'Containerisation', the term very familiar to present day shipping industry was a completely unknown concept a few decades back.
It was Malcom McLean, owner of a huge trucking company in USA, who first conceived the idea of containerisation by transporting containers through 'Ideal - X' in 1956 and initiated a revolution in the history of shipping industry. Over the years, the industry has created a separate identity within the shipping world through continuous development and Maersk Lines, P&O Nedlloyd, Zim lines, Sealand Services (CSX), APL, Hapag Lines and others have come up as international major serving customers all over the globe.
Container Freight Station (CFS) or Inland Container Depot (ICD) also referred to as dry ports; provide various services for handling containers outside the port.
The terms ICD and CFS are used interchangeably as there is not much of difference in their functioning. Generally, a dry port located in the hinterland is called ICD; while if located in the port city, it is known as CFS. Dry ports are the hubs, which facilitate the aggregation and transportation of export containers from hinterland to the gateway ports. Similarly, they act as receiving hubs for the import containers meant for hinterland. Other associated functions include cargo consolidation, stuffing and destuffing, warehousing, custom clearance and duty collection, processing of custom documents, cargo and container handling and others.
The term logistics is defined as "the process of planning, implementing and controlling of the efficient, cost effective flow and storage of raw material, in-process inventory and finished products and related information from the point of origin to the point of consumption as per customer demand".
The entire process involves a large number of activities to be done in accordance with user requirement and requires proper integration of different activities, which would lead to the smooth flow of operations across the value chain. Integrated logistics co-ordinates all the logistical activities taking place in a value chain to provide optimum benefit to the user.
The concept of integrated logistics service is new ; traditional transport companies, courier companies and freight forwarders have emerged as integrated logistics service provider by leveraging on their existing infrastructure and experience. They not only provide the prime functions like transportation, warehousing, packaging, clearing and forwarding but also handle other activities like order processing, sales tax and excise duty documentation, invoicing, collection of bills, inventory management, and others.
With the strategies taken up by traditional industrial firms to reduce operational costs and enhance value addition throughout the value chain, importance of integrated logistics has got a new dimension. Outsourcing of logistics service to specialised service provider having considerable expertise over the industry becomes the trend.
Transportation, an indispensable component of economic progress, is an essential and major sub-function of logistics, creating time and place utility in goods. It serves as the backbone of supply chain management.
Though traditionally, transportation involves physical movement of goods, however, in the new economy era, it is largely influenced by information and communication technologies with the focus being on knowledge of customer needs and value added services in order provide maximum benefits to user.
Traditionally, warehousing involves the storage of raw material, work-in-process inventory or finished goods in a covered space in the most suitable way for a specific time period. It also adds temporal and spatial significance to the value of the commodity. With the growing importance of logistics and supply chain management throughout the world, warehousing has emerged as one of the vital component of the supply chain.
Globally, the USD100 billion warehousing industry has undergone significant changes in the last decade owing to the growth in world trade and expansion of international markets as well as increasing application of new technology. Internationally, warehousing industry is classified into three different types: Public warehousing, Private warehousing and Contract warehousing. Of these, contract warehousing, which has dedicated customers with long-term agreement, is the fastest growing segment of the industry internationally and is expected to grow at a rate of 12-15 percent over the next couple of years.
Ports act as the interface for seaborne trade movement. Most of the major ports of a country provide warehousing facilities to users through its own warehouses and also by privately-owned warehouses located within or outside the port arena. Increased liberalisation of the economy has boosted private sector participation in ports.
Internet and Information Technology have revolutionised the maritime industry which uses more and more software to better serve (rapidly and efficiently) its clients in reducing time and administrative procedures.
Traditionally, a transportation chain involves a multitude of activities taking place at different points and performed through the transfer of paper documents and manual processes. The application of Internet and IT has changed the entire scenario by integrating the different processes and bringing considerable efficiency across the chain...
Internet is fostering new ways in which business is done. The maritime industry has been laggard in adopting Internet technology, especially in Developing countries. However, adoption of Internet has become the choice of the industry to substantially increase the efficiency level and reduce cost of operations. Business processes within the maritime sector are increasingly become web-enabled to take advantage of the new technology. As a result, the fragmented nature of the industry, the lack of transparency and usual geographical dispersion of various parties involved in the trade and shipping industries have been reduced.
Information technology (IT) has increased the efficiency and productivity of different economic activities and has taken the centre-stage in today's world. IT includes not only software required for ship operations and cargo handling at ports but also other software products reducing substantially the volume of paper transfer and increasing transparency of operations.
The software required for a ship operation can be divided into technical software and commercial software. The technical software are power plant maintenance software, loading software, navigational software, marine software etc, while, commercial software includes cargo management software, port information software and others.
The loading software is mandatory for any vessel as per the International Maritime Organisation (IMO) and is generally required at the construction stage of the vessel. The software requires the generic approval as well as specific approval with which the ship is classified from the ship classification societies.
Other software products include Electronic Data Interchange (EDI), which eliminates duplication of manual data by replacing it with electronic data entry, increases accuracy and eliminates processing delays. Vessel Traffic Management Information System (VTMIS), monitors all the vessel traffic with the goal of improving safety and security and optimising overall port operations. Use of Internet as a medium of information and communication reduces the gap between the service provider and client resulting into lower demand for the intermediaries and more assurance of profitability.
The information has been provided in part by I-maritime consultancy. (2003)