those of rubberized fiber cushioning.
Even when exposed to major loads, they retain their cushioning capability.
PE foams do, however, have two considerable disadvantages. Firstly, they are costly, which
excludes them from many applications, secondly they do not have good weather resistance.
5. You are a merchant exporter. A prospective overseas client has shown interest
in your products. Write a letter making a firm offer mentioning all relevant facts
regarding product features, payment terms, transport details, insurance, delivery
schedules, packaging etc.,? Assume all relevant details about the product and the
client.
Letter with all relevant details
ANS:
Date:
Reference:
TO :
Addressee's Name,
Designation,
The Company's Name,
Full Address with Phone Number.

Subject :
Dear sir,
We are exports of wide variety of items including the white metal toys and white metal

sheet. We have been dealing in these items for the last twenty years and exporting a variety
of items to many Asian and Eurpean Countries including the USA and the UK.
We are one of the recognized exporting houses in India. We belive that your company
imports these items from India. We are enclosing herewith a copy of our catalogue and
pricelist alongwith our discounting rates and other terms for your perusal. We shall be glad
to have business relations with you. We assure you better competitive rates and good
quality products.
Yours Faithfully
___________________
Senior Manager - Marketing
Encl: As Above
NOTE :
This is a typical letter. You have to add your company's name with full address. And the
receiver's name and full address also should be added in the place allotted for that purpose.
Without those primary details no letter carries any significance. So, you are requested to
provide all those important details. Failing which the letter will make a wrong impression
about your company and you among the receivers of your letters. This is the most unwanted
attitude on your side in dealing with the clients who are the most valued assets of any
business organisation. If necessary, leave those spaces blank.
6 List out the Principal Export Documents along with a brief description of each of
them.
List of Principal Export Documents
Description of Principal Export Documents
ANS:
The export documents are classified into three major categories:
(A)

Principal

Documents

(B)

Auxiliary

Documents

(C) Documents for claiming Export Assistance

(A) Principal Documents :
Export Invoice : Types of Export Invoices
1. Proforma Invoice:
2. Combined Certificate of Origin and Value.
3. Consular Invoice:
4. Invoice Certified by a Recognized Chamber of Commerce

5. Legalized Invoice
6. Customs Invoice
The following are the essential details which should be available in the invoice

Name and address of the exporter

Invoice number and date

Buyers and Sellers Order numbers

Name and address of the overseas customer Name of the vessel and sailing
date

Unit price and total value

Terms of payment

Insurance reference

Customs and consular declaration

Shipping marks and number on packages

Quantities and description of commodities

Net weight and gross weight as well as measurement in metric units

Specification of packing

Terms of sale (FOB., CIC., C&F, FAS, etc,)

Bill of lading number

Letter of credit number and date.

Import licence number and date.