dhl
Transcript of dhl
Industry Profile
The Indian express industry is set for sizzling growth, despite rising usage of
facilities like short messaging services or multimedia message services. Several
large-sized corporate and multinational express players are keen on acquiring
controlling stake in some of established Indian courier companies. India's express
industry is expected to register a growth of at least 20 per cent per annum during the
next five years and more than double its size by 2012.Opening of banking,
insurance, retail, aviation and telecom sectors and their penetration to smaller cities
would be the major growth driver.
The size of India's courier industry currently stands at around Rs 7,100 crore (Rs 71
billion) and is estimated to have grown at a CAGR of around 33 per cent over the
past decade. At its current estimated size, the courier industry is larger than the tea
industry and close to the size of paper and shipping industries in India.
The industry ranks amongst the fastest growing segments of the Indian economy
and over the next five years, it is expected to register a growth rate higher than of
industries such as retail, banking, financial, chemical and automobiles. The industry
is highly fragmented with more than 2500 express players and a few large sized
players account more than half of the industry revenues.
The industry contributes more than Rs 1000 crore (Rs 10 billion) to the government
revenues by way of service tax, income tax and other levies and it offers
employment opportunity to about a million people. The organized part of the express
industry in India is 65 per cent of the total market. "Organized sector in the domestic
market is little less than 50 per cent. The unorganized and semi organized
segments, which consist largely of regional and intra-city service providers account
for the rest.
Amongst domestic players Blue Dart, DTDC, First Flight and Overnite Express are
leading express services companies in India while UPS, FedEx, DHL and TNT are
leading international player’s presence in the country. These industry players earn
about 52 per cent of its revenues from document parcels.
Challenges faced by the industry include matching upto the rising expectations of
the customer, expanding the network to reach hitherto uncovered areas, containing
rising fuel and freight costs and retention of manpower.
Need for private express players:
While the domestic courier industry in India is booming at a 25% annual growth rate,
the amount of mail handled by India's largest 'courier firm', the India Post, the
government-run postal service, has shrunk by a whopping 50% over the past five
years.
There aren't any better examples to capture the collapse of government-controlled
institutions at a time when the Indian economic growth is being praised around the
world. Also the Speed Post, which is supposed to be one of the fastest and best
services of the Indian Post, is under major criticism from the people.
DHL & its competitor strategy:
DHL, with its bold yellow and red corporate colors, initiated a major marketing
campaign about two years ago with the pitch, “Competition. Great for you. Bad for
them.” While some advertisers shy away from attacking their rivals by name, DHL
did exactly that. Some television ads showed DHL drivers and trucks out-
maneuvering FedEx and UPS. Obviously, DHL believed acknowledging its two
larger competitors created an opportunity for the upstart brand to be seen as a
credible third member of the pack. DHL has moved into the next phase of its
branding campaign with current advertising that focuses on superior customer
service.
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DHL & its competitors inception in the Indian market :
All the foreign companies — UPS, FedEx, TNT and DHL — initially entered the
Indian market through alliances with Indian players, hoping to leverage the strong
distribution network of their domestic partners. DHL tied up with AFL, Fedex with
Blue Dart, UPS with Elbee, and TNT with Skypak. Both Elbee and Skypak were
strong domestic players and leveraged their networks to garner business for their
foreign partners. With the changing market, players who had previously
concentrated only on the small packages started delivering packages of up to 25 kg
across countries. The industry became technology-savvy and streamlined its
operations using e-tracking.
As the market grew, competition intensified and business changed, the existing ties
floundered and the foreign companies forged new ties and looked for new
acquisitions, even as they announced major investment and expansion plans. DHL,
the world’s leading express and logistics company, offers express and logistics
services in India. In 2004, it acquired a majority stake in Blue Dart Express Limited,
South Asia’s largest integrated air express, courier and logistics company, for Rs
720 crore by buying the stakes of the founding shareholders of Blue Dart and
Schroder Capital Partners.
While DHL Express offers international express services, Blue Dart caters to the
domestic market. Blue Dart’s operations are supported by a fleet of five Boeing 737
freighters and 3,429 ground vehicles. In 2004-05, Blue Dart handled 42.02 million
shipments in India and 0.53 million shipments internationally. “India is one of the
fastest growing markets for DHL Express in the Asia Pacific region..
In September 2006, the Netherlands based TNT Express, which was the first
multinational brand in India to offer both international and domestic services using
an integrated air and road network, acquired Speedage Express Cargo Services, a
division of Mumbai-based ARC India Ltd, for Rs 200 crore as part of its strategic
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objective to become the leading provider of express deliveries in India. TNT is going
to investing 100 million euro ($121 million) in the Indian market over the next five
years.
In 2002 Federal Express, which began operations in India in 1984 and 13 years later
became the first express company to launch an all-cargo flight to India, parted ways
with Blue Dart, with which it had an agreement since 1984, and formed a new
association with little-known Prakash Airfreight. In July 2007 Federal Express made
an unsuccessful bid to acquire Safe Express, a home grown company that was
started by Pawan Jain in 1995 and has grown to be one of the largest logistics
companies in India, which has over 3,000 vehicles, 3 million sq ft of warehouse
space and delivers over 2.5 million packages a month.
As the domestic players seek to expand they have attracted the interest of private
equity funds. Anil Ambani’s Reliance Private Equity, a division of the listed Reliance
Capital, has acquired a 44 per cent stake in DTDC Courier and Cargo Ltd, a large
Bangalore-based courier and express player, for Rs 65 crore. First Flight, India’s
second largest courier company, which handles over 85 million consignments
through its network of 700 offices, is looking to garner investment of over Rs 100
crore from private equity firms.
It plans to invest these in setting up 14 warehouses in key cities and acquire larger
aircraft. Elbee Express, which offers an integrated express service network for the
distribution of consignments, documents, parcels and commercial goods covering
11,600 locations in 1,645 cities and 643 towns in India, has invested significant
resources in state-of-the-art customer service centers and staff training, to ensure
high and efficient service levels.
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Conclusion
There are many risks and obstacles for companies attempting to enter the market —
the industry suffers from congestion, fragmentation, over-regulation, a weak
transport network, inadequate infrastructure, complex tax laws and insufficient
technological aids — but all this hasn’t prevented a host of logistics operators from
establishing a growing presence in the market.
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Company Profile
DHL is the first letters of the last names of the three company founders, Adrian
Dalsey, Larry Hillblom and Robert Lynn.
In 1969, just months after the world had marvelled at Neil Armstrong's first steps on
the moon, the three partners took another small step that would have a profound
impact on the way the world does business. The founders began to personally ship
papers by airplane from San Francisco to Honolulu, beginning customs clearance of
the ship's cargo before the actual arrival of the ship and dramatically reducing
waiting time in the harbour.With this concept, a new industry was born: international
air express, the rapid delivery of documents and shipments by airplane.
The DHL Network continued to grow at an incredible pace. The company expanded
westward from Hawaii into the Far East and Pacific Rim, then the Middle East, Africa
and Europe. By 1988, DHL was already present in 170 countries and had 16,000
employees. At the beginning of 2002, Deutsche Post World Net became the major
shareholder in DHL. By the end of 2002, DHL was 100% owned by Deutsche Post
World Net.
In 2003, Deutsche Post World Net consolidated all of its express and logistics
activities into one single brand, DHL. The DHL brand was further strengthened by
Deutsche Post World Net's acquisition of Exel in December 2005. The DHL
expertise is pooled from a number of companies acquired by Deutsche Post World
Net. To name a few:
Exel: at the time Deutsche Post World Net acquired Exel in December 2005, it had
around 111,000 employees in 135 countries. Exel primarily offers transport and
logistics solutions for key customers.
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DHL is the global market leader in international express, overland transport and air
freight. It is also the world's number 1 in ocean freight and contract logistics. DHL
offers a full range of customised solutions - from express document shipping to
supply chain management.
Logistics
DHL is the global leader in logistics - with more highly experienced professionals
at more locations in more countries than any other provider. DHL goal is to build
strong, long-term partnerships with customers by providing world class services,
across all operations.
The new DHL brand architecture
With the acqusition of Exel plc in December 2005, Deutsche Post World Net
(currently known as Deutsche Post DHL) further strengthened its logistics power. As
a result, DHL is now operating with two new logistics brands: DHL Supply Chain and
DHL Global Forwarding.
To cover all of customer service needs, DHL operates under five specialist divisions
DHL Freight
DHL Freight offers international and national transport solutions for part and full load
in Europe. DHL move goods by road, rail and a combination of the two.
DHL Freight covers the former DHL's non-documents and non-parcels business as
well as the former Danzas Euro cargo road transport business.
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DHL Express
DHL Express is the perfect partner for all worldwide express and parcel needs. DHL
Network covers over 4,000 offices and more than 120,000 destinations worldwide.
DHL Express is the result of the consolidation of the former DHL Worldwide Express
business and the Deutsche Post Euro Express parcels business and offers Same
Day, Express, Parcel and Freight services.
With DHL, customer can rely on one company for all their express shipment needs
- whether local or global. DHL provide the following option to their customer for the
service they are looking for.
DHL Global Forwarding
DHL Global Forwarding is the market leader in air and ocean freight and a project
logistics services provider operating worldwide. A range of value-added services
rounds off the product and service portfolio, giving an excellent market position and
providing customers with a unique service dimension worldwide.
DHL Global Mail
Global Mail offers comprehensive international mail services and provides
outstanding expertise in international direct marketing services and publication
solutions.
DHL Supply chain
Regardless of whether customer operate in the healthcare, technology/aerospace,
automotive/industrial or retail/consumer/fashion sectors, DHL can handle all of
complex, global logistics tasks: DHL Supply Chain provides customer with
customized, IT-based solutions along the entire supply chain.
As well as core procurement logistics, warehousing and sales logistics operations,
DHL offer top-flight value-added services such as finishing, co-packing, price
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labelling, billing, order processing - all the way to sales promotion and financial
services.
DHL goal is nothing less than to transform the logistics industry and to deliver
beyond customers' expectations wherever and whenever they need - by offering the
most comprehensive suite of services and becoming the only genuine one-stop
source for logistics solutions, globally.
A supply chain is the flow of goods, information and finance. It typically starts by
sourcing raw materials or semi-finished goods, which are scheduled and transported
into factories to be made into finished products (see Diagram 1.0). These then pass
through warehouses or distribution centres and are delivered to retailers,
wholesalers or direct to consumers' homes or business premises. Finally,
aftermarket activities involve the maintenance and repair, or the return and recycling,
of products at the end of their life. Supply chain planning optimises overall flows and
inventories, by balancing resources with demand at all stages.
Diagram 1.0 - Supply Chain model
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TSP: Shipment Movement Process
Four main functional teams of DHL staff are involved during these 9 stages
to capture the various checkpoints which provide information on a shipment’s
status. They are Courier, Gateway, Operations and Hub.
Booking:
Booking is the standardized process of accepting and processing shipment pick-up
requests,changes and cancellations from customers.
Dispatch:
Dispatch is the standardized process of allocating and submitting pick-up requests to
couriers and communicating any pick-up changes,cancellations or messages.
Pick-up:
Pick-up is the standardized process of accepting shipments for carriage (including
packaging and paperwork) from customers.
Outbound:
Outbound is the standardized process of preparing shipments for onward
transportation to the next or final destination by the local Service Centers.
Export:
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Booking Dispatch Pick Up O/Bound Export Transfer Import I/Bound Delivery
Export is the standardized process for consolidating international shipments to a
moment,lodging shipments with handling agents/carriers and advising destination of
flight information.
Transfer:
Transfer is the standardized process for Break-bulk,trans-shipment and/or re-
consolidating shipments and handling units at an intermediate point in the network.
Import:
Import is the standardized process for clearing international shipments for Inbound
or to Bond management(for shipments not cleared on arrival at destination).
Inbound:
Inbound is the standardized process of sorting ahipments to delivery routes at the
local Service Center.
Delivery:
Delivery is the standardized process oftransferring the custody of shipments to
consignees or the nominees.
Courier
Couriers have direct contact with our customers and therefore their interaction
with our customers is either during the pick-up of a shipment or during the
delivery of a shipment.
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As soon as a shipment is picked up from the customer, the courier scans the
shipment to capture the PU – Shipment Pickup checkpoint.
When a shipment is ready for delivery, the courier scans the shipment to
capture the WC – With Delivering Courier checkpoint. This reports that a
shipment has been allocated to a delivery route and a delivery attempt will be
made. Upon the successful delivery of a shipment, the courier enters the OK
– Delivery checkpoint that reports the successful delivery of a shipment.
The courier may capture other checkpoints for events that are variations to
the generic shipment movement process flow. All checkpoints that may be
captured by a courier are listed in the table below.
Courier Checkpoint List
Checkpoint Description
BA – Bad Address Reports that a delivery cannot be completed without
better address information
CA – Closed on Arrival Reports that a receiver’s business premises were
closed and delivery could not be completed
CM – Customer Moved Reports that the receiver is no longer at the delivery
address shown on the AWB
DD – Delivered Damaged Reports that the receiver has accepted delivery of a
shipment but considers the shipment damaged or
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Courier Checkpoint List
Checkpoint Description
contents missing at time of delivery
ND – Not Delivered Reports that a shipment was with a delivery courier
but delivery has not been attempted or completed and
where no other service incident applies
NH – Not Home Reports that no one was available or authorised to
accept the shipment at the time delivery was
attempted to the receiver’s private address or
temporary accommodation (hotel)
OK – Delivery Reports the successful delivery of a shipment
PD – Partial Delivery Reports that a delivery has been made and signed
for, but with one or more shipment pieces unavailable
at the time of delivery
PU – Shipment Pick-up Reports the physical receipt of a shipment from the
shipper
RD – Refused Delivery Reports that the receiver has refused to accept
delivery of the shipment
RT – Returned to
Consignor
Reports that a shipment is being returned for a
specific reason to the shipper or DHL origin
SI – Security Inspection Reports that all pieces of a shipment have been
inspected by DHL for security purposes
WC – With Delivering
Courier
Reports that a shipment has been allocated to a
delivery route and that a delivery attempt will soon be
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Courier Checkpoint List
Checkpoint Description
made. (Delivery details are expected on the same day
as the shipment is reported out for delivery)
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Operations
Operations are facilities where shipments are prepared for export or, for
delivery after having completed import procedures.
Checkpoint capture in these facilities may be at individual shipment level or at
a handling unit level (eg. a batch of shipments in a container).
The checkpoints to be captured during this phase of the shipment movement
process in Operations are listed in the table below.
Operations Checkpoint List
Checkpoint Description
AD – Agreed Delivery Reports that a shipment has arrived at the destination
Service Centre and is awaiting it’s expected and
scheduled delivery date
AR – Arrival in Delivery
Facility
Reports the arrival of a shipment at the destination
delivery facility
BA – Bad Address Reports that a delivery cannot be completed without
better address information
CA – Closed on Arrival Reports that a receiver’s business premises were
closed and delivery could not be completed
CC – Awaiting Consignee Reports that the shipment is awaiting receiver
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Operations Checkpoint List
Checkpoint Description
Collection collection at a DHL location as per customer request
CO - Transport Collect Reports that a shipment is to be billed Transport
Collect and to indicate the billing amount for the
shipment
CS – Closed Shipment Reports that a shipment is missing after all standard
efforts have been made to locate it
CU – Confirmed Uplift Reports that the handling unit/shipment uplift by a
movement operator has been confirmed to DHL. This
may or may not affect the Service Commitment for
each shipment
DI – Customer Duty and
Tax Invoice
Reports that an invoice has been created for
duty/tax/Transport collect charges for a shipment
DF – Depart Facility Reports the departure of a shipment from the control
of a DHL facility
DM – Damaged Reports damage to all or part of the shipment or
packaging. May or may not result in a service failure
DS – Destroyed/Disposal Reports that a shipment has been destroyed under
instructions or as part of standard procedures
FD – Forwarded to Third
Party Delivery Agent-
Delivery Details Expected
Reports the hand over of a shipment to a third party
delivery agent when DHL has contracted for delivery
details to be returned by the agent
HI – Lodged into held
Inventory Control
Reports that a shipment has been lodged into the
held inventory control section
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Operations Checkpoint List
Checkpoint Description
HO – Lodged out of held
Inventory Control
Reports that a shipment’s “held in inventory” status
has been resolved and the shipment is ready to be
taken out for further processing
HP – Held for Payment Reports that a shipment is on hold at a DHL facility
pending payment of any applicable fees, and that
delivery has not as yet been attempted
IA – Image Available Reports that images of shipment paperwork have
been made available to the network
MC – Miscode Reports that a shipment has been received at a DHL
Facility with an incorrect service area code shown on
the Airwaybill, shipment or product label
MD – Missed Delivery
Cycle
Reports that a shipment has missed the current
courier delivery cycle
MS – Missort Reports that a shipment has been incorrectly sorted,
despite the correct destination service area code
present on both the Airwaybill and the package
OH – On Hold Reports that the progress of a shipment has been
suspended, and that the shipment is being held
securely at a DHL facility until progress can continue
OK – Delivery Reports the successful delivery of a shipment
PL – Processed at
Location
Reports the outbound processing or transfer of a
shipment and its location
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Operations Checkpoint List
Checkpoint Description
RT – Returned to
Consignor
Reports that a shipment is being returned for a
specific reason to the shipper or DHL origin
RW – Reweigh Reports that a piece has been reweighed during the
outbound process
SC – Service Changed Reports that a change in service has been made to a
shipment in transit
SI – Security Inspection Reports that all pieces of a shipment have been
inspected by DHL for security purposes
SM – Scheduled for
Movement
Reports that a shipment is now scheduled to move on
a specified date and time
SS – Stopped Shipment Reports that a shipment’s progress has been stopped
by an official government authority and that the
shipment will not be delivered or returned to DHL
ST – Shipment Intercept Reports that a special handling instruction has been
raised against a shipment
TP – Forwarded to Third
Party-No Delivery Details
Expected
Reports that a third party will deliver a shipment. No
delivery details are expected
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Gateway
Gateway is the DHL facility that processes shipments through import and
export procedures. Many of the procedures at Gateway involve a third party
such as customs, other government regulatory authorities, airlines and airport
ground-handling agents.
The checkpoints to be captured by Gateway are listed in the table below.
Gateway Checkpoint List
Checkpoint Description
AF – Arrived Facility Reports the arrival of a shipment at a DHL transit
facility
BL – Bond Location Identifies the exact physical storage location of the
shipment in the bond facility
BN – Customer Broker
Notified
Reports that the customer’s broker has been
contacted to arrange for the clearance of the
shipment
BR – Cleared and
Delivered by Customer’s
Broker
Reports the transfer of responsibility for a shipment
and related documentation to a customer nominated
broker
CD – Controllable
Clearance Delay
Reports that a shipment’s progress has been delayed
because import, export or transit clearance-
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Gateway Checkpoint List
Checkpoint Description
processing requirements cannot be completed due to
a reason that has been agreed to be within DHL’s
control
CR – Clearance Release Reports a shipment’s release from clearance
processing or from a bonded area
CS – Closed Shipment Reports that a shipment is missing after all standard
efforts have been made to locate it
CU – Confirmed Uplift Reports that the handling unit/shipment uplift by a
movement operator has been confirmed to DHL. This
may or may not affect the Service Commitment for
each shipment
DF – Depart Facility Reports the departure of a shipment from the control
of a DHL facility
DI – Customer Duty and
Tax Invoice
Reports that an invoice has been created for
duty/tax/Transport collect charges for a shipment
DM – Damaged Reports damage to all or part of the shipment or
packaging. May or may not result in a service failure
DS – Destroyed/Disposal Reports that a shipment has been destroyed under
instructions or as part of standard procedures
ES – Entry Submitted Reports that a completed customs entry has been
submitted to Customs for processing
HI – Lodged into held
Inventory Control
Reports that a shipment has been lodged into the
held inventory control section
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Gateway Checkpoint List
Checkpoint Description
HO – Lodged out of held
Inventory Control
Reports that a shipment’s “held in inventory” status
has been resolved and the shipment is ready to be
taken out for further processing
HP – Held for Payment Reports that a shipment is on hold at a DHL facility
pending payment of any applicable fees, and that
delivery has not as yet been attempted
IC – In Clearance
Processing
Reports that a declarable shipment is under routine
clearance processing
MC – Miscode Reports that a shipment has been received at a DHL
Facility with an incorrect service area code shown on
the Airwaybill, shipment or product label
MS – Missort Reports that a shipment has been incorrectly sorted,
despite the correct destination service area code
present on both the Airwaybill and the package
NA – Not Arrived Reports that a pre-alerted WPX shipment has not
physically arrived on the advised linehaul movement
OH – On Hold Reports that the progress of a shipment has been
suspended, and that the shipment is being held
securely at a DHL facility until progress can continue
PL – Processed at
Location
Reports the outbound processing or transfer of a
shipment and its location
RR – Response Received Reports that Customs has provided or updated a
status for a house airwaybill entry which has been
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Gateway Checkpoint List
Checkpoint Description
submitted to Customs for processing
RT – Returned to
Consignor
Reports that a shipment is being returned for a
specific reason to the shipper or DHL origin
SC – Service Changed Reports that a change in service has been made to a
shipment in transit
SI – Security Inspection Reports that all pieces of a shipment have been
inspected by DHL for security purposes
SM – Scheduled for
Movement
Reports that a shipment is now scheduled to move on
a specified date and time
SS – Stopped Shipment Reports that a shipment’s progress has been stopped
by an official government authority and that the
shipment will not be delivered or returned to DHL
ST – Shipment Intercept Reports that a special handling instruction has been
raised against a shipment
TD – Transport Delay Reports that a delay has occurred to a handling unit
during transport between two DHL facilities. This may
or may not affect the Service Commitment for each
individual shipment
UD – Uncontrollable
Clearance Delay
Reports that a shipment’s progress has been delayed
because import, export or transit clearance-
processing requirements cannot be completed due to
a reason that has been agreed to be outside of DHL’s
control
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Hub
The Hub is the facility where shipments are consolidated for loading onto
departure flights or, shipments are received on behalf of a Gateway. Many of
the procedures at the Hub involve a third party such as airlines and airport
ground handling agents.
The checkpoints to be captured by the Hub are listed in the table below.
Hub Checkpoint List
Checkpoint Description
AF – Arrived Facility Reports the arrival of a shipment at a DHL transit
facility
CS – Closed Shipment Reports that a shipment is missing after all standard
efforts have been made to locate it
CU – Confirmed Uplift Reports that the handling unit/shipment uplift by a
movement operator has been confirmed to DHL. This
may or may not affect the Service Commitment for
each shipment
DF – Depart Facility Reports the departure of a shipment from the control
of a DHL facility
DM – Damaged Reports damage to all or part of the shipment or
packaging. May or may not result in a service failure
DS – Destroyed/Disposal Reports that a shipment has been destroyed under
instructions or
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Hub Checkpoint List
Checkpoint Description
as part of standard procedures
MC – Miscode Reports that a shipment has been received at a DHL
Facility with an incorrect service area code shown on
the Airwaybill, shipment or product label
MS – Missort Reports that a shipment has been incorrectly sorted,
despite the correct destination service area code
present on both the Airwaybill and the package
OH – On Hold Reports that the progress of a shipment has been
suspended, and that the shipment is being held
securely at a DHL facility until progress can continue
PL – Processed at
Location
Reports the outbound processing or transfer of a
shipment and its location
RT – Returned to
Consignor
Reports that a shipment is being returned for a
specific reason to the shipper or DHL origin
SC – Service Changed Reports that a change in service has been made to a
shipment in transit
SI – Security Inspection Reports that all pieces of a shipment have been
inspected by DHL for security purposes
SM – Scheduled for
Movement
Reports that a shipment is now scheduled to move on
a specified date and time
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Hub Checkpoint List
Checkpoint Description
SS – Stopped Shipment Reports that a shipment’s progress has been stopped
by an official government authority and that the
shipment will not be delivered or returned to DHL
ST – Shipment Intercept Reports that a special handling instruction has been
raised against a shipment
TD – Transport Delay Reports that a delay has occurred to a handling unit
during transport between two DHL facilities. This may
or may not affect the Service Commitment for each
individual shipment
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Research Objective and Its Background
Research Background:
Clearance process is an important activity in the express company. In the express
company clearance process involve the submission of the required paper work to
the customs concerning to a particular shipment arrived (import) at the customs or
the shipment that need to be sent to other country (export). So it is important to
understand clearance process followed in an organization and what are the activities
involved in it.
When the shipment arrived at the consignee country, shipment has to get the
approval of customs inorder to clear the shipment on a particular duty.In the
process of clearance from the Mumbai customs,many queries were raised regarding
various technicalities and documents of the shipment.Due to this reason,the Bond
Rate(number of Shipment remain unclear from customs) of DHL increased.One of
the major reason for the above problem was of improper documents submitted by
DHL to the Mumbai customs.In DHL shipment documents are submitted by
Clearance support agents(CSA) along with the help of Skyline team and Clear on
Arrival team(COA). The project given to me was to identify the Non-Value added
activities in process of each team and the time they take for submittting documents
of each shipment,and suggest recommendations for the same.
Research Objective:
To study the clearance process.
To study the Documents preparation process carried out by respective teams.
To identify the Non-Value added activities in the respective teams.
To find out the possible reasons causing such problems.
To suggest recommendations
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Research Methodology
DHL express is divided into separate departments or parts like COA(Clearance on
Arrival), CSA(Clearance support agent), BOE (Bill of entry) filling, NCG(Network
control group), Operations & Warehouse. The clearance process is undertaken by
all of the above teams.
For understanding the clearance process & to improve the process, both Primary as
well as Secondary data collection methods were adopted. More emphasis was given
on Primary Method of data collection.
Primary Data Collection Method:
The Primary Data was collected by personal interaction with responsible
employees and through field work.
DHL express is divided into separate departments or parts like
COB(Clearance on board), CSA(Clearance support agent), BOE (Bill of entry)
filling, NCG(Network control group), Operations & Warehouse. Every
department is important to accomplish activities, so information was collected
from each department.
As there are various departments in the express unit, the information was
collected from the employees of each department.
An activity related to information from different departments with each other
was better understood from the IT Department.
The entire custom clearance process was understood with the help of the
custom officials in the courier department.
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Secondary Data Collection Method:
For Secondary Data Collection websites were used.
From websites, a rough idea regarding services offered and their
management was studied. But the actual information was collected through
the employee of the various departments.
Also websites of Customs and of courier companies were used for the data
collection.
Companies’ websites provided information mainly on services offered.
From Customs websites information on customs rules and regulations was
collected.
Financial Reports of the last three months of the company was studied to
understand the problems in the billing process of the company.
In order to understand the core reasons causing the problems, software
named Importing Accounting System (IAS) was used. The software IAS
helped to give every minute detail like the procedures, date and time of each
procedure carried on the shipment from the time it was booked at its origin to
the time it was delivered to customer.
PC DOC another software was used to get the print of the original DDR.
Gone through the software Special Clearance Module(SCM) inorder to study
the status of current and past shipment details.
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CUSTOMS CLEARANCE PROCESS
Customs basic
Whenever any good(s) enter or leave a country, they are regulated by the law
of that country. In India, Custom Regulations are governed by the Indian Customs
Act 1962.
Why are goods regulated?
Safeguard industry – Safeguard domestic market from foreign competition,
thereby restricting unwanted competition
Prevention of Illegal and Illicit commodities– Drugs, Narcotics, Illicit Films,
Religious grounds, Smuggling.
Natural Laws – Protect nature and the environment
International laws – Eg. WTO
Due to these regulations, goods crossing over international boundaries are
regulated
Import or Export of Goods is regulated by whom: -
Director General of Foreign Trade (DGFT) under the Ministry of
Commerce and Trade (MoC&T)
Central Board of Excise and Customs (CBEC) under the Ministry of
Finance (MoF)
Allied Laws & Regulations of other related Government
Departments / Ministries.
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World Trade Organisation (WTO) and General Agreement for
Trade and Tariffs (GATT)
Regulatory Bodies:
Ministry of Commerce & Trade:
Is responsible for the country‘s external trade and related matters connected
with it. It formulates policies in the sphere of foreign trade, in particular the Export
Imports (EXIM) Policy of the country also known as Foreign Trade Policy.
Director General of Foreign Trade (DGFT):
Is primarily responsible for the issuance of import-export Code numbers,
grant of import-export Licenses, issue of Advance Release Orders and other matters
specified in the import-export Policy & Procedures (EXIM policy). The DGFT is
responsible for actually framing the various laws to promote trade as well as
safeguard the industry. The DGFT is responsible for implementing policies laid down
by the Ministry of Commerce and Trade.
Ministry of Finance:
Has overall responsibility of Customs rule regulation and procedure. It
announces the budget in every financial year depending upon which, duties and
taxes change every financial year.
Central Board of Excise and Customs (CBEC):
Central Board of Excise and Customs (CBEC) is a part of the Department of
Revenue under the Ministry of Finance. It deals with the tasks of formulation of
policy concerning levy and collection of Customs and Central Excise duties,
prevention of smuggling and administration of matters relating to Customs, Central
Excise and Narcotics to the extent under CBEC's purview. The CBEC implements
the policies relating to customs and excise laid down by the Ministry of Fina
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Scope of the customs:
Objectives of Customs Department: -
Protection of national economic, commercial & business interests &
combating economic & commercial fraud
Protecting Domestic Industry
Collection of duties & taxes & compliance to fiscal & statistical
regulations
Regulating trade with other countries in applying national rule.
Facilitating trade with other countries
Combating illicit trafficking, particularly in drugs & other threats to
society
Check and oversee the laws that have been framed by the GOI and
the DGFT, are being followed.
Process for clearance followed by Custom Authorities:
When goods enter the country, the Custom Authorities will follow regulatory
clearance procedures to oversee the entry of the goods and for calculation of the
duty. The broad process is as follows:-
1) The authorities ensure that the various laws are being abided. (Eg: If a drug is
prohibited under a certain act, that will not be cleared by Customs and the
action will be taken as per that law).
2) The commodity is also checked according to the policy it falls under
(Prohibited, Restricted, Canalized, and Free).
3) The commodity is then classified according to the ITC code.
4) If it comes under the purview of the free policy, then the allied laws are
checked.
5) The duty is calculated based on the type of commodity as per the ITC
classification
6) The commodity is cleared by the customs after ensuring duty payment.
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Classification of Goods:
1) The basic reason for classification is for understanding the nature of the
goods, without physical checking of the goods.
2) Goods that enter international trade are not charged to a single rate of
customs duty by the importing / exporting country. It is required that such goods
which enter the international trade are grouped into exclusive similar categories /
class of goods [chemicals, metals, textiles, machinery, etc.] and enumerated on
the basis of well defined criteria.
3) The sub division and enumeration of all goods entering International trade
along with well defined rules of interpretation, form what is normally termed as
the nomenclature of goods, in a country.
4) Governments utilizes the nomenclature as the basis for prescribing
appropriate duty on goods imported / exported. The nomenclature combined with
the duty rates is called the Tariff. As the tariff is normally a part of the Tariff Act in
a country, it is called the ‘Tariff Schedule’.
There are various methods of classifying the goods:
According to the Policy:
Prohibited goods
Restricted goods
Canalized goods
Free goods
According to the nature of the commodity this is done through the ITC
(International Tariff Code) which is a 8 digit harmonization code.
Modes of Clearance
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Two Modes of clearance:
1. Courier Mode
For regulating such imports and exports, the Government has framed the
Courier Imports and Exports (Clearance) Regulations, 1998. Any goods
not within Courier Mode regulations go under the Cargo Mode.
Courier mode can have 1 BOE for 10 shipments. Authorized couriers
(Such as DHL) can clear the shipment
Import:Except for certain excluded categories, all goods are allowed to be
imported through the courier mode.
Export:All goods are allowed to be exported though courier mode, except
for certain excluded categories.
2. Cargo Mode
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Modes
Courier ModeWeight: <70 kgs.Value: <INR 1,00,000Goods: Samples (<INR 25000) Gifts (<INR 50000)Dimensions: <=118x88x120 cm
Cargo ModeWeight: No weight LimitValue: No value LimitGoods:Commercial & Non commercial Shipments,free goodsDimensions: No Dimension limit
Cargo mode requires a separate formal BOE for each shipment. Only the
CHA can clear the shipment.
Import:Goods be imported through cargo are (a) animals and plants; (b)
perishables; (c) publications containing maps depicting incorrect
boundaries of India; (d) precious and semi precious stones, gold or silver
in any form; and (e) chemicals falling within Chapters 28, 29 and 38 of the
Customs Tariff.
Export:Goods to be exported through cargo mode are those which attract
any duty on exports or those exported under export promotion schemes,
such as Drawback, DEPB, DEEC, EPCG etc. Other exclusions form
courier mode include goods where the value of the consignment is above
Rs.25, 000/- and transaction in foreign exchange is involved.
Paperwork required for Customs Clearance:
1) Commercial Invoice
2) AWB (Airway Bill)/ Shipping Bill
3) Catalogue or Write up
4) BOE (Bill of Entry)
5) Packing List
6) Any duty exemption certificates
7) GATT Declaration
8) IEC (Import Export Code)
9) Purchase Order Copy
10)Authorization letter
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Clearance Process Followed by DHL
DHL follows Global Standard Clearance Process which consists of 5 stages
as follows:
1) Data Administration
DATA CLEANSING
Shipment Movement
Ensure shipment information is complete and accurate
Full names & addresses
Check against registered names / addresses (where required)
Commercial
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DATA ADMINISTRATION
CLASSIFICATION
BROKER REVIEW
CLEARANCE SUPPORT
DECLARATION
Ensure commercial information is complete & accurate
Accurate reflection of commercial invoice
Multi line information is required
DATA CLEANSING PROCESS
Do data cleansing from the Customs Alert – do not wait for WPX
alert
Retrieve documents from Clear in the Air (CIA)
Check for accuracy in ALL key fields
Complete ALL multi-line information
After Data Cleansing, the data should be 100% accurate including
details of ALL line items
Classifier and / or Broker should not need to refer to images
CLEARANCE AGENTS are responsible for Data Administration
The Data Administration Agents (DAA) are responsible for preparing
shipment records (or files) for customs clearance entry by ensuring that the
information available in the shipment record reflects the available data to DHL
(in DHL systems, including CIA images, and Customer Database Records).
The DAA also assists with general administrative duties related to customs
clearance such as the printing, collation, distribution and filing of customs
clearance-related documentation ( facility size relative ).
The tasks of the DAA include:
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Validate and if needed, correct the data elements in the shipment
records to ensure that the data elements in the records are in
accordance to the approved format and structure acceptable to the
regulatory agencies and systems.
Verify and if needed, correct the shipment details in the shipment
record to ensure that the information in the shipment records are in
accordance to the information available in commercial documents
provided by the customer and/or customer instructions available in
DHL’s Customer Database Records
Note: In relation to the task stated above, the DAA will ensure that
multi-commodities in a shipment are recorded in the shipment record. The
DAA will verify the actual number of shipment commodities from the
commercial documents available in the shipment.
If a shipment record is not available (example over-landed
shipments), the DAA will assist to create an initial shipment record
(or file) for the over-landed shipment using the commercial
documents available on the physical shipment
Assist in administrative duties within the clearance department such
as the printing, collation and distribution of the required customs
documentation needed for lodgment of a customs entry.
Perform filing and archiving of customs documents for shipments
that have been cleared by DHL ( facility size relative ).
Perform co-ordination duties within the clearance department as
assigned by the duty supervisor, and/or between the clearance
department and other DHL departments (e.g. between the
clearance department and NCG, or warehouse operations or the
accounting department ) and/or external agencies (e.g. between
Customs and the DHL clearance department)
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2) Classification
Auto Classification
Manual Classification
Goods can be manually classified by Classifier.
Calculate duty/tax
Check compliance forProhibited & Restricted Commodities
Update Categarization
CLASSIFIERS are responsible for Classification
The Classification Agents (CA) are responsible for classifying the commodities in a
shipment in accordance to the national tariff tables, and determining a preliminary
assessment of the duties and taxes payable for shipments imported/exported
through DHL Express.
The tasks of the CA include:
Determine the shipment value in accordance to the local valuation
guidelines provided by the local authorities
Determine and classify the shipment commodities in accordance to
the national tariff classifications tables available, and determining
the corresponding duty and tax rates, taking into consideration: (1)
Country of origin for preferential treatment; (2) Concessions or
Exemptions applicable to the shipment commodity or
importer/exporter; and (3) Applicable customer instructions
recorded in the Customer Instruction Database Records.
Compute a preliminary assessment on the duty and taxes payable
to the external agencies (including any additional taxes e.g.
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countervailing or anti-dumping taxes), and fees or charges payable
to DHL
3) Clearance Support
Contact DHL Origins
Contact Destination Customers
Permit and licence handling
Contact Regulatory Authorities
Other Special Handling
Third party broker handover
CLEARANCE SUPPORT AGENTS are responsible for Clearance Support
The Clearance Support Agents (CSA) will act as the “voice” of the clearance
department to external parties. The CSA will facilitate the clearance of DHL
shipments by communicating with customers the clearance requirements and
any discrepancies preventing the successful clearance of these shipments.
He/She will coordinate with the customer to obtain the necessary shipment
information and documents for the clearance department to successfully clear
the shipments through the regulatory agencies when the existing information or
documents are insufficient to permit successful clearance of the shipments.
The tasks of the CSA include:
Contact DHL customers (both origin and destination) for
clearance-related shipment information or documents when
the existing documents or information available are not
sufficient for DHL to clear the shipments
Provide customer with duty and tax advice notification and to
seek payment approval from these customers when the duty
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and tax amounts payable exceeds DHL’s payment limits
Collate the clearance documents and coordinate handover
of these documents to the assigned broker for BTO
shipments.
Review the “Shipment in Bond” inventory report to ensure
that these shipments are worked on a daily basis.
Maintenance of the customer instructions and customer
general information databases to ensure that the databases
are up to date and accurate
4) Broker Review
Review and finalise declaration prior to lodgement
Risk management based
Final categorisation
Create appropriate declaration
Assemble supporting paperwork
The Broker is responsible for lodging customs entries for shipments that are
imported, exported or transshipped through DHL. In lodging this entry, the
Broker will ensure that the entry is performed in a timely manner in
accordance to DHL performance standards (e.g. COA and BOS) and that
both the regulatory compliance requirements and the instructions of
customers (if any) are met.
The tasks of the Broker include:
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Ensure the timely submission of customs entries in order to
attain the clearance performance standards set for the
location
Validate, approve and submit a shipment declaration for the
shipment after satisfying himself that the preliminary
assessment performed by the Classification Agent is in
order, the information in the shipment record is reasonably
accurate and complete, and that the regulatory compliance
requirements of the governmental agencies and customer
instructions have been satisfied.
Ensure that the duty and tax payment approvals are
obtained before submission of the customs declaration
Approve and submit the cargo manifest to the appropriate
agencies in accordance to the local requirements
Maintenance of the tariff databases (National, Product and
Commodity Databases) , including approving any additions
to these databases, to ensure that the databases are up to
date and accurate.
Provide technical advice on customs related matters to
customers (internal and external), including solutions design
inputs for new DHL products
Assist in the preparation of clearance-related reports as
assigned by the Customs Clearance Supervisor or Manager
Provide assistance as when required in regulatory audits
performed on DHL customs clearance operations
Assist as required by clearance management to prepare for
TSP certification, and ensure that compliance is maintained
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5) Declaration
Lodge declaration with Customs
Various declaration types
Obtain clearance status
Pay Customs
Update other systems
e.g. Finance, Shipment Movement
BROKERS are responsible for Broker Review and Declaration
Thus, the purpose of each stage is as follows
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In the above 5 stages,my project comes under Classification and Clearance
Support.Under this,there are 2 different teams known as Clear on Board(COB) and
Clearance Support Agents(CSA).
Clear on Board(COB)
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Prior Clearance
Data is received at 14.00 hrs
Update ECE
Download images of AWB and Invoice through CIA
Print BOE
Attach BOE to images
Update ICD and CPF in ECE
Prepare BOE for assessment
Assessment of BOE
Duty payment preparation
Re updatation in ECE
Shipments on Hold and Detained Shipments
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Detention Shipments Shipments
Hold Shipments
Formal Clearance Prior Clearance Hold/Detained
COB Clearance
Any shipments left after prior clearance ie they are not cleared, follow the hold
shipment process
1. Hold Shipments
Prepare BOE for assessment
Update ICD and CPF in ECE
Assessment of BOE
Detention (Warehouse deposit)
Duty preparation
Any shipments left after Hold shipment process ie they are not cleared, follow the
detained shipments clearance process
2. Detention Clearances
Examination
Assessment
Duty Preparation
Clearance (Gate pass)
Formal Clearance
For Formal Clearance, all documents are handed over to the Broker for Broker
Clearance for which DHL levies a charge of Rs. 1200.
Clearance Support Agents
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Introduction
This document deals with the Clearance Support Group Agents (CSA) who form an
integral part of the Clearance Department as they communicate and co-ordinate with
DHL customers.
Purpose
The objective of the document is to give an understanding of the working of the CSA
and the functions and activities performed by them.
Basic Definitions
Clearance Support Group Agents (CSA) are those that act as the voice of the
clearance department to external parties. The CSA facilitates the clearance of
shipments by communicating with customers the clearance requirements and
any discrepancies preventing the successful clearance of these shipments. They
coordinate with the customer, to obtain the necessary shipment information and
documents for the clearance department to successfully clear the shipments
through the regulatory agencies when the existing information or documents are
insufficient to permit successful clearance of the shipments.
Detention Receipts (DR) are receipts, which contain the details of the various
shipments that are held by the customs due to various reasons.
Overview of Activities performed by CSA
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Clearance related shipment information
CSA contact the customers at both, the origin and destination for any kind of
clearance-related shipment information or documents when the existing
documents or information available, is not sufficient to clear the shipments.
Repeated Reminders
They send reminders and make repeated calls to the customer when shipments
are held by customs due to insufficient paperwork or due to non-payment of a
large duty amount, which exceeds DHL payment limits. These calls are made
everyday, till the customer reverts and completes the necessary formalities or till
such time as NCG receives the message so as to abandon the shipment.
Seek payment approval
They provide the customer with duty notification and seek payment approval from
these customers when the duty and tax amounts payable exceed DHL payment
limits.
BTO shipments
Collate the clearance documents and coordinate handover of these documents
with the assigned broker for BTO shipments.
Shipment in Bond
Review the “Shipment in Bond” inventory report to ensure that these shipments
are worked on a daily basis.
Maintain database
They maintain databases of customer instructions and customer general
information to ensure that the databases are up to date and accurate
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Issues Identified
After Studying the complete Process of Import Clearance,certain issues were
found out in the process
In COB Team
Improper Checking of CPF
Approximate entry of Freight details
Putting shipment on Hold
Lack of cooperation between COA team member and CSA
Arguments on CTH details among themselves
In CSA Team
Lack of time management
Number of calls are made to the consignee for asking required documents
Lack of co-ordination between CSA and clearance team on field
Arguments between CSA and Skyline team member on BoE
CSA's don’t pick up consignees calls or incoming calls
RECOMMENDATIONS
Majority of their time gets utilized in explaining, or updating others
regarding the status of their BoE, there should 1 person in a team to whom
all the information about the BoE should be given and all the other people
should approach him for any queries rather then disturbing others.
In case of regular BoE, team leader should distribute the the files to his
team, and for those files Skyline team leader should be a link between
CSA and his team members, this will help CSA to know who is preparing
which BoE.
A lady preparing Cargo BoE spend her half of the time in preparing
folders, she can utilized this time in preparing regular BoE and folders can
be prepared by the people who make folders for regular BoE. About 3-4
hours of her time can be saved by doing this.
Due to large number of calls, pressure is increasing on CSA's and
because of this, the effectiveness of calls are going low. Team should set
some target calls per day and based on that each CSA should be given
average of 50 calls per day. This way they will concentrate on only these
number of calls and inturn effectiveness will improve.
Communication gap between NCG and delivery team causes release of
shipments duty free even if they bear duty due to delay in the billing.
In order to bridge the gap between the two, the first process before billing
can be the identification and segregation of dutiable goods and separating them
from non dutiable ones.
Technical Suggestions
1. Updating the database of customer consistently can be useful in
long run.
2. Sufficient backup must be available in case of hardware failure such
as if a printer is not functioning, the other must be used.
3. Maintaining the centralize database of the paper work required for
the various type of shipment can be useful in the long run
LIMITATIONS
As DHL counter present at the airport is the Customs controlled area it
was difficult to get much information regarding rules and regulations which
were largely
The relevant literature review on the billing process in DHL was not
available.
Primary data was collected only through interviews and observations and
not by collecting first hand data through questionnaires.
CONCLUSION
The suggestions made above for the improvement of the process are
feasible and can be applied with ease.
The study done can be useful as a part of a large level project for the
overall improvement.
The method described above does not require any substantial costs.
Some attention and carefulness is required to detect the problem at an
early stage to eliminate it.
If the above described points are allowed and followed (as a test drive),
I’m sure substantial progress can be made.
BIBLIOGRAPHY
Websites
http://www.dhl.co.in/publish/in/en/about/history.high.html
http://www.dhl.co.in/publish/in/en/about/divisions.high.html
http://exim.indiamart.com/act-regulations/customs-act-1962.html
http://www.psbedi.com/logisticsinfo_enter.htm
http://www.infodriveindia.com/Exim/Guides/How-To-Import/
Ch_19_Custom_Clearance_of_Imported_Goods.aspx
Interviews
Mr. C S Mishra, Deputy Commissioner, Customs.
Mr. Sanjay Matre, Appraiser, Customs.
Mr. Santosh Shelar, Examining officer, Customs.