Venkat Presentation

7/31/2019 Venkat Presentation

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ROLE OF ICD AND

CFS INCONTAINER

MANAGEMENT

CONTAINERIZATION


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WHAT IS A CONTAINER ?

Containers are steel or aluminum boxes that can be moved on trucks, rail

road cars and ships and can carry different kinds of merchandise.

Inaugurated on April 26, 1956, container made shipping cheap, thereby

changing the shape of the world economy.

The container in the last three or four decades has become the core of a

highly automated system that enables movement of goods from anywhere

to anywhere at low costs and with minimum complications on the way


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Pre container era - cost of handling freight at the port was the major part of

the major part of the total freight cost.

Cost of Shipping One Truckload of Medicine from Chicago to Nancy,

France (estimate ca. 1960)

The container idea is not new with Mr. Malcolm McLean - the idea has been in use

British & French railroads used wooden containers to move furniture in late 19th

century

Cincinnati motor terminal company developed interchangeable truck bodies which

could be lifted on and off wheels with a crane

NY Central & Pacific Rail Road used steel containers to be fork lifted and transferred

between trains


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Yet all above were not successful.

McLeans fundamental insight about the container was that shipping

companys mission was moving freight - rather than moving ships.

The container was not just a metal box, but an entire new way of handling

freight - a new system with new types of ports, ships, cranes, storage

facilities, trucks, trains and new organizational and operational

improvements among the shippers.


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Under this new system the benefits ofcontainerization became quickly clear.

Average Cost of Handling One Cubic Meterof Freight - 1970

Capital

Cost

Operating

Cost

Cargo

Handling

Total

CostConventiona l ship $2.30 $3.81 $17.00 $23.11

Containe r ship $2.50 $2.47 $5.90 $10.87

Source: UNCTAD, Review of Maritime Transport, 1975.


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In the light of such cost advantages ofcontainer ships over conventional ships.

There was a boom in container shipping.

Source: UNCTAD


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HISTORY OF CONTAINERIZATION

Modern container shipping celebrated its 50th anniversary in 2006. Almost

from the first voyage, use of this method of transport for goods grew steadilyand in just five decades, containerships would carry about 60% of the value

of goods shipped via sea.

The idea of using some type of shipping container was not completely new.Boxes similar to modern containers had been used for combined rail- and

horse-drawn transport in

England as early as 1792.


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HISTORY OF CONTAINERIZATION

, in 1955, Malcom P. McLean, a trucking entrepreneur from North Carolina,

USA, bought a steamship company with the idea of transporting entire trucktrailers with their cargo still inside. He realized it would be much simpler and

quicker to have one container that could be lifted from a vehicle directly on

to a ship without first having to unload its contents.

On 23 April 1966, ten years after the first converted container ship sailed,

Sea-LandsFairlandsailed from Port Elizabeth in the USA to Rotterdam in

the Netherlands with 236 containers. This was the first international voyage

of a container ship.


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Container shipping began to prove its worth at an international level. From

this point on the industry began to grow to the point where it would quicklybecome the backbone of global trade, even though few at the time would

have made such bold predictions

1968 and 1969 were the Baby Boomer years for container shipping. In 1968alone, 18 container vessels were built, ten of them with a capacity of 1,000

TEUs which was large for the time. In 1969, 25 ships were built and the size

of the largest ships increased to approaching 2,000 TEU. In 1972, the first

container ships with a capacity of more than 3,000 TEU were completed by

the Howaldtwerke Shipyard in Germany


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Now an entire industry had emerged, demanding unprecedented investment

in vessels, containers, terminals, offices and information technology tomanage the complex logistics.

The present-day industry is truly global and touches all our lives in ways we

cannot imagine. In fact, Mark Levinson, a noted economist, suggests thatthe container and container shipping are largely responsible for the growth

of global trade.


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Port Country 1990 2003

Hong Kong China 5.1 20.8

Singapore Singapore 5.21 18.4

Shanghai China 0.5 11.4

Shenzhen China 0.0 10.7

Busan Korea 2.3 10.4

Kaoshung Taiwan 3.5 8.8

Rotterdam Netherlands 3.7 7.1

Los Angeles United States 2.6 6.6

Hamburg Germany 2.0 6.1

Antwerp Belgium 1.6 5.4

Dubai United Arab Emirates 1.1 5.1

Port Klang Malaysia 0.5 4.8

Long Beach United States 1.6 4.7

Qingdao China 0.1 4.2New York United States 1.9 4.0

Tanjung Pelepas Malaysia 0.0 3.5

Tokyo Japan 1.5 3.3

Bremen/Bremerhaven Germany 1.2 3.2

Laem Chabang Thailand 0.1 3.2Gaioia Tauro Italy 0.0 3.0

WorldsLargest

Containerports

Source

:ContainerisationInternationalYearbookandUN

Economic&SocialComm.

forAsia

&thePacific

ContainersHandled (million

20-footequivalents)


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Import Containerized Cargo, 1998-2004:Top 10 US Ports


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Import and Export ContainerizedCargo, 2004: Top 10 US Trading

Partners


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Containerization has reduced shipping costs more

for some than for others.

It costs $2500 to move a container from Baltimore

(USA) to Durban (S. Africa) and $7500 more tohaul it by road the 215 miles from Durban toMaseur in Lesotho.

The cost of transporting a container from a city inCentral City to a port is three timesas much asshipping it from that port to the USA.


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The first perspective is: What are the economicconsequences of the new technological systemsurrounding containers? A variety of economichistorical studies of recent transport technologies -the steamboat, the canal era, the railroad, the

automobile, the interstate system and the jet aircraft- exist. the sharp drop in transport costs. thesetechnologies promoted led to higher mobility, risingregional and international trade and associated

economic development.

There are three perspectives availablewhile examining the major economic

impacts of containerization.


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The second perspective comes from the fact

that the benefits of a physical technology andinfrastructure associated with containerizationare greatly enhanced and indeed multipliedwhen firms using containerization reshapetheir operations and indeed theirorganizational structures to take full advantageof the benefits of containerization.


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ROLE OF ICD

The exporters may take the goods to the ICD/CFS and file the Shipping

Bill and other documents. The goods are examined by the CustomsOfficers and they are stuffed into the containers and thereafter the

containers are sealed. Such containers are transported to the Seaports

(gate way ports) by the Container Corporation of India or any other

authorized agency, either by rail or road, when the containers are loadedinto the vessels (ships) for delivery of the same at the specified foreign port.

In the case of export through ICD, the exporters are requested to file two

additional copies of Shipping Bills known as "Transference Copies" along

with other documents as discussed. The rest of if the procedure is the same

as in the case of exports through Customs Port/Airport.


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ROLE OF CFS

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