UNIT 4:

Transport

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Introduction .......................................................................................................................................... 4

4.1 Origins & Destinations ............................................................................................................ 5

4.1.1. Sources & Destinations of Goods for Movement ................................................................. 5
4.1.2. Collection & Delivery Sites .......................................................................................................... 7

4.2 Modes of Transport................................................................................................................. 9

4.2.1. Suitability & Selection of Modes of Transport ....................................................................... 9
4.2.2. Modal Nodes ...............................................................................................................................13
4.2.3. Characteristics of Movements by Air .....................................................................................14
4.2.4. Characteristics of Movements by Road.................................................................................20
4.2.5. Characteristics of Movements by Sea ...................................................................................28
4.2.6. Characteristics of Movement by Rail .....................................................................................32
4.2.7. Other Modes of Transport .......................................................................................................33
4.2.8. Facility Security Precautions ....................................................................................................34

4.3 Third Parties........................................................................................................................... 35

4.3.1. Selecting a Freight Forwarder .................................................................................................35
4.3.2. Other Parties Involved in International Movement ............................................................37

4.4 Movements ............................................................................................................................ 40

4.4.1. Movement ....................................................................................................................................40
4.4.2. Issues Involved in Undertaking Movements ........................................................................41
4.4.3. Planning Movements .................................................................................................................42
4.4.4. Information Exchange ...............................................................................................................43

4.5 The Goods to be Moved ........................................................................................................ 45

4.5.1. How Characteristics of Goods Impact their Handling .......................................................46
4.5.2. Unitization Methods ..................................................................................................................51
4.5.3. Flow of Goods Requiring Movement .....................................................................................54

4.6 Planning & Scheduling .......................................................................................................... 56

4.6.1. Route Planning & Scheduling ..................................................................................................56

4.7 Managing Transport Providers ............................................................................................ 62

4.7.1. Selecting Transport Providers .................................................................................................62
4.7.2. Managing Transport Providers ................................................................................................66

4.8 Import & Export Documentation......................................................................................... 69

4.8.1. Working with Agents ..................................................................................................................69
4.8.2. Documentation ...........................................................................................................................72
4.8.3. Monitoring the Movement of Goods .....................................................................................80

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4.9 Customs Procedures & Controls ......................................................................................... 83
4.9.1. The Role of Customs..................................................................................................................83
4.9.2. International Classification of Goods .....................................................................................85
4.9.3. Customs Procedures .................................................................................................................87

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Welcome to the Transport Unit of the Certification in Humanitarian Logistics course.
During this unit, you will be looking at the function of transport in supporting
humanitarian logistics.

The unit will look at aspects of international and local movements and the modes of
transport available. It will consider the role of third parties in assisting in the
movements and in the use of outsourced transport providers. Road is often the
major mode of transport to be used and this unit will also consider the nature of
goods to be moved, planning and scheduling movements, and the selection and
management of third-party providers.

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This first section will consider the activities involved in moving goods from suppliers or
donors to warehouses and, finally, to beneficiaries. We will consider origins and
destinations along with the respective collection and delivery sites.

The role of transport is to connect the origin of goods with the destination. The origin and
destination may be in different countries, requiring international movement, or they may be in the
same country.

International movements can involve movements from source within the origin country, through
ports/airports to ports/airports in a destination country, and on to the ultimate destination.

International movements often involve the use of two or more modes of transport. Organizing such
movements can be a very complex and involved activity. Delays at the modal interchanges, where
goods are moved from one mode of transport to another, can have an effect in subsequent
transport mode(s), and can create major problems in the movement of humanitarian aid. In order
to expedite international movements, knowledge of documentation and customs requirements,
port/airport procedures, and other such formalities is necessary. Field operators may have the

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resources of a central head office to effect such movements. If this is not the case, the use of a
global shipping company or freight forwarder can help to smooth the movement.

Full-load, bulk shipments may be in container loads for air, rail, or sea shipment, or in rail wagon
loads. As will be discussed later, the role of the freight forwarder contributes greatly to the planning
of these movements across country boundaries. At the destination port, airport, or railhead,
arrangements may need to be made for onward road transport to the final destination. This may
involve the transport mode owned by the organization or, more likely, the use of a third-party
transport provider, especially if more specialized vehicles are required. It is the responsibility of the
transport provider to meet the level of service requirements regarding collection and delivery times.

Part loads which need to be moved internationally are best organized through a groupage
arrangement. This involves a forwarder, or perhaps the shipping line, combining the goods with
other cargo to make a full unit load. While costing more than the shipment of a full load, this
arrangement usually has the advantage of costing less than would be charged for shipping a part
load. Groupage usually requires the goods to be presented to the shipper a little earlier than full-
unit loads, and there is sometimes a delay at the destination where the goods are broken down into
the individual consignments again. It is important to note that humanitarian organizations must
exercise caution when sending part loads. The nature of the goods being moved, and the status of
the organization, must not be compromised by being grouped with cargos which are unacceptable
or are being moved by companies who are not acceptable to that humanitarian organization.

It is important to note that containerized, shared cargo must be custom-cleared together. So if one
part of the cargo, regardless of owner, is missing some documents, the whole container is blocked
until all parts of the cargo are cleared. Where the missing documents are from another organization
there is little that can be done except to wait. This situation is not uncommon.

International movements by rail, sea, and air will be subject to timetables. This means that deliveries
from origin to the shipper at origin need to fit to the loading cut-off times imposed by that shipper.
Transshipment and movement to final destination will be governed by arrival times and subsequent
customs, handling and documentation requirements prior to release.

Local movements relate to the movement within national boundaries, and will involve the use of one
or more modes. These movements may involve relatively long distances; alternatively, they will
relate to local movements, from depots and warehouses to the end user.

Local movements, within a specific country, will usually involve road transport. This may involve
movement of bulk loads from ports, airports, and railheads to warehouses and depots, bulk
movements between facilities such as warehouses or depots, or delivery of smaller consignments
from a local warehouse or depot to end users at a number of destinations in an area.

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Situations which involve local movement will include:
 An international movement which is not fully integrated from origin to final destination; the
local movement may comprise the local segment from port or airport.
 Movements between storage locations, for example, warehouses, and depots.
 Movements from storage locations to final destination, for example, a feeding station.
 Movements at final destination to the ultimate recipient of the goods.

Careful planning is needed to optimize the use of the vehicle and driver, whatever the nature of the
movement. There are a number of factors to be considered when planning movements and they
are dealt with below. It is important to understand the constraints which may be faced when trying
to balance the service required by the customer with the costs involved in executing the movement.

The characteristics of the collection and delivery site, including the way it is managed, can have an
impact on the movement of goods. These will need to be understood when arranging collection
from, or delivery to, that location. Also, the characteristics of the goods for delivery must be made
known to the receiving site to ensure that it has the physical capability to handle them.

In terms of the consignment, the following information is required:

 The number of packages and whether they are, for example, palletized or not
 The weight of the package(s) and of the unit pallet load
 The dimensions of the packages and of the unit pallet load
 The product characteristics
 Route constraints to destination such as bridge and street width clearance for transport
vehicles

It is also important to know the method by which the goods will be handled at the receiving site. If
the goods are received in loose form, it must be decided whether they will need to be palletized
during the unloading process. Should this be the case, it is important to know whether it will be
done inside the vehicle or on the floor, outside the vehicle. The method of unloading will also have
an impact on the turnaround time for the vehicle.

The method of unloading/loading at the site may also have an influence on the type of vehicle which
is required. For example, if the goods are containerized and for collection from a port, then a
specialized, flatbed vehicle or trailer unit will be required. If the vehicle is moving a palletized load, it
could be more efficient to use a truck which is capable of being offloaded from the sides, rather than
the rear.

If goods to be received are already stacked on pallets, or in units suitable for mechanical handling,
the availability of handling equipment will need to be determined; again this will influence
turnaround time.

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In some cases, the regional or local warehouse, or perhaps the program manager, may stipulate a
delivery time for the goods. Sometimes, in terms of load planning, this can create a constraint on
developing an effective route plan. Similarly, when arranging to deliver or to collect goods, for
example from a freight terminal, a booking in system will stipulate the time when the vehicle needs
to arrive. In some cases, this will be quoted as a specific time, although usually a tolerance will be
allowed. It is important to know what the tolerance is to ensure that penalty costs, such as
demurrage, are not incurred.

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The role of transport within logistics is to transfer goods and materials between two
specified points, ensuring that they arrive in good condition, at the right time, and at an
acceptable cost. A mode of transport is the means by which goods and materials are
transferred from one point to another. The basic modes are road, rail, sea, air, and in-
land waterway.

The criteria of speed, reliability, and cost must be examined when considering the choice
of mode. Different modes will have quite different characteristics and will meet the
speed/reliability/cost criteria to varying degrees. The appropriate mode must be carefully
selected, if it is to match all the requirements. Intermodal solutions may provide the
most effective and efficient transport option.

While the physical characteristics of certain goods and materials may determine a
specific mode of transport, most goods will be capable of being moved by a variety of
modes. Customer requirements and constraints on the organization providing the
transport must be considered. In humanitarian aid situations, it is often environmental
factors, such as the destruction of roads and railways, which have a significant impact
on mode selection.

It is important to fully recognize the operational characteristics of the mode or modes

which have been selected. It is also necessary to consider the type of vehicle or
equipment which will be used within that mode.

Mode selection is influenced by:

 Operational factors
 Mode selection criteria
 Matching operational factors to the selection criteria

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Certain, operational aspects need to be considered when selecting the appropriate mode:
 The requirements of the customer who is being serviced
 The nature of the consignment being transported
 The constraints imposed by environmental factors

C US T OM E R  The geographical location and dispersion of the delivery point

FEA TU RE S destination(s).
 The delivery time required by the delivery point, for example within 24
hours.
 Anticipated frequency of deliveries or delivery schedule, e.g. to meet
planned distributions to beneficiaries.
 The features of the delivery point must be known, in terms of route
issues (e.g. bridge washed out), physical access, weight restrictions,
and loading/unloading facilities.
 The average consignment size will impact on the choice of mode. Are
a few large consignments or many small consignments to be
delivered?

C O NS IG NM E N T  The size, shape, and weight of the goods being transported.

FEA TU RE S  The value, requirement for security in transit, and degree of fragility.
 Obsolescence/deterioration of the product.
 The hazardous nature of goods.

ENV IR O NM E N TAL  In some countries, environmental and legislative considerations, for

C O ND I TI O N S example, vehicle and axle weight limits could substantially limit the
choice of the most effective mode of transport.
 The country's transport infrastructure, in terms of the extent and
quality of roads and railways, will define mode availability.
 Laws and taxation policies may offer incentives or restrictions on the
use of particular modes of transport.
 Availability of labor and capital, specialist and technological knowledge
and Government funding, can influence mode availability.
 Climatic conditions, for example, monsoon weather, can restrict the
choice of mode.
In selecting the appropriate mode, it is necessary to compare the selection criteria with operational
factors related to the choice of mode. The mode selected should give an optimum solution related
to the nature of the goods to be moved, the urgency of the delivery need, and the minimization of
cost. It is important to realize that the most appropriate mode may not necessarily be the least
costly option.

Once the optimum mode is selected, on occasions, it may be necessary to vary it to meet specific
delivery requirements. For example, if goods are normally shipped by road, an emergency delivery
may need to be sent by airfreight to meet a specific, program requirement.

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Four key criteria can be used when comparing different transport modes. These criteria are:
 The speed which the mode exhibits.
 The reliability which the mode demonstrates in its ability to fulfill service requirements
 The comparative cost-per-unit transported, depending on the mode chosen
 The flexibility which the mode exhibits

Speed and reliability will have a major impact on the ability to deliver humanitarian aid effectively,
and efficiently, to where it is needed.

SP EE D The nature of a mode normally determines the speed at which goods can
be moved; however, the quality of infrastructure, such as pot holes on a
road, and environmental factors, such as traffic or storms, can slow some
modes down.

REL IA BIL I T Y The reliability of a transport service to deliver the correct goods, in the
right condition, at the required time, every time, is a major aspect of
customer expectation. Unreliable service can have a critical impact on the
ability of a program team to meet its humanitarian objectives.

C OM P A RA TI VE The cost of a mode will often be expressed in terms of the unit cost for
COST transporting the goods or materials, rather than an absolute figure. This
could be expressed as a cost per sack, cost per ton, and cost per pallet, or
similar. The distance which the goods have to travel must also be
considered. Therefore, modal cost can also be expressed in terms of a
value per ton kilometer, for example. Understanding costs, at this level of
detail, allows a very precise comparison of modes to be made.
However, if the goods are in the form of a full load, and there is a choice
of available modes for the consignment size, the absolute cost for
transportation could be compared. For instance, transport could be
quoted as a cost per 24-ton load from point A to point B.

FL EX I BIL I T Y Flexibility relates to the scope for variation which exists in a mode. The
infrastructure within which a mode has to operate will affect the flexibility
of that mode.
Comparatively speaking, road transport is a very flexible mode, due to the
road infrastructure which exists in most countries. Rail, for example, is
less flexible, being constrained by the available, fixed infrastructure, in this
case where tracks have been laid, and routes have been set up.

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 It is important to use a structured approach to mode selection. It is important to understand the
following points:
 Opportunities and constraints in the choice of mode will be identified from careful analysis
of all relevant operational factors
 Modes which realistically cannot be considered should be ruled out early on
 Geographical factors and lack of infrastructure may rule out certain modes
 Matrices are effective for comparing options

Certain categories of goods will be more suitable for a specific mode. It is sometimes useful to
construct a comparison matrix, such as the example shown below:

Speed Moderate Moderate Slow Very high

Reliability Good Good Limited Very good
Cost per mt/km Medium Low/medium Low/very low High
Flexibility High Low Low Medium
Network Size Extensive network Limited & fixed Restricted network Limited network
Other - Short and medium - Large consignments - Large quantities - Emergency phase
Considerations distances - From port of discharge - Less urgent - Expensive goods
- From a neighboring to inland operation site - Pre-positioning phase - Fragile/perishable items
country to operation - Ecological - Second phase - Cold chain
site
- Long distances with no - No alternative options
- Internal transport time constraints - Small shipments
- Short/medium distance - Ecological (e.g. diplomatic pouch)
- Long distances with
time constraints
Advantages - Relatively fast - Economical - Economical - Fast
- No transshipment - Large loading capacity - Large loading capacity - Reliable
- Direct delivery - Range and speed (in - No restriction on - Limited losses
- Flexible most countries) capacity - Direct
- Cost - Cheap - Easy tracking/tracing
Disadvantages - Potential danger - Difficulty finding freight - Slow - Expensive
(e.g. landmines) cars - Transshipments at - Restricted journeys to
- Potential blocks - Delays ports between airports
(e.g. rainy season) - Transshipment - Use as a second means - Restricted capacity &
- Sometimes - Inflexible of transport for large items (e.g. no
sociopolitical problems - Tracking volumes dangerous goods)
(e.g. nationality of driver - Higher theft risk in port
or vehicle registration ) - Not flexible

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Nodes describe the type of infrastructure which supports a specific mode of transport. It is
necessary to identify the various modal nodes which link the movement of goods, both in terms of
using an individual mode, and through intermodal activities.

Nodal categories are defined by the mode which they are supporting. For example, ports support
the sea mode, while airports support the air mode. In both cases, the movement through these
nodes usually involves the transshipment of the goods, ready for onward movement through the
use of another mode of transport, typically road or rail. Freight terminals exist to support the
movement of goods by road and rail. Again, this will typically involve transshipment of the goods
and, in some cases; this will also lead to a break-bulk activity taking place.

Container bases are the places at which containers are loaded and unloaded, or are transshipped.
Where unit loads are moved through the use of containerization, container bases may be used to
hold containers prior to collection or on-shipment. In order to achieve the swiftest vessel
turnaround, containers need to be unloaded and loaded as quickly as possible. The use of
container bases as an integral part of a port operation will support this requirement. They may be
operated by the port authority, or by a third-party, under contract to the authority.

In humanitarian aid situations, central warehouses, for example, provide a number of opportunities
to optimize the use of drivers and vehicles in a transport operation:
 Use of driver changeovers to allow continuous movement of vehicles, overcoming drivers’
hours legislation.
 Interchange of trucks and trailers, again to facilitate the onward movement of goods over
longer distances.
 Transshipment of goods from primary to secondary operations.
 To support intermodal activities when linked, for example to railheads.

In reality, in terms of all modes except for road, more than one mode of transport will normally be
needed to complete the total journey. However, where different modal options exist to move goods
between any two points, a structured decision process for integrating those modes should be used.

In certain situations, it could prove to be beneficial to consider the use of more than one mode to
move goods between the goods’ origin and regional warehouses. Rail is effective over long
distances, but its restricted network will often mean the use of road transport to move loads
between railheads and their final destination. Containerization has particularly facilitated the
integration of sea and road/rail modes.

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The use of more than one mode of transport can facilitate the movement of goods, however, it does
need to be carefully planned in order to make an effective and efficient movement. At each transfer
point between modes, there is the risk of delays occurring if the different legs of the movement are
not integrated. One major issue, if cargo is held at a port or airport for a length of time, is that of
demurrage. Demurrage is a charge made by the port or airport authority, for space taken up by
goods, usually awaiting collection by the consignee or his agent. Shipping lines can also charge
demurrage on the containers which are held for a period of time before being moved to their final
destination. The cost of demurrage will normally be borne by the humanitarian organization itself.

Image supplied by kind permission of The Queensland Transport and Logistics Council.

Air transport has the considerable advantage of speed over all other modes. Air transport is
particularly suited to high-value, low-weight, and low-volume consignments, and speed-critical
movements of goods. Air offers a more secure mode of transport for high-value, high-risk goods. It
is also ideal for highly perishable, short-life goods and in circumstances where the delivery
requirement is extremely urgent. In emergency situations, in particular, air is the preferred mode of
transport.

Careful planning is needed to ensure that the benefit of speed over the majority of the distance to
be traveled is not diluted by the use of road, for example, from the airport to the ultimate
destination.

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Major world airlines and other global logistics service providers have created a considerable air
cargo infrastructure. The increase in passenger traffic routes gives an opportunity to ship
consignments on passenger routes, as well as on dedicated cargo flights. This has extended the
available coverage and, in some cases, has made air freight a more cost-effective option, particularly
for international movement. Internal flights within a country are sometimes limited by the availability
of airports and an associated network. Also, because of the relatively shorter distances involved, the
cost of this movement is not usually economically comparable to other modes.

In addition to such commercial movements, it is also possible to charter a plane or, perhaps, to have
the use of military aircraft to allow a totally dedicated movement to take place. This gives the
possibility of moving goods from one location to another, without being constrained by commercial
timetables and specific airport locations. The charter may be totally ad hoc, that is, a ‘one-off’
charter to achieve a particular humanitarian objective. Alternatively it may be a regular event,
monthly, for example, in order to transport routine supplies or perhaps members of staff.

Certainly in terms of commercial charter, unit cost can become an issue, particularly if the aircraft is
not fully loaded. However, if consignments are consolidated and the aircraft is fully loaded, the unit
cost of moving the material may, in fact, be cheaper compared to using a scheduled aircraft. Where
loads from different humanitarian organizations are consolidated, it will usually be necessary to get
authority at the appropriate level in the organization to avoid potential conflicts of interest, and
possibly to acknowledge other, political considerations.

A number of factors will influence the decision to charter and the nature of the aircraft chartered:
 Availability of different types of aircraft
 The nature, quantity, weight, size, and volume of the cargo
 Aircraft equipment available for handling and also the loading and unloading equipment
available at origin and destination
 The distance to be traveled and possible constraints on certain airspace
 Airport restrictions to particular types of aircraft regarding: landing, parking, unloading and
subsequent takeoff.
 Possible noise restrictions at certain airports
 Securing landing permissions

Specialist service providers, such as freight forwarders, can be used to manage the wide range of
activities associated with international movement. This includes customs entry and the preparation
of documentation, insurance cover, arranging shipment, collecting, and, if necessary, packing and
preparing goods for transportation. They will also manage de-grouping at the destination and
onward transit to the final destination.

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Modern freight aircraft are capable of carrying heavy loads where speed is of the essence.

It is possible to apply the containerization approach to air transport. Some aircraft are capable of
handling standard ISO containers. Others will handle pallets or a specifically designed container,
sometimes referred to as an ‘igloo.’ These are often rented to freight forwarders, who will
consolidate goods from a number of consignees to optimize freight rates.

Two bodies, in particular, control and influence the commercial movement of goods by air.

The International Air Transport Association (IATA) is an association of air transport operators. It
seeks to simplify and standardize air transport documentation, procedures, and operational activity.
Its members carry the bulk of the world’s scheduled air traffic around the world. IATA aims to help
its members meet increasingly stringent, and diverse, national regulations, without diminishing the
speed and reliability of delivery across the world. For example, IATA has laid down requirements
which ensure that global cargo security measures are harmonized and are operationally
manageable.

The Air Cargo Tariff (TACT) produces manuals to facilitate the movement of cargo by air, interpreting
and detailing the complex IATA regulations. Its manuals list such things as specific, country
information on charges, import/export regulations, and cargo agents’ details, and carrier
information, such as inter-airline agreements and aircraft loading charts. It also publishes
comprehensive rates listings three times per year.

Dangerous goods are defined as articles or substances which are capable of posing a risk to health,
safety, property, or to the environment when transported by air, and which are shown in the
regulations related to the carriage of dangerous goods by air that are published by IATA .

The IATA Dangerous Goods Regulations (DGR) contains all provisions mandated by the International
Civil Aviation Organization and all rules universally agreed upon by airlines to correctly package, and
to safely transport, dangerous goods by air. These rules are designed to protect the safety of
aircraft, their passengers, and crew. DGR is complex, and it is advisable to seek professional advice.
Goods which may appear simple or harmless may, in fact, be classified dangerous and require
special consideration, e.g. vehicles, chlorine.

The basic responsibilities of the shipper are to:

 Decide whether the goods to be carried are dangerous or hazardous as defined by the IATA
DGR regulations
 Ensure that the goods are correctly described and classified, including the risk
 Meet the required packing and labeling requirements

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  Complete the necessary dangerous goods shippers’ declaration documentation

The basic responsibilities of the carrier are to:

 Accept each consignment of dangerous goods, or to directly supervise the acceptance of
the dangerous goods
 Load and secure the dangerous goods, or to supervise the loading, and to secure the
dangerous goods onboard the aircraft, so that they do not move during transport
 Inspect for damage and leakage before and after loading and unloading, and the inspection
and decontamination in case of leakage
 Crosscheck that the dangerous goods are contained in a package which is designed,
constructed, filled, closed, secured, and maintained so that, under normal conditions of
transport (including handling), there will be no accidental release
 Report accidental incidents or accidents, as prescribed by their country of registry

The cargo which needs to be handled on arrival will have been loaded in a number of ways:
 Loaded in bulk on the floor of the
aircraft and held in place by strapping,
ropes, or nets. Bulk loading does slow
offloading, sorting, distribution, and
customs processing.
 Preloaded on air-pallets (aluminum
plates), secured, and loaded into the
aircraft. Wherever possible, pallets
should be taken off the aircraft using
handling equipment. Breaking pallets
down in the aircraft is difficult and time-
consuming, and may create problems in
terms of flight crew duty time.
 Containerized and then loaded onto the aircraft. Again, these need to be taken off the
aircraft prior to being broken down.

When preparing to receive goods sent by air in this way, a number of things should be considered:
 Space off the runway is required for parking the aircraft. If there is no such space available,
the aircraft will have to be unloaded on the runway. This requires consideration of
offloading time and the scheduled arrivals of other aircraft.
 The weight of the loaded aircraft, and the ability of the ground to support the parked aircraft
where space is available off the runway.
 Aircraft may arrive at all hours and trucks and labor for manual offloading must be available.

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  If the aircraft is to be offloaded using handling equipment (e.g. forklift, hi-lift, tow truck),
availability of an appropriately-sized piece of equipment must be arranged. If no forklift is
available, it may be possible to get one sent on the arriving aircraft; this will, however,
possibly reduce the amount of material that the aircraft can carry.
 Storage space will be required near the offloading point if the supplies are to be temporarily
stored, prior to onward movement. Potential security problems need to be addressed.

The Air Waybill (AWB) is perhaps the most important document related to airfreight, and its
completion is regulated by IATA definitions. Each AWB has a unique identifying number, the first
part of which is the IATA airline code number. The AWB is the carrier’s receipt by air, evidence of the
contract of carriage, and is usually non-negotiable. It is made out to a named consignee, who is the
only party to whom the carrier can deliver.

Packaging and labeling for air transport is an important consideration. Transport by all-freight
aircraft will usually take place using some form of unit load device, reducing the need for packaging.
However, the method of loading and unloading, and onward transit may still require a strong and
durable packaging medium. Ultimately, it is the nature of the goods being transported that will
determine the precise nature of the packaging.

Multi-package consignments should be covered by a packing list which details the precise contents
of each package. Labeling should include details of the sender and consignee, other relevant
markings, and the package number. This should be shown as a part of the total consignment, e.g.
Box 3 of 12.

In some disaster situations where the existing infrastructure is

either destroyed or unusable, helicopters may offer the only
way of receiving humanitarian aid supplies. They come in all
shapes and sizes, and are capable of transporting not only
people, but also materials and equipment.

Helicopters have the ability to transport materials loaded

internally and also externally. When transported externally,
materials are placed in a net or suspended from a line,
attached to the underside of the helicopter.

This is known as slinging. These goods need to be detached

before the helicopter can land and discharge any goods carried
internally. A suitable landing space must be found for the
helicopter which will take its weight, and is not enclosed by
anything which may interfere with the rotors. In extreme circumstances,
the helicopter may remain hovering while aid is unloaded.

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Helicopters are able to land and take off in very confined spaces, or where landing is impossible or
not an option, hover while they drop supplies to the ground.

The table below gives an indication of the payload capability and range for a cross section of
helicopters:

The operating cost for a helicopter can range from 700 USD to 4,000 USD, or more, per hour,
depending on the type. Similar to other modes of transport, it may be beneficial to pre-negotiate
price and availability, in the form of a frame agreement.

Bell 206L-4 320 200 645

Ecureil 350-B2 350 N/A 900
Bell 212 200 N/A 2,000
Sirkorsky S-76C 180 650 1,500
Super Puma L1 432 2,543 4,470
Super Puma L2 450 3,044 4,902
Super Frelon SA 321 450 3,800 5,200
Super Puma 332 cl 360 N/A 4,500
MI-8 270/518 N/A 3,000
MI-17 307 N/A 3,000-4,000
MI-26 432/1,036 N/A 20,000

Frame agreements are covered in more detail in the Procurement Unit.

Similarly, the table below gives an indication of the payload capability and range for a cross-section
of aircraft:

Hercules C130 3,700 20.4 130

Antonov AN12 2,100 18 90
Antonov AN124 6,500 120 850
Ilyushin IL76 3,800 45 180
Boeing 707 4,700 42 210
De Havilland Buffalo 3,400 6.2 N/A
Twin Otter 1,700 2.3 N/A

The Internet can be a valuable source to find additional information on types of aircraft and
helicopters. It is important to note that the above tables are just indications, and that you should

AO/HLCP/0188 V3.0
always check and confirm specific details with the helicopter or aircraft operator. Other, important
details may include width and height of doors to ensure that goods will fit, and height of doors to
ground to ensure that appropriate handling equipment is available.

For national distribution of most general traffic, particularly within a country, road transport remains
the main option and most widely used mode. It is very flexible and usually has the advantage of
utilizing a widespread infrastructure. Road transport allows goods to be carried in a vast variety of
ways, from motorcycle courier to 40 tons (and above) articulated vehicles.

While flexibility of network and unit of carriage are the prime advantages of this mode, factors of
volume and distance will, ultimately be disadvantageous. Where distance is very high or where the
total volume of the consignment is many times the vehicle maximum, road transport may be
inappropriate.

Road transport has the possibility to allow significant control to be exercised on the delivery of
goods and materials to customers. Road transport is relatively speedy, although road congestion,
the quality and standard of the roads themselves and, in some parts of the world, their susceptibility
to climatic conditions, will impact on the efficiency of this mode.

Initially, the decision must be made to use either one’s own vehicles or to use a third-party transport
provider. A third-party provider provides both trucks and drivers. The decision will be impacted by
what is seen as the relative advantages and disadvantages of using one’s own vehicles compared to
those operated by a third-party transport provider. For example, it may be more appropriate, in
order to reduce the risk to its staff, for an organization to use third=party transport in less secure
areas.

The advantages of owning vehicles include:

 Vehicles can be built specifically to carry a particular product. Special equipment for
materials handling can be attached.
 The driver can be specially trained and will fulfill the ‘ambassador’ role for the organization.
 Vehicles can be painted or labeled with your organization’s colors, logo, or flag.
 Management retains total control over the vehicle and its operation.

A major disadvantage is that management of the transport function can occupy a great deal of
management time, requires specific expertise, and significant capital investment. In contrast, third-
party carriers can often provide more cost-effective transport facilities, but careful consideration
must be given to the level of service required.

AO/HLCP/0188 V3.0
The advantages of using third-party transport include:
 Organizations can use commercial providers to meet fluctuating demand requirements.
 Variable loads and journeys can be catered for.
 The transport provider may be able to offer a more cost-effective and a more efficient
service.
 Responsibility for administration of vehicles and drivers is no longer the responsibility of the
organization, allowing staff to concentrate on more productive areas.
 There is no requirement for capital to be invested in transport.

Where service to customers is a prime consideration, this could be affected because a measure of
control is lost with third-party operations. Control should not be “externalized” to the third-party (as
some organizations wrongly do). Performance feedback and communication with customers’ needs
are to remain a strong feature, and be controlled by the contracting organization.

Even if an organization owns its vehicles, there may be occasions when a need arises for additional
capacity, to meet peak activity or other short-term needs. This can be met by the use of vehicles,
supplied by a commercial transport provider.

If an organization decides to acquire its own vehicles, there are a number of areas to be considered.
The type of vehicle, in terms of the chassis-cab and the body-type, needs to be determined. The
nature of the operation may require that mechanical handling aids will need to be incorporated into
the overall vehicle specification.

Although there is a vast range of vehicle types which are available to meet the operating
requirements, they might not always be available for use. However, it is important to be able to
select the appropriate vehicle for the purpose required even if, at a later stage, it is necessary to
revise this choice to reflect availability in the field.

A description of the main body-types is shown in the chart below. The range of vehicle types can be
considerable, and manufacturers offer a large range of vehicle options to meet requirements. As an
example, the table below details major types and combinations that is available:

* Note that the specimen payload is the weight of goods which could be carried, without exceeding
the maximum gross vehicle weight. Where legislation does not specify a maximum gross weight, or
local circumstances allow, this payload may be increased. For goods which have a high cubic
measurement, but are light in weight, the capacity of the load carrying area may be filled before the
maximum payload is reached.

AO/HLCP/0188 V3.0
2 axles, 4 wheels 3.5 1 Various
2 axles, 6 wheels 7.5 3.5 Various
2 axles, 6 wheels 18.8 12 12
3 axles, rigid 26 18 12
4 axles, rigid 36 35 12
3 axles, arctic 26 18 16.5
4 axles, articulated 38 24 16.5
tractor trailer
5 axles, articulated 40 24 16.5
6 axles, articulated 41 27 16.5
Vehicle & drawbar 40 26 18.75
trailer

Vehicles can be categorized into two main types:

 Rigid vehicles comprise a cab and chassis onto which the desired body is placed. They will
also act as the prime mover in a drawbar combination.
 Articulated tractors are the motive unit for the movement of trailers.

It is also important to consider the drivetrain type of the vehicle which is most suitable for the
vehicle’s intended use. Off-road or poor road surfaces may require vehicles that deliver power to
more than one set of wheels. It is the drivetrain type specifies the number of wheels that receive
torque from the engine simultaneously.

Abbreviations such as 4x2, 4x4, 6x2, 6x4 are used to describe this. The first number is normally the
total number of wheels on the vehicle; the second is the number of wheels receiving power. So, a
4x2 is a 4-wheel vehicle of which two wheels receive torque from the engine. More technically, it is
the axel which receives the torque. Each axel has two axel ends to which the wheels are attached,
and some vehicles have more than one wheel mounted on the end of an axel.

The second consideration is the engine/transmission layout which is used, typically in smaller
vehicles: front wheel, rear wheel, or all-wheel drive, and the location of the engine and transmission,
at the front or rear of the vehicle. Certain combinations are more suitable again depending on the
vehicle’s intended use.

<Sourced in part from http://en.wikipedia.org/wiki/Four-wheel_drive>

The smallest vehicles used are car derivatives, which are generally used for small, local deliveries.
Often, they will be used for the delivery of emergency consignments.

Moving to the next size, we have a variety of vehicles all under the 7.5 ton gross vehicle weight
(GVW). The next group of vehicles still has two axles, but increase in weight to 18 tons GVW. If we
add a third axle the payload increases; a fourth axle will increase it to over 20 tons.

AO/HLCP/0188 V3.0
Articulated vehicles can operate at various GVWs, according to the combined number of axles on
the tractor and its trailer. If payloads are high, articulated units and trailers offer a good solution.

Where bulk, rather than weight, is the constraining factor, drawbar combinations offer an
opportunity to maximize cubic capacity.

The specification of the vehicle body will vary according to the goods and materials being carried.
There are many variants of body type available; a description of the main body types is shown below:

P L A TF O RM S The simplest and cheapest body type is the platform or flat bed. It
provides all-around access to the load, but offers little security or
protection from the weather. Loads also need to be restrained. This will
generally involve roping and sheeting, which is a time consuming
operation.

VAN B OD Y The van or box body reduces the payload of the vehicle, but provides
protection for a perishable product and added security. Construction will
depend upon the needs for insulation, waterproofing, or strength. A rear
door usually provides access. Sometimes a door will be built into one, or
both, of the body sides.

C UR T AIN - S ID ED Curtain sided bodies overcome the disadvantages of access, since the
B OD IE S curtains can be pulled back to reveal the full length of the platform. This
improves the speed of loading as well as unloading. Advantages of load
restraint and weather protection are maintained, whilst body weight is
less than the box body. Other variants will replace the curtains with
sliding panels.

TA N KE RS Tankers are designed to carry powders or liquids. They require a

pumping mechanism and piping to discharge the load.

BUL K C A R RI ER S Bulk carriers are generally built as box bodies without the roof. They will
require a tipping mechanism to allow the load to be discharged.

D RA W BA R A rigid master truck with a drawbar trailer is the usual configuration. The
bodies may be of the demountable type. Drawbars offer increased cubic
capacity for bulky lighter loads.

AO/HLCP/0188 V3.0
Mechanical handling aids, incorporated into the vehicle’s construction, can reduce handling times
for loading and unloading.

Advances in mechanical handling equipment have enabled larger unit loads to be handled, thus
eliminating the need to handle individual items.

Probably the simplest, and most widely used, handling aid is the pallet. They are designed to be
lifted ‘on to’ and ‘off of’ vehicles, using either a fork lift truck or a hand pallet truck, where a loading
dock is in use. This considerably reduces loading and unloading times, allowing the driving time
element of a day’s work to be optimized. It should be remembered, however, that not all loading
and unloading points would have the equipment to offload pallets.

Tail lifts are fitted to the rear of some vehicles. They are operated hydraulically. They allow goods to
be easily moved from the vehicle bed to ground level.

For awkward-sized and heavy loads, a crane can be built on to the load platform to allow quicker
loading and unloading.

It should be recognized that any equipment added to the vehicle will reduce the available payload.

At all times, it is the operator’s responsibility to ensure that the vehicle and its equipment are fully
maintained and kept in a roadworthy condition.

Whether the vehicles being used are owned, hired, or are managed by a third-party, it is important
to ensure that all local laws relating to the licensing, insurance, and regulation of vehicles are being
followed:
 Normally a license to operate the vehicle on a public highway is required.
 For larger trucks there may be an additional license fee to be paid.
 Vehicles should be insured to at least the minimum required by law. Different organizations
will have internal policies regarding the extent to which their own vehicles should be
insured.
 Vehicles may also require documentation relating to the maximum permissible weights in
terms of gross vehicle weight, axle weight, and payload.

Drivers are also required to hold the appropriate license for the class of vehicle they are driving.

There are two other aspects of road transport documentation which need to be mentioned.

The IRU, through its national associations, represents the entire road transport industry worldwide.
It speaks for the operators of coaches, taxis, and trucks, from large transport fleets to driver-owners.

AO/HLCP/0188 V3.0
In all international bodies that make decisions affecting road transport, the IRU acts as the industry’s
advocate. By working to the highest professional standards, the IRU improves the safety record, and
environmental performance, of road transport and ensures the mobility of people and goods.
Among its practical services to the industry, the IRU is international guarantor of the TIR (Transports
Internationaux Routiers) carnet system, under which trucks are sealed by customs upon departure
and can cross several borders without further checks until they reach their destinations.

The CMR Convention (full title: Convention on the Contract for the International Carriage of Goods
by Road) is a United Nations convention signed in Geneva on 19 May 1956. It has been ratified by
the majority of European states and many surrounding countries as shown below (image by Alinor
(http://creativecommons.org/licenses/by-sa/3.0/).

The Convention recognized the desirability

of standardizing the conditions governing
the contract for the international carriage of
goods by road, particularly with respect to
the documents used for such carriage and
to the carrier’s liability. The Convention
applies to every contract for the carriage of
goods by road in vehicles for hire and
reward, when the start and end points for the carriage are situated in two different countries, of
which at least one country is a signatory to the Convention.

Where the vehicle containing the goods is carried, over part of the journey, by sea, rail, inland
waterways, or air, the Convention still applies to the whole of the carriage.

The consignment note is made out in three original copies, signed by the sender and by the carrier.
These signatures may be printed or replaced by the stamps of the sender and the carrier if the law
of the country in which the consignment note has been made out so permits. The CMR
consignment document typically has 3 copies, each a different color. The first copy, red, is handed
to the sender, the second, blue, accompanies the goods to the receiver and the third, green, and is
retained by the carrier. The consignment note is prima facie evidence of the contract, the conditions
of the contract and the receipt of the goods by the carrier.

For the purposes of the customs requirements for international movements and other formalities
for all goods moved by road which have to be completed before delivery of the goods, the sender
must attach the necessary documents to the consignment note or hand them to the carrier. All of
the information which the carrier requires must be supplied. It is important to note that these

AO/HLCP/0188 V3.0
requirements apply to all movements of goods, whether internationally or locally within a particular
country.

The consignment note should contain the following particulars:

 The date of the consignment note and the place at which it is made out
 The name and address of the sender, of the carrier and of the consignee
 The place and the date of taking over of the goods and the place designated for delivery
 The description in common use of the nature of the goods and the method of packing, and,
in the case of dangerous goods, their generally recognized description
 The number of packages and their special marks and numbers
 The gross weight of the goods or their quantity as otherwise described
 Charges relating to the carriage (carriage charges, supplementary charges, customs duties
and other charges incurred from the making of the contract to the time of delivery)
 The requisite instructions for customs and other formalities
 Other information, specifically related to that shipment
 A statement that the carriage is subject, notwithstanding any clause to the contrary, to the
provisions of the Convention

The carrier must check, as far as possible, the quantity and condition of the goods to be carried.
The sender is responsible for any damage to people, equipment, or other goods which is incurred
during the transit, unless the defect was apparent to the carrier at the time of taking on the
consignment and showed no reservations about it.

The sender is responsible for any problems caused by the inadequacy of the paperwork.

Other clauses detail the responsibilities and liabilities of the carrier, the consignor, and the
consignee.

Legislation and regulatory frameworks for transport usually include a specific requirement for
vehicle safety. Aid organizations will also lay down safety and security policies which need to be
followed. Requirements will include the vehicle weight, the way it is loaded, and how the load is
distributed.

Drivers and operators of vehicles are responsible for using a vehicle on the road with a safe and
secure load. Legislation will often state that, in transit, the drivers have full responsibility for the
safety of their load, even if they did not load it personally. Even if, in some countries, the legislation
is not implemented, respected, or followed, every effort must be made to ensure that the
organization’s drivers are following the legislation that has been laid down.

AO/HLCP/0188 V3.0
Drivers must ensure, as far as is reasonably practicable, that:
 The load space and condition of the vehicle floor are suitable
 Use is correctly made of load anchorage points
 There are enough lashings, for example ropes, and that they are in good condition
 Lashings are correctly made and properly tightened
 The front of the load is firmly against a fixed restraint to prevent the load shifting in transit
 Where required, wedges, etc., are properly used to ensure that the load cannot move
 Where loose bulk loads are being transported they are secured in such a way to ensure that
they cannot fall off the vehicle
 The vehicle or its axles are not overloaded, nor is the vehicle loaded too high to affect the
stability of the load and its movement or the ability of the receiver to safely unload it
 They check the load before moving off, after traveling a few kilometers and after
removing/adding to the load during the journey

It is important to ensure that both the vehicle and its load are protected from theft and loss.
Insurance is required for both the load and the vehicle. Vehicle insurance is dealt with in the Fleet
Management Unit. Insurance for the load needs to be arranged. This may be covered by the overall
shipping terms, if the road transport is performing an onward shipment, for example. In other cases
the load may be covered by a blanket insurance policy. In any event, it is advisable to confirm the
insurance status and requirements with the sender/owner of the goods to be moved. Having
insurance does not release the transporter from taking necessary precautions to avoid theft and
loss.

Vehicles and their loads can be protected in a number of ways. Operationally, potential hijacks can
be limited by using major roads only. Radio linkage or tracking devices such as GPS will allow a
vehicle to be constantly tracked and its planned location to be monitored against its actual location.
When stationary, alarm and immobilizer systems are available to deter theft of the vehicle, and
particularly for closed, rigid vehicles, the actual load. Should articulated combinations be in use,
loose trailers can be protected using a clamp and padlock on the trailer pin,

Open-backed vehicles present more of a problem. Only tight sheeting or covering will reduce
temptation. Tanker vehicles require different methods. Use of dipstick checks and metering should
be used when off-loading liquid cargoes. Problems of dipstick frauds or dilution can, perhaps, be
detected through weighing. Seals are the main method of securing single consignment loads in
closed vehicles, or on tankers. One-way metal or plastic seals have largely superseded simple,
crimped, lead seals on wire. This shows a number, which is annotated to drivers’ documentation;
the seal cannot be removed and replaced. On delivery, the customer should remove the seal, or be
satisfied that it is intact before it is broken.

AO/HLCP/0188 V3.0
A thief intending to steal a loaded vehicle requires:
 Knowledge of an attractive load
 The opportunity to access it
 Time to steal it and to get away before detection
 A market for the goods
 Limited or negligible perception of risk

Main origins of vehicle theft are from depots, from overnight parking areas, and from the roadside.

Theft can be committed by:

 Stealing an unattended vehicle
 Hijacking the vehicle
 Threatening or bribing drivers

Drivers are central to prevention of this type of loss, and their integrity is essential. Consequently,
careful recruitment and selection of drivers is critical. Training will impress upon them the need for
care, and procedures to follow to avoid risk of theft. Driver identification cards can be used for
added security, and to avoid thieves gaining access to vehicles by misrepresentation when parked
on third-party premises. However, there is little to prevent deliberate collusion by drivers. Vigilance
is essential and attention must be paid to any pattern of discrepancies on loads.

Use of this mode is limited by access to ports.

Speed over longer distances can be relatively
quick.

Loads, unless containerized, will be generally

limited to full-load, high-volume, low-value traffic,
for example, grain moved using bulk carriers.

Where distance is relatively short, “roll-on roll-off”

(RORO), vessels are often used. This provides an
interface between sea and road modes, and
speeds the transit of goods between international
locations which lie in relative proximity to each
other.

Over longer sea routes, the use of containerization through “lift on lift off” (LOLO) techniques,
becomes more attractive. On such routes, a large and specialized container vessel at very low unit
cost undertakes the marine element of the journey. Transfer at a seaport is quick and simple, using
overhead cranes. Either rail or road trailer, or a combination of both, will undertake land transit.

AO/HLCP/0188 V3.0
 Sophisticated, mechanical handling equipment provided at port, and inland rail terminals, allows
quick turnaround times to be achieved. Overhead cranes and straddle carriers can load or unload
containers in minutes. This can reduce ship turnaround times to just hours, increasing their cost-
effectiveness and time at sea.

In less developed ports, unloading and general labor by stevedores (dock workers) will include
significantly much more manual loading and unloading activity. This will result in potentially longer
transfer times.

Containers are particularly useful for inter-modal operations. The early introduction of standard
sizes, methods of construction, and securing have allowed standard equipment to be developed for
their handling. An ISO container is a box 8 ft., or 8 ft. 6 inches high by 8 ft. wide by 10, 20, 30, or 40
ft. long.

Standard dimensions allow close stacking, and ships are now available that can carry up to two
thousand five hundred, 40 ft. containers. For land distribution a train can hold upwards of 25
containers, whilst an articulated road vehicle carries just one 40 ft. container.

20’ 19’2” x 7’6” x 7’8” 2,200 21,800 33.2

40’ 39’1” x 7’6” x 7’8” 3,700 26,780 67.7
40’ High Cube 39’1” x 7’6” x 8’7” 3,870 26,510 76.3

Sea transport for loose and containerized cargo can be split between liners and trampers. Liners
are managed through regular sailing schedules, on fixed routes, with firm freight rates, often
controlled through a shipping conference. This is where shipping companies have formed an
association to agree upon and set freight rates and passenger fares over different shipping routes.

There are different shipping conferences for different regions of the world. Trampers have no fixed
schedule or defined routes. The whole vessel may be chartered or, alternatively, a certain amount
of space, and an agreement to collect the cargo from an origin port and discharge at a destination
port would be made.

Rates are subject to negotiation, and the relationship between the ship owner and the consignor is
governed by the terms of the Charter Party. On occasion, it may be most economical and efficient
to charter the whole vessel, for example, where large quantities of food have to be moved quickly to
disaster areas.

Bulk shipping is a term applied to the movement of dry, bulk cargos such as ores, grains, coal, and
fertilizers, and wet cargos, such as oil, petroleum, and liquid gas. The shipper sometimes owns
vessels, for instance, in the case of oil, or chartered for an agreed upon number of sailings.

AO/HLCP/0188 V3.0
The B/L is the transport waybill for a sea freight consignment. It is usually issued in a set of 3
originals and several, non-negotiable (N/N) copies.

The B/L is signed on behalf of the ship owner by the person in command of a ship, or the shipping
agent, acknowledging the receipt on board the ship of certain specified goods for carriage. It
stipulates the payment of freight and the delivery of goods at a designated place to the consignee
therein named.

The B/L has a triple function:

 It affirms the contract of carriage and sets out the terms thereof
 It is a receipt signed by the Master or another duly authorized person on behalf of the ship
owner, acknowledging receipt on board the ship of certain specified goods that he
undertakes to deliver at a designated place
 It is a negotiable document of title to the goods. To make sure that at least one original Bill
of Lading reaches the consignee in good time (since he will receive the goods only against
presentation of at least one Original B/L), the carrier usually establishes three original bills of
lading, which are sent to the consignee under two separate registered mails (it is also
possible to send one by ship’s bag)

The B/L must contain the following information:

 Name of the shipping company  Description of goods
 Flag of nationality  Gross/net/tare weight and
 Shipper’s name  Freight rate/measurements and weight
 Order and notify party of goods/total freight

<source: http://en.wikipedia.org/wiki/Bill_of_lading>

The B/L states to whom, and on what terms, the goods are to be delivered at destination.

Without an Original Bill of Lading the goods will not be released. The usual way to get the goods
without the presentation of the original B/L is the establishment (by the consignee’s bank) of a bank
guarantee, covering the value of the goods. Such guarantee can only be canceled by remittance of
the original B/L to the bank.

It is sometimes possible, at the discretion of the carrier, for the consignee, holding a copy B/L to sign
a Letter of Indemnity in Return for Delivery of cargo. On receipt of the B/L it should be passed to
the party responsible for clearing the goods. Once the vessel has docked and the goods have been
unloaded, the B/L and appropriate customs documents will be required to obtain release of the
goods for onward transport.

AO/HLCP/0188 V3.0
There are three different entries possible in the box headed “CONSIGNEE”:

T O BEA RE R This means that any person having possession of the B/L may collect the
goods; such person is not required to disclose his identity or to explain
how he came into possession of the Bill of Lading. The mere fact that he
has possession of, and presents, the B/L is sufficient.
Issuing Bills of Lading “to bearer” is not a common practice and carries
significant risk.

T O O RD E R This is the form of B/L used most frequently in commercial transactions.

As long as the shipper holding the Bill of Lading has not endorsed it, he is
entitled to dispose of the goods. By endorsing it, he transfers his rights to
the endorsee, that is, the person to whom the B/L is assigned by
endorsement. Title to the goods is thereby transferred to the new holder
of the B/L who may, in turn, assign it by endorsement to somebody else.

T O A NAM ED P A R TY
(Straight Bill of Lading)
In contradiction to a Bill of Lading “to order”, the Straight B/L (one in which
it is stated that the goods are consigned to a specified person) does not
entitle the shipper to dispose of the goods. That right is vested
exclusively in the receiver who, alone, has the right to collect the goods,
upon presentation of the B/L and proof of his identity.
The Straight B/L may be assigned by means of a document instrument in
writing, evidencing the assignment, which the assignee must present to
the Master of the vessel together with the original B/L when he collects
the goods.
On Straight B/L, the term “to the order of” printed on standard B/L must
be crossed out, and the deletion initialed by both the shipper and the
Master.

A Clean Bill of Lading is a B/L which contains nothing in contradiction to qualify the receipt on board
of the ship, the goods in “apparent good order and condition”. Goods may sometimes be ‘received
alongside,’ which can result in a delay prior to the physical loading of the goods onto the vessel.

An Unclean Bill of Lading is a B/L containing notation that goods received by carrier were defective.

The Through Bill of Lading is issued when a shipper wishes the carrier or shipping line to arrange for
transport to a destination beyond the port of discharge. The Through Bill of Lading, in addition to
the agreement to carry goods from port to port, includes a further journey (by sea or land) from the
port of ship’s destination to a distant place (for instance, a destination inland instead of a port).

AO/HLCP/0188 V3.0
Rail offers an effective method of bulk haulage. It is, therefore, very suitable for the movement of
large load sizes over longer distances. It is here where the major cost benefit of rail traffic lies.
Where the total delivery distance is not high, perhaps less than 500 km, rail will often be found to be
an uneconomic option.

Documentation for movement by rail is controlled through the rail waybill. The rail waybill is a non-
negotiable document. It contains the instructions to the railway company for handling, dispatching
and delivering the consignment. No other document is required except for international transport
across borders, where inquiries should be made locally, as to the proper documentation needed.

Rail waybills are not to be confused with bills of lading which is the document given to the shipper
indicating the railway’s acceptance of the consignment. It is important that the rail waybill specifies:
 Date of order  Destination
 Shipper’s name  Consignment load description
 Point of origin  Rail car type required (more info:
http://worldtraderef.com/WTR_site/Rail_Cars/Guide_to_Rail_Cars.asp)
 Consignee’s name
In some cases, the size of the consignment will mean that the entire train movement is dedicated to
one organization. Significant quantities can be moved in one trainload. In certain circumstances,
wagons can be built to customer specifications, but normally wagons will be available on a spot hire
basis. Wagons come in all shapes and sizes; examples of these applications are flats, tankers,
hoppers, and side-loaders. However, the availability both of locomotives to haul the train, and the
wagons themselves, will impact on the speed and reliability of this mode.

For long distances, the international transport container option is often attractive. Containers are
built to an international (ISO) standard size and can be easily handled between road, rail, and sea.
Containers will offer a medium for transporting smaller unit loads, and facilitate routes requiring an
intermodal application. Third-party service providers at custom-built rail terminals will often
consolidate loads for a particular country. Groupage and consolidation facilities at railheads allow
consignments which are smaller than container loads to be handled.

Without a dedicated railhead, an organization will still need to deliver to a transshipment point by
road. The unit load can then be placed onto a wagon for on-shipment to the destination railhead,
for final delivery, again, usually by road. In some instances, the road vehicle itself will be loaded onto
the train. Loading and unloading facilities will normally be available at main terminals, such as major
road transshipment points and ports, however, smaller goods facilities may not be adequately
equipped to efficiently handle the loading and unloading of wagons.

Rail can prove a cost-effective method of intermodal transport if both land and sea distance is long.

Rail can be quite speedy, although transit between railheads and the final destination can reduce
this aspect. Also, where the train has to be split at an intermediate point and wagons joined to a
variety of different trains; there will often be delays which will increase the overall transit time. The

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timetables will not always coincide which, again, adds to the overall transit time. Climatic conditions,
such as the rainy season leading to flooding, can also impact the reliability of the mode.

It is useful to acknowledge other modes of transport which may be encountered from time to time.

In some instances, the only

possible means of transport is by Elephant 500 kg 5-8 hours
animal, for example, for final 50 kg (mountain work)
transportation to very remote
Donkey 50 kg (mountain work) 8 hours
villages.
Mule 50 kg (mountain work) 8 hours
Managing animals is not easy and
Llama 50-80 kg 8-10 hours
the best way to deal with this is to
Horse 60 kg 6 hours
rent them from the owner who will
also manage and care for them. Bull 150-250 kg 8-10 hours

The owner will, therefore, be in Camel 150-250 kg 50 km

charge of all logistical aspects of Yaki 70 kg 50 km
the “convoy.”

The big difference between a truck and an animal is that, even if the animal does not move, it is
eating and drinking; consequently, planning is of a crucial importance to ensure that sufficient food
and water are available en route. Benefits of using animals as a mode of transport include:
 Local animals are adapted to their climate and conditions and their owners know how to
best use them in these conditions, e.g. donkeys in the mountains don’t fear fog but
helicopter pilots do.
 Supporting the local economy by purchasing transport locally.

The goods being moved must be packaged in relation to the weight which the particular animal
being used can carry. For information, the table above shows the animals used most frequently in
such situations and their approximate work rates. These may vary locally because of climatic or
other local conditions.

Where road and rail transport is not possible,

due to lack of infrastructure, it may be

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necessary to transport goods by river or man-made, in-land canals. This mode of transport also
suits bulk shipments of commodities. This will often be done using motorized barges or similar
vessels. Goods can be loaded and unloaded using jetties and quayside facilities. In some cases they
may be unloaded from seagoing vessels direct for onward transit.

Although transit times are slow, there is usually little to delay the movement of the vessel between
points. In the dry season, rivers may become too shallow; in the rainy season, they may be in full
flood, and this may create some problems for movement of the vessels.

Freight interchanges, depots, and terminals are typically operated by third-parties. Although the
management of these facilities may offer security and protection of both the vehicle and its load, it is
advisable to ensure that other precautions are in place to protect the organization’s goods and
assets.

It is important to be aware of the security arrangements which are in place at the locations where
loads are being transshipped or vehicles are being left during breaks in their journeys. These
locations should be as secure as possible and have their own security arrangements in place.

This should include:

 Adequate perimeter protection, in the form of fences and, if possible, lighting or cameras
 Controls on the entry and exit of staff and visitors
 Controls on the entry and exit of all vehicles, including contents
 Recording of all vehicle movements
 If the stay in the location involves the payment of a fee, the controlling organization should
be able to provide evidence of indemnity against loss and theft

Often, the degree of effectiveness which security arrangements will deliver can be judged from the
quality of their security staff. The nature of most guarding jobs means that, either companies
employ low-grade and low-paid staff, or good staff who quickly get bored, routine-bound, and slack.
This can quickly lead to situations of loss, arising either through corruption and bribery of low-paid
workers, or through sloppiness.

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There are a number of third parties who are involved in the movement of goods. They
have key roles to play in helping humanitarian aid organizations to move goods to the
beneficiaries. This section will consider:
 Freight forwarders
 Other parties involved in international movement:-
 Clearing agents
 Customs
 Port authorities
 Customs brokers
 Labor including stevedores (dock workers)

It should of course be recognized that, from time to time, goods are held up or do not
arrive at all for reasons beyond the control of either the transporter or the receiver. This
is known as ‘force majeure.’ It essentially releases one or both parties from liability when
an extraordinary event, beyond the control of the parties, occurs. Typically, ‘force
majeure’ covers natural disasters such as fire or flood, other “Acts of God,” or war.

Ideally, a freight forwarder should be used which has trained, competent, experienced, and
trustworthy staff. The forwarder should carry the appropriate government licenses and authorities
to conduct customs clearance formalities, and have ongoing access to information regarding
changes in customs requirements for the countries in, and through which, the goods must travel. In
order to do this, the forwarder should have at least a countrywide, and preferably a multi-country,
network. They should be able to prove influence in the transport market, with port authorities and,
if possible, other regulatory bodies. Also, experience of working with humanitarian aid
organizations, for example, experience in successfully handling duty exemption arrangements for
humanitarian organizations, should influence the choice of forwarder. They should have offices in
the port itself or very close by and be able to demonstrate influence with port authorities and other
interested parties.

The forwarder should be able to offer a wide variety of services, or have access to all modes of
transport, through demonstrable relationships with a variety of shippers. This will remove the need

AO/HLCP/0188 V3.0
to arrange contracts with different companies for different services, for example, road, and sea and
airfreight. It is useful if the chosen forwarder has its own warehouses, bonded or otherwise, or has
unimpeded access to such facilities to protect and control goods in transit. Ideally, the forwarder
should have transport facilities in the origin and destination countries or, again, be able to
demonstrate firm relationships with transport companies, and have demonstrable influence in the
transport market.

A freight forwarder should be chosen which has a proven record of reliability, accuracy, and
timeliness and is flexible in its availability to deal with short notice situations, outside of office hours,
and on weekends and public holidays. They should have been in business for a number of years
and have an established reputation. Wherever possible, this should be checked by obtaining
references from other organizations which have used their services. It should have trained,
competent, experienced, and trustworthy staff.

Where a forwarder is going to be involved in international movements by sea, it should have an

office close to both the ports of origin and of entry. It should be experienced in hiring labor for
cargo handling. Its services need to include verification of goods arriving at the port and of
managing discharge, storage, and loading operations, checking weights, inspecting shipping
packages for visible damage and arranging on-shipment to final destination.

More able forwarders will have embraced technology to a high degree, thus allowing good inter-
office communications, particularly in order to deal with any problems which arise. It should also be
able to use technology efficiently, including a good telecommunications system and a track and trace
system which allows visibility of the consignment at all times. More sophisticated forwarders will
have systems that can also be accessed by their customers.

The following checklist summarizes the key areas discussed above. If possible, when selecting a
freight forwarder, all these characteristics should be identified:

 Licensed by the government to conduct Customs clearance formalities and be up-to-date on

changes in Customs requirements
 Offer a wide variety of services, so that you do not need to contract with many different
companies for different services (e.g. sea and air freight, re-packaging of damaged materials,
etc.)
 Own or have access to a bonded warehouse to protect and control shipments in transit
 Own a trucking fleet for inland transport and have access to specialized vehicles when
needed such as container trucks, low-bed trailers, tankers, etc.
 Have trained, competent, experienced and trustworthy staff
 Have a proven record of reliability, accuracy, and timeliness, as verified by references from
other groups that have used their services
 Are flexible in their availability on short notice, also outside of office hours and on public
holidays
 Have an established reputation; have been in business for a number of years

AO/HLCP/0188 V3.0
  Have influence in the transport market, with port authorities, etc.
 Are experienced in successfully handling duty exemption arrangements for humanitarian
organizations
 Have an office in the port area or nearby
 Are experienced in verifying goods arriving in the port: discharge, storage and loading
operations, checking weights and inspecting shipping packages for visible damage
 Are experienced in hiring porters for cargo handling
 Have at least a country-wide, preferably a multi-country regional network
 Use technology effectively, including a good telecommunications system and, preferably, a
computerized tracking system that allows visibility of where any shipment is at a given time

Although it is advisable to use an intermediary, such as a freight forwarder or clearing agent, to

handle international movements, it is still important to have a basic understanding of the roles of
other third-parties involved in international movement. It should be noted that these third parties
might be private companies or in some cases state run organizations.

Clearing agents perform a similar role to the freight forwarder, but will often be based in what, to the
consignee, is the country of destination. Essentially, the selection criteria for an agent are similar to
that of a freight forwarder. In some countries, a government clearing and handling service must be
used. The consignee will work with this agency to secure release of the goods. The consignee may
still choose to employ a freight forwarder to manage the process on their behalf.

Although movement within economic blocs, such as the European Union, minimizes the need for
cross-border controls on the shipment of goods generally, movement between one country and
another will require customs documentation to be completed. This can be an involved and
complicated process. Not only is it necessary to know the regulations related to the export of goods
from the origin country; it is also necessary to understand the requirements of the destination
country. Where movements pass through intermediate countries, there may also be additional
customs requirements to be met. In many countries, customs officers have a considerable degree
of ‘power’ and, often, delays in moving cargo will stem from customs problems, such as missing or
incomplete customs documentation.

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The role of the port authority is to manage the port, ensuring optimal use of labor and resources to
minimize vessel turnaround times. Typically, the authority will manage the berths, schedule arrivals
and departures, and the loading and unloading of vessels. They will also manage all dock facilities,
such as lifting equipment, RORO facilities, and rail lines and facilities within the perimeter of the dock
area. They will also manage the pilotage of vessels in and out of the port where required, when
necessary. As the jurisdiction of civil police will not extend into the port area, the authority will also
be responsible for the security and policing of the port area.

Customs brokers are organizations, specializing in the preparation and processing of customs
documentation. Freight forwarders often carry out this role as part of their service. Customs
brokerage plays an important part in maintaining the flow of goods through a port by ensuring that
paperwork is accurately completed and efficiently processed.

In order to conform to the receiving government’s requirements, it may be necessary to inspect the
cargo upon arrival. This may be carried out by a government department, or by a private inspection
service. The inspection is carried out to check the quality of the cargo, its conformance to the
specification, and its fitness for use in that country. Until the inspection has been carried out and
the cargo approved, it cannot be moved to its final destination.

In the days before containerization, the

labor and dockworkers who loaded and
unloaded the ships were known as
stevedores. The term stevedore comes
from the Spanish ‘estivador’ meaning to
stow a cargo.

Loading a ship demanded special skills, to

make sure that the ship did not become
unbalanced and capsize. With the advent of containerization, the need for these skills was reduced
considerably. Nevertheless, the loading and unloading of non-container vessels still takes place and,
in these circumstances, the role of the dockworker is still crucial to the movement of goods by sea.

Container vessels will handle standard ISO containers. The task of the ship operator is to secure
enough traffic to fill the vessel.

AO/HLCP/0188 V3.0
Although some vessels carry loose, general cargo, where volumes to be moved are below a
container load, these can be routed through consolidation service providers in order to achieve the
most economic rates.

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Whether movements are being made on a national or international basis, they need to
be carefully planned. Routine movements, taking place on a regular basis, need to be
planned at the onset, but can then usually be managed fairly easily. Non-routine
movements occurring on an ad hoc basis will have to be planned each time they occur.
It is important to understand the types of movements which will need to be organized,
the areas which need to be considered as part of the planning and the importance of
monitoring information on the progress of the movement for the benefit of both the
organization managing the movement, and the customer at destination.

Air, sea, and rail movements will either be undertaken through the use of scheduled services or
some sort of one-off, spot-hire arrangement. Road transport is usually seen as being more flexible,
although groupage services which run to set routines are also available for less than vehicle loads.

Such services run to set timetables between ports, in some cases supplemented by short feeder
services from a major port to other smaller ports. It is, therefore, necessary to plan the movement
around the scheduled times. This will impact on the time when the goods need to be made
available for collection and movement to the railhead, port, or airport, to meet a particular
departure. The schedule will also influence the delivery time to the customer. In terms of these
modes, delivery to final destination usually involves transshipment to road and this time factor
needs to be incorporated into the overall journey time.

In terms of movement by sea, smaller shippers often organize themselves through shipping
conferences. Larger shippers will compete independently. All offer scheduled sailings at a regular
frequency. Air cargo routes are also subject to timetables as are rail movements. There is little
room for flexibility when using scheduled services.

Couriers are ideal for handling smaller packages, sometimes having a high intrinsic value, which
need to be moved quickly between two points. Usually they will offer a one-stop movement from
door to door. They are relatively expensive and would not normally be used for routine carriage.

AO/HLCP/0188 V3.0
For larger volumes which need to be moved on a one-off basis, spot-hiring is used. This allows
flexibility in terms of the timing of the movement. In sea terms, this facility is offered through
chartering. This may be an entire vessel for a single journey, or some form of time-based
arrangement. Chartering is often appropriate if scheduled services between the origin and
destination are not available, or have ceased to operate. Alternatively, it may involve purchasing
space on what is colloquially known as a ‘tramper.’ These vessels have no fixed abode and move
from port to port on a route defined by the destination of the cargoes it carries, rather than a set
shipping schedule. It is not always easy, however, in this situation, to obtain accurate arrival times
for the cargo.

Similar arrangements exist for airfreight, particularly in terms of chartering an entire airplane.
However, there are certain other factors which need to be considered for this particular mode. The
range of the aircraft may be less than the distance to be traveled, requiring interim stops to be
planned. The type of aircraft available may not be suitable for the goods to be moved. Outside of
territorial waters, the sea is available to all, while airspace over a country can be restricted. Landing
slot availability may constrain the capability of the aircraft to land at certain airports.

Situations will arise where special arrangements have to be made to move goods. This is often
related to the nature of the goods. For example, heavy, plant equipment will require special slinging
and stowage for sea, air, and rail movement. When moving by road, special trucks, such as low
loaders, may be needed; this would usually involve contracting with a specialist provider.

In planning movements, it is necessary to have a clear understanding of the volume and the nature
of goods to be moved, in order to determine the resources required for that movement. An
understanding of the structure of the tariffs and rates which apply to a movement will allow break
points to be identified which improve the unit cost of movement. This may influence the actual
volumes being moved at a particular time.

Movement of goods raises a number of issues with which we must deal. The safety of people
involved in the movement, whether they work for the humanitarian aid agency or not, must be
considered. The security of the goods and the people employed in moving them is a factor. In
addition, there are general issues to be considered, regarding the management of people involved
in the handling, be they the organization’s staff, or third-parties.

AO/HLCP/0188 V3.0
The safety of staff employed by the organization, whether on a permanent or temporary basis,
should be a prime consideration. Appropriate training should be given and tasks assessed to
identify the risks involved in executing the job. For example, if the driver of a vehicle is involved in
the loading or unloading of goods, then manual-handling training should be provided. In many
countries, local health and safety at work legislation describes the requirements for risk assessment
of work, and also of the procedures for investigating serious accidents to staff. Staff who have an
accident at work still need to be paid when on sick leave and their jobs will need to be covered,
either by paying other staff overtime, or by paying temporary staff to cover their work.

For employed drivers, records should be kept of any accidents on the road, and a process of check
testing should be developed to ensure that individuals can be checked and retrained where
appropriate.

Where the activity involves movement in, for example, an earthquake zone, appropriate information
on the occurrence of aftershocks should be gathered before initiating the movement activity.

Insurance cover for goods to be carried is discussed elsewhere; it is also advisable for the
organization to ensure that appropriate liability insurance is in place to cover their employees.
Contractual arrangements with temporary and contract workers should be checked to ensure that
appropriate cover is held.

The security of goods, and the staff involved in their movement, is of paramount importance. An
assessment of potential risks should be made prior to initiating movements, and appropriate steps
should be taken to remove or minimize them. Where security concerns are related to conflict
zones, assistance from the military can be explored. Tracking of movements is discussed in the
section below headed ‘Planning movements.’

Movements, in a national context, can usually be managed more closely than movements between,
or across, countries. One or more third parties, working in different time zones and in different
languages, will often manage international movements.

Often, international movements are planned and managed by a freight forwarder or logistics service
provider. They will work within the broad plan to meet the client requirements, in terms of
movement time and routing. Local movements can be usually planned and coordinated more
easily.

In planning movements by sea, port capability and the control of port activity needs to be
understood in order to assess any possible constraints which would impede the movement of

AO/HLCP/0188 V3.0
goods through them. The following factors will indicate the suitability of a port to handle the
planned movements:
 The number, type, and size of ships that can be handled at one time
 Typical vessel waiting and discharge times
 Availability of equipment to handle different types of consignment, for example, bulk,
bagged, loose, containers etc., and its state of repair
 Availability of labor, working hours and typical discharge rates for both manually unloaded
cargo and containers
 Operational factors that may constrain activity such as the risk of congestion or the impact
of the weather at certain times
 Port documentation requirements and the efficiency of procedures for clearing cargo
 Storage facilities and infrastructure such as railways, roads

Ideally, movements should be planned and managed by a dedicated traffic office. This will be
responsible for determining the appropriate routing for the goods, allocate resource (own or
contracted), and inform the destination of estimated delivery time.

During the movement they will track the progress of the goods, and update delivery times
accordingly. They will manage the staff involved in the movement and deal with any issues which
arise. They will also handle any problems which occur during the movement, liaising with
contractors, freight forwarders, and shippers as required. The traffic office may actually produce the
required documentation to cover the transit; alternatively, they will be responsible for collecting the
required documents together prior to dispatch.

Where the movement of goods is to an area under the control of the local, public authority, a clear
understanding of the requirements covering movement of goods must be gained from the
appropriate authority, prior to initiating any movement.

Once movements have been planned and are initiated, it is important to maintain an information
flow between all parties involved to ensure the safety and security of the goods, and the adherence
to service promise. In environments within which humanitarian aid organizations operate, many
events can have an impact on the efficient movement of goods. In natural disaster or conflict zones,
the risk to the movement is potentially severe. Having up-to-date information on the status of the
movement allows problems to be quickly identified and addressed. This is necessary, not only to
protect the integrity of the load but, where the organization’s staff are involved in the movement, the
safety of personnel as well.

Where goods are being moved by a third-party, the onus is on that third-party to track the
consignment, or the transport medium moving the consignment, and either convey the status to the

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sender or provide, perhaps through the use of the Internet, the ability for the sender to track its
goods.

Where an organization is transporting goods using its own resource, the onus is obviously on the
organization to have appropriate procedures in place to track the progress of the goods. Vehicles
can be fitted with global positioning devices (GPS). These allow the base to monitor the location of
the vehicle in real time, and to compare its progress and route with that which has been planned.
Vehicles can be equipped with cell phones or radios, to allow the driver to contact base, perhaps to
give a status report, but equally importantly, to alert the traffic office of any problems which occur.
Communication is, of course, two-way. Continuous contact with the vehicle allows the traffic office
to redirect vehicles if problems arise about which the driver does not know, such as congestion and
road closures.

This contact allows the sender to notify the receiver at destination of any changes to the estimated
delivery times. This can be critical if the goods are urgent and, perhaps, lives depend on their timely
arrival.

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Humanitarian aid has to be moved through the supply chain, sometimes over hundreds
and thousands of kilometers, usually using more than one means of transport. A
number of factors will influence and have an impact on this activity, and the role of
transport is to execute this movement at the right time, in the right condition, to the right
place, at an acceptable cost to the organization.

It is important to recognize how the characteristics of goods impact on their handling.

The movement of goods involves understanding the characteristics of those goods so
that they can be loaded, transported, and unloaded correctly, so as to avoid damage,
loss, and possibly injury, to those involved in the movement. This, therefore, involves
understanding the safety and security precautions and requirements which may
influence the handling of the goods. For example, food may need to be protected from
adverse weather conditions and perhaps moved in a temperature-controlled
environment, such as a refrigerated container. Medicine and drugs need to be moved in
a secure vehicle and may also be required to be temperature controlled. Tents and other
bulky equipment may require special handling equipment to facilitate vehicle loading
and unloading activity.

Usually, the modal choice is constrained by weight or cube parameters. For example, if
goods are being moved which have a high cube-to-weight ratio; the size of the transport
medium must be optimized as close as possible to the permitted weight for the
equipment. Conversely, if the cube-to-weight ratio is low, the size of the transport
medium can be relatively small, as the weight limit will be reached at a low cubic
capacity, e.g. a metric ton of nails occupies less volume than a metric ton of blankets.
The size of the goods, and their weight, must be considered when selecting the
appropriate method of transport and handling.

Goods can be unitized for transportation in various ways and the advantages and
disadvantages of the various methods need to be assessed. Finally, factors which
influence the demand for, and supply of, goods for movement should also be considered.

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The characteristics of the goods will influence the nature of the handling method required. In broad
terms, the key factors to consider are:
 The size, shape, and weight of the goods being transported
 Whether the goods are flammable, hazardous, or toxic
 The value of the goods
 The requirement for security in transit
 The degree of fragility
 The speed with which the goods might deteriorate during transportation
 The speed with which the goods are required

Product characteristics can influence the selection and size of the transport resource. For example,
the nature of hazardous goods being transported may, possibly, restrict the volume which can be
moved at any one time; this will, consequently, define the size of resource required.

The characteristics may also create a need for

specialist handling. Staff may have to be trained
to handle specific types of goods. They may also
need to be trained in the use of any special
equipment which is required to handle the goods.
It is important to remember that this may not just
be the transport staff, but also, for example,
warehouse staff who will be involved in loading
and unloading and the storage of the goods.

In many cases, loading and unloading will be

carried out manually, using available labor. This
will typically be one box, carton, or sack at a time. This may require a large number of workers to
complete the activity. Examples of this could be:
 Creating a ‘human chain’ to move the goods over a distance.
 Positioning people on the truck to move goods to the back

The photograph to the right illustrates the first

situation.

Advances in mechanical handling equipment

now offer the opportunity to manage larger
loads and eliminate this need to handle
individual items. Handling equipment is
discussed in detail in the Warehouse Unit.

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Such equipment includes:
 Pallet loading and moving equipment
 Tail lifts
 Conveyors
 Built in cranes

Probably the simplest, and most widely used, handling aid is the pallet. Pallets are designed to be
lifted onto and off of vehicles, using either a forklift truck or a hand pallet truck, where a loading dock
is in use. It should be remembered that not all delivery points might have the equipment to offload
pallets. In humanitarian aid situations, however, pallets may not be in use, or equipment is not
available to handle loads received on pallets. In this situation, activity using manual labor as
described above may need to be used.

Tail lifts can be fitted to the vehicle, usually at the rear. They are operated using hydraulics and do
not interfere with normal dock loading as they can be folded away under the chassis of the vehicle,
making them suitable for demountable vehicles as well.

Roller conveyors can assist movement of goods into and within a vehicle. They usually comprise of a
system of two or more tracks, which allow heavy loads on rollers to be moved by hand. The tracks
can be either permanently fixed to a loading dock or designed to be portable. Additionally, such
devices can be powered to enable rapid loading and unloading.

Some vehicles will have a small crane incorporated into the body, either behind the cab of the
vehicle or in the middle of the body. These facilitate the loading and offloading of large crates or
bundled/banded goods which are not actually palletized.

When planning movements of goods, it is important to understand the nature of the goods to be
moved and the way in which they are being transported. This will help to shape the methods and,
where possible, the equipment which will be used to carry out the required movement.

In most countries, special legislation will exist to cover certain types of goods being moved. It is,
therefore, important to check with the appropriate authority about what legislation exists, and put
arrangements in hand to comply with the legislation before and during transit.

Goods to be moved which will usually be covered by legislation include:

There will normally be regulations relating to the movement of such goods. The supplier or donor of
medicines and vaccines, for example, will usually supply information regarding their storage and
transport. This is often related to temperature ranges. In some countries refrigerated vehicles or
refrigerated containers will be required to transport these items. Some countries will have

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legislation, detailing regulations concerning the movement of chilled and frozen food. Perishable
goods may also need to be transported in a temperature-controlled environment.

It is important that the temperature is controlled all along the chain.

Internationally agreed-upon regulations impact on the movement of hazardous goods by road, rail,
sea, and air. These goods are sub-divided into classes which define the hazard and identify the
possible threats posed during transportation. There are nine classes of goods, some being further
sub-divided.

CLASS 1: Explosive substances, explosive articles, and pyrotechnic devices. Includes

Explosives ammunition, fireworks, detonators, etc.

CLASS 2: Transported as compressed, liquefied, refrigerated liquefied or gas in solution.

Gases Includes aerosols. This class has three divisions:
2.1 Flammable gases, i.e. butane, propane;
2.2 Non-flammable, non-toxic gases, i.e. oxygen, liquid nitrogen, and
compressed air;
2.3 Toxic gases, i.e. chlorine, coal gas.

CLASS 3: Flammable liquids - includes liquids with a boiling point of 35 degrees C or less or a
Flammable Liquids flash point of 60.5 degrees C or less. Examples are Petrol, Alcohol, etc.

CLASS 4: Flammable solids - substances liable to spontaneous combustion and substances

Flammable Solids that, in contact with water, emit flammable gases. This class has 3 divisions:
4.1 Flammable solids such as hexamine solid fuel tablets for camping stoves;
self-reactive substances and desensitized explosives.
4.2 Substances liable to spontaneous combustion under the conditions
encountered in air transport such as Phosphorus that burns by itself
when exposed to air.
4.3 Substances that, in contact with water emit flammable gases, i.e.
“Dangerous when wet”. Examples are sodium, zinc particles, etc.

CLASS 5: Oxidizing Substances and Organic Peroxides. This class has two divisions:
Oxidizing Substances 5.1 Oxidizing substances - substances, which themselves are not necessarily
& Organic Peroxides combustible, but which by yielding oxygen, may cause, or contribute to the
combustion of other material. An example is a generator that produces
oxygen by chemical reaction.
5.2 Organic peroxides - these are thermally unstable substances which may
undergo heat generating, self-accelerating decomposition - which may be
explosive, rapid, sensitive to impact or friction or react dangerously with
other substances. An example is Hydrogen Peroxide.

CLASS 6: Toxic and Infectious Substances. This class has two divisions:
Toxic & Infectious 6.1 Toxic substances - those substances are liable to cause death or injury if
Substances swallowed, inhaled, or absorbed through the skin. Examples are
pesticides and poisons.
6.2 Infectious substances - those are known to contain, or reasonably
expected to contain, pathogens.

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CLASS 7: For example the waste of X-ray machines.
Radioactive Material
CLASS 8: Substances which, in the event of leakage, can cause severe damage by chemical
Corrosives action when in contact with living tissue or materially damage other freight,
containers, or the aircraft. Examples are mercury, battery acids, etc.

CLASS 9: Miscellaneous Substances and Articles - substances that have a hazard in

Miscellaneous transport, but are not covered by any of the other Classes; such as magnetic
articles, which can have an impact on the aircraft’s compass. Internal combustion
engines, dry ice (solid carbon dioxide), etc.

It is the responsibility of the sender to know if the goods are hazardous. Some humanitarian aid
organizations will advise, or have an indicative list, for the goods which they may need to move. In
case of doubt, the nearest Certified Dangerous Goods Shipper should be consulted for advice and
direction.

As a general guide the following points are relevant:

 Where hazardous goods are concerned, legislation will normally cover packaging and
labeling. These regulations place a responsibility on the sender of the goods. It should be
remembered that, if the goods have come from outside the destination country, there might
be need for further labeling and, perhaps, repackaging, to reflect any local requirements.
 Hazardous goods transported in bulk loads, e.g. full tanker load vehicles, tank containers
transported on trucks, or bulk carriers, are also normally subjected to legislative constraints.
The transit medium must conform to construction regulations and be appropriately marked.
Information cards and other relevant information must usually be carried, giving full details
of the load, emergency procedures.
 Appropriate safety equipment must be carried, and there may be regulations concerning
vehicle parking. If the journey has to be split appropriate arrangements need to be made
for the temporary storage of the goods.
 Dangerous goods in packages or in bulk, for example, chlorine, will often be covered by
specific safety legislation.
 Certain items are prohibited from being transported at the same time in a common
container or vehicle.

Often, vehicle construction and use legislation will stipulate limits on vehicle lengths, widths, and
weights. However, these will not apply to those vehicles which are specifically designed, constructed,
and used solely for abnormal loads. These loads are sometimes defined as loads which cannot be
divided into smaller loads, for example, heavy plant, and equipment. These vehicles will have higher
length and width specifications, and will usually have a significantly higher maximum vehicle weight
permitted. The actual transit may have to be notified to local police and an in depth knowledge of
the route is required, such as bridge height, if the load is going under, or maximum weights if the

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load is crossing. Because of the nature of the vehicles required it is usually more appropriate to
contract out such movements to specialist providers.

If it is necessary to transport animals using trucks, again relevant legislation should be followed.
Regulations often exist to ensure that animals do not suffer distress or discomfort, and that the risk
of spreading disease is minimized. Vehicles may require non-slip floors, adequate ventilation, and
suitable loading ramps. Provision will normally need to be made for food and water and appropriate
breaks in the travel. Where airfreight is used, the aircraft must have a pressurized, insulated hold
within which the animals can be carried. As most aircraft are constructed of aluminum alloy,
protection from animal waste is required to ensure that corrosion of the alloy does not occur, e.g.
plastic sheeting and duct tape. Regulations will often also cover the cleaning and disinfecting of
vehicles. Different legislation can apply to different animals and their movement in different
countries. In some countries legislation may not exist to cover the transport of animals. In this case
it is important to consider best practice and to ensure the health and wellbeing of the animals at all
times.

Movement of people is often conducted in a convoy situation. Select the safest and shortest route
from the place of origin to the destination. Trucks with a low center of gravity should be used, or
buses. They should be inspected and proven to have good lights, brakes, tires, and steering
mechanisms.

It is important to make provisions for personal effects to travel with the owners. Consider this when
planning the number of people in each vehicle, or move personal effects in the trailer attached to
the truck carrying the owners. Put livestock in a separate truck in the same convoy.

When planning the movement, if water points along the route are felt to be inadequate, include a
water tanker in the convoy. Also consider vehicle repair facilities along the route in case of
breakdown, or accidents. If inadequate, include replacement vehicles in the convoy as well as a
mobile workshop with mechanics. Do not overcrowd the vehicles. In the event of a breakdown,
passengers may have to double up.

Prepare a passenger manifest ahead of time and check people off as they board vehicles, and again
upon arrival at the destination. Where appropriate, medical and registration records should
accompany the people. Take care of the drivers. To drive safely, they need adequate meals, rest
breaks, and time for vehicle maintenance. Provide relief drivers.

AO/HLCP/0188 V3.0
The form of the goods to be moved will influence
the manner in which the goods are transported.
Some goods will be best handled loose, for
example, grain in sacks. These will be handled
individually, when loading and unloading vehicles.
Transshipment from ships to vehicles can involve
the use of slings and nets to handle a number of
loose items at one time. Likewise, when being
transported by air, the opportunity may exist to
bulk the goods, using pallets designed to fit the
transporting aircraft although, on discharge, these
pallets often need to be stripped and returned
with the aircraft. Other goods, especially those
packed in cartons or boxes, can be formed into a
unit load through the use of a pallet. Where the
goods to be moved are irregular in shape,
unpackaged, or not stackable on pallets, the use of
stillages can be used to facilitate their movement
and handling. Examples of stillages are shown on
the right:

Stillages are stackable for easy transportation, provide protection from damage and, like most
pallets, are reusable.

There are a number of important advantages to using pallets and stillages to transport goods:
 Palletized and stillaged goods often provide a more compact load than loose goods.
 Loading and unloading is speeded up, minimizing vehicle turnaround times.
 They offer the opportunity to optimize the capacity of the transport equipment.
 They provide a unit load that can be easily moved through a multi modal route.
 Lockable stillages and banded or stretch wrapped pallets provide some protection for the
goods from damage and loss.

Although pallets and stillages have considerable advantages in the movement of goods, there are
also some disadvantages that need to be considered:

AO/HLCP/0188 V3.0
  Pallets need to be correctly stacked to ensure safe transit. This may require some training
of staff in the correct configuration to be assembled.
 Pallets need special equipment, e.g. forklift trucks, to facilitate their handling and
loading/unloading. This may not always be available.
 Pallets come in many shapes and sizes which can make it difficult to optimize the use of the
transport equipment, although the two standard sizes (1200x800 and 1200x1000) are the
most commonly used.
 Although pallets and stillages are designed to be reused, it is sometimes difficult to recover
them once they have been delivered to the final destination.
 If final deliveries are to be made in less than pallet quantities to a particular customer, there
is a tradeoff to be considered between optimizing the vehicle capacity use and the time
involved in consolidating consignments for different customers onto one pallet.
 Pallets take up space and reduce the overall volume available for goods.
 Pallets add weight to the movement. E.g. a 1200x800 pallet weighs approximately 25 kg
 Phytosanitary compliance for international use. Pallets must be made of materials that are
incapable of being a carrier of invasive species of insects and plant diseases. The standards
for these pallets are specified in the International Standards for Phytosanitary Measures No.
15. See www.ippc.int for full details.

The container provides an effective and secure way of moving goods between nodes. It offers a
flexible solution for the transport of goods; it is effectively a box which is capable of being
transported using a variety of different modes of transport, such as sea, road, and rail. Containers
may hold a full load of an organization’s goods (referred to as FCL or Full Container Load). Where an
organization has a smaller volume to move it can be referred to as an LCL (Less than Container
Load), and will normally be consolidated with other cargo destined for the same port.

There are certain standards which apply to the dimensions of basic shipping containers, regulated
by ISO (International Standards Organization). Within the overall dimensions, the design of
containers can be very varied. The basic size of a container is 8 feet wide by 8 feet 6 inches high.
Standard containers are available in lengths of 10, 20, 30, and 40 feet. Higher cube containers can
have a height of around 9 feet 6 inches.

Half-height containers are available for heavy goods where cubic capacity is not important.

Maximum gross weights apply. The container’s Tare weight (i.e. the weight of the empty container)
will also be specified in order to determine the maximum permitted payload.

The range of lengths gives an opportunity to build load sizes which optimize capacity.

Sometimes a larger-sized container than required will be supplied for a particular shipment. This is
in order to optimize the return load logistics of the operator.

AO/HLCP/0188 V3.0
There are advantages and disadvantages to containerization, which will be discussed in this section.

 They offer a means of consolidating cartons, boxes etc. into a manageable unit load.
 Providing due care is taken in loading and unloading a container, the product packaging
need not be as robust as would be required for un-containerized transit.
 A container whose capacity is fully utilized provides an economic transport solution.
 Containers offer the opportunity to optimize the capacity of the carrying medium, be it road,
rail, or ship.
 They are secure and considerably reduce the risk of theft and pilferage of goods.
 They provide an opportunity to offer, through the use of different transport modes, an end-
to-end service from supplier to customer.

 They require sophisticated handling techniques. Although the rail and ship operators will
have infrastructure in place to handle containers, this may not necessarily apply to all port
facilities. This will sometimes result in slower transit times overall.
 Lack of handling facilities at donors’ and other suppliers’ premises and at ports and airports,
may tie up trailers and vehicles, for example, whilst containers are stuffed and de-stuffed.
 Often, containers will be used on trips where the container operator cannot secure a return
load. This may delay the return of containers and occasionally result in non-availability.

There is a vast range of containers available. There are three main types of box container:
 Non-insulated containers have a standard construction, protect against weather and theft,
but offer no real protection against extremes of temperature.
 Insulated containers are lined to prevent heat loss, but constructed to ensure airflow
around the goods is maintained.
 Refrigerated containers have a built-in unit which keeps the goods chilled or frozen as
required. They obviously require a power origin to maintain the temperature level.

There are many container variants available to suit different types of goods and materials. The
major types are:
 Standard box containers allow access through end doors, and usually have internal lashing
points.
 Open0sided containers have walls of mesh, and are often used to transport hazardous
goods. Otherwise, they will be curtain-sided, to allow side access to the container for
loading and unloading purposes.
 Tank containers comprise a transit tank of dimensions to fit a standard container size. The
tank is constrained by a rigid framework.

AO/HLCP/0188 V3.0
  Top loaders allow the roof to be removed to allow an irregular-shaped load, for example, to
be dropped in from above.
 Flats provide a sound bed upon which cargo, such as engineering equipment, can be
moved. They will have end gates and lashing points.

Within the standard dimensions, there is very little that cannot be transported by container.

The demand for goods to be moved will be created by a number of reasons. Some of these will be
short-term responses to disasters, for example. There will also be long-term humanitarian aid
situations, requiring a structured and routine approach to movement. The supply of goods will be
influenced by the nature of the demand which needs to be fulfilled. This will also be influenced by
the capacity of donor facilities, ports, and airports, and their capability to create the goods flow. It
will also be influenced by the level of donor support that can be created, both in the immediate
environment and in other countries.

As a relief operation progresses, the available infrastructure be it physical or social, will change. It
could show an improvement, but there is always the risk that there is further deterioration. This
needs to be carefully monitored and responded to. In order to understand the flow of goods for
movement, it is necessary to examine:
 The factors influencing demand
 The factors influencing supply

The type and extent of a disaster will influence demand for goods. Disasters either happen as a
result of a natural occurrence, such as an earthquake, hurricane, flood, or some other extreme
weather condition. Alternatively, they will be man-made, such as an armed conflict. In both cases,
the level of demand which needs to be met will be influenced by the number of people affected by
the disaster, and the presence of other aid organizations contributing to the relief effort.

Whether the disaster is natural or man-made, there will inevitably be a disruptive impact on the
infrastructure which is required to allow the movement of goods.

After an earthquake, for instance, roads may be damaged and bridges lost. This will influence the
relief activity. In an armed conflict situation, not only may the physical infrastructure be affected, but
also the social and governmental structure.

In a rapid-onset situation, the nature of goods to be moved may be different from that which is
found in a slow-onset situation, or an in ongoing humanitarian aid initiative. In a rapid-onset
situation, there will be a need to transport critical items, such as food, tents, blankets, and kitchen

AO/HLCP/0188 V3.0
sets and, perhaps, rescue equipment. As the situation stabilizes, the main goods which will be
supplied regularly will be food, materials for reconstruction, medicines, and other such items.

From a demand management perspective, rapid-onset allows little time for planning, and the
requirement for trucks, for instance, cannot be easily assessed. In slow-onset situations and where
rapid-onset situations have stabilized, more time is available to assess ongoing demand, and to plan
for the servicing of it over time. If the humanitarian aid agency is operating in isolation, or with only
a small number of other agencies, while this can facilitate activity planning, it can also place a
significant burden upon the participating organizations.

In terms of the three phases of humanitarian response, the first (emergency relief phase) is
obviously the most critical. This phase needs to be executed quickly and will place a considerable
strain on the resources available. Indeed, in many cases it may be necessary to secure the
resources to move goods before any goods are actually moved. This may be a challenge if a number
of organizations are competing for a limited amount of resources.

As the response moves to the next phase, levels of demand may change, especially if people are
relocated while the reconstruction is taking place. The reconstruction phase will vary in length and
level of demand, and the nature of the demand to be managed will change; this may also change the
type and numbers of transport equipment required.

The nature of the demand will have an impact on the nature of the goods supplied. In the first
instance, when emergency relief is required, it may be necessary to build up stocks of relief supplies.
This means that there will be a greater volume of goods to be moved in the upstream part of the
supply chain, compared to the downstream side. As the relief activity progresses, the nature and
quantity of the goods being requested will change. Effective planning is required to meet these
changes without reducing transport operational efficiencies.

Some organizations may hold stocks of goods, either locally or internationally. This will facilitate the
supply activity. As the phases of the relief activity change, local warehouses may be moved or
consolidated and this, again, creates pressure from a transport planning perspective. The scale of
the disaster, and the associated response, will determine the nature of the donors. Some disasters
could result in donors being mainly aid organizations and governments. In this situation there is an
opportunity to put some structure into managing the supply side movement of goods. Where the
disaster has stimulated intense public reaction, the range of donors could increase significantly.
Organizations operating the field could be faced with managing a supply situation, involving larger
numbers of smaller volume consignments, sometimes arriving at the onward shipment area
unplanned.

AO/HLCP/0188 V3.0
In this section, we will be looking at specific issues related to the planning and scheduling
of movements using road transport. We will consider both primary and secondary
distribution and the:
 Factors affecting route scheduling
 Route planning techniques
 General route configurations

The nature of the movement can be split into two basic types. Primary distributions are those which
involve typically bulk movements between two specific locations. This may be, for example, between
two warehouses in a network, or from a port or railhead to a warehouse. Secondary distribution
relates to movements which may involve multiple deliveries within a defined area, such as a regional
or local warehouse to extended delivery points. In both cases, the emphasis is on achieving full
utilization of the resources used; filling the vehicle to capacity, minimizing the distance traveled, and
optimizing the hours which the driver is being paid to work. Often, due to the nature of primary
distribution operations, it is easier to achieve this situation, compared to a secondary distribution
operation.

In practical terms, in the aftermath of a disaster it may be difficult to plan ahead exactly when trucks
will be needed for primary and secondary distribution. Ad hoc decisions in the early days of the
operation are to be expected, due to lack of information about the pipeline and the arrival of
unexpected goods.

One mitigation strategy in many parts of the world to ensure readiness is to organize trucks on
standby (for free) when the expected turnover of trucks is high enough. By queuing and waiting at
specified loading points, truck drivers will be ensured of getting some work. It is common to
contract a local contractor who will be the focal point to organize and manage, for a fee, the standby
of drivers and trucks.

We shall first look at planning and scheduling primary distribution. The planning objectives involve
the maximization of load carried, minimization of distance traveled, and its associated time and the
minimization of time spent loading and unloading.

AO/HLCP/0188 V3.0
In humanitarian aid situations, primary transport is often carried out using rigid vehicles. However,
where articulated vehicles are used, it is important to think of them as two separate units, the
tractor, and trailer. This allows the flexibility of this type of vehicle to be used to the full. Thus, traffic
should be organized so as to make maximum use of each. This generally means using more trailers
than tractor units, with the spare trailers being unloaded and loaded at the most convenient time
and the driver being kept as long as possible. This will increase the percentage of loaded running
time for the trailers and tractor units.

For example, if the operation involves undertaking regular work between two storage depots or
warehouses, it may be beneficial to leave one or more trailers at each location, so that the driver
need stay at the site only to uncouple the trailer being delivered or returned and collect another
trailer. The stand trailer can then be loaded/unloaded at a convenient time to suit the warehouse
operation. An important decision when using such an operation is the ratio of the number of
trailers to the number of tractor units. In order to achieve a reasonable degree of flexibility, an
average ratio of 1.5 trailers per tractor is more likely to be financially acceptable.

There are two main methods of organizing trunking operations using articulated vehicles and these
are known as relay trunking and balanced trunking.

Relay trunking is used when two articulated vehicles travel regularly from different directions to an
intermediate depot. The operation can be organized so that they travel to the intermediate depot
and pick up a trailer for local deliveries in the afternoon. The trailer from the other vehicle can be
coupled up for the return trip. In this way, the two articulated vehicles can undertake both long
distance trunking operations and local deliveries from the intermediate depot.

Balanced trunking is an alternative way of using two articulated vehicles to have an intermediate
transfer point which is, more or less, halfway between the two distant depots. To cover the total
return distance could mean an overnight stop for the drivers but, by exchanging loads at the
transfer point and returning with the other trailer, both trips can be made within the driving day.

Local delivery to final destinations, such as relief distribution and other extended delivery points, can
involve multi-drop operations. They are typically, relatively small consignment sizes and are usually
referred to as secondary distribution. There are a number of scheduling factors which can influence
the efficiency of a secondary distribution operation.

AO/HLCP/0188 V3.0
In some cases, computerized planning systems are available to assist in the task of optimizing
secondary distribution effectiveness and efficiency. Computer-based planning and scheduling
software can have a considerable impact on the effectiveness of this activity and manage operations
involving a wide variety of routing and scheduling requirements. These include:
 Multi-trip routes and multi-day routes which may start in one location and end elsewhere
 Multi drop or single drop trips
 Daily or weekly scheduling
 Deliveries and collections, drivers’ work rosters and conformance to drivers’ hours
regulations
 Recognizing and accommodating delivery windows
 Managing deliveries and collections
 Providing appropriate reports at defined intervals

Ideally, a system should incorporate, or be linked to, vehicle monitoring systems and fleet
management systems. Benefits include:
 Improved customer service
 Increased control of the transport operation giving reductions in both operational and
administrative transport costs

Regardless of whether a computerized or a manual system is in use, there are a number of factors
to be considered.

 Availability of drivers and their level of training

 Type of licenses held by the drivers
 Possible restrictions on work arrangements, for example, related to trade union rules
 Hours and shift patterns and compliance to government working hours legislation

 Service policy
 Vehicle capacity target
 Ability to contract additional resources

 Number of vehicles available at any time

 Mix of vehicle types and carrying capacities
 Mix of vehicle dimensions

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  Location: distance from origin
 Delivery point features: for example, restricted access
 Time windows
 Requirement for return loads

 Road infrastructure
 Road conditions, for example, road works or road closures, or bridges having been
destroyed
 Travel problems, for example, security issues during conflict situations
 Climatic conditions, for example, during the rainy season
 Legal restrictions: time of operation, weight restrictions.

It is vital that a road assessment is always carried out prior to the route planning taking place, as this
could have a significant impact on the way this activity is approached.

All the above factors can be built into a model to illustrate the load planning operation. The model is
illustrated below:

Route Planning Model

In summary, the vehicle routing and scheduling process needs to fulfill the following objectives:

AO/HLCP/0188 V3.0
  Maximizing vehicle payload (by maximizing vehicle fill out and back) and maximizing vehicle
utilization (by maximizing number of loaded journeys per vehicle) while…
 Minimizing distance (e.g. by minimizing overlapping deliveries) and minimizing time (e.g. by
minimizing non-moving time) subject to…
 Meeting customer requirements, in terms of cost, service, and time and meeting legal
requirements, in terms of vehicle capacity and drivers’ hours

Essentially, route planning involves planning the movement of a particular quantity of goods in
vehicles of known capacity. It assumes that goods are supplied from a fixed depot, and that the
location of individual customers is known. It recognizes that restrictions on vehicle operations do
occur, due to such factors as constraints on working hours, the total length of daily travel possible
and the volume which can be moved within a normal working day. An acceptable solution to the
route planning and vehicle-scheduling challenge should provide optimum routes which satisfy the
demands of the customers, take account of legal requirements, and reflect the efficient and cost
effective use of the operator’s resources.

A satisfactory solution should provide a schedule of routes which minimize, either total distance, or
time, traveled by vehicles. Route planning involves an investigation of all possible routes, applying
the following operational conditions:
 The number of calls to a particular delivery point in any single day is limited.
 The total vehicle travel in any day is limited and the driver’s time is limited.
 Vehicles have a fixed carrying capacity.
 Volume of goods for each delivery point is known and each drop has a location for which
there is an established driving time to and from the warehouse or to the next delivery point.
 The quantity of goods delivered to any drop is smaller than the vehicle’s carrying capacity
and there is an established time to deliver/collect at the drop point.

A vehicle route is scheduled by taking one order, and establishing the time from the depot to the
drop. The time taken to deliver at the drop is then added, and the total time available to the driver
is checked to ensure that it is not exceeded, and that the vehicle is not over capacity. The next
order in geographic proximity is then identified and the time taken to drive from the first customer is
added. To this is added the time taken to deliver at the drop. The result is then, again, checked to
ensure that the total time available to the driver is not exceeded, and that the vehicle is not over
capacity.

This procedure continues until one or both of the two constraints are reached; this then fully utilizes
the available driver’s time or the vehicle capacity. This procedure is then repeated for another
vehicle until all orders are allocated or all available vehicles are fully loaded.

In terms of the calculation of driving time, it should be remembered that it is important to use an
average speed, related to the type of vehicle, the nature of the roads over which the journey is

AO/HLCP/0188 V3.0
taking place, and to allow for such things as delays at junctions, hills and urban congestion. Also, for
example, climatic conditions may need to be considered. In practice, average speed will be
considerably less than the maximum permitted speed for a road.

In planning secondary distribution, three basic

types of route can often be identified. These are:
 ARC or CIRCUMFERAL routes, which link
drops in an arc shape at various
distances from the depot.
 AREA routes, which link drops in
concentrated areas.
 RADIAL routes, which link drops along
radial patterns to and from the depot.

The following diagrams describe these three

types of routes. For illustration, each of the
techniques described above has been modeled
using the same set of data, and the same vehicle
capacities and daily driver time. The figures to
the right of each diagram show the results
obtained.

In humanitarian situations, routes may, in practice, be much simpler. Typical configurations may link
a number of delivery locations, serviced by one vehicle, such as shown below:

Alternatively a number of locations will be serviced by

different vehicles as shown to the right.

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If the need arises, or the decision is made to use external transport providers, there has
to be a structured approach to the selection, and subsequent monitoring and control, of
the provider or providers selected. There may be a short-term need to be filled, such as a
rapid-onset disaster, which would require more of a ‘spot-hire’ approach to supplement
own vehicle operations. Alternatively, there could be a longer-term need to be addressed,
which will require a formal contract to be in place to manage the relationship between
the organization and the provider. In either case, there are a number of important
issues to be considered to ensure that a reputable provider is sourced who will provide
the required level of service at an acceptable cost.

There are a number of steps involved in selecting a provider and issuing a transport contract. In
addition, the organization’s procurement rules for services need to be complied with. The main
steps in the process are:
 Transport Needs Evaluation: tonnage to be moved, nature of goods, times of movement,
possible movement of the beneficiaries
 Transport Market Evaluation: type and availability of transport services
 Transport Network Design: different services to be contracted, corridors, routes to be used
 Decision on services to be contracted
 Short-listing: appropriate providers who are reliable and qualified to do the work
 Request for Quotation (RFQ) preparation setting out the conditions, terms, and rates for the
requested service
 Offers assessment
 Agreement award
 Track/monitor/report

In some parts of the world, there may be few or no transport companies. In these situations,
individuals operate independently or in organized groups, e.g. truck drivers, pilots, or animal
handlers. In such circumstances it may be advisable to select and hire a local contractor, as a focal

AO/HLCP/0188 V3.0
point to organize the multiple independent individuals. The selection criteria and procedures
outlined in this section are equally applicable to these situations.

The risk of using a transport provider in the required area must be assessed, and the appropriate
insurance taken out. Origins of information on providers need to be investigated and the
constraints of securing providers in crisis and emergency situations must be recognized. There are
a number of selection criteria to be considered when sourcing and selecting a prospective transport
provider who is reliable and qualified.

Five key selection criteria need to be examined; cost provides the opportunity for an objective
assessment. Although other users and the provider himself may be willing to share data on
capacity, availability, and reliability, sometimes only a subjective assessment can be gleaned. Usually
the general reputation will be a subjective measure.

The reputation of the provider for service, reliability, and condition of equipment is important. If
your organization has contacts in the area in which the provider operates, they should be used to
get a view of the provider’s reputation. If information is not available from your own network of
contacts, have the operator provide the names of existing clients for whom he does work and ask
them for an opinion on the provider.

Reliability is about rail, sea, and air freight operators publishing, and keeping to, timetables and
schedules. In terms of road transport, it is about the provider being able to meet time requirements
and constraints, both at the point of loading, and at the delivery point. Specifying delivery times
usually sets a collection/loading requirement. Is the provider able to demonstrate an understanding
of this relationship, coupled with realistic journey times? Another important point to consider is the
provider’s ability to demonstrate reliable and consistent service delivery over a period of time.

It is important to know the available capacity of the provider, and its relationship to the forecast
demand which your organization needs to be transported. An understanding of how this capacity is
made up, the range of truck sizes available, for example, as well as the total capacity available, are
important. This will be influenced by the volumes to be moved for other customers, and the
fluctuations in those volumes, due to such factors as seasonality; the nature of other customers’
relationship with that provider, and the provider’s perceived or demonstrated ability to flex the
capacity to meet customer requirements.

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This is linked to capacity. Availability is an indicator of the provider’s ability to manage the demand
which is placed on the equipment by its customers and, if running a mixed fleet, its ability to manage
that range of individual capacities. It is also an indication of the way it manages the servicing,
maintenance, and repair regimes which are in place, and which can influence the number of pieces
of equipment available at any one time.

Cost primarily relates to the price which the provider will charge for the service being provided. If
the costs of different providers are to be compared, the basis of those costs should, wherever
possible, be quoted in the same way. The relationship between load and part-load rates may vary
from provider to provider, and it is difficult to compare rates quoted per load with rates based on a
distance parameter. In reviewing the quoted costs, it is also useful to consider whether the service
provided will create any additional costs within the organization. If this is the case, they should be
included in the overall financial comparisons.

Although there may not be enough time to carry out a full assessment of these factors, they should
all be considered, to some extent, before a purchase decision is made. If there is time to fully assess
providers, especially where a longer-term contract is envisaged, then it may be useful to use some
form of numerical rating process to score the various factors. This will then allow the possible
providers to be ranked prior to the final selection.

Most organizations will have a Procurement function of some sort. They will usually lay down the
guidelines for the selection process for suppliers. In some cases, this will extend to full involvement
in the identification and selection of providers and the issuing of contracts. If the process involves
issuing an invitation to tender, Procurement often will require advice on suitable transport providers
to whom the invitation will be issued.

Where no contract, as such, is made with a provider, there may be a process in place for selecting
an approved list of suppliers. These may offer a range of services and will be selected on a one-off
basis, depending upon the nature of the work to be done, and their availability at the time required.

It is also likely that procurement rules will detail the evaluation process for supplier performance.

When receiving goods via international shipment, it is important to specify INCOTERMS in the
contract, purchase order, or in kind goods donation documentation.

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INCOTERMS or International Commercial terms are a set of rules published by the International
Chamber of Commerce (ICC) covering the most commonly used trade terms in international trade.
The three-letter terms are used to communicate the risks, tasks, and costs associated with transport
and delivery, and will help to avoid misunderstandings and issues between parties of the contract.
Published since 1936 and revised every ten years, the most recent version is INCOTERMS 2010 and
is accessible on-line at: http://www.iccwbo.org/incoterms/id3040/index.html

INCOTERMS serve to specify and avoid issues regarding who is responsible to:
 Clear shipments for export and import
 Pay loading, transport and discharge costs
 Assume risk for damage or loss during transport and discharge
 Take out insurance as protection against risks during transport

Finally, when using INCOTERMS, it is important that you are sure the sender knows what they mean.
Most international organizations which ship goods do, but small, local organizations may not. If in
doubt, confirm their understanding.

Appendix A contains a summary of the INCOTERMS.

In moving goods through the use of third-party providers, as part of a humanitarian aid initiative,
there will be potential risk attached in terms of theft or loss of the goods. It is necessary to
understand the level of insurance which the provider will offer to cover the goods it carries on behalf
of its clients. Often, if any insurance cover is offered, it will be fairly nominal. It is important,
therefore, to ensure that the goods which the third-party provider is carrying are properly insured.
The cost of this may be influenced by the reputation of the transport provider. In setting up
contracts with providers, it is important that the situation is clarified and, if appropriate,
incorporated in the contract terms. If there is any doubt as to the cover provided, advice from the
organization’s insurance office should be sought.

If insurance costs differ for transportation provided by different transport providers, these should
be included in the overall cost comparison, discussed earlier.

In many countries, information on possible providers can be obtained from a recognized transport
trade association. The degree of information available will, obviously, vary from country to country,
but because of the regulatory nature of the industry, it is likely that there will be some form of
representative body for the national haulage industry. In some cases, their ability to assist in
providing the names of potential transport providers will be limited to the major players in the
country. Sometimes, there will be local trade bodies who will be better informed about local
companies.

AO/HLCP/0188 V3.0
It should be remembered, however, that these bodies will only be able to provide general
information; they will not recommend providers. If the questions asked are properly structured to
reflect the particular nature of the transport activity that is planned, responses from such bodies will
provide useful information to contribute to the overall selection decision.

When a disaster occurs, particularly a rapid-onset disaster, there will, inevitably, be a surge in the
demand for transport. This will make it difficult to secure the amount of resource required. If a
number of organizations are involved in the relief effort, there may be intense competition for the
available resource. If contracts exist for ongoing work, it could be possible to temporarily divert
some, or all, of that resource. It may be possible to group goods together with those of other
agencies through sharing the available resource and prioritizing the goods to be moved.

Possible origins of transport in other countries can also be identified and plans drawn up, detailing
how it would be shipped to the affected zone.

It is obviously difficult to predict ‘crisis’ conditions; contingency planning will help to define the
course of action to be followed if one occurs. This will identify the possible origins of additional
transport, and it could be linked to some form of ‘in principle’ agreement with the provider to supply
additional resource at short notice. This capability may also be included in the overall selection
process.

From a cost perspective, the increase in demand for transport will often result in an increase in
prices. Unscrupulous transport providers may seek to capitalize on the crisis by charging
considerably inflated prices with the knowledge that an alternative supply of transport is not
available. Humanitarian organizations should make use of coordination and collaboration
mechanisms, such as the Logistics Cluster or other interagency forums. These mechanisms are in
place to ensure that competition for resources by different organizations does not cause inflated
prices, and also that available capacity is shared and fully used.

Once a transport provider has been selected it will be necessary to manage its performance to
ensure that it is delivering the required level of service at the agreed upon price. This will be done at
the operational level on a job-by-job basis, and also at a higher level, through the collection and
analysis of data on a weekly or monthly basis.

Different Types of Contracts

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Contracts will exist to cover the provision of services and the basic requirements of the contract are
that it should clearly state:
 The client’s requirement in terms of the scope and service quality. This would include such
things as the basis of the work.
 The service to be supplied by the contractor and the method of operation.
 The charge for the supply of the service.

There is a range of services which might be provided under contract. They will include, for the road
mode:
 Provision of vehicles and drivers under the management of the aid organization for either a
short, ‘spot-hire’ requirement, or on a longer-term basis. The charging will usually be quoted
on a day or weekly rate basis.
 Provision of trucking services to collect and deliver goods. There are different ways in which
the charging basis of the contract can be put together. The main variations are:

Fixed Cost: This would normally be quoted as a cost per load or consignment for a particular, fixed
journey. This type of contract is usually used where the volumes to be moved, the routes covered,
and the services required are very predictable.

Rate per Unit: This will stipulate the charge which will be made for transporting the goods. The
terms of the charging could be expressed as a cost per case, per day, per man-hour, per kilometer
or per pallet kilometer.

Open Book/Cost Plus: Where an organization is looking for a long-term contract, the open book
arrangement may be used. Once the required service is determined, the client and the contractor
will agree upon the resources required to provide the desired level of service. The contract price is
then set at the cost of the resources used plus a management fee for running the operation. The
client has access at any time to the actual resource costs incurred in running the operation.

As part of the contract terms, where a transport provider is providing the delivery service, it is
important to verify that the delivery of the goods has been made. When booking the load, the
transport provider will normally prepare a consignment note. This will state the collection and
delivery locations, required time of delivery, and the nature of the consignment. In addition, the aid
organization will raise its own delivery documentation. The signed, transport provider
documentation will act as proof of collection and delivery, and a copy should be returned to the aid
organization in order to support payment of the transport provider invoice. The contract terms
need to be available, in order to check that the transport provider has charged for the work at the
appropriate rate.

Also, the organization’s delivery documentation should be signed by the receiving location, and
returned by the transport provider. If the receiving organization is paying for the goods and/or the
haulage, these documents will be required to support invoicing procedures.

AO/HLCP/0188 V3.0
It is important to be able to measure the performance of the transport providers to ensure that they
are performing to the service requirements laid down in the contract. The origin documentation will
be transport provider consignment notes. Depending on the nature of the contract and the ability
of the transport provider to provide feedback, data may be provided by them to confirm that the
contract level of performance is being met.

Performance data will be both ‘hard’ and ‘soft’. Hard data will relate to such things as on-time
delivery, in-full delivery, damages, and costs. It may be possible to gather some soft data related to
the dispatching and receiving organization’s perception of the service provided by the transport
provider, in terms of such attributes as driver attitude, condition of vehicles, and flexibility.
Performance data should be collected on an ongoing basis and presented weekly or monthly,
depending on the requirements of the organization and the level of activity of the provider.

As stated, the objective of gathering performance data is to ensure that providers are performing to
the service requirements laid down in the contract. The reports produced will act as a basis for
providing feedback to providers on their performance and service delivery level. Some transport
providers will also compile performance reports for clients. These reports should provide the basis
for regular discussion and review between the provider and the aid organization.

It is important that the feedback is given in a constructive way. If there are service failures, often,
these will have been dealt with at the time. Discussion at review should attempt to identify common
reasons for failures and to jointly agree upon what must be done to prevent a recurrence. This is
best done in the spirit of supply chain partnership, rather than the traditional, more confrontational
supplier–customer relationship.

The feedback should also highlight successes and things done well. Opportunities should be sought
to build on successes, to further improve and broaden service delivery.

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In this section, we will look at the range of documentation used in international trade,
and at the importance of recording and monitoring the movements of goods. We will
also look at the use of different agents, who can assist humanitarian organizations in
carrying out import and export activities.

To facilitate the import and export of goods,

humanitarian organizations often contract the
services of agents to act as intermediaries, to
ensure the correct application of import/export
procedures, including creation of proper
documentation.

The main agents working in import/export are:

 Clearing agents for customs
 Freight forwarding agents (freight
forwarders)
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(http://creativecommons.org/licenses/by-
nd/2.0/deed.en)

An organization can mandate a clearing agent to deal with customs issues.

Clearing agents, or freight forwarders, must normally qualify by demonstrating that they have
sufficient knowledge and expertise, to obtain a license to operate from the relevant governmental
authority. Such licenses are often payable, and validated, on a yearly basis.

In many countries, only official, licensed clearing agents are authorized to effect customs clearance,
and are able to obtain the release of imported or exported goods. Their tasks include the
classification of the goods, presentation of the required customs documentation, and to guarantee
that taxes or duties are collected, or that the relevant exemption is granted.

In some countries the government regulates the clearing of goods through a governmental clearing
service.

AO/HLCP/0188 V3.0
Often the use of a clearing agent is compulsory to prepare the customs documentation.

The clearing agent is working on behalf of the humanitarian agency, and provides a service. An
agent needs to be treated like any other service provider. It is important to maintain a close
relationship with the agent, and to closely monitor their performance, especially when they are
dealing with customs exemption. Under certain criteria, the organization can be held responsible
when the clearing agents make fraudulent use of their privileges.

It is important to advise the relevant bodies, in writing, when an organization is using a clearing
agent or of any change of appointed clearing
agent. Customs and Excise, port, and airport
authorities need to have this information, so
that they can notify the appointed clearing
agent of the arrival of shipments and handover
to them the documents accompanying the
cargo, which will enable them to clear the
goods immediately upon arrival.

A clearing agent works on behalf of the

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humanitarian organization and is its By U.S. Coast Guard
representative in customs matters. Their (http://creativecommons.org/licenses/by-nc-
nd/2.0/deed.en)
behavior and professional ability will, therefore,
reflect on the organization. Their competences can have a significant effect on an organization’s aid
operation. It is important to select a trustworthy and competent clearing agent; this selection is
important even where they have been awarded licenses by the government or the national customs
authority.

It is important to check before appointing a clearing agent that they have the professional
knowledge and capacity to carry out the clearance procedures, and that they have sufficient financial
resources available.

In the earlier Units of this program, we looked at the specific characteristics and principles of
providing humanitarian aid, and the organizations working in the humanitarian field.

When agents work on behalf of organizations, it is important that their behavior is irreproachable
and enables the organization to adhere strictly to established principles, particularly in transparency.

The actions of the agent must be honest and in good faith, particularly in their way of operating
legally and ethically.

The criteria for selecting a clearing agent should include the following:
 The agent’s accreditation or license and reputation with the authorities (government,
customs and excise, port/airport)

AO/HLCP/0188 V3.0
  The agent’s reputation with the local population (preferably with no political connections
and affiliation)
 The agent’s reputation with other humanitarian organizations
 The efficiency of the agent in clearing goods – this should include speedy and reliable
response when goods arrive and immediate and efficient clearance
 The experience and capacity of the agent – their ability to handle additional numerous and
large shipments, this is particularly important when he is acting as agent for other
organizations
 Their size and presence within the country – number and location of offices and staff,
particularly in countries with various entry points
 The cost of their services. Clearing agents will have a range of ways of charging for their
services. These will include a tariff based on the weight of the consignment, a tariff based
on the value of the consignment and a job-based tariff. These costs are often regulated by
local country laws.
 The availability of secure or bonded warehouses; and sufficient transport capacity to deliver
goods (should this be required)
 The agent’s understanding of the needs and principles of humanitarian aid

The selection of the right clearing agent is of great importance. The efficient clearance of goods
avoids unnecessary demurrage, and expensive storage, charges. If goods are not cleared efficiently,
it can mean the non-availability of goods to the programs, and it can even mean the confiscation of
the goods when they are not claimed in time.

We have to bear in mind that fraudulent and illegal behavior of the clearing agent; such as
misinterpretation of customs privileges, not to mention smuggling and non-compliance with legal
requirements, can cause grave financial consequences to the organization. Customs claims can
often be enforced up to 10 years from the date of importation.

We previously looked at the role of freight forwarders, but it is worth reminding ourselves of their
role, particularly regarding importing and exporting goods.

Freight forwarders basically provide transport and storage services. They enable organizations to
carry out import and export activities. These will usually include the service offered by clearing
agents, but they are normally specialized in transport services. As with clearing agents, some
countries grant licenses to freight forwarders. It may be compulsory to use the services of freight
forwarders to obtain delivery and to export shipments at airports and seaports.

The services provided by different forwarders will vary, but usually include a combination of the
following:
 Receive or ship goods at seaports or airports on behalf of clients (sender/receiver) including
the provision of intermediate storage

AO/HLCP/0188 V3.0
  Preparing and handling of documentation
 Presenting goods for customs clearance for imports or exports
 Ensuring taxes/duties are paid or exemptions are granted
 Planning and costing of pre-carriage to the point of shipment and on-carriage to the final
destination
 Booking and coordinating transport and freight space both within the country and
internationally
 On special request, arranging warehousing and packing of goods
 Consolidation, or groupage, of small consignments into larger loads for transportation
 Payment of freight charges, port dues, loading and unloading operations, etc.
 Represent the cargo interest when goods are damaged during transportation and lodge
initial claims against carriers and stevedoring companies

Some freight forwarders will operate their own fleets of vehicles and will run their own warehouses.
Others will use third-party and subcontractors.

The same criteria are applicable for the selection of a freight forwarder as for clearing agents. They
must be efficient and trustworthy, and have the financial resources to pay for freight, handling,
storage, and customs expenses.

In the Procurement Unit, we looked at the role of the inspection company. It is worth reminding
ourselves of their role, particularly in providing pre-shipment inspections.

Some countries require imported goods to be certified for value and physical compliance before
they are shipped. Some humanitarian organizations and donors may also require pre-shipment
inspections for certain goods, e.g. foodstuffs.

Inspection companies can carry out this pre-shipment inspection and complete the relevant
documentation.

Some donors or organizations may ask an inspection company to carry out a survey at the port of
disembarkation, or in the final warehouse.

An inspection company, or a superintendent, is not an average agent which can be used for
insurance purposes. However, some insurance companies can accept their reports as additional
evidence to support cargo claims.

An essential feature of all import and export transactions is documentation.

AO/HLCP/0188 V3.0
People responsible for importing or exporting goods must know what documentation is required,
and have to ensure that these documents are taken in order.

The documents which have to be produced for the import or export depend upon the country
requirements; in addition, special documentation may be required for certain types of goods.

The earlier section identified the sources, where information can be gathered on the procedures
and documentation needed for different countries and various types of goods.

Certain countries may require that some documents be certified. This is particularly the case for
certain specific goods, e.g. certificate of origin for food. Certification is usually provided by a
chamber of commerce or industry, or a government department or consulate. Certification is
usually subject to a fee.

There are various categories of documentation required when importing or exporting. These are:
 Inquiry documents
 Instruction documents
 Transport documents
 Insurance documents
 Customs documents
 Payment documents

Listed below are some of the most common documents:

This is the supplier’s, or freight forwarder’s, response to a price inquiry for the procurement of
goods and/or freight. Today, markets are volatile and quotations/offers are often valid only for a
limited period of time; this is due to price fluctuations (commodity prices or increased fuel costs
related to the transportation).

After receiving a quotation from an exporter, the buyer may request a pro-forma invoice. This is a
preliminary invoice and is prepared prior to the date of shipment, or even before a firm order has
been received. The pro-forma invoice is issued on the seller’s letterhead.

The main purpose of a pro-forma invoice is to enable the importer to obtain an import license, for
pre-clearance purposes or for the seller to arrange for a letter of credit before the final contract is
signed.

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Export Cargo Shipping Instructions

Shipping instructions give the freight forwarder, or transport provider, the elementary information
on how to handle and dispatch the export shipment. The information includes instructions for
booking of cargo, information for completing the transport documents, description of the goods,
number of packages, weight, dimensions, eventual indication on hazardous cargo, special handling
of fragile items, the name of the ultimate consignee, the delivery address, and any other special
instructions which must be observed.

Many freight forwarders, or transport companies, have their own, pre-printed forms which may be
filled in by the exporter; or the information is given by the exporter in written form on the company's
letterhead.

Organizations holding global/local frame agreements with freight forwarders will, in most cases,
include the generic shipping instructions as a part of the contract. Specific shipping instructions
related to special destinations or commodities will be issued with the specific transport order.

These are the instructions which the bank needs to secure the payment of the goods. The payment
will either be governed by a letter of credit or, if a letter of credit is not used, by the payment
instructions which are given in the form of a separate document. The final section of this unit will
cover methods of payment in detail.

The Bill of Lading is a contract of carriage used for sea freight. It has four main purposes:
 It is a receipt which is issued by the transportation carrier to the shipper, acknowledging that
they have received the shipment and that those goods have been placed on a particular
vessel for a named destination. In addition, it states the terms on which the goods have to
be carried.
 It specifies the number of packages, e.g. boxes, crates, received. Unless a written remark is
made by the ship’s agent or the Master of the vessel, the goods listed on the Bill of Lading
are received in sound condition for transportation. The Bill of Lading does not cover the
quantity, quality, or condition of goods inside the outer packaging.
 It defines the terms of the contract between the exporter and the carrier for the carriage of
the goods from one specified port to another.

AO/HLCP/0188 V3.0
  It is a document of title (i.e. certificate of ownership) to the goods. This means that whoever
has the Bill of Lading can take delivery of the goods at the port of destination. It must be
produced at the port in order to claim the receipt of goods.

A Bill of Lading can be negotiable, which means ownership of the goods can be transferred to a third
party. To do this, the carrier marks the Bill of Lading ’to order’, or to ‘the shipper’s order,’ to ensure
that it can be negotiated by a third party.

Where collection and payment is through banking channels, such as a letter of credit, negotiable
Bills of Lading are required.

An Air Waybill is a non-negotiable transport document used in airfreight. It is not a document of title
of ownership. The document serves as:
 Establishment of the terms between the shipper and the air transportation company for the
transport of goods
 Proof of receipt of the goods for shipment, stipulating the description of the commodity,
number of packages and weight
 An invoice for the applicable transportation charges
 A certificate of limitations of liability
 A contract of transport to carry the consignment to the airport of destination according to
specific conditions

An air waybill is a fairly complex document, and is often completed by a freight forwarder, rather
than the exporter. This is a good example of a service which freight forwarders provide. It is
important to make sure that the freight forwarder has clear instructions on any special
requirements which need to be observed (e.g. dangerous goods classification).

A Rail Waybill is a document used for the carriage of cargo or containers by rail. It usually serves
both as evidence of the contract of carriage, and as a receipt of goods.

This certificate is used as evidence that a shipment has been exported as instructed. It will contain
details of the goods, details of the flight or vessel, the ports of export and destination, and details of
the final delivery point.

This document is an important part of the document audit trail which customs might want to see to
give VAT zero rating on goods being exported.

AO/HLCP/0188 V3.0
The certificate of insurance provides evidence that insurance has been obtained and what level of
cover exists. It stipulates the extent, limitation and any exclusion of the coverage, and the insured
value.

The certificate often also indicates the name of the "average agent" that has to be contacted for
average expertise in the event the goods arrive damaged or are lost.

Cargo insurance (also called Marine Cargo Insurance) covers the physical damage to, or loss of,
goods while in transit by land, sea, and air. So, a better term to use would be Transport Insurance.

Cargo insurance moves the burden of risk from either the exporter or importer of goods, to the
insurance underwriters with either the exporter or importer, depending on the terms of trade,
organizing and paying the insurance premium.

There are a number of different types of cargo insurance:

 Open Cover
 Specific Voyage Policy
 Contingency Insurance

This is the most common type of cargo insurance used by organizations. The insurance covers a
number of consignments. It can either be an open policy for a period of time and will cover all
shipments during that time, or it can be for a specific value which requires renewal once the insured
amount is exhausted.

Specific voyage insurance is an insurance policy for a specific consignment and covers only that,
specific shipment.

When exporting goods, the terms may require the importer to take responsibility for insurance for
the goods, e.g. under FOB and CFR Incoterms 2010. In these cases, the exporter is exposed to the
risk of damage to the goods while in transit and the importer refuses to accept them. In the worst
case, the importer may not have insured the goods. Contingency insurance will cover the exporter
for this contingency.

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Cargo insurance can be obtained from an insurance company or through freight forwarder (if one is
being used). Banks will often offer cargo insurance as part of a trade finance package. Best practice
is to use a specialist, cargo insurance broker.

In the sales contracts which include the Incoterms CIF or CIP, the seller is obliged to obtain and to
pay for insurance on behalf of the buyer, so that the buyer can claim directly with the insurer.
Incoterms 2010 requires that the insurance shall be taken with underwriters or insurance
companies of good repute and, failing express agreements to the contrary, be in accordance with
minimum cover of the Institute Cargo Clauses (Institute of London Underwriters) or any similar set of
clauses. The minimum insurance shall cover the price provided in the contract plus 10%.

For maritime transport, there are three categories of insurance cover available:
 Institute Cargo Clauses (A): this provides maximum cover and is basically an all - risks
cover for loss and damage that is subject to a few exclusions.
 Institute Cargo Clauses (B): this is an intermediate level of cover and provides protection
against such things as fire or explosion, vessels being stranded, grounded, sunk, or
capsized.
 Institute Cargo Clauses (C): this is the minimum level of cover referred to in Incoterms.

There are also Institute Cargo clauses for air transport. There is a single set of clauses which are
equivalent to the (A) clauses in maritime transport.

Specialist, marine cargo insurance brokers can often provide additional benefits when dealing with
claims and settlement procedures.

The commercial invoice will contain accurate details of the goods including quantities, weights, unit
and total prices, purpose of the goods, and any other information to help identify the goods
(manufacturer, model number, trademarks, etc.).

It should be virtually the same document as the pro-forma invoice.

The export invoice will contain details of the value of goods being exported. It will contain details of
the goods, including description, price, and country of origin.

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Different national Departments of Custom and Excise may require specific, additional documents to
enable the clearance of the goods. These are likely to include the following:

Some countries may require import licenses for certain goods. The license is a formal official
authorization of importation. It is used by countries to regulate the amount of goods imported and
to ensure that any import quotas are respected.

This is the formal permission by a country to export certain goods. They will usually be general
licenses which mean that individual shipments do not require separate applications. When
exporting goods, it is the responsibility of the seller to ensure that the necessary export
license/permit is obtained.

This certificate is usually completed and issued by the manufacturer (exporting firm) and gives
details of the origin of the goods or its components. These documents are often required by
countries to give evidence on the origin of the goods.

This document will certify that the goods have been donated, and are provided free of charge. It will
often state that the goods are to be used as part of the organization’s operation.

This document will certify that goods and/or packaging materials have been fumigated, sterilized, or
disinfected. These will cover goods such as food or second-hand clothing. These certificates are
usually required by sanitary services or health inspectorates to allow importation, and are issued by
specialist companies.

Some food consignments may require a certificate stating that they are free from radioactive
contamination.

This document will certify that plants, plant products and plant materials, e.g. seeds, grains and
pulses, are free from agricultural disease. These certificates are usually issued by
Ministry/Department of Agriculture in the country of origin.

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This document will certify that goods, such as fresh, chilled, and frozen meat and milk products, are
not contaminated by any disease.

This document certifies that no genetically modified organisms exist in the goods.

This document will certify that the goods have been inspected, pre-shipment, by an inspection
company.

This document is issued for medical and controlled drugs, mentioning generic names and
composition.

This document is widely used for sea and airfreight and, in certain countries, for road transport, to
regulate the carriage of dangerous goods. The Dangerous Goods Declaration specifies dangerous
cargo and the classification of the hazards. It informs the transporter, and the ports and airports, of
dangerous goods being transported.

The document stipulates the official classification and packaging requirements for each mode of
transport.
 Air = IATA (International Air Transport Association) DGR (Dangerous Goods Regulations)
 Sea = IMO (International Maritime Organization) IMDG (International Maritime Dangerous
Goods). The code is updated every two years
 Road = ADR = The European Agreement concerning the International Carriage of Dangerous
Goods by Road (ADR) was done at Geneva on 30 September 1957

Only qualified people are authorized to issue Dangerous Goods Declarations. Individuals are
required to attend special courses in order to be licensed to issue IATA DGR certificates. The license
has to be validated every two years. Only approved packaging may be used for the transport by air
of classified items.

Dangerous Goods are covered in more detail in the Transport Unit.

The packing list gives full details on all the items contained in boxes, crates, containers, vehicles, or
on pallets. The description will include the type of items, their dimensions, and weight.

AO/HLCP/0188 V3.0
It is crucial that the movement of goods being imported or exported is monitored and recorded, and
that the documentation is maintained. The import and export of goods is strictly regulated,
therefore, it is vital that procedures are respected and such transactions are carried out in a
transparent way to avoid any accusations of improper conduct.

The keeping of proper records, and the coherent filing of all relevant information and documentary
proof, will allow justification to the appropriate authority (e.g. MFAE, Customs and Excise) the import
and export of goods.

Such information may be requested after several years. Files should be kept for 10 years.

The import and export of goods may involve movements over large distances, and over long periods
of time. These movements can also involve a number of different parties. It is important to be able
to track and trace goods as they are in transit, during their entire journey. There are two reasons to
track and trace goods:
 To be able to control the flow of the consignment, to ensure that goods are not held up
unnecessarily and are delivered in time
 To be able to justify the movement of goods for any future audit

The main objective of monitoring and controlling the movement of goods is to ensure that they are
not held up unnecessarily. Delay can mean that goods are not getting into the country, and to the
final beneficiaries, when they are needed. It can also lead to increased costs which have to be
absorbed, such as demurrage and intermediate storage, when movement is held up. Uncontrolled
storage can lead to risks of theft, loss, and damage.

Track and trace systems can be simple or complex. Their main aim is to have accurate information
of the whereabouts of goods in the supply chain, and to ensure coherent supply chain management
and pipeline planning.

This record of information can then be used in a number of ways:

 To advise people further down the supply chain of expected dates for receiving goods so
that the receiver can prepare for their reception
 To ensure that correct documentation is available, and all procedures in place, at the next
point in the supply chain
 To identify where goods are being held up, so that actions can be taken to remove the
obstacles causing the delay
 To monitor the performance of agents, e.g. average time to clear goods

A simple system can involve gathering information obtained from manufacturer, shipping company,
customs, and/or clearing agent, on the progress of shipments of goods. This will enable the

AO/HLCP/0188 V3.0
progress of shipments to be followed. Providing a regular report on the movement of goods by fax,
phone, or e-mail, each time the goods are dispatched or delivered at transshipment points, can
facilitate the monitoring.

More and more shipping/transport companies are using more ‘complex’ systems using technology
to track and trace goods. This allows them to have instant information to establish the exact
location of goods and they can then provide their customers with accurate information on the
whereabouts of shipments en route. There are now options for the customer to get this
information by using the internet (web tracking), by logging on to the shipping company’s web site to
obtain the required information. They can also send an e-mail (e-track) asking for details, which can
be replied to with the relevant information or, another option, is the use of a mobile phone (m-track)
by using text messaging.

Information on movements of goods should be recorded and include, at minimum, the dates,
quantities, goods, movement type, origin, and destination. This can be done simply by using a
whiteboard, a book, a spreadsheet, a database program, or using Electronic Data Interchange (EDI)
to an organization’s Enterprise Resource Planning (ERP) system.

Whichever method is used, the key requirement is that it should be easy to identify the present
location of goods which are being imported or exported, and to provide movement reports required
for the planning of the future use of the material by the humanitarian organization.

It is also critical to maintain archive records of completed imports and exports. These records
should include:
 Record of movements such as transport and customs documents
 Record of correspondence and all other relevant documentation

The record of movement maintained while goods were being imported or exported needs to be
kept and filed, in case it needs to be looked at in the future. It may be that Customs and Excise want
to see justification of which goods were imported or exported, years after the actual transaction is
finalized. Keeping these records can avoid problems which can lead to investigations, payment of
duties, taxes, customs fines, even confiscation of goods, and the loss of privileges.

Archive records and files of completed imports and exports should normally be kept for a period of
10 years. The record of movement may be needed to demonstrate to Customs and Excise that the
correct procedures were applied and that the required documentation was obtained and
completed.

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An archive file should contain (if appropriate) the following:
 Shipping advice
 Purchase order
 Transport documents
 Customs documents and correspondence
 Correspondence with clearing agents/freight forwarders
 Exemption documentation
 Eventual claim reports to justify losses and irregularities

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This section looks at the role of customs when importing and exporting goods, and the
procedures which need to be followed so that goods can be cleared and released.

The main ‘institution’ which people involved in importing and exporting for humanitarian
organizations need to understand and work with, is the Customs service/department. In some
countries it will be referred to as the Customs Service; in others it is referred to as Customs and
Excise. This depends on the scope of their responsibilities. The department is usually within the
country’s Ministry of Finance.

Customs levies are the duties, dues, or taxes imposed by laws of a country on imports and exports.
Excises are different than customs levies. Excises are inland taxes on goods, whereas customs
duties are border taxes. For example, a 20% excise tax may be applicable to a good once
manufactured in the country, and a further 10% customs duty applied when it is exported across
the border out of the country.

Governments use, and rely upon; the customs service to control the physical movement of goods,
people, and conveyances across country
borders and frontiers. The customs services
do this by implementing and administrating a
range of government policies.

Different countries will have different

customs regulations, and these are subject
to change, so it is important, as we covered
in the first section, to understand what the
current regulations are for the country in
which the humanitarian organization is
Monte Aymond, by Wallygrom
working. (http://creativecommons.org/licenses/by-
sa/2.0/deed.en)
The World Customs Organization (WCO)
states the responsibility of customs as:
 Collection of customs duties and taxes

AO/HLCP/0188 V3.0
  Protection of society
 Protection of the environment
 Collection of statistical information
 Trade compliance
 Trade facilitation
 Protection of cultural heritage

Customs is responsible for checking that goods moving between countries do not breach any
import and export controls, and that duty, or taxes, are collected.

They do this by inspecting goods and by verifying the accuracy of the documentation provided with
the goods.

Customs tend to place more emphasis on import controls than on export controls.

It is important to note that, in some areas of the world, governments may not enforce customs
controls. It is possible that military groups, warlords, or tribes may run customs. In such
circumstances, it is important to understand
your organization’s policies for dealing with
such groups and to make use of trusted, local
agents, ensuring transparent dealings so as
not to risk the reputation of your organization.

Import controls control the movement of

goods into a country. These controls can take
the following forms:
 Duties and taxes charged on certain
Kenya-Uganda Border Crossing Sign, by Chris Guillebeau
goods, mainly in the form of import
(http://creativecommons.org/licenses/by-nc/2.0/deed.en)
duty and VAT. The reason for charging
import duty is usually stated as to protect local producers rather than to raise revenue.
 Controls on the goods that cannot be imported into a country, there may be certain
restrictions or they may be banned completely. Countries may have a list of goods that
cannot be imported - this can range from certain foodstuff, vehicles over a certain age to
used clothing.
 Check the existence of documents allowing the import of goods that may be restricted such
as import licenses.
 Specific requirements on marking of goods or packaging materials used.
 Specific requirements for temporary imports. Countries may allow goods to be imported on
a temporary basis without paying duty, but they may require a deposit or security to be paid.

AO/HLCP/0188 V3.0
Export controls control the movement of goods out of a country. These controls will take a similar
form as those for importing:
 Duties charged on goods being exported
 Controls on the goods that cannot be exported out of a country, there may be certain
restrictions or they may be banned completely. Countries will have a list of goods that
cannot be exported from their country
 Check the existence of documents allowing the export of goods that may be restricted such
as export licenses
 Specific requirements for temporary imports and exports. Many countries will allow certain
taxes or duty paid when goods were imported, to be reclaimed, should these goods be
exported.

Export controls are mainly in place to control the export of goods manufactured in that country, and
mainly affect manufacturing or exporting companies based in that country.

Where export controls may affect humanitarian organizations are:

 When goods are purchased in a country and then subsequently exported to another
operation in another country, e.g. equipment.
 Where goods are imported into a country and then exported back out of that country to
another operation in another country, e.g. vehicles.

It is important that goods are correctly classified and identified when restrictions may be in place;
and to ensure that the correct duties or taxes are levied. Most countries use the Harmonized
Commodity Description and Coding System (HS), which provides a standard numbering system for
most products. The HS is an international classification of all commodities moved in international
trade. It was compiled by the Customs Co-Operation Council (CCC) (now called the World Customs
Organization) and is managed by the World Customs Organization (WCO).

The HS is used for a number of purposes including:

 Customs duties
 International trade statistics
 Rules of origin
 Transport duties and statistics
 Surveillance and identification of controlled or dangerous goods

Goods are first classified into sections, and then into chapters. Goods are then classified by a six-
digit code. The first two digits indicate the chapter number, the next two digits indicate the main

AO/HLCP/0188 V3.0
heading within the chapter, and the final two digits are the sub-heading. Countries may then add
further digits for their own use. For example, within the European Union two additional digits are
added to the code to classify all movement within the community. When goods are imported from
outside the EU a further two digits are added, to make a ten-digit number. These extra digits are
mainly used for statistical purposes.

The following lists the sections and chapters of the system including a description of the sections:

1 1–5 Live animals; animal products

2 6 – 14 Vegetable products

3 15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats;
animal or vegetable waxes
4 16 – 24 Prepared foodstuffs; beverages, spirits, and vinegar; tobacco and manufactured
tobacco substitutes
5 25 – 27 Mineral products

6 28 – 38 Products of the chemical or allied industries

7 39 – 40 Plastics and articles thereof; rubber and articles thereof

8 41 – 43 Raw hides and skins, leather, fur skins and articles thereof; saddlery and harness;
travel articles, handbags and similar containers; articles of animal gut (other than
silkworm gut)
9 44 – 46 Wood and articles of wood; wood charcoal; cork and articles of cork; manufactures
of straw, esparto or of other plaiting materials; basketware and wickerwork
10 47 – 49 Pulp of wood or of other fibrous cellulose material; waste and scrap of paper or of
paperboard; paper and paperboard and articles thereof
11 50 – 63 Textile and textile articles

12 64 – 67 Footwear, headgear, umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips

riding crops and parts thereof, prepared feathers and articles made therewith;
artificial flowers; articles of human hair
13 68 – 70 Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic
products; glass and glassware
14 71 Natural or cultured pearls, precious or semi-precious stones, precious metals,
metals clad with precious metal and articles thereof; imitation jewelry; coin
15 72 – 83 Base metals and articles of base metal

16 84 – 85 Machinery and mechanical appliances; electrical equipment and parts thereof;

sound recorders and reproducers, television image and sound recorders and
reproducers, and parts and accessories of such article
17 86 – 89 Vehicles, aircraft, vessels and associated transport equipment

18 90 – 92 Optical, photographic, cinematographic, measuring, checking, precision, medical or

surgical instruments and apparatus; clocks and watches; musical instruments;
parts and accessories thereof
19 93 Arms and Ammunition, parts and accessories thereof

20 94 – 96 Miscellaneous manufactured articles

AO/HLCP/0188 V3.0
 21 97 Works of art, collectors' pieces, and antiques

22 - Other unclassified goods

23 98 – 99 Services: agricultural, construction, transport, energy, environment, and business

services

http://www.foreign-trade.com/reference/hscode.htm

The classification code determines the duty rate. It is important to make sure the correct code is
used. If the services of a freight forwarder or of a clearing agent are used; it is important that they
correctly code and classify the goods on your behalf.

Basic customs procedures for the import or export of goods are similar in most countries.

Essentially, goods which are to be imported or exported by ship, aircraft, train, or road vehicle are
subject to the following procedure:

 Goods can only be brought into the country and unloaded at prescribed import landing
places. By sea these will be prescribed ports, by air these will be a customs airports, and for
rail and road these will be customs checkpoints.
 Goods can only be removed from customs control once written permission is given by the
customs authority.
 Goods can be unloaded only after customs have granted the necessary permit. This will be
granted when they have received the necessary documents (usually called an Import
Manifest or ships manifest for the port of call) giving full details on the goods to be
unloaded.
 Before goods can be removed from customs control they need to receive a Bill of Entry,
Customs Declaration (or other document required by law). The Bill of Entry enables the
customs to examine the goods and compare this with the Import Manifest.
 The Bill of Entry must be accompanied with all other documents required by customs such
as invoices, import licenses, certificate of origin and Bill of Lading (sea), Air Waybill (air),
Freight Transit Order (rail), Road Waybill (road), or delivery order. (For goods imported by
sea it is normal for the original B/Lading to be handed over to the agents of the vessel at the
port of destination, who exchanges this document against a delivery order. The delivery
order allows the release of the goods by the shipping line to the consignee.)
 Customs may physically examine imported goods including counting, inspecting, testing etc.
or they may examine the documentation related to the goods.

AO/HLCP/0188 V3.0
  If duty is payable on the goods, the levies must be paid instantly or a bond security may be
provided that guarantees payment later.
 If goods are not removed within a prescribed time after they have arrived, then storage or
demurrage (demurrage will be explained later in this section) can be charged or goods can
be sold to recover any costs including customs duties that are payable.
 In cases where import licenses are required, customs will check the goods that are being
imported are in accordance with the license.
 A ship which has brought goods for import can only leave the port when written permission
(known as Port Clearance) is given by Customs.

 Goods for export can be loaded only after Customs has issued the necessary permit (usually
called Entry Outwards), and after the exporter has provided the necessary documents
endorsed by Customs, to the person in charge of the transport.
 Written permission (known as Port Clearance) has to be granted by Customs before a ship
with export goods can sail.
 An application for Export Clearance must be accompanied by a document (usually called the
Export Manifest) showing what goods to be exported, and any other documents required by
customs e.g. export permit, transport documents.
 Customs may physically inspect goods being exported or they may examine the
documentation related to the goods.

It is particularly important to understand what container demurrage and port storage charges are,
and what can be done to avoid them, as these charges can be very high.

Container demurrage is a penalty for exceeding the free time before the container is returned to the
container depot in the port and, equally, port charges will apply if the container is not taken from the
port within the allowed free time from the port or freight terminal.

Delays can be caused by people working in humanitarian organizations where their actions, or lack
of actions, lead to delays in either unloading or loading of goods.

The main reasons for delays are:

 Not understanding the specific customs procedures for the country in which they are
operating
 Not having all the documents required by customs available when needed
 Actual goods not corresponding to the goods described in the documentation
 Duties not being paid on time, or exemption from duties not being obtained before goods
arrive

AO/HLCP/0188 V3.0
  Not providing clearing agents with accurate information
 Not monitoring the movement of goods
 Actions of inefficient clearing agents
 Delays in obtaining exemption from the relevant national authority

As a consequence of the potentially high charges which can be imposed, it is important that the
specific customs procedures and rules are known; particularly what documentation is required by
customs. The movement of goods needs to be monitored, as well as the control of the relevant
documentation. It is important, when using clearing agents, that they are selected and managed
well.

It may be possible to have demurrage charges waived. To do this it is important to find out to whom
to apply (i.e. to the Liner for Container demurrage and to Port authorities for port storage), what
procedure needs to be followed and within what time an application for waiver can actually be
made. The appointed local, or global, freight forwarder will often have knowledge of this, and should
be approached.

Organizations may want to import goods into a country for a limited period. These are goods which
are brought into a country for temporary use, or goods which are being temporarily stored before
being sent to their ultimate destination in another country.

For temporarily imported goods some countries will issue ‘temporary import permit/license’. The
procedure for temporary importation will involve:
 The issuing of an import declaration or a customs bond stating the goods being imported
on a temporary base
 The securing of a bond guarantee (where appropriate) equivalent to the duty and VAT
payable
 The bond will be cancelled when the goods are definitively exported from the country within
a specified time period
 The goods (value, weight, etc.) when being exported must be identical as stated on the
temporary import declaration
 If the goods have been temporary imported for repair, then any repair costs or value of new
parts should be declared at the time of export

Goods which have been imported for temporary storage before being forwarded to their ultimate
destination will be cleared ‘In Transit’. The procedure for clearance of goods in transit will involve:
 Goods in transit will usually have to be stored separately from other goods.
 Storage will usually be in a bonded warehouse under the supervision of Customs or in a
secure warehouse accepted by Customs or where Customs have given the organization’s
warehouses bonded status.

AO/HLCP/0188 V3.0
  A bond security may be required in order to guarantee any liabilities for customs duties and
VAT.
 The period of storage for goods "in transit" will normally be limited in time as prescribed by
Customs.
 Transit goods are under permanent Customs control and customs officials may need to be
present when gaining access to these goods.

The nature of humanitarian aid should allow humanitarian organizations to receive exemption from
the payment of taxes and customs duties when importing and exporting.

Organizations may have agreements in countries where they operate, which cover the exemption of
taxes and customs duties. An example of such an agreement would include the following:

The organization shall be exempt from all direct taxes, except for charges for public utility services.

The organization shall be exempt from all indirect taxes (including value-added taxes) for purchases
of articles intended for official use and for the purchase of articles intended for aid programs within
the country.

The organization shall be exempt from customs duties and charges, and from restrictions on the
import and export of all goods and materials intended for official use and for aid programs within
the country.

The organization shall be granted air-traffic rights and be exempt from over flight and landing fees
for all transports over and through the country.

It is possible, even where agreements do not exist, for governments to give temporary exemption of
taxes and duties to humanitarian aid organizations for all goods imported for a particular aid
operation within their country. This mainly happens in large disaster situations. The exemption is
temporary, and will be for a certain period of time; after this time normal customs rules and
regulations will apply.

It is particularly important, in this situation, to keep a record of all the goods which are imported
during this temporary exemption period, including all documentation. In particular, records of
assets, e.g. vehicles, must be kept. The customs may request, at a later date, information from the
organization on what goods were imported during this exemption period.

AO/HLCP/0188 V3.0
Where agreements do not already exist, and there is no general waiver, it is possible for
humanitarian organizations to apply for, and receive, preferential status and exemption from taxes
and custom duties. Some countries will have their own rules on which types of organizations and
which organizations they will exempt.

The procedure for obtaining tax and duty exemptions will vary between countries, but it is the
responsibility of the receiving organization, not donors, to apply for such exemption.

Arrangements will normally be made through the Ministry of Finance, the Ministry of Foreign Affairs,
or the Customs Authority, within a country.

It is important to note that exemptions are for tax and duties which generate revenue for the local
authority/government and not for other costs which might be incurred, e.g. offloading goods.
Organizations need to be careful that they are not claiming exemption for costs which are not
government revenue.

As well as exemptions from taxes and duties, humanitarian organizations can apply for special
arrangements to facilitate the clearance of goods and to receive priority treatment. For example,
arrangements might be made with the Civil Aviation Authority and airport authorities for the priority
clearance of relief flights and the waiver of fees. These arrangements might include over-flight
clearance, free landing rights, and parking, priority handling of aircrafts and reduced cost for
handling services.

It is important to establish what the procedure is within the country at the start of any aid operation,
but also to regularly check that the procedures have not changed. Where clearing agents are used,
it is important that they are aware of any agreements the organization has within that country, and
for the particular operation.

Governing bodies overlooking issues in international trade set down the customs rules in countries.
These governing bodies are the World Trade Organization (WTO) and the World Customs
Organization (WCO). There are also international trade agreements between countries and
common markets.

A number of countries and markets have developed trade agreements which facilitate cross-border
business between them by easing the import and export of goods and use of preferential rates of
duty between them or by removing duty altogether.

It is important to know whether trade agreements apply for the country in which the organization is
operating and what the specific agreements are.

Examples of common markets include:

 ANDEAN: The Andean Community of Nations

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  ASEAN: Association of South East Asian Nations
 CARICOM: The Caribbean Community
 COMESA: Common Market of Eastern and Southern Africa
 ECOWAS: Economic Community of West African States
 EFTA: European Free Trade Association
 EU: European Union
 NAFTA: North America Free Trade Agreement
 UEMOA: West Africa Economic and Monetary Union

The Kyoto Convention is an international customs agreement which was established in May 1973 to
lay down recommendations for simplifying and harmonizing customs procedures worldwide. Annex
J5 of the Convention deals, specifically, with relief consignments, seeking to, “ensure that the aid
actually reaches the victims in need,” (page 4)

These guidelines, published in June 1999, were written to help to apply Annex J5. The reasons for,
and the benefits of, the annex are explained, followed by a practical application of the three
standards and three recommended practices that make up Annex J5.

Also in this document, is a Model Agreement on Customs Facilitation in International Emergency

Humanitarian Assistance, drawn up by WHO and UNOCHA (formerly UNDHA) to establish a
framework to encourage the fast and efficient delivery of aid in emergencies.

For additional details, see the Logistics Cluster guidelines available on-line at:
http://dlca.logcluster.org/display/LOG/Customs/.

A carnet is an international customs document which is used to simplify customs procedures when
temporary importing and re-exporting, and moving goods through countries. It facilitates the cross-
border movement of vehicles with or without loads. Effectively, a carnet is a book of vouchers. A
country will remove one copy of a voucher at the point of entry into the country and a second copy
of the voucher at the point of clearance or exit from that country.

There are 3 principal carnets: the ATA Carnet, the TIR Carnet, and the Carnet de Passage en
Douane.

The ATA Carnet (Carnet for Temporary Admission of Goods) is used to permit duty-free,
temporary import and export of certain goods: by presenting an ATA Carnet to customs it will allow
duty-free and tax-free passage into, and then out of, the same country. The carnet also provides a
financial guarantee to customs that, in the event that goods which are temporarily imported are not
re-exported and remain in the country, import duties and taxes will be paid. The carnet can be used
for goods which are ‘tools of trade’ including, commercial samples, professional equipment, goods

AO/HLCP/0188 V3.0
for presentations, shows, exhibitions, and goods brought in for repair. It cannot be used for
consumable goods such as food and medicines.

An ATA Carnet is issued by the Chamber of Commerce and they are responsible for the payment of
duties and taxes, should the carnet not be used correctly. The cost of the carnet is based on the
value of the shipment, and either a deposit or bank guarantee is applied. The advantages of an ATA
Carnet are that they reduce costs as no duty or tax is paid and they allow a single document to be
used for all customs transactions. Once the goods have finalized their journey, and the Carnet is no
longer used, it has to be returned to the issuing Chamber of Commerce for ultimate cancellation.

The TIR Carnet is used to enable vehicles to travel across borders/frontiers and through countries
without having to be inspected at every frontier. Customs will not need to inspect the goods but can
just check the custom seals on the vehicle/containers to ensure that they are not broken. Once free
passage is granted, they remove the entry section of one page of the Carnet. At the point where the
vehicle leaves the country, the exit section of the page is removed to prove that the goods which
have entered in the country have left it, so as to allow waiver of duty or tax.

The TIR system is not recognized in most developing countries but a number of these countries
have bilateral agreements or legislation which allow sealed vehicles to pass through their territories.
TIR Carnets are issued by national trade/truck organizations. The advantage of a TIR Carnet is that it
facilitates the border crossing.

The Carnet de Passage en Douane is used to temporarily import and re-export vehicles, free of
duty. It can, therefore, be used to enable vehicles to move through countries without being charged
duties or taxes, and also for importing and temporarily using a vehicle in countries accepting the
carnet. The carnet is usually valid for 12 months, but some countries impose shorter periods. This
carnet only applies to the vehicle, and not to the goods contained within it.

A Carnet de Passage is issued by the Automobile Association who will require a deposit or bank
guarantee.

All Carnets have to be returned to the issuing office once they are no longer used, for ultimate
cancellation. If the carnets are not returned then the deposit or guaranteed sum may not be
recovered.

There are two main types of tax that relate to the importing and exporting of goods and services:
Value Added Tax (VAT) and Duty Tax.

Value Added Tax (VAT) is a sales tax, levied on the sale of goods and services. In some countries,
including Australia and Singapore, it is known as ‘goods and services tax’ (GST). VAT is an indirect
tax, in that the tax is collected from someone other than the person who actually bears the cost of

AO/HLCP/0188 V3.0
the tax (the seller rather than the consumer). VAT is eventually paid for by the end consumer of the
goods and services.

VAT is levied on imported goods, and will either be collected by Customs at the time that goods are
imported, or collected by registered companies who will then submit it to the VAT authorities.

Different countries will have different rates of VAT for different types of goods and services. This
usually includes certain goods and services which are exempt and no VAT is charged.

This is a levy imposed by a government on particular goods which are being imported. The tax
bracket is usually based on the types of goods and may vary on their origin. The tax amount is
calculated as a certain percentage of the value of the goods. Different goods may have different tax
rates.

Duty tax is imposed by countries to control and to regulate the flow of imported goods, to protect
their local industries and to penalize the dumping of products of foreign origin which could have
been heavily subsidized.

When such taxes are paid, it is important to keep a record of the tax invoice for eventual later
justification, or for reimbursement purposes once exemption is granted.

As mentioned earlier in this section, humanitarian organizations can apply for exemption from
duties and taxes. When such exemption is given; it is mandatory that the goods are used
appropriately within the work of the organization. If these goods are then sold, destroyed or
donated, permission is usually required from the ministry which granted the exemption. It is likely to
be seen as fraud if these goods are disposed of without getting prior permission.

It is important, therefore, to keep accurate records of goods which have been imported, tax- and
duty-free, and be able to account for them and to justify their ultimate use.

AO/HLCP/0188 V3.0