Book 1

379
Senior Secondary Course
Basics of Transportation
1
NATIONAL INSTITUTE OF OPEN SCHOOLING

(An autonomous institution under Ministry of Education, Govt. of India)
A-24/25, Institutional Area, Sector -62, NOIDA -201309 (U.P.)
Website: www.nios.ac.in, Toll Free No.: 18001809393
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i
© National Institute of Open Schooling
2023 ( Copies)
Published by:
Secretary, National Institute of Open Schooling
A 24-25, Institutional Area, Sector-62, Noida-201309 (U.P.)
ii
ADVISORY COMMITTEE
Prof. Saroj Sharma Dr. Rajiv Kumar Singh
Chairperson Director (Academic)
National Institute for Open Schooling, National Institute for Open Schooling,
NIOS, Noida (India) NIOS, Noida (India)
COURSE DESIGN COMMITTEE

Prof.Gayathri H Dr Sandhya Kumar Prof S Ganesan
Head -Skilling in Schools Deputy Director Head- Education Initiative
Logistics Skill Council (LSC) NIOS Logistics Skill Council
Chennai Noida Chennai
Mr Ravikanth Yamarthy Ms Reena Fatima Murray Ms. Alpana Chaturvedi

Chief Operating Officer Senior Executive CEO
Logistics Skill Council Quality Standard, My Logistics Gurukul,
Chennai LSC Chennai New Delhi
Samir Chaturvedi Mr Kunjal Patel Ms Priyanki Vardhan

Head, Supply Chain Head, Procurement, Consultant Academic,
Haldiram Snacks Pvt. Ltd. (Academic) NIOS
New delhi HP- India Noida
LESSON WRITERS
Dr. R Ganesh Murthi Dr. Veni Mathur Mr. Vinod Asthana
Founder & CEO Chairperson Vice-Chairperson
Corporate Link Asia The Chartered Institute of The Chartered Institute of
Chennai Logistics and Transport (CILT), Logistics and Transport (CILT),
New Delhi New Delhi
CONTENT EDITING & FINALISATION

Logistics Skill Council, Chennai
COURSE CO-ORDINATOR
Dr. Sandhya Kumar
Deputy Director (NIOS),
Noida U.P
GRAPHIC DESIGNING and DTP

M/s Multigraphics,
Karol Bagh, New Delhi
iii
A Word with You
Dear Learner,
Welcome to the course "Basics of Transportation".
I am glad that you have chosen this course as one of your subjects at senior secondary level.
Many young people are choosing Logistics as a career with well-paying jobs. In this context, our goal is to
give learners a fundamental understanding of the Basics of Transportation. Additionally, this course shall
make you aware of the employment and business opportunities available in this sector, allowing you to focus
your time and energy on activities that will produce results. Basics of Transportation is designed to meet the
dictates of market place and support the company's strategic plan. Inputs that you receive in this course will
assist you in comprehending how and why you could decide to pursue it as a career since transportation
management is one of the most demanding careers in today's market.
Do you know that Transportation is the soul of all organizations' supply chains? Transportation management
is crucial for a business to understand and execute efficient, cost-effective operations. Effective manage-
ment of transportation reduces input costs, which further helps to keep accounts and finances under control.
The survival of an organization now depends on its capacity to manage inventory. In this context, our goal is
to give our learners a fundamental grasp of the basics of transportation management, as well as information
on changing market demand, new business prospects brought on by international marketing, global sourc-
ing of raw materials, and cutting-edge manufacturing technology. To grow earnings and survive in the com-
petitive business environment, many companies today need to change their transportation techniques and
control practices.
This course has five modules, namely Transportation; Consolidation of Cargo; Inbound and outbound
documentation; Feasibility assessment and route optimization; and GST and its application used for various
types of goods. Each lesson has been designed keeping in view the requirements of self-motivated learners
like you. It has a text written in simple language, supplemented by pictures and figures to lend clarity to the
content.
I hope you will find the lessons interesting and will be able to apply your knowledge in real-life situations.
So, read all these lessons carefully and prepare well for the examinations. You ultimately have to enter the
field of Internship and work and your success at the place of work will depend on how skillfully you have
performed your assigned job. It is expected that project work will help you in developing the skills to
understand the various aspects of Basics of Transportation Management and make it a meaningful experi-
ence in your life.
In case you have any difficulty in your studies, do not hesitate to write to me.
Wishing you good luck and success! iv
How to use the Learning Material
Congratulations! You have accepted the challenge to be a self-learner. It means, you have to organize your
study, learn regularly, keep up your motivation and achieve your goal. Here it is solely you, who is responsible
for your learning. NIOS is with you at every step. It has developed the material in Basics of Transportation
keeping only you in mind. A format supporting independent learning has been followed. You can take the best
out of this material if you follow the instructions given below.
Title: The title of the lesson will give a clear indication of the contents within. Do read it.
Introduction: This will introduce you to the lesson and also link it to the previous one.
Objectives: These are statements of outcomes of learning expected from you after studying the lesson.
You are expected to achieve them. Do read them and check if you have achieved the same.
Content: Total content has been divided into sections and sub-sections. A section leads you from one
content element to another and a sub-section helps you in comprehension of the concepts in the content
element. The text in bold, Italics or boxes is important and must be given attention.
Intext Questions: Objective types self-check questions are asked after every section, the answers to
which are given at the end of the lesson. These will help you to check your progress. Do solve them.
Successful completion will allow you to decide whether to proceed further or go back and learn the unit
again.
Notes: Each page carries empty space on the outer margins for you to write important points or make
notes.
What You Have Learnt: It is the summary of the main points of the lesson. It will help in recapitulation and
revision. You are welcome to add your own points to it also.
Terminal Questions: These are questions answered that provide you an opportunity to practice for
better understanding of the whole topic.
Answers to Intext Questions: These will help you to know how correctly you have answered the Intext
questions.
Activity: Activities, if done by you, will help you to understand the concept clearly.
Key Terms: The important terms used in the lesson are highlighted in this section. Do remember these
terms.
Do and Learn: In this section certain activities have been suggested for better understanding of the
concept.
Role Play: To make your learning interesting an imaginary situation is given based on any concept
covered in the lesson. You are required to enact the imaginary situation through realistic behavior. You are
free to choose any other concept/topic of your choice to play the role.
QR Code: A quick response (QR) code is given in every lesson which is a type of barcode that stores
information and can be read by a digital device, such as a cell phone.
Audio: For understanding difficult or abstract concepts, audio programmes are available on certain con-
tent areas. You may listen to these on Mukt Vidya Vani, Community Radio FM-91.2 or on YouTube channel
"niosradiovahini".
Video: Video programmes on certain elements related to your subject have been made to clarify certain
concepts. You may watch these at NIOS live YouTube channel and also see live programs on PM e-vidya.
v
COURSE OVERVIEW
LESSON
1
1. Types of Transportation 1. Transportation & Mobility
2. Types of Transport Modes
3. Essentials of Transport
4. Concept of Multi Modal Transport
5. Freight Forwarder & MMLP
2. Consolidation of Cargo 6. Introduction to Consolidation

7. Consolidation: Importance & Limitations
8. Shipper's and Buyer's Consolidation
9. Modes of Transportation for Consolidation
10. Air Consolidation
11. Ocean Consolidation
12. Road Consolidation
LESSON
2
3. Inbound and Outbound 13. Inbound and Outbound Documentation
Documentation 14. Quality Check and Inventory Documentation
15. Transport Coordination
4. Feasibility Assessment 16. Transportation Requirements

and Route Optimization 17. Route Optimization
18. Transport Policies in India
19. Cargo Arrangement and Consolidation Charge
5. GST and its Application 20. Goods and Services Tax

21. Documentation for GST Application
22. GST and Modes of Transportation
23. Filing an E-way Bill
24. Bill of Lading and Bill of Entry
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CONTENTS
LESSON PAGE NO.
1. Types of Transportation 1. Transportation & Mobility 01-20

2. Types of Transport Modes 21-40
3. Essentials of Transport 41-66
4. Concept of Multi Modal Transport 67-88
5. Freight Forwarder & MMLP 89-102
2. Consolidation of Cargo 6. Introduction to Consolidation 103-126

7. Consolidation: Importance & Limitations 127-144
8. Shipper's and Buyer's Consolidation 145-164
9. Modes of Transportation for Consolidation 165-184
10. Air Consolidation 185-204
11. Ocean Consolidation 205-230
12. Road Consolidation 231-256
Note: The syllabus has been bifurcated into two sections -
I. (i) Lessons for the Tutor Marked Assignment (TMA)
II. (ii) Lessons for public examination question paper
Lessons in Section (ii) are further divided as-
A. Lessons for objective type Questions only
B. Lessons for subjective type of questions.
The details of the different sections are on the next page.
vii
Bifurcation of Syllabus (2023)
Total no. of Lessons=24
MODULE TMA (40%) Public Examination (60%)

(No. & name) (No. of lessons -10) OBJECTIVE 50 % SUBJECTIVE 50 %
(No. of lessons -7) (No. of lessons -7)
1 Types of L-1: Transportation L-2: Types of L-4: Concept of Multi

Transportation & Mobility Modes Transport Modal Transport
(5 Lessons) L-5 : Freight Forwarder L-3: Essentials of
& MMLP Transport
2. Consolidation L-6 :Introduction to L -10: Air L-9: Modes of

of Cargo Consolidation Consolidation Transportation
(7 Lessons) L-7: Consolidation: for Consolidation
Importance & Limitations L-11: Ocean Consolidation
L-8: Shipper’s and L-12: Road
Buyer’s Consolidation Consolidation
3. Inbound and L-13: Inbound and L-15: Transport L-14: Quality Check and
Outbound Outbound Coordination Inventory Documentation
Documentation Documentation
(3 Lessons)
4. Feasibility L-17 Route L-16: Transportation L-18: Transport

Assessment Optimization Requirements Policies in India
and Route L-19: Cargo
Optimization Arrangement and
(4 Lessons) Consolidation Charge
5. GST and its L -20 Goods and L-24: Bill of Lading L-21 Documentation
Application Services Tax and Bill of Entry for GST Application
(5 Lessons) L -22 GST and Modes L- 23 : Filing an
of Transportation E-way Bill
viii
Transportation and Mobility MODULE - 1
Types of
1 Transportation
TRANSPORTATION AND MOBILITY

Notes
“To ensure that our transport systems meet society’s economic, social
and environmental needs whilst minimising their undesirable impacts on the economy,
society and the environment” - Council of European Union: Brussels, Belgium, 2006.
Transport provides mobility to men and materials for satisfying human needs leading to
higher level of welfare measured in terms of GDP. Thus, transport becomes an integral
factor in sustain-able development due to the pressure it places on the environment, its
economic and social impacts, and its linkages with other sectors. The transport sector
has been growing continuously in recent years and will continue in the future as well –
despite the current dip caused by the Covid 19 crisis– making a strategy for sustainable
transport should be a priority at local, national and global levels.
LEARNING OUTCOMES
After reading this lesson, the learner-
 explains the role of transport in providing mobility to men and material;
 elaborates the need for application of technology in transportation;
 emphasises the need for sustainability in land use pattern;
 coordinates between modes of transport and multimodal transport to achieve

cost effectiveness and efficiency.
Basics of Transportation 1
MODULE - 1 Transportation and Mobility
Types of
1.1 OBJECTIVE OF TRANSPORT- MOBILITY,
Transportation SUSTAINABILITY & LAND USE PATTERN
The main objectives of transport are –
 Environment;
 Safety;
Notes  Economy;
 Integration; and
 Accessibility and Social Inclusion.
Let us learn about each of these objectives in detail.
1. Planning for transport has to be done keeping in view the importance of
safeguarding the environment for which special attention needs to be given to:
 noise reduction;
 improvement in local air quality;
 reduction in greenhouse gases;
 protection as well as enhancement of the landscape in and around the towns;
 support biodiversity;
 prevent the water from pollution; and
 improvement in the quality and comfort of journey for commuters.
2. The transport planning objectives relating to Safety are:
 to reduce accidents; and
 to improve security.
3. The objectives relating to Economy are:
 to improve efficiency in terms of reduction of costs for using the transport
system for business users and transport providers and commuters; and
 to improve reliability.
4. The term Integration can be seen as:
 integration within and between different types of modes of transport, so

that people can transfer easily between modes;
2 Senior Secondary
 integration of the modes with the environment, Types of

 improvement in land-use planning, at national, regional and local level, so Transportation
that transport and planning work together to support more sustainable travel
choices and reduce the need/demand for travel; and
 to create an inclusive society by integrating policies for education, health
and wealth creation with transport planning. Such an integrated planning
procedure will result in improvement of transport interchange and better
Notes
land-use policy for overall development.
5. The transport planning objectives relating to Accessibility and Social
Inclusion are:
 ease of access to a particular transport system/mode, for example, how
much time it takes to reach a bus stop from home or the frequency of
buses, whether they are wheelchair friendly or not, etc.;
 minimum travel times, distances or costs to reach any facility like place of
work or entertainment; and
 Ease of participation in activities (for personal travel) or delivery of goods
to their final destination (for goods travel), provided by the interaction of
the transport system, the geographical pattern of economic activities, and
the pattern of land use as a whole.
Once the above mentioned objectives are met; it helps to improve the
Mobility, Sustainability and Land-use Pattern, resulting in better integration
of transport modes and the society in general for economic development of
the region. Every Transport Planning Authority needs to focus on 3 key
strategic areas. They are to -
 Improve journey times and connections: to be able to tackle congestion
and improve integration and connections between different transport modes
to attain the objectives for economic growth, social inclusion, integration
and safety;
 Reduce emissions: to deal with the issues of climate change, air quality
and health improvement with the objective of protecting the environment;
and
 Improve quality, accessibility and affordability, to encourage people
with a choice of public transport, wherein its availability should mean better
quality transport services and value for money as an alternative to the car.
Types of Looking at the objectives from the point of view of Rail Transport; the key areas to
Transportation develop the rail network to bring about sustainability on a long term basis could be
listed as:
 Offer world class train services which connect our hinterlands with major towns,
providing journey times and quality of service that are competitive with car and
air;
 Provide access to inter-urban services through high quality interchange stations

Notes
that link with feeder rail services or offer easy transfer to car, bus, tram, subway,
ferry, cycle and walking;
 Make commuter train services attractive to passengers by ensuring that the

journey to work is a high quality, reliable travel option and by ensuring that our
rolling stock choices take account of environmental considerations, including air
quality and noise emissions;
 Support movement of freight trains carrying an increasingly wide range of

products with effective interchange to road and sea, also offer door-to-door
services; and
 Conceive a rail plan that delivers efficiently and effectively to support our aims
and vision ( example: GATISHAKTI project)
Policy & regulatory

1. Transportation development at the federal &
Planning & state level will have a
decision-making significant impact on whether
sustainable transportation
process objectives are achieved.
2. Operation of The supply of an effective

transportation service can be
the existing imporved dramatically by
transportation enhancing the operation of the
exsting transportation modes
system and physical infrastructure.
The design philosophy

adoptcd by industry will palya
3. Transportation vital role in delivering
modes sustainable transportation
modes.
4. Use of the The way we use the

transportation sector will be a
transportation critical factor in achieving
sector by world wide sustainable
development
customers
4 Senior Secondary
AVOID SHIFT IMPROVE Types of

Transportation
Notes
Smart City planning to Shift from personallzed Improve and promote innovation
reduce/avoid need of vehicles to non-motorized technology to produce alternative
traveling and public transport fuel for energy efficiency
Social sustainabillity Economic sustainabillity Environmental sustainabillity
Fig. 1.1: Towards sustainabillity in life
INTEXT QUESTIONS 1.1

1. What is the importance of transport in our daily lives?
2. What are the main objectives of transport?
3. What are the main issues Transport planners must keep in mind?
4. What is the need to develop rail transport?
1.2 BENEFITS OF TRANSPORTATION
A. Socio-Economic Benefits of Transportation

The transport sector has the potential to improve the lives and livelihoods of
billions of people—their health, their environment, their quality of life—and
stabilize climate change. But today it is stuck going in the wrong direction, with
transport contributing to gross inequalities in access to economic and social
opportunities, rising numbers of deaths resulting from transport-related accidents,
intensive fossil fuel use, massive emissions of greenhouse gases, as well as air
and noise pollution. This looks like a grim picture but there is a way forward and
it requires all the stakeholders to work together to achieve and attain all the
benefits from a coordinated approach to development of transport infrastructure.
I. Advantages of Modes of Transportation

Each mode of transportation has its advantages, so we have added a few benefits
of the four primary methods of transportation.
Types of Road Transportation:

Transportation 1. Flexible Service: For road transportation, timings and routes can be tuned
and changed to suit individual requirements easily; this gives road Transportation
a great advantage over all different vehicles.
2. Door-to-door assistance: The best benefit of road transportation that makes

it the salvation of the transport industry is its character to offer door-to-door
services from origin to destination or warehouse to warehouse.
Notes
3. Service in Rural areas: It is most adaptable and flexible with a reach into the
most remote areas that are not accessible by rail, air, or water.
Rail Transportation:
1. High speed, covering huge ranges: Its speed over long ranges is higher than
any other distinct mode of transport (aside from airways). Therefore, it is the
best choice for long-distance traffics.
2. Dependable: It is the most reliable mode of transport as it is least affected by

weather conditions compared to other methods.
3. Suitable for heavy and bulky goods: It is economical, and faster, and best
suited for bulky and heavy goods transportation over huge distances.
Water/Sea Transportation
1. Helpful in Defense: For the vigorous defense of the country, the development
of shipping is vital as it is known as the second line of defense.
2. Essential for Foreign Trade: Water transportation plays a critical role in foreign
trade as many countries depend mainly on water transportation for foreign trading,
such as India.
Air Transportation:
1. Rapid speed: Among all the modes of transportation, air transportation is the
fastest.
2. Unbroken Journey: Air transportation offers an unbroken journey over sea

and land, due to which it can take you from one location to another location
quickest.
3. Can operate for emergency services: It can operate even when every other
means of transport can’t due to floods or other natural calamities. So at that
6 Senior Secondary
time, it is the only mode of Transportation that can be employed to do the relief Types of
work and offer the essential commodities of life. Transportation
Pipeline:
1. Low maintenance cost: Both the maintenance and operation cost is meager.
2. Less energy requirement: The consumption of energy is deficient.
3. Less rate of delays: The losses of carrying mineral oil and natural gas and
Notes
delays are minimized with a pipeline system.
II. Disadvantages of Modes of Transportation
Each mode of Transportation has its disadvantages, which can be enumerated

below:
Road Transportation:
1. Accidents and breakdowns: There is a high risk of breakdowns and accidents
in the instance of road transport, due to which it is not a safe or predictable
option.
2. Vulnerable to season and weather conditions: It is very susceptible to

weather conditions and seasonal changes or, in the case of natural calamities
such as floods or heavy rains.
3. Not best for heavy cargo and long distances: It is not very appropriate for
transporting heavy cargo over long distances, which is a considerable drawback.
Rail Transportation:
1. Huge capital outlay: Rail transportation needs a considerable investment of
capital. The funds for building, sustaining, and hanging expenses are enormous
compared to other modes of Transportation.
2. Centrally administrated: Being the public utility service, rail transportation

has a monopoly, and there is centralized administration, so the authorities fail to
meet the personal needs of the people as compared to roadways.
3. No rural service: Rail service in rural areas is un- economical due to substantial
capital needs and traffic.
Water Transportation:
1. Riskier: It is more dangerous than other modes of transport as there is always
the danger of sinking boats or ships.
Types of 2. Slow speed: It is a quiet mode of transport. Failure of monsoon might result in
Transportation the fall of rivers’ water level, making navigating the ship or boat difficult.
Air transport:
1. Very expensive: It is the most costly mode of Transportation. The fare of
transport is very high, which is difficult to afford for the ordinary person.
2. Unreliable and uncertain: Air transport is not very reliable and is unsure as it
Notes is controlled mainly by weather conditions. Fog, snow, or other unfavorable
weather conditions might cause suspension of air service or cancellation of
scheduled flights.
3. Specialized skills needed: Air transportation requires a specialized skill and a

high degree of training for its operation.
Pipeline:
1. Leakage: If there is a leakage, the repairing has to be done as soon as possible.
2. High initial cost: The cost of construction of pipelines is high.
3. Security: The security of pipeline transportation is complex.
Passengers Freight
Direct Users Operators

• Time and cost savings. • Time and cost savings.
Capacity
• Income from transport • Income from transport
and operations
operations
efficiency
Indirect Employers & Retail Customers

Assessibility • Access to labor or customers. • Productivity and added gains.
SCOPE
and • Rent income. • Rent income.

• Goods and services to users. • Goods and services to operators.
economies
• Range of suppliers and markets.
of scale
Induced Society Economy
Multipliers and • Improved mobility. • Formation of distribution networks.

• Increased social opportunities. • Attraction ofeconomic activities.
opportunities
• Increased competitiveness.
SCOPE
8 Senior Secondary
A SUMMARY of the Benefits of Transportation is given below: Types of

Transportation
Improved Active More Active Transport
Transportation Conditions Activity
 Improved user convenience  User enjoyment

and comfort
 Improved accessibility for non-  Improved public fitness and health Notes
drivers, which supports equity
objectives
 Option value  More local economic activity
 Higher property values  Increased community cohesion

(positive interactions among neighbors)
which tends to increase local security
 More neighborhood security
Reduced Automobile Travel More Compact Communities
 Reduced traffic congestion  Improved accessibility, particularly for

non-drivers
 Road and parking facility cost  Transport cost savings

savings
 Consumer savings  Reduced sprawl costs
 Reduced chauffeuring burdens  Open space preservation
 Increased traffic safety  More liveable communities
 Energy conservation  Higher property values
 Pollution reductions  Increased security
 Economic development
Types of
Transportation
1. What is the advantage of road transport?
2. What benefits can be accrued from rail and water transport?
3. Give the pros and cons of pipeline transport.
Notes 1.3 USE OF TECHNOLOGY AND MULTIMODALITY

The use of technology is transforming the way we plan, build, design, and operate our
transportation systems. Transport authorities use technology to assess traffic, detect
crashes, collect tolls and fares, and manage transit operations and traffic signal systems.
Commuters/travelers do journey planning based on traffic condition reports, electronic
maps, on-board vehicle performance monitors, real-time transit arrival information,
and a host of other services that did not exist a generation ago. Some of us are already
driving hybrid vehicles or commuting in buses powered by hydrogen, electricity or
bio-fuels. Looking forward into the future, we are counting on greater advancements
in transportation technology, not just to get us where we want to go, but also to reduce
greenhouse gases, improve air quality, and support economic development.
Even today, innovative transportation technology such as autonomous vehicles and e-

bikes, is helping us get to wherever we want to go; whether just down the road or
across the country or many miles into outer space. Transportation technology, especially
the use of GPS has brought a change in our travel patterns and up-gradation in our
vehicles.
Types of Transportation Technology

Finding creative solutions/innovations in transportation technology has led to interesting
changes in usage of different modes of transportation; such as mentioned below -
1. Hyperloops
Hyperloops are being used as a method of both passenger and freight
transportation that use electric propulsion and low-pressure tubes to glide along
at speeds that surpass those of commercial aircrafts. The use of magnets to
propel the tube greatly reduces the amount of energy and monetary costs for
operation. Hyperloops are still in the process of development therefore the top
speed achievable is actually half of the proposed 750 mph. It is bound to become
a game changer in the field of transportation.
10 Senior Secondary
Types of
Transportation
Notes
Fig. 1.2: Hyperloop
2. Aerospace
The transportation technology relating to commercial space flights has introduced
amazing advancements. The buzz word is Aerospace, where big companies are
battling it out to be the first company to offer commercial space flights.
3. Automatic Self-Driving Vehicles

Self-driving vehicles are becoming a reality; where getting into your car, punching
in an address, sitting back and letting a car take you to your destination without
you having to touch the steering wheel or get stressed out navigating traffic.
Companies like Google, Waymo, Uber, Tesla and Ford are all developing
machine learning, Artificial Intelligence and deep learning platforms that help
cars calculate their surroundings by taking data through sensors located at
numerous points in real-time and navigate safely and efficiently. Additionally,
GPS monitors routes to find the quickest way to a destination, upcoming
accidents or bottlenecks that can be subverted.
Fig. 1.3: Automatic Self Driven Vehicles
Types of 4. Electric Vehicles

Transportation Some companies have manufactured electric cars, which run strictly on battery
power. The most advanced electric vehicles can run from 150 miles to 350
miles on a single charge. These vehicles are fantastic examples of transportation
technology.
Electric bikes and scooters (known as e-bikes and e-scooters) have become
viable travel options for movement within the city limits in the most eco-friendly
Notes
manner.
5. Last-Mile Robots
Technology that helps to get our packages and products from the warehouse/
retail outlet to the final consumer is last-mile robotics. Instead of depending on
a delivery driver, companies are now employing robots to deliver package
straight to your doorstep. Amazon and FedEx are currently employing robots in
certain cities to deliver packages within a few mile radius of their fulfillment
centers, and Domino’s Pizza is using robots to deliver their pizza orders on time.
Fig. 1.4: Last mile robots
1.4 THE IMPORTANCE OF TECHNOLOGY IN THE

TRANSPORT OF THE FUTURE
The four pillars of future transport, are marked by the development of ITS, future
technologies that will help to achieve transport sustainability are:
1. Reduce emissions, caring for CO2 emissions
12 Senior Secondary
2. Increase security in preventing road accidents Types of

Transportation
3. Reduce costs, improve performance
4. Always connected, communication and Internet of Things in the vehicle
These technological developments will be beneficial for both passenger cars as well as
industrial vehicles users.
1.5 SIX FUTURE TRANSPORTATION TECHNOLOGIES Notes

THAT WILL CHANGE TRANSPORTATION (AND THE
TRUCKING INDUSTRY) FOREVER
Modern transportation is currently experiencing major changes thanks to transformative

transportation technologies. Although we’ve become accustomed to long international
flights, jam-packed public transportation and diesel trucks that only get 20 kpl, the
future of transportation promises to change all of that and much more — and it’s
closer than many people realize. Let’s take a look at 6 transportation technologies
sure to impact the trucking and transportation industries forever.
1. Self-Driving Automobiles: Self-driving automobiles are already here. They’re

still undergoing the earliest stages of development and testing, but they’re already
present on our nation’s roadways. While there may be setbacks in the progress
of fully autonomous vehicles, developers remain optimistic about the future of
this transportation technology.
Fig. 1.5: Self-driving car
Types of 2. Smart Cars: Many consumers already own smart vehicles. The exact definition
Transportation of a smart car varies between manufacturers, dealers and individuals, but it
generally describes a compact, fuel-efficient vehicle that utilizes new and
innovative technology to make life easier for the driver and passengers. In some
cases, manufacturers are transitioning to electric or hybrid cars. This new
generation of smart vehicles still has some challenges to overcome — such as
the distance they’re able to travel between charges, the number of passengers
Notes they can hold and even the amount of trunk space — but they’re already common
on our nation’s streets and highways.
Fig. 1.6: eVehicle

3. Next-Gen GPS Devices: GPS units are nothing new — they have been
around for decades. The biggest difference when comparing modern GPS
devices to earlier models is the amount of functionality seen in the newer
hardware. In the past, GPS devices were very limited. They could calculate
total mileage and provide an estimated time of arrival to a final location.
Today’s GPS units are much more versatile. Not only do they fulfill the basic
functionality of planning a trip, but they can make adjustments for extreme
weather, traffic conditions or even your preferred route.
14 Senior Secondary
Types of
Transportation
Notes
Fig. 1.7: GPS in car

4. Transportation Technologies will Impact Public Transportation for
Individuals: Typically reserved for big cities and crowded residential areas,
public transportation often comes with negative connotations. Not only are these
vehicles often overstuffed with passengers, but in some areas, they are hotbeds
of crime and suspicious activity.
Future public transportation hopes to change all of that thanks to forthcoming

and developing transportation technologies. Some areas already use personal
transportation pods to mitigate many of these issues.
Since there is only room for one passenger per pod it immediately reduces the
risk of crime or personal injury, and their intuitiveness makes them an excellent
example of how easy it is to integrate new transportation technologies into
everyday life.
5. High-Speed Rail Networks: High-speed rail networks are generating

tremendous interest all around the globe. The Shinkansen bullet train was officially
unveiled in Japan in 1964, and countries have been hoping to introduce their
networks ever since.
Although there’s been little progress, some nations like China have created the
largest network of High speed corridors. The Hyperloop is an underground rail
that shows speeds up to 240 mph in early tests. Developers hope to achieve
three times that speed with the finished version.
Types of
Transportation
Notes
Fig. 1.8: High speed train

6. Gyroscopic Vehicles: Although flying cars might be too complicated for
mainstream use any time soon, hovering vehicles — which are propelled with
the assistance of monorails and balanced through the innovative use of next-gen
gyroscopes — could solve public transportation issues across the globe. While
these vehicles look like they’re something out of a scientific comic book or
television show, they could become a reality sooner than expected.
Sometimes referred to as gyrocars, their size makes them more akin to modern
buses or trains. Early conceptualizations show a vehicle that can move along on
city streets and even raise its body via built-in stilts to navigate through traffic
congestion without stopping.

1. How is technology transforming our transport sector?
2. Write a note on Hyperloop technology.
3. Why is application of technology useful?
1.6 THE ROAD TO INNOVATION

While the future is anything but clear, it is the beginning of new breakthroughs and
innovations of all kinds. Although travelers in the U.S. might never see a high-speed
rail network that is capable of matching the speeds of Japan’s bullet train or ride in a
single-passenger pod around their nearest airport, these developments — as well as
16 Senior Secondary
some early conceptualizations and prototypes — are proof of fun and exciting times Types of
ahead. Transportation
WHAT YOU HAVE LEARNT
Sustainable Development
Notes
Sustainable Transportation
Modes Infrastructures Operations
Environment Economy Society

Climatc Change Materials and Safety
Air quality Energy Growth Health
Noise Employment Disturbance
Land Use Pricing Access
Waste Competitiveness Equity
By using key enabling technologies as a foundation for change, Transport

organisations are able to develop disruptive and sustainable strategies. Today,
Transport organisations are faced with a growing pressure to deliver a quality, cost
effective service while improving customer satisfaction.
Advantages of Technology on Our Lives

 Ease of Access to Information.
 Saves Time.
 Ease of Mobility.
 Better Communication Means.
 Cost Efficiency.
 Innovation In Many Fields.
 Improved Banking.
 Better Learning Techniques.
Types of Types of Transportation Technology

Transportation  Hyperloops
 Underground Tunneling
 Aerospace
 Autonomous Vehicles
Notes  Last-Mile Robots
 Electric Vehicles
TERMINAL EXERCISE
1. What do you mean by sustainable transport?
2. How does transport bring about growth of any region? Explain in detail.
3. Compare rail transport with water transport.
4. What are the benefits of road transport?
5. What is meant by Multimodal transport?
6. How does use of technology help in better transport experience?
ANSWERS TO INTEXT QUESTIONS

1.1
1. Transport provides mobility to men and materials for satisfying human needs
leading to higher level of welfare measured in terms of GDP. Thus, transport
becomes an integral factor in sustain-able development due to the pressure it
places on the environment, its economic and social impacts, and its linkages
with other sectors.
2. The main objectives of transport are –
 Environment;
 Safety;
 Economy;
 Integration; and
 Accessibility and Social Inclusion.
18 Senior Secondary
3. They are to Types of

Transportation
 Improve journey times and connections
 Reduce emissions
 Improve quality, accessibility and affordability
4. The key reasons to develop the rail network to bring about sustainability on a
long term basis could be listed as:
Notes
 Offer world class train services
 Provide access to inter-urban services
 Make commuter train services attractive to passengers
 Support movement of freight trains carrying an increasingly wide range of

products
 Conceive a rail plan that delivers efficiently and effectively to support our
aims and vision ( example: GATISHAKTI project)
1.2
1. Road Transportation
1. Flexible Service
2. Door-to-door assistance
3. Service in Rural areas
2. Rail Transportation
1. High speed covering huge ranges/long distances:
2. Dependable in all weather conditions:
3. Suitable and economical for heavy and bulky goods movement:
3. Water Transportation
1. Helpful in Defense
2. Essential for Foreign Trade
3. Cheapest and most environmental friendly
Types of 4. Advantages of Pipeline

Transportation 1. Low maintenance cost: Both the maintenance and operation cost is meager.
2. Less energy requirement: The consumption of energy is deficient.
3. Less rate of delays: The losses of carrying mineral oil and natural gas and
delays are minimized with a pipeline system.
Disadvantages of Pipeline
Notes
1. Leakage: If there is a leakage, the repairing has to be done as soon as possible.
2. High initial cost: The cost of construction of pipelines is high.
3. Security: The security of pipeline transportation is complex.
1.3
1. The use of technology is transforming the way we plan, build, design, and operate
our transportation systems.
2. Hyperloops are being used as a method of both passenger and freight

transportation that use electric propulsion and low-pressure tubes to glide along
at speeds that surpass those of commercial aircrafts.
3. The four benefits of future transport with use of ITS will help to achieve transport
sustainability as:
1. Reduce emissions, caring for CO2 emissions
2. Increase Security in preventing road accidents
3. Reduce costs, improve performance
4. Always connected, communication and Internet of things in the vehicle
20 Senior Secondary
Types of Transport Modes MODULE - 1
Types of
2 Transportation
TYPES OF TRANSPORT MODES

Notes
India's transport network is the most extensive in the world. However, accessibility
and connectivity are limited. Only 20% of the national highway network is four lane
and one third of the rural population lacks access to an all-weather road. Ports and
airports have inadequate capacity and often poor transport connectivity. Trains move
very slowly owing to poor maintenance, and the entire railway system is grappling with
issues of financial sustainability. In India, in 2019 the transportation costs were nearly
6.3% of GDP while in US was merely 3.2%.The World Bank Group's suggestion for
the transport sector in India focuses on the reform and development of railways,
highways, and rural roads, and on improving road safety and ensuring asset sustainability.
LEARNING OUTCOMES
 relates transport planning to judicious land use pattern as the main cause for
economic growth of any region;
 explains the pros and cons of different modes of transport available today;
 plans for the two most dominant modes of land transportation for the carriage
of men and materials;
 determines the best modal mix for each specific region;
 plans for transport in the most environment friendly and sustainable way.
MODULE - 1 Types of Transport Modes
Types of
2.1 ECONOMIC GOALS IN LAND TRANSPORTATION
Transportation
The two most important modes of land transportation are Road & Rail. The
development of these modes largely depends on the geographic physical features,
economic goals and the land use pattern. Transport modes are designed to carry
passengers as well as freight. For example, a passenger plane has a belly-hold that is
used for luggage and cargo. Every mode of transport is characterized by a set of
Notes technical, operational, and commercial characteristics. Technical characteristics are
speed, capacity, and motive power, while operational characteristics relate to speed
limits, safety conditions, or operating hours. The demand for transport and the ownership
and operation of modes support economic activities and generate an income.
1. Roadways
Road networks occupy large spaces besides, physiographical features like rivers
or rugged terrain pose constraints in road construction which substantially
increases costs. On the other hand, road transportation has better operational
flexibility as vehicles can provide door-to-door service in all kinds of terrain.
With containerization, road transportation has become a crucial link in freight
distribution between ports and commercial hinterlands.
Therefore, it is the most popular mode of freight transportation in India and

accounts for over 60 percent of the nation's freight movement. The trucking
industry consists of two major segments-TL (truck load) or LTL (less than truck
load). TL operations charge for the full truck independent of the quantity shipped.
Rates vary with the distance traveled. LTL operations charges are based on the
quantity loaded and the distance traveled. The LTL rates exhibit economies of
scale. Trucking is more expensive than rail but offers the advantage of door-to-
door shipment and a shorter delivery time. It also has the advantage of requiring
no transfer between pickup and delivery. TL shipping is suited for transportation
between manufacturing facilities and warehouses or between suppliers and
manufacturers.
Fig. 2.1: Roadways
22 Senior Secondary
2. Railways Types of
Railways need a dedicated path to move. This poses a physical constraint because Transportation
a low gradient is required for movement of heavy passenger and freight load.
Having the advantage of being a mass carrier heavy industries are traditionally
linked with rail transport systems, today containerization has improved the
flexibility of rail transportation by linking it with road and maritime modes. Rail is
by far the land transportation mode offering the highest capacity with a 23,000
tons fully loaded coal unit train being the heaviest load ever carried. Gauges, Notes
however, vary around the world, often challenging the integration of rail systems.
Fig. 2.2: Railways

Railways incur a high fixed cost in terms of rails, locomotives, cars/wagons, and
yards. There is also a significant trip-related labor and fuel cost that is
independent of the number of cars/wagons (fuel costs do vary somewhat with
the number of cars) but does vary with the distance travelled and the time taken.
Any idle time, once a train is powered, is very expensive because labor and fuel
costs are incurred even though trains are not moving. Idle time occurs when
trains; exchange cars for different destinations or when there is track congestion,
Labor and fuel together account for over 60 percent of railroad expense. From
an operational perspective, it is thus important for railways to keep locomotives
and crew well utilized.
Rail is priced to encourage large shipments over a long distance. Prices display
economies of scale in the quantity shipped as well as the distance travelled. The
price structure and the heavy load capability makes rail an ideal mode for carrying
large, heavy or high-density products over long distances. Transportation time
Types of by rail, however, can be large. Rail is thus ideal for very heavy, low-value
Transportation shipments that are not very time sensitive. The resulting transportation cost tends
to be low. Coal, for example, is a major part of each railroad's shipments.
Small, time-sensitive, short distance, short lead time shipments rarely use rail.
3. Pipelines
Pipelines can be laid on land, underground or underwater. Their purpose is to
Notes move liquids such as petroleum products over long distances in a cost-effective
manner. The longest gas pipeline links Alberta to Sarnia (Canada), which is
2,911 km in length. The longest oil pipeline is the Tran-Siberian, extending over
9,344 km from the Russian arctic oilfields in eastern Siberia to Western Europe..
Pipeline construction costs vary according to the diameter and increase
proportionally with the distance and with the viscosity of fluids (from low viscosity
gas to high viscosity oil). Pipelines have been able to successfully connect
refineries and harbors. The six major pipelines in India are:-
 Naharkatia-Nunmati-Barauni Pipeline:
 Mumbai High-Mumbai-Ankleshwar-Kayoli Pipeline:
 Salaya-Koyali-Mathura Pipeline:
 Hajira-Bijapur-Jagdishpur (HBJ) Gas Pipeline:
 Jamnagar-Loni LPG Pipeline:
 Kandla-Bhatinda Pipeline:
India leads among countries globally with a planned and announced pipeline
length of 29,612 km from 2021-2025. The US and Russia follow with pipeline
lengths of 15,848 km, and 8,170 km, respectively. km, respectively.
Fig. 2.3: Pipeline transportation
24 Senior Secondary
Among companies, Indian Oil Corp Ltd leads globally with the highest planned Types of
and announced pipeline length of 16,360 km during the outlook period 2021- Transportation
2025. Bharat Petroleum Corp Ltd and GAIL (India) Ltd follow with pipeline
lengths of 11,301 km, and 10,792 km, respectively.
2.2 TRANSPORTATION & LAND USE PATTERN

The interactions between transportation and land use create a complex framework
Notes
that looks into economic, political, demographic and technological changes. Changes
in transportation technology, investment in infrastructure and service levels can change
overall accessibility and choice levels. The recent trend towards digitalization has
improved urban mobility, on-demand services, availability of real time information and
home deliveries.
Land use characteristics affect activity patterns, and bring about changes in trip
generation, both for passenger and freight, which are influenced by economic and
demographic changes. Increase in transportation demand largely depends on rising
incomes as well as population size. Trip patterns change travel demand which in turn
influences development of new transportation infrastructure or services. The interactions
between transportation and land use are often referred as a "chicken-and-egg"
conundrum as it is difficult to show whether transportation changes precede land use
changes, or vice-versa.
Fig. 2.4: Transportation and land use

As mentioned before, this relationship is highly complex and involves interaction between
the transport system, spatial interactions, and land use:
Types of  Transport system. The transport infrastructures and modes that support the
Transportation mobility of passengers and freight. It generally expresses the level of accessibility.
 Spatial interactions. The nature, extent, origins, and destinations of the urban
mobility of passengers and freight. They take into consideration the attributes of
the transport system as well as the land use factors that are generating and
attracting movements.
 Land use. The level of spatial accumulation of activities and their associated
Notes
levels of mobility requirements. Land use is commonly linked with demographic
and economic attributes.

1. How is the concept of LTL useful?
2. What are the drawbacks of the present rail system?
3. Write a note on pipelines.
4. Bring out the relation between land use and transport.
2.3 RAIL AND ROAD TRANSPORT

Let us now learn about the contribution of rail and road transport the Indian economy.
Transport infrastructure plays a key role in the growth of Indian economy . The transport
system can be looked upon as the controller of the country's economy and offers a
vital link between production and consumption. The amount of traffic moving on the
roads or railways is an indicator of its progress. Over the years, the transport has
recorded a considerable growth in India both in terms of distance as well as the output
of the system.
Movement of Freight Traffic:

Today, railways and roadways are considered the most crucial modes of Land
Transportation. In 1950-51, railways carries 85% of freight traffic but over the years
roadways have taken 65% .
The major causes of this role reversal are expensive fares, limited capacities and extreme
competition from road sector. Besides, railways lags behind in terms of providing
satisfactory customer services, whereas the construction of new highways have opened
possibility of doorstep delivery service, which further boosted the demand for roadway
freight movement.
26 Senior Secondary
The National Transport Development Policy Committee predicts that the projection Types of
of freight movements by road vs. rail transportation would be 50:50 in 2031-32 as Transportation
compared to present scenario of 65:35 in 2017. A target growth of 15% for railway
transportation has been envisaged within the next 15 years, which would also help to
reduce environmental pollution and encourage green transportation. This will impel
logistics industry to take up the rails and waters as eco-friendly transportation modes.
The Pros and Cons

Notes
Rail freight is cheaper than road freight as rail cars can carry larger volumes over
greater distances. Although, road freight is more expensive, yet it offers greater flexibility
in terms of doorstep delivery and volume of goods to be transported. Intermodal
transport, which is combining these two modes of transport offers many benefits For
example, if a small package needs to be transported, there would be saving in cost by
moving a larger distance by rail and covering the first and last mile on road
Road vs. Rail
Pros Cons
Road Freight can be delivered quickly Limitations such as cargo size and
as per a set schedule weights maybe applicable for road
weight across various states
Cost effective and economical May not be a cost effective option

especially over short distances across longer distances
Used for long haul, short haul, Slower than rail over long distances
local and over border movements
Full door to door movement Limitations due to weather and

road conditions
Easier option for tracking of Not as environmentally friendly as

cargo movement through GPS rail
and satellite tracking
Rail A greener option for transport Additional costs to move a

as trains burn less fuel per ton container from rail head to final
mile than road vehicles destination, mostly using road
freight.
Types of Freight trains carry more freight Possible delays in cross border due
Transportation at the same time compared to to change of train operators
road transport
On average, long distance freight Not economically viable across

movement is cheaper and quicker shorter distances
by rail
Notes
Freight trains have proven to be Abnormal cargoes cannot be
transit-sensitive even more than moved in normal rail wagons
ocean freight delivering cargo from
China to Europe in as less as 18
days compared to 44 days by sea
Here are some advantages of rail transport over road transport to consider:
1. Rail transport can be cost effective: Shippers, who convert long-haul freight
from road to rail, can save 10-40%. Rail has lower fuel costs compared to road
transport, especially when shipping a high volume of freight. Rail also has less
costs associated with drivers and typically has better costs for drop trailer
programs.
2. Shipping via train is more environmentally friendly: Trains burn less fuel
per ton mile than trucks. On top of that, using rail transport over road transport
can lower greenhouse gas emissions by 75%.
3. Trains are capable of hauling large loads: Trains can handle high volumes
of freight. In fact, one double-stacked train can hold approximately the same
amount as 280 trucks. This can be very beneficial for shippers with large loads.
4. Railways are reliable: Railways have standardized transit schedules and don't
share their tracks with the public like trucks do with the road. For that reason,
trains aren't hindered by traffic and weather the same way trucks are.
5. Rail freight can be efficient: For many types of loads, the average transit
time is comparable to that of road transport. While rail shouldn't be used for
time-sensitive shipments, it can provide very similar transit times for longer hauls.
2.4 OPTIMAL CHOICE BETWEEN HIGHWAYS AND RAILWAYS

"Transportation by train is cheaper. It is safer. It is also the more eco-friendly option."
-Greta Thunberg
28 Senior Secondary
Some Facts: Types of

Example Pune to Mumbai: Transportation
For Railways - At 72 people per carriage, a 26 carriage rake can move - 1872 people
with their luggage. That's about 150 km at 6 liters per km - 900 litres of diesel (the
WDM3 series at about 12 litres per km).
For Roadways - If 1872 people took cars with each car carrying 4 people, it comes
to 468 cars. Let's say each car has a fuel efficiency of 15 km/l, that's 10 litres per car Notes
- 4680 litres of fuel.
This is the reason why the current government is heavily investing into the DFC
(Dedicated Freight Corridors). Freight trains will run at 100 km/h on these and make
longer runs (without needing to wait on sidings for passenger trains to clear). This
would also free up the tracks for passenger trains which can now clear quicker and
average about 120-130 km/h with top speeds pegged at 150-60 km/h. The overall
network speed increases substantially. India is in the making of its first High Speed
Rail Corridor between Ahmedabad and Mumbai.
With the development of high speed trains and DFC, Indian Railways will be in a
position to win back the lost traffic from road to rail. India would be able to effectively
decentralize its metros and allow small towns to come up as business hubs.

1. Why is rail losing its share in freight movement?
2. Give advantages of rail vs road.
3. How has transport brought about synergy between economy, ecology and
society?
2.5 WATER & AIR TRANSPORTATION AND MODAL SHARES

Water transport is very important because it is the cheapest way of transporting bulky
goods over a long distance. In the world, there are two major types of water transport
namely: Inland water transport and Ocean water transport.
1. Inland water transport-IWT: This system of transport works through all

navigable rivers, lakes, and man-made canals. In many large rivers in different
parts of the world ships and barges carry passengers and goods for
transportation; the main rivers where inland water transport is important are the
Types of Rhine and Danube in Europe, Zaire in Africa, the Nile in Africa, the Mississippi
Transportation in the USA, the Ganga and Brahamaputra in India, etc. Some examples of
comprehensive inland waterway systems include Western Europe, the Volga /
Don system, the St. Lawrence / Great Lakes system, the Mississippi and its
tributaries, the Amazon, the Panama / Paraguay, and the interior of China.
In India the IWAI - Inland waterwayAuthority of India has declared five National
Waterways as: Ganga system (NW1), Brahamaputra system (NW2), West
Notes coast canal in Kerala (NW3), Godavri and Krishna system (NW4) and East
Coast Canal on Mahanadi (NW5). But less than 1% of the freight traffic moves
on inland waterways.
Fig. 2.5: Waterways in India
30 Senior Secondary
2. Ocean Waterways: Ocean waterways are used to carry a lot of the world's Types of
trade, the majority of the bulky goods, materials, and passengers pass through Transportation
ocean waterways from one country to another at the cheapest cost.
Maritime transportation has high terminal costs since port infrastructures are
among the most expensive to build, maintain, and operate. These high costs
also relate to maritime shipping, where the construction, operation, and
maintenance of ships is capital intensive. More than any other mode, maritime
transportation is linked to heavy industries, such as steel and petrochemical Notes
facilities adjacent to port sites. Yet, with containerization, maritime shipping has
become an enabler of globalization, allowing trading of a wide range of goods
and commodities.
With physical properties such as buoyancy and limited friction, maritime

transportation is the most effective mode to move large quantities of cargo over
long distances. The construction of channels, locks, and dredging help to facilitate
maritime circulation by reducing its discontinuity, but such endeavors are highly
expensive.
Water transport, by its nature, is limited to certain areas. Within India, water
transport takes place via the inland waterway system or coastal waters or
International shipping. Water transport is ideally suited for carrying very large
loads at low cost. In most countries, water transport is used primarily for the
movement of large bulk commodity shipments and is the cheapest mode for
carrying such loads. It is, however, the slowest of all the modes and significant
delays occur at ports and terminals. This makes water transport difficult to operate
for short-haul trips though it is used effectively in Japan and parts of Europe for
daily short-haul trips of a few miles.
In global trade, water transport is the dominant mode for shipping all kinds of
products. Cars, grain, apparel, and other products are shipped by sea. For the
quantities shipped and the distances involved, water transport is by far the
cheapest mode of transport for global shipping. Delays at ports, customs, and
the management of containers used are major issues in global shipping. Major
ocean carriers include Maersk, Sealand, Evergreen Group, American President
Lines, and Hanjin Shipping Co.
3. Air transportation: Air routes are practically unlimited. Air transport constraints
are multidimensional and include the site (a commercial plane needs about 3,300
meters of runway for landing and take-off), the climate, fog, and aerial currents.
Air activities are linked to the tertiary and quaternary sectors, notably finance
Types of and tourism, which lean on the long-distance mobility of people. More recently,
Transportation air transportation has been accommodating growing quantities of high-value
freight and is playing an increasing role in global logistics.
Notes
Fig. 2.6: Transportation by air
Advantages
1. Rapid speed: Among all the modes of transportation, air transportation is the
fastest.
2. Unbroken Journey: Air transportation offers an unbroken journey over sea

and land, due to which it can take you from one distinct destination to another
quickest.
3. Can operate for emergency services: It can operate even when every other
means of transport can't due to floods or other natural calamities. So at that
time, it is the only mode of Transportation that can be employed to do the relief
work and offer the essential commodities of life.
Disadvantages
1. Very expensive: It is the most costly mode of Transportation. The fare of
transport is very high, which is difficult to afford for the ordinary person.
2. Unreliable and uncertain: Air transport is not very reliable and is unsure as it
is controlled mainly by weather conditions. Fog, snow, or other unfavorable
weather conditions might cause suspension of air service or cancellation of
scheduled flights.
32 Senior Secondary
3. Specialized skills needed: Air transportation requires a specialized skill and a Types of
high degree of training for its operation. Transportation
4. Intermodal transportation: Intermodal Transport is a combination of different
modes to attain advantages of cost, time, safety and reliability in the movement.
Although intermodal transportation applies to passenger movements, such as
using the different, interconnected modes of a public transit system, it is over
freight transportation that the most significant impacts of inter-modalism have
been observed. Containerization has been a powerful vector of intermodal Notes
integration, enabling maritime and land transportation systems to interconnect.
2.6 MODAL SHARES

Each transportation mode has key operational and commercial advantages and
properties. However, contemporary demand is influenced by integrated transportation
systems that require flexibility in the respective use of each mode. As a result, modal
competition exists at various degrees and takes several dimensions. Modes can compete
or complement one another in terms of cost, speed, accessibility, frequency, safety,
comfort, etc. There are three main conditions that ensure that some modes are
complementing one another:
 Different geographical markets: If different markets are involved, modes

will enable a continuity within the transport system, particularly if different scales
are concerned, such as between national and international transportation. This
requires an interconnection, commonly known as a gateway, where it is possible
to transfer from one mode to the other. Intermodal transportation has been
particularly relevant to improve the complementarity and connectivity of different
geographical markets.
 Different transport markets: The nature of what is being transported, such

as passengers or freight, often indicates a level of complementarity. Even if the
same market area is serviced, it may not be equally accessible, depending on
the mode used. Thus, in some markets, rail and road transportation can be
complementary as one may be focusing on passengers and the other on freight.
 Different levels of service: For a similar market and accessibility, two modes
that offer a different level of service will tend to complement another with niche
services. The most prevailing complementarity concerns costs versus time.
Thus, there is modal competition when there is an overlap in geography, transport

markets, and level of service. Cost is one of the most important considerations in
Types of modal choice. Because each mode has its price/performance profile, competition
Transportation between the modes depends primarily upon the distance traveled, the quantities shipped,
and their value. While maritime transport might offer the lowest variable costs, road
transport tends to be most competitive over short distances and for small bundles of
goods. A critical factor is the terminal cost structure for each mode, where the costs
(and delays) of loading and unloading a unit impose fixed costs that are incurred
independent of the distance traveled.
Notes
0.4% Inland
water Transport
6%
Costal
Shipping 50.1%
Roads
7.5%
Pipeline
36%
Railways
Fig. 2.7: Modal share of transportation in India
2.7 MODAL SHIFT

The technological evolution in th e transport industry aims at adapting transport
infrastructures to growing needs and requirements. When a transport mode becomes
more advantageous than another over the same route or market, a modal shift is likely
to take place.
A modal shift involves the growth in the demand of a transport mode at the expense of
another. In the case of passengers modal shift depends on income levels, comfort, etc.
For freight a shift involves faster and more flexible and cost effectiveness. Availability
34 Senior Secondary
and accessibility of a mode depends on the geographical variations and passengers Types of
and freight are forced to use the only available modes that may not be the most effective Transportation
to support their mobility. Areas with limited modal choices tend to be among the least
developed. On the other hand, advanced economies possess a wide range of modes
that can provide services to meet the needs of society and the economy.
All modes are affected by fuel price volatility, from the individual car owner to the
corporation operating a fleet of hundreds of aircraft or ships. In the context of higher
energy prices and environmental concerns and therefore, higher input costs for Notes
transportation, the following can be expected:
 Higher transport costs increase the friction of distance and constrain mobility.
As a major consumer of petroleum, the transport industry must increase rates.
Across the board increases cause people to rethink their movement patterns
and companies to adjust their supply and distribution chains.
 Because energy costs impact modes differently, a modal shift can be anticipated.
Road and air transport are more energy-intensive than the other modes, so
energy price increases are likely to impact them more severely than other modes.
This could lead to a shift towards water and rail transport in particular.
 Higher fuel prices incite a greater fuel economy across modes and reducing
speed.
Space Factor
Saving Moeny
• Low dependency of private vehicle • Saving 18% of truckload
• Lesser requirement for parking space • Increased revenue in future
• Possibility of better infrastructure
• Decreased cost of transportation
BENEFIT OF
Logistics Strategy
INTERMODAL
• Eco Friendly
AND
• Reduced cost and save time
MULTIMODAL
• Improved Delivery
SYSTEM
Reliable and transparent

Environmental Factor
• Better business growth
• 4X more efficient than conventional
• Optimized use of technology
trucking freight
• Low change of service failure
• Low Carbon emission
• East service availability
Fig. 2.8: Benefits of Intermodal Transport
Types of Comparison Between Passenger & Freight Movement:

Transportation Board, get off, and transfer without assistance.
Process information and act on it without

assistance.
Make choices between transport modes without

assistance, but often irrationally.
Notes
Make travel accommodations related to
Fig.2.9: Passengers comfort and safety.
Must be loaded, unloaded and transferred.

Information must be processed through logistics
managers.
Logistics manages meet choices between

transport modes rationally.
Fig.2.10: Freight Require accommodations relatd to storage.
1. Name the important waterways in India.
2. Bring out the features of water transport.
3. What makes air transport not the best suitable mode for freight transport?
4. What is intermodal transport?
Habits,
Life Style Mobility,
Communication
Time Savings, Natural

Accessibility Resources
Investments, Environmental
Infrastructure imapcts
needs
36 Senior Secondary
Comparison between Railway Transport and Road Transport Types of

Transportation
Sn. Railway Transport Road transport
1. It is ideal for bulk cargo. And it is It is ideal for non bulk cargo, i.e., for
ideal for long distances. less quantity. And it is useful for any
distance.
2. It can be used from station to station. Road transport is used for door to Notes
door delivery.
3. More pilferage and breakages i.e., Safety of materials is more due to

safety of material is less. careful handling and direct
accountability of the river.
4. Gradient should be minimum. Steeper gradients can be provided.
5. Reliability is on specific services only. Irregular Services and scheduled

All other are poor. Freight rates not custom tailored i.e., good. Freight
uniform. rates uniform.
6. Not readily available due to shortage Readily available.

of wagons.
7. No formalities of octori in between Octori holds up, cause delay and

the stations. render the services irregular and acts
as an irritant.
8. Total cost is higher than that of road Total cost is less than that of rail
transport. transport.
9. Less employment potential. Higher employment potential.
10. Tractive resistance of a steel wheel on Tractive resistrance of pneumatic

steel rail is about 1/5 to 1/6 of the wheel tyre and highway is 5 to 6
pneumatic wheel tyre on the highway. times more than that of railway
wheel on steel track.
11. Packing and other economies are not Packing and inventory economies
there are there.
Types of TERMINAL EXERCISE

Transportation
1. Compare and contrast rail and road transport.
2. What are the causes for road transport becoming a preferred mode for movement
of freight? How can we change this modal share in favour of a cleaner mode?
3. What is the concept of Intermodal transport? How does it meet all the challenges
faced by other modes?
Notes
4. Write a note on transport and its relationship with Economy, ecology and society.

2.1
1. LTL carriers use consolidation centers where they bring in many small loads
originating from a geographical area and leave with many small loads destined
for the same geographical area. This allows LTL carriers improve their truck
use although it increases delivery time somewhat. Key issues for the LTL industry
include location of consolidation centers, assigning of loads to trucks, and
scheduling and routing of pickup and delivery. The goal is to minimize costs
through consolidation without hurting delivery time and reliability.
2. Railways need a dedicated path to move. Gauges, however, vary around the
world, often challenging the integration of rail systems.
3. Pipelines can be laid on land, underground or underwater. Their purpose is to
move liquids such as petroleum products over long distances in a cost-effective
manner. Pipeline construction costs vary according to the diameter and increase
proportionally with the distance and with the viscosity of fluids (from low viscosity
gas to high viscosity oil). Pipelines have been able to successfully connect
refineries and harbors.
4. This relationship is highly complex and involves interaction between:
 Transport system. The transport infrastructures and modes that support the
mobility of passengers and freight. It generally expresses the level of
accessibility.
 Spatial interactions. The nature, extent, origins, and destinations of the urban
mobility of passengers and freight. They take into consideration the attributes
of the transport system as well as the land use factors that are generating
and attracting movements.
38 Senior Secondary
 Land use. The level of spatial accumulation of activities and their associated Types of
levels of mobility requirements. Land use is commonly linked with Transportation
demographic and economic attributes.
2.2
1. The major causes of this role reversal are expensive fares, limited capacities
and extreme competition from road sector. Besides, railways lags behind in
terms of providing satisfactory customer services, whereas the construction of Notes
new highways have opened possibility of doorstep delivery service, which further
boosted the demand for roadway freight movement.
2. Here are some advantages of rail transport over road transport to consider:
 Rail transport can be cost effective.
 Shipping via train is more environmentally friendly.
 Trains are capable of hauling large loads.
 Railways are reliable.
 Rail freight can be efficient.
2.3
1. In India the IWAI - Inland waterwayAuthority of India has declared five National
Waterways as: Ganga system (NW1), Brahamaputra system (NW2), West
coast canal in Kerala (NW3), Godavri and Krishna system (NW4) and East
Coast Canal on Mahanadi (NW5). But less than 1% of the freight traffic moves
on inland waterways.
2. Water transport, by its nature, is limited to certain areas. Within India, water
transport takes place via the inland waterway system or coastal waters or
International shipping. Water transport is ideally suited for carrying very large
loads at low cost. In most countries, water transport is used primarily for the
movement of large bulk commodity shipments and is the cheapest mode for
carrying such loads. It is, however, the slowest of all the modes and significant
delays occur at ports and terminals. This makes water transport difficult to operate
for short-haul trips though it is used effectively in Japan and parts of Europe for
daily short-haul trips of a few miles
3. Disadvantages of Air transport
Types of 4. Very expensive: It is the most costly mode of Transportation. The fare of transport
Transportation is very high, which is difficult to afford for the ordinary person.
5. Unreliable and uncertain: Air transport is not very reliable and is unsure as it is
controlled mainly by weather conditions. Fog, snow, or other unfavorable weather
conditions might cause suspension of air service or cancellation of scheduled
flights.
6. Specialized skills needed: Air transportation requires a specialized skill and a

Notes
high degree of training for its operation.
7. Intermodal Transport is a combination of different modes to attain advantages

of cost, time, safety and reliability in the movement. Although intermodal
transportation applies to passenger movements, such as using the different,
interconnected modes of a public transit system, it is over freight transportation
that the most significant impacts of inter-modalism have been observed.
Containerization has been a powerful vector of intermodal integration, enabling
maritime and land transportation systems to interconnect.
40 Senior Secondary
Essentials of Transport MODULE - 1
Types of
3 Transportation
ESSENTIALS OF TRANSPORT
Notes
Transportation is essential for the movement of people and goods across the globe.
With the advancement in technology the efficiency of transportation has also increased.
Motor-based means of transportation have revolutionized the sector. The four important
means of transport are road transport, rail transport, water transport, and air transport.
Road transport is the most commonly used means of transport in most parts of the
world. In some low-lying areas like Venice water transport is the primary means of
transport.
Modes of transportion are the ways, methods, vehicles and machines used to move
products from one location to another location. Products need to move from one
location to another location and doing that involves using a mode of transportation.
Some common modes of transportation involve picking up products, using technology
or using machines like trucks, boats, and airplanes to move products. Determining
which of the modes of transportation to use depends on the product, urgency, and
restrictions for moving that product.
LEARNING OUTCOMES
 explains the relationship between different modes in bringing movement/

transportation;
 explains the spatial and temporal effects of transport;
 Identifies the specific areas in which a financial or technological impetus needs

to be given to improve efficiency in transport.
MODULE - 1 Essentials of Transport
Types of
3.1 ROAD TRANSPORT
Transportation
Road transport means transportation of goods and personnel from one place to the
other on roads. Road is a route between two destinations, which has been either
paved or worked on to enable transportation by way of motorised and non-motorised
carriages. There are many advantages of road transport in comparison to other means
of transport. The investment required in road transport is very less compared to other
Notes modes of transport such as railways and air transport. The cost of construction, operating
cost and maintaining roads is cheaper than that of the railways.
Features of road transport

Road transport can be classified as transporting either goods and materials or
transporting people. The major advantage of road transport is that it can enable door-
to-door delivery of goods and materials and can provide a very cost-effective means
of cartage, loading and unloading. Sometimes road transport is the only way for carrying
goods and people to and from rural areas which are not catered to by rail, water or air
transport. Delivery of goods between cities, towns and small villages is made possible
only through road transport.
However, in spite of various merits, road transport has some major limitations. For
instance, there are more chances of accidents and breakdowns in case of road transport.
So, motor transport is not as safe as other means of transport. Road transport is also
quite less organised in comparison with other modes. It is irregular and undependable.
Rates for road transportation are also unstable and unequal, while the speed in road
transport is slow and limited, which is a major drawback. Road transport of the future
aims to work on these negativities and turn them around.
Fig 3.1: Road transport in India

42 Senior Secondary
Types of
3.2 ADVANTAGES AND DISADVANTAGES OF ROAD
Transportation
TRANSPORT
A. Advantages
1. Less Capital Expense: Road transport services are less expensive when
compared to other modes of transport. The cost for constructing, maintaining
and operating roads is very less than that of railways and air transport.
Notes
2. Door to Door Service: The unmatched benefit of road transport is that it
gives door to door service for all the freight deliveries. Road transport is
the only extensive system that gives transportation to the final destination.
When you compare this to a rail or air transport where you need to make a
delivery to the transportation terminal and get into the rail or plane after
completion of several security checks- the first and last mile movement has
to be done by road. With road transport, you can just load the items from
your place, drive and unload it right at your required destination.
3. Service in Remote Areas: Road transport is best applicable for

transporting goods to and from remote areas that are not connected by
other means like rail, air or water transports. The trade-off for goods
between cities and small villages happens majorly via road transport.
4. Flexibility: Road transport possesses has a huge benefit of flexibility. The

routes and timings can be altered easily and quickly according to individual
needs without much problem.
5. Suitable for Short Distance: Road transport provides a faster and less
costly means of transporting goods over short distances. Other modes of
transport like water, air or rail may incur delays in transit of goods with
loading and reloading required in multiple locations. In road transport than
it can be loaded directly into a single vehicle and later transported directly
to the final destination.
6. Lesser Risk of Damage in Transit: As the multiple instances of loading

and reloading are non- existent, there would be very little chance of harm
to the transported goods. Hence road transport is best suited for transporting
delicate goods that have more possibility of being damaged.
7. Packing charges saved: The procedure of packing the goods in road

transport is very minimal while compared to other means of transport, where
they would need to ensure safety for multiple loading and unloading process.
Types of 8. Rapid Speed: If you need to transport goods with short notice, then road
Transportation transport is always preferred.
9. Low total cost: Road transport needs less initial investment and the capital
for operating and maintenance is relatively less.
10. Initiating own road service: Another benefit of road transport is that any
private operator can start a delivery service as the right of way (road
infrastructure) is already available for use without incurring any cost in its
Notes
construction. Roads have provisions to use any type of vehicle like private
cars, public buses, sharing vehicles, two-wheelers, etc. This will meet the
needs of different kinds of services.
11. Connecting other Modes of Transport: Even if air or rail transports
may be used for long-distance transports, the end destinations in both the
starting and end phase require the use of road transport. It acts as a
connecting link to other modes of transport.
12. Employment: Road transport provides employment to many persons
directly and indirectly.
13. Helpful in Production of Perishable Good: Road transport is helpful in
production of perishable goods as it facilitates the distribution of perishable
goods from point of production to point of consumption.
14. Beneficial to Industries: Industries which are situated away from railway
links, the road transport helps them a lot. It facilitates the mobility of men
and materials for these industries.
B. Disadvantages
In spite of various merits, road transport has some serious limitations; the
following are the disadvantages of road transport system.
1. Frequent Accidents & Breakdowns: Road transport system is dotted
with frequent accidents. According to an estimate, there are large number
of deaths due to road accidents. So it is not safer mode of transport.
2. Inadequate Roads: Most of the roads are in bad shape and are
inadequate. There are only 34 km long roads per 100 sq. km area in India
while in Japan there are270 km roads per 100 sq. km.
3. Heavy Taxes: There is heavy tax burden on motor transport in India. Tax
burden per motor vehicle in India is Rs. 3500 while in America it is Rs.
860.
44 Senior Secondary
4. Poor Maintenance of Roads: Roads are not maintained properly in India. Types of
Less than 0.1 percent of national income is spent on the maintenance of Transportation
roads in India, while in Japan it is 3 percent of the national income.
5. Rising Cost of Petrol and Diesel: Due to high prices of petroleum

products and diesel, operational costs of road transport are rising and making
the mode of transport more costly.
6. Unsuitable for Long Distances and Bulky Goods: Road transport is Notes
unsuitable for long distances as it is uncomfortable as compared to railways.
It is also not suitable for bulky goods.
7. Seasonal Nature: During rainy or flood season, roads become unfit and
unsafe for use.
8. Slow Speed: The speed on roads transport is slow and limited as it not a
24/7 operation.
9. Lack of Organisation: The road transport is comparatively less organised.

More often, it is irregular and undependable. The rates charged for
transportation are also unstable and unequal.
3.3 ROAD TRANSPORT IN INDIA

India has the second-largest road network in the world, spanning a total of 5.89
million kilometres (kms). This road network transports 64.5% of all goods in the
country and 90% of India’s total passenger traffic uses road network to commute.
Road transportation has gradually increased over the years with improvement in
connectivity between cities, towns and villages in the country.
In India, sale of automobiles and movement of freight by roads is growing at a rapid

rate.
1. Market size: Highway construction in India increased at 17.00% CAGR

between FY16-FY21. Despite pandemic and lockdown, India has constructed
13,298 km of highways in FY21.
In FY21, 13,298 kms of highway was constructed across India. In June 2021,
the Ministry of Road Transport and Highways constructed 2,284 kms of national
highways compared with 1,681 kms in June 2020.
In October 2020, the foundation stone was established for nine National
Highway projects.
Types of The roads sector is likely to account for 18% capital expenditure over FY 2019-
Transportation 25.
2. Key Investments/Developments: The Government aims to boost corporate

investment in roads and shipping sector, along with introducing business-friendly
strategies, which will balance profitability with effective project execution.
3. Government Initiatives: Some of the recent Government initiatives are as

follows:
Notes
 The Indian government launched Gati Shakti-National Master Plan, which
will help lead a holistic and integrated development of infrastructure
generating immense employment opportunities in the country.
 In October 2021, the government issued a notice related to concessions

under the Vehicle Scrapping Policy (effective from April 2022) to encourage
vehicle owners towards discarding old vehicles which have higher fuel
consumption costs.
 In October 2021, the government launched a conversion project for 15

major roads in the Agartala smart city, the project will convert these roads
to weather-resilient ones, and further strengthen development of the region.
 In October 2021, the government announced rules to improve road safety,

such as fixed driving hours for commercial truck drivers and a mandate to
install sleep detection sensors in commercial vehicles.
 In FY22 (until October), the Ministry of Road Transport and Highways

constructed national highways extending 4,450 kms compared with 4,956
kms in FY21 (until October).
 In October 2021, the government announced a plan to install charging

stations every 40 to 60 kilometres on national highways to strengthen wayside
amenities;
 To transform road infrastructure in Punjab, Haryana, Jammu & Kashmir

and Rajasthan, the Indian government has planned to construct roads for
the growth of these regions
4. Road Ahead: The Government, through a series of initiatives, is working on

policies to attract significant investor interest. A total of 200,000 km of national
highways is expected to be completed by 2022.
46 Senior Secondary
In the next five years, National Highway Authority of India (NHAI) will be able Types of
to generate Rs. 1 lakh crore (US$ 14.30 billion) annually from toll and other Transportation
sources.
3.4 RAIL TRANSPORT

Rail transport facilitates the movement of passengers and goods via vehicles that can
only move on railway tracks or rails. A train is built by connecting a series of wagons
Notes
or coaches that move along the track, an engine or locomotive running on electricity or
on diesel powers the movement of trains. Complex signaling systems are utilised if
there are multiple route networks. Rail transport is also one of the fastest modes of
land transport.
Features of Rail Transport

Rail transport has emerged as one of the most dependable modes of transport in terms
of safety. Trains are fast and the least affected by usual weather turbulences like rain or
fog, compared to other transport mechanisms. Rail transport is better organised than
any other medium of transport. It has fixed routes and schedules. Its services are more
certain, uniform and regular compared to other modes of transport. Rail transport
originated from human-hauled contraptions in ancient Greece. Now it has evolved
into a modern, complex and sophisticated system used both in urban and cross-country
networks over long distances.
Rail transport is an enabler of economic progress, used to mobilise goods as well as

people. Adaptations include passenger railways, underground (or overground) urban
metro railways and goods carriages. Rail transport has some constraints and limitations
also. One of the biggest constraints of rail transport is a heavy cost. Trains need high
capital to build and maintain and the cost is magnified when a whole rail network is to
be built. The cost of construction, maintenance and overhead expenses are very high
compared to other modes of transport. Also, rail transport cannot provide door-to-
door service as it is tied to a particular track. Intermediate loading or unloading involves
greater cost, more wear and tear and wastage of time.
Types of Rail Transport services

 Metro rail
 Milk run
 Mono rail
 Under-ground rail
Types of  Passenger train

Transportation  Freight train
 Light railway
 Cable rail
 Commuter rail
Notes  Inter-city rail

 High-speed rail
3.5 ADVANTAGES AND DISADVANTAGES OF RAIL

TRANSPORT
A. Advantages
1. It is relatively safer mode of travel.
2. Rail transport has the ability of conveying heavy and bulky goods;
3. It is very cheap, safe and comfortable for passengers over a long distance.
4. Rail transport provides a fast and reliable service as there are fewer chances
of congestion and delay.
5. Railways provide movement of coal and iron ore between mines and
factories.
6. High-speed trains help to reduce travel time like Bullet trains in Japan and
China.
7. Railways in India have helped to open up new and many remote places by
providing connectivity with major economic hubs.
8. Rail is particularly suited to passenger movement because it provides speedy,
cheap, comfortable and safe journey for distances under 400km.
9. Railroad transport offers the development of industrial hubs and enhancement
of other economic activities along its routes. For example the development
of DMIC- Delhi-Mumbai Industrial Corridor along Western DFC.
10. Rail is a relatively clean form of transport and causes little air pollution.
B. Disadvantages
1. It involves high construction costs (referred to as Sunk Costs), maintenance
costs and operating costs.
48 Senior Secondary
2. Railways are expensive to use, especially over short distances or for small Types of
amounts of cargo. Transportation
3. Rail transport is relatively slower.
4. Rail transport is inflexible and trans-shipment of cargo is often necessary at
rail terminals.
5. Sometimes the routes are indirect or circuitous dependent on the topography,
hence there could be slow movement of commodities across mountain or Notes
swampy regions.
6. It cannot accommodate awkward loads since cargo must fit both train and
routes dimensions (about 3m width).
7. Lines established in the past may become out-dated and become a financial
burden.
8. Rail gauges differ in many countries so movement of through traffic is difficult.
3.6 RAIL TRANSPORT IN INDIA
Fig. 3.2: Rail transport in India

Indian Railways is among the world’s largest rail network, and its route length network
is spread over 67,956 kms, with 13,169 passenger trains and 8,479 freight trains,
plying 23 million travellers and 3 million tonnes (MT) of freight daily from 7,349 stations.
India’s railway network is recognised as one of the largest railway systems in the
world under single management.
Types of The railway network is also ideal for long-distance travel and movement of bulk
Transportation commodities, apart from being an energy efficient and economic mode of conveyance
and transport. Indian Railways is the preferred carrier of automobiles in the country.
Government of India has focused on investing in railway infrastructure by making
investor-friendly policies. It has moved quickly to enable Foreign Direct Investment
(FDI) in railways to improve infrastructure for freight and high-speed trains. At present,
several domestic and foreign companies are also looking to invest in Indian rail projects.
Notes 1. Market Size
 Revenue growth has been strong over the years. Indian Railways’ gross
revenue stood at Rs. 174,660.52 crore in FY20. Freight earnings in FY20
stood at Rs. 113,487.89 crore. Passenger earnings for Indian Railways
was at Rs. 50,669.09 crore in FY20.
 Freight remains the key revenue earning segment for the Indian Railways,
accounting for 79.1% of the total revenue in FY22 (until August 2021),
followed by the passenger segment. In FY20-21, Indian Railways recorded
the highest loading in freight transportation. Since August 2020, the Indian
Railways has run 450 Kisan Rail services and was able to transport over
1.45 lakh tonnes of agricultural produce & perishables
 RailTel, a PSU under the Railway Ministry, which provides fast and free
Wi-Fi across the Indian Railways network, announced its highest ever
consolidated income of Rs. 11,660.05 million for FY19-20.
 In November 2020, India Railways announced that 40% of dedicated

freight corridor (DFC) will be opened for traffic by end-FY21, while the
entire 2,800 km route will be completed by June 2022.
 India was among the top 20 exporters of railways globally as of 2017.
 Indian Railways is developing and creating technology in areas such as

signaling and telecommunication with 15,000 kms being converted into
automatic signaling and 37,000 kms to be fitted with ‘KAVACH’, the
domestically developed Train Collision Avoidance System.
2. Investments/ Developments: Foreign Direct Investment (FDI) Inflows in

railway-related components stood at US$ 1.23 billion from April 2000 to June
2021.
Following are some of the major investments and developments in India’s railways
sector:
50 Senior Secondary
 In November 2021, Indian Railways announced that ~102 semi-high-speed Types of

Vande Bharat Expresses are expected to commence operations by 2024, Transportation
with at least 10 new trains scheduled to launch by August 2022 that will
connect 40 cities.
 In October 2021, Indian Railways announced a plan to establish ~500

multi-modal cargo terminals under the ‘PM GatiShakti’ programme, with
an estimated outlay of Rs. 50,000 crore (US$ 6.68 billion) in four-five
years. Through this plan, the government plans to integrate various modes Notes
of transportation for seamless movement of parcel and bulk cargo (e.g.,
coal and steel).
 Since the launch of first ‘Kisan Rail’ service on August 7, 2020, the Indian
Railways have operated a total of 1,040 Kisan Rail services by transporting
~3.38 lakh tonnes of consignment across 72 routes in the country until July
30, 2021.
 In July 2021, the Ministry of Railways received bids from the private and
public sectors to operate 29 pairs of trains with about 40 modern rakes.
 On July 25, 2021, the Indian Railways Station Development Corporation

(IRSDC), a nodal agency of the Ministry of Railways spearheading the re-
development of railway stations across the country, claimed that the two
railway stations – Habibganj and Gandhinagar will be redeveloped in four
years.
 The Indian Railways has decided to undertake electrification of Broad Gauge

(BG) rail lines in a mission mode and is likely to complete the process by
2023-24.
 As of May 5, 2021, Indian Railways commissioned Wi-Fi at 6,000 railway

stations.
 In January 2021, Prime Minister Mr. Narendra Modi flagged off the world’s
first double-stack, long-haul container train from New Ateli in Haryana to
New Kishanganj in Rajasthan.
 In January 2021, Hyundai Motor India Ltd. (HMIL) has announced that it
has exported 125 cars to Nepal via the Indian Railways. The export is
claimed to be eco-friendly and the first-ever by the company. With this
step, the company is aiming to reduce carbon footprint by 20,260 tonnes.
 On November 26, 2020, National High-Speed Rail Corporation Limited
Types of (NHSRCL) signed an agreement with L&T to design and construct 47%
Transportation alignment works for Mumbai-Ahmedabad bullet train project.
3. Government initiatives
Few recent initiatives taken up by the Government are:
 In October 2021, India and Nepal signed an MoU (Memorandum of

Understanding), for a proposed US$ 3.15 billion railway line project, to
Notes connect Kathmandu and the Indian border town Raxaul.
 In June 2021, the Central Government approved the implementation of a

235 km semi high-speed rail corridor between Pune and Nashik in
Maharashtra.
 In June 2021, the Central Government approved a Rs. 25,000 crore (US$
3.43 billion) five-year plan to use 4G technology to modernise communication
networks in railway stations and improve the safety and security of train
journeys.
 In April 2021, Indian Railways completed the arch closure of the under-
construction Chenab Bridge which is the world’s highest railway bridge.
Chenab Bridge is 1315 m long and will be 35 meters higher than Eiffel
Tower in Paris. The total cost of the bridge is estimated to be Rs. 1,486
crore (US$ 200.46 million) and the design life of the bridge is said to be
120 years.
 Under the Union Budget 2021-22, the government allocated Rs.

110,054.64 crore (US$ 15.19 billion) to the Ministry of Railways.
 The Government is going to come up with a ‘National Rail Plan’ to enable

the country to integrate its rail network with other modes of transport and
develop a multi-modal transportation network.
 A ‘New Online Vendor Registration System’ has been launched by Research

Designs & Standards Organisation (RDSO), the research arm of Indian
Railways, to have digital and transparent systems and procedures.
4. Road Ahead: Indian Railway network is growing at a healthy rate. In the next
five years, Indian railway market will be the third largest, accounting for 10% of
the global market. The Indian Railway launched the National Rail Plan, Vision
2024, to accelerate implementation of critical projects, such as multitrack
congested routes, achieve 100% electrification, upgrade the speed to 160 kmph
52 Senior Secondary
on Delhi-Howrah and Delhi-Mumbai routes, upgrade the speed to 130 kmph Types of
on all other golden quadrilateral-golden diagonal (GQ/GD) routes and eliminate Transportation
all level crossings on the GQ/GD route, by 2024.
3.7 WATER TRANSPORT

Water transportation happens to be the cheapest means of transporting bulky and
perishable goods over long distances, especially for the north-east India, where road
Notes
and rail transport is blocked during rains. There is lesser pollution in water transport.
Besides, the cost of operation of water transport is very less as it operates on a natural
track create by rivers and water bodies
Examples of Water transport vehicles

 Motorboat
 Cargo ship
 Speedboat
 Sailboat
 Yacht
 Ferry
 Canoe
 Raft boat
 Battleship
 Cruise ship
 Jetski
 Windsurfer
 Riverboat
 Submarine
 Tug boat
Water transport consists of:

(i) Inland water transport
(ii) Ocean-transport
Types of Water Transport

Transportation
Inland Ocean
Rivers Lakes Canals Coastal Shipping Overseas Shipping
- for passengers
Notes - for cargo Liners Tramps Tankers
- Boats
- Steamers etc Cargo Passengers
Fig. 3.3: Water transport

(i) Inland Water Transport
As shown in the chart above, inland water transport consists of transport by

rivers, canals and lakes.
 As per the National Waterways Act, 2016, 111 have been declared as
National Waterways (NW)
 These waterways pass through 24 states and two union territories, with an
approximate total length of 20274 km
 These proposed waterways will pass through nearly 138 river systems,
creeks, estuaries and related canal systems of India.
Fig. 3.4: Inland Waterways
54 Senior Secondary
Rivers are suitable for small boats as well as big barges. River transport played a very Types of
important role prior to the development of modern means of land transport. With the Transportation
construction of railways their importance has gradually declined.
Canals are artificial waterways made for the purpose of irrigation as well as navigation.
Canal transport requires a huge amount of capital investment in construction and
maintenance of its fairways. The cost of the canal transport is, therefore, higher than
that of river transport.
Notes
Lakes are either natural like rivers or artificial like canals.
A. Advantages of Inland Waterways

1. Cost savings
2. Fuel and Energy Efficient: It is fuel-efficient compared to the other modes

of transport- rail and road. For example, the Integrated National Waterways
Transportation Grid Study states that one litre of fuel will move 24 tons
through one kilometre on road, 85 on rail and 105 km on inland water
transport. Further, 1 HP can move 150 kg on road, 500 kg on rail and
4000 kg on water.
3. Cost of developing waterways is much lower than rail & road.
4. Reduces transportation and transition losses
5. Environment Friendly
6. Least fuel consumption per tonne km
7. Carbon dioxide emission is 50% of trucks
8. Negligible land requirement as compared to rail and road transport
9. Supplementary Mode
10. Reduces pressure on road and rail
11. Reduces congestion and accidents on road
12. Optimal Modal Mix: It will provide optimal modal mix by converging river
transport with other modes
13. Better connectivity: It helps create seamless interconnectivity connecting

hinterlands along navigable river coasts and coastal routes. Further, riverine
routes are likely to play a crucial role in connecting the north-eastern states
to the mainland
Types of 14. Inland Waterways hold huge potential for domestic cargo transport, cruise,
Transportation and tourism and passenger traffic.
15. Development of inland waterways will help in the generation of job

opportunities
B. Disadvantages of Inland waterways

1. Inland waterways have low transport speed thus not suitable where time is
Notes an important factor
2. It has limited area of operation, depending on the infrastructural premises

and depth of the waterways
3. There are only very few cases in which Inland water transport (IWT) can
offer door-to-door transport of cargo
4. Operational disruptions due to weather is a major disadvantage
The Inland Waterways Authority of India Act, 1985

The Act provides for the constitution of an Authority for the regulation and development
of inland waterways for purposes of shipping and navigation and for matters related to
it.
The Inland Waterways Authority of India was formed in 1986. It undertakes projects
for development and maintenance of IWT infrastructure on national waterways through
grant received from Ministry of Shipping
The Act declared 111 rivers or river stretches, creeks, estuaries as National (inland)
Waterways.
It enables the Central Government to regulate these waterways for development with
regard to shipping, navigation and transport through mechanically propelled vessels.
Issues and Challenges in development of Inland waterways

1. Cost estimation: In respect to operating costs per ton-km, IWT has lower
cost than rail and road transport. However, this cost argument is challengeable.
There are two factors which distinguishes how freight moves on land versus on
water:
i. A road travels straight while rivers bend and curve; therefore the difference
between freight costs for IWT and road/ railways is not much
ii. Cost of loading and unloading freight
56 Senior Secondary
2. Inadequate depth: To be viable for a navigable inland waterway, river needs Types of
enough depth throughout the year However, in their natural state many Indian Transportation
rivers simply do not have that level of water. This will necessitate extensive
dredging.
3. Impact on other activities: Water in rivers has competing demands, including

dams and farming. To maintain the water levels in the river to the degree needed
for them to function as inland waterways, the water use for such other activities
might get curbed. Notes
4. Inadequate Air Draft: Multiple bridges with low vertical clearance obstruct
the passage of bigger inland water transport vessels on many inland waterways
such as NW 3
5. Lack of night navigation infrastructure: Rudimentary night navigational

facilities and markings are also a major issue.
6. Shortage of IWT vessels: Vessel building is highly capital intensive and faces
difficulties in obtaining project finance from banks and financial institutions.
7. Shortage of MRO facilities: There is severe shortage of MRO (Maintenance,

Repair and Overhaul) facilities for IWT vessels.
8. Inadequate industries: Inadequate number of Industrial units on the riverside,

especially along the Brahmaputra is a major discouragement hindering
development of inland waterways - result in no cargo commitments by the private
players.
9. Lack of funds: Dredging as well as infrastructure for IWT requires huge

investments. However, both public and private funding in the sector is low.
10. Environmental Impact: Dredging operations will damage river bed, and can
lead to change in habitats for various aquatic flora and fauna. This will also
impact aquifers along the river, damaging the ability of water to percolate
underground. In Kerala, dredging can result in the ingress of excess saline water
into the creek or rivers. Construction of jetties, river ports will necessitate removal
of trees/ mangrove forests in the area. For example, at Dharamtar port in NW10,
for construction of a jetty, the mangrove forest belt on the bank has been removed.
Other environmental concerns include pollution due to oil and diesel from vessels,
leakage and spilling of cargo.
Types of 11. Social impact: Ecological impacts can have implications for livelihoods of people
Transportation dependent on the rivers and creeks. For example: impact on fishing community,
people dependent on riverbed cultivation. Displacement is another major concern
as land is needed for number of facilities like ports, jetties, and other infrastructure.
12. Ocean transport: Ocean transport has brought the different parts of the world
closer by facilitating Foreign Trade and united all the nations of the world into
one big world market. As it operates over seas and oceans it is, obviously, the
Notes cheapest mode of transport.
Fig. 3.5: Ocean transport
Ocean transport includes:

1. Coastal Shipping
2. Overseas Shipping
1. Coastal Shipping: It is one of the most important means of transport for carrying
goods from one part to another all along the vast coastline of India. It is most
suitable for carrying heavy, bulky and cheap traffic like coal, iron ore, etc. Earlier,
coastal shipping in India was mainly in the hands of foreign shipping companies.
From 1951 onwards, it is exclusively reserved for Indian ships. The Sagarmala
Project is envisaged to give a boost to coastal shipping in India.
2. Overseas Shipping: It is useful when the passengers and goods have to cross
ocean to reach a foreign destination.
58 Senior Secondary
Types of vessels employed in the overseas shipping Types of

(i) Liners- Liners are the ships which have regular fixed routes, time and charges. Transportation
They are usually a collection of vessels under a single ownership, i.e., a fleet.
They provide a regular service, whether full of cargo or not.
(ii) Tramps- Tramps are ships which have no fixed routes. They have no set rules
or rate schedule. Usually, they do not sail till they have full cargo. They can be
chartered by exporters and are ready to sail anywhere and at any time. Tramps Notes
are more suitable to carry seasonal and bulky goods.
(iii) Tankers- Tankers are the vessels which are specially designed to carry liquids
like oil, petrol, etc. They have a large capacity.
i. Advantages of ocean transport

1. It involves a low running and maintenance cost which makes it the cheapest
form of transport system over long distances.
2. Large vessels especially run economically since fuel costs can be spread
over greater quantities. Distance does not add greatly to total transport
costs.
3. It has the capacity of conveying heavy and bulky cargoes.
4. Water transport has a natural route network that is free to use. This allows
flexibility of service, frequency of movement, and little congestion (except
where water channels are narrow as in the case of the Straits of Dover or
the Suez and Panama Canals).
5. Canals provide good access and also encourage the development of industry
and commerce. Some towns have grown largely through their connection
with canals. For instance, the industrial hub of NOIDA which was created
across the river Yamuna.
6. It causes relatively little environmental pollution, but sometimes oil discharge

from tankers seems to be the major problem to this mode of transportation.
7. During natural calamities like flood and rains, when rail and road transport
is disrupted, relief operations can be operated through water transport.
8. Development of shipping is essential for the defense of the country also. It

is also called second line of defense.
Types of 9. Water transport plays important role in foreign trade. India’s foreign trade
Transportation is mainly dependent on water transport.
ii. Disadvantages of ocean Transport

The following are the disadvantages of ocean transport:
1. This mode of transportation is very slow compared to road transport hence,

it is unsuitable for perishable goods and urgent cargoes.
Notes
2. Water transport is more risky as compared to other means because there is
always danger of sinking ships or boats.
3. There may be delays at locks and docks, while navigation may be impeded
majorly due to poor weather conditions.
4. It is unsuitable for short distance journeys since transshipment is both costly

and time-consuming.
5. Canals are costly to build, maintain, and dredge, and also follows inflexible
and circuitous routes. An adequate supply of water may be difficult to obtain
and the limited dimensions of barges may be too small for modern
requirements.
6. As ships increase, the number of ports capable of receiving oceans carrying

vessels is declining; this results in less flexible routes and services for the
movement of such commodities as oil. Super-tankers, for instance, cannot
use Suez Canal and large ships can no longer enter the smallest port except
the modern ones which are very few.
3.8 WATER TRANSPORT (MARITIME) IN INDIA

Around 95% of India’s trading by volume and 70% by value is done through maritime
transport.
India has 12 major and 205 notified minor and intermediate ports. Under the National
Perspective Plan for Sagarmala, six new mega ports will be developed in the country.
Foreign Direct Investment (FDI) of up to 100% has been allowed under the automatic
route for port and harbour construction and maintenance projects. It has also facilitated
a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland
waterways and inland ports.
60 Senior Secondary
India’s key ports had a capacity of 1,534.91 million tonnes per annum (MTPA) in Types of
FY20. In FY21, all key ports in India handled 672.60 million tonnes (MT) of cargo Transportation
traffic.
Merchandise exports reached US$ 255.92 billion in FY21.
 India began full operations in Iran’s Chabahar Port by the end of May 2021.
India is building two terminals at the port and will operate them for 10 years
 In Union Budget 2020-21, the total allocation for the Ministry of Shipping was Notes
Rs. 1,702.35 crore (US$ 233.48 million).
 The Finance Minister proposed to double the ship recycling capacity of 4.5
million light displacement tonnes (LDT) by 2024; this is expected to generate an
additional 1.5 lakh employment opportunities in India.
1. Major Ports Authorities Bill 2020
The Bill provides for the regulation of major ports of
1. Chennai
2. Cochin
3. Jawaharlal Nehru Port
4. Kandla
5. Kolkata
6. Mumbai
7. New Mangalore
8. Mormugao
9. Paradip,
10. VO Chidambaranar
11. Vishakhapatnam.
The Bill provides for the creation of a Board of Major Port Authority for each major
port. It will have a member each from the state governments, the Railways Ministry,
the defense ministry, and the customs department and will be given independent financial
power.
Types of 2. Challenges faced in respect of existing ports include

Transportation 1. inadequate road networks within the port area
2. inadequate cargo-handling equipment and machinery
3. inefficiency due to poor hinterland connectivity through rail, road, highways,

coastal shipping and inland waterways,
4. inadequate navigational aids, facilities and IT systems

Notes
5. insufficient dredging capacity
6. lack of technical expertise and
7. a lack of equipment for handling large volumes.
The turnaround time at ports in India therefore remains abysmal.
3. Government initiatives
1. Sagarmala program: It focuses on modernizing and developing ports,
enhancing port connectivity, supporting coastal communities, and stimulating
port-linked industrialization. Sagarmala aims to reduce the logistics costs
for foreign and domestic trade. It also aims to double the share of water
transportation in the modal mix. You will read more about this in a later
lesson.
2. Jal Marg Vikas project: Jal Marg Vikas Project (JMVP) is a project for
the development of National Waterways in India. JMVP was implemented
as an initiative towards national integration with an aim to reduce rail and
road congestion, carbon footprint, and minimal resource depletion.
3. Central Road and Infrastructure Fund: The Ministry of Finance has

amended the Central Road Fund Act, 2000 to include a list of projects and
infrastructure sub-sectors, including inland waterways, for which the CRF
could be used. The CRF has since been renamed the Central Road and
Infrastructure Fund.
4. Way forward
1. The government needs to open up the dredging market to attract more
players, to increase and maintain draft depth at ports to attract large vessels
and enable them to become hub ports.
2. Expedite the completion of various projects under Sagarmala, especially
62 Senior Secondary
those aimed at improving port connectivity, setting up coastal economic Types of

zones (CEZs), and establishing new ports. Transportation
3. Financing for inland vessels could be made part of priority sector lending
by banks.
4. The setting up of a single-window facility for cargo clearance and putting in

place fully mechanized cargo handling infrastructure will be critical to
increase throughput. Notes
5. Enhance technology use in ports and, wherever feasible, draw lessons from
successful global ports such as Rotterdam, Felixstowe, and Singapore to
improve efficiency.
INTEXT QUESTION 3.3
1. Write about any four government initiatives to promote growth in the road sector.
2. Mention any two investment projects on IR.
3. What are the details of the National Rail Plan?
4. What are the benefits and drawbacks of IWT?
5. What are the different types of ships used in shipping?
6. What are the challenges faced by Indian ports today?
7. What is Jal Marg Vikas project?

 Development and maintenance of fairway width of 2.5-3 m depth
 Recurring siltage and irregular siltation
 Speed control regulations to avert bank erosion and safety of other users
 Safety against cross ferries
 Connectivity to terminal locations
 Clearance at cross structures/bridges
 Identification of navigational channel in a wide river
 Discharge control by regulations
Types of  Difficulty in land acquisition for development of terminals

Transportation
TERMINAL EXERCISE
1. Write a detailed note on the Government initiatives to enhance road transport in
India.
2. How does Gati-shakti and National Rail Plan will help to make railways ‘future
Notes ready’?
3. What is the role of IWAI in bringing connectivity and freight movement through
rivers?
4. Why is it essential for India to upgrade its air transport services?

A1. Some of the recent Government initiatives are as follows:
 The Indian government launched Gati Shakti-National Master Plan, which

will help lead a holistic and integrated development of infrastructure
generating immense employment opportunities in the country.
 In October 2021, the government issued a notice related to concessions

under the Vehicle Scrapping Policy (effective from April 2022) to encourage
vehicle owners towards discarding old vehicles which have higher fuel
consumption costs.
 In October 2021, the government launched a conversion project for 15

major roads in the Agartala smart city, the project will convert these roads
to weather-resilient ones, and further strengthen development of the region.
 In October 2021, the government announced rules to improve road safety,

such as fixed driving hours for commercial truck drivers and a mandate to
install sleep detection sensors in commercial vehicles.
A2. Following are some of the major investments and developments in India’s railways
sector:
 In November 2021, Indian Railways announced that ~102 semi-high-speed

Vande Bharat Expresses are expected to commence operations by 2024,
with at least 10 new trains scheduled to launch by August 2022 that will
connect 40 cities.
64 Senior Secondary
 In October 2021, Indian Railways announced a plan to establish ~500 Types of

multi-modal cargo terminals under the ‘PM GatiShakti’ programme, with Transportation
an estimated outlay of Rs. 50,000 crore (US$ 6.68 billion) in four-five
years. Through this plan, the government plans to integrate various modes
of transportation for seamless movement of parcel and bulk cargo (e.g.,
coal and steel).
A3. The Indian Railway launched the National Rail Plan, Vision 2024, to accelerate
implementation of critical projects, such as multitrack congested routes, achieve Notes
100% electrification, upgrade the speed to 160 kmph on Delhi-Howrah and
Delhi-Mumbai routes, upgrade the speed to 130 kmph on all other golden
quadrilateral-golden diagonal (GQ/GD) routes and eliminate all level crossings
on the GQ/GD route, by 2024.
A4. IWT has some advantages that can be enumerated as -
1. Rivers are natural mode of transport, so cost is low.
2. It can carry much larger quantities of heavy and bulky goods such as coal,
and, timber etc.
3. It provides much more flexible service than time-tabled scheduled running

of railways.
4. The risks of accidents and breakdowns are low.
A5. There are three types of vessels employed in the overseas shipping:
(i) Liners
(ii) Tramps
(iii) Tankers
A6. Challenges faced in respect of existing ports include
1. inadequate road networks within the port area,
2. inadequate cargo-handling equipment and machinery,
3. inefficiency due to poor hinterland connectivity through rail, road, highways,

coastal shipping and inland waterways,
4. inadequate navigational aids, facilities and IT systems,
5. insufficient dredging capacity,
Types of 6. lack of technical expertise and

Transportation
7. a lack of equipment for handling large volumes.
8. The turnaround time at ports in India therefore remains abysmal.
A7. Jal Marg Vikas Project (JMVP) is a project for the development of National
Waterways in India. JMVP was implemented as an initiative towards national
integration with an aim to reduce rail and road congestion, carbon footprint, and
Notes minimal resource depletion.
66 Senior Secondary
Concept of Multimodal Transport MODULE - 1
Types of
4 Transportation
CONCEPT OF MULTIMODAL
TRANSPORT Notes
Intermodal transportation is the use of more than one mode of transport to move a
shipment to its destination. A variety of intermodal combinations are possible, with the
most common being truck and rail. Multimodal transport is a term used to describe the
linking of transport responsibilities, documentation and liability in the movement of
goods (by land, sea and air) using existing infrastructure. In multimodal transport one
transport document, one rate and through-liability are used. This linking results in
improved transport efficiency and provides the user with a single point of responsibility
and greater cost transparency.
LEARNING OUTCOMES
 identifies the fundamentals of multimodal transport;
 explains the need for innovation for speedy movement of passengers and goods;
 expostulate that an optimal mix of modes leads to amalgamation of the advantages

of different modes used;
 derives various types of combinations possible to achieve the objective of faster

movement.
MODULE - 1 Concept of Multimodal Transport
Types of
4.1 WHAT IS MULTIMODAL TRANSPORT?
Transportation
According to the MT Convention: Multimodal transport is also known as combined
transport. It is the transportation of goods under a single contract, but performed with
at least two different means of transport. The carrier is liable (in a legal sense) for the
entire carriage, even though it is performed by several different modes of transport (by
rail, sea and road, for example). The carrier does not have to possess all the means of
Notes transport, and in practice usually does not. The carriage is often performed by sub-
carriers or “actual carriers”. The carrier responsible for the entire carriage is referred
to as a multimodal transport operator or MTO.
The MT Convention further defines a multimodal transport operator (MTO) as -
“Any person who on his own behalf or through another person acting on his behalf
concludes a multimodal transport contract and who acts as a principal, not as an agent
or on behalf of the consignor or the carriers participating in the multimodal transport
operations and who assumes responsibility for the performance of the contract”:
A multimodal transport contract is defined as -
“A contract whereby a multimodal transport operator undertakes, against payment of

freight, to perform, or to procure the performance of international multimodal transport”.
A multimodal transport document is:
“One which evidences a multimodal transport contract, the taking in charge of the
goods by the multimodal transport operator, and an undertaking by him to deliver the
goods in accordance with the terms of the contract”.
It is necessary to distinguish between Uni-modal Transport, Intermodal Transport and

Combined transport from Multi-modal transport. While all these terms concern transport
logistics there are subtle and clear distinctions to be made in the use of each of these
several terms.
1. Unimodal Transport
Unimodal Transport is the transport by one mode only. For Unimodal transport
each carrier issues his own transport document, e.g. a bill of lading, an airwaybill,
a consignment note etc. The concept of Through Transport really refers to
Unimodal transport.
For example: Take the case of an ocean transport combining a movement by

two vessels via a port of trans-shipment. In that case the first carrier would issue
68 Senior Secondary
a “through bill of lading” covering the move from port of loading via the port of Types of
transhipment to the port of discharge. Depending on the type of contract the Transportation
first carrier may be responsible for the entire transport or may be only for that
part which takes place on board his own vessel.
2. Intermodal Transport
Intermodal Transport is the transport by several modes of transport from one
point or more interface points to a final port or points, on one or several transport Notes
documents where the issuing carrier may not take responsibility for the goods
for the entire transport. With Intermodal Transport the ocean carrier may issue
a Combined Transport Bill of Lading where the first carrier is only responsible
for his part of the transport and acts as an agent only for the subsequent modes.
Both Unimodal and Intermodal Transport can be undertaken by one or several

carriers.
3. Combined Transport
Combined Transport is the transport by several modes of transport from one
point or port via one or more interface points to a final port or point on one
transport document issued by one carrier, where the issuing carrier takes
responsibility for the goods during the entire transport under a network liability
system. The ‘network’ refers to the varying scale of monetary liability of the
MTO (Multi Modal Transport Operator) in relation to the cargo depending on
the fact whether the damage to cargo is localised on the concerned mode-sea,
rail, air or road.
4. Combined Transport vs Multi-modal Transport

Sometimes the expressions Combined Transport and Multi-Modal Transport
are used interchangeably. But it is useful to make a distinction because the terms.
Combined Transport is being increasingly used to describe a physical combination
of two modes of transport e.g. piggy back (road transport vehicles carried on
rail wagons in Europe and now in India as well). Such combined transport in its
loose sense may or may not be multi-modal transport. A more appropriate
expression for such combination systems would be Bi-modal systems (Road
Railer, Trailer-train, Transtrailer etc.) emphasising the physical combination of
the two modes (road-rail) in a compatible operation to facilitate quick and easy
change from one mode to another. The essence of MMT is not the physical
combination or ‘marriage’ of two modes but the fact that the MTO accepts
Types of liability, as a Principal and not as agent, for the cargo from the moment he
Transportation (MTO) takes charge of the cargo from the shipper (consignor) until he (MTO)
delivers it to the consignee. The MTO issues the MMT document - One invoice
for the total transport over all modes and guarantees the transit time to the
shipper/ consignee.
The following could be possible MTOs -
1. Vessel Operating MTOs (VO-MTOs)

Notes
2. Non-Vessel Operating MTOs (NVO-MTOs)
 Road Haulers
 Railway Companies Common Carriers
 Airline Companies
3. Others (Other than common carriers)
 Freight Forwarders
 Terminal Operators
 Container Operators
 Warehouse companies
 Commercial Companies
 Container Lessors
 Consolidators.
Examples of Multimodal Transport
A. Bulk Movement of Cement in India

ACC cement in India is credited as the first company to introduce the concept
of movement of Bulk Cement, an alternative to bagged cement, which is of
particular advantage to large consumers of cement. Internationally, the trend is
to move cement more and more in loose form rather than bagged. In fact, over
90 percent cement in the USA, and other European countries is transported
and sold in bulk, unlike in India, where only one percent is transported in bulk.
ACC has pioneered the introduction of multi modal transport of cement. Cement
is manufactured in their plant at Wadi in Karnataka. The same is stored in silos
before pumping the loose cement into the Bulker type wagons called the BCCW
70 Senior Secondary
type of wagons. ACC has procured 4 such Bulk rakes for transport of loose Types of
cement to its packing plant at Kalamboli near Mumbai. The cement is then Transportation
bottom discharged from the wagons and is pumped to silos and bagged in the
packing plant. There is option to send both Bulk or Bag cement to the Mumbai
market- this supply chain has reduced costs, opened up opportunity to offer
Bag or Bulk cement to customers and has applied the principle of Rail cum
road- in the first leg and last mile supply chain. This is an example in the multi
modal transport concept in cement leading to increased efficiency, service and Notes
savings.
Fig. 4.1: Bulk movement of cement
B. Movement Of Foodgrains By Food Corporation Of India (FCI)

FCI is making great attempts towards the promotion of Multimodal transportation
for handling and transportation of bagged food grains of 10,000 MT from FSD
OJM at Kolkata to Lalabazar/Badarpur ghat/ Ramnagar, Assam through Road
and Inland Water transport mode through India and Bangladesh under the
Protocol on Inland Water Transit & Trade between India and Bangladesh
(PIWT&T). This type of movement includes the following:
(a) Placing and scheduling of required number of trucks at FSD OJM at

Kolkata, loading the trucks and transporting of food grains by road to
Budge Budge jetty .
(b) The food grains are then loaded directly to the IWT vessels to be transported
to Karimganj Port in India via IWT mode.
Types of (c) From Karimganj the food grains are loaded in trucks and transported to
Transportation the designated depots in Assam.
(d) Internal movement of food grain bags using hand carts, trolley, head load,
cranes etc. to be done.
(e) The costs, charges, levies, taxes, duties, cess, fees, expenses, toll, protocol
charges, shed charges, wharfages/ lighterage charges, Port/Custom overtime
charges, Vessel overtime charges, Crane charges, Barge charges, Berth
Notes
Hire charges, IWT freight, Insurance charges, demurrage etc. at the loading
and unloading ports and all expenses and costs whether statutory / non
statutory – are facilitated for smooth multimodal movement of food grains.
C. Rice Movement by FCI

Another example of multimodal transport by FCI is the dispatch of raw rice
stock from Visakhapatnam to Agartala in Tripura in the northeast region through
many modes like sea-river-road. This activity undertaken by the Food
Corporation of India, AP region has enabled to meet the public distribution
system requirements.
It involves transportation of rice stock from Vizag port to Diamond Habour in

Kolkata by a ship. At Diamond Harbour, the stock is trans-shipped into barges
and taken through river movement up to Bangladesh. Thereafter, it transits
Bangladesh through trucks and again boarded from Bangladesh to feed FCI
depots in Agartala by trucks.
The movement is regulated by Protocol on Inland Water Trade and Treaty

(PIWTT) signed between India Bangladesh governments. This novel venture
has provided an alternative route and helped to reduce costs.
1. Compare Combined and multimodal transport.
2. Give examples of MTOs.
3. Define Multimodal Transport. Give one example in India.
4.2 BENEFITS OF MULTIMODAL TRANSPORT

Multimodal transport has many advantages. Let us find out what they are-
72 Senior Secondary
 coordinated and planned as a single operation, it minimizes the loss of time and Types of
risk of loss, pilferage and damage to the cargo at trans-shipment points. Transportation
 The markets are expanding due to faster transit of goods;
 The burden of issuing multiple documents for each segment of transport is reduced
to minimum.
 The consignor / consignee has to deal with only the MTO (multimodal transport
operator) in all matters related to the goods transportation. Notes
 Ease of trade
 Efficient transport and timely delivery
 Door to door service
 Energy efficient
 Environment friendly eco-system
 Sustainability
 Risk and liability
 Reduces transport costs
4.3 BENEFITS OF INTERMODAL AND MULTIMODAL

TRANSPORT
While moving any commodity using a variety of forms of transportation, a shipper may
come across the terms intermodal and multimodal. Sometimes these terms are incorrectly
used interchangeably. Therefore, understanding the difference between the two would
assist a shipper in communicating their needs properly to the service providers and
help to reduce costs. Let us take a look at the difference between intermodal shipping
and multimodal shipping.
1. Intermodal Shipping
Simply put, intermodal shipping is when the shipments are handled by several
different shipping companies. Intermodal is defined as the movement of cargo
from origin to destination by several modes of transport where each of these
modes have a different transport carrier responsible, each with its own
independent contract - Multiple carriers during a single journey. Each leg of
the shipment is handled by a separate transport carrier. The Shipper will have
Types of several contracts, one with each transport carrier to handle their specific leg of
Transportation the shipment. Using a combination of different transport carriers is sometimes
better to achieve the best total shipping cost for door to door movements. Using
a single transport carrier to provide a door to door movement, may achieve the
best routing and requires less logistics coordination and paperwork.
For example:- Let us say that you need to move a large amount of cargo from
point A to B. Both of these sites are land locked and on different continents.
Notes This could mean in order to move your cargo, you will contact a trucking company
to transport your shipment to a rail yard. From the rail yard, you will move your
cargo to a shipping port. The cargo will be loaded on to a ship and moved
overseas to another port- where it will be unloaded and moved to another rail
carrier. Finally the shipment will be trucked from the rail yard to your destination
location.
When using intermodal shipping, each leg of that shipment will be handled by a separate
company. This means that you will need to have several contracts, one with each
carrier to handle their specific leg of the shipment. There are some advantages to
doing this. You can negotiate terms separately with each company. This may also be
disadvantage as you will need to keep track of several contracts with different providers.
You may also be responsible for handling coordination of delays, as one company will
not be aware of the delays that another company might be having.
Some advantages of Intermodal transportation are associated with:
a) Shippers can choose carriers to take advantage of lower rates for each transport
leg;
b) gain flexibility and specialized handing of loading and unloading goods at different
ports;
c) reduce their carbon footprint by choosing environmentally friendly carriers;
d) increased security of the products being transported; and
e) Shippers have more access to equipment and can better control capacity and
selection of transit schedules.
The benefits of Intermodal transportation can be categorized into three main

points:
 Containerization: Using an intermodal container eliminates direct handling of

the cargo between pickup and delivery. These metal containers are of
standardized sizes and extremely durable, ensuring your cargo will be protected.
74 Senior Secondary
 Intermodal Contracts: Multiple contracts with different contractors allow for Types of
negotiation and the shippers selection of their preferred methods and costs. Transportation
This gives the shipper the most control over the entire process.
 Fuel Efficiency: Intermodal transport allows the shipper to ensure the route
their cargo travels is the most fuel efficient. This can result in lower overhead
costs and a reduced environmental impact.
2. Multimodal Shipping: Multimodal refers to the movement of cargo from origin Notes
to destination by several modes of transport where each of these modes have a
different transport carrier responsible, however under a single contract or bill of
lading - Single carrier during a single journey. The same transport carrier is
responsible for moving the shipment in all legs, in all modes. In simple terms,
Multimodal is using various modes of transport but with one transport bill of
lading.
For example - Multimodal Transport can be worked out in a couple of ways.

You could go with a company that has all of these modes of transport available
to them or set up a single contract with an agent. An agent would do all the
negotiation on the back end for you while you only have one contract to keep
track of. The agent would also be responsible for coordinating loading, unloading,
and delays.
Advantages of Multimodal transportation are:
a) Shipment tracking efficiency able to monitor with one transport carrier from
door to door delivery;
b) access to remote parts of the world with responsibility and liability of the
movement with one transport carrier;
c) efficiency in delivery time; and
d) minimization of logistics coordination expenses of a shipper
Therefore, the benefits of Multimodal transport can be enumerated under two heads:
 Multimodal contract: One single contract reduces the amount of time and
paperwork dedicated to the shipping of cargo. A multimodal contract often
means less of a headache, and any delays or issues during the process will be
taken care of by the contractor.
 Multimodal transport operator: The MTO will be liable for any unexpected
costs or damages incurred during shipping. Though modern intermodal shipping
Types of is very safe, multimodal shipping will allow the shipper even more peace of mind
Transportation knowing that they won’t need to wrangle multiple companies to address any
problems should they occur.
To sum up we can say that, the advantage of both Intermodal and Multimodal Transport
is given by the most efficient combination of multiple transport modes, optimising lead
times, reducing inventory costs and keeping the level of freight costs under control.
This combination results in increased environmental sustainability, reducing the
Notes transportation carbon footprint.
Regardless of your choice with Intermodal or Multimodal, Shippers require a

transportation management system (TMS) to ensure door to door tracking visibility,
ability to perform routing scenarios to determine the best overall total shipping cost
with the best overall routing transit time. The transportation management system must
have capabilities for coordination with and between transport carriers and suppliers,
along with freight rates and contract management.
4.4 MULTIMODAL VS. INTERMODAL: SHIPPING BENEFITS

1. Intermodal transportation gives the shipper opportunity to reduce costs if handled
properly, but many shippers prefer not to spend their time on planning out an
efficient intermodal route. Multimodal transport, on the other hand, relieves the
shipper of this burden, but may cost more due to routes chosen at the preference
of the Multimodal Transport Operator (MTO).
2. The need for insurance for each individual contract in intermodal transportation
could end up costing more if handled inefficiently.
3. At the same time, Multimodal leaves these choices to the MTO, but assures the
shipper that they will have minimal responsibility in solving an issue if something
goes wrong. Additionally, multimodal transportation is more direct than
intermodal, so shippers may prefer this option when shipping high value cargo.
4. Both options can be speed efficient. Multimodal is generally chosen when speed
efficiency is more important than cost efficiency, as specialized agents will plan
the best routes. Intermodal can be as fast or faster than multimodal, depending
on the priority of the shipper, but planning out a route that is both fast and cost
efficient can be a daunting task.
76 Senior Secondary
Types of
Loading Vessel Discharging Vessel Transportation
Intermodal
Contract No.2
Shipping Line
Destination Transport Provider
Contract No.3
By Rail Notes
Shipper
Consignee
By Road By Road
Origin Transport Provider Contract No.3
Contract No.1
Destination Transport Provider
Fig. 4.2: Intermodal operation-

running on several independent contracts

1. Give any four benefits of MMT.
2. What is Intermodal Transport?
3. How does containerization help in Intermodal transport?
4. What is the multimodal contract?
5. How does TMS help in transportation?
4.5 TYPES OF MULTIMODAL TRANSPORT

Multimodal transport which refers to a combination of at least two means of transport
results in an integrated transport chain where the strength of each alternative is utilized.
Main characteristics of multimodal transportation are trans-shipment terminals. These
terminals allow efficient cargo handling between short-distance and long-distance traffic
as well as application of standardized and reusable loading units. However, combined
freight transport can be organized in different ways. In general, trucks cover short
distances between the loading area and the trans-shipment point respectively between
the place of arrival and the recipient. Long-distance haulage is conducted by other
means of transport such as train, ship or even plane.
Types of Regarding combined container transport, standardized loading units are trans-
Transportation shipped along different means of transport. In doing so, various combinations of land,
water, and air transportation are applied in practice. Trailer shipment (rail transport
of trailers) refers to a combination of rail and road haulage. Three different modes can
be identified.
Notes
Fig. 4.3: Combined container transport
Rolling Road Forwarding of Trailers
Fig. 4.4: Trailer shipment

The rolling road usually describes carriage of whole trucks – including both tractor
and trailer – on low floor trains. In this regard, the second alternative that contributes
to additional cost savings is forwarding of trailers without the tractor as it reduces
transport weight and labour costs. However, this option requires a second tractor at
the place of arrival. Swap body transport is basically similar to container transport
where loading units are handled by overhead cranes at the trans-shipment centre.
Roll-on roll-off traffic means the carriage of freight vehicles on ships over a certain
distance. A rarely applied option is LASH-transportation. In the course of this, an
inland water vessel, commonly known as LASH barge, is carried by the barge carrier
– a seagoing vessel.
The introduced multimodal modes of transport basically combine the flexibility of trucks
with economies of scale of such means of transport that are destined for long-distance
forwarding. However, additional handling processes are cost and time consuming.
The benefits of utilizing different means of transport ideally outweigh or even exceed
the expenses. This mainly depends on the distance to be covered, the efficiency of
trans-shipment points and the goods to be conveyed.
78 Senior Secondary
Types of
Transportation
Roll-on roll-off traffic Last - transportation
Fig. 4.5: Roll-on roll-off traffic
4.6 COMBINED CONTAINER TRANSPORT

Notes
Combined transport is a form of intermodal transport. In this there is the movement
of goods in one and the same loading unit or road vehicle, using successively two or
more modes of transport without handling the goods themselves in changing modes.
Combined transport is intermodal transport where the major part of the journey is by
rail, inland waterways or sea, and any initial and/or final legs carried out by road are
as short as possible.
The following combinations are used-
1. RAIL-ROAD
(i) Lorry: Lorries make it possible to provide a door-to-door service, as they
cover the short distances separating factories and terminals. They enable
the major advantages of road haulage to be tapped, i.e. a network that
reaches further and is denser.
(ii) Container: Containers lead to better logistical management of the areas

used for loading and unloading goods, since their rigid structure enables up
to six of them to be stacked in one pile. Container lengths have been
standardised at between 20 and 53 feet.
(iii) Swap body: Swap bodies are standardised loading units equally suitable
for carriage on road vehicles or railway wagons. As they can be used in a
broad range of situations, are simple in design and inexpensive, this form of
conveyance has been highly successful and is currently one of the most
widely used transport systems on the market.
(iv) Semi-trailer: While semi-trailers are more costly and heavier, their advantage
is that they can be coupled directly to a tractor and do not require a road
chassis, unlike containers and swap bodies.
(v) Terminal: Terminals are interchange hubs between rail and road traffic.
They are fitted with all the equipment required to handle and tranship loading
units from one transport mode to the next in a rapid and efficient manner:
Types of gantries and mobile cranes, modern computer systems integrating tracks,
Transportation storage areas, transhipment areas and connections to roads and motorways.
(vi) Wagon: There are a plethora of different wagons available for combined
transport purposes. Those most commonly used for rail-road combined
transport are flat wagons, fitted with scotching systems for swap bodies
and containers, as well as base plates for swap bodies. Wagons used to
carry semi-trailers have very low floors and recesses to accommodate the
Notes wheels.
(vii)Rolling road: The rolling road concept is the only option available to
shippers and freight forwarders to run combined transport services without
committing to specific investment. Lorries are carried on purpose-built low-
floor wagons, while drivers travel in seated accommodation or couchettes.
Transhipment between road and rail takes place at terminals, using mobile
ramps, with the lorries subject to specific conditions resulting from the
category and clearance gauge of the line worked. Rolling road services are
limited to set routes. Owing to the particular requirements associated with
the purpose-built wagons used, there are no plans to introduce this option
for wagonload traffic.
2. Rail-Maritime
There are two main types of sea shipping:
Short-sea: This is transport by sea over short distances, for example between
Great Britain and the continental ports of the English Channel and the North
Sea.
Deep-sea: This is transport by sea over long distances, sometimes between

continents, for example between Asia and Europe.
(i) Ship: Ships carry transport units by sea between different ports. They can
vary considerably in size depending on the distance to be covered and the
volumes to be transported. Most of the time they sail on set routes arranged
by the shipping companies and shippers. In the case of deep sea shipping,
they only carry “sea containers”, complying with the technical features
stipulated in the ISO standards in force. In the case of short sea shipping,
some companies also accept transport units such as swap bodies (with or
without road chassis) and semi-trailers (accompanied or not).
80 Senior Secondary
(ii) Container: Containers lead to better logistical management of the areas Types of
used for loading and unloading goods, since their rigid structure enables Transportation
them to be stacked up to three high. Container lengths have been
standardised at 20 and 40 feet, making them the ideal transport unit for sea
shipping.
(iii) Wagon: The wagons used for rail-sea combined transport are flat wagons,
fitted with scotching systems for containers.
Notes
(iv) Port Terminal: Port terminals are, naturally enough, located in sea ports.
Their infrastructure generally enables them to handle both road-sea traffic
and rail-sea traffic. They have one or more quays where ships can moor,
with railway tracks running parallel to the quay so that loading units can be
transferred directly from ships to wagons and vice versa.
3. Rail-Waterway
Rail-barge transport is very similar in terms of the way it is managed to rail-sea
transport. However, it is different from the latter in terms of the market segments
it serves. Unlike sea shipping, transport by inland waterway is a way of linking
industrial centres which have a sea and/or waterway port, on a single land mass.
Where such inland waterway terminals are connected to the railways, volumes
carried in intermodal rail operating programmes can also be carried by inland
waterway and thereby collected from and distributed to the main industrial centres
in Europe.
(i) Barge: Barges are shallow-draught boats equipped with a platform on

which intermodal transport units (containers and swap bodies) can be carried.
(ii) Container: Containers lead to better logistical management of the areas

used for loading and unloading goods, since their rigid structure enables
them to be stacked up to three high. Container lengths have been
standardised at 20 and 40 feet, making them the ideal transport unit for sea
shipping.
(iii) Swap body: Swap bodies are standardised loading units equally suitable
for carriage on road vehicles and on railway wagons. As they can be used
in a broad range of situations, are simple in design and reasonably priced,
this form of conveyance has been highly successful and is currently one of
the most widely used transport systems on the market. Swap bodies cannot
be used in combined rail-sea transport but they are sometimes used in
transport by inland waterway.
Types of (iv) Wagon: The wagons most commonly used for rail-waterways combined
Transportation transport are flat wagons, fitted with scotching systems for swap bodies
and containers, as well as base plates for swap bodies. Wagons used to
carry semi-trailers have very low floors and recesses to accommodate the
wheels.
(v) Inland waterway terminal: Inland waterway terminals are located at the
heart of inland ports, the latter are interlinked by waterways such as rivers
Notes and canals. Their infrastructure generally enables them to handle both rail-
road traffic and rail-barge traffic, for that reason they are often called
“trimodal terminals”. They have one or more quays where barges can moor,
with railway tracks running parallel to the quay so that transport units can
be transferred directly from the barges to wagons and vice versa.
4. Rail-Air
Because freight forwarding is concentrated among international transport
integrators and logistics firms, airports are increasingly setting up Cargo Centres
as multimodal hubs. The spread of cabotage in the wake of rapid expansion of
air cargo traffic cannot be absorbed by road transport alone and rail transport
offers an effective alternative to road congestion, especially between airport
Cargo Centres and distribution platforms.
Benefits of Combined transport

Combined Transport presents a range of benefits. It contributes towards a better
quality of life and proposes a seamless transport solution in order to improve the
productivity of the entire chain.
The main benefits of combined transport can be summarised as follows:
 Friendly towards the environment: on routes where volumes can be bundled

and distance is appropriate, combined transport provides substantial energy
gains and lower CO2 emissions
 Friendly towards society: reduces accidents, road congestion and dependency

on energy reserves
 It allows for a better use of existing capacity
 It combines the flexibility of road with the economies of rail on long journeys for
large volumes
 It is well integrated in the logistics chain
82 Senior Secondary
 It is safe and secure: reduce risk for goods during the transport journey Types of
Transportation
Example of Combined Transport
Roro - Roll on Roll off

Roll-on/roll-off (RORO or ro-ro) ships are cargo ships designed to carry
wheeled cargo, such as cars, trucks, semi-trailer trucks, trailers, and railroad cars, that
are driven on and off the ship on their own wheels or using a platform vehicle, such as
a self-propelled modular transporter. This is in contrast to lift-on/lift-off (LoLo) vessels, Notes
which use a crane to load and unload cargo.
RORO vessels have either built-in or shore-based ramps or ferry slips that allow the
cargo to be efficiently rolled on and off the vessel when in port. While smaller ferries
that operate across rivers and other short distances often have built-in ramps, the term
RORO is generally reserved for large oceangoing vessels. The ramps and doors may
be located in the stern, bow, or sides, or any combination thereof.
Fig. 4.6:Roll-on/roll-off Car Carrier

Roro In India: Roll-on/roll-off concept in India pertains to an activity where loaded
trucks are directly carried by railway wagons to their destination. The first ever RO-
RO service in India was run by Konkan Railway. Konkan Railways passes through
tough terrains of India. There is NH-66 passing through same route. Truck drivers
find it extremely difficult to drive loaded trucks through ghats, undulating surfaces,
narrow roads and poor road and weather conditions. The KRC came with concept of
RORO, where loaded trucks are moved on wagons and are travelled by train. This
has helped in saving of fuels, decrease in wear and tear of lorries (trucks), relief to
drivers of driving in extreme conditions, can reach faster to destination. This also helps
in decongestion of roads and lowering of pollution. This concept has been beneficial
for both truck operators and KRCL.
Types of
Transportation
Notes
Fig. 4.7: Trucks on Train - RORO

This rolling highway operates between Kolad in Maharashtra and Verna in Goa, with
an extension to Surathkal in Karnataka. This service is more commonly known as
RORO (roll-on-roll-off) in Konkan Railway.
Some Other Examples of Multimodal Transport are -
1. In the Northeast where cargo is being transported to Guwahati through trucks,

from where air cargo is being used to transport fresh produce to the Middle
East and other countries.
2. Cargo is also being transported through Kandla port in the west via western
DFC, aggregated in Palwal and then distributed via road to U.P, Punjab and
Haryana.
3. Anand Vihar Station as a Multimodal hub for passenger movement –Anand

Vihar is an interchange metro station between the Blue Line and Pink Line of
the Metro in Delhi. Once constructed, the Anand Vihar station of the regional
rapid transit system (RRTS) between Delhi and Meerut will have seamless
connectivity with two Delhi Metro corridors, inter-state bus terminals (ISBT)
and the Indian Railways station. The Anand Vihar area is already a major
transport hub of the national capital. According to the National Capital Region
Transport Corporation (NCRTC), which is the implementing agency of the RRTS
project, the integration with these different modes of transport will be done
through lifts, walkways, escalators, foot over bridges (FOBs) as well as
underpasses. The integration is a key aspect of the RRTS project, in order to
provide a better travel experience to passengers.
84 Senior Secondary
INTEXT QUESTIONS 4.3 Types of

Transportation
1. Give examples of combined transport.
2. What is RO-RO and Lash transport?
3. What are the two types of rail-marine transport?
WHAT YOU HAVE LEARNT Notes
Key difference between Intermodal transportation and Multimodal transportation:
Intermodal Transportation Multimodal Transportation
Uses different contracts with multiple Uses a single contract with one carrier
providers, i.e. each carrier issues a for transporting cargo – regardless of
separate bill of lading. As well as other the number of modes of transport.
documents for each interchange.
The shipping manager of each company The manager needs to settle for a
has the flexibility to decide on the best fixed rate throughout the journey.
rate for every contract.
Types of Shippers take responsibility for the Carrier takes responsibility for the
Transportation shipment. shipment.
Shippers reduce their carbon footprint Easy access to remote parts of the
by choosing environmentally-friendly world.
carriers.
Operates with one transportation unit Involves the use of various units across
Notes
throughout the journey. different modes.
TERMINAL EXERCISE
1. What are the benefits of multimodal transport? Explain the advantages derived
at the Anand Vihar Terminal.
2. Compare and contrast Intermodal transport with Multimodal transport.
3. Rail-road is the most common system of combined transport. Explain giving

examples from India.
4. How is trailer shipment different from Ro-Ro shipment?

4.1
A1. The expressions Combined Transport and Multi-Modal Transport are used
interchangeably. But it is useful to make a distinction because the expression
Combined Transport is being increasingly used to describe a physical combination
of two modes of transport e.g. piggy back (road transport vehicles carried on
rail wagons in Europe and now in India as well). Such combined transport in its
loose sense may or may not be multi-modal transport. A more appropriate
expression for such combination systems would be Bi-modal systems (Road
Railer, Trailer-train, Transtrailer etc.) emphasising the physical combination of
the two modes (road-rail) in a compatible operation to facilitate quick and easy
change from one mode to another. The essence of MMT is not the physical
combination or ‘marriage’ of two modes but the fact that the MTO accepts
liability, as a Principal and not as agent, for the cargo from the moment he
(MTO) takes charge of the cargo from the shipper (consignor) until he (MTO)
delivers it to the consignee. The MTO issues the MMT document - One invoice
86 Senior Secondary
for the total transport over all modes and guarantees the transit time to the Types of
shipper/ consignee. Transportation
A2. The following could be possible MTOs -
1. Vessel Operating MTOs (VO-MTOs)
2. Non-Vessel Operating MTOs (NVO-MTOs)
 Road Haulers - Railway Companies Common Carriers - Airline Companies

Notes
3. Others (Other than common carriers)
 Freight Forwarders - Terminal Operators - Container Operators -

Warehouse companies - Commercial Companies - Container Lessors -
Consolidators.
4.2
A1. The advantages of Multimodal Transport are-
 coordinated and planned as a single operation, it minimizes the loss of time

and risk of loss, pilferage and damage to the cargo at trans-shipment points.
 The markets are expanding due to faster transit of goods;
 The burden of issuing multiple documents for each segment of transport is

reduced to minimum.
 Ease of trade
A2. Intermodal shipping is when the shipments are handled by several different
shipping companies. Intermodal is defined as the movement of cargo from origin
to destination by several modes of transport where each of these modes have a
different transport carrier responsible, each with its own independent contract -
Multiple carriers during a single journey. Each leg of the shipment is be
handled by a separate transport carrier. The Shipper will have several contracts,
one with each transport carrier to handle their specific leg of the shipment. In
using a combination of different transport carriers is sometimes better to achieve
the best total shipping cost for door to door movements. Using a single transport
carrier to provide a door to door movement, may achieve the best routing and
requires less logistics coordination and paperwork.
A3. Containerization: Using an intermodal container eliminates direct handling of

the cargo between pickup and delivery. These metal containers are of
standardized sizes and extremely durable, ensuring your cargo will be protected.
Types of A4. Multimodal contract: One single contract reduces the amount of time and
Transportation paperwork dedicated to the shipping of cargo. A multimodal contract often
means less of a headache, and any delays or issues during the process will be
taken care of by the contractor.
A5. Shippers require a transportation management system (TMS) to ensure door to

door tracking visibility, ability to perform routing scenarios to determine the best
overall total shipping cost with the best overall routing transit time. The
Notes transportation management system must have capabilities for coordination with
and between transport carriers and suppliers, along with freight rates and contract
management.
4.3
A1. The examples are - Trailer shipment (rail transport of trailers) refers to a
combination of rail and road haulage. The rolling road usually describes carriage
of whole trucks – including both tractor and trailer – on low floor trains.
forwarding of trailers without the tractor as it reduces transport weight and
labour costs. Swap body transport is basically similar to container transport
where loading units are handled by overhead cranes at the trans-shipment centre.
A2. Roll-on roll-off traffic means the carriage of freight vehicles on ships over a
certain distance. A rarely applied option is LASH-transportation. In the course
of this, an inland water vessel, commonly known as LASH barge, is carried by
the barge carrier - a seagoing vessel.
A3. There are two main types of sea shipping:
Short-sea: This is transport by sea over short distances, for example between
Great Britain and the continental ports of the English Channel and the North
Sea.
Deep-sea: This is transport by sea over long distances, sometimes between

continents, for example between Asia and Europe.
88 Senior Secondary
Multi Modal And Inter Modal Transport MODULE - 1
Types of
5 Transportation
MULTI MODAL AND INTER

MODAL TRANSPORT Notes
Multimodal and Intermodal transportation involve moving cargo from origin to destination
using more than one mode of transport -be truck, rail, barge, ship - using different
carriers to operate each leg of the journey. The difference is in the contract of carriage
/ bill of lading and transport carrier responsibility / liability of the movement. As it can
be seen from the figure below that in multimodal transportation, one contract covers
the entire journey and one entity delivers the goods from door-to-door using multiple
modes. While in intermodal transportation, there is a separate contract for each
individual leg of the journey meaning that there is more than one responsible entity for
the successful delivery of the cargo.
LEARNING OUTCOMES
After reading this lesson the learner-
 distinguishes between the operations involved in intermodal and multimodal

transport;
 enumerates the need and responsibilities of an MTO and freight forwarder;
 judiciously selects a system that saves cost and time;
 explains the need for and organization of MMLPs in India.
5.1 DIFFERENCE BETWEEN MULTIMODAL AND

INTERMODAL TRANSPORT
Multimodal Shipping: facilitates the movement of cargo from origin to destination
using several modes of transportation under a single contract or Bill of Lading by a
MODULE - 1 Multi Modal And Inter Modal Transport
Types of single carrier for the entire journey. The same transport carrier is responsible for moving
Transportation the shipment across all modes - negotiations, track and trace, loading and unloading,
handling of delays etc. It is like a one stop shop concept! Multimodal transportation
has certain advantages in terms of -
a) Shipment tracking efficiency: Being able to monitor with one transport carrier
from door-to-door;
b) Access to remote parts of the world with responsibility and liability of the
Notes
movement with one transport carrier;
c) Efficiency in delivery time; and
d) Minimization of logistics coordination expenses of a shipper
Intermodal Shipping on the other hand can be defined as the movement of cargo
from origin to destination using several modes of transportation where each mode is
operated by a different carrier, and each leg requires an independent contract. Though
this system uses multiple carriers for a single journey with each leg handled by a separate
transport carrier it still has some benefits like better chances for negotiating with different
companies.
a) Shippers can choose carriers to take advantage of lower rates for each transport
leg;
b) Shippers gain flexibility and specialized handing of loading and unloading goods
at different ports;
c) Shippers reduce their carbon footprint by choosing environmentally friendly

carriers;
d) There is increased security of the products being transported; and
e) Shippers have more access to equipment and can better control capacity and
selection of transit schedules.
The advantage of both intermodal and multimodal transportation is that they offer the
most efficient modal- mix that optimises lead times, reduces inventory costs and freight
costs. It also results in increased environmental sustainability, reducing the transportation
carbon footprint. The use of transportation management system (TMS) which has the
capability to coordinate with and between transport carriers and suppliers, along with
freight rates and contract management will help intermodal and multimodal
transportation to ensure door-to-door tracking visibility, ability to perform routing
scenarios in such a way that will bring down shipping costs and transit times.
90 Senior Secondary
Intermodal & Multimodal Shipping in a Nut Shell : The figure below explains the two Types of
concepts very well - Transportation
Intermodalism
Origin Terminal Destination
Road Rail Maritime
Ticket / Contract Ticket / Contract Ticket / Contract

Multimodalism
Notes
Ticket / Contract

1. What is Intermodal shipping? How is it advantageous?
2. What is the benefit of TMS?
3. Why is Multimodal Shipping important?
5.2 MULTIMODAL TRANSPORT OPERATOR (MTO)

Multimodal transport operator means any person who is engaged in the business of
carriage of goods and using at least two different modes of transport. He operates
under a Multimodal transport contract, from the place of acceptance of the goods in
India to a place of delivery of the goods outside India or within India; registered under
the Multimodal Transportation of Goods Act, 1993.
In simple terms - a multimodal transport operator is one who handles the transport
of cargo from its origin to the final destination by different modes of transport.
The cargo that is transported thus will usually go under a single transport contract or
bill of lading.
As per the MMTG Act three categories of companies are eligible to be registered as
MTOs. They are
(1) Shipping Companies
(2) Freight Forwarding Companies
(3) Companies which do not fall in either of the above two categories.
Types of In the case of Shipping Companies (which own and operate vessels) as well as Freight
Transportation Forwarding Companies, the turnover of the last three years should be Rs. 50 lakhs or
more to make them eligible for registration as MTO. In addition, the following are also
required-
1. certificate of turnover duly signed and issued by a Chartered Accountant
2. have offices/agents/representative in at least two other countries

Notes Multi-Modal Transport & Applications MTO-Definition
Multi-Modal Transport Operator
The chain that interconnects different links/modes of transport (air, sea & land)
into complete one process that ensures an efficient and cost- effective door-to-
door movement of goods under the responsibility of a single transport operator,
known as a Multi-Modal Transport Operator (MTO), on one transport
document.
Fig. 5.1: Multi modal operations
5.3 FREIGHT FORWARDER

A freight forwarder / agent is a person, agency, or business involved in the
collection, shipment, and delivery of goods. Therefore, a freight forwarder is the
person (physical or legal) responsible during the international transport of goods, with
the aim of ensuring that transport is carried out safely, efficiently and profitably. The
freight forwarder therefore acts as an intermediary between the importer, the exporter
and the companies involved in the transport.
The functions performed by the freight forwarder include planning, processing and
managing the transportation of goods between customs. In addition, this person is
responsible for carrying out all the formalities regarding documentation, process,
insurance and transport costs.
92 Senior Secondary
Advantages of having a forwarding agent Types of

The freight forwarder facilitates the shipment for both the importer and the exporter. Transportation
This translates into a number of benefits:
 Advice on the most cost-effective and efficient alternative.
 Preparation and presentation of the documentation required for export.
 Accomplishment of the procedures to pack and load the merchandise.
Notes
 Management with customs agents abroad to ensure compliance with regulations.
 Simplifies the process and management and can access better prices.
5.4 TYPES OF FREIGHT FORWARDERS

Depending on the functions to be performed during the transport of goods, there are
different types of freight forwarders. The different classes are described below:
1. Multimodal Transport Operators (MTO): includes all the necessary formalities

and operations from the place of origin to the destination. This type of agent is
capable of coordinating all the means of transport necessary to carry out the
transaction.
2. Air Transport Agents: Manage the expeditions of goods from airlines, usually
long distance. This person must be a member of IATA.
3. Road Transport Agents: These are the intermediaries that act between carriers
and shippers, responsible for the transport of goods by road.
4. Port Agents: They act at airports, seaports and cargo terminals, thus taking
responsibility for the transfer of goods from one mode of transport to another.
5. Cargo Agents: They act as agents for the ship owners, responsible for the
operational management of the vessel. This person delivers and receives the
letter during the maritime transport.
As per Multi Modal Transportation of Goods (MMTG) Act 1993, a Freight Forwarder
can act as MTO (multi model transport operator) or NVOCC ( non vessel operating
common carrier) who needs a composite policy covering legal liability, error & omission,
theft, burglary, shore delivery, pilferage, etc risk in one policy.

1. Who can be a MTO?
Types of 2. Who can register as an MTO?

Transportation
3. Who is a freight forwarder?
4. What is the benefit of using a freight forwarder?
5.5 LIABILITY & OPERATION OF A FREIGHT FORWARDER

Look at the illustration given below to understand the operation and liability of a freight
Notes forwarder.
WAREHOUSE
CARGO PICKUP INLAND TRANSPORT

CARGO PORT DEPOT
LOADING OF CARGO
PROPOSAL FOR
SHIPPER SHIPMENT ARRANGING SHIPPING
C O M PA N Y
BILL OF LADING
EXPORT LOADING PORT
DECLARATION
FREIGHT FORWARDER SHIPPING OF CARGO
CONSIGNEE CUSTOM CLEARANCE

FORWARDER'S
OVERSEAS BRANCH AND PAPERWORK
RELEASE OF CARGO INLAND TRANSPORT

TO CONSIGNEE
DISCHARGE PORT
Fig. 5.2: Operations of freight forwarder
5.6 HOW DOES A MULTI-MODAL TRANSPORT

OPERATOR DIFFER FROM A FREIGHT FORW ARDER?
As a Multi-Modal transport operator uses multiple modes for transportation of goods
from Point A to Point B covered under one bill of lading, they can have the following
entities:-
1. Shipping Lines: because under Carrier Haulage, they undertake rail, road
modes of transport - either via their own infrastructure or via 3rd party
2. Freight Forwarder: because in a lot of cases specially where they issue House
Bills, they are taking on the role of the carrier and as such may and in a lot of
cases do offer rail, road and sea modes of transport - either via their own
infrastructure or via 3rd party
94 Senior Secondary
3. NVOCC Operators: because in most cases the NVOCC performs/undertakes Types of

the services of a Shipping Line/Freight Forwarder combined, along with the Transportation
risks/responsibilities that comes with performing such services. This could include
but not restricted to offering rail, road and sea modes of transport - either via
their own infrastructure or via 3rd party
In short - any entity that signs a multi-modal contract, assumes the responsibility
for the same, and issues a multi-modal transport document to the merchant.
Notes
The multimodal operator decides the plan of shipment as he chooses the means
and modes of transport, and then the freight forwarder just applies it in the form
of bill of lading (contracting or document activities).
Freight Forwarder
Shipper Consignee
For MTO
Two or more different modes of

transportation
One Liability
One Document
Guarantee transit time
Fig. 5.3: Role of Freight Forwarder
5.7 MULTIMODAL LOGISTICS PARKS

Logistic parks are defined industrial areas, regional, national and/or international where
multiple activities relating to transport, logistics and the distribution of goods are carried
out by various operators. The Operators are just owners or occupants of buildings
and facilities like warehouses, break-bulk centers, storage areas, offices, car parks,
etc. Logistics parks are planned on a large scale as the size determines the facilities,
functions, and services that are possible to carry.
5.8 NEED FOR LOGISTICS PARKS

Logistics Parks have facilitated the shippers in a number of ways -
 The requirements of demand and supply are being met on time.
 Logistics Parks bring about better connectivity as they are generally located in
the industrial belts, and near airports, ports, and ICDs.
Types of  Logistics Parks enable regional development as they give impetus to ancillary
Transportation industries like equipment suppliers, construction companies, consultants, banking/
insurance and trucking companies.
 Due to their large scale the logistics parks offer larger and better managed storage
facilities than common warehouses.
 The logistics parks are multimodal transportation and trans-shipment hubs for
the all types of cargo.
Notes
 Due to streamlining of processes, usage of optimal modal mix, ensuring 24/7
operations and elimination of intermediaries the Logistics Parks have become
more cost-efficient.
 An effective modal mix helps to reduce congestion and improve environmental

quality.
 Logistics parks are located in large areas and application of IT enables security,
visibility and real time tracking of cargo
 They promote economic development by attracting businesses and generating

employment and resources for future expansion.
 Logistics park management ensures improved general maintenance, landscaping,

security & waste control.
 State-of-the-art warehousing & cold storage facilities can also be provided .
 They promote growth in freight generation and movement.
5.9 MMLPS IN INDIA

Multimodal parks can help India develop a world-class logistics sector because of its
enormous economic potential. Freight logistics-comprising transport, warehousing,
and value-added services for transit by road, rail, inland water, sea, and air-drives
trade and is a catalyst for economic growth.
India has made significant progress in developing logistics capacity in recent years.
Despite these achievements, the Indian Logistics industry is faced with significant
challenges -
 India's logistics cost almost doubled from 7-8% of GDP in 2000 to about 14%
in 2014 while in developed economies it is only 8%-10% of GDP.
96 Senior Secondary
 India suffers clogged transport networks, a skewed mix of transport modes, Types of
insufficient storage and handling facilities for in-transit commodities, and regulatory Transportation
hurdles.
Under the Make in India initiative the Government of India recently kicked off a program
to develop Multi-Modal Logistics Parks, or MMLPs. These parks, to be set up under
the Logistics Efficiency Enhancement Program, aim to reduce logistics costs; improve
freight aggregation, distribution, storage, and warehousing; and create various value-
added services, including labeling, packaging, tagging, and crating. This leads to greater Notes
time and money savings.
For MMLPs to succeed, roads, railways, and other available modes of transportation
must be improved for smooth and uninterrupted linkages among adjacent parks,
industrial clusters, and consumption centers. Cutting-edge information technology for
delivery management must also play an important role for MMLPs to work effectively.
Fig. 5.4: Multi modal park

Ministry of Road Transport and Highways and the National Highways Authority of
India are planning to establish a total of 35 MMLPs across the country over the next
few years.
5.10 MULTIMODAL LOGISTICS PARKS AS A SOLUTION

The development of MMLPs at strategic locations is envisaged as a key policy measure
to rationalize cost of logistics in India and improve its competitiveness. Setting up of
Multi-Modal Logistics Parks (MMLPs) as a part of transport ministry's Logistics
Efficiency Enhancement Program (LEEP) will improve the country's logistics sector
Types of by lowering overall freight costs, reducing vehicular pollution and congestion, and
Transportation cutting warehousing costs.
The COVID-19 event has highlighted the need for greater regionalization of the supply
chain. The development of MMLPs at strategic locations in different regions can help
in developing the supply chain in a more agile and cross-functional way. The MMLPs
can provide:-
(i) infrastructure for enabling seamless multimodal freight transfer;

Notes
(ii) mechanized warehouses and specialized storage solutions such as cold storage;
(iii) mechanized material handling and intermodal transfer container terminals, and
bulk and break-bulk cargo terminals;
(iv) value-added services such as customs clearance, bonded storage yards,

quarantine zones, testing facilities, and warehousing management services; and
(v) late-stage manufacturing activities such as kitting and final assembly, grading,
sorting, labeling, and packaging activities, reworking, and returns management.
Furthermore, MMLPs could improve the utilization and performance of inland
container depots (ICDs) and container freight stations where they exist.
In addition, logistics parks will be able to leverage the new opportunities thrown up by
the Dedicated Freight Corridor (DFC) - the electrified broad-gauge railway line that
will link the industrialised hubs of West Bengal in the east via Delhi, Haryana and
Punjab in the north, to Rajasthan, Gujarat and Mumbai in the west. Meant only for
freight, the DFC will carry goods at a faster and more efficient manner across the
country.
The Government has decided to set up as many as 35 Multi Modal Logistics Parks, at
carefully chosen locations, at a total capital cost of Rs. 50,000 crore. The MMLPs
have been conceptualized to enable seamless intermodal freight movement and offer
multiple functionalities such as freight aggregation and distribution. Storage and
warehousing solutions and value-added services such as customs clearances and IT
services will also be provided to users.
The parks will enable the shift from a point-to-point to a hub-and-spoke model in
logistics sector, eventually helping us bring down logistics costs by at least half and
enabling more efficient movement of new-generation vehicles.
The Model Concession Agreement for MMLPs has been finalized and all MMLPs
will be developed as part of the Design, Build Finance, Operate and Transfer (DBFOT)
model.
98 Senior Secondary
Types of
Transportation
1. What is the concept of MMLPs?
2. Give any 3 benefits of MMLPs.
3. According to LEEP policy how can MMLPS improve freight movement in India?
WHAT YOU HAVE LEARNT Notes
The difference between Multimodal shipping and Intermodal shipping is given in the
chart below -
The difference between MTO and Freight Forwarder is explained below
Operators Main Functions
Freight Forwatrder Freight forwarder means the person or company, as an agent,

concluding a contract with a customer on freight forwarding
services relnting to the carriage, concoliddation. storage,
handling, packing or distribution of the goods as well as ancillary
and advisory services in connection there with.
NVOCC ANVOCC arranges tgransport of goods as a carrier and issucs

own bills of lading or equivalent document but does not own or
operate a major means of transport.
Types of MTO Multimodal transport operator means any person who on his
Transportation own behalf or through another person acting on his behalf
concludes a multimedal transport contract and who acts as a
principal not as an agent or on behalf of the consignor or of the
carries participating in the multimodal transport operations, and
who assumes responsibility for the performance of the constract.
The main aim behind the concept of establishing MMLPs is as below -

Notes
MMLPs expected to bring down losistics costs by performing 4 functions:
 Freight aggregation and distribution
 Multi Modal freight transportation
 Storage and Warehousing with modern, mechanised warehousing space satisfying

the special requirements of different commodity groups
 Value added services (VAS) such as customs clearance with bonded storage
yards
TERMINAL EXERCISE
1. Bring out the difference between Multimodal and Intermodal shipping, giving
the benefits to the movement of freight.
2. How can an MTO be registered and what role does he play in the movement of
freight?
3. Why are freight forwarders needed and how they help in the smooth movement
of freight?
4. What role do MMLPs have for reducing logistics cost?
5. Discuss the role of MMLPs as envisaged in the LEEP policy of the Transport
Ministry.

A1. Intermodal Shipping can be defined as the movement of cargo from origin to
destination using several modes of transportation where each mode is operated
by a different carrier, and each leg requires an independent contract. Though
this system uses multiple carriers for a single journey with each leg handled by a
separate transport carrier it still has some benefits like better chances for
100 Senior Secondary

negotiating with different companies. Types of

Transportation
a) Shippers can choose carriers to take advantage of lower rates for each
transport leg;
b) Shippers gain flexibility and specialized handing of loading and unloading

goods at different ports;
c) Shippers reduce their carbon footprint by choosing environmentally friendly

carriers; Notes
d) There is increased security of the products being transported; and
e) Shippers have more access to equipment and can better control capacity
and selection of transit schedules.
A2. The use of transportation management system (TMS) which has the capability
to coordinate with and between transport carriers and suppliers, along with
freight rates and contract management will help intermodal and multimodal
transportation to ensure door-to-door tracking visibility, ability to perform routing
scenarios in such a way that will bring down shipping costs and transit times.
A3. Multimodal transportation can offer the most efficient modal- mix that optimises
lead times, reduces inventory costs and freight costs. It also results in increased
environmental sustainability, reducing the transportation carbon footprint.
5.2
A1. Any entity, be it a company, firm or propriety concern engaged in the business
of transportation or freight forwarding in India or abroad becomes a Multimodal
Transport Operator and comes under the purview of the Multimodal
Transportation of Goods Act, 1993 and needs to be registered.
A2. (1) shipping Companies
(2) Freight Forwarding Companies
(3) Companies with a turnover of Rs. 50 lakhs or more are eligible for registration
as MTO.
A3. A forwarding forwarder / agent is a person, agency, or business involved in the

collection, shipment, and delivery of goods. Therefore, a freight forwarder, is
the person (physical or legal) responsible during the international transport of
goods, with the aim of ensuring that transport is carried out safely, efficiently
and profitably.

Types of A4. Benefits are:

Transportation
 Advice on the most cost-effective and efficient alternative (get better prices).
 Preparation and presentation of the documentation required for export.
 Accomplishment of the procedures to pack and load the merchandise.
 Management with customs agents abroad to ensure compliance with

regulations.
Notes
5.3
A1. MMLPs are defined industrial areas, regional, national and/or international where
multiple activities relating to transport, logistics and the distribution of goods are
carried out by various operators who are just owners or occupants of buildings
and facilities like warehouses, break-bulk centers, storage areas, offices, car
parks, etc.
A2. Logistics park management ensures improved general maintenance, landscaping,

security & waste control.
 State-of-the-art warehousing & cold storage facilities can also be provided
 They promote growth in freight generation and movement.
A3. According to the LEEP policy the MMLPs can provide:-
(i) infrastructure for enabling seamless multimodal freight transfer;
(ii) mechanized warehouses and specialized storage solutions such as cold

storage;
(iii) mechanized material handling and intermodal transfer container terminals,
and bulk and break-bulk cargo terminals;
(iv) value-added services such as customs clearance, bonded storage yards,

quarantine zones, testing facilities, and warehousing management services;
and
(v) late-stage manufacturing activities such as kitting and final assembly, grading,
sorting, labeling, and packaging activities, reworking, and returns
management. Furthermore, MMLPs could improve the utilization and
performance of inland container depots (ICDs) and container freight stations
where they exist.

Introduction to Consolidation MODULE - 2
Consolidation
6 of Cargo
INTRODUCTION TO
CONSOLIDATION Notes
Consolidation is a fairly simple thought on the whole: it’s when goods from one or
several shippers is merged into one shipping container. Consolidation refers that
shippers obtain to pay bulk rates, since they are shipping commodities all at the same
time instead of forwarding a lot of smaller shipments separately. In general, consolidation
is a fantastic alternative for consignor s who only have less pallets of cargoes or
smaller shipments they need to package and ship in one container. Sometimes, these
consignments arrive from multiple locations or shippers, and require to be merged to
avoid paying higher charges. When a consignor chooses to consolidate shipments, the
cargo is brought to a consolidation warehouse (generally the one closest to the point
which has the most commodities to ship), put onto pallets, and organized into one
container.
LEARNING OUTCOMES
 explains the concept of consolidation;
 compares and contrasts sea and air consolidation;
 categorizes different cargo consolidation methods;
 analyses shipment consolidation in supply chain;
 designs innovative techniques for cargo consolidation.

MODULE - 2 Introduction to Consolidation
Consolidation
6.1 WHAT IS LTL FREIGHT CONSOLIDATION?
of Cargo
Look at the picture below. You can see that the goods received from different
manufacturers, which are Less than a Truckload (LTL) are collectively packed into
one truckload and then taken directly to the different retailers. This is the essence of
LTL.
Notes RTA/KD Manufacturer
Case goods Manufacturer
Upholstery Manufacturer
Cargo Consolidation
Services Terminal
Furnishings Shop
Direct Delivery to Retailer
Fig. 6.1: Consolidation

Why is it important to learn about LTL? It is important because there are several
benefits of using LTL. These are-
Decrease LTL Freight Cost- The distinctive savings a consignor can expect ranges
from 10% to as high as 50%. The wide difference in savings is derived from the
consignor’s LTL freight characteristics. The savings is received in the procedure of
consolidation, where the trailer load line haul charges are significantly lesser than the
line haul charges of hub and spoke LTL model.
 Costing Simplicity - Instead of utilising difficult algorithms to determine LTL

charges for each consignment, consignors do very simple pricing with local cartage
and trailer load costs assigned by either pallet or density.
 Enhanced Transits -In adding to the functional time savings of tendering shipment,
if the LTL consignment is given to an appropriate LTL service provider, they will
make the delivery and consignors will experience faster delivery times because
a consignment does not move through the LTL hub and spoke network.

 Lesser touches thus decreasing claims -With the LTL cargo consolidation, goods Consolidation
are touched only fewer stops as it reaches before its destination. Normally with of Cargo
a LTL shipment consolidation, a consignment is moved through a single trailer
with single cross docks into its journey and avoids the opportunity of associated
risks.
 More transparency on consignment status - under a consolidation method

multiple consignments move together and the majority of the time these move
on a single tracking number system. These cargoes will be opened at final Notes
distribution in front of consignees which leads to transparency.
 Less congestion on transporting and receiving docks- Dock congestion assistance

is one of the advantages which is often overlooked and enclosed as a freight
consolidation remedy. Since fewer LTL carriers are involved in the distribution
and only a single trailer is involved, the shipping and receiving docks are far less
congested. This offers smoother, more timely and precise dock activities.
 Essential of fewer carrier relationships - Due to TMS technology and access to

pool spot docks for the consolidation and deconsolidation of shipment, and in
order to get help with their freight consolidation activities most of the consignors
utilize a logistics service provider (LSP). These LSPs will operate via its managed
transportation services. This means that the logistics service agents will manage
all their carrier relationships which is required in the consolidation.
 Decrease accessorial charges -LTL consignments are well known for their
capability to direct accessorial charges. By converting these consignments from
multiple LTL’s to a single trailer load, the opportunity for the prospect of having
an accessorial charge evaluate is dramatically decreased.
 Sustainability- The carbon footprint is reduced under the LTL consolidation

because there are lesser trucks are involved in the process. Further by
introducing the intermodal, there is improvement in the line haul. Moreover, it
reduces not only the carbon footprint , but also road congestion.
 Superior service -The final outcome in all the advantages just listed is a superior
level of service for all stakeholders, at a decreased price. Introduction of logistics
agents further simplifies the operation for the consignor. These agents offer regular
freight consolidation by enabling their team to develop skill on customer cargoes
routes and create good relationships with the DC pool agents that will be handling
their customer last-mile pick-up and / or distribution.

Consolidation Characteristics of LTL Consolidation

of Cargo Generally speaking, not every consignor will use a LTL consolidation method. So let’s
take a quick look at the two main characteristics which essentially help in deciding
whether the consolidation method is an alternative for the company.
Off-site consolidated Multiple LTL orders sent shorter (cheaper) distance to central
consolidation center. Remaining distance to distribution center
distribution center discounted at full truckload price, consolidated
Notes with other customers.
Distribution Center
Distribution Center
Distribution Center
Distribution Center
Fig. 6.2 : LTL consolidation
Volume & Frequency

The foremost characteristic of a successful LTL pool consolidation method is a high
frequency of LTL consignments. Here it does not mean high volume of consignments.
No doubt, the volume enhances the opportunity of running a consolidation on a certain
day, but it is not absolutely essential for a consolidation method. So based on this, the
consignors should look for a hybrid of LTL consolidation, standard LTL consignments
and to be operated through a logistics intermediary.
Geographic Density
The consignor’s LTL volumes have a geographical density in which the shipment can
be routed regionally to then make the “last-mile delivery”. Moreover, in joining hands
with logistics service providers, it could easily be executed through their network of
cross dock agents located in other regions.

1. Freight Consolidation decreases freight cost - True / False.
2. LSP stands for ______ .
3. With the LTL cargo _____, goods are touched only fewer stops

4. The foremost characteristic of a successful LTL pool consolidation method is a Consolidation

____ frequency of LTL consignments. of Cargo
6.2 WHAT IS CARGO CONSOLIDATION?

Cargo consolidation is quite a simple notion. It is the process where the goods from
one or multiple consignors is united into one shipping container. Consolidation refers
to the process where consignors obtain an economical rate for shipping their goods
Notes
along with other shippers. In general, consolidation is an economical alternative for
consignors who only have a smaller pallet of cargo or smaller consignments they need
to pack and transport in one container. Sometimes, these consignments arrive from
multiple spots or suppliers, and require to be united to avoid paying higher rates.
When a consignor selects to consolidate consignments, the goods are brought to a
consolidation container freight station, packed onto pallets, and organized into one
container.
Fig 6.3: Cargo consolidation
 Need ot Consolidate at Origin

Basically, if an exporter wants to increase their profitability, consolidation is the
right method for them. Consolidation offers flexibility and alternatives when they
planning for their consignments. For instance, as previously pointed out, by
merging consignments the consignors can avoid sending multiple individual
consignments. So we can say, consolidation saves both time and energy and
increases profit.
 Merits of Consolidation
1. Cost efficiency: For consignors who do LCL shipments, the consolidation’s
cost efficiency is one of its most significant benefit. It will facilitates an exporter
by saving money by obtaining the bulk rates. Merging consignor orders means
that they can purchase from separate vendors and obtain their goods which is
sent through a consolidation warehouse and transported together at a given

Consolidation time. The capability for a consignor business is to make more regular and lesser
of Cargo purchase orders which will make sure to have more cash flow to work with
overall.
2. Merging smaller shipments: In addition, some vendors need full container

load for minimum orders. If an exporter business doesn’t require a larger orders
like this, then the consolidation offers them the choice of working with these
vendors as they will be able to merge all smaller shipments from each and transport
Notes in one container. By merging these cargoes, the manufactures can also order
from vendors who wouldn’t generally sell minimum quantities internationally.
For instance, a vendor may have a minimum order quantity of 10,000 units
when transporting internationally, but might permit an order of 100 units if
transporting domestically. In these circumstances, consignor will be be able to
place numerous smaller unit orders and with the assistance of consolidators,
merge them into a full container.
3. Hiding identity of vendor: in some businesses, consolidation can assist in

hiding the identity of their vendor or manufacturer. In this case the vendor
information can be confined when goods are drop-shipped from consolidation
store houses straight away to consumers to avoid having them begin working
directly with their vendor.
4. Stock flexibility: Consolidation offers superior transportation, timeline, and

stock flexibility in a business. Goods that are stored in a consolidation store
house provide fluid cargo-ready dates, because the consignments are ready to
move just when a consignor needs them. Actually, it also means that one can
free up inventory space, prevent dead stock at domestic store house, and evade
the domestic issues of freight distribution.
5. Control of cargo: Finally, consolidating the consignments facilitates control of

the cargoes into a consignor hands. For instance, if quality control find mistakes
with an order that’s already been transported to a destination close to consignee,
they have to wait to get replacement parts or consignments sent to them.
Consolidation permits quality control measures in advance at a trusted store
house which is closer to their supplier, which decreases the chances of losing
time as well as control owing to issues with that order.
1. Consolidation offers a set of flexibility - True / False.

2. _____ offers superior transportation. Consolidation

of Cargo
3. Consolidating the consignments will facilitate to put the _____ of the cargoes
into a consignor hands.
4. The consolidation’s _____ efficiency is one of its most significant benefit.
6.3 CONSOLIDATION IN WAREHOUSING

So far you have studied about consolidation. Earlier, you have also learnt about Notes
warehousing. So, how does consolidation apply to warehousing? Let us find out here.
Warehousing is a method that brings together small consignments from a number of

vendors in the similar geographical location. These are then united into larger, more
economical, shipping consignments intended for the same spot. A consolidation store
house or warehouse is a third-party storage facility where small consignments are
combined into bigger and more economical trailer loads bound for a similar location.
The consolidated loads may also go through zonal distribution before being distributed
to the end-users.The illustration below shows how a freight consolidation warehouse
functions.
FREIGHT SHARED FULL

CONSOLIDATION TRUCKLOAD SHIPMENT
FACILITY
Fig 6.4: Freight consolidation
6.4 WHEN SHOULD A FIRM USE A CONSOLIDATION

WAREHOUSE?
A firm can use a consolidation warehouse in the following situations-
1. Geographical resemblance among suppliers

If a firm has multiple vendors situated in the same geographical area, using a
consolidation warehouse can increase their cost- and operational-effectiveness.
This is because this sort of warehousing pulls together numerous shipments from
several suppliers and unites them into larger and more economical consignments.
These consolidated loads are then transported straight to the destination.

Consolidation 2. Less-than-Truckload (LTL) distributions

of Cargo Through this sort of warehousing, a firm can often ship LTL loads to their
consumers in a cost-efficient and secure manner. This is because consolidation
warehousing consists of combining small consignments into a larger load, which
is then directly distributed to the final destination with nominal handling along
the path.
Notes 3. Keep up with fluctuations in consumer demands

As consumer demands for some goods can fluctuate over time, storing them for
long periods can decrease their overall worth and increase their inventory carrying
charges. Through consolidation warehousing, they can source, consolidate, and
transport such goods per demand and lesser inventory levels.
Having learnt of the conditions under which consolidation warehousing is used,

can you now tell what are the benefits of consolidation warehousing?
6.5 BENEFITS OF CONSOLIDATION WAREHOUSE

The essential benefits of a warehouse consolidation are as follows-
 Higher competence: If a firm’s consignments always arrive at one particular

location, they will extensively increase their overall effectiveness. This is
particularly significant if they have several suppliers situated in the same location,
as they are not required to continually go to and from different spots to manage
all their consignments.
 Decreased Shipping Costs: When competence is higher, prices are generally

lower. Administering all their warehouse activities in a single facility helps a firm
to decrease their costs the most. This will significantly decrease their travel time
and increase accuracy. It will augment efficiency and safety, and decrease errors
and downtime.
 More regular shipping: With consolidation warehousing, a firm can transport

smaller orders more regularly while decreasing costs. These amenities can facilitate
the storage and consolidation of lesser consignments of shipments and their
transportation as per their consumers’ expectations. This results in enhanced
flexibility for their freight shipping requirements.
 Enhanced customer satisfaction: While superior efficiency and lesser

prices bear great consequence for a firm business, everything they do boils
down to one thing- that is , satisfying their consumers. If they always offer

remarkable consumer service, people will keep coming back to purchase from Consolidation
them. of Cargo
 Reduced handling and claims: Since the consignments are merged and
shipped straight away to the final destination, this type of warehousing reduces
the material handling of cargoes along the path. With lesser touches, the risk of
cargo damage is considerably lowered, which in turn, decreases the possibility
for claims.
Notes
 Lower levels of stock needed: Consolidated warehousing is a collective
attempt by a number of vendors. With private warehousing, sellers must be
capable to fill a complete warehouse. If they cannot accomplish a full stock
level, they are basically wasting space as well as money. With the consolidated
warehousing method the space is shared among the inventory of several vendors.
 Reduced Fuel Emissions: Since smaller shipments from various suppliers are
consolidated into larger consignments, this sort of warehousing utilizes lesser
number of trailers for transportation. The outcome is decreased fuel emissions,
expenditures and ultimately, ecological friendly logistics.
 Reduced Risk: A consolidated warehouse can lower the risk for a firm
considerably. Private warehousing can be luxurious, which needs a large capital
venture. A firm will have to invest a huge sum of money without assured success.
If not planned properly, a trade can lose that huge investment and put their
complete wellbeing at risk.
Consolidating a firm warehouse operations into a single facility can save their time and
increase their operation’s effectiveness, decrease errors and reduce prices. Most
prominently, it enhances consumers’ satisfaction with their business, enabling them to
increase their ROI and construct sustainable growth.
6.6 CONSEQUENCES OF USING A CONSOLIDATION

WAREHOUSE
Company or
Plant A
Customer
Company or Consolidation A B C
Plant B Warehouse
Company or
Plant C
Fig. 6.5: Consolidation warehouse
Consolidation  Incorrect & delayed order fulfillment: Using a consolidation warehousing

of Cargo that lacks suitable coordination can lead to imprecise and delayed order
fulfillment. This sort of warehousing requires regular coordination between
vendors, processing centers, transport firms, etc., to make sure that cargoes
are distributed to the destination in a perfect and timely manner.
 Maximum time spent on planning & organizing-:This sort of warehousing

consists of regular coordination, in-depth planning for consolidation and
Notes deconsolidation of consignments, etc. Hence consolidation warehousing requires
more time allocated for planning, organizing, and implementing a competent
operation.
To evade the disadvantages of using a consolidation warehouse highlighted above,

it is suggested that a trustworthy logistics service provider is selected who can
competently carry out all essential operations.

1. ______ is a place where commercial cargoes are stored.
2. A consolidated warehouse can lesser the risk for a firm -True / False
3. Consolidating a firm ______ operations into a single facility can save their time
4. Consolidated warehousing is a ______ attempt by a number of vendors.
6.7 MERITS AND DEMERITS OF CARGO CONSOLIDATION
I. Benefits of cargo Consolidation

In an progressively more dynamic and customer-driven market, load
consolidation has become increasingly more widespread. There are numerous
good reasons. Some of them are-
1. Decreased Shipping charges: The first benefit of consolidating freight is

lower costs. When a consignment only fills up part of a trailer, a firm is still
covering the fuel surcharge the driver’s salary, the scheduling, and other
charges for the full capability. However, by raising the volume, a firm can
reduce the price per unit.
2. Decreased freight damages: Freight which is palletized and correctly

packed together is far less likely to be jostled and spoiled. Also, LTL

freight on a customary path will be moved regularly owing to multiple stuffing Consolidation
and de stuffing points. When a consignment is consolidated with others en of Cargo
route to the similar final destination, these “in-between” stuffing and de
stuffing stops are eliminated.
3. Decreased emissions : In addition to decreasing the fuel prices, using

lesser trucks also leads to lesser fuel emissions. Instead of spreading lesser
shipments across several trucks, a shipper can merge everything into a
single truck thereby efficiently slashing their carbon foot print. Notes
4. Streamlined transport: Consolidated LTL freight executes much like a

trailer load shipment, in that there are no in-between stops. This streamlines
transit times, which is precious in the quick-moving world of retail distribution
chains where direct times are often short.
5. Lesser dock congestion: A congested dock can generate serious problems

for sellers from detention times to late consignments. By consolidating the
LTL freight, lesser trailers are used that lessen backups and delays. This
benefits the drivers as well, because the last thing they need is pointless “
wait time” counting beside their hours of service.
6. Transparency: Tracing a large volume of LTL consignments presents

challenges, as each has its own distinctive tracking number. With consignment
consolidation, numerous consignments spend the majority of time on a
solo tracking number merely breaking out separately for the final location.
II. Drawbacks of cargo Consolidation

However, for all the benefits of consolidating consignments, there exists few
drawbacks as well.
1. Scheduling: The sum of communication needed for a freight consolidation

is clearly far higher than that for more customary freight. Until a structure is
in place, it can take a lot of effort to hold both carriers and shippers on the
same page. Sometimes, rescheduling can lead to confusion and a great
deal of lost time, so appropriate planning is essential.
2. Lesser lead times: When customer demand is high, the lead times have
to be kept low. This creates enormous challenge for freight consolidation.
Retailers anticipate immediate order fulfillment so, it calls for a strategy
that permits quick and organized consignment consolidation – either inside
or with other sellers.

Consolidation 3. Replicating domestic strategy for global freight consolidation: The

of Cargo same policy which is used domestically can also be replicated on the global
side of the distribution chain. A less than container load (LCL) is the global
equivalent of an LTL consignment. The major difference between LCL and
LTL consignments is the price. Logistics service providers handle several
global shippers and can offer cargo consolidation remedies.
4. Making Freight consolidation work for business: Consolidated

Notes consignments is an extremely useful method for shippers and logistics carriers
alike. Similarly, it’s never been more required than it is now. As the economy
booms and technology leads to progress, the reasons to execute a shipment
consolidation policy will only increase.

1 Cargo consolidation decreases freight charges -True / False .
2. Consolidated consignments is an extremely useful method for customs brokers

- True / False
3. ______demand is at an entire time high, which refer that the lead times are at an
entire time low.
4. The most clear merit to consolidating freight is ______ costs.
6.8 TYPES OF CARGO CONSOLIDATION
Cargo consolidation
Consolidation of goods is done through shipping containers. These are generally
standard-sized and can be shipped over long distances. They can be transferred from
one form of shipping to another, without opening. This type of shipping with containers
aids the processing of the consignment. While the containers are numbered, they are
easily tracked through computers.
Shipping with containers helps in preventing congestion in ports. The containers are
sealed and therefore it safeguards the transported goods from damage and theft, since
the cargoes inside are not visible.
So, we can summarise the advantages of consolidation as-
 The paths of groupage shipment can be used

 Consolidation is efficient in terms of costs Consolidation

of Cargo
 Through consolidation a firm can ship any type of goods, palletized or non-
palletized
 Transportation methods are standard and assure security
Let us now learn about the categories of consolidation.
Categories of Cargo Consolidation Notes

Goods containers for consolidation are of two kinds- FCL and LCL containers.
Exporters can ship their cargoes in separate containers or consolidate the cargoes of
numerous vendors in a single container if those are of a lesser volume.
Your Shipment Other Importers Shipments
Fig. 6.6: FCL/LCL
1. FCL ( Full Container Load):

Transportation is moved out both in complete, opened or refrigerated containers.
The entire container is packed with cargoes. Further in these sort of shipments
goods tracking is done easily throughout the time of the transportation. This
kind of transportation has lower service charges and one can do regular / weekly
shipping.
You may wonder what are the different types of FCL? Where are they used? They are
used-
 From factory to factory or from origin port to destination port
 Shipping with a mixture of modes of transport such as land by train, ferry and/or
ocean transport

Consolidation  Shipping of cargoes with special features such as oversized cargoes, goods
of Cargo which come under customs control, groupage shipments of exhibits etc.
2. LCL (Less than a container load)
Notes
Other Importers
Your Shipment
Shipments
Fig. 6.7: LCL

This type of consolidation is used to combine small groupage consignments. The cargoes
are shipped in the similar container despite being from diverse traders. Electronic
processing of documents assists traders in tracking the position of the shipment easily
at any time. LCL attracts lower shipping rates and lower transit time. What is LCL
shipping used for?
 Groupage consignments of partial loads for export and import from and to several
locations
 Weekly shipping
 Shipping of cargoes with unique characteristics

1. Goods carrying containers for consolidation are divided into _____ .
2. LCL shipping offers door to door services - True / False
3. Consolidation of goods is carried through an ______ shipping containers.
4. Shipping with containers assists in avoid the _____ in ports
6.9 SEA AND AIR CONSOLIDATION

The two most familiar forms to ship cargoes across continents are Air and Ocean
freight. One needs to consider their advantages before selecting one or the other.

Air Freight vs Ocean Shipping: Determining the perfect form of transportation for Consolidation
any firm needs ongoing analysis. A one-time evaluation of a firm’s distribution chain of Cargo
requirements won’t be adequate to keep it competent and cost efficient. There are
various factors to consider while selecting air freight or sea shipping.
Let us find out what these factors are.
Notes
Fig. 6.8: Air freight and sea shipping

Price is based on freight characteristics: It is generally perceived that sea shipping
is more economical than air freight. A firm needs to see how each is billed. Air freight
is generally billed on chargeable weight in nature, which is a metric intended by integrating
the weight and size of the shipment. In ocean transportation, shipment weight is not
generally factored in. Sea shipping is billed by container- generally a full standard
container (20',40' and 40’hq ) is charged a flat price where as the Less than container
loads (LCL) are billed by calculating the cubic meter. For huge, heavy consignments,
shipping via sea is frequently much more economical. But as consignment sizes reduce,
the margin among the air and ocean charges also decreases. But the real price of
transportation is only the beginning.
Speed differs greatly by type: Air freight is quicker than ocean transportation,
hands down. Sea shipments can at times take weeks to arrive. Air freight can arrive at
its locations in only a day or two. Whereas the ships are getting quicker and sea
shipping paths are being continually optimized, there is still no beating the rapidity of
air freight. But before transporting everything by air right away, take the time to
strategically plan the shipping strategy. It will generate long-term efficiency and save
money.
Reliability can be gained through both modes: Airlines are normally superior at
handling schedule changes than sea carriers. Aspects like weather circumstances can

Consolidation pitch off airline schedules far more simply than sea journeys, but flights be inclined to
of Cargo be rearranged and rescheduled rapidly and competently. In addition, there are usually
multiple flights each day between major cities, while ships tend to leave weekly. This
does not necessarily mean that air freight is always more reliable than ocean freight.
When ships are thrown off schedule, they are inclined to require a few days to get
back on top of their operations. On the other hand, ongoing alliances among ocean
carriers can construct trustworthiness and integrity for ocean service, which makes
Notes sea shipping an appealing alternative even for some time receptive freight like fresh
products, fashion, and automobile parts.
Difficulty of ocean association may affect service: Whereas the alliances among
ocean carriers create increased trustworthiness, those similar alliances can cause
obstacles. For instance, if three sea carriers work together, one week they may have
a ship from one carrier, and another week they have the similar ship but a different
hauler. Every carrier has their own set of regulations about what goods are permitted.
So even by transporting the similar cargo on the same ship every week, if a diverse
hauler is in charge, there is a prospect that their cargo could be denied because the
regulations have changed.
Air freight or sea shipping- how to decide? : Naturally, the number one reason to
decide air freight is the rapidity of distribution. Moving goods through air permits a
short timetable as compared to ocean service. This is mainly beneficial when shipping
goods with short shelf lives. Yet, the cost for quicker service is frequently higher shipping
charges. It’s up to a firm to decide what is suitable for their shipping strategy.

1. Ocean shipping is always economical than air freight - True / False
2. Air freight is ______than ocean transportation.
3. The number one reason to decide air service is the rapidity of ______.
4. _______ are normally superior at handling schedule changes than sea carriers.
6.10 TYPES OF CARGO CONSOLIDATORS IN

CONSOLIDATION
From supplying cargoes to a local store to shipping goods across the world, businesses
require to determine the best path to distribute their cargoes. The process of transporting
and distributing goods has never been simple. Yet, because of the augmentation of

diverse party logistics (PLs), selecting the best supply method for a firm business may Consolidation
seem more complicated than ever. PLs are symbolized using numbers, and each stage of Cargo
of PL becomes more difficult. From 1PLs to 5PLs, trades have a lot to consider
before they conclude their distribution chain. Here is a breakdown of each stage of PL
and why trades can gain from them.
Notes
Fig. 6.9 Diverse party logistics

First-party logistics (1PL): First-party logistics (1PL) are considered the simplest
of all transporting methods. The 1PL manufacturer supplies their goods themselves,
basically becoming the manufacturer, vendor, consignor, and receiver of the goods.
Most of the retailers fall under this group. For instance, a trade that generates t-shirts,
transports them to their stores, then sells those products at their store is a 1PL. This is
the reason the most 1PL trades are small in nature and they focus only on transport
and distribute locally.
Second Party Logistics (2PL): One limitation of 1PL logistics is that the manufacturer
must utilize their own transportation. For bigger businesses, this could mean owning
and managing a fleet of trailers, planes and vessels. To avoid the cost of running their
own vessel, businesses often invite a second party to transport for them. This is an
illustration of second-party logistics (2PL).
Third Party Logistics: Trades may bring in a second party to take over their
transportation part, but the more difficult the shipping and distribution are, the less
cost-efficient a 2PL becomes. In order to overcome 2PL inefficiencies, trades often
elect to bring in a third-party logistics (3PL) agents. These 3PLs offer complex logistics
services to keep distribution chains running efficiently. In a 3PL joint venture, the business
maintains and manages the distribution series while the 3PL finds paths to enhance the
supply chain.

Consolidation Fourth Party Logistics: Fourth-party logistics (4PL) are like the 3PL, but take
of Cargo things a step further. If a firm elects to utilize a 4PL provider, they will be surrendering
control of the entire distribution chain and letting the 4PL take over. Utilizing a 4PL has
certain merits. 4PL agents are professionals at what they do, hence a firm need not
assign resources to hire and train distribution chain managers. 4PL agents also manage
distribution chains for other trades, and by pooling all their assets together, can decrease
shipping and warehousing charges even further.
Notes Fifth party Logistics: Whereas most trades won’t utilize fifth-party logistics (5PL),
it is significance to know what they do. Moving beyond 4PLs, 5PLs manage each
step of the distribution chain, from manufacturing to delivery. The goal is to generate
the most effective distribution chain possible by making each individual step as
competent as it can be.
Which PL Is Best?
The million dollar question is: Which PL is finest? Whereas no PL is appropriate for
every trade, most trades will incline towards a 3PL or 4PL. A 5PL is just too huge
(and expensive) for several businesses to take benefit of. Whereas 1PLs and 2PLs
seem to be perfect for few trades, committing their trades to one of these could be an
error.
1. PlL stands for ______.
2. Fourth party logistics is also referred as ______.
3. One limitation of 1PL logistics is that the manufacturer must utilize their own
_____.
4. To avoid the price of having to run their own vessel, businesses often invite in a
_____ party to transport for them.
6.11 DO’S AND DON’TS OF FREIGHT CONSOLIDATION

The process of freight consolidation begins when numerous small consignments moving
to the same spot are combined. This provides a number of merits to consignors and
customers when used properly. By combining the consignments, the freight forwarder
saves on fuel charges and the consumer saves on entire shipping charges. But, when
wrong consignments are bundled together, it can result in chaos.

Here are a few do’s and don’ts of freight consolidation- Consolidation

of Cargo
1. Freight that should be consolidated
 Commodities packaged on skids or pallets that is simply loaded and does
not need extra care.
 General commodities
 Products such as textiles, garments, auto parts as well as technology that is

Notes
correctly packaged and suspect to be time sensitive or hamper with other
goods.
 Freight with stock prices that outweigh transportation charges generating a

sense of necessity such as with modified computers or goods that are need
to be transported within a certain sum of time.
2. Freight That Should Not Be Consolidated

 Fragile or bulky merchandise: The saving in cost through consolidation is
nullified if the dimension or fragility of the freight needs extra handling and
time to avoid damage.
 Freight that needs temperature control: Anything that needs accurate

temperature to avoid spoilage or contamination should always be transported
separately from other goods.
 Goods prone to customs inspections: This is particularly true of automobiles

and boats where a VIN number verification can delay a complete container
from shipping.
 Hazmat shipment such as chemicals that can interrelate or cause hazardous

reactions if there is a calamity.
Once a firm determines that their merchandise is appropriate for freight consolidation,
it is very important to select a reputed freight forwarder. An experienced forwarder
has the capability to decrease failures and coordinate alternatives if an interruption
does occur. Moreover, a trustworthy forwarder will recognize cargoes which require
special packaging and consideration in order to decrease the hazard of damage.
Freight consolidation has the potential to decrease shipping prices for several
companies, but should only be executed after careful planning and consideration.

Consolidation
6.12 PREPARING COMMODITIES FOR INTERNATIONAL
of Cargo TRANSPORTATI ON
For trades that transport internationally, return cargoes owing to damage in transmit
can be a massive burden in terms of time as well as money. Here are few suggestions
to equip a firm’s products for international parcel transportation.
1) Ensure that goods are ready for the pressures of global shipping: Afirm
Notes should scrutinize how protected their cargoes are throughout the complete
journey. This is mainly the case for bigger goods. It’s not merely about making
sure that the cargoes are safeguarded, but that it is ready for what global shipping
throws at it. Ensure that-
 cargoes are stackable. both confined and also capable to be placed beside,
on top of and against other cargoes without spoilage
 cargoes can hold out being handled, stuffing and lifting with a forklift
 cargoes being sent by airplane can deal with tilting all through takeoff and
landing
 cargoes being sent by ocean can deal with the motion of the sea
 cargoes being sent by surface are adequately packaged to withstand

shaking or shocks during surface transport as well as mechanical handling.
2) Accurate Packaging : Firm sending their parcels globally need to invest in

reinforced package boxes as a minimum standard. The extra protection reduces
damage during the journey. This can also be ensured by making sure that the
fragile cargoes are labeled as such on the outside of the packing so couriers
take care while handling. Firms may think about crating or palletizing the cargoes,
whether for a LCL or full shipping. This will enhance the structural protection of
their larger and heavier cargoes.
3) Internal packaging and taping: Even if a firm uses parcel boxes, palletize or
crate their cargoes, they must stress on internal packaging. Packing peanuts or
air cushions can be used to fill the small spaces in parcel boxes. More extensive
internal packing may be required for bigger cargoes to reduce the empty spaces.
So, no matter how strong the box is, if few and/or fragile commodities are kept
without filling the free space, there is strong possibility of damage.
4) Verify the maximum weight of commodities:It is very important to record

the weight and dimensions of the commodities during and after packaging. This

helps in selecting appropriate box or crate for the weight of the cargo, preventing Consolidation
damage or accidents. This is particularly imperative when sending huge parcels, of Cargo
which owing to their sheer weight, require boxes or crates to handle heavier
cargoes.
5) Prefer functionality : There are several packing alternatives which overlook

safety. The soft packaging methods such as sacks and baskets are rising in
popularity. While the consumer might like how the cargoes are delivered, it
becomes meaningless if the cargo inside is damaged. If softer packaging is used, Notes
ensure that it protects the contents, holds the cargo together, and prevents
tampering or theft.
6) Listen to consumers : Finally, and most significantly listen to consumers! If

consumers complain that cargoes arrive damaged or missing, analyze why your
firm’s packaging may not be working and improve it. Understanding a firm’s
consumers is particularly significant if they are considering launching a new
commodity with potentially difficult packaging necessities. Identify a firm’s weak
points and where their present packaging falls short to plan and stop losses with
innovative products.

1. The _______methods are rising popularity in several industries.
2. ______ goods cannot be consolidated with general cargo - True / False
3. If a firm is adding fragile commodities inside without filling the adjacent space,
they are extremely increasing the possibility of ______.
4. Commodities packed on _____ that is simply loaded does not need extra care.

 Consolidation is a logistics policy where a consignor merges multiple shipments
within a specific geographic region into a single consignment container that is
then line hauled to a destination spot.
 Cargo consolidation is quite a simple notion on the whole. It is the process

where the goods from one or multiple consignors is united into one shipping
container.

Consolidation  Warehousing is a method that brings together small consignments from a number
of Cargo of vendors in the similar geographical location and unites them into larger, more
economical, shipping consignments intended for the same spot.
 A consolidation warehouse is a third-party storage facility where small

consignments are combined into bigger and more economical trailer loads bound
for a similar locations.
 Goods containers for consolidation are of two sorts namely FCL and
Notes
LCL containers. With these type of containers, the cargoes are shipped to
different locations.
 A cargo consolidator is a company that specializes in combining cargo

consignments belonging to multiple consignors into full container loads. There
exists different types of agents ranging from 1PL to 5 PL.
 Once a firm determine that their merchandise is appropriate for freight

consolidation, it is very important to select a highly regarded freight forwarder
with solid knowledge. An experienced forwarder proactively controls stuffing
at not only the origin, but also during journey and destination.
 A firm which send cargo internationally should pack and tap properly, verify
weight and dimension, prefer functionality and listen to consumers.
TERMINAL EXERCISE
1. Describe ocean consolidation in your own words.
2 Who is a logistics service provider?
3 What is the difference between Less-than-Truckload (LTL) and Less-than-

container-load (LCL)?
4. How is warehousing useful?
5. Write one function of Fifth party logistics.
6. Bring out the significance of LTL freight consolidation.
7. Discuss the categories of cargo consolidation
8. When should a firm use a Consolidation Warehouse?
9. List the Do’s and Dont’s in freight consolidation.
10. Sketch the confronts of consolidated shipments.

11. Explain the role of warehousing in consolidation. Consolidation

of Cargo
12. Spotlight the merits of consolidation.
13. Distinguish between Air and Ocean consolidation.
14. Sketch the types of cargo consolidators involved in consolidation services.
15 How do you prepare cargoes for international transportation?
Notes
6.1
1. True
2. Logistics service provider
3 Consolidation
4 High
6.2
1. True
2. Consolidation
3 Control
4. Cost
6.3
1. Warehouse
2. True
3. Warehouse
4. Collective
6.4
1. True
2. False
3. Customer

Consolidation 4. Lesser
of Cargo
6.5
1. Two
2. True
3. ISO
Notes 4. Congestion
6.6
1. True
2. Faster
3. Distribution
4. Airlines
6.7
1. Third party logistics
2. 4PL
3. Transportation
4. Second
6.8
1. Soft packaging
2. Temperature controlled
3. Damage
4. Pallet

Consolidation: Importance & Limitations MODULE - 2
Consolidation
7 of Cargo
CONSOLIDATION: IMPORTANCE &

LIMITATIONS Notes
Most commonly seen in Global export, consolidation of cargo is quite a straight-

forward model. It comprises packaging, or bundling several small consignments into
one huge shipment for distribution to the same final destination. Instead of individual
organizations paying substantial shipping charges and dealing with slower transporting
speeds, consolidation (sometimes also referred as cargo / freight consolidation) puts
commodities from many shippers into one shared shipping container. Further
consolidated shipping permits shippers to earn favored rates and assists to optimize
distribution chain logistics by saving time as well as decreasing cost.
LEARNING OUTCOMES
 enumerates the significance of consolidation in supply chain;
 outlines the procedure of consolidation;
 suggests remedies for consolidation confronts;
 predicts opportunities in cargo consolidation;
 plans and implements freight deconsolidation.
7.1 PROCESS OF CONSOLIDATION

Cargo consolidation unites the small consignments into one big container for distribution.
Further this deals with ordering several things from one ecommerce trader and getting
the goods together with economical shipping. One can also order cargoes from a

MODULE - 2 Consolidation: Importance & Limitations
Consolidation diversity of dealers, dealing with several distribution dates and shipping fees. Which
of Cargo one creates the most sense? Perhaps, when a client orders from a single source.
For an organization, consolidation of cargo goods can be an efficient business trend

that saves cash and time by reducing the risks of transport delays. The consolidation
of cargo consists of packaging or bundling several small consignments into one big
shipment for supply to similar end location. Instead of an individual firm paying
considerable shipping charges and dealing with lesser transporting speeds, the
Notes consolidation of cargo adds cargoes from several consignors into one shared transport
ISO container. Consolidation of cargo mainly depends on the utilization of a
consolidation store house at the origin point; that is, where the uniting of the cargoes
starts. For example a toy, pet or a fabric store might take their goods to a consolidation
store house, where their smaller packages are pooled into one bigger consignment.
This consolidated parcel is then distributed to its final destination, where the individual
consignments are segregated apart and distributed to each intended consignee.
7.2 LESS THAN CONTAINER LOAD OR LCL SHIPPING

LCL refers to Less Than Container Load or LCL shipping. It is when a firm transports
cargoes through ocean freight and they are stuffed into a shared ISO container along
with other consignor’s commodities for transit. It can be a simple and economical
alternative choice to FCL which is full container load / consignment of shipping. The
important characteristics is that in spite of filling a whole container with a company’s
cargo , they will be sharing a container with other consignees. This form of shipping
means that an exporter does not have obtain enough cargo to fill an entire container
load and that, in spite of paying for a whole container, they merely pay for the space
within that they utilize. This is mainly supportive for smaller organizations, or first time
consignees who are merely in the phase of experiment.
7.2.1 Shipment of LCL

If a firm is transporting less number of cargoes which do not take up adequate space
(low quantity), chances are they desire LCL. Numerous companies never obtain
adequate cargoes to fill a complete container particularly when a firm is shipping less-
volume cargoes. Once a firm attains a certain quantity even though it is not sufficient to
entirely fill a container, it becomes more price efficient to transport through FCL.
Since FCL is charged as a flat price that, which is more costly than LCL, yet is most
price efficient per cbm of space surrounded by the container.

7.2.2 Process of LCL shipping Consolidation

 Generally the local freight consolidators will contact the consignor of Cargo
 They will choose, in connection to the readiness of the cargoes, which container
vessel they will use
 The cargoes will be received or delivered to a store house say a container
freight station (CFS) which is adjacent to the port of origin
 The customs clearance will take place in the CFS Notes
 Once clearance is done in CFS, the cargoes will be stuffed into a shared ISO
container along with other consignors
 The consolidated container will be sealed by customs and sent to the origin
port
 It is boarded onto the container vessel which moves towards the port of
destination
 Once the container arrives at the destination port, the container is taken off from
the vessel and shifted to a CFS / local store house
 At the store house, the container seal will be broken and cargoes will be de-
stuffed from the container
 Next the customs clearance will take place (this is will done through the
assistance of consignees’ shipping agent who is located in importing country).
 After customs clearance the cargoes will be moved by truck from CFS to
respective consignees factory / premises
 Further the delivery arrives to the consignees factory /premises
 The consignee de-stuffs his cargoes from the truck / trailer and then utilizes it or
sells it further.
1. ______is the process where a carrier or a shipping company combines several

smaller shipments into one full container.
2. LCL stands for Long cargo load - True / False
3. Consolidation of cargo mainly depends on the utilization of a consolidation

warehouse at the _____ point.

Consolidation 4. Several companies never obtain _____ cargoes to fill a complete container.
of Cargo
7.3 SIGNIFICANCE OF FREIGHT CONSOLIDATION
Freight consolidation is a service which is related to shipping that can decrease the
entire shipping cost as well as enhance safety. It is one of the several names given to
the service comprising of consolidation , assembly and consolidation of cargo, etc.
Further it is a method in which various little consignments that are all being forwarded
Notes
to the similar spot will be consolidated or merged, on a single trailer / truck, and then
transported together to their final destination. This method is not only helpful to the
consignor, but also the consumer or buyer to whom the cargoes are being sent.
Hence, consignors are able to pay bulk charges. This makes freight consolidation
perfect for exporters who normally send less pallets of cargo at a time, or those who
have a huge occurrence of smaller consignments. Instead of moving them all separately,
these consignments are united and transported in one container.
Whereas the commodities in the consignment most often arrive from a single exporter,
sometimes the goods can arrive from numerous locations. This facilitates and makes
sure that the trailer / truck will be filled and helps to hold prices down.
Retail
Destination
Freight
FREIGHT SharedFULL
SHARED full
CONSOLIDATION
Consolidation Truckload Shipment
TRUCKLOAD SHIPMENT
FACILITY
Facility
Fig. 7.1: Basics of freight consolidation

There are several advantages of consolidation of freight, but it all begins with and
rotates around price savings.
1. Price Advantage: Apart from several merits of freight consolidation , there

are also numerous ways it help an exporter to save money. Traders who are
utilizing less-than truckload can take advantage of cargo consolidation. This
method will save the trader money on the transporting end as well.
These savings takes place because the price of shipping is shared by merging a
consignment with others’ on the truck; the exporter need not pay for the empty
space of trailer / truck for which they do not have sufficient cargo; the overall

price of shipping is decreased as the exporter can obtain bulk rates for Consolidation
consignments. of Cargo
By merging orders from separate exporters and areas and forwarding them to
a consolidation store house, they can shipped their cargoes together at any
moment. This facilitates for more regular, less procurement orders. Through
freight consolidation, a firm can evade the heavy charges for warehouse sites,
stock management amenities, and having to keep a fleet of vehicles. A firm
need not store their consignment on their own. They can forward it to the area Notes
where it will be transported to consignees.
2. Safety: Freight consolidation can greatly decrease the risks n transportation.

When there is a system in place and an experienced consolidator to handle an
exporter’s freight, their cargoes will be in secure hands. There are less transfers
of the consignment, lesser number of trucks leading to reduced probability of
accidents. All this, along with the handling by a skilled agent, can offer the peace
of mind that the cargo will securely reach its final location at regular interval.
3. Enhanced customer satisfaction: Customers can be irritated at delayed

cargoes or if their requirements are held up. By utilizing freight consolidation
the exporter can get the cargoes to customers rapidly and efficiently. This permits
the seller to keep ahead of requirement, and be on top of the consumer’s
requirements.
4. Administer the complete Shipping Process: Utilizing the consolidation of

freight provides the seller better control over due dates as well as manufacturing
schedules. Further they can also administer the complete supply chain either on
their own, or through a consolidator partner. If the seller shipping agent creates
any problem in relation to consignment, the issue will be sorted out by the
cargo consolidator. This helps in managing the cargo and makes the process
more effective.
5. Increased steadiness: Once an exporter understands the patterns of the

ordering of their consumers, they can construct them into their consolidation
strategy. This permits the seller to have the stock readily available for their
respective consumers and not mix up to fill orders. Cargo Consolidation helps
the seller to take benefit of the savings on reliable transportation schedule.
6. Develop a relationship with consumer and carrier : By transporting smarter

and more effectively, a firm will be able to construct association with other
organizations, consumers, and carriers. First, they can set up alliances with other

Consolidation organizations who depend upon LTL haulage. When an exporter creates a
of Cargo good relationship with the carrier then the cargoes will be sent to the proper
destination without any hassle.
7. Enhanced Flexibility & Time Management: Consolidation of freight will

also enhance the flexibility of the seller shipping requirements and construct
the orders in a timely manner. It further provides quicker shipment times, as well
as decreases the wait time for shipping small consignments. If the shipper cargoes
Notes are stored at a facility of consolidation, they will be ready to move when they
are required for consignment. This enhances the timeline and stock flexibility,
where the consumers will be grateful and think twice before changing.
7.4 LCL SHIPPING CHARGES

LCL pricing is easy, clear and calculated by utilizing the volumetric load. The charges
of LCL are generally calculated on the basis of cubic meter i.e CBM or volume
weight and higher of two is taken.
Pickup Origin Main Leg Destination Delivery
Fig. 7.2: LCL shipping costs

There are few significant features which one has to remember
i) Carriage terms
a. Have a shipper agreed based on ex works shipment, the consignee will
arrange the shipment particularly from the seller factory to importer unit; or
b. Free on Board – the consignee is only accountable for the ocean shipment
charges
ii) An exporter goods will be packed with other shipments and the packaging
ought to be sufficiently tough to permit added handling.
iii) LCL transmit times are normally 4 days higher than the full container consignment
equivalent.
iv) In LCL shipments , insurance is significant for all sorts cargoes during movement
from origin factory to destination factory.

INTEXT QUESTIONS 7.2 Consolidation

of Cargo
1. ______ consolidation can decrease the shipping charges..
2. FOB stands for______.
3. In _____ terms the consignee will arrange the shipment particularly from the
seller factory to importer unit.
4. If an exporter creates a good ______ with the carrier then the cargoes will be Notes
sent to the proper destination without any hassle.
7.5 IDENTIFY OPPORTUNITIES THROUGH LOAD

CONSOLIDATION
The opportunities of consolidation are as follows-
1. Cost saving: Sometimes, the exporters will merely utilize half or two-thirds of
a truck, but they have to pay for the complete space including for the space
which is not occupied. But in the case of consolidation services it merges several
LTL consignments that are heading in same directions into a full truck consignment,
and the exporter just pay the freight charges for the space which is occupied.
2. Decreased chance of damages: Where LTL utilized a hub-and-spoke supply
form with several touch locations, consolidation utilizes a model that drastically
decreases the handling of the cargo as freight journey from exporter to
consolidation hub to importer. With fewer touch locations there is less prospect
for cargoes to be damaged.
3. Speedy arrival in market place: A consolidation plan can assist in sending
the freight to the respective locations where it required to be, and moves as per
your schedule. A consolidator agent is one who collects huge freight volumes
from different exporters, can put a strategy into place that adds their freight on
a trailer by using the truck space better and delivers to the customer with
quick shipping.
Shipper Consignee
Shipper Consignee
City Origin Linehaul Intermediate or Linehaul Destination City
Driver Terminal Driver Consolidation Driver Terminal Driver
Terminal
(if needed)
Shipper Consignee
Fig. 7.3: Quick shipping through consolidation

Consolidation 4. Enhanced Visibility and Service: The method of load consolidation facilitates
of Cargo the process by improving the visibility. Consistency of information is maintained
and the consignment will be distributed together.
5. Less Dock Congestion: When the different cargo arrives at the dock from
different shippers through various trucks it leads to dock congestion. Therefore
instead of numerous LTL truck carriers moving towards the dock, it can be
bought by a single truckload through the service of a consolidator agent
Notes
6. Superior scheduling: Time management becomes simple with LCL as it leads
to proper time-management as well as accurate scheduling. When an exporter
is planning for LCL consolidation, they will be dealing with a cargo consolidator.
Most 4PLs and LCL consolidators will have executives for scheduling the pick-
up, transmit, and distribution of shipment. A superior 4PL partner generally will
send the information at each step of the distribution process. Further it gives
visibility and adequate time to organize for the shipments connection to inward
and outward.
7. Adequate time : As the time which is spent towards scheduling and tracking is
less, the exporters able to devote more time to their other core business. The
benefit with LCL is the cost is very low, service is effective and consumer
satisfaction is high. as The LCL consolidation being a customized service serves
those consumers who are looking for less distributions from diverse origins but
to the similar final destination.
8. Lower rates: The most relevant benefit is the decrease in price. With LCL,
exporters will pay only for the space which they occupy in a container . By
committing certain cargoes based on cubic meter or though several pallets on a
reliable basis, a 4PL service provider can cater to the different exporters’
commodities “in the mix.”
9. Simple optimization : The distribution chains that rotate among the full-container-
loads are extremely challenging to optimize. Let us image than an exporter is
shipping his cargoes especially FCL on Tuesday. This cargo, after the pick-up,
is transmitted for delivery and arrives at importer’s units after ten days (Friday).
The executives working with an importer team decides instead of Friday the
previous day will be better.
10. Concentrate on core business: Entering into a contract with the professional
and reliable 4PL load consolidator will help to manage transport effectively
and free up the staff of an export firm so that they can concentrate on other

core areas of their business. As less time is spent on managing an exporter Consolidation
freight there will be more time for closing their deals with other importers. of Cargo
Therefore, a well-designed, lean, and customized distribution chain can lead a
firm towards yearly profits.

1. A consolidation ______ can assist in sending the freight to the respective
Notes
locations.
2. The supply chains that revolve among the ______are extremely challenging to
optimize.
3. The LCL consolidation being a customized service that outfit to all those
consumers who are looking for ____ distributions.
4. The _____ chains that rotates among the full-container-loads are extremely
challenging to optimize.
7.6 POTENTIAL CONSOLIDATED SHIPPING CHALLENGES

With the quick expansion of global trade and the constant expansion of shipping
services, the LCL shipping is used extensively, but LCL shipping is diverse from FCL
mode. Its shipping needs have their individuality and freedom. Some challenges faced
during the time of execution of shipment are as follows.
1. Expense: In LCL distribution, an exporter’s consignment is merged with a
number of other smaller quantity shipments. This generates added expenditure
and will cost the exporter more per cubic meter than if they were to transport
via FCL.
2. Fees: One has to bear in mind that each destination will have diverse fees on
their final location linked with the import such as a) terminal handling costs)
store house charges c) distribution and d) hosting costs, etc. Based on the
situation, an exporter might end up by paying the similar amount of cash to
bring a less quantity consignment which is equal to a large quantity one.
3. Delays: There is always a possibility of delays while transporting the cargoes.
But with LCL transport, the danger is much bigger, mostly owing to handling.
Initially, somebody needs to assemble pieces of goods together in order to fill a
container. Subsequently, somebody must process the relevant documents and
arrange the cargoes for every little quantity shipment once the container comes
and it will be forwarded to the importer. A delay can occur at any stage.
Consolidation 4. Customs: In the cargo consignments it can lead to delays in customs if any
of Cargo organization transports their goods without appropriate documentation. When
the custom authorities scrutinise the cargoes, they will check all consignments
and once they are satisfied it will move to the next stage. This sort of extension
may lead to delays in shipping.
5. Damages: When transporting the LCL cargo, an exporter might not have the
control over the other goods which are stuffed into the same container. Sometimes
Notes different cargoes such as heavy as well as fluids could be stuffed together in a
container which could damage the other cargoes too. Additionally, the cargoes
may be misplaced or lost during the journey if a container holds goods which
are moving to several destinations. While using LCL shipping, it must be ensured
that their cargo is insured.
6. Other problems: The goods which are consolidated will be moving to the
similar destination with different exporter’s cargo and will be packed into carton
boxes / drum / pallets etc. Since there are diverse owners’ goods in a box which
are mixed together, it is referred as LCL. This is utilized when the exporter’s
shipment quantity is inadequate to fill the complete container. The categorization,
segregation, packing as well as unpacking and distribution of LCL goods are all
moved out at the agent’s terminal container freight station or at Inland container
depot.
7.7 FREIGHT CONSOLIDATION

1. The consolidation of LCL can be segregated into direct or transfer. The direct
consolidation means that the cargoes in the LCL containers are stuffed and de-
stuffed at the similar sea port. Such containers are not opened prior to the
arrival of cargoes at the final destination port, that is, the cargoes are in the
similar de-stuffing port. This method of LCL service has a short transport period
and is suitable and quick. Normally, a good LCL consolidator will offer only this
mode of service. Transshipment on the other hand means the cargoes in containers
that do not belong to the similar port of destination and require to be unpacked
and de-stuffed or it is transshipped halfway especially in a hub like Singapore,
Colombo, Jebelali, etc.
2. The consolidation of LCL goods is normally undertaken by a consolidator and

not by shipping company. The shipping firm accepts only FCL goods bookings,
and does not directly accept LCL commodity bookings. Only a few eminent
cargo consolidators can book their space with relevant shipping line after

consolidating the LCL goods. Nearly all the LCL goods are shipped via the Consolidation
‘centralized handling and supply’ of the freight consolidation firm. of Cargo
3. When an exporter is negotiating a contract with the importer, they have to pay
special attention to the pertinent shipping terms. He has to meet the shipping
terms after the importer had offered Letter of credit. In certain export operations,
exporter often come across L/C regulations mentioning that LCL goods shipping
does not conform to the freight consolidator’ house bills of lading. Since the
shipping firms do not straight away accept the LCL goods booking, generally Notes
the shipping line issues an ocean bills of lading to these cargo consolidators, and
in turn these consolidators further issue House Bill of Lading to the exporter. If
the L/C guidelines do not accept the consolidators B/L, there will be no alternative
in the real shipping process, which will create L/C discrepancy.
4. The cargo weight of the LCL consignment should be accurate in terms of CBM
or metric tomes. Before distribution of LCL goods, the exporter should need to
calculate the weight and dimension of the cargoes as precisely as feasible.
When the cargoes are distributed to the store house chosen by the cargo
consolidator, the store house will once again calculate the size and weight. In
case the manufacturing unit alters the packaging part , then the manufacturing
unit should be informed in time. Therefore the exporter should not wait for the
cargoes to be distributed to the cargo consolidator CFS and wait for their
feedback.
5. In some ports, owing to inadequate distribution of LCL cargoes it leads to high

price so that the cargo consolidators who are experts in LCL for the less
quantity they charge based on CBM or Metric tonne whichever is higher. For
instance, in certain origin port areas they charge the cargoes based on 2 metric
tonnes even if the load is less than two metric tonnes. As a result, when the
goods quantity is less, few of these features should be paid attention when the
goods are shipped in the sea port.
6. For few routes and sea ports that are comparatively remote, and consumers
propose to distribute LCL cargoes to inland locations, it is best to consult before
entering into the contract and validate that there are shipping firms and cargo
consolidators who can render services to these remote ports. If services are
offered ,in such cases they can discuss about the relevant fees and enter into the
contract.
7. Currently, in order to comply with the guidelines of “WTO”, domestic customs

authorities will concentrate on inspections of commodities related to sensitive
Consolidation and trademark. For cargoes consisting of intellectual property rights, such relevant
of Cargo declaration forms should be filled in advance. Certain details should be arranged
in advance such as a) brand or trademark registered by manufacturing unit b)
consumer order or authorization letter etc..

1. The consolidation of LCL can be segregated into ______ or transfer
Notes
2. The cargo weight of the LCL consignment should be accurate in terms of ____or
metric tomes.
3. The ______ which are consolidated will be moving to the similar destination
with different exporters’ cargo.
4. Before distribution of LCL goods, the exporter should calculate the ____ and
_____ of the cargoes.
7.8 FREIGHT DECONSOLIDATION

Deconsolidation is the function of segregating the LCL consignments in order to arrange
them for final distribution. It is the reverse of consolidation and it is the method of
segregating inbound consignments into several shipments so that they can be delivered
to a importer through the outbound truck. This permits exporters to send their
commodities to multiple areas more effectively and in a more economic manner. LCL
consignments are consolidated into a container at port of origin and deconsolidated at
port of destination. The process of consolidation and deconsolidation work is carried
out at a container freight station.
The deconsolidation is a 4PL service that offers price savings and enhances speed to
market for importers. Further, it is the method of breaking the cargoes of a single
consignment of goods into numerous smaller consignments and processing those cargoes
for end inland distribution straight from the port of origin to the delivery hub. It is an
imperative element of the distribution method and normally a 4PL effectively forwards
freight to a broad array of areas at lower charges.

Consolidation
of Cargo
Notes
Fig. 7.4: Freight deconsolidation

There are countless advantages resulting from utilizing the deconsolidation services.
These comprise superior stock management, reasonable costs, and faster speed-to-
market. It further assists the importers and exporters to shift its distribution nearer to
consumer demand and decrease stock and amenities costs. A judicious method of
these cargoes permits time-sensitive commodities to arrive much quicker on store
shelves or in an importer’s hand. Decreased shipping charges are also an advantage of
4PLs which can effectively consolidate cargoes from sea containers into domestic
trucks thus gaining effectiveness by decreasing the number of distributions to an importer
to an extent of 50%. Deconsolidation enhances an exporter’s entire cycle time. Imported
cargoes can be simply administered in a method of just-in-time which eradicates the
requirement for surplus stock, preserving re-handling time period, and reducing points
of delivery.
Once commodities have been deconsolidated and move from a CFS, all data about
those goods is managed via a shipping management and tracking structures till it arrives
carefully at its final location. Protection is provided 24/7 for all the containers and
trucks and they are tracked and scrutinized regularly to provide on-demand as well as
computerized real-time reporting.
Moreover certain 4PLs provide the labeling with barcode, messages of EDI, distributing
routing fulfillment, vessel window administration, and other eminence guarantee services
to assist an exporter with importer compliance. This service further assists the producer
to avoid expensive price backs and also offers added services which are valuable.
These comprise of creation of label, labeling carton method, scanning, inspection in
respect to quality and unique project work.

Consolidation 7.8.1 Benefits of Consolidation and Deconsolidation in Freight Shipping

of Cargo Supplier A
Customer A
Supplier B
Sea/rail transport Customer B

Supplier C
Road transport Road transport
Notes
Loading cargo Container Container Unloading cargo
into a container loading unloading off a container
Fig. 7.5: Freight consolidation/ deconsolidation

1. Reasonable freight shipping charges: Freight consolidation is well recognized
and has a huge impact on the cargo shipping costs as the exporters only pay for
the quantity of space they have booked for their commodities, as opposed to
the FCL / FTL consignment, where the exporters pay for the whole container
weight. Likewise, the freight deconsolidation, when finished properly, can save
the charges towards the final delivery of the cargoes.
2. On Time stock : It is simple for exporters to obtain a space for their cargoes in
LCL or LTL consignments as compared to a full container cargo. Also, exporters
can consolidate and transport their cargoes as soon as they desire and do not
have to stay for the manufacture or purchasing of cargoes to fill a whole container.
The commodities can next be deconsolidated and kept in areas adjacent to the
market, which results in faster stock movement, replacement and accessibility
of cargoes in the market. Exporters can have a 4PL associate to engage such
consignments which serves as an added advantage to business.
3. Availability of exporter’s goods in the market : While several businesses

wait to fill a whole container before transporting, for numerous businesses this
could lead to non-availability of their cargoes in the market. In such situations,
exporters consolidate their cargo based on the seasonal tendency and market
requirement of their commodities. Therefore, the consolidation and
deconsolidation of shipment assists the exporters to make sure their cargoes
are available to the final customers at all times.
7.8.2 Issues faced by shippers

While there are obvious advantages to deconsolidation, exporters face some issues
and challenges too. These are-

1. It can be confusing: Obtaining the needed space for consolidation and precise Consolidation
deconsolidation can be a puzzle as it consists numerous touch locations, several of Cargo
service agents and various locations. Several exporters as a result, employ a
4PL agent for these consignments.
2. Lack of proper communication: Consolidated consignments are engaged at

numerous phases based on the form of consignment, its path and the final location.
Co-coordinating flanked by these holding locations can be devastating and can
also direct to a lack of position visibility and communication among the exporter Notes
and the service provider agent. Appointing a 4PL can offer superior visibility
and rank reports for the respective consignments.
3. Inadequate planning and safety of cargo: Inability to have visibility towards

an end-to-end into cargo movement, starting from its consolidation to
deconsolidation, could prove to be hazardous, costly and unproductive.
4. It can be hazardous: As the process of consolidation and deconsolidation of

goods moves via several handling and touch locations, the possibility of harm to
the goods increases unless there is tracking or sufficient visibility at each of these
operational locations. Decreasing the number of touch locations as much as
feasible is important to raising the worth of the cargo.
5. Delay in Distribution : There could be numerous reasons owing to which the

method of deconsolidation which can be delayed in turn it leads to delay in end
distribution to the final consumer or to the subsequent step in the distribution
chain. The delays could be due to timings and administration.
Although there are problems and hazards in the method, if planned correctly
consolidation and deconsolidation can offer several advantages to the exporters
and importers. Several exporters generally have an alliance with a freight
forwarders agent for their consignments.
1. ______ is the function of segregating the LCL consignments in order to arrange

them for final distribution
2. 4PL stands for ______.
3. The deconsolidation is a 4PL service that offers price savings and enhances
speed to market for ______.

Consolidation 4. Decreasing the number of ______is important to raising the worth of the cargo
of Cargo
 Cargo consolidation unites the small consignments into a big container for
distribution..Further this deals with ordering several things from one ecommerce
trader and obtain the goods together with economical shipping, or order cargoes
from a diversity of , dealing with several distribution dates and shipping fees
Notes
 LCL refers to Less Than Container Load or LCL shipping is when a firm transport
cargoes through ocean freight and they’re stuffed into a shared ISO container
along with other consignor’s commodities for transit.
 Freight consolidation is a service which is related to shipping that can decrease

the entire shipping charges as well as enhance safety
 The significance of freight consolidation includes price advantages,safety,enhance

customer satisfaction, administer the complete shipping process, increased
steadiness, develop the relationship with consumers and carrier, enhanced
flexibility and time management
 The potential consolidated challenges are expense, fees ,delays ,customs and
damages
 In the case of Load consolidation services it merges several LTL consignments

that are leading in same directions into a full truck consignment, and the exporter
just pay the freight charges for the space which is occupied.
 Deconsolidation is the function of segregating the LCL consignments in order to

arrange them for final distribution. It is merely the reverse of consolidation and it
is the method of segregating inbound consignments into several shipments so
that they can be delivered to a importer through the outbound truck
 Freight deconsolidation in cargo shipping refers by segregating or breaking the

cargo into one huge consignment into lesser parcels or smaller consignment so
that they can be shipped to their relevant location, which could be a store house
or a final consumer.
TERMINAL EXERCISE
Explain the following briefly.
1. Freight consolidation

2. Differentiate between FCL and LCL Consolidation

of Cargo
3. LCL Consolidator
4. Terminal handling charges
5. Customs
6. Write a note on LCL shipping.
7. Discuss the advantages of freight consolidation. Notes

8. Freight deconsolidation plays an important role in delivery-discuss.
9. Bring out the importance of load consolidation.
10. Sketch the benefits of Consolidation and Deconsolidation in Freight Shipping.
11. Sketch the process of consolidation.
12. Discuss the significance of freight consolidation.
13. Bring out the opportunities in connection to load consolidation.
14. Spotlight the potential challenges of consolidated shipping.
15. Highlight the main issues in relation to deconsolidation.

7.1
1. Consolidation
2. False
3. Origin
4. Adequate
7.2
1. Freight
2. Free on Board
3. Ex works
4. Relationship

Consolidation 7.3
of Cargo
1. Plan
2. Full-container-loads
3. Less
4. Distribution
Notes 7.4
1. Direct
2. CBM
3. Goods
4. Weight and Dimension
7.5
1. Deconsolidation
2. Fourth party logistics
3. Importers
4. Touch locations

Shipper's and Buyer's Consolidation MODULE - 2
Consolidation
8 of Cargo
SHIPPER’S AND BUYER’S

CONSOLIDATION Notes
Shipper’s consolidation services explains the scenario of multiple consignments from

the same origin stuffed into one FCL container by the shipper or supplier. It is then sent
to the final port of destination, where the individual consignments are unloaded and
distributed to several buyers or consignees. Buyer’s consolidation service merges the
less-than-container-load (LCL) consignments from various suppliers that share a
common consignee. The consignments are consolidated at a central consolidation
location, stuffed into a dedicated container and sent to the final destination as a full-
container load (FCL).
LEARNING OUTCOMES
 explains shipper's consolidation;
 identifies the benefits of buyer consolidation;
 outlines the opportunities of traders consolidation;
 explains the process of shipper and buyer consolidation;
 selects the appropriate form of consolidation.
8.1 SHIPPER’S CONSOLIDATION – WHAT DOES IT MEAN?

Shipper’s consolidation takes place when several shipments from similar origin are
stuffed into one FCL container by the consolidator. It is then moved to the port of
destination, where the individual consignments are de-stuffed and distributed to several

MODULE - 2 Shipper's and Buyer's Consolidation
Consolidation consignees. It is a method where the shippers combine multiple LCL consignments
of Cargo together, heading to the same destination.
Shipper Consolidation is a distribution chain management plan where companies

decrease their supplier base to a few trusted partners. The aim is to streamline the
purchasing process, improve the eminence of trade operations and most significantly,
cut down on the prices.
There are numerous ways in which the plan can positively impact an organization’s
Notes
bottom line, comprising decreased operational charges and back-office expenses.
The one location where it is often most helpful is in inbound shipment management.
Shipping huge quantities of freight from lesser suppliers can cost significantly less than
obtaining multiple consignments from several suppliers.
Fig. 8.1: Shipper’s consolidation
8.2 ADVANTAGES OF SHIPPER’S CONSOLIDATION

There are surely times when narrowing the circle of shippers is worth the effort. If a
firm is presently using multiple vendors for the same goods, using this plan can have
many advantages. Some of these are-
1. Decreased shipping charges

A good inbound cargo management plan, with less vendors and closer proximity,
can cut into the bottom line and increase profitability. Instead of purchasing
3,000 units of a particular goods from ten different suppliers in different areas, a
firm can source the similar cargoes from two or three suppliers and pay for less
trailers going to fewer areas.
2. Better costing on bulk orders

Buying a huge quantity of cargoes from fewer suppliers presents prospects for
ordering in bulk. It is a purchasing process that habitually results in discounts
through decreased per-unit charges. Purchasing huge for less offers the power
to drive down consumer prices or lead those savings to the bottom line.

3. Healthy relationships Consolidation

Many firms utilize the vendor consolidation in order to transform bland of Cargo
relationships into solid associations. Trying to handle too many vendors may
prevent the formation of personal bonds. That is why it is best to partner with a
few trusted vendors that understand your trade and work hard to meet your
requirements.
4. Focus on core business Notes

Managing multiple suppliers takes time and resources that a firm may not have.
Through consolidation, they can concentrate on more significant things like cargo
improvement, maintaining efficiency and managing consumer relationships.
1. Shipper consolidation leads to decrease in shipping charges - True / False .
2. Shipper consolidation combines the less than container consignments from

different consignors - True / False
3. Shipper consolidation is a _____ management plan where companies decrease

their supplier base
4. A good inbound cargo management plan, with less vendors and closer proximity,
can increase _____.
8.3 STEPS OF SHIPPER'S CONSOLIDATION
Fig 8.2: Process of shipper’s consolidation

Look at the Figure 8.2 that shows the process of shipper’s consolidation. The plan is
quite simple. A firm has to decrease the number of suppliers as well as service providers
Consolidation they work with and construct a smaller, more efficient distribution chain. While the
of Cargo notion is straightforward, the implementation is a little more difficult, and it is applicable
to each organization. Here are some basic steps a firm could take to appraise the
suppliers they are considering as long-term partners:
Step 1: Create a focus group

Creating a focus group of stakeholders is useful to prioritize trade goals and determine
Notes which consolidators are best qualified to assist you. This group may comprise members
of a firm’s procurement, marketing, logistics, operations, legal, documentation and
accounting departments who understand the firm’s plan and can provide valuable
input.
Step 2: Determine the organization’s current status

Review your present distribution chain and vendor network to obtain a baseline of
where you are at present and where you want to be. Some basic questions to begin
with are:
 What vendors are presently procuring from and where are they are situated?
 Are your consolidators handling the same products from multiple shippers?
 Whether the consolidator is rendering services to the final destination which you
are looking for?
 Have you had any negative experiences with any consolidators that has resulted
in increased charges?
 Whether these consolidators are easiest to work with?
Step 3: Launch metrics and goals

Once a firm is aware of where they are and where they want to be, they have to set the
appropriate goals and determine the metrics that assist in evaluating those goals. For
instance, if sending on-time deliveries to your customer is important to your business,
a firm can set a precise on-time delivery objective and start measuring consolidators
against it.
Step 4: Examine and classify current consolidators

Conducting a contractor analysis is a simple path to classify the providers. Generate a
spreadsheet that highlights the agreed-upon metrics, and then systematize each
consolidator into three groups:
 High performing (meeting almost all goals)

 Low performing (meeting a few but not all) Consolidation

of Cargo
 Underperforming (unable to meet few or any goals)
The findings may astonish a firm because consolidators that seems to be simple to deal
with may not be meeting the goals, while others may be beyond expectations.
Step 5: Choose the finest vendors for your distribution chain

In order to assist your business and attain the goals, a firm can start generating
Notes
consolidation decisions based on the analysis of the present consolidator’s capability.
While there is no set number of consolidators to hold, those firms which you continue
doing trade with should provide reliable value.
One of the main issues for several businesses today is supervising their consolidator
base. This often leads to an unnecessary increase in time, workload, and effort for
ensuring easy relationship in order to obtain the most cost-effective value and the best
feasible service.
It can be actually expensive as well as distracting to expand new consolidator relations,

which in turn takes away time as well as attention from the core necessity of a trade.
The consolidation base is well worth to a trade’s while, as it can offer an increment in
service/excellence level as well as a decrease in sourcing / operation expenses and
other costs.
8.4 FACTORS INFLUENCING CONSOLIDATION OF VENDOR BASE

In connection to the shipper consolidation, in order to make a smart appraisal, here
are five estimations that firm should make before consolidating their vendor base:
Cargo Capability: It is significant that suitable thorough research is conducted for

the Buyer, Consolidators, Locations by keeping in mind that it is forever advisable to
receive the widest feasible service from a single spot of origin. Therefore, it is also
essential that the selected consolidator has adequate knowledge and expertise in each
and every location of final destination.
Soft Costs: The costs that are direct and hard are much simpler to measure than soft
charges, which are more complicated to forecast and assess owing to their intangibility.
Therefore, it is significant to consider the cost effectiveness.
Known Ability: It is necessary to look for consolidators who have same business
experience of customer service as your organization is looking for. A trustworthy /
respectable consolidator is a key differentiator, therefore, make sure to create an

Consolidation informed choice through references while selecting your consolidator base.
of Cargo
Visibility and Control: For trades, it is a genuine struggle to have attentive visibility
over expenditure due to multiple consolidators. Therefore having single source of
consolidators can assist in monitoring and make your trade more cost effective.
Delivery and the product usage Service: Make sure that service stages obtained
are exemplary- this is the key to vendor consolidation. Therefore, it is forever advisable
to look for a consolidator with essential warehousing and logistics competence that
Notes
resonate the most with your trade criteria.
Consolidation is a time consuming and difficult procedure and to endow a firm’s

competitive edge a single-consolidators is the path to take.
1. A ______is a simple path to contrast and classify the consolidators.
2. It is necessary to look for consolidators who have same business experience -

True / False
3. Once a firm is aware where they are and where they want to be, they have to
set the appropriate _____ .
4. A firm should review your present distribution chain and _____ to obtain a
baseline of where you are at present.
8.5 BENEFITS OF SHIPPER’S CONSOLIDATION

So far you have learnt about the process of shipping consolidation and how you can
select classify vendors. Do you think consolidation is useful or beneficial to a firm?
Yes, you are absolutely correct! Consolidating orders by using the shipper’s
consolidation will help the firm in the following ways.
1. Greater cost savings

One of the most clear advantages is a much-deserved price saving. By
outsourcing a few processes or responsibilities, a firm uses less resources and
also invests less time. In spite of the work being shifted to the shipper, eventually
achieving the similar output and high eminence will result in benefit to the firm.
For the largest impact, a firm requires to find a shipper consolidator who can
be trusted for quality work. Selecting the wrong shipper consolidator can be
just as impactful to the bottom line, although negatively. It’s also worth mentioning

that bringing on several consolidators, or ignoring consolidation to work with Consolidation

several partners, will generate price redundancies. It is best to monitor what a of Cargo
firm is outsourcing, which means using a more efficient plan as opposed to
merely de-stuffing everything and anything.
2. Better productivity
When a firm’s vendor wants to offer deliverables promptly, they have to decrease
the internal work which leads to efficiency. A firm should use less resources and Notes
man-hours, decrease tasks and speed up the improvement. Furthermore, these
resources and labor at current can be outsourced and also be redistributed to
other internalized ventures.
3. High purchasing power

By finding a single consolidator, a firm may get much more buying power and
have more power to request or negotiate for superior contract terms. Several
will even provide exclusive discounts or partner advantages for consolidating
your orders. When operations stretch across several vendors, the spending
power of a firm is diluted. A firm will spend much more on services that could
be handled by a single consolidator.
4. Improved visibility and controls

Because a firm is consolidating or moving all of those responsibilities to a single
shipper consolidator, a positive side outcome is that the firm’s visibility will
improve simultaneously. Further a firm can also get back some of the control
they might have relinquished by stretching out those tasks among multiple partners.
When it’s time to plan a firm’s distribution chain it’s much tougher to do so when
there are several suppliers. Consolidating to achieve superior visibility and
superior control takes a firm’s business nearer to the green line.
5. Trustworthy supplier relationships

Another advantage of shipper consolidation is enhanced relationships. A firm
can construct stronger, more dynamic and more reliable associations in the long
run. A solid shipper consolidation approach is to identify a partner a firm can
generate such a bond with. At times, it’s less significant to look at the instant
advantages and more crucial to think of the long term impact. With a long-term
shipper consolidator, a firm can better realize their operations, quality control
structures and distribution chain connections.

Consolidation 6. Decreased training

of Cargo It is obvious that a firm wants to invest as much as feasible in their new hires,
but they don’t want to waste their resources either. Having a shipper consolidator
who handles tasks or responsibilities despite in-house teams, leads to less
responsibility on a firm’s employees and less training needed. Further, shipper
consolidators also maintain and update technologies, for decreasing the strain
on a firm’s workforce. This also decreases the peripheral training they will require
Notes overall.
7. Less management tasks

Managing several suppliers, vendors and internal-to-external methods leads to
more administrative work. It is a trade-off, but one that doesn’t essentially require
to happen. Through shipper consolidation, those administrative assignment can
be decreased. Usually, a firm would need to manage everything from entry of
information, transaction records, communications and joint strategies. It all
devolves to one or two shipper consolidators at maximum when a firm
consolidates. This leads to more efficiency and better organization.
Let’s pause for a minute here. Use the margin on the side to quickly write the seven
benefits of using the services of a shipping consolidator.
You will now read about various strategies of shipper’s consolidation.
1. Consolidate Multiple Orders To Save On Shipping
Fig. 8.3: Consolidating multiple orders

The shipper’s consolidation is a collaborative method comprising trade partners, supply
chain companies, and retailers. The consolidator obtains the products that to be shipped,
verifies to make sure things are in order, takes the cargoes out of their packaging and

repackages them into a single container box that is big enough to hold them. Here are Consolidation
some strategies that trading partners should follow to ensure a successful shipper of Cargo
consolidation.
 Agree on the trade process: The entire consolidation method should be

determined upfront.
 Review consolidation formation: This step reviews the trade and technical
areas and how the formation differs from other order or consignment types Notes
 Preparing for execution: This has to do with selecting the test trading partners,
allocating mapping directions, and generating test transactions.
 Assess readiness to transact: At this phase, shipper need to test the

transactions, sort out the issues, and analyse any changes in the method.
 Analyze Initial consignments: In this phase, these test transactions are audited
and tested once more for compliance and correctness.
 Full execution: This entails generating a decision about whether to move ahead,
notifying business partners of consolidation, and evaluate the advantages of the
entire process.
8.6 ORDER & SHIPPER CONSOLIDATION

Order and shipper consolidation need effective alliance between several players and
partners in the fulfillment process. It is significant to follow the tested practices that will
facilitate shipper to streamline and optimize their efforts.
Fig 8.4: Order and shipper consolidation

Consolidation Alliance with trusted partners

of Cargo A shipper needs to have seamless alliance with all parties concerned for the success of
shipper consolidation. This may comprise trade partners, fulfillment centers, and supply
chain companies. But more significantly, a shipper requires a reliable shipping partner
to professionally consolidate the consignments on behalf of the shipper. A shipper
consolidator plays an important role in the entire process as they’re accountable for
making sure that the order is complete and precise, next they must package and distribute
Notes it to the final customer. They can also partner with a professional 4PL that can provide
store housing, picking as well as packing services. This way, a shipper can offer the
complete process to them and reduce the hazards of disruptions or mistakes that may
take place when there are several parties involved.
Mutual agreement about processes

To make a shipper alliance work, the shipper should determine and define the complete
consolidation process at the beginning. Clearly sketch who is responsible for what and
how to make the alliance function.
 Will a shipper offer the consolidator partner the cargoes as orders arrive in?
 Will the consolidators take the responsibilities of packaging and analysis of

orders as they consolidate them? Or
 Will a shipper send their entire inventory to them so they can also warehouse
the cargoes in addition to picking, packing as well as logistics?
Contracts may differ based on how a shipper needs to work and the phase of services
that their consolidators offer. So it is significant to thoroughly describe everything upfront
and prevent issues before they occur.
Careful Implementation
One of the most difficult aspects of the shipper consolidation process is execution.
With a huge risk of errors, delays, and disruptions, this requires to be cautiously
planned and spaced out to control the negative forces. As such, the complete order
consolidation process greatly depends on testing diverse aspects of the process. As a
shipper prepares for execution, they may require to operate a test transaction with
several business partners and shipping firms so that a shipper can finalize the finest
partners for their business. This phase will also help them to recognize any problems
before they finalize the process. But a shipper should not be too quick to jump into
final execution because they still require to audit the test operations and analyze them
for compliance and accuracy. A shipper can then make a judgment about how to

proceed, which consolidators to work with, and how the methods should work. Consolidation
of Cargo
Enter the MSP
Several companies flounder because they do not have adequate professional staff for
managing their supply chain efficiently. The in-house staff needs to deal with labor
suppliers based their operations such as marketing ,customs clearance, documentation
,customer service,warehousing,transportation and more. Companies frequently
determine that this is a work for a managed service provider (MSP). An MSP can Notes
make important cost-saving and productivity-enhancing inroads into shipper
consolidation. Having alliance with an MSP to consolidate a shipper cargo can enhance
the service quality and have additional benefits such as-
 Cost savings: As mentioned above, working with one or two shipper

consolidators concentrates your labor spend. A shipper should be able to
negotiate price breaks with MSP in exchange for the larger volume accruing to
the chosen locations.
 Objectivity: Quality MSPs could develop their labor flows to make sure that
all their preferred shippers are treated fairly. All the shippers should be completely
informed as to the needs and protocols for every requisition that is opened.
 Quality candidates and service: when shipper consolidators are aware that
they will be gauged against their rivals, they will strive to enhance their customer
service and will offer fully qualified staff to fill each job.
 Compliance: MSPs will offer compliances as well as logistics services. Working

with lesser consolidators will give shipper the time it requires to fully recognize
the path they work. This insight helps to keep a shipper compliant with tax and
labor regulations as well as your internal rules related to logistics and shipping.
 Risk management: While shipper consolidation achieves its merits by

decreasing the number of work vendors in use, a strong MSP will construct
failsafe measures to make sure their shippers are never left in a bind because
their demand cannot be filled. They will bring in good labor stable with the
accurate mix of huge and specialty services to cover all the locations and build
strong shipper relationships.
 Diversity: Consolidating the shipper pool can actually increase the diversity of
both vendors and the capable employee they provide. It is significant to
understand that every consolidator brings their own strengths and specializations
in the workforce managing team.

Consolidation
of Cargo
1. MSP stands for ________.
2. Shipper consolidation can really increase the diversity - True / False
3. The _____ method need important change that can upset the complete
organization.
Notes 4. A firm by finding a single consolidator, leads to more _____ power.
8.7 BUYER CONSOLIDATION

Buyer consolidation is a process of shipping freight from a country of origin to a final
destination by grouping your shipments together into one huge shipment. By consolidating
a number of consignments, a shipper may be able to save on shipping charges and
decrease the risk of damage to their freight. Buyer consolidation offers a remedy for
customers who utilize multiple suppliers or have several manufacturers ship to a singular
final destination while decreasing freight charges and streamlining the method. By
grouping these diverse suppliers and producer’s shipments onto a single, committed
full cargo container before shipping ,the consumer enjoys a more effective and
streamlined distribution chain.
Fig. 8.5: Buyer’s consolidation

Buyer’s consolidation services merges less-than-container-load (LCL) consignments
from diverse shippers that share a common buyer. The consignments are consolidated
at a central consolidation location, stuffed into a dedicated container and sent to their
final destination as a full-container load (FCL). Buyer’s consolidation consignment is
also referred to as freight consolidation. It is a process of shipping two or more
consignments from different shippers in the same nation. It’s the opposite of so-called
‘segregation’, which comprises delivering each consignment individually. In shipping
terminology, it will comprise consolidating two or several LCL (Less than Container
Load) consignments into one FCL (Full Container Load) consignment. Managing LCL

shipments is comparatively simple but sending several LCL shipments to the similar Consolidation
destination can be needlessly costly. of Cargo
Understanding the logic of Buyer’s Consolidations

When a consignment is considered LCL, it means that they do not have adequate
goods to fill a container. Here, a shipper cargo will be consolidated into a joint container
along with other consignees’ goods. On cargo arrival the container will be sent to a
bonded container freight station (CFS) for de-stuffing, or de-consolidation. Notes
Look at the illustration below to understand the process.
Buyer consolidation process flow
SUPPLIER/ FWF CONSIGNEE

VENDOR
FWF
CF S OCEAN
CARRIER
Fig. 8.6: Buyer’s consolidation process flow
Trader’s benefit
1. The utmost advantage is decreasing their landed charges. Since they would have
a full container load (FCL), there would be no necessity to de-consolidate goods
at a CFS, thereby eliminate extra handling and shipping charges.
2. This also means that your goods will be handled less, which decreases the transit
time.
3. Decreased handling also reduces the risk of damage to the consignments.
When to use Buyer Consolidation

A consignee can use buyer consolidation in the following cases-
 When buying cargoes from several suppliers in the same nation of origin
 When you have several consignments within the same period
 When consignments are not really urgent

Consolidation (i) When buying cargoes from several suppliers in the same nation of origin
of Cargo When a buyer, usually the consignee of the cargo, is purchasing goods from
several suppliers in the same nation, buyer’s consolidation services are perfect.
The consignee does not need to be burdened with tracking numerous sea or air
shipments or with the final destination tariffs of individual clearances for numerous
LCL consignments. Nor do they desire to incur the final destination tariffs of a
customary LCL consignment, which may consist of destination consolidator as
Notes well as destination CFS tariffs.
(ii) When you have several consignments within the same period
Buyer’s consolidation consignments are also perfect for several air or ocean
consignments in a time phase of up to eight weeks. Further, these can be
consolidated into single shipment to save cost and hassle. The only time it can
be costly is when storage charges from the consolidator’s store house for holding
those individual goods build up, which can at times outweigh the charges of
numerous LCL or single air freight consignment.
(iii) When consignments are not really urgent

There is time to consolidate adequate freight to make a buyer’s console valuable
where there is no sense of emergency for consolidation.

1. FCL stands for ______.
2. ______services merges less-than-container-load (LCL) consignments from

diverse shippers that share a common buyer. - True / False
3. On cargo arrival the container will be sent to a _____ for de-stuffing.
4. A _____ will receive and consolidate the cargoes from the several sources at
point of origin
8.8 MERITS OF BUYER CONSOLIDATION

Generally, a consignee can take benefits of buyer’s consolidation consignment through
consolidating lesser consignments into one larger one. There are numerous benefits
one can avail of. Let us find out what these benefits are.

BUYER CONSOLIDATION Consolidation

of Cargo
HUB
Notes
Superstore Distribution
Fig. 8.7: Buyer consolidation merits

1. Cost savings: Consolidating several LCL consignments into one FCL shipment
normally means buyers only have to pay the following shipment tariffs once:
 Export Handling Charges: also referred to as the ‘consolidator handling

fee’, the export handling cost is charged by a consolidator for preparing all
the documents (comprising the bill of lading) to export and import the
shipment. Instead of paying these charges multiple times with numerous
LCL consignments, they can pay it just once with one huge FCL shipment.
 Documentation Fees: officially referred to as a ‘consolidator

documentation fee’, these charges are associated with preparing
documentation for a consignment.
 Final Delivery and Collection charges: also referred to as a ‘cartage

fee’, fees for cargo delivery and collection are the charges connected with
receiving the goods and handing it over to the final destination.
Traders can save an immense amount by consolidating goods into an FCL

consignment so that there is no need to pay these charges several times.
However, they might not be able to save on everything. Therefore, a shipper
should ask their consolidator for a comparison quotation among LCL as
well as buyer’s consolidation.
2. Track one consignment: Instead of dealing with the hassle of tracking numerous
of consignments at once, a consignee’s consolidation will need you to track only
one consignment as it journeys from the point of origin to point of destination.
3. Decreased risk of damage: Consolidating the goods into one consignment

Consolidation means decreased handling. As an outcome, the consignments may journey in

of Cargo fewer trailers and/or vessels because there will be lesser transfers (or, as some
call it ‘touch points’). This eventually decreases the risk of the product becoming
damaged.
4. More trustworthy shipments: Normally, if a supplier is trustworthy and if the

planning is careful, consolidating goods will facilitate your cargoes in arriving at
the final destination with minimum disruptions. By uniting your goods into a
Notes Buyer’s Consolidation, consignee will have one arrival date for all goods, rather
than numerous arrival days and risk of delays at several trans-shipment hubs.
This will permit for more precise planning when distributing to your end-user.
5. Decreased impact on the environment: If a company is running a green

trade, or just need to take further measures in their business to care for natural
surroundings, consolidating the shipping is a splendid way to decrease the amount
of emissions utilized for shipping the cargoes. This could be from a decrease in
trailer movements handling the goods or a decrease in container usage.

1. Buyer consolidation leads to ______.
2. Amazon had introduced “Amazon Day” in the year ______.
3. Eagle Foods is ______ based company that supplies milk as well as snack
foods to its consumer
4. By uniting the goods into a buyer’s consolidation,______ will have one arrival
date for all goods
8.9 DEMERITS OF BUYER CONSOLIDATION

Some of the disadvantages of buyer consolidation are described her.
1. Not appropriate for time sensitive goods

While consolidated consignments are efficient at saving charges, they normally
take longer to arrive. Consolidating adds additional work to the entire shipping
procedure and failure to take this into account may lead to inconvenient delays.
Hence, if stock is to be distributed sooner rather than later, consolidation is not
advisable.

2. Not appropriate for certain cargoes Consolidation

Hazardous cargoes like certain chemicals or explosives, perishable cargoes (like of Cargo
food or milk) and fragile items do not fit the consolidation model. In fact, several
dangerous cargoes cannot be consolidated owing to their cargo type and
perishable goods often require to journey with similar sorts of product only.
Inconvenience might also take place if the cargoes (especially hazardous goods
and foodstuffs) are subject to inspection by customs.
Notes
3. Added costly planning
Consolidation sounds easy enough but there are a lot of strategies is involved.
Feature like pricing, timing as well as the dimension of each piece of goods all
require to be taken into account to make sure that the consignment arrives on
time and in the same condition. This means you will require to find a carrier that
can really perform the consolidation at a suitable price. It is at all times worth
evaluating LCL as well as Buyer’s Consolidation pricing before managing your
shipment.
4. Collaboration not always feasible

Consolidation comprises the careful handling of documents by several suppliers,
and therefore close association. This might not be feasible at all times, particularly
if the two shippers are in direct rivalry with each other (or, they just have a
negative association with the other shipper). Some shippers are also inexperienced
in consolidating goods and therefore may have no thought what they are doing,
which leads to a poor outcome.
5. Usage of Incoterm
To make sure the risk exposure is more or less among the entire distribution
chain, it’s always a good thought to function under the same ‘incoterm’. This
may be challenging if you are taking into consolidating, as the diverse contracts
you have (utilizing the same incoterm) with several suppliers might affect your
capability to consolidate.
6. Complicated Scheduling
Scheduling a buyer consolidation can pose a large inconvenience for consignors
and carriers alike. A lot of communication is required for scheduling several
shipments at one time, and getting carriers and consignors on the same page will
probably create some confusion.

Consolidation 7. Short lead times

of Cargo The most complicated challenge for consignors with buyer consolidation is the
increasingly short lead times on consignments. Customer demand is huge and
unless the cargoes is in stock, the consumer is more apt to merely move on the
next cargo and that is a precious customer lost. Instant fulfillment is a buyer’s
highest main concern and that immediacy has generated a high challenge for
consignors and consignees.
Notes
1. Incoterm stands for _______.
2. Consolidation sounds easy enough but there is a lot of ______is involved
3. Consolidated consignments are efficient at saving charges, they normally take

____ to arrive.
4. Instant ______ is a buyer’s highest main concern.

 Shipper’s consolidation services explains the scenario in which several shipments
from similar origin are stuffed into one FCL container by the consolidator. It is
then moved to the port of destination, where the individual consignments are
de-stuffed and distributed to several consignees
 Shipper consolidation is a distribution chain management plan where companies

decrease their supplier base to a few trusted partners, with the aim of streamlining
the purchasing process, improving the eminence of trade operations and most
significantly, cutting down the costs.
 Shipper’s consolidation is a collaborative method comprising trade partners,

supply chain companies and retailers.
 Order and shipper consolidation need effective alliance between several players
and partners in the fulfillment process.
 Buyer consolidation is a process of shipping freight from a country of origin to a

final destination by grouping shipments together into one huge shipment. By
consolidating a number of consignments, a shipper or buyer may be able to
save on shipping charges and decrease the risk of damage to their freight.

 Buyer’s consolidation services merges less-than-container-load (LCL) Consolidation

consignments from diverse shippers that share a common buyer. The of Cargo
consignments are consolidated at a central consolidation location, stuffed into a
dedicated container and sent to their final destination as a full-container load
(FCL).
TERMINAL EXERCISE
Notes
Explain in your own words what you understand of the following term-
1. Buyer Consolidation
2. Reliable supplier relationships
3. Shipper consolidation
4. Documentation fee
5. Short lead time
6. Illustrate the shipper consolidated method.
7. Discuss the role played by managed service provider in consolidation.
8. When is buyer consolidation used?
9. Write a note on shipper consolidated tariff.
10. List the demerits of buyer consolidation.
11. Differentiate between shipper and buyer consolidation

12. Buyer consolidation will be an asset for consignee - comment
13. Explain the prerequisites of shipper consolidation
14. Spotlight the working method of shipper consolidation
15. Sketch the merits of buyer consolidation

8.1
1. True
2. True
3. Supply chain
Consolidation 4. Profitability
of Cargo
8.2
1. Contractor analysis
2. True
3. Goals
Notes 4. Vendor network
8.3
1. Managed service provider
2. True.
3. In-house
4. Negotiation
8.4
1. Full container load
2. Buyer’s consolidation
3. Bonded container freight station
4. Consolidator
8.5
1. Cost savings
2. 2019
3. An American
4. Consignee
8.6
1. International commercial terms
2. Strategies
3. Longer
4. Fulfillment

Modes of Transportation for Consolidation MODULE - 2
Consolidation
9 of Cargo
MODES OF TRANSPORTATION
FOR CONSOLIDATION Notes
In the global trade, an organization with the ability to transport consignment in the most
cost and time effective manner reigns supreme in their sector. Therefore, an important
part of transportation management lies in constructing an efficient distribution chain
from the different modes of transportation. Understanding the strengths and weaknesses
of each mode is important to build an efficient supply chain. Generally, logistics
managers hire the carrier based on certain traits such as whoever can transport the
greatest volume of cargo with the greatest speed over the greatest distance at the
lowest charge. Each of the modes of transportation has its own merits and demerits
for shippers to take into consideration.
LEARNING OUTCOMES
 explains the various modes of transportation;
 classifies the various transportation systems;
 examines the modes of transportation used in consolidation;
 identifies the prospects of consolidation;
 plans and constructs diverse freight consolidation.
9.1 TRANSPORTATION
Transportation refers to the movement of cargoes and persons from one location to
another through various means. Transport means to shift something, often huge

MODULE - 2 Modes of Transportation for Consolidation
Consolidation quantities of commercial goods, over longer distances. Transportation also refers to
of Cargo the action of shifting someone or something or the process of being transported. Further
it is referred as a process or an act of transporting or being transported.
Transportation in India
India’s transport division is large and varied; it caters to the requirements of 1.3 billion
people. In recent times this segment contributed about 5.5 percent to the country’s
Notes GDP, with surface transportation contributing the lion’s share but at present it is
drastically increased. For a nation excellent physical connectivity in the urban and rural
sectors is necessary for economic growth. While the early 1990s, India’s rising economy
has witnessed a growth in demand for transport infrastructure and services. However,
this division has not been able to keep pace with increasing demand and is proving to
be a drag on the economy. Major enhancement in the division are therefore needed to
support the nation’s continued economic development and to decrease poverty.
Fig. 9.1: Modes of transportation

 Roads: At present, roads are the foremost method of transportation in India.
They fetch almost 85 percent of the nation’s passenger traffic as well as more
than 60 percent of its freight. India’s highway network density at 0.66 km of
roads per square kilometer of territory is parallel to that of the United States
(0.65) and much larger than China’s (0.16) or Brazil’s (0.20). Yet, most of the
roads in India are narrow and are congested, with poor surface quality, and 33
percent of India’s rural areas do not have all-weather roads.
 Railways: Under the single management, the Indian Railways is considered

one of the biggest railways. It generally carries around 19.8 million passengers
as well as 2.4 million tonnes of cargo a day. It is also one of the world’s leading
employers. The railways perform an important role in shifting goods and
passengers across India’s vast territory. Yet, most of its chief corridors have
capability constraint.

 Ports: India has nearly 13 major and more than 199 minor and intermediate Consolidation
ports stretching across 7500 km long coastline. India’s ocean borne global trade of Cargo
being 95% by volume and 67% by worth, the ports perform a very important
role in developing international trade in a rising economy. These ports contribute
towards the nation’s growing global trade in petroleum goods, iron ore, and
coal, as well as the mounting movement of containers. Indian ports normally
handle more than 850 million tonnes of cargo and about 9.0 million TEU container
traffic in a year. The future prospects for port division, especially container ports Notes
is massive considering that the container traffic is anticipated to develop to 40
million TEU by 2025. Inland water shipping also remains mostly undeveloped
in spite of India’s 14,000 kilometers of navigable rivers and canals.
 Aviation: India has more than 128 airports, including international airports. On
an average Indian airports handle 142 million passengers and 1.6 million tonnes
of goods in a year. The dramatic increase in air traffic for both passengers and
goods in present years has positioned a heavy strain on the nation’s major
airports. Passenger traffic is anticipated to develop more than 15% annually
and it is projected that the aviation industry, presently 9th largest in the world,
will need 30 billion USD investment in the next 15 years to hold pace with the
rising demand.
 Urban Transport: India is experiencing rapid urbanization with the current

urbanization stages at 30% translating to inhabitants of approximately 340 million
living in urban divisions. The urban economy accounts for around 60% of the
GDP. In most of the developing economies such as India the motorization rates
are in double digits. Accident and casualty rates are one of the highest in the
world which is affecting mainly the poor and vulnerable without their own means
of transport. In the southern and southwestern locations of the nation, the
transport infrastructure is better developed.
1. _______refers to the movement of cargoes and persons from one location to

another.
2. _______ are the foremost method of transportation in India
3. India’s rising economy has witnessed a growth in demand for transport _______
and services.
4. India is experiencing quick _____ with the current urbanization stages.

Consolidation
9.2 TYPES OF TRANSPORTATION
of Cargo
In logistics we frequently come across a query regarding the modality in which cargoes
are shipped; whether a firm is aware of the accurate modality for their goods when
importing or exporting cargoes?
When transporting cargoes, for instance in containers, there are one or manifold
modalities involved. Here we discuss seven diverse modalities, to be consulted alone
Notes or in combination with one another, to create the most competent and price-effective
remedy for a firm’s distribution chain. When operated and linked correctly, this will
positively save a firm time, cost and effort. But what are the different modalities in
logistics? And how can a firm link these in an appropriate way, to be helpful for their
trade?
In logistics we differentiate the subsequent seven diverse modalities: Modes or types

of transportation refer to an amalgamation of networks, infrastructures, vehicles, and
operations. These comprise the road transport structure, train, ocean transport, and
modern aviation. These modes are discussed here.
1. Air freight
Fig. 9.2: Air freight

An extremely well-known and widespread modality is air transportation. This modality
is a quick, smart and safe way to ship a firm’s cargoes within hours from one destination
to another. Air goods transportation is extremely suitable for fragile and valuable cargoes.
It is nevertheless, a costly technique of transportation, but useful where time is of
essence. While utilizing an air freight, extra rules and set of laws might apply, such as
safety screenings, and extra checks for dangerous goods. The room as well as the
load is computed and weighed in air shipment, making the computation different from
other modalities.

2. Road transport Consolidation

of Cargo
Notes
Fig. 9.3: Road transport

You have all seen trucks carrying goods. This is a relatively economical and safe
modality that we commonly see. Though, when utilizing road transport a firm might
need to look into the elevated emissions that these trailers produce. Bearing in mind
the environmental responsibility we bear, intermodal shipping might be superior to
consider, which can definitely impact prices when utilized strategically.
3. Rail transport
Fig. 9.4: Railways in India

This modality is quickly growing as an (inter)-continental modality, for instance to- and
from countries such as Russia and China, linking with Eastern Europe. Rail transport is
a quicker modality than ocean transport and is ideal for transporting huge, out-of-
gauge, weighty cargoes as well as break bulk. Rail is an attractive, secure and
comparatively quick modality.

Consolidation 4. Deep sea

of Cargo
Notes
Fig. 9.5: Ocean transportation
Deep sea also referred to as ocean transportation is the main cost-efficient, yet time
consuming form of shipping. Ocean ships are mainly utilized for intercontinental
shipment. Ocean containers are frequently utilized in this modality, particularly for huge,
heavy, out-of-gauge and or else break bulk cargoes. Ocean transport is the most
generally utilized modality.
5. Short sea
Fig. 9.6: Short sea transportation

Short sea transportation mainly serves the ports that are situated in the same continent.
From one major port to another in another continent, or from a chief port to an exterior
port, short sea links are endless and are frequently united with rail links, shipping the
goods into the locality, ahead of its final location.
6. Inland shipping
Fig. 9.7: Inland shipping

Shipping above the inland waters, a modality that frequently subsist within one nation Consolidation
or port region, for instance in Europe such as the Belgium Netherlands Luxembourg of Cargo
region (Benelux). Inland transporting is utilized to shift cargoes ahead in inland ports
through inland seaways, which cannot be attained or sailed by huge deep sea ships.
1. Deep sea also referred as________.

Notes
2. Modes of transportation are divided into ______.
3. ______shipping is largely utilized for shipping liquids as well as gases.
4. An extremely well-known and widespread modality, is ______ .
9.3. AIR FREIGHT CONSOLIDATION

Air consolidated shipping is a means of shipping where an air consolidator unites all
individual LCL consignments from several consignors into one full ULD shipment.
Taking part in consolidated distribution earns the shipper an ideal rate. When the full
ULD shipment reaches its location, the consignments are then deconsolidated into
their original LCL consignments.
In this form, shipments from multiple consignors share space on an airplane. All
consignments are listed on the similar master way bill, but each consignment also
possesses house way bill. This structure keeps the goods organized. Air freight
consolidation is very fast and shifts a shipment to its destination in the shortest possible
amount of time.
LCL vs. FCL

 Less than container consignment is referred as LCL or LTL, that is, a shipment
which is too little in mass to need a full ULD load to ship. These forms of
consignments are priced based on quantity and are consolidated to fit into a full
ULD.
 The option is full container load (FCL), which is when a consignment does have
adequate mass that need a complete ULD to ship. This sort of shipment generally
has a flat rate per ULD.
 Advantages of Air consolidated shipping
 Price savings. Often, consignors will merely use half or two-thirds of a ULD,

Consolidation but have to pay for the full space. Consolidation services unites several LTL
of Cargo shipments that are heading to similar spots into a full ULD load, and a shipper
pays only for the space for which freight takes up.
 Chance of damages is less. Where LTL utilizes a hub-and-spoke distribution

form with less touch points, consolidation utilizes a model that considerably
decreases the handling of the cargoes as freight shifts from consignor to
consolidation center to receiver/consignee. With less touch points there’s less
Notes chance for cargo to be damaged.
 Faster to market. A consolidation plan can assist a consignor to obtain their

freight delivered where it requires to be, as per their schedule. An air consolidator
with huge freight volumes can put a strategy into place that adds the freight on a
ULD and enhanced utilizing space and a swifter shipping distribution model.
 Cons of Air Consolidated Shipping
 Finding a consolidator- Not all consolidators are willing to move consolidated

consignments because of the added difficulty. When a consignor finds a
consolidator who is willing and able to execute consolidated shipments, you
require to be aware that they are charging you properly.
Proper planning- Consolidated consignments need more organization and

strategies than FCL shipments. As a consignor, you require to be aware of
pricing policies, sizes, timing, and other specifications in order to ensure your
consignment gets where it is required to move safely and quickly.
 Time- Consolidated consignments can take more time than FCL transportation
because of the added packs. As a consignor, you require to be conscious of this
and plan accordingly.
 Starting with Air Freight Consolidation Service
Many exporters don’t instinctively think of air freight as a possible choice for shipping
their freight. Sometimes it’s a rigid idea about price, sometimes it is a false impression
about potential. But there are a several more options than consignors realize. For
instance, they can transport anything from a few kilos to thousands of kilos to most
internal and worldwide destinations.
1. The Upside: The frequency based on the destination / origin can be once or
twice weekly, and the anticipated transit time is faster in nature.
2. The Downside: The downsides are concerned for instance customs can examine,
inspect a consignment inside the consolidation, thereby delaying the process
that you’re trying to speed up. In other cases, the airlines sometimes obtain Consolidation
more freight consignments than their daily capacity limits, which can delay your of Cargo
shipments. Moreover, there exist other incidents too such as misrouting, loss of
goods, and robbery, which are seldom but can take place.
3. The procedure: Obtain the correct information:
 Cargo name with description & harmonized system (HS code #) per
product Notes
 Cargo packed weight, size and dimensions per box / wooden crate
 Port of origin and destination cities
 Final destination of international airport
 Finding a Consolidator: Once a consignor obtains a request in front of a

reputable consolidator, they should be able to obtain an email back with costing
generally within a few hours.
Air consolidation costing is generally based on the gross or volume weights

(density versus dimensional weight). The airlines will use whichever is the higher
weight. Charges go by the weight break as mentioned below:
 Minimum
 Less than 45 K
 45 K
 100 K
 300 K
 500 K
 1000 K
Charges and weight breaks will vary from location to location, as each has its own
cost structure.
In order to calculate 'volume weight' consolidators use the following formula-
Multiply the length by the width by the height (in inches) to obtain the cubic inches,
then, divide by 166 to obtain the volume weight or, Volume weight = (L X W X H)/
166

Consolidation  Process of Air Freight: Air freight consists of moving the cargo from Point X
of Cargo to Point Y through aircraft. By utilizing an air freight, goods are transported
quickly across the world. Though it may seem to be easy the process can be
quite difficult. A firm is required to think about whether air shipment is right for
them, understand all that’s needed, have the accurate documentation so that
shipment isn’t delayed, and connect to a professional consolidator to make
sure their transaction flows smoothly.
Notes Step1:Requesting quotes and order the cargo
Once a firm has decided that air freight is correct for them, they need to discuss and
negotiate with their foreign suppliers to make sure they can comply with air shipment
requirements. Air shipment is a two-way contract, so they require to have their vendor
on board if air shipment is their transport of choice.
Step 2: Understand the force of air shipment

Before a firm signs any documentation with their supplier, ensure they understand
how air freight functions and the impact of utilizing air shipment to transport their
cargo.
This comprises doing some research to understand how volumetric ratios work, what
air freight containers to use, what are the airfreight security regulations, etc.
Step 3: Pack the goods and book the freight

The next step is to pack the goods and book the freight. Further, a firm should make
sure of the following:
 Speak to your consolidator about any limitations relevant to the aircraft. A firm’s
goods will clearly be required to fit in the aircraft.
 Compare diverse services. There are several available choices and paths for
airfreight around the globe. This was extensively impacted by the COVID-19
pandemic, which forced many businesses to get used to and think of innovative
paths to transport cargoes around the world as air freight alternatives became
limited.
 Select the right path. Usually, a firm can select between different airlines providing
diverse routing and shipment times.
Step 4: Air consolidator arranges shipment

Once a firm’s goods are packed and their freight is booked, it’s time for your consolidator

to arrange your shipment. In case of exports a firm is required to prepare documents Consolidation
such as commercial invoice, packing list, Quality certificate, Certificate of origin , of Cargo
Exporter declarations, Dangerous goods forms, etc. Further, once a firm’s flight is
booked, an airway bill will be produced to sketch the service and agreement of carriage.
The cargoes will then transported on designated services and can typically be tracked
online via their air consolidator.
Step 5: Cargoes are processed via export customs clearance and placed for
Notes
shipment
On arrival, a firm’s goods will move through several stages. During journey, the ICE
will initiate customs clearance so that their cargoes can arrive at respective locations
with all duties and GST paid. Subsequent to this, when the goods land, cargoes will
be moved to cargo terminal operator. CTOs have responsibility under custom legislation
to ensure the protection of the cargo terminal and cargoes subject to customs control.
The CTO will separate the goods which are ready for collection.
 Obtaining a Master Airway Bill
Fig. 9.8 : Airway bills

A “Master Airway Bill” (MAWB) is offered for all cargoes covered by one or more
“house” airway bills which merely refers to an airway bill provided by an air
consolidator who is acting as carrier.
If a firm has arranged their shipment through a MAWB, the cargoes will perhaps be
consolidated. On arrival, the goods will then be shifted to a Customs Bond facility
for deconsolidation. At the bonded area, customs are informed that the goods has

Consolidation arrived by providing an outturn report, which spotlights the particulars of air cargo that
of Cargo has arrived in that location and has been discharged from an airplane. Each shipment
obtained must be outturned.
If arranged on a direct airway bill, in such case, freight is shipped on the airline without
House Air Way Bill (HAWB). Direct consignments are normally used when freight
and service requirements are immediate. Further these freights will not be consolidated
with other goods. The cargoes can then be received straight from the CTO and do not
Notes need deconsolidation.
Step 6: Cargoes are moved from the airport to the consignee

Once cargoes are customs cleared and outturned, a freight forwarder will receive the
goods and distributed it to your final location. A tail lift is fitted with on the rear of a
work trailer where a device is permanently installed and is designed to assist the handling
of cargoes from ground level or a stuffing dock to the level of the truck bed, or vice
versa. It’s also helpful to know the distribution point’s opening hours to make sure
goods can be supplied within their timeframe. A firm’s air consolidator will work with
the organization to recognize this key information.

1. LTL utilizes a ______distribution form with less touch points,.
2. In ______ shipment the charges and weight breaks will vary from location to
location
3. _______consignments are normally used when freight and service requirements

are immediate.
4. On _____, the goods will then be shifted to a Customs Bond facility

for deconsolidation.
5. In ______ shipment the charges and weight breaks will vary from location to
location
9.4 SEA FREIGHT CONSOLIDATION

In sea freight shipping, containerized goods arrive in two main forms - LCL (Less than
Container Load) as well as FCL (Full Container Load). As their names spotlights,
LCL comprises merchandise that takes up less than the complete space of a full container,
which leads to sharing a container, and FCL merely means having an complete container
to yourself.
Consolidation
of Cargo
Shipper Delivery to airport Shipping Distribution Consignee
Fig. 9.9: Sea freight consolidation Notes

 LCL shipping: How it works
Also referred as ‘groupage’, LCL shipping basically refers to grouping several shipments
together in one container. Since this comprises sharing a container, it is a little more
logistically difficult and needs more and better coordination to make sure that everything
moves effortlessly and as planned.
Consolidation ofcargo
Fig.9.10 : Cargo consolidation
 Booking an LCL
When a firm decides to transport LCL, they are required to offer the dimensions and
weight of the goods to their sea consolidator. Documents and structure such as the Bill
of lading, Packing list and commercial invoice must also be filled in and submitted.
Based on a firm’s goods type and final destination port, extra documentation may also
be needed.
 Making merchandise ready

LCL consignments are generally shipped on a schedule such as fixed or weekly or
fortnightly based on the final destination port, so timing is important. Grouping of LCL
goods takes place at a store house, referred as the origin consolidation store house. A
sea consolidator will pick the cargo from the manufacturer’s factory, which is the more
general practice. Alternatively, a firm can also send the goods to the sea consolidator’s

Consolidation warehouse by own trailer or truck. Moreover, when a firm selects to do the latter,
of Cargo your goods arrive well-arranged, packaged, and ready to be stuffed.
 Transfer to respective port

As mentioned on the contract/booking, when the LCL container is packed and
prepared, it is shipped to the departure port. Normally the Port cut-off dates for
containers are about three days earlier to sail date. Once the consolidated goods
Notes arrive at respective port, they are transmitted into the hands of the shipping line and
then transported to the port of destination.
 Transshipment
If a firm is shipping to a secondary port, their LCL goods may be offloaded at a
transshipment spot, where it will either get shipped to another container or wait for
more goods to load the container before commencing to its final destination.
 Arrival at final destination

As soon as the LCL container reaches the destination port, the sea consolidator ‘s
destination agent will take over. They will receive the container and transfer it to a
store house called the destination deconsolidation warehouse. There, the goods in the
container are de-stuffed into individual LCL consignments.
 Obtaining merchandise
At this juncture, the buyer can move to the warehouse to pick up the goods.
Alternatively, they can have their own agent to handle delivery on behalf of buyer, in
such case the merchandise will be sent from the deconsolidation store house to the
final destination store house from which it will be handed over to the buyer.
 Delays in LCL transportation

Usually, LCL transportation does not take any longer than FCL transportation in terms
of journey time if all moves well. It may even be quicker if they are lucky enough to
preserve a remaining space fit for your goods at the last minute.
 Shared container and responsibility

However, a firm may face delays when waiting for other consignors to get their goods
grouped and ready. In addition, if any paperwork mistake arises, delays are highly
feasible as customs may hold the entire container. Therefore, a firm should make sure
to keep their cargo ready on time and ensure their documents are correctly and
precisely filled in.

 Secondary ports Consolidation

Another delay related problem may occur if a firm is shipping towards small ports. Most of Cargo
global trade lanes provide frequent and fixed sail dates. When a firm’s goods are sent
to small ports, it means that they may have to wait a couple of weeks for the
subsequently sail date, and then have to wait more for domestic feeders to ship such
goods from the main ports.
 Transshipment and intermodal Notes

If goods are going through transshipment and/or any intermodal shipping, delays are
not unusual. As highlighted above with transshipment, the goods may require to be
de-stuffed and transferred into another container or wait for other goods to be stuffed
into the container. As for intermodal shipping, more logistics are needed as goods will
require to be shifted from the deconsolidating port to the domestic terminal and onwards.
Things to bear in mind

 LCL costing is based on the volume and not weight for the cargo. Weight only
becomes an issue if it is in excess and being trucked to and/or from the port.
 Cargoes such as automobiles cannot be transported via LCL shipping.
 Based on the goods, port of origin and destination , added documents and
certificates may be needed.
 Goods may be damaged in journey if the other shipments are not appropriately
packed. Other features such as bad weather at ocean may also leads to cargo
damage. Transshipments as well as intermodal shipping result in high probability
of goods being damaged as it will move through the hands of several people.

1. In_______ the consignors are required to offer the dimensions and weight of
the goods to their sea consolidator.
2. LCL consignments are generally shipped on a ______.
3. Goods may be damaged in journey if the other shipments are not appropriately
_____.
4. Delay may occur is if a firm is shipping towards a _____ ports.

Consolidation
9.5. ROAD FREIGHT CONSOLIDATION
of Cargo
Road freight consolidation is important for trade success as well as to earn profits
owing to the immense advantages which it has to offer. Increased effectiveness, quicker
delivery, and decreased operational costs make this a preferred alternative for
consignments with low volume. Actually, it is a method in which various small
consignments that are all being transported to the same place will be bundled, palleted
Notes or consolidated on a single trailer, and then transported together to their final destination.
The method is not only helpful to the consignor, but also to the customer or retailer to
whom the goods are being sent. Consignors are also able to pay bulk rates. This
makes road freight consolidation perfect for companies who normally send a few
pallets of goods at a time, or those who have a high occurrence of smaller consignments.
Fig.9.11 : Road freight consolidation

While the goods in the shipment most often arrive from a single vendor, other times the
goods can arrive from multiple spots. This ensures the trailer will be filled and assist to
hold costs down. Commodities are then normally de-stuffed and organized, and sent
to final distribution. Further, these firms provide a form of surface freight consolidation
or pooling referred as shared truckload, which can be accessed via the platform of
these firms.
With the growing trade and commerce, the requirement for containerized transportation
from the international market has grown as well. The factors such as unavailability of
containers, longer wait time, traffic, non-strategic transportation, etc., are several factors
that have led to increased shipping prices and freight charges.
1. Surface freight consolidation and deconsolidation: The term surface freight

consolidation is pooling various small consignments into one large consignment.
Thismeans that a number of manufacturing units can join hands together and use
one container or trailer for their goods based on their requirements. When the
consolidated goods arrive at its destination/s, it is deconsolidated i.e. separated
into relevant packages and distributed accordingly. And not only diverse firms

but a single firm can also employ consolidation and deconsolidation if their Consolidation
cargoes are moving to several diverse destinations on a single path. of Cargo
 Merits of surface freight consolidation & deconsolidation
1. Minimize transportation charges: A huge volume of freight has lower
transportation costs. Thus, with surface freight consolidation and deconsolidation,
numerous companies (with LCL or LTL) can unite their consignments together.
Therefore, they evade the charges for renting an entire container or truck, in
Notes
turn, save container charges, and other freight costs.
2. Enhanced relationship among shippers and carriers: Consolidating for
surface freight forwarding also improves professional rapport among associated
firms by establishing long-term transportation partnerships with them. The carrier-
consignor bond is improved, with decreased overhead operational charges and
augmented profits for all the stakeholders.
3. Saves time & increases effectiveness: While taking the total time taken by
each container individually, one consolidated container has shorter transporting
time. ( Instead of doing five rounds for each consignment, all the cargoes reach
in a single round in less time) Quicker transmit time, decrease in costs, and
reduced wait time all add up for increased effectiveness..
4. Better transportation scheduling: Because there are several firms involved,
the carrier is accountable for the consolidated consignment. So, the stuffing
process is quicker. Consolidation reduces the docking and wait time. This holds
the consignment schedule on track.
5. Happier Customers : With surface freight consolidation and deconsolidation,
the entire shipping method becomes quicker and more effective. Thus,
deliverables would reach your customers quicker. The enhanced services will
attract them to your trade.
 Risks of surface freight consolidation: A surface consolidation and
deconsolidation plan has its share of risks. Some of them are:
 Consignors may not have the available resources for the process of
consolidation and deconsolidation. In that case, they would require to
outsource the consignment.
 With numerous touch points and service agents, the entire process can be
confusing. Diverse companies can have different locations. Owing to this,
the goods might require to be stuffed and un stuffed multiple times, increasing
the risk of loss or damage.
Consolidation  Because several shippers are concerned, coordination and efficient

of Cargo communication can be a hassle.
 A hindrance in surface consolidation or deconsolidation can delay the

complete shipment, thus, creating delayed services and delivery.
The enormous benefits comprised by surface consolidation and deconsolidation

outweigh the risks. If consignors opt for a reputed surface consolidators or shipping
carrier, these risks can be reduced, or even prevented on the whole. With appropriate
Notes
planning, recorded shipping particulars, firms with a superior track record, reliable
sources, surface consolidators liability insurance and now, with the assistance of
elegant containers and huge data the consignment can be tracked effectively, ensuring
protection and secure distribution.

1. ______ is quicker in surface freight transportation.
2. Surface transport helps to minimize transportation charges - True / False
3. With surface _____ consolidation and deconsolidation, the entire shipping method
becomes quicker and more effective.
4. A huge _____ of freight has lower transportation costs.
5. ______ is quicker in surface freight transportation.
6. Surface transport helps to minimize transportation charges - True / False
 Transportation refers to the movement of cargoes and persons from one location
to another through various means by which such movement is accomplished.
 Roads are the foremost method of transportation in India . They fetch almost 85
percent of the nation’s passenger traffic as well as more than 60 percent of its
freight
 An extremely well-known and widespread modality, is air transportation. This

modality is a quick, smart and safe manner to ship a firm cargoes within hours
from one destination to another.
 The term rail transportation refers to the transport in which the cargoes are
transferred from one location to another through the rail network. It assists to

offer administrative amenities to the government. The public servants as well as Consolidation
the defense forces function their mobility from the railways. of Cargo
 Deep sea also referred as ocean transportation is the main cost-efficient, yet
main time consuming form of shipping. Ocean ships are mainly utilized for
intercontinental shipment
 Air consolidation costing is generally based on the gross or volume weights

(density versus dimensional weight), whichever, is the higher weight, the airlines Notes
will use.
 In sea freight shipping, containerized goods arrives in two main forms - LCL
(Less than Container Load) as well as FCL (Full Container Load).
 Road freight consolidation is important for trade success as well as to earn

profits owing to the immense advantages which it has to offer. Increased
effectiveness, quicker delivery, and decreased operational costs make this a
preferred alternative for consignments with low volume.
TERMINAL EXERCISE
Define the following terms-
1. Transportation
2. Inland shipping
3. Master Airway bill
4. Transshipment
5. Volume weight
6. Write a note on pipeline transportation.
7. List the confronts of air freight shipment.
8. How do you obtain a master airway bill?
9. Highlight the functions of LCL consolidator.
10. Discuss the risks involved in surface freight consolidation.
11. Explain the transportation system in India.
12. Explain the different modalities in logistics.
13. Sketch the process of air freight.

Consolidation 14. How does a LCL sea freight consolidation function?

of Cargo
15. Spotlight the merits of surface freight consolidation & deconsolidation.

9.1
1. Transportation 2. Roads 3. Infrastructure

Notes
4. Urbanization
9.2
1. Ocean transportation 2. Seven 3. Pipeline
4. Air transportation
9.3
1. Railway 2. Air 3. Quick
4. Road
9.4
1. hub-and-spoke 2. Air 3. Direct
4. Arrival
9.5
1. LCL sea transportation 2. schedule 3. Packed
4. Small
9.6
1. Stuffing 2. True 3. Freight
4. Volume

Air Consolidation MODULE - 2
Consolidation
10 of Cargo
AIR CONSOLIDATION
Notes
Air shipment is gaining more and more attention as time moves on. The demand for
regular deliveries, delivery speed, and growth in global business expansion is pushing
export-import firms to have more effective shipping alternatives for customers.
Eventually, as the fastest form of shipping, air shipment generally proves to be the
finest remedy for firms looking to expand their global consumer reach. In air cargo
consolidation, all of a firm’s cargo aboard the airplane operates under the same Master
Airway bill between the air carrier and the cargo consolidator but each of the individual
consignments have their own associated House Airway bill to keep it organized.
LEARNING OUTCOMES
 explains the concept of air consolidation;
 identifies the prospects of air consolidation;
 assesses the prime concern of ULD identification;
 categorizes different Unit load devices;
 outlines the air consolidation documents.
10.1 WHAT IS AIR CONSOLIDATION?

Air Consolidation is a logistics strategy where an air consolidator combines several
consignments together within a specific geographic region into a single consignment
ULD / container. This container is then line hauled to a final destination point. Here,

MODULE - 2 Air Consolidation
Consolidation lesser consignments that were part of shipments of the consolidation are broken down
of Cargo and transported to their final location. It is the process where an air carrier or air
consolidator agent combines various smaller consignments into one full ULD.
A consolidation comprises various air cargo shipments (consignments) booked under

a single master air way bill. The individual consignment will have their own house air
way bills. Each freight forwarder has his own path of numbering. There is no global
standard. A consolidated shipment is the outcome of pooling the multiple LTL
Notes consignments from several consignors into one full ULD / container (multi-stop
truckload) shipment. Consolidated shipping permits shippers to earn favorite rates
and assists optimal distribution chain logistics by saving time and decreasing cost.
Consolidated shipping is perfect for traders that have only a few pallets of freight or
lesser shipments that are required to be packaged / palletized and transported in one
container / ULD. These shipments will come from several locations from various
consignors, in order to avoid paying a higher rate. This job is done by the consolidator
agents who will consolidate them into one single consignment.
Fig. 10.1: Air consolidation

Let us now learn about the benefits or significance of air consolidation.
Significance of air consolidation

1. Cost effective: Many consignors believe this is the most significant benefit of
consolidation. If a firm only uses half or two-thirds of a ULD, they will naturally
still have to pay for the complete space. Consolidation permits a firm to merge
multiple LTL consignments which are moving in the same vicinity into one full
ULD load shipment, and they pay only for the space which they occupy.
2. Decreased damage risk: Even though consolidators deal with sophisticated

technology, in freight shipping, the cargo damage is still a lingering problem.
Consolidated transport significantly decreases the on-again, off-again handling
of the cargo which will be moving across the shipper, consolidation center, and

buyer / importer. With lesser touch points, the hazard of damaged cargoes is Consolidation
considerably lowered. of Cargo
3. Enhanced quality control: Another advantage of consolidation is that it permits
a consignor to take control of their cargoes. Consolidation permits a firm to
carry out quality control measures as soon as the cargo even reaches the store
house. This in turn decreases the chances of losing time as well as control owing
to unforeseen issues with that order.
Notes
1. Air consolidation is the process where an ______ combines various smaller
consignments into one full ULD.
2. ULD stands for _____ .
3. Consolidated shipping is perfect for _____ shipments.
4. A consolidation will comprises of various air cargo shipments (consignments)

booked under a single ______ air way bill.
10.2 AIR CONSOLIDATION BENEFITS

You have already learnt that air freight consolidation is a transporting service that can
decrease the entire shipping cost as well as augment security. The air freight consolidation
service may be called consolidation service, assembly service or cargo consolidation.
But no matter what an air consolidator agent elects to call it, the idea remains the
same. Because of the air consolidation by transporting multiple commodities in a single
ULD rather than sending several smaller consignments separately, consignors are able
to pay bulk rates. This makes air freight consolidation perfect for firms who normally
send the less quantity pallets of cargo at a time, or those who have a elevated frequency
of lesser shipments
There are several benefits for the traders who utilize the air freight consolidation. Let
us see what they are.
1. Important Cost Advantages: There are several advantages to air freight

consolidation for the shippers who are using LCL air shipment. The foremost is
reduction in freight charges. These savings take place because a consignor will
share the price of shipping. It means a consignor will typically pool their freight
with other exporters on the same ULD.. A consignor will only pay for the space
that their cargo takes up and nothing more. By optimizing how a firm utilizes
Consolidation space in the ULD in partnership with other firms who ship to the same location,
of Cargo a firm’s overall price of shipping will be lowered.
By using an air freight consolidation, consignor can also avoid the heavy charges
for storage locations and inventory administration facilities. Furthermore, in order
to manage a firm air consolidation from origin to final distribution , a consignor
need not store their shipment on their own. They can send it to the warehouse /
facility where it will be shipped to consignees. This will help to streamline the
Notes procedure. The savings can be considerable enough to make a huge difference
in a firm’s bottom line, and boost their profit margin. This can be a genuine
difference-maker for mid-sized and smaller trading firms who have their profits
cut into significantly by transporting costs.
2. Safety : When a consignor ships his goods through air freight consolidation, it
decreases the risks . When a firm has systems in place and utilizes a skilled
consolidator to handle the freight, then a consignor’s goods will be in safe hands.
Sending cargo via air freight consolidated means that the cargo will be moving
on a single ULD which will protect the cargo too . The quality handling of a
skilled consolidator can offer a consignor peace of mind that the consolidated
air freight will securely reach its final destination on time.
Apart from safety , air freight consolidation provides added trustworthiness

because a consignor goods are handled less, there is a lesser risk that something
will go missing, or be sent to the wrong destination point. There is less chance
that something will disrupt the distribution and cause it to be late.
3. Enhanced Customer Satisfaction: Clearly, having satisfied consumers is an

immense benefit in itself. Using an air freight consolidation helps a firm to provide
their goods to customers quickly and effectively. This is particularly true if a firm
sends stock in advance to the consolidation facility. When an order arrives in,
consolidator will send the goods directly from the warehouse / center, rather
than picking up from the company. This permits a firm to stay ahead of demand,
and be on top of their consumer’s requirements.
4. Manage the complete shipping process: Using an air freight consolidation

also provides the firm more control over their due dates and manufacturing
schedules. They will also be able to administer the complete supply chain either
on their own, or through a consolidator partner. Having more control over a
firm’s consignment will notify the consignor sooner, thus preventing commodities
being sent to the wrong location. If the consolidator discovers problems with

the shipment, it will be the responsibility of the consolidator and they will find Consolidation
suitable remedy for the same. of Cargo
5. Better Consistency: Once a firm learns the ordering patterns of their customers,
they can construct them into their consolidation plan. This permits consignors to
have stock readily available for their customers and not be hassled to fill orders.
Having a reliable shipping schedule will also assist the consignor to take benefit
of the savings that air freight consolidation offers. When a consignor increases
the consistency of their distribution chain, it will lessen the odds that they have a Notes
delayed shipment, missing cargo, or a consignment sent to the wrong consignee.
6. Enhance customer & carrier relationships: By transporting smarter and

more effectively, consignor will be able to build good associations with other
firms, consumers, and their air carriers. Initially, consignor can establish
associations with other trades who depend upon LTL shipping. When a firm
learns that other organizations also send the same product, or a similarly-sized
weight on the similar schedule to a shared consignee, a consignor can set up a
shipping partnership that will help to decrease the price for both of you and
construct smarter loads. As for your customers’ point of view, they will also be
grateful that you have gotten together to arrive at a more effective shipping
structure. Further, they will also appreciate the savings that air freight consolidation
offers. Working with the correct air carriers will make it all happen for a consignor.
An organization goods may have unique requirements that their carrier will
have to offer for, and not having an association in place will not reassure them
that things are going to be fine. Reliable relationships with your air carrier can
also direct to better pricing in the future.
7. Enhanced flexibility & time management: Using air freight consolidation

will also enhance the flexibility of your shipping requirements and make your
orders more timely. Air freight consolidation frequently provides faster transmit
times, as well as decreased wait times for shipping small consignments. Having
the freight stored at a consolidation warehouse / facility will have the commodities
ready to ship when they are required for shipment. This enhances the timeline
and stock flexibility, which the seller customers will appreciate should they
need a change.
1. Air consolidation is the process where an ______ combines various smaller

consignments into one full ULD.
Consolidation 2. ULD stands for _____ .

of Cargo
3. Consolidated shipping is perfect for _____ shipments.
4. A consolidation will comprises of various air cargo shipments (consignments)

booked under a single ______ air way bill.
10.3 DEMERITS OF AIR CONSOLIDATION

Notes While air consolidation of commodities can offer benefits, there may be possible
drawbacks as well:
 Possibility of inconvenience: The utilization of consolidated freight can take

somewhat longer for consignments to arrive while the consolidation and de-
consolidation procedure adds extra work to the logistics process. If a firm doesn’t
account for this, they can experience issues with delays that annoy customers or
leave your firm without stock at hand.
 Not appropriate for all shipment types: Cargoes that are fragile, perishable
or dangerous aren’t suitable for consolidated cargo. Fragile as well as perishable
consignments that can get broken or perish can lead to loss and can
inconvenience the consumers who are waiting for their commodities. Dangerous
materials can lead to hazardous accidents when put with other goods. Also,
consignments that require to move through customs can create frustrating delays
if a firm consolidates them.
 Extra strategy involved: Selecting to consolidate the freight requires finding

a suitable carrier that can carry consolidation at an economical price. Firms also
have to do more work to make sure that consignments still come on time and
plan to handle any delays that occur in the process.
 Securing a carrier: Owing to the added complication of consolidation, not all

carriers are prepared to transport consolidated consignments. Even when a
consignor is able to find a consolidator that’s willing and capable to transport
consolidated consignments, make sure that they are well informed about their
consolidation process and they charge appropriately. Associating with an online
consolidator agent can help to guarantee that consignor could obtain a fair rate
when determining the carrier.
 More time spent on strategy: Although not essentially a bad thing, consolidated
shipping needs additional time spent in organizing and planning. Consignor requires
to be extra cautious and aware of features such as pricing, sizes, timing, and

numerous other specifics to ensure that their distribution comes securely and Consolidation
promptly. of Cargo
 Time consumption: The consolidated consignments can typically take more
time than other FTL shipping methods owing to the additional steps within the
procedure such as consolidation and deconsolidation. Before planning a
consolidated consignment, shippers must be conscious of the complete procedure
and plan accordingly.
Notes
1. Fragile goods are suitable for air freight consolidation- True / False.
2. Air freight consolidation charges are economical to all the destinations - True /
False
3. Consolidated shipping need additional ____ for organizing and planning.
4. Before planning a consolidated consignment,____ must be conscious of the

complete procedure
10.4 AIR CONSOLIDATION PROCESS

So far, we have studied about the advantages and demerits of using air consolidation
for the transportation of goods. Let us now learn about the process of air consolidation
of cargo.
The method of airfreight is utilized in conjunction with other transporting methods such
as train, marine, is extensively used and has become one of the most effective distribution
options in present global trade. The airfreight industry has developed progressively
over the past decades and is considered an effective and fast path of transporting
cargoes.
The process of air cargo has several vital steps taken by the air freight consolidator
and the air carrier. Here is the process on how air shipment is carried out on a regular
basis.
The air freight process consists of five major steps. These are-
1. Shipping
2. Forwarding out
3. Air transport

Consolidation 4. Forwarding in
of Cargo
5. Consignment
All these five steps have further steps one has to take. There are certain precautions
one has to take to ensure a smooth process, with no damage to the goods and with
effective coordination with the airlines. Let us learn more about this process now.
I. Shipping
Notes
There are three significant steps that are followed under the procedure of shipping.
1. Assembling the consignment: Receiving the cargoes for consignee and

preparing the packing objects and the packing list is significant. Once the
consignment is assembled then the cargo will move onto the next step.
2. Creating RFT (Read for Transport): It is also significant to make sure

you pack your cargoes and label packages clearly. Subsequent to the
packaging, the air freight consolidator will prepare any needed protected
documents and other pertinent transportation documentation and prepare
for consignment.
3. Ordering Transport: Once the consignment has arrived, it will be sent to

the air freight consolidator warehouse and left at storage space ready for
pick up.
II. Forwarding Out

When the cargoes are being exported, the following steps apply during
transportation.
 Cargoes are picked up after the order is obtained and given a POA (Proof
of Acceptance)
 An incoming verification is performed and sorted based on the flight dates

for cargoes to be transported
 Re-verification for labeling mistakes and re-label if needed and make essential
protection declarations
 Arrange all pertinent customs documents and clear for customs
 Consolidate all cargoes according to all regulations and prepare a master

AWB (Air Waybill)
 Arrange shipment to airline and inform the obtaining end of the incoming
consignment
III. Air Transport Consolidation

During the air transportation, there are several important steps that are carried of Cargo
out during the voyage of the package.
 Arrange and plan for handling and storage of consignments based on
confirmed bookings.
 Execute incoming and administration verifications
 Sort cargoes and documents Notes
 Execute outgoing and administration verifications

 Arrange ULDs (Unit Load Devices) according to precise instructions
 Arrange ramp transport and safety checks
 Load onto cargo aircraft and prepare for flight
 Once landed arrange for ramp transport of goods
 Obtain ULDs and breakdown ULD as per instructions
 Verify incoming consignments against documents
 Arrange for store house storage and clear flight manifest
 Load cargoes onto truck and dispatch
IV. Forwarding In
Importing cargoes through air transportation is considered a convenient technique
to transfer packages. Here are few steps taken to make sure cargoes are
delivered on time-
 Picking up the relevant documents once advised by the airline and arranging
internal pickup of the documents
 Arranging customs documents, aiding with clearance as well as printing the
customs release note
 Prepare for local pick up of the consignment from the airline
 Arrange delivery to buyer with all pertinent documentation and obtain POD
(Proof of Delivery)
V. Consignment
 Obtaining shipment – Once the consignment is obtained, verification of
all number of cargoes will take place in order to watch any noticeable
damage. Once cleared, then POD is offered.
Consolidation  Unpacking cargoes– Unpacked cargoes are checked thoroughly for

of Cargo any damage that may have taken place during transportation.
 Verify cargoes with administration – Count the present cargoes with

the packing list or purchasing order towards verification of any missing
items. Prepare for any warranty claims along with payments for transport
vendor where essential. Make preparations for customs declarations when
necessary.
Notes
1. RFT stands for ________.
2. AWB denotes ________.
3. Importing cargoes through ______ is considered a convenient method to transfer

packages.
4. The process of ______ need several important steps taken by the air freight
consolidator.
10.5. TYPES OF AIR CARGO UNIT LOAD DEVICES

An ULD (Unit Load Device) is a unique appliance that is utilized in air transportation
to load goods, baggage as well as mail. The ULD arrives in two forms such as pallets
and containers. Unit Load Devices (ULD) is utilized as containers carried in the holds
of properly sized and equipped aircraft which is in a protected form to carry baggage
and goods, so that they cannot move within the hold in an aircraft.
1. Containers
Fig.10.2: Aircraft containers

The air craft containers are of different types which are as follows- Consolidation
of Cargo
Demi, HMA stall, LD-1, LD-11, LD-2, LD-9 Reefer, LD-4, LD-7 with Folding
Wings, LD-7 with Angled Wings, LD -39, M1-H, LD-29 Reefer, LD-3 Reefer, M-
2, MDP, M-1, M-6, LD-8, LD-7, M-6, Type A Pen, PNA Half Pallet, PLA Half
Pallet, PMC/P6P Pallet, M-6 Twin car rack, LD-9 and LD-6
Table 10.1: Types of Uld Containers

Notes
S. Pallet Location Suitable Max gross Tare wt.
No. Type for wt
1 AKE Lower deck 747 ,777,A330 1,588 kgs 100 kg
2 AMJ Main deck 747 F 6804 cm 355 kg
3 PLA Lower deck 747 ,777 3,175 kgs 168 kg
4 HMA STALL Main deck 747 F ,777 F 3,500 kg 1310 kg
5 AKN Lower deck 747 ,777 1,588 kg 129 kg
6 RKN Lower deck 747 ,777 1,588 kg 82 kg
7 RAP 747,777 4,620 kgs
8 LD-1 747,777 ,767,787 1,588 kgs
9 LD-6 747,777 ,787 3,175 kgs
10 LD-9 747,777 ,787 4,624 kgs
11 LD-11 747,777 ,787 3,176 kgs
12 LD-39 747 5,035 kgs
13 M-1 747,777 F 6,804 kgs
14 M-1 H 747,777 F 6,800 kgs
15 M-2 747,777 F 11,340 kgs

Consolidation Table 10.2: Types of Uld Pallets

of Cargo
S. Pallet Features Suitable Maximum Tare wt
N. Type for gross wt
1. PAG, PAJ, All aircraft: Widebody 6,033 kgs 105 kg

P1P lower holds,
lower deck,
Notes main deck.
2. PLA lower deck 777 ,747 3,175 kgs 91 kg
3. PRA (16 Main deck 747 F,777F, 11,300 kgs 410 kg

Foot Pallet) A330
4. PMC or Main deck & 747,777, 6,804 kgs 120 kg

P6P Lower deck A330
5. PGA (20 Main deck & 747 13,608 kgs

Foot Pallet) Lower deck (Freighter),
also known 777
as P7A,P7E,
P7F,PSG,
PGE,PGA
6. PYB Main deck 747 F 1,814 kgs

(QL & QR
Position)
1. AKN is a _______.
2. PMC is a _______.
3. Unit Load Devices (ULD) is used as containers carried in the holds of properly
sized and equipped _____.
4. The ULD arrives in two forms such as _____ and containers.

Consolidation
10.6 IDENTIFICATION OF UNIT LOAD DEVICES
of Cargo
All ULDs are recognized by their ULD number. A three-letter prefix spotlights its sort
and key characteristics, follow by a 4 or 5 digit series number (4 if prior to October 1,
1993; either 4 or 5 if after October 1, 1993) to uniquely recognize it from others of the
similar type. The ending with a two character (alpha-numerical) suffix categorizes the
ULD’s owner (if an aircraft, often the similar as IATA designator codes . For
instance, AKN 12345 DL identifies that the ULD is a forklift able LD3 with the unique Notes
number 12345 and its owner is Delta Air Lines.
Table 10.3: IATA ULD Prefix
S. Type Base Size Contour / Restraint

No. (Depth × Base Width) (Overall Width X Height
1. A Certified 2,235 mm × 3,175 mm Main Deck, 2,438 mm

Aircraft (88 in × 125 in) × 2,438 mm (96 in
Container × 96 in)
2. B Certified 2,235 mm × 2,743 mm Main Deck, 2,438 mm

Winged (88 in × 108 in) × 2,438 mm (96 in
Aircraft Pallet × 96 in)
3. C Non-Aircraft - Lower Deck, 2,337 mm

Container × 1,626 mm (92 in
× 64 in)
4. D Non-Certified - Main Deck, 2,438 mm

Aircraft × 2,997 mm (96 in
Container × 118 in)
5. E Non-Certified 1,346 mm × 2,235 mm Lower Deck, 2,007 mm

Main Deck 53 in × 88 in × 1,626 mm (79 in
Aircraft × 64 in)
Container
6. F Non-Certified 2,438 mm × 2,991 mm Lower Deck, 4,064 mm

Aircraft Pallet (96 in × 117+3D 4 in × 1,626 mm (160 in
× 64 in)
7 G Non-Certified 2,438 mm × 6,058 mm Lower Deck, 2,007 mm

Aircraft Pallet (96 in × 238+1D 2 in) × 1,143 mm (79 in
Net × 45 in)
Consolidation 8. H Certified 2,438 mm × 9,125 mm Lower Deck, 2,438 mm

of Cargo Horse Stalls (96 in × 359+1D 4 in × 1,143 mm (96 in
× 45 in)
9. J Thermal 2,438 mm × 12,192 mm Main Deck, 2,438 mm

Non-Structural (96 in × 480 in × 2,438 mm (96 in
Igloo × 96 in)
Notes 10. K Certified 1,534 mm × 1,562 mm Main/Lower Deck,
Cattle Stalls (60.4 in × 61.5 in) 3,175 mm × 1,626 mm
(125 in × 64 in)
11. L Certified Multi- 1,534 mm × 3,175 mm Main Deck, 2,438 mm

Contour Aircraft (60.4 in × 125 in) × 2,946 mm (96 in
Container × 116 in)
12. M Thermal Non- 2,438 mm × 3,175 mm Main Deck, 2,235 mm

Certified Aircraft (96 in × 125 in) × 2,286 mm (88 in
Container × 90 in)
13. N Certified 1,562 mm × 2,438 mm Lower Deck, 2,007 mm

Aircraft Pallet (61.5 in × 96 in) × 1,626 mm (79 in
Net × 64 in)
14. P Certified 1,194 mm × 1,534 mm Lower Deck, 3,175 mm

Aircraft Pallet (47 in × 60.4 in) × 1,626 mm (125 in
× 64 in)
15. Q Certified 1,534 mm × 2,438 mm -

Hardened (60.4 in × 96 in)
Aircraft Container
16. R Thermal 2,438 mm × 4,978 mm -

Certified Aircraft (96 in × 196 in)
Container
17. S Certified Multi- 1,562 mm × 2,235 mm -
Modal Air/Surface (61.5 in × 88 in)
Container
18. U Non-Structural - Lower Deck, 4,724 mm

Container (Igloo) × 1,626 mm (186 in
× 64 in)

19. V Automobile - Main Deck, 2,438 mm Consolidation

Transport × 2,438 mm (96 in of Cargo
Equipment × 96 in)
20. W Certified ULD - -

for Aircraft Engine
Transport
21. X Reserved for Miscellaneous sizes, Main Deck, 2,438 mm Notes

airline internal use largest dimension × 2,997 mm (96 in
between 2,438 and 3,175 × 118 in)
mm (96 and 125 in)
22. Y Reserved for Miscellaneous sizes, largest Main Deck, 3,175 mm

airline internal use dimension 2,438 mm (96 in × 2,083 mm (125 in
× 82 in)
23. Z Reserved for Miscellaneous sizes, largest Main × 2,083 mm

airline internal use dimension >3,175 (125 in × 82 in)
mm (125 in
1. ______is a Non-Certified Aircraft Pallet.
2. ______ is a Automobile Transport Equipment
3. _____ type ULD refers to Non-Aircraft Container.
4. Z type ULD Reserved for _____ internal use.
10.7 DOCUMENTS FOR AIR CONSOLIDATION

A. Air Cargo documents: Following are the important documents needed for
the air cargo
1. Air freight consignments: It is handled by Air Waybills (AWB) which is

an agreement between the consignor and airline that spotlights the terms
and conditions of air transportation and can never be done in negotiable
form.
2. Export License: An export license is a certificate provided by the suitable

licensing agency. Only after obtaining such license an exporter is permitted

Consolidation to transport his goods in a foreign market. The license is offered to an

of Cargo exporter after a vigilant review of the particulars surrounding the specified
export transaction.
3. Packing List : It is a comprehensive document mentioning how all the

cargoes have been packaged inside the consignment. The document
comprises of packaging methods, quantities, sizes and weights of all
packages inside the consignment. Based on the method of consignment,
Notes the list of freight packing can be generated.
4. Commercial Invoice : This invoice authenticates all of the particulars of

the cargoes that have been shipped. This comprises consigner and
importer’s details, cargo information, costing, currency and International
commercial terms, etc. In other words it is a statement comprising complete
particulars of the cargoes shipped.
B. Statutory Declaration Form (SDF): As per rule 6(1a) of Foreign Exchange

Regulation Act, 1973 the SDF stands for the Statutory Declaration Form.
When the shipping bills are carried out electronically in customs house, this
document is to be utilized, whilst the document GR is used when shipping bills
are done manually.
C. Quality Certificate: This certificate acts as the procedure of certifying that a

certain goods has undergone the performance tests and quality guarantee tests
and meets the qualification criterion mentioned in their agreements, regulations,
or requirements.
D. Shipping Bill: This document is an imperative document provided by the

Customs Service Centre after the consignor applies to obtain this bill. This bill
supports the seller to obtain customs clearance, load the cargoes, and claim
duty drawbacks. It is a customary report where the shortcoming is asserted
and mainly serves as an assessable record. This can be presented through
ICEGATE which is a customs online software system. To receive this document,
the consignor will require the following documents:
 SDF / GR Forms for consignment to all the nations
 Packing list
 Export License
 Indent

 Acceptance of Agreement Consolidation

of Cargo
 Invoices
 Purchase Order
 Letter of Credit
 AR1 and AR4
 Quality Certificate Notes

 Port related document
E. Insurance Certificate: It is a certificate of insurance which confirms to

prospective trade partners and consumers that their business is accurately
covered with the precise insurance and that it is secure for them to do trade. It
is also used to guarantee the importer that insurance will cover the loss of or
damage to the goods during transit.
F. Destination Control Statement: It spotlights the commercial invoice and air

waybill to notify the carrier and all foreign parties that the cargoes can be exported
only to specific destinations.
G. Shipper’s Export Declaration (SED): It is utilized to control exports and

perform as a source document for official export statistics. SEDs are prepared
by the consignor or the seller’s agent and filed electronically prior to consignment
departure.
H. Shipper’s Letter of Instructions: It is the transporting instructions to the air

consolidator or aircraft from the consignor.
I. Airway bill: It is a document that accompanies cargoes transported by air. It

offers the detailed data about the consignment and permits it to be tracked. The
bill has several copies so that every party occupied in the consignment can
document it. It is also referred to as an air consignment note and it serves as a
receipt of cargoes by an Airline, as well as an agreement of carriage among the
consignor and the carrier. It’s an official contract that is enforceable by law. The
document becomes an enforceable agreement when the consignor’s agent and
shipping line (or carrier’s agent) together sign the document.
J. Certificate of Origin: The certificate of origin is an instrument to establish

evidence of the origin of cargoes imported into any nation. The certificates are
offered under the ambit of the rules of origin of any importing nation that grants
such allowance tariffs or simply insist on a non -preferential certificate without
Consolidation granting any tariff allowance. Several nations have created their regulations of
of Cargo origin ,which grant superior access to cargoes from the developing and the least
developed nations under the preferential form. There are two groups of certificate
of origin viz 1.Preferential and 2 Non Preferential.
1. Value of cargoes will be mentioned in a ______.

Notes
2. SED stands for ______.
3. The certificate of origin is an instrument to establish evidence of the origin of

cargoes.
4. ______document is an imperative document provided by the Customs Service

Centre.
2. SED stands for ______.
 Air consolidation is a process in which various lesser consignments that are all
being sent to the similar destination will be bundled /consolidated on a single
ULD and then transported together to their final destination.
 A consolidation will comprises of various air cargo shipments (consignments)

booked under a single master air way bill. The individual consignment will have
their own house air way bills.
 Consolidated shipping is perfect for traders that merely have only a few pallets
of freight or lesser shipments and they require packaged / palletized and
transported in one container / ULD.
 There are several benefits for the traders who utilize the air freight consolidation.
It simply decreasing the headaches through the innovated shipping methods, but
it all begins and help the traders towards price savings
 Airfreight comprises the consignment of packages and cargoes through an air

carrier. An air carrier could be either commercial or charter. Shipping via air
carriers permits shipments a simpler gateway to any location that airlines fly and
land

 An ULD (Unit Load Device) is an unique appliance that is utilized in air Consolidation
transportation to load goods, baggage as well as mail. The ULD arrives in two of Cargo
forms such as pallets and containers.
 An Air Waybills (AWB) which is an agreement between the consignor and

airline that spotlights the terms and conditions of air transportation and can never
be done in negotiable form.
TERMINAL EXERCISE Notes
Briefly explain the following-

1. Air Consolidation
2. Air Consolidator
3. ULD pallet
4. ULD container
5. Airway bill
6. Discuss the significance of air consolidation.
7. Highlight the demerits of air consolidation.
8. Explain the steps involved in air transport.
9. Sketch the ULD pallets with specifications.
10. Distinguish between Shipping bill and an Airway bill.
11. Spotlight the advantages of air consolidation.
12. Bring out the process of Air consolidation.
13. List various ULD containers with specifications.
14. How do you identify a Unit load device?
15. Sketch the documents used for air consolidation.

10.1
1. Air consolidator agent 2. Unit Load device
3. Lesser 4. Master

Consolidation 10.2
of Cargo 1. True
2. True
3. ULD
4. Shipping
10.3
Notes
1. False
2. False.
3. Time
4. Shipper
10.4
1. Read for transport
2. Airway bill
3. Air transportation
4. Air cargo
10.5
1. ULD container
2. ULD pallet
3. Aircraft
4. Pallets
10.6
1. F
2. V
3. C
4. Airline
10.7
1. Commercial invoice
2. Shipper’s export declaration
3. Certificate of origin
4. Shipping bill
Ocean Consolidation MODULE - 2
Consolidation
11 of Cargo
OCEAN CONSOLIDATION
Notes
Ocean consolidated shipping is a method of shipping where a cargo consolidator

combines individual LCL consignments from several shippers into one full container
shipment. Participating in consolidated shipping earns the consignor preferred rates.
When the full container consignment reaches its final destination, the shipments are
then deconsolidated into their original LCL consignments and delivered to final
consignee. The benefits of ocean consolidated shipping are cost savings, reduced
chance of damages. and speed to market.
LEARNING OUTCOMES
 explains the concept of sea consolidation;

 outlines the prospects of ocean consolidation;
 designs the LCL process;
 classifies the various ocean going containers;
 plans and executes sea consolidation documents.
11.1 MEANING AND DEFINITION

LCL refers to less than a container load and express sea shipping for commodity
loads which is not large enough to fill a full 20ft or 40ft shipping container. As LCL
shipments fill less than a full 20ft or 40ft shipping container, these cargoes are grouped
with other cargoes and sent to the respective destinations. This is why these forms of

MODULE - 2 Ocean Consolidation
Consolidation LCL shipments are sometimes referred as groupage shipments. In other words ,LCL
of Cargo is a term utilized in sea freight to explain the loads that are "less than a container load,"
or a consignment that does not fill a complete container. Shipping via LCL is generally
economical in nature but sometimes may be more expensive than FCL because of the
route, destination, and needs.
A loose commodity load may be sometimes confused with LCL. Actually it is a load
that is not palletized. This method can apply to consignments that do not need palletization
Notes and/or cannot be containerized owing to their dimensions. At times these loose cargo
is utilized to describe cargoes that merely have not been palletized. Most of the carriers
expect pallet cargoes in order to avoid any damage, smoother stuffing and de-stuffing
and lead for a smooth journey.
Fig. 11.1: Weekly consolidation
1. Work pattern of LCL Shipment

In an LCL consignment, different consignors share their cargos into a single
container. When commodity volume is not adequate to fill a full container, a
LCL shipment is generally cheaper, because the price of shipping a full cargo
container is shared among different consignors. When comparing the CBM
cost with that of an LCL shipment and an FCL consignment, LCL will be higher,
but the whole cost is often lower.
2. Entering into a LCL Contract

The LCL shipments is a fashionable shipping method being utilized by the
consignors and consignees because the merits outweigh the negatives. There
are five features to consider:

 Quantity Consolidation
 The gross weight of Cargo
 Cargo category
 Voyage / Route
 Time period
The volume of the consignment is computed by the quantity of space it occupies. The
capacity of a carton is calculated by multiplying the length, width and height. Ocean Notes
freight is levied by its volume (unless it is more than 1,000 kg per CBM), and this
comprises the LCL consignments. It is a perfect to consider an LCL contract if the
volume of the cargoes is between 1 to 18 CBM. Otherwise, transporting via air (for
less than 1 CBM) or moving for full container (for greater than 18 CBM) might be a
more cost-effective choice.
The gross weight is the entire weight of the consignment as a whole, comprising the
weight of the packaging as well as the master cartons. It is best to consider shipping
under an LCL contract if the gross weight of the consignment is more than 150kg
during peak period as well as 200kg during the off-peak term.
A consignor might be thinking why peak and the off-peak season should be taken into
consideration. It is because the transport rates are dynamic and they change in response
to the fluctuations in supply and demand. Since air transport method is the number one
option for smaller consignments, it is also a technique that is more vulnerable to changes
in costing. Moreover, when the demand for transport goes up, the substitute to air
freight is to utilize a LCL contract.
The product type is also being taken into account when shipping. Some goods are not
permitted to be shipped via air owing to airline limitations such as compressed gasses,
aerosol cans as well as dry ice. In this situation, ocean freight, particularly LCL, can be
a good option based on the volume of the consignment.
The routing is also taken into account while entering into an LCL contract. Not all
routes or destinations are available for LCL sea shipments due to a lack of LCL
consolidators to those locations. The actual reason is because there are no adequate
shipments to consolidate that particular route. In such circumstances, the next step is
to find out a substitute route or ports. If the alternative path is more expensive, then
other transport options should be taken into account.
The last feature is time. Time plays an important element in any distribution chain. As
for trades who are selling cargoes on e-commerce websites, the timing could be a hit

Consolidation or a miss. Inadequate stock for a couple of days can greatly influence the page ranking
of Cargo of a listing. So, imagine having no stock for an extensive period, the listing can rapidly
dwindle to the final page, and there is a considerable chance of a loss of income.
Therefore, the timing of the distribution should be taken into account when shipping
the goods.
If a firm manufactures their product and if the quantity is less but it has to be sent only
through containers, they can find a reliable freight forwarder for feasible options. Faster
Notes vessels are also available on some paths but they only provide FCL services. As the
LCL consignment can take around four weeks to be distributed, paying for a full
container might also be a valuable option, and eventually less expensive than air
consignments. If time is not a problem, then a LCL contract will be a better choice.
Following is a checklist that a firm should take into consideration when deciding if an
LCL agreement is a right choice for them. If one or more of the points below don't
meet a firm's requirements, then LCL might not be the best choice to consider.
 The shipment time can be contained by 5 to 7 weeks (based on the route). A
firm should still verify with their freight forwarder for a possibility of a quicker
option.
 The gross weight of the consignment is more than 150kg.
 The quantity of the consignment is between 1 to 18 CBM.
 The available transport path is direct or does not need significant transfers.
 If the cargoes fall beneath the list of restricted air shipment items, LCL might be
one and only available choice.
3. Cost for a LCL Shipment

Generally a normal cargo vessel can hold about 3,000 containers. That is nearly
200,000 CBM worth of goods! The price of a LCL consignment is calculated
on the basis of the actual volume or the space that the consignment occupies in
a pooled shipping container, which is generally at a minimum of 1 CBM. If the
whole volume of the consignment is less than the minimum, then the amount will
be considered as 1 CBM. Therefore, even if the cargoes take far fewer space
than the minimal prerequisite, a firm will still be required to pay the price for the
minimum volume.
Pickup Origin Main Leg Destination Delivery
Fig. 11.2: LCL shipping costs

If sea freight is calculated on the basis of actual volume, air freight amount will be either Consolidation
by the gross weight or the volume load, whichever is higher. For instance, a 0.8 CBM of Cargo
consignment with a gross load of 50kg will have a volume load of 160kg when
transported through Air . If sent by LCL, then the price will be based on the sea
freight's minimum of 1 CBM.
Freight forwarders have multiple terms on few of their product tariffs but what they
charge is generally a global standard. For a LCL consignment, apart from the price of
the sea freight which is paid to the shipping line for moving the cargoes from point X to Notes
point Y, there are other charges involved. These charges are for services such as
chassis charges, which is also shared among the shipments within the similar container.
Other charges that are generally added for LCL consignment are warehousing fees
since the container requires to be transferred to a store house to get sorted out based
on the shipment, as well as other precise handling fees.
The total price per CBM for a sea freight can be anywhere among $25 and $140,
based on the type of cargo and route. The charges for LCL freight generally changes
on monthly basis, so it is significant to verify the validity of the quoted tariff that a firm
freight forwarder offers, before arranging the transportation.

1. LCL stands for ______.
2. CBM refers to Cubic meter - True / False
3. Sea freight is calculated on the basis of ______.
4. The _____ type is also being taken into account when shipping.
11.2 OCEAN CONSOLIDATION BENEFITS

Consolidating the freight permits to make the most of higher quantities by either batching
their own similar freight or coordinating with other exporters who have cargo headed
in the similar direction. Once these pooled consignments arrive, they have broken
down to LTL and distributed to their final location. In a mounting dynamic and customer
driven market ,consignment consolidation has become increasingly more common.
There are numerous good reasons..

Consolidation
of Cargo
Notes
Fig. 11.3: Ocean consolidation

1. Decreased Shipping costs: The most obvious advantage to consolidating
freight is lesser costs. When a consignment only fills up part of a trailer, they will
be still covering the fuel surcharge , the driver's salary, the scheduling, and other
prices for the occupied capacity. However, by mounting the volume, will reduce
the cost per unit.
2. Decreased freight damages: Freight that is in the palletized form and packed
properly is far less likely to be damaged. In a LTL freight on a customary route
will be moved regularly due to multiple loading and de-stuffing locations. When
a consignment is consolidated with others en route to the similar location, these
"in-between" stuffing and unloading stops are eradicated.
3. Reduced Emissions: In addition to lesser the fuel prices, using fewer trailers
also refers lower fuel emissions. In spite of spreading smaller consignment across
multiple trailers, a consignor can consolidate everything into one - efficiently
slashing their carbon footprint.
4. Streamlined Transmit: Consolidated LTL shipment operates much like a
trailer load shipment, there exists no in-between stops. This assists to streamline
the transit times, which is invaluable in the quick-moving world of retail distribution
chains where direct times are often short.
5. Fewer Dock Congestion: A congested dock can generate serious issue for
consignors from detention times to late consignments. By consolidating LTL
cargo, fewer trailers are used. That refers to lesser backups and delays. This
helps the drivers as well, since the final thing they need is unnecessary wait time
counting next to their hours of service.

6. Benefits of committed Fleets: For several businesses considering consolidating Consolidation

their cargo systems, a committed fleet is a essential option. Dedicated fleets of Cargo
offer businesses with the trailers and trucks which are necessary to shift cargoes
on a regular schedule. Instead of investing internal funds in a trucking structure,
a devoted fleet offers the capital which is needed to ship materials, as well as the
distribute system and skilled drivers to economically and efficiently ship freight
in standard schedules.
7. Management of complete supply chain: Because 4rd party logistics agents, Notes
a firm often build good relationship with merchants and wholesalers that they
distribute to, by utilizing their logistics squad to consolidated cargo management
which often offers access to the complete supply chain. Whereas spot shipping,
LTL transport, and other one-time distribution uses may feel like it offers a firm
more control, at the same time the lack of relationships becomes costly.
Consolidation offers distinctive communication channels so that a firm business
is capable to build associations with distributors and consumers alike.
8. Decreased capital costs: Storage locations, transportation trucks, and
extensive inventory management amenities are all important capital costs. Several
full-service logistics agents often have these resources available to assist to
manage inventory from a firm business until it is distributed to the end retailer,
wholesaler, or manufacturer. Instead of storing a firm finished cargo on their
own, a firm can send it to a location with the experience, the capital, and the
trade structure to manage their product well.
9. Multi-Modal Transportation: Surface, train, air, and sea are all choices
available to logistics agents for shipping goods. Although a single trucking firm
may concentrate on trucking, their trade relationships and store house locations
are constructed with multi-model transportation in mind, which is the normal for
sophisticated business systems. A good quality logistics association will offer a
firm with enhanced access for those times that a firm have to transport a container
overseas.
10. Reduced Risk: Wrecks occur. This is a reality that anyone in shipping
understands and mitigates, and is the base of risk management in transportation.
Dedicated transport systems offers reduced risk by utilizing the experience of a
committed team to deal with that risk, from the trailer mechanics to distribute
and the drivers themselves. Consolidated cargo also decrease the risk because
there are less trips traveled the entire order of the cargo.

Consolidation 11. More Transparency : Tracing a huge quantity of LTL shipments presents
of Cargo confronts, as each one has its own distinctive tracking number. With consignment
consolidation, numerous shipments spend the greater part of time on a single
tracking number merely breaking out separately for the final distribution.
12. Enhance consumer satisfaction : As a consignor, one should understand

how significant it is for your customers to obtain their items as speedily and
cost-efficiently as feasible. They anticipate the seller to not only handle their
Notes cargo responsibly but also distribute it within their guidelines. To decrease a
firm exposure to claims, enhance their productivity and decrease their own
expenditures. A cargo consolidation program can assist to bundle numerous
shipments into lesser trucks. Not only will fewer trailers bump a firm customers'
docks as a consequence, but will also considerably diminish the managerial
work of managing distribution appointments, while also mounting the competence
of unloading.
13. Augment the supply chain : As a firm consolidate their shipments, they need
to look for any prospective patterns and repetitive orders from their clients.
Once a firm have recognized such patterns and orders, they should become a
part of the firm's consolidation strategy. A consolidation strategy drives order
and reliability to a firm shipping schedule, facilitate to plan and communicate
efficiently to their customer with an understanding that their weekly variability is
decreased through leveraging the scale of several shippers. Such scheduling will
not only augment their distribution chain's steadiness but also reduce the odds
of late consignments, cargo misplacement, and their customers' prospective
dissatisfaction when a firm do not offer the cargoes and services they require.
14. Take benefit of association synergies: The items such as quantity. cargo
mix,seasonality,consignees are merely a few items that will blow a firm's financial
form on a short as well as long-term basis."By associating with a 4PL, a firm
can take advantage of any prospective relationship synergy, Further, a firm must
make sure their 4PL understands their transportation goals and has the
sophisticated technology and infrastructure needed to distribute their savings
through a cargo consolidation program. Whereas consolidation might not be
rocket science, there are several moving parts to administer. A lack of venture in
people,technology,appliances or constant process improvements will be exposed
right away as an outcome"
15. Attain scale and cost savings: If a firm is mid-sized (or smaller),they should
understand merely how challenging it is to attain whichever shipping quantities

are needed for a firm to achieve scale and price savings. However, these Consolidation
prospective confronts can be alleviated greatly by leveraging their shipping costs of Cargo
with other firms in network and consolidate shipments together, thereby maximize
their cost savings.
16. Transport smarter and administer relationships: To ship effectively, a

primary aim is to maximize the cube and load of a trailer. By pool resources, a
firm drastically augment their opportunity to more competently use the space of
the trailer. If a firm transport pong balls, and a firm down the street ships golf Notes
balls, imagine the prospect a firm have to work together to construct better
loads. This analogy can be applicable to any firms that ship less than trailer load
freight, in spite of of their industries.
17. Benefits of LCL Shipment for the Consignee: The consignee only requires
to pay for the space that they want to utilize since the container is pooled with
other consignments. This choice permits small trades to take advantage of the
less cost of sea shipping without requiring huge quantity. Air consignments are
charging either by the gross load or the quantity weight, whichever is higher.
While the sea LCL is charging tariffs per cubic meter (or per 1,000 kg whichever
is upper), making it a more reasonable choice for shipments that are small yet
heavy provided that the transmit time is not a problem.

1. Consignor refers to _______.
2. Ocean freight is best for shipping large goods - True / False
3. A congested dock can generate serious issue for ______.
4. Dedicated ______ offers reduced risk by utilizing the experience of a committed

team to deal with that risk.
11.3 DEMERITS OF OCEAN CONSOLIDATION

Yet, for all the advantages of consolidating shipments, there are drawbacks as well.
1. Complicated Scheduling: The amount of communication needed for a cargo

consolidation is clearly far higher than that for more customary freight. Until a
structure is in place, it can take a great agreement of effort to hold both carriers
and consignors on the same page. Confusion can direct to rescheduling and an
immense deal of lost time, so appropriate planning is important.
Consolidation 2. Short lead times: Customer demand is at all time high, which refers lead times
of Cargo are at an all occasion low. This generates a huge confront for freight consolidation.
Retailers anticipate immediate order fulfillment . So implementing a plan that
permits for quick and organized consignment consolidation either internally or
with other consignors has to be job one. While the advantages of carrier
consolidation far outweigh the negatives, there are constantly two sides to each
story. Few negatives for consolidation comprises of the following
Notes 3. Identifying a Carrier: Most of the general transporter never offer
consolidation services. They might not keen to take these sort of job or risk
related with managing the numerous shipments in one container. This is merely
one reason that utilizing a freight forwarder is very important to make this progress
work efficiently.
4. Managerial Time Increases: With more things occurring in the consignment,

there are increased logistics to administer when consolidating. This isn't essentially
a detriment, but it is somewhat to think about as a firm weigh the plusses and
minuses of hauler consolidation.
While considering the benefits that the consolidation of goods can offer, be
aware of these prospective drawbacks as well:
 Possible for inconvenience: The utilization of consolidated cargo can

mean that it takes to some extent longer for consignments to arrive since
the consolidation as well as de-consolidation procedure add extra job to
the logistics process. If a firm don't account for this, they can experience
troubles with delays that annoy customers or leave a firm without the stock
that require on hand.
 Not appropriate for all consignment types: Commodities that are

perishable products, fragile or dangerous aren't well suitable for consolidated
freight. Fragile and perishable consignments that can obtain broken or expire
can generate a firm to lose money and can inconvenience the consumers
who are waiting for their goods. Dangerous materials can direct to dangerous
accidents when add with other goods. Finally, consignments that require to
go through customs can cause annoying delays if a firmconsolidatethem.
 Extra strategy involved: Selecting to consolidate a firm freight need work

on the part to find a suitable carrier that support consolidation at an
reasonable cost. A firm also have to do additional work to make sure that
consignments still arrive on time and come up with plans to hold any delays
that occur in the process.
Consolidation
of Cargo
1. CFS stands for ________.
2. Consignee refers to Freight forwarder - True / False
3. The ocean freight price of a LCL consignment is calculated per ______ .
4. The amount of _____ needed for a cargo consolidation is clearly far higher than
that for more customary freight. Notes
11.4 OCEAN CONSOLIDATION PROCESS

LCL shipping refers to a process where the consignors mutually share the container
space when the package dimension is importantly less than the maximum cargo a
container can carry. It is a win-win condition, both for the shipping firm as well as the
consignors. The shipping firm recovers the price of the container while allocating the
box makes the shipping inexpensive for the consignors. Not only is this an immense
path to save up on shipping costs, but it also formulate for a much more eco-friendly,
accountable, and sustainable international shipping practices. the another name for
LCL consignments is "groupage shipments"- as they are created by grouping smaller,
individual parcels together.
WAREHOUSE
CARGO PICKUP INLAND TRANSPORT

CARGO PORT DEPOT
LOADING OF CARGO
PROPOSAL FOR
SHIPPER SHIPMENT ARRANGING SHIPPING
C O M PA N Y
BILL OF LADING
EXPORT LOADING PORT
DECLARATION
FREIGHT FORWARDER SHIPPING OF CARGO
CONSIGNEE CUSTOM CLEARANCE

FORWARDER'S
OVERSEAS BRANCH AND PAPERWORK
RELEASE OF CARGO INLAND TRANSPORT

TO CONSIGNEE
DISCHARGE PORT
Fig. 11.4: Process of ocean consolidation

Consolidation 1. LCL shipment work procedure: Once a firm opts for an LCL consignment,
of Cargo the process is quite easy and efficient. Here comes the step by step channel to
obtain a firm goods transported to their customers through LCL shipping:
Step 1 : Registering with a shipping firm

Since shipment firms play a significant role in getting their goods delivered flawlessly to
their customers, therefore selecting the correct shipping partner is very crucial part of
Notes the procedure.
Step 2 : The shipping firm will obtain the information about the firm package
Once a firm contact the shipping firm for their transportation requirements, they will
enquire about all the particulars of the shipment. In such case a firm have to offer them
with data about the final destination, dimensions of their consignment as well as the
time at which they can receive the goods from the manufacturing unit. They process all
of this data and ascertain what other parcels can a firm shipment be grouped with, and
the vessel that can be assigned to distribute their cargo.
Step 3 : LCL Dispatch and Shipping

Once a firm package reaches the shipping firm's store house, preferably near a sea
port. It is pooled with other smaller parcels which are to be distributed along the
similar trade path and then moved into a transport container. This procedure is habitually
referred as 'Container Stuffing'. This container is then elevated off and put on a vessel,
which sets sail to distribute the cargoes to the desired spot.
Step 4 : Arrival and Delivery

Once the vessel arrives at its location, the container is taken off and shipped into a
store house for separation purposes. Once the ungrouping is finished, the shipping firm
distributes the goods to their consumers at their doorsteps.
Example of LCL consolidators services in India:

Let us assume a LCL consolidator is offering LCL consolidation at all metropolitan
cities worldwide. The procedure of LCL consolidation in such case consists of the
movement of less than container freight from an Inland Container Deport to a selected
hub terminal & terminal which is under customs seal, generally in a domestic container
of some type. At the designated hub terminal, the sealed containers are opened and
the goods are re-worked final destination-wise, without re-examination by customs.
Indian customs allows the reworking of LCL container boxes in certain designated
port cities. This prospect has already led to maximum increase in the trade area of

LCL consolidation in the nation. Decreased transmit time of LCL hub has given prospect Consolidation
to consignors to shift their LCL loads quicker at extremely effective price charges. of Cargo
LCL shift from Terminals to Port is taking place by train as well as by surface.
2. Tariff components in LCL shipment: As the shipping process comprises
multiple stages, each phase contributes a fair bit to the entire LCL shipping cost.
Contrary to general opinion, the real shipping of the goods incurs lesser cost
than the grouping and ungrouping of the parcels at the store houses. The reason
is that there exists a fair bit of manpower and infrastructure cost in the procedure. Notes
LCL shipping tariffs are normally computed based on the sizes of the parcels
i.e. the length, width and breath. The normal unit for LCL shipping costs is USD
per CBM / Cubic meters. However, if the load of the parcel exceeds 1000 kgs
(1 ton), then the charges are levied based on the load. The chances of this
occurring with LCL parcels are rare as LCL shipping is suggested for smaller
consignment size.
3. Calculation of LCL shipment: To calculate the sizes of a commodity in CBM
, all that a firm has to do is to bundle it into a cubical/cuboidal parcel and measure
the product package box's length, width, and height. For instance, if a firm's
cargo fits into a package that is 3.2 meters long, 3.5 meters wide, and 4 meters
high, then the quantity of the package would be 3.2 X 3.5 X 4 = 44 CBM.
Ensure that a firm should adapt all the units in meters before multiplying them.
Note:- International LCL consignments are normally stuffed in 20ft and 40ft
standardized containers in all the main shipping firms.

1. The another name for LCL consignments is "groupage shipments" - True / False
2. If the parcel exceeds 1000 kgs (1 ton), then the charges are levied based on the
_____.
Consolidation 3. Once a firm opt for an LCL consignment they opt for a _______service.
of Cargo 4. Commodities that are ______ products aren't well suitable for consolidated
freight.
11.6 TYPES OF CONSOLIDATED CONTAINERS

Container divisions structure the most integral part of the complete shipping industry,
Notes business, and transportation. These shipping containers are the structure that store
several kinds of goods that require to be transported from one part of the world to
another utilizing diverse sorts of container vessels. Shifting these containers will safeguard
the contents on the long voyages they create and make sure they make it back to a
firm in single piece. As such, based on the sort of goods to be transported or the
special services required from them, container divisions may vary in sizes, structure,
substances, construction etc. different types of shipping containers are being utilized
at present to meet the necessity of all kinds of commodity shipping.
Few of the most widespread types of shipping containers in use at present are point
out below.
1. Dry storage container: The most normally utilized shipping containers; they
arrive in several dimensions standardized by ISO. They are utilized for
transporting of dry materials and arrive in the size of 20ft, 40 ft and 10ft.
2. Flat rack container: With the collapsible sides, these are like easy storage
transporting containers where the sides can be folded so as to create a flat rack
for transport of a extensive variety of cargoes.
3. Open top container: With a convertible top that can be totally removed to
construct an open-top so that substances of any height can be transported easily.
Fig. 11.5: Open top container

4. Tunnel container: These are container storage units offered with doors on Consolidation
both ends of the container, they are particularly supportive in faster stuffing and of Cargo
de-stuffing of materials.
Notes
Fig. 11.6: Tunnel container

5. Open side storage container: These storage units are offered with doors that
can alter into entirely open sides offering a much wider room for stuffing of
materials.
Fig. 11.7: Open side container

6. Double doors container: They are type of storage units that are offered with
double doors, constructing a wider room for stuffing and de-stuffing of materials.
Construction substances comprises of steel, iron etc in standardized dimensions
of 20ft and 40ft.
Fig. 11.8: Double door container

Consolidation 7. Refrigerated ISO containers: These are temperature related transported

of Cargo containers that forever have a cautiously controlled low temperature. They are
completely utilized for consignment of perishable objects like fruits and vegetables
over extensive distances.
8. Insulated or thermal containers: These are the transporting storage containers

that arrive with a regulated temperature control permitting them to retain a
higher temperature. The option of substances is so done to permit them a long
Notes life without being damaged by steady exposure to elevated temperature. They
are most appropriate for long-distance shipping of cargoes.
9. Tanks: These container storage units utilized mostly for shipping of liquid
substances, they are utilized by a enormous proportion of the complete shipping
industry. They are typically made of strong steel or other anti-corrosive substances
offering them with long life and safeguard to the materials.
10. Cargo storage roll container: A foldable container, this is one of the focused
container units prepared for intention of shipping sets or stacks of substances.
They are constructed of thick and strong wire mesh beside with rollers that
permits their simple movement. Availability in a series of colored wire meshes
creates these transporting container units a little more joyful.
Fig. 11.9: Cargo roll container

11. Half height containers: Another type of transporting containers comprises of
half height containers. Construct mostly of steel, these cargo containers are half
the height of full-sized containers. They are utilized particularly for cargoes like
coal, stones etc which require simple stuffing and unloading.
Consolidation
of Cargo
Notes
Fig. 11.10: Half height container

12. Car carriers: Car carriers are another type of container storage units which is
made particularly for consignment of cars over long distances. They arrive with
collapsible sides that assist a car fit closely inside the containers without the
hazard of being damaged or shifting from the spot.
13. Intermediate bulk shift containers: These are dedicated storage transporting
containers construct solely for the intention of intermediate transporting of goods.
They are intended to handle huge amounts of substances and made for the
reason of shipping substances to a final destination where they can be additional
packed and sent off to final location.
Fig. 11.11: Intermediate bulk shift container

14. Drums: As the name propose, circular transporting containers, prepared from
a option of substances like steel, fibre,lightweight metals, hard plastic etc. they
are most appropriate for bulk shipment of liquid objects. They are smaller in
dimension but owing to their structure, may require extra space.

Consolidation
of Cargo
Notes
Fig. 11.12: Drums

15. Special purpose containers: Not the normal containers, these are the container
units which are custom made for focused purposes. Mostly, they are utilized for
high profile services like the consignment of weapons and arson. As such, their
structure and substance composition based on the special intention they require
to cater to. But in several cases, protection remains the top priority.
Fig. 11.13: Special purpose containers

16. Swap bodies: They are an unique type of containers utilized mostly in Europe.
Not made as per the ISO standards, they are not consistent transporting container
units but particularly helpful all the same. They are offered with a strong bottom
and an adaptable top making them appropriate for shipping of several sorts of
products.

Consolidation
of Cargo
Notes
Fig. 11.14: Swap bodies
1. ______ container storage units offered with doors on both ends of the container.
2. ______ is an unique type of containers utilized mostly in Europe.
3. _______are most appropriate for bulk shipment of liquid objects
4. _______ are the transporting storage containers that arrive with a regulated
temperature control permitting them to retain a higher temperature.
11.7 IDENTIFICATION OF CONTAINERS

The container recognition structure is an ISO standard (ISO 6346) comprising of a
series of letters and numbers.
 Owner code: The owner comprising of three capital letters that recognize the
owner of the container. There is a global agency (Bureau International des
Containers et du Transport Intermodal) that provides owner codes on behalf of
ISO so that no single code is allocated to more than one owner. In the above
container owned by the American company Textainer, the world's biggest
container leasing firm with a fleet of 3.5 million units. For the intention of brand
identity, shipping and container leasing firms generally highlight their logo on the
container, which is frequently painted with distinct colors.
 Product group code: It displays right after the owner code and comprises of
one capital letter, either U, J or Z; U relates to a container, J spotlight to equipment
that can be connected to a container, such as a power unit and Z highlight to a
trailer or chassis utilized to fetch a container. As a result, each mobile intermodal
appliance has its own recognition code.

Consolidation  Registration Number (or Serial Number): A series of 6 digits where each
of Cargo cargo container belongs to a holder has a distinctive value. Consequently, each
holder code can have up to 1 million containers.
 Check digit: This single digit is utilized to cross-check if the identification

sequence is precise. By convention, it is boxed to ensure it is segregated and is
standing out from the registration number. While terminal gates hold a huge
number of containers, there is always a hazard that the identification series was
Notes not properly inputted. The standard process consists of the series to be remotely
inputted by a video camera with the operator penetrating the sequence manually
in the data system. Increasingly, that series being inputted automatically via optical
character identification software. A numerical operation is carry out on the
container recognition sequence such as owner code, cargo group code, and
registration number) which outcomes in a single-digit number, which is then
contrast with the check digit. If they match, then the recognition sequence is
accurate (there is still a possibility for mistake, but it is very low).
 Dimension and type code : A series of 4 letters or digits that normally display
right under the container recognition sequence. Its intention is to offer information
about the sizes and the type of container; the first character is associated to the
length of the container whereas the second character is connected to its height.
On the above shown container, the first two numbers 45 point out that the
container is a 40 footer (4; normally the length of the container) of 9 feet 6
inches in height (5; high cube). The balance two component of the series (G1)
indicate that it is a general-purpose container.
1. Owner Code (3 letters): TGH

2. Product Group Code (1 letter):U
3. Registration Number (6 Digits): 759933
4. Check Digit (1 digit):0
5. Size & Type Code (4 digits/letters): 45G1
Operational Characteristics
Maximum weight: 30, 480 kg
Container weight: 3, 870 kg
Payload weight: 26, 610 kg
Cubic capacity: 2, 700 cubic feet
Fig. 11.15: Container identification code

The operational uniqueness of the container is also normally displayed. They comprise Consolidation
the maximum gross weight which is the maximal weight the stuffed container can have, of Cargo
generally around 30 metric tons. The container weight (Tare) is also offered, a number
between 4 to 10 metric tons. The consignment or pay load is the gross minus the tare
weight, which is the maximum weight that can be stuffed into the container. Maximum
cargo quantity data is also offered since cargo carried by container is inclined to "cube
out" before it "weights out".
Notes
1. The owner code comprising of four capital letters -True / False.
2. A series of _____digits that normally display right under the container recognition
sequence.
3. The consignment or pay load is merely the _____ minus the tare weight
4. This _____ digit is utilized to cross-check if the identification sequence is precise.
11.8 DOCUMENTS FOR SEA CONSOLIDATION

The most important shipping documents for sea transportation are as follows
1. Packing List: It is a comprehensive document mentioning how all the cargoes
have been packaged inside the consignment. The document comprises of
packaging methods, quantities, sizes and weights of all packages inside the
consignment. Based on the method of consignment, the list of freight packing
can be generated.
2. Commercial Invoice : This invoice authenticate all of the particulars of the
cargoes that have been shipped. This comprises consigner & importer's details,
cargo information, costing, currency and International commercial terms etc..In
other words it is a statement comprising complete particulars of the cargoes
shipped.
3. ARE : For removal of excisable cargoes for export by Air, Sea, Post or Land,
this document acts as an application. This document is provided by an producer
or merchant exporter when excisable cargoes are exported.
4. Quality Certificate: This certificate acts as the procedure of certifying that a
certain goods has undergone the performance tests and quality guarantee tests,
and meets the qualification criterion mentioned in their agreements, regulations,
or requirements.
Consolidation 5. Shipping Bill: This document is an imperative document provided by the

of Cargo Customs Service Centre after the consignor applies to obtain this bill. This bill
supports the seller to obtain customs clearance, load the cargoes, and claim
duty drawbacks. It is a customary report where the shortcoming is asserted
and mainly serves as a assessable record. This can be presented through
ICEGATE which is a custom online software system. To receive this document,
the consignor will require the following documents:
Notes  SDF / GR Forms for consignment to all the nations
 Packing list
 Export License
 Indent
 Acceptance of Agreement
 Invoices
 Purchase Order
 Letter of Credit
 AR1 and AR4
 Quality Certificate
 Port related document
6. Letter of Credit: It is an undertaking by the consignee's bank that if the

consignor exports the cargoes and handover the documents as stipulated in the
letter, the bank would make payment to the exporter. It is a certificate that
guarantee the consignee's payment to the consignors. It is offered by a bank
and make sure timely and complete payment to the seller. If the consignee is not
able to make such a payment, the bank covers the complete or the balance
payment on behalf of the importer.
A letter of credit is provided beside a pledge of securities or cash. Banks normally

receive a fee, ie, a percentage of the size/quantity of the letter of Credit.
7. Bill of Lading: In International business shipping occupies an imperative place

as a mode of transport. The document which is evidencing the carriage of cargoes
by sea is the Bill of lading. It is a document offered by the shipping line or its
agent, acknowledging the receipt of the cargoes for carriage which are deliverable
to the importer or his assignee in the same condition as they were received.

8. Insurance certificate: It is a certificate of insurance which confirm to Consolidation

prospective trade partners and consumers that their business is accurately of Cargo
covered with the precise insurance and that it is secure for them to do trade.
This certificate assists the authorities to check the consignment, in terms of whether
the selling goods includes the insurance or not. Also, it supports to determine
the accurate value which ultimately decides the import tariff aggregate.
INTEXT QUESTIONS 11.7 Notes
1. For removal of excisable cargoes for export by Sea ______ document is used.
2. The Bill of lading is issued by _______.
3. Letter of credit is an undertaking by the consignee's bank.
4. ______ certificate certify that a certain goods has undergone the performance
and quality guarantee tests.

 LCL refers to less than a container load and express sea shipping for commodity
loads which is not large enough to fill a full 20ft or 40ft shipping container. As
LCL shipments fill less than a full 20ft or 40ft shipping container, these cargoes
are grouped with other cargoes and sent to the respective destinations.
 Consolidating the freight permits to make the most of higher quantities by either
batching their own similar freight or coordinating with other exporters who have
cargo headed in the similar direction.
 Ocean consolidation benefits consists of decreased Shipping costs, decreased

freight damages
 reduced emissions, streamlined transmit, fewer dock congestion, benefits of

committed Fleets, management of complete supply chain, decreased capital
costs, Multi-Modal transportation, reduced risk, more transparency ,enhance
consumer satisfaction ,Augment the supply chain, take benefit of association
synergies, attain scale and cost savings, transport smarter and administer
relationships.
 Consolidating shipments have drawbacks such as complicated scheduling, short

lead times, identifying a carrier, managerial time increases
 Container divisions structure is the most integral part of the entire shipping industry,

Consolidation business, and transportation. These shipping containers are the structure that
of Cargo store several kinds of goods that are to be transported from one part of the
world to another utilizing diverse sorts of container vessels.
 The container identification structure is an ISO standard (ISO 6346) comprises

of a series of letters and numbers.
 The most important shipping documents for sea transportation are packing list,
invoice, SDF, Quality certificate, Shipping Bill, Bill of lading, Letter of Credit,
Notes
Insurance Certificate.
TERMINAL EXERCISE
Describe the following questions briefly-
1. Gross Weight
2. LCL
3. Thermal containers
4. Check digit
5. Letter of credit
6. Explain the costing in relation to LCL shipment.
7. List the demerits of ocean consolidation.
8. How do you calculate a LCL shipment?
9. Sketch the identification of containers.
10. Write a note on shipping bill.
11. How does an exporter enter into LCL contract?
12. List the benefits of ocean consolidation.
13. Sketch the different types of consolidated containers.
14. Highlight the significance of process of sea consolidation.
15. Discuss the documents used for ocean consolidation.

Consolidation
of Cargo
11.1
1. Less than a Container Load
2. True
3. Actual volume
Notes
4. Product
11.2
1. Exporter
2. True
3. Consignors
4. Transport system
11.3
1. Container Freight station
2. False
3. CBM
4. Communication
11.4
1. True
2. Load
3. Door to door
4. Perishable
11.5
1. Tunnel
2. Swap bodies
3. Drums
4. Insulated

Consolidation 11.6
of Cargo
1. False
2. Four
3. Gross
4. Single
Notes 11.7
1. ARE
2. Shipping Line
3. Consignee
4. Quality

Road Consolidation MODULE - 2
Consolidation
12 of Cargo
ROAD CONSOLIDATION
Notes
Road cargo consolidation is when several small shipments are combined into one
trailer load and forwarded to the same destination. In general, it is a multi-stop trailer
load shipment with many consignments that are picked up in a consolidation store
house or distribution center and remain in the same trailer until it reaches the final
destination. LTL refers to less-than-truckload were several shippers’ freight is on the
same truck rather than having a single firm’s freight exclusively on an individual truck.
Several LTL consignments are combined into one trailer to fill it as close to capacity as
possible. This is a great alternative for shipments that are among one and six pallets.
LEARNING OUTCOMES
 explains the basic concept of road consolidation;
 lists the merits of road consolidation;
 outlines the procedure of consolidation;
 identifies the various domestic containers;
 lists the road consolidation documents.
12.1 BASIC CONCEPTS OF ROAD CONSOLIDATION

1. Meaning and definition: Transportation of cargoes comprises loading and
unloading at origin and destination. It also integrates selecting the right form of
transportation (air, land, or sea), choosing the appropriate carrier or freight

MODULE - 2 Road Consolidation
Consolidation shipping agents, and considering several other features for speedy and cost-
of Cargo efficient transportation. When it comes to road transportation, the trucking sector
is accountable for most of the overland freight movement in the nation.
Truck consignments can be generally categorized into two groups, i.e., FTL
(Full Trailer load) and LTL (Less than trailer load). The former makes up a
gigantic 46.4%, whereas the latter position at 11.3% of the market share. Both
the shipping techniques are used to deliver a high point of customized service to
Notes consignors.
Definition : Surface shipping is an imperative part of several business operations. It is

defined as the procedure of shipping goods or commodities by surface. It can also be
defined as the cargoes shipped by trailer or by train.
2. Road shipment classification: Any consignment that exceeds the beneath

criteria are considered freight and require to be transported as such.
 Packages beyond 150 lbs
 Packages beyond 165 inches in length and width combined
 Packages bigger than 108 inches in length
3. Types of freight shipments : There are three important forms of road shipments:
full trailer / truckload (FTL), Less than trailer / truck load and partial truckload
(PTL). There also exists intermodal freight as well as express freight.
Fig. 12.1: Full truck load

4. Full trailer / truckload (FTL): Full truckload comprises of moving bulk or
pallet consignments that are huge enough to justify the use of a complete semi-
trailer, normally more than 15,000 pounds. Full trailer / truckload can be more
cost efficient and decrease the opportunity for freight harm with less handling
than LTL.

5. Less than trailer /truckload (LTL):LTL is the shipping of relatively small Consolidation
freight. The options to LTL carriers are package carriers or full trailer load of Cargo
carriers. Package carriers generally handle less packages and freight that can
be segregated down into units less than 150 pounds. Full trailer consignment
carriers shift freight that is stuffed into a semi-trailer. Semi-trailers are usually
among 26 and 53 feet and need a substantial quantity of freight to make such
shipping economical.
Notes
Fig. 12.2: Small packages

6. Partial trailer / truckload (PTL): A partial trailer / truckload (PTL)
consignment is among 6 and 12 pallets with a entire weight of over 5000 pounds.
7. Intermodal: Intermodal transportation generally refers to shipping with a mixture

of rail and trailer. However, it can include a variety of transportation methods
comprising rail, trailers or vessels to streamline the shipping procedure. By
integrating the rail in a firm freight shipping can decrease the fuel use, lower
charges and provide a reliable technique of shipping.
8. Expedited: Expedited freight generally refers to time-critical consignments in

which freight has to be distributed quickly. Expedited freight is most often shipped
by trailer or air.
4. What is the difference between FTL and LTL?

FTL- Full truckload /trailer load or FTL shipping is an ideal choice for large
consignments or large volumes of cargoes that take up the entire truck. The
truck carries consignment only from the respective company. A firm can still
book a complete truck even if their shipment doesn’t take up the entire capacity.
Most organizations do this to make sure that their cargoes or goods transportation
doesn’t get jammed with other cargoes.

Consolidation LTL- Less than trailer load / truckload or less than load is when one truck carries
of Cargo freight from several consignors rather than from an individual organization. In LTL,
several shipments are loaded in one trailer to utilize its capability as near as feasible.
Small businesses normally prefer this sort of trucking load with lesser shipping
obligations and budget constraints.
FTL Shipping :Full Trailer Load shipping is a great alternative if you have high valued
goods. FTL shipping means that a firm consignment will have a dedicated trailer that
Notes consists only what they are shipping. Because of this, however, FTL consignments can
cost significantly more than LTL shipments.FTL consignments are well suited to handling
sensitive or high value goods, as there is as least possible handling of the consignments.
Are there any advantages of FTL Shipping? Yes, some of the advantages of FTL
consignment are: 1.Decreased handling times 2. Distribution more timely than other
distribution types 3.Can be more cost efficient if they have several pallets to ship and
4.More precise and faster rate quotes when shopping around and evaluate carriers
5. Working method of FTL and LTL

FTL operates on a point-to-point delivery model. In this method, the consignor
loads their FTL goods onto the trailer, which straight away drives to the final
destination without stopping.
LTL or less than trailer / truckload operates on a hub-and-spoke supply chain

model. At first, LTL freights are received from several shippers from a particular
province or area. After that, these consignments are brought together to a
provincial hub or center and stuffed into one trailer. The truck then directs towards
the final destinations with several distribution stops.
6. Difference between FTL and LTL shipping

FTL and LTL have one thing in general, i.e., both these shipping techniques
move a firm shipment or freight across the surface. However, there are several
differences among LTL and FTL shipping. Let us find out what they are.
Fig. 12.3: FTL/Partial/LTL shipping

 Cost : LTL is cost-efficient when a consignors ship a few pallets at a time, Consolidation
as they have to pay for the space they are using instead of paying for the of Cargo
total trailer capacity. Less than trailer load shipping agents ensure the safety
of a manufacture pallets by filling the goods with other cargoes that require
to be transported towards the same location. Full trailer / truckload services
or FTL shipping need booking an entire truck, which is more expensive
than LTL shipping.
 Transit time : It is the time needed for a consignment to be distributed Notes

after picking it up from the spot of departure. In the method of less than
trailer / truckload, a shipment doesn’t move straight away to the final
destination as LTL trailer has to distribute several shipments. The real LTL
freight shipping time might differ from the estimated distributed time. After
picking up the consignment, the truck moves straight to the destination and
reaches within the expected time. In the method of full trailer / truckload
service, the consignment pick-up time is generally fixed.
 Safety of cargoes : In less than load consignment, a consignor cargoes

might be stuffed and unloaded many times, to load cargoes from other
consignors, before the distribution. It increases the handling and exposure
that additionallt increase the possibility of damage, particularly if the goods
are fragile and sensitive. In FTL freight a consignor guarantees entire safety
of the consignment because once it is stuffed the truck is sealed, and the
driver goes straight away to the destination.
7. Merits of FTL and LTL

FTL and LTL have their own set of merits. LTL can facilitate a firm by saving
an important amount of price as they don’t have to reserve the complete truck.
It is especially appropriate for small consignments with only less pallets at a
time. FTL is suitable for shipping high-valued and sensitive goods or
consignments. Also, it assures on-time pick-ups and distributions. FTL is a just
right option for wholesalers and producers who hold raw materials, valuable
cargoes, sensitive or dangerous materials.
8. How to select LTL or FTL?

When it comes to transportation, the most general question among the consignors
is, “Should they utilize FTL freight or LTL freight”? Choosing between LTL and
FTL shipping may differ from situation to situation. However, there are a few
pointers that can assist a firm to decide.

Consolidation Sl. No. LTL FTL

of Cargo
1. transporting less than 12 pallets Need to ship more than 12 pallets at
at a time one time
2. Cargoes don’t require special Are shipping fragile or sensitive goods

handling
Notes
3. Have flexibility with shipping and Need timely pickups and deliveries
distribution time
4. Need to save money Budget is not a constraints
9. Cost of Ship Freight

The rate to ship freight is dependent on several aspects. While selecting which
freight carrier to utilize for transportation, a firm should review and evaluate cost
that each organization offers. The main features that determine freight shipping
rates are- 1.Dimensions 2.Method of transportation 3.Density 4.Weight
5.Stowability 6.Liability 7.Freight class 8.Packaging 9.Facility form at
consignment’s origin and destination and 10.Time sensitivity
1. Full Trailer Load shipping is a great alternative if you have low valued goods. -
True / False
2. FTL stands for _____.

3. ______ shipping is an imperative part of several business operations
4. LTL is _____ when a consignor ship a few pallets at a time.
12.2 ROAD CONSOLIDATION BENEFITS

Shipping is costly. That is why several small firms are opting to enhance their bottom
line by switching from their present shipping technique to less-than-truckload (LTL)
freight after reviewing how road consolidation transportation can save small trades
money while reforming the logistics at the same time.

SHIPMENTS ROUTED INDIVIDUALLY Consolidation

TRUCKLOAD of Cargo
20,000 Lbs.
1,05 0 XYZ Company
Manufacturing LT L
or Distribution 10,000 Lbs.
Center $500 ABC Company
SHIPMENTS CONSOLIDATED - MULTI-STOP ROUTING
30,000 Lbs. TRUCKLOAD

XYZ Company
Manufacturing Notes
$1,120
or Distribution
Center
ABC Company
Fig. 12.4: Road consolidation
1) Need not pay for unused cargo space : There is no need to waste money on
paying to run half-filled delivery trailers. With LTL shipping, a firm’s consignment
will be pooled with other deliveries. So, a firm could save funds without having
to handle the logistics.
2) Decrease warehouse charges: Since a firm can send more shipments when
they use LTL shipping, they won’t require to stockpile as many cargoes at one
time. This decreases a firm’s warehousing needs and construct additional savings
each month for their company.
3) Access to professional skill : Most of the small trades lack dedicated in-
house shippers. When small trade owners use LTL shipping, they can acquire
full merit of the smart logistics professionals working at these firms to enhance
their practices.
4) Support during problems : Although no one expects to have damaged goods
to reach their consumers, LTL consignors can help by offering the information
required to file an insurance claim or send a replacement product to their customer.
5) Better shipping rates :The economical rates are normally reserved for the
largest shippers. But when trades use LTL freight through a consolidator, even
the smallest firm can obtain a good shipping quote.
6) Decreased environment impact ; Sharing space with other consignments
drastically lowers the company’s carbon footprint and helps to hold the planet
healthier.
7) Faster delivery times : In several instances, LTL shipping might actually be a
quicker method for shipping their cargoes. When a firm uses LTL freight, they
need not have to wait for consumers to place adequate orders to fill up a complete
trailer load before shipping products out.
Consolidation 8) Shipment security : LTL shipping firms take security very seriously. Once a
of Cargo firm hands over their shipment to a professional LTL shipper, they can feel
confident that their package will stay secure until it reaches its final location.
9) Easy to locate shipment : Most LTL consignors have top-of-the-line tracking
structures so a firm and their customers can keep their eyes on the progress of
the consignment. So a firm can forget about dealing with the hassle of keeping
track of their deliveries.
Notes
10.) Access to sophisticated shipping technology : Several LTL shippers use
the sophisticated and best shipping technology. A firm trade can gain advantage
from these without additional expenses.
11) Provide customers a variety of supply chain services : Most LTL freight
services offer a variety of different distribution options to meet the requirements
of themselves and their customers.

1. Define Road Consolidation.
2. LTL stands for ____ .
3. Most LTL consignors have ______ tracking structures.
4. The economical rates are normally reserved for the _____shippers.
12.3 DEMERITS OF ROAD CONSOLIDATION

In general, the LTL shipping is a reliable, cost-efficient way to transport a small quantity
of cargo. Most transporters maintain 97% or better on-time distribution rate. But
trade owners should be conscious of both good and terrible possible outcomes. A firm
should be prepared to deal with one of these constraints when using LTL:
1) Losing the entire shipment : One of the disadvantages of shipping through

an LTL carrier is that during transit ,there is a chance that the entire shipment
will not arrive to its final destination on time or is lost . On the other hand, if
shipped via a package CWT program then a firms have a higher possibility that
most of their order will arrive in the scheduled transit time. However, a complete
LTL consignment is contained in a single trailer and anything that holdsup or
damages that single trailer will also delay or harm the complete pallet of
merchandise.

2.) Higher risk of cargo damage : In spite of the fact that there is less handling of Consolidation
the consignment, the risk of cargo damage is really higher with LTL providers. of Cargo
LTL carriers utilize forklifts to handle and stuff the freight, frequently double-
stacking pallets in a truck as well, making a firm’s consignment more susceptible
to damage. Suitable packaging and the correct use of dunnage, as well as
blocking and bracing methods, are important to guarantee a damage-free
distribution.
3) Financial Drawbacks : Finally, LTL quantities don’t mechanically contribute Notes

to package income based incentives, only if a firm has negotiated this into their
parcel contract. Unless a firm’s intermediaries agreement particularly states so,
the profits tendered to the LTL carrier will not throw in to the incentive obtained
from the parcel carriers . Though LTL transportation will normally save a firm
money, don’t take it as an assurance in every case.
Other constraints include 1.Higher cost consignments, especially when there are only
1 or 2 pallets 2.Carriers may not be able to offer value added services such as handling
etc. 3.Limited flexibility for commodity movement and 4.No prospects for smaller
quantity shipments.

1. LTL shipping is a way to transport a small quantity of cargo - True / False.
2. LTL carriers utilize ______ to handle and stuff the cargoes.
3. The risk of cargo damage is really _____ with LTL providers.
4. LTL transportation will normally save a firm _____.
12.4. ROAD CONSOLIDATION PROCESS

The road consolidation process is as follows-
Step 1: Arrange and package freight

When it comes to making the most of a firm’s less-than-truckload shipping financial
plan, this step is the most important. Without proper packaging if a firm arranges their
freight for pick-up it can be harmful to the final condition of their consignment. As new
cargoes are picked up and stuffed throughout a firm trailer’s journey, LTL freight is
subject to regular handling during transit. As such, the more a firm can do to moderate
their goods’ risk for damage, the better off a firm will be in the end. To perform this, a

Consolidation firm should ensure to package their cargoes in a way that will secure them from
of Cargo jarring, bumping and crushing during their LTL voyage.
Labeling LTL Freight

Once a firm’s cargoes are neatly packaged in expectation of transport, the next thing
a firm does is to mark their freight with all suitable labels and notations. Generally LTL
carriers will have a lot of data on their plate. The most overbooked trailers can have a
Notes cluster of different goods utilizing their trucks. Each of these cargoes has a different
consignor, destination and set of handling directions. As a firm might imagine, it can be
complicated for the truckers in charge of all of these moving parts to keep in mind
what’s needed for each package. To make sure that nothing gets forgotten or
mishandled during shipping, make sure to label a firm’s product with any unique
instructions a firm would like to make plainly clear. Labels instructions like “This Side
Up”, “Do Not Stack”, “Handle With Care”, and “Fragile” will assist the individuals
charged with handling your freight do so safely.
Step 2: Get a Quote

Once a firm have their freight packaged in a way that will make for smooth stuffing /
de-stuffing, promote its secure transportation and have it correctly labeled, then the
firm is ready to obtain a quote for their LTL shipment. To obtain a precise price that
will make the job done, it is important that the firm must include the subsequent
information when soliciting with shipping agents for a truck: 1.Firm’s entire product
weight 2.The precise dimensions of firm freight ( Height ,Length, Width, Pallet count
(if applicable)) 3.Adetailed description of what the firm’s commodity is 4. All accessorial
needs of their freight (Lift-gate service, White-glove services (pick-up/distribution))
5. All Pin Codes with Pick up and Drop spots. and 5. Ideal pick-up and distribution
time frames.
Step 3: Book Your Load

The next phase in LTL shipping path is to book a firm’s shipment with the carrier they
select. As long as a firm transparently communicated the precise dimensions of their
freight, their anticipations for pick-ups, drops and any sort of LTL services required,
booking their consignment with confidence should arrive easily. Make sure to pick a
firm with a demonstrated history of shifting LTL freight successfully. In current history,
though, trucking firms have started employing LTL freight tracking to fight this problem,
through the use of a tracking code and attentive upkeep on the driver’s behalf, good
service providers can assist their consumers to achieve a bit higher visibility over their
consignments.

Step 4: Load and Track Your Shipment Consolidation

Once the firm has properly packaged their freight, chosen the right service provider of Cargo
from the field and when the trailer has arrived, it’s time to stuff the freight. Trailer
drivers are subject to a stringent set of legislative rules and regulations that dictate the
amount of time they’re permitted to spend behind the wheel. These rules are referred
as a trailers hours of service and specify that a driver can only be aggressively “on-
duty” for nearly 14 hours within a 24 hour period. Since trucking firms, and their
drivers, only make cash whilst their wheels are turning, they’re extremely motivated to Notes
exploit their HOS clock.
Since transmit timing and guaranteed distribution timeframes on LTL freight can be so
complex to forecast, in such cases tracking number should become a firm’s best friend. A
firm should also verify their freight frequently and touch base with their importer to
make sure that everyone is on the similar page for their freight’s arrival. Should the
freight arrive at an vacant spot because the buyer wasn’t aware it was coming, in such
cases extended delays may crop up. So a firm should share their tracking code with
whoever is in-charge of handling the commodity upon arrival.
Step 5: Note Any Damage On The Bill of Lading (BOL)

Communication is essential to make sure that this step is done properly. After a firm’s
freight has made its voyage and has arrived at the buyer’s door, verify for external
damage as soon as possible. Ensure that the buyer identifies any damage on the bill of
lading before accepting it. Commodity claims sometimes occur and successfully filing
a claim will be far more complex without a appropriate noted BOL. Note, LTL
consignors normally have nine months after their consignment delivers to file a claim.
As such, communicate with a firm’s receiver to make sure they don’t accept any
damaged cargoes without making a note of it on the bill of lading.
Step 6: Keep the bill of lading for Record-Keeping

Once a firm’s load has been successfully distributed, a firm’s commitment to it isn’t
quite completed. Sometimes, consignors throw away their bill of lading without
understanding the long-term damaging this may do. The benefits of holding onto this
file far outweigh the price of sacrificing the space required to do so. Whether it’s for
accounting intention, to weigh future consignment price against, as a lead to a firm’s
freight class and NMFC codes or to utilize when filing a freight claim, a firm can
probably use it in the future. As such, the final phase is to hang onto BOL for future
use.

Consolidation How to identify an LTL shipping agent

of Cargo The largest feature impacting a firm’s less-than-truckload transport success is the
trustworthiness and history of the transportation service provider they use. Several
LTL consignments go wrong simply because a consignor placed their reliance with the
wrong firm. Whether their consignment fails or their budget suffers, transportation
service provider choice mistakes can come back to trouble the consignors that make
them. Always look for an eminent shipping intermediary who treats a firm’s freight,
Notes deadlines and their goals as their own.

1. The second step of road consolidation process is to get _____ .
2. Once a firm cargoes are neatly packaged , the next thing is to mark their products
with all suitable______.
3. Crating a cargo where applicable is the finest way to make sure its _____
during voyage.
4. ______ drivers are subject to a stringent set of legislative rules and regulations
12.5. TYPES OF DOMESTIC CONTAINERS

Most of the commodities are now being transported from factory through either rail or
by road. So there exists the need for certain containers so that trailers and shipping
agents can provide a comprehensive door to door intermodal service. The agents
should render the services that are ‘Client-focused’ which are the backbone of this
segment. Each service is tailor-made to suit the specific needs of the client concerned.
The agents normally operate through a network of terminal/hubs. As a subject of
policy, most of the new terminals being commenced are now being planned as pooled
domestic/international terminals.
The key asset in which domestic goods is carried is the standard 20ft container.
CONCOR’s fleet of TEUs in nation service is presently at roughly 20000 TEUS.
These are generally owned and few are brought in on short or long term lease based
on the demand needs. Further, container corporation also use the conventional ISO
(international) containers by offering unique Cabotage tariffs for empty movements. In
this method, containers that would otherwise move as empty are ‘borrowed’/leased
on a short-term basis (generally for a single trip) for domestic goods movement, thereby
raising the carrying capability for domestic commodities as a whole. Widespread
movement of shipping-line blank containers is carried out by CONCOR to balance
the discrepancy levels of exports and imports in the nation. By “Cabotaging” these Consolidation
containers, CONCOR can provide a considerable discount to both shipping lines and of Cargo
the prospective domestic client.
A. TYPES OF CONTAINERS
1. 20 foot General Purpose Container
Notes
Fig. 12.5: 20 ft general purpose container

The standard 20ft transporting container is popular owing to its ease of maneuverability
and lesser weight. Generally, the 20ft containers are more economical than their
corresponding 40ft option, their cost per square foot is in reality more expensive. We
could sometimes see the goods vessel capacity or business volumes stated in TEU’s.
This refers to twenty-foot equivalent unit, and merely refers the volume of freight that
could outfit in containers just like this.
Table 12.1
S. External Internal Door Opening Weight

No Measurements Measurements Measurements
1 19ft 10in long; 19ft 4in long; 7ft 8in wide; 4,960 lbs tare;
8ft wide; 8ft 6in 7ft 8in wide; 7ft 6in high 62,240 lbs max
high [6.05m 7ft 10in high [2.34m wide; load [2,250 kg
long; 2.44m [5.90m long; 2.29m high] tare; 28,230 kg
wide; 2.59m 2.35m wide; max load]
high] 2.39m high]
2. 20 foot General purpose High Cube Container : These type of containers

are similar to standard 20ft but with the additional room of an additional 12
inches of height. This makes it simpler to have interior insulation and light fixtures
although still maintain a usual ceiling height. It also opens up the entire design,
and often times higher ceilings will assist to make the complete interior feel
much larger overall.
Consolidation Table 12.2

of Cargo
8ft wide; 9ft 6in 7ft 8in wide; 8ft 6in high 62,130 lbs max
Notes long; 2.44m [5.90m long; 2.59m high] tare; 28,180 kg
high] 2.70m high]
3. 20 foot Refrigerated Container : It is sometimes referred as a reefer container,

the 20ft refrigerated transport container is a regular 20ft container with the added
advantage of insulation.
Table 12.3

8ft wide; 8ft 6in 7ft 6in wide; 7ft 5in high 60,800 lbs
high [6.05m 7ft 5in high [2.28m wide; max load
long; 2.44m [5.44m long; 2.26m high]
wide; 2.59m 2.28m wide;
high] 2.26m high]
4. 40 foot General Purpose Container : 40ft transporting containers are the

most widespread containers manufacturing units will find. They are huge enough
to permit more cargoes. Like the general use 20-foot transport containers, their
lower ceiling height could be an obstacle for those that need interior insulation
though still having a reasonable ceiling height.
Table 12.4

1 40ft long; 8ft 39ft 6in long; 7ft 8in wide; 8,333 lbs tare;
wide; 8ft 6in high 7ft 8in wide; 7ft 6in high 58,863 lbs max
[12.19m long; 7ft 10in high [2.34m wide; load [3,780 kg

2.44m wide; [12.04m long; 2.29m high] tare; 27,600 kg Consolidation

2.59m high] 2.35m wide; max load] of Cargo
2.39m high]
5. 40 foot General Purpose High Cube Container : If a firm prefer a 40ft

container but require a bit more vertical space, a 40 ft high cube container
provides the same size with the extra one foot of overhead room.
Table 12.5
Notes
wide; 9ft 6in 7ft 8in wide; 8ft 6in high 58,450 lbs max
long; 2.44m [12.04m long; 2.59m high] tare; 26,512 kg
high] 2.70m high]
6. 40 foot Reefer Container : With a 40ft reefer or refrigerated cargo container,

a firm will obtain the advantages of the 40ft shipping container competence
beside with built-in insulation.
Table 12.6

1 40ft long; 8ft 38ft long; 7ft 6in 7ft 6in wide; 10,780 lbs tare;
wide; 8ft 6in high wide; 7ft 5in high 7ft 5in high 56,420 lbs max
[12.19m long; [11.58m long; [2.28m wide; load [4,900 kg
2.44m wide; 2.28m wide; 2.26m high] tare; 25,645 kg
2.59m high] 2.26m high] max load]
7. 40 foot Refrigerated High Cube Container : If a firm is carrying perishable

cargoes in such case the 40ft container will be ideal. In this sort of container it
will have insulation of a refrigerated container.


of Cargo
1 40ft long; 8ft 38ft long; 7ft 6in wide; 10,490 lbs tare;
Notes 2.44m wide; [11.58m long; 2.57m high] tare; 29,240 kg
2.89m high] 2.28m wide; max load]
2.57m high]
8. 45 foot General Purpose High Cube Container :The 45-foot cargo containers
are a bit different from what we've discussed so far. They have the standard
container corner castings 40 ft apart, except that they have two equal ~2.5ft
extensions on every end of the container. These expansions also have corner
castings at the definite corner extents of the container. Having several sets of
corner castings permits 45ft containers to be stacked with 40ft cargo containers.
Table 12.8

2.44m wide; [13.56m long; 2.59m high] tare; 30,480 kg
2.70m high]
12.5.2 OTHER COMMON CONTAINERS

The transport cargo containers in this group are definitely less common than those
above but are still somewhat extensively available in certain areas.
1. 48 foot General Purpose High Cube Container: A 48ft cargo container is

wider than all containers formerly mentioned. With an extra 6in of width, a 48ft
container is 6.25% wider than a 40ft or 45ft container.

Table 12.9 Consolidation

of Cargo
6in wide; 9ft 6in 8ft 2in wide; 8ft 6in high 56,280 lbs max
long; 2.59m wide; [14.48m long; 2.59m high] tare; 25,527 Notes
2.89m high] 2.49m wide; kg max load]
2.70m high]
2. 53 foot General Purpose High Cube Container : The 53ft cargo container
is the biggest mass-produced container. Similar to a 48ft container, it is also 6in
wider than a 40ft container. And like a 48ft container, a 53ft container has
corner castings at 40ft, followed by two equivalent extensions that fetch the
length out to 53ft. till the extensions on a 53ft cargo container are about 6.5ft
long each. More significantly, 53ft containers have limited accessibility and are
mainly used in North America.
Table 12.10

1 53ft long; 8ft 6in 52ft 6in long; 8ft 2in wide; 11,070 lbs tare;
2.59m wide; [16m long; 2.59m high] tare; 25,460 kg
2.70m high]
3. 40 foot General Purpose Pallet Wide High Cube Container: Pallet wide
cargo containers are merely a bit wider (roughly 2in) than standard width
containers but not as wide as 48ft and 53ft containers. The extra width is to
hold 'euro pallets'. In the United States and some other nations the standard
pallets are 48in (1219mm) by 40in (1016mm). the Euro pallets, in contrast, are
800mm (2ft 7.5in) by 1200mm (3ft 11.2in). The somewhat wider dimension of
a pallet-wide 40ft container permits it to hold 30 euro pallets, while a standard
40ft container can only accommodate 25.


of Cargo
1 40ft long; 8ft 2in 39ft 6in long; 8ft wide; 8,636 lbs tare;
wide; 9ft 6in high 8ft wide; 8ft 8ft 6in high 63,015 lbs max
[12.19m long; 10in high [2.44m wide; load [3,917 kg
Notes 2.49m wide; [12.04m long; 2.59m high] tare; 28,583 kg
2.70m high]
B. Shipping cargo container moving features

One must keep the following things in mind when operating a shipping container:
1. Weight (cargo weight plus container weight)
2. Size and dimensions of the cargo container to understand the space needed
3. The storage cargo container distribution options
4. Overhead hindrances
5. Insurance
6. Outsourcing
7. Logistical charges
8. Maneuver clearance and
9. Voyage distance
C. Methods to Move a Shipping Container

Truck : Shipping the cargo container by surface transport is the most common
process used. Other popular sorts of trucks utilized in shipping the cargo
containers are-
1. Tilt-bed or rollback trailer: Rollback trailers, also referred to as flatbed tow

trucks, are an excellent transport alternative when the container isn't too
heavy. This truck has a distinctive design that permits one to use the inclined
plan to slide the container onto the ground.
2. Step-deck trailer: This trailer has a flat platform on which the container is
set.

Consolidation
of Cargo
1. CONCOR refers to _____.
2. TEU stands for Twenty Equivalent Unit - True / False
3. CONCOR is also offering services from CRTs and _____ Sidings.
4. Rollback trailers are also referred to as ______ tow trucks.

Notes
12.6 IDENTIFICATION OF DOMESTIC CONTAINERS
1. Marking of containers
The marking on the containers comprises of letters and numerals of the owner
code, equipment type identifier, serial number and verification digit shall be not
less than 100 mm (4 in) high.
All characters shall be of proportionate width and thickness, they shall be strong
and in a colour distinctfrom that of the container.
The ISO container size and type codes: In 1995 there was an ISO contract
concerning container marking codes to describe the length, height and category of
cargo container in a simple to read sequence. This sequence is comprises of four
letters or digits that generally come out right under the container identification series.
 The first character is connected to the length of the container
 The second nature is relative to its width and height.
 The remaining two factors of the sequence recognize the container form and
other characteristics connected to its type.
2. Diffrent types and sizes of containers

Table 12.12
S.No Length Height Type
1 2 - 20 Feet 2 - 8 Feet 6 Inches G1 - General Purpose

Container
2 4 - 40 Feet 5 - 9 Feet 6 Inches R1 - Refrigerated Container

"High Cube"

Consolidation 3 L - 45 Feet U1 - Open Top Container

of Cargo
4 M - 48 Feet P1 - Platform Container
5 T1 - Tank Container

Notes 1. In a given container if it is marked as 4 5 G1 then the 4 denotes _____.
2. G1 stands for _____ .
3. The marking in the containers comprises of letters and numerals of the owner
code, _____, serial number and verification digit.
4. Verification digit shall be not less than _____ high.
12.7 DOCUMENTS FOR ROAD CONSOLIDATION
A. Documentation For Transportation

1. GST - E way bill- E- way bill is an electronic document carried by a person
who is carrying any consignment of cargoes of value exceeding Rs.50000/
- as mandated by the Government. It is created from the E-way common
portal by the registered persons or transporters who cause movement of
goods of consignment before the commencement of such movement. Under
GST, transporters should carry an e-way bill when they are shifting the
cargoes from one place to another when certain conditions are fulfilled. E-
way bill being an electronic way bill when goods are progressed in such
situation this to be generated on the e-way bill portal.
A GST registered person cannot transport cargoes in a vehicle whose worth exceeds
Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated
on ewaybillgst.gov.in. Alternatively, E-way bill can also be generated or cancelled
through SMS , Android App and by site-to-site integration through API.
When an e-way bill is generated, a unique E-way Bill Number (EBN) is allocated and
is accessible to the supplier, recipient, and the transporter.
Purpose of E-way Bill

E-Way Bill is a method to make sure that goods being transported abide with the GST
Law and is an efficient tool to track movements of goods and check tax evasion. It has
two components:
1. Part A- Details of the recipient. and 2. Part B- Transporter details. Consolidation

of Cargo
Information to be provided in Part A of Form GST EWB -01 : 1.GSTIN of
Supplier 2.Place of Dispatch 3.GSTIN of Recipient 4.Place of Delivery 5.Document
Number 6.Document Date 7.Value of Goods 8.HSN Code and 9.Reasons for
transportation etc.
Part-B of Form GST EWB-01 : 1.Vehicle Number for Road.2.Transport Document

Number/ Defenses Vehicle no./ Temporary Vehicle Registration No / Vehicle Notes
Registration No.
If the distance between the exporter or consignee and the transporter is less than 50
Kms and transport is going to take place within the same state in such condition, Part
B of e-Way Bill is not required.
Criteria to Generate an e-Way Bill

 Registered Person : E-way bill must be generated when there is a progress of
goods of more than Rs 50,000 in value to or from a registered person. A
Registered person or the transporter may choose to generate and bear e-way
bill even if the value of goods is less than Rs 50,000.
 Unregistered Persons: Unregistered persons are also required to generate e-

Way Bill. However, where a supply is made by an unregistered person to a
registered person, the receiver will have to make certain all the compliances are
met as if they were the supplier.
 Transporter: Transporters who carry commodities by road, air, rail, etc. also
require to generate e-Way Bill if the supplier has not generated an e-Way Bill.
Issuance of e-Way Bill

E-Way bill will be generated when there is a faction of goods in a vehicle/ conveyance
of price more than Rs. 50,000 (either each Invoice or in cumulative of all invoices in a
vehicle/conveyance) - a)In relation to a 'supply' b)For certain reasons apart from a
'supply' ( say a return) c)Due to inward 'supply' from an unregistered person
For this reason, a supply may be either of the following:
 A distribution which is done for a consideration (payment) in the course of

trade
 A distribution which is done for a consideration (payment) which might not be in

the course of trade

Consolidation  A distribution without any consideration (without payment)In easy terms, the
of Cargo term 'distribution' generally means a:
1. Sale - sale of goods and payment made
2. Transfer - division transfers for instance
3. Barter/Exchange - where the payment is by goods instead of in cash
Therefore, e-Way Bills must be generated on the general portal for all these types of
Notes
movements. For assured specified Goods, the e-way bill needs to be generated
mandatorily even if the value of the consignment of Goods is less than Rs. 50,000:
1. Inter-State movement of Goods by the Principal to the Job-worker by Principal/

registered Job-worker***,
2. Inter-State shipment of Handicraft commodities by a dealer exempted from

GST registration
Documents required with Driver during transportation of goods under GST
The driver in charge of the truck should carry the following documents:
1. Documents such as Invoice, bill of supply, delivery challan as needed
2. A copy of E-way bill, E-way bill number or E-way bill mapped to a Radio
Frequency Identification Device, RFID
Note- An E-way bill mapped to RFID will not be applicable in case the commodities
are transported by means of rail, airway or a vessel. Moreover, it is also significant to
note that if cargoes are shipped by rail, the cargoes shall be distributed to the buyer
only on producing a valid E-way bill.
2. RFID and compliance requirements : In situations where a dealer prepares

an Invoice Reference Number (IRN) by uploading the required Form GST
INV-01, the transporter does not need to carry a physical invoice. If they mention
the IRN to the scrutinizing executive it would suffice. Few category class of
transporters is needed to obtain an RFID embedded in their truck. Such type of
transporters to be informed by the Commissioner. When the RFID is embedded,
an E-way bill has to be mapped to the RFID before the commencement of
progress of goods. As of now, this notification has not yet been issued.
In case E-way bill is not required, the documents required
In certain circumstances, which are yet to be notified, the Commissioner may require
the transporters to carry the subsequent documents as an alternative of an E-way bill:

1. Documents such as invoice, bill of supply or bill of entry or Consolidation

of Cargo
2. In cases where movement of cargoes is for other than distribution, transportation
of job work, transportation of liquid gas etc a Delivery Challan (DC) to be
given. The DC should be issued in triplicate and in accordance with rules of the
Act.
The procedure of document verification

An authorized officer may intercept any vehicle carrying cargoes during their movement. Notes
On the journey, the transporter has to offer the documents which he is carrying for
authentication. This comprises a verification of all the above spotlighted documents.
For vehicles with embedded RFID, the RFID will be read by a reader and details of
E-way bill mapped will be matched with the goods that the transporter is carrying.
12.8 IMPACT OF RULES ON TAXPAYERS AND

TRANSPORTERS
By going through the above regulations, we could take a stand that there is something
for everyone: 1.For traders and transporters who have not yet gone digital, they can
still carry a physical invoice and an E-way bill, whereas, for traders who are digital,
they can use the IRN and EBN.They should make sure that when there is any technical
breakdown there should be a substitute path that the dealers could opt for.2.But for
small-time transporters, this digital process might disrupt their business. They may
think the RFID installation could be costly and eventually may not be able to withstand
the competition which is existing from big transport organizations. In connection to
Micro and Small Enterprises earlier schemes, the Government had planned to offer a
subsidy/ financial help for installing RFID. Whether these sort of schemes will move
forward and will really help the dealers is something one has to wait and
watch.3.Carrying multiple invoices and E-way bill may be cumbersome for the
transporter. Even a small delay like a break-down of the vehicle might put the transporter
in a difficult situation. IRN and E-way bill in electronic form helps.4.Carrying valid
document is a must. The person in charge of carrier will have to check the validity of
the E-way bill and in case the goods are being shifted to another vehicle, the E-way bill
required to be updated with the new truck details.
1. E- way bill is an _____ document.
2. RFID stands for ______.

Consolidation 3. In case the goods are being shifted to another vehicle, the E-way bill required to
of Cargo be _____.
4. For traders who are digital, they can use the IRN and _____ .
 Transportation of cargoes comprises loading and unloading at origin and

Notes destination; selecting the right form of transportation (air, land, or sea); choosing
the appropriate carrier or freight shipping agents, and considering several other
features for speedy and cost-efficient transportation.
 LTL is the shipping of relatively small freight. The options to LTL carriers are
package carriers or full trailer load carriers. Package carriers generally handle
less packages and freight that can be segregated down into units less than 150
pounds
 FTL- Full truckload / trailer load or FTL shipping is an ideal choice for large
consignments or large volumes of cargoes that take up the entire truck.
 There are also various types of general containers and unique containers such
as Open Top, Side Doors, Tanks, Ventilated, Reefer and 22ft/high cube
containers to outfit to special sorts of commodities like bulk, perishable, fruits &
vegetables etc.
 The marking in the containers comprises of letters and numerals of the owner
code, equipment type identifier, serial number and verification digit shall be not
less than 100 mm (4 in) high.
 E- way bill is an electronic document carried by a person who is carrying any

consignment of cargoes of value exceeding Rs.50000/- as mandated by the
Government. It is created from the E-way common portal by the registered
persons or transporters who cause movement of goods of consignment before
the commencement of such movement.
TERMINAL EXERCISE
Explain the following briefly.
1. Intermodal
2. Purpose of e-way bill
3. Step deck trailer

4. FTL merits Consolidation

of Cargo
5. Twenty Foot Container
6. Write a note on ship freight costing.
7. List the demerits of road consolidation
8. Spotlight the features of shipping cargo container
9. How do you identify domestic containers? Notes

10. Highlight the criteria to generate an e-Way Bill
11. Distinguish between FTL and LTL.
12. Spotlight the benefits of road consolidation
13. Sketch the different types of containers
14. Explain the process of road consolidation.
15. Describe the issuance of E-way bill.

12.1
1. False
2. Full Truck / Trailer load
3. Surface
4. Cost-efficient
12.2
1. It refers to a consolidator combines individual LCL shipments from various

shippers and create a full truck load.
2. Less than a Truck / Trailer load
3. Top-of-the-line
4. Big

Consolidation 12.3
of Cargo
1. True
2. Forklifts
3. Higher
4. Money
Notes 12.4
1. A quote or quotation
2. Labels
3. Safety
4. Trailer
12.5
1. Container Corporation of India Limited
2. True
3. Private
4. Flatbed
12.6
1. Height
2. General purpose container
3. Equipment type identifier
4. 100 mm
12.7
1. Electronic
2. Radio Frequency Identification Device
3. Updated
4. EBN

Curriculum Senior Secondary Course
Curriculum
1. Rationale
Transportation plays a central role in supply chains, affecting every part of the process that starts from
planning and procurement to supply and lifecycle management. Transportation plans must be multi-modal,
be coordinated with land use planning, include community inputs, and account for environmental and social
impacts. Transportation plans play a crucial role in analyzing issues, setting priorities, and guiding programming.
The Basics of Transportation course will empower the learner to perform better and as per industries
requirements.
2. Objectives
The objectives of developing this course are to:
·  lay the groundwork for learners’ future jobs in logistics, Transportation and other similar professions by
teaching them the Basics of Transportation;
· clarify the nature and scope of various forms of transportation leading to selection of the best option for
specific situations;
·  develop entrepreneurial skills in learners and equip them with knowledge of modern forms of transportation
to ensure timely and smooth delivery of products;
·  emphasize the need to meet the dictates of market and manage both inbound and outbound logistics;
·  develop an efficient workforce to transport products to customers on time and in good condition and
play a vital role in reducing the overall cost of goods and services.
3. Scope
Transportation is a derived facility for the service industries. Growths of E-Commerce and policy
announcements to promote the sector have also given a fillip to the development of the industry. Digitization
and extended distribution chains provide multiple opportunities for entrepreneurial ventures too. Imparting
skills in transportation while in school shall make students aware of opportunities for employment and
entrepreneurship, enabling them to channelize effort and time in the outcome-oriented activity.
4. Eligibility Conditions
a. Age: 14 years and above
b. Qualification: Secondary pass
5. Course Structure
Basics of Transportation i
Curriculum
Module Name Marks Study Hours
Module 1: Introduction about Transportation

L-1: Transportation & Mobility
L-2: Types of Transport Modes
L-3: Essentials of Transport
L-4: Concept of Multi Modal Transport
L-5 : Freight Forwarder & MMLP 15 25
Module 2: Consolidation of Cargo

L-6 :Introduction to Consolidation
L-7: Consolidation , Importance & Limitations
L-8: Shipper’s and Buyer’s Consolidation
L-9: Modes of Transportation for Consolidation
L -10: Air Consolidation
L-11: Ocean Consolidation
L-12: Road Consolidation 25 50
Module 3: Inbound and Outbound documentation

L-13: Inbound and outbound documentation
L-14: Quality check and Inventory Documentation
L-15: Transport Coordination 10 35
Module 4: Feasibility assessment and route optimization

L-16: Transportation Requirements
L-17: Route Optimization
L-18: Transport Policies In India
L-19: Cargo Arrangement And Consolidation Charge 10 50
Module 5: GST and Its Applications

L -20 : Goods and Services Tax
L-21 : Documentation for GST application
L -22 : GST and Modes of Transportation
L- 23 : Filing an E-way Bill
L-24 : Bill of lading and Bill of Entry 20 40
Sub Total 80 Marks 200 Hours
Internship 20 Marks 40 Hours
Total 100 240
ii Senior Secondary
Curriculum
6. Medium of Instruction
English (The course shall be translated in Hindi and regional mediums as per need)
7. Teaching Methodology
Theory: Printed self learning material with face-to-face contact sessions for academic support.
Assignment: One assignment shall be administered for continuous assessment and project work.
8. Evaluation
Evaluation for this subject shall consist of internal evaluation through Tutor Marked Assignments (TMA) and
term end external examination. The external examinations will be conducted twice a year i.e. in the months of
April and October. TMA will be treated as a learning tool. It will enable the learners to know their progress
and to prepare well for the examination. Besides the above strategies of evaluation, certain inbuilt components
for self evaluation in the form of Intext Questions, Terminal Questions, Role Play and Activity for learners
would also be provided in each lesson.
9. Scheme of Evaluation
Term End Examination (TEE) – 80 Marks
Internship - 20 Marks
Tutor Marked Assignment (TMA) – 20% of Theory

Pass Criteria- 33% separately in theory and Internship
10. Course Description
Module 1: Introduction about Transportation

L-1: Transportation & Mobility
L-2: Types of Transport Modes
L-3: Essentials of Transport
L-4: Concept of Multi Modal Transport
L-5 : Freight Forwarder & MMLP
Concept of Multimodal & Intermodal Transport, Introduction to Multimodal transport, the difference between
Multimodal and Intermodal transport, Type of transport Modes, Detail and characteristics of air, road, rail,
water, pipelines, package carriers, Need, Aim and Key Issues of Multimodal transport.
Basics of Transportation iii

Curriculum
Module 2: Consolidation of Cargo

L-7: Consolidation , importance & Limitations
L-6 : Introduction to Consolidation
L-8: Shipper’s and Buyer’s Consolidation
L-9: Modes of Transportation for Consolidation
L -10: Air Consolidation
L-11: Ocean Consolidation
L-12: Road Consolidation
Introduction and understanding of Consolidation, Processes involved, importance & Limitations of

Consolidation, Shipper’s and Buyer’s Consolidation, Modes of Transportation for Consolidation - Air,
Ocean & Road, Air Consolidation - (Process and Documentation involved), Ocean Consolidation - LCL
cargo (Process & Documentation involved), Ocean Consolidation - LCL cargo (Process & Documentation
involved), Road Consolidation - LTL to FTL (Region wise)
Module 3: Inbound and outbound documentation

L-13: Inbound and outbound documentation
L-14: Quality check and inventory documentation
L-15: Transport coordination
Inbound and outbound documentation, Quality check and inventory documentation, Transport coordination
Module 4: Feasibility assessment and route optimization

L-16: Transportation requirements
L-17: Route optimization
L-18: Transport policies in India
L-19: Cargo Arrangement and consolidation charge
Transportation requirements based on consignment volume, type, and destination, ODC, Right transporter
based on cost analysis and compliance to delivery dates, Documentation for transportation of goods, Cargo
Arrangements and consolidation charts
iv Senior Secondary
Curriculum
Module 5: GST and its application

L -20 : Goods and Services Tax
L-21 : Documentation for GST application
L -22 : GST and Modes of Transportation
L- 23 : Filling an E-way Bill
L-24 : Bill of lading and Bill of Entry
Classification of the transaction with Intra-State or Inter-state and match with the applicable GST and
Central Goods and Services Tax (CGST), Integrated Goods and Services Tax (IGST), State Goods and
Services Tax (SGST), GST is payable under reverse charge in case the Service provider is an unregistered
party, GST Identification Number (GSTIN), Permanent account number (PAN) number, email id Description
about Service Accounting Code (SAC) / HSN code, Unique Identification Number (UIN) for multilateral
entity, Filling of E-way Bill, Bill of lading and Bill of Entry
Basics of Transportation v

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379

Senior Secondary Course

NATIONAL INSTITUTE OF OPEN SCHOOLING

COURSE DESIGN COMMITTEE

Mr Ravikanth Yamarthy Ms Reena Fatima Murray Ms. Alpana Chaturvedi

Samir Chaturvedi Mr Kunjal Patel Ms Priyanki Vardhan

CONTENT EDITING & FINALISATION

GRAPHIC DESIGNING and DTP

2. Consolidation of Cargo 6. Introduction to Consolidation

4. Feasibility Assessment 16. Transportation Requirements

5. GST and its Application 20. Goods and Services Tax

LESSON PAGE NO.

1. Types of Transportation 1. Transportation & Mobility 01-20

2. Consolidation of Cargo 6. Introduction to Consolidation 103-126

Note: The syllabus has been bifurcated into two sections -

I. (i) Lessons for the Tutor Marked Assignment (TMA)

II. (ii) Lessons for public examination question paper

Lessons in Section (ii) are further divided as-

A. Lessons for objective type Questions only

B. Lessons for subjective type of questions.

The details of the different sections are on the next page.

MODULE TMA (40%) Public Examination (60%)

1 Types of L-1: Transportation L-2: Types of L-4: Concept of Multi

2. Consolidation L-6 :Introduction to L -10: Air L-9: Modes of

4. Feasibility L-17 Route L-16: Transportation L-18: Transport

TRANSPORTATION AND MOBILITY

After reading this lesson, the learner-

 explains the role of transport in providing mobility to men and material;

 elaborates the need for application of technology in transportation;

 emphasises the need for sustainability in land use pattern;

 coordinates between modes of transport and multimodal transport to achieve

 integration within and between different types of modes of transport, so

 integration of the modes with the environment, Types of

 Provide access to inter-urban services through high quality interchange stations

 Make commuter train services attractive to passengers by ensuring that the

 Support movement of freight trains carrying an increasingly wide range of

Policy & regulatory

2. Operation of The supply of an effective

The design philosophy

4. Use of the The way we use the

AVOID SHIFT IMPROVE Types of

Social sustainabillity Economic sustainabillity Environmental sustainabillity

Fig. 1.1: Towards sustainabillity in life

INTEXT QUESTIONS 1.1

2. What are the main objectives of transport?

4. What is the need to develop rail transport?

1.2 BENEFITS OF TRANSPORTATION

A. Socio-Economic Benefits of Transportation

I. Advantages of Modes of Transportation

Types of Road Transportation:

2. Door-to-door assistance: The best benefit of road transportation that makes

2. Dependable: It is the most reliable mode of transport as it is least affected by

2. Unbroken Journey: Air transportation offers an unbroken journey over sea

2. Less energy requirement: The consumption of energy is deficient.

II. Disadvantages of Modes of Transportation

Each mode of Transportation has its disadvantages, which can be enumerated

2. Vulnerable to season and weather conditions: It is very susceptible to

2. Centrally administrated: Being the public utility service, rail transportation

3. Specialized skills needed: Air transportation requires a specialized skill and a

2. High initial cost: The cost of construction of pipelines is high.

3. Security: The security of pipeline transportation is complex.

Direct Users Operators