Summer Internship Report

Introduction: Logistics is the management of business operations which includes acquisition, storage, transportation and delivery of goods along
the supply chain. Logistics management is increasingly becoming a topic of interest among academicians and practitioners since it may lead to reduced operational costs, improved delivery performance and increased customer satisfaction levels. The global logistics industry is estimated to be worth USD 300 billion. Though most of the large service providers are headquartered in Europe, the biggest market is the US, which captures about one-third of the world market. The global logistics industry is characterized by high costs of operations, low margins, shortage of talent, infrastructural bottlenecks, demand from clients for investing in technology and providing one-stop solutions to all their needs, and consolidation through acquisitions, mergers and alliances. Though, in India, the industry is still in its infancy, there is immense potential for growth. The Indian logistics industry is currently plagued with low demand, poor infrastructure, high costs, government regulations etc. However, it is going to turn around on the back of robust GDP growth, globalization, FDI in logistics and increasing government support. This paper highlights the current state of the industry, including the dynamics and opportunities for growth, globally, in general, and in India, in particular, based on findings from surveys of logistics service providers, and users, of India and other countries.
Summer Internship Report
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Global Logistics Industry This section gives an overview of the size of the global logistics industry and its current status and prevailing dynamics.
Size of the global logistics industry Currently the annual logistics cost of the world is about USD 3.5 trillion. For any country, the annual logistics cost varies between 9% and 20% of the GDP, the figure for the US being about 9%. US-based Armstrong & Associates, Inc. tracks the issues and trends in the world logistics market and in the US logistics market, in particular, in their annual surveys of top 25 global LSPs. According to the firm, the global logistics market sizes in 1992, 1996 and 2000 were USD 10 billion, USD 25 billion and USD 56 billion, respectively. In 2003 and 2004, the corresponding figures were USD270 billion and USD 333 billion, registering high growth rates. Though most of the large LSPs are headquartered in Europe, the US logistics market is the largest in the world capturing one-third of the world logistics market. In 2006, it was about USD 80 billion. In 2006, it grew to USD 89 billion, and in 2008, it registered an impressive growth rate of 16% to cross the USD 100 billion mark for the first time and reach USD 103.7 billion (Foster and Armstrong, 2006, 2007, 2008). However, considering the fact that the logistics market in the US is about 10% of its annual logistics cost (Foster and Armstrong, 2006), there is still immense potential for growth of 3PL in the US in particular, and in the world in general.
Current status and dynamics of the industry The extant literature on the logistics industry points to a number of issues that service providers have to address, such as pricing pressures, high costs of operations and low returns on investments, hiring and retaining talent, pressure from clients to broaden the range of service offerings and internationalize operations, demand for customized solutions and more value-added services, besides infrastructural bottlenecks and government regulations. Service providers complain that clients expect them to have the latest software, databases and ERP (Enterprise Resource Planning) packages, and invest in new technologies such as RFID and satellite-based real-time tracking systems. Clients perceive that these investments are part of the basic service package, and often do not want to match the same with increased payments for these additional services. Pressure from clients to broaden the range of service offerings and internationalize operations, has forced service providers to look for suitable alliances, mergers and acquisitions that help fill the gaps in service offerings, and industry verticals and geographic areas served, achieve economies of scale and enhance service providers capability to support international operations.
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Currently, the world logistics market is going through a consolidation phase. Tibbett & Britten Group of North America was acquired by Exel Logistics in August, 2004, and Deutsche Post World Net, parent company of DHL, took over Exel in December, 2005. Bax Global was taken over by Deutsche Bahn, parent company of Schenker, in November, 2005 while A. P. Mller acquired P&O Nedlloyd in February, 2006, and TNT Logistics was sold to Apollo Management L. P. in November, 2006. However, mergers and acquisitions have their own set of problems in terms of integration of two diverse business units. Carbone and Stone (2005) tracked the evolution of 20 leading European LSPs between 1998 and 2004 in terms of their approach to mergers, acquisitions and alliances, and found that although growth led to more coverage, integration of two different cultures was one of the most difficult challenges faced by these firms in the consolidation process. Recent trends in the logistics industry indicate that to be successful, service providers have to differentiate themselves from their competitors in terms of offering valueadded services, focus on key customer accounts that have the potential to generate high profitability for a long term, enter into suitable alliances to complement the range of services offered and geographic areas served, and sell logistics services to clients suppliers and customers, thus leading to complete supply chain integration.
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Indian Logistics Industry This section gives an overview of the size of the Indian logistics industry, its competitive dynamics and future prospects.
Size of the Indian logistics industry The annual logistics cost in India is estimated to be 14% of the GDP, which translates into USD 140 billion assuming the GDP of India to be slightly over USD 1 trillion. Out of this USD 140 billion logistics cost, almost 99% is accounted for by the unorganized sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 1%, i.e. approximately USD 1.5 billion, is contributed by the organized sector. So, one can see that the logistics industry in India is in a nascent stage. However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities.
Competitive dynamics and other issues The following problems existing in the Indian logistics industry make it unattractive for investments and also create entry barriers. Logistics is a high-cost, low-margin business. The problem of organized players is compounded by unfair competition with unorganized players, who can get away without paying taxes and following operating norms stipulated in the Motor Vehicles Act such as quality of drivers and vehicles, volume and weight restrictions, etc. Economies of scale are absent in the Indian logistics industry. Even the organized sector that contributes slightly more than 1% of the logistics cost, is highly fragmented. Existence of the differential sales tax structure also brought in diseconomies of scale. Though VAT (Value Added Tax) has been implemented since April 1, 2005, failure in implementation of a uniform VAT structure across different states has let the problem persist even today. Apart from the non-uniform tax structure, Indian LSPs have to pay numerous other taxes, octrois, and face multiple check posts and police harassment. High costs of operation and delays involved in compliance with varying documentation requirements of different states make the business unattractive. On an average, a vehicle on Indian roads loses 24-48 hours in complying with paperwork and formalities at different check posts en route to a destination. Fuel worth USD 2.5
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billion is spent on waiting at check posts annually. A vehicle that costs USD 30,000 pays USD 7,500 per annum in the form of various taxes, which include the excise duty on fuel. This is why freight cost is a major component of the cost of a product in India. There is lack of trust and awareness among Indian shippers with regard to outsourcing logistics. The volume of outsourcing by Indian shippers is presently very low (~ 10%) compared to the same for the developed countries (> 50%, sometimes as high as 80%). The unwillingness to outsource logistics on part of Indian shippers may be attributed to skepticism about the possible benefits, perceived risk, and losing control, of sensitive organizational information, and vested interests in keeping logistics activities in-house. Indian shippers expect LSPs to own quality assets, provide more value-added services and act as an integrated service provider, and institute world-class information systems for more visibility and real-time tracking of shipments. However, they are unwilling to match the same with increased billings; even pay little attention to timely payments that leave LSPs short of adequate working capital. Indian freight forwarders face stiff competition from multi-national freight forwarders for international freight movement. MNCs, because of their size and operations in many countries, are able to offer low freight rates and extend credit for long periods. Indian freight forwarders, on the other hand, because of their smaller size and lack of access to cheap capital, are not able to match the same. Moreover, clients of MNCs often want to deal with a single service provider and especially for FOB (Free on Board) shipments specify the freight forwarders, which most of the time happen to be the multi-national freight forwarders. This is sort of a non-tariff barrier imposed on Indian freight forwarders. Poor physical and communications infrastructure is another deterrent to attracting investments in the logistics sector. Road transportation accounts for more than 60% of inland transportation of goods, and highways that constitute 1.4% of the total road network, carry 40% of the freight movement by roadways. Slow movement of cargo due to bad road conditions, multiple check posts and documentation requirements, congestion at seaports due to inadequate infrastructure, bureaucracy, red-tapeism and delay in government clearances, coupled with unreliable power supply and slow banking transactions, make it difficult for exporters to meet the deadlines for their international customers. To expedite shipments, they have to book as airfreight, rather than sea freight, which adds to the costs of shipments making them uncompetitive in international markets. Moreover, many large shipping liners avoid Indian ports for long turnaround times due to delays in loading/unloading and hence Indian exporters have to resort to transshipments at ports such as Singapore, Dubai and Colombo, which adds to the costs of shipments and also delays delivery.
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Low penetration of IT and lack of proper communications infrastructure also result in delays, and lack of visibility and real-time tracking ability. Unavailability and absence of a seamless flow of information among the constituents of LSPs creates a lot of uncertainty, unnecessary paperwork and delays, and lack of transparency in terms of cost structures and service delivery. For example, a shipper has to pay a higher freight rate if it cannot ensure return load. At present, there is no real time process by which a shipper may know about the availability of trucks and going rates at the destination market. Therefore, it has to pay more. Had the market information been available to both the shipper and the service provider, the service providers cost structure would have been transparent to the shipper and it would have ended paying the actual market rate. Another example would be that LTL (Less than Truckload) shipments cost more than FTL (Full Truckload) shipments. Now, when a shipper books a LTL shipment, it has no idea about the status of its shipment after it leaves the warehouse at the origin and before it reaches the warehouse at the destination. The service provider may still convert this LTL shipment into a FTL shipment at its own warehouse before delivering at the destination. So, the shipper ends up paying LTL rates for a FTL shipment. Had there been visibility during delivery, this problem would not have occurred. Since most of the LSPs are of relatively small size, they cannot provide the entire range of services. However, shippers would like service providers to offer more valueadded services and a single-stop solution to all their logistical problems. The inability of service providers to go beyond basic services and provide value-added services such as small repair work, kitting/dekitting, packaging/labeling, order processing, distribution, customer support, etc. has not been able to motivate shippers to go for outsourcing in a big way. Service tax levied on logistics service fees (currently 12.36% with educational cess) may make outsourcing costly and outweigh the possible benefits. There is lack of skilled and knowledgeable manpower in the logistics sector. Management graduates do not consider logistics as a prime job. To improve the status of the industry, service providers have to move beyond the level of brokers and truckers to attract and retain talent.
Future prospects Despite problems, The Indian logistics industry is growing at 20% vis--vis the average world logistics industry growth of 10%. Since the organized sector accounts for merely 1% of the annual logistics cost, there is immense potential for growth of the sector. The major opportunities are highlighted below.
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Many large Indian corporates such as Tata and Reliance Industries have been attracted by the potential of this sector and have established logistics divisions. They started providing in-house logistics services, and soon sensing the growth of the market, have started providing services to other corporates as well. Large express cargo and courier companies such as Transport Corporation of India (TCI) and Blue Dart have also started logistics operations. These companies enjoy the advantage of already having a large asset base and an all-India distribution network. Some large distributors have also forayed into the logistics business for their clients. Since logistics service can be provided without assets, there is growing interest among entrepreneurs to venture into this business. Indian shippers are gradually becoming more aware of the benefits of logistics outsourcing. They are now realizing that customer service and delivery performance are equally important as cost to remain competitive in this global economy. The Indian economy is growing at over 9% for the last couple of years (compared to the world GDP growth rate of 3%), which implies more outputs and more demand for specialized logistics services.
The Indian government has focused on infrastructure development. Examples include the golden quadrilateral project, east-west and north-south corridors (connecting four major metros), Free Trade and Warehousing Zones (FTWZ) in line with Special Economic Zones (SEZ) with 100% Foreign Direct Investment (FDI) limit and publicprivate partnerships (PPP) in infrastructure development. It is expected that infrastructure development would boost investments in the logistics sector. In India, 100% FDI is allowed in logistics whereas in China, until recently, foreign investment was not allowed in domestic logistics. Almost all large global logistics companies have their presence in India, mainly involved in freight forwarding. For domestic transportation and warehousing, they have tie-ups with Indian companies. As the Indian logistics scenario looks promising, these MNCs are expected to play a bigger role, probably forming wholly-owned subsidiaries or taking the acquisition route. The latter may be the preferred route of investment since the target company is readily acquired with its asset base and distribution network, and the need for building everything from scratch can thus be avoided. The benefits for the acquired company include the patronage of an MNC and access to the MNCs global network. As an example, DHL Danzas, the biggest logistics company in the world, has taken over Blue Dart.
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Our Company: SSS Sai Shipping Services Pvt. Ltd.
Background SSS Sai Shipping Services Private Limited was established in May 1988 at Mumbai as a Custom House Agent [CHA] with assurance of patronage from 2-3 importers of their co-operation and a small workforce. We have now become one of the reputed Licensed CHAs having more than Nineteen Branch offices at key Cities and ICDs in India and global tie-ups. We have adequate work force of over 250 skilled professionals chosen from various disciplines, well equipped with modern sophisticated Communication Systems. Handling over 50000 TEU Import/ Export by Sea and 500 tons by Air per annum. We offer Ocean Freight, Transportation, Warehousing facilities with Insurance coverage at all locations, in addition to speedy, economical, specialized Customs Clearance Services for Exports and Imports to our valuable customers. As you may be aware that clearance through customs itself is a very specialized field. It is known fact that many projects have run into rough weather due to the improper handling of Technical issue at the customs level. These issues if proper handled and taken care of, can save substantially the Cost of projects by cutting down in clearance, excess levies by customs and save avoidable exorbitant port charges. Hence, our foremost focus is on what matters most to the customer effective Custom clearance & Transportation for reliable, realistic, end to end result. Mr. Haresh A Dhakan, our founder Partner having experience in the field of Clearing and Forwarding business for around 31 Years and is assisted by retired Government officials with 30 years experience in the field of Valuation, Classifications and ITC Policy matters. For almost two decades in Clearing and Forwarding business we have Established excellent rapport with officers of Customs, Ports, ICDs, CONCOR, CWC, STPI, Shipping Cos., Insurance Cos., Surveyors & other Trade Custodians and hence we would be in better position to accomplish tasks undertaken by us as well as by our network associates overseas. The Director General Shipping, Govt. of India has licensed us for operating as a registered MTO.
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Objectives & Services Provide by us to our Valuable customer:1. Customs Clearance of Import/Export cargos at all branches in India. 2. Arranging Road / Rail Transportation within India. 3. Insurance formalities with Insurance companies (i.e., New India Ins. co. or United India Insurance Co.) 4. Assistance in Import / Export Procedures and guidance on Import or Export policy matter. 5. Procurement of Import License such as DEPB, SIL & Specific License. 6. Packing & Crafting and Warehousing facility. 7. Providing best competitive Ocean / Air freight. 8. Facilities for Door-to-Door deliveries around the Globe. 9. They have their own registered License: MTO/DGS/474/2005 10. There also around 15 G Card holders working for Exclusive client handling. 11. Impeccable track record of over 20 years with Port & Customs 12. Excellent Rapport and Recognition with officers of Customs, Ports, ICDs, CONCOR, CWC, STPI, Shipping Cos., Insurance Cos., Surveyors & other Trade Custodians 13. International Trade bodies like FIATA, GFN have granted their prestigious membership in recognition to our Services. 14. Servicing honored members over 15 years consistently 15. Clientele includes various MNC, Major Industries & Star Export Houses
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Presently we are handling Cargos & providing our services to the Various Industries & projects viz., IT Parks, Chemical Industries, Food Grain, Hospitality Services, Paper and Steel Industries, Plastic, Pharmaceutical products, New & used Cars, Handicrafts Guar Gum, Textile and Jewellery, Machineries, Food subsidiary etc. Your decision to use SSS Sai Shipping Service private Limited is supported by the Technology to track your goods on a global basis and the Expertise to assure time definite delivery. SSS Sai Shipping Service Private Limited with local expertise and facilities including Pick Up, Warehousing, Consolidation, Import/Export clearance, and Transportation is the right choice for a market place, demanding service that is integrated, flexible and predictable. International Trade bodies like FIATA, GFN have granted us their prestigious membership in recognisation to our Customer Services. With the introduction of SEZ Act 2006, and having rich experience of a decade in the field of EOU & STPI, SSS has expended its scope of work to providing consultancy services exclusively for SEZ Developers and Unit inside.
Mission Statement To provide innovative, practical and top quality logistic services that improve business solutions, in an environment of fairness, honesty and courtesy towards our clients, vendors, employees and society at large.
Vision Statement To provide all the logistic services under one roof and become the leading firm in the country with cutting edge technology so that our esteemed members feel a complete satisfaction, which reflect on their recurring confidence to route their cargo through us.
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Clearing and Forwarding Licensed by the Government of India we are authorized Custom House Agents/ Custom Brokers. Operating in more than 15 cities with the SOLE objective of reducing your overheads & providing expert advisory consultation on Customs procedures, harmonized tariffs, duty structures and duty benefits. We are the best possible solution you can ask for, with an assurance of a guaranteed outcome. SSS Sai Shipping Services Pvt. Ltd. offers Custom Clearance of cargoes at all branches in India. The services include taking care of all statutory and legal requirements and ensuring timely dispatch of cargoes ranging from bulk, project and containerized cargoes etc, to major clients in India. The clearing agency is manned by highly trained professionals who are fully conversant with latest rules and procedures of DGFT and Customs to get the maximum advantage to its customers in terms of duty benefit and faster clearance. With the introduction of SEZ Act 2006, and having rich experience of a decade in the field of EOU & STPI, SSS has expanded its scope of work to providing consultancy services exclusively for SEZ Developers and Unit inside. Apart from regular clearance work SSS provides services relating to:
SEZ Notifications. Preparation of Bond-cum-Legal Undertaking. Various Customs formalities. Preparation of Annual Returns Checking of all pre & post Documentation
Staff Training in operational matters.
Custom House Agent We are one such applaud able Custom House Agents with awards & testimonials - due to our wide experience in handling different kinds of cargoes. Our CHA team includes trained and experienced personnel having good working relations with customs officials and well versed with the rules and regulations governing imports and exports into and out of India, ensuring trouble free and quick documentation. We at SSS Sai Shipping Services Pvt. Ltd. are aware of the logistic requirements of clients especially, towards eliminating hurdles and timely delivery of the consignments. These aspects are taken care of through close liaison with the Shipper, Consignee, Shipping Agent, Custom & Port authorities, Transport Contractors and others involved in the clearance of the consignments in the best possible manner for faster execution & total commitments.
SSS Sai Shipping Services Pvt. Ltd. staff's have an in-depth and thorough knowledge of initial project registration and customs clearance of capital goods imported for Mega Infrastructural projects.
Freight Forwarding SSS Sai Shipping Services Pvt. Ltd. with its wide Network in India and abroad acts as an intermediary between cargo carriers and suppliers/buyers. Since rates are negotiated for bulk cargo and retailed to individual shippers -SSS Sai Shipping Services Pvt. Ltd. offers most competitive rates to its Customers. The expertise covers wide range of cargo. Services are customized to focus on speed and trouble free shipments to different global locations. We provide a comprehensive service whether the requirement is a single parcel or a full container load for our exporters and importers, thus achieving a regular customer base. Just as with ocean freight, by using a corporate method of freight consolidation to many major airports or cities worldwide, we are able to provide exceptionally low rates for airport-to-airport, door to airport and door-to-door deliveries.
Warehousing facility SSS Sai Shipping Services Pvt. Ltd. provides warehousing facilities at Ports, with all latest technologies and equipments. As we handle all types of cargoes, our insistence of maximum care - benefits the client of safe custody for his goods.
Our Services include:

Planning Requirements Inventory management Order processing Warehouse management systems
Cargo Warehousing:

Adequate insured private warehousing space Warehouse space for storage of goods carted direct at these centers Safe storage of goods Control checks on entry & exit of goods
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Helps our clients to reduce fixed overheads, increase efficiency, cut down valuable management time and offer great efficiency
Transportation The transport sector is one of the core sectors - keeping the country on the move, literally. Upon this sector, especially road transportation plays the most demanding role on the entire growth of a nation. And in this highly competitive transportation industry SSS Sai Shipping Services Pvt. Ltd. has carved out a distinct niche for itself. As you are aware, the need of industry today is point-to-point delivery. We open, in giving a total solution to the trade, economy & safety counts maximum - which SSS Sai Shipping Services Pvt. Ltd. endorse to its fullest by :
Cargo Pick up facility round the clock by own fleets of close bodied trucks. Transportation of air cargo, custom cleared in hinterlands to international airport. Transport of goods from port of discharge to hinterland destinations, in conjunction with our overseas partners & associates. Offer "door to door" delivery of consignments.
The Company is well equipped to handle all kinds of cargos booking through its network of branches spread throughout the country and enjoys a reputation for secured delivery and strict adherence to the time schedules. It is supported by a fleet of trucks, trailers and trained personnel besides excellent warehousing facilities at various stations.
Sea & Air Logistics SSS Sai Shipping Services Pvt. Ltd. provides a full range of logistics consulting services within the logistics chain, which are based on proven methodologies that take into account the process of the business and their impact on logistical issues and profitability in the short, medium and longer terms.
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SSS Sai Shipping Services Pvt. Ltd. is a dynamic and successful Air & Sea Logistics company, providing a high quality of service through a team of dedicated professionals. SSS Sai Shipping Services Pvt. Ltd. provides great flexibility and efficiency in providing services to its customers. We specialize in managing the transport of major infrastructure and industrial projects to and from India. Our organization provides project shippers with a frequency and reliability of the entire scope of services on sea and air, which allows projects to move on formulated & contrived manner anywhere in the world. SSS Sai Shipping Services Pvt. Ltd. has a Sea of experience in logistics management. Our logistic management services consultants have undertaken numerous projects across all types of industry and were entrusted with various major projects of diverse interest. Commodities Handled STPI, Plastics, Glassware, Guar Gum, Food Grain, Handicrafts, Machineries, Sports requisites, Food subsidiaries, Chemical Industries, Hospitality Services, Hospitality Services, New and Used Cars, Jewellery and textile, Pharmaceutical Products, Medical Equipments, Paper and Steel Industries, etc. Project Cargo SSS Sai Shipping Services specializes in Project cargo, break bulk and heavy lift movements out of all major gateway ports in India. Our integrated services include: Inland haulage Honoring project time schedule Contingency planning and reporting
Branches Ahmedabad, Bangalore, Baroda, Bhopal, Chennai, Delhi, Hyderabad, Indore, Jaipur Jodhpur, Kandla, Kolkata, Kota, Mundra, Nagpur, Pipavav, Pune , Udaipur, Visakhapatnam Our worldwide networks Bulgaria, Denmark, Djibouti, Finland, France, Germany, Greece, Holland, Italy, Norway, Poland, Slovakia, Spain, Saudi Arabia, South Africa, Sweden, Tanzania, U A E, Uruguay
Our work profile: At SSS Sai Shipping Services Pvt. Ltd., we had joined as trainees in the company. But, after learning the basic procedures of import and export, we took interest in the export department. We had to look after the documentation part of the exports. Also sometimes complete the formalities of releasing the B/L. We took part in the various other general activities of the company. We have also prepared the Quality Policy as well as the Company Clients presentation. Visiting different offices at Mumbai, Nava Sheva, Airoli, Jodhpur and Jaipur gave us wide-ranging information about this field. Also visiting different ICDs, CFSs and CONCORs gave us in depth knowledge of the real working of the logistic industry. Our work at the company was not restricted to one department. We have not only worked in export, import and administrative department, but also worked in the finance department when it was needed.
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IMPORTS
Indias Scenario for Import Indias Imports during December, 2008 were valued at US $ 20256 million representing an increase of 8.8% over the level of imports valued at US $ 18610 million in December, 2007. In Rupee terms, imports increased by 34.2%. Cumulative value of imports for the period April- December, 2008 was US$ 225809 million (Rs. 1003947 crore) as against US$ 171718 million (Rs. 693445 crore) registering a growth of 31.5% in Dollar terms and 44.8% in Rupee terms over the same period last year. Oil imports during December, 2008 were valued at US $ 4712 million which was 30.9% lower than oil imports valued at US $ 6824 million in the corresponding period last year. Oil imports during April- December, 2008 were valued at US$ 78827 million which was 44.8% higher than the oil imports of US$ 54421 million in the corresponding period last year. Non-oil imports during December, 2008 were estimated at US $ 15544 million which was 31.9% higher than non-oil imports of US$ 11786 million in December, 2007. Non-oil imports during April- December, 2008 were valued at US$ 146982 million which was 25.3% higher than the level of such imports valued at US$ 117297 million in April- December, 2007. The trade deficit for April- December, 2008 was estimated at US $ 93819 million which was higher than the deficit at US $ 58981 million during April- December, 2007.
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The procedures for imports in India
1. The person in Charge is required to Submit Import General Manifest (IGM). 2. Custom authorities check the documents; grant entry inward after entry inward is granted goods can be unloaded from the cargo. 3. Importer has to submit bill of entry giving details of goods to be declared to customs. 4. Bill of entry can be for home consumption or warehousing. 5. Importer to submit other documents like Invoices, contracts, product literature, packing list, import license. 6. Noting of bill entry by custom officer. 7. Examination of goods and assessment by custom officer (first appraisement) or assessment of goods on the basis of documents (second appraisement). 8. Customer officer to approve assessment (valuation of goods) on the bill of entry and return to importer. 9. Importer ha to pay duty, if clearance for home consumption and to execute bond if clearance for warehousing. 10. Person in charge: (a) In case of vessel its master (b) in case of aircraft its commander or pilot-in charge (c ) in case of train its conductor or guard (d) in case of vehicle or other conveyance its driver or other person in charge. 11. Significance of person in person incharge: 12. He is responsible for submitting IGM 13. He is responsible for ensure that good comes through approved route and land at approved places only. 14. He has to ensure the goods are unloaded after entry inward is granted; 15. Import general manifest (IGM): The person in charge have to submit IGM. In case of vessel or air craft it has to submit before arrival and in case of vehicle it has to submit within 12 hours of arrival.
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16. Noting of bill of entry: Bill of entry submitted by importer is cross checked with import manifest submitted by person-in-charge, if the description tallies, the same is noted by custom duty. 17. Relevant Date for rate and valuation of Import duty. In case of bill of entry is entered for home consumption, the date on which bill is presented. In case of warehouse goods, when the bill of entry for consumption is presented for clearance from warehouse Bill of Entry: Bill of entry is very vital and important document which every importer has to submit to custom officer in respect of imported goods. Bill of entry contains details of goods exported. Bill of entry can be of three types: Bill of entry for Home Consumption: is used when the goods are cleared on payment of full duty for use within India. Bill of Entry for warehousing: If the Imported goods are not required immediately, Importer may like to store the goods in a warehouse without payment of duty under bond and then clear the goods from the warehouse on payment of duty. Bill of entry ex-bond clearance: This is used for clearance from the warehouse on payment of dut0y.
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EXPORTS
Indias Scenario for Export The countrys exports fell to $ 10.7 billion or by 33.2 per cent in April 2009 from $ 16.1 billion in the same month last year due to the global economic downturn. In March too, exports slipped by over 33 per cent, making performances in these two months the worst in 14 years. In April 2009, exports dipped for the seventh month in a row. As imports too fell steeply by 36.6 per cent to $ 15.7 billion in April 2009 from $ 24.8 billion a year ago, trade deficit declined to $ 5 billion from $ 8.7 billion last year. The steep fall in import was on account of over 50 per cent drop in oil import bill during the month under review. Oil imported contracted by 59 per cent to $ 3.6 billion while non-oil inbound shipments dropped by 24.6 per cent to $ 12 billion. The governments target is to make sure that at least we have flat growth in exports in 2009-10. According to the Union Commerce Ministry, the decline in exports would continue till September. As the export figures started declining after September 2008, the year-onyear growth figure from September 2009 could show some upward movement because of the low base. As inventories with foreign buyers get exhausted, exporters have begun getting orders. Slowdown has depressed Indias appetite for imports. Exports for May 2009 dip by 30 % According to the initial estimates available with the Ministry of commerce, overseas sales of Indian goods (exports) have contracted for the eighth month running during May 2009 and stood at nearly $ 10.9 billion, which is an annual dip of 30 per cent. The latest numbers are a notch better than the 33.2 per cent contraction seen in the previous month, but far worse than the 27.3 per cent expansion seen in May 2008. The period of unprecedented export dip since October 2008 is one of the longest in Indias trade history. A similar contraction was seen for six months at a go between July and December 2001. In 2008-09 exports expanded by 3.4 per cent, the lowest since 2000-01 and stood at $ 168.7 billion. While Commerce Ministry expects flat growth in exports during 2009-
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10, exporters claim that they can manage $ 200 billion worth of exports if the government supports them with incentives in the Budget and foreign trade policy.
Exports likely to reach $60-62 billion by 2010-11. Due to strong fundamentals and other derivatives of value to customers, the industry will continue to grow despite global slowdown. The BPO industry will see sustainable growth over the next two years, Mr. Mittal added. The IT and BPO industry would generate new jobs, giving 22.3 lakh direct and 80 lakh indirect jobs. Meanwhile, a high-level Nasscom team will be on a five-day visit to the U.S. next month to hold talks with the new administration there, top politicians, think-tanks and corporates to convince them of the benefits of outsourcing and immigration issues. Nasscom will also raise the tantalization issue to avoid double taxation on income in the U.S. Indians with H1B or L1 visas contribute significantly to the US social security schemes every year, but do not they get benefits since India and the U.S. does not have a tantalization agreement.
Growth in the Merchandise Export Though Indias export have gone down but the Indias merchandise exports increased from US $ 63.8 billion in 2003-04 to US $ 162.9 billion in 2007-08 recording average annual growth rate of 26.4% during the last four years. (Values in US $ billions) Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2007-08(AprNov.) 2008-09(AprNov.) Exports 63.8 83.5 103.1 126.3 162.9 99.9 119.3 %Growth -30.8 23.4 22.5 29.0 Imports 78.1 111.5 149.2 185.6 251.4 153.1 203.6 %Growth -42.7 33.8 24.4 35.5
19.4
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A number of initiatives were taken to meet the objectives as well as the strategies that had been announced in the 5 year Foreign Trade Policy. Sectors with significant export prospects coupled with potential for employment generation in semi-urban and rural areas have been identified as thrust sectors and specific sectoral strategies have been prepared. Special Focus initiatives have been prepared for Agriculture, Handicrafts, Handloom, Gems and Jewellery and Leather and Footwear sectors.
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Some of the major initiatives are shown below: (1) Excise duty reduced across the board by 4% for all products except petroleum products and those products where current rate was less than 4%; (2) Interest subvention of 2% has been provided till 31.3.2009, to the following labor intensive sectors for exports: Textiles (including Handlooms), Handicrafts, Leather, Gems & Jewellery, Marine Products and SMEs; (3) Additional funds of Rs.350 crore provided for export incentive Schemes; (4) All items of handicrafts included in Vishesh Krishi and Gram Udyog Yojana; (5) Back-up guarantee to ECGC for up to Rs.350 crore; (6) Rs1,100 crore provided to ensure full refund of claims of CST/Terminal Excise duty/ Duty drawback on deemed exports; (7) Additional funds of Rs.1400 crore provided for textile sector to clear the backlog claims of TUF; (8) Export duty on iron ore fines eliminated, and for lumps, reduced to 5%; (9) Import duty on naphtha for power sector eliminated; (10) Some pending issues relating to Service Tax refund on exports resolved. . (11) Introduction of a scheme for incentivising agro processing units. (12) Introduction of Focus Product and Focus Market Schemes with a total incentive package exceeding Rs. 2000 Crores. (13) Duty free import upto 5% for sectors like gems and jewellery, handloom, handicrafts, leather and footwear, etc. (14) Giving Export Promotion Council status to Khadi & Village Industries Commission as well as setting up of new Export Promotion Councils namely, Electronics and Computer Software EPC, Indian Oil Seeds and Produce Exporters Association, Services Export Promotion Council and Telecom Equipment Manufacturers Association of India EPC. (15) Reduction in customs duty under EPCG scheme from 5% to 3%. (16)Extension of Export Obligation period under EPCG scheme for cottage and tiny sector from 8 years to 12 years.
(17)Extension of DEPB scheme till 31st December 2009 (18)Extension of IT exemption for 100% EOUs till 31st March, 2010. (19)Introduction of a single set of common forms called Aayaat Niryaat Forms. (20)Allowing payment of interest on delayed payments of Terminal Excise Duty and Central Sales Tax.
The procedure for Export in India Preparation of Invoice by the Exporter. Preparing the Packing list. Container booking either through CHA or direct shipping company. The Invoice & the Packing List to the CHA. CHA will make shipping bill [For goods under free goods 5 copies, under DEPB 6 copies, under Draw back 6 copies, under ex-bond-(Export oriended units) 5 copies] (1st original copy will be given to the custom after CS No, 2nd copy will be given to custom for export proof, 3rd (in case of DEPB or Drawback) will be given to the government for the exemption government, 4th copy will be with the CHA, 5th/6th TR (transfer copy with the driver whos carrying the goods). Custom will give shipping bill no. Assessment of invoice n shipping bill by the custom superintendent. Custom will give custom security no. Inspection of the goods. Seal (both the seals). Signature of the superintendent - LET EXPORT. Youll get the BL from the shipping line. Payment of the transport charges. Packing of the cover to be sent with the driver. Reach the port. It gets empty at the yard. Well receive the TR copy + EGM (export general manifesto) by the shipping sail. Goods leave the country.
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Note: There are 2 seals on the container 1st of the ICD or the Exporter(if he has the authority) 2nd of the Shipping Line The 1st seal will be cut at the docks before putting the container in the ship. The cover sent with the driver can only be opened by the consignee. IGM (import general manifest) Bill of Export will be filed instead of Shipping bill when we are exporting by the road. (To Nepal, Bangladesh)
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The details in the documents given by the Exporter i.e. Invoice & Packing List are as follows:-
INVOICE Invoice no. RBI Code, IE code, PAN no. Exporters detail. Consignee (Importer). Buyer (if any). Vessel / Flight No. Port of Lading & Discharge &Destination. Terms of delivery n Payment (Price Type, Payment, Port and Shipment) Description of goods, quantity, rate, amt., packing & forwarding charges n total invoice amt.
PACKING LIST Invoice no. RBI Code, IE code, PAN no. Exporter detail Consignee (Importer) Buyer (if any) Vessel / Flight No. Port of Lading & Discharge &Destination Terms of delivery n Payment (Price Type, Payment, Port and Shipment) Description of goods, quantity, weight, size, total gross and net weight.
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Special Economic Zone (SEZ) Special Economic Zones Special Economic Zone is a Zone which is physically delineated from domestic tariff area and considered as foreign territory for the purpose of duties and taxes India was the first in Asia region to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asias first EPZ set up in Kandla. Over the period of time, the Government had experienced various shortcomings on account of the multiplicity of controls and clearances, absence of world class infrastructure, and unstable fiscal regime. With a view to provide an internationally competitive environment for exports, Government of India announced the SEZ policy in April 2000. The objective of the SEZ Policy included making available goods and services free of taxes and duties supported by integrated infrastructure for export production, expeditious and single window approval mechanism and a package of incentive to attract foreign and domestic investment for promoting export-led growth. Effective from 10th February, 2006, Special Economic Zones Act, 2005 and Special Economic Zones Rules, 2006 have put in place a dynamic piece of legislation with multifold objectives of (a) Generation of additional economic activity; (b) Promotion of exports of goods and services; (c) Promotion of investment from domestic and foreign sources; (d) Creation of employment opportunities; and (e) Development of infrastructure facilities Major incentives to SEZ Developers A. Direct taxes 100% income-tax deduction allowed to the Developer under section 80-IAB of the Income-tax Act, 1961 for any consecutive 10-years out of first 15-years from the date of notification of the SEZ. Exemption from minimum alternate tax under section 115JB of the Income-tax Act, 1961.
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Exemption from dividend distribution tax under section 115-O of the Income-tax Act to the Developer, being a domestic company.
B. Indirect Taxes Duty free import/domestic procurement of goods for development, operation and maintenance of SEZs. Exemption from Central Sales Tax (CST). Exemption from Service Tax. C. FEMA/FDI 100% Foreign Direct Investment permitted for setting up of Special Economic Zone with the approval of Board. D. Miscellaneous Generation, Transmission and Distribution of power in SEZ allowed. Full freedom in allocation of space and built-up area to approved SEZ Units on commercial basis. Authorized to provide and maintain services, viz., water, electricity, security, restaurants and recreation centers on commercial basis.
Incentive to the SEZ Units A. Direct taxes 15-years tax holiday in a phased manner subject to certain conditions. 100% income tax exemption under section 10AA of the Income-tax Act, 1961 for the first 5-years, 50% for the next 5-years and thereafter 50% of the ploughed back export profits for next 5-years. No tax on any amount declared, distributed or paid by an enterprise by way of dividend (interim or otherwise) on or after 1-4-2005 and out of its current income. The dividend referred to in section 115-O shall not be included in the total income of the assessee, being a Developer or an Entrepreneur.
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Exemption from minimum alternate tax under section 115JB of the Income-tax Act, 1961.
B. Indirect taxes Duty free import/procurement from domestic sources all their requirement of capital goods, raw materials, office equipment, DG sets, for implementation of their project in the SEZ without any license. Exemption from Central Sales Tax (CST). Exemption from Service Tax C. FEMA/FDI 100% FDI allowed through automatic route for all manufacturing activities in the Special Economic Zone, except for the following activities. Arms and ammunition, explosive and allied items of defense equipment, defense aircraft and warship; Automatic substances; Narcotics and psychotropic substances and hazardous chemicals; Distillation and brewing of alcoholic drinks; and Cigarettes/cigars and manufactured tobacco substitutes. Sectoral norms as notified by the Government shall apply to the foreign investment in services. The cases not covered by automatic route shall be considered and approved by the Board. External Commercial Borrowing (ECB) by SEZ units up to US $ 500 million in a year under Automatic Route without any maturity restriction through recognized banking channels. Free to bring in export proceeds without any time limit. Flexibility to keep 100% of export proceeds in foreign currency account. Freedom to make overseas investment from such foreign currency account. Exemption from interest rate surcharge on import finance. Units allowed to write-off unrealized export bills
SEZs have created employment for large number of unemployed rural youth. Even in the services sector, 12.5 million sq meters space is expected in the IT/ITES SEZs which as per the NASSCOM standards translates into 12.5 lakh jobs. It is, therefore, expected that establishment of SEZs would lead to fast growth of labour intensive manufacturing and services in the country. The total investment in the SEZs, as on 30th September 2008, were Rs.93507.23 crore and the total employment generated so far to 3,62,650 persons. Out of the 531 formal approvals given till date, 174 approvals are for sector specific and multi product SEZs for manufacture of Textiles & Apparels, Leather Footwear, Automobile components, Engineering etc. which would involve labour intensive manufacturing. Exports from SEZs during the year 2007-08 was to the tune of Rs.66, 638 crore with a growth of 92% over 2006-07 (overall growth of exports of 381% over past four years. Exports from SEZ had registered an extraordinary growth rate of 92% in 2007 08 while it was 52% in the previous year 2006 07. The major share of SEZs exports are Gems & Jewellery, Trade & Service, Computer/Electronic Software and Hardware sector. The exports has grown from Rs 34,615 Crores to Rs 66,638 Crores in 2007 08.India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone(EPZ) model in promoting exports, with Asias first EPZ set up in Kandla in 1965. With the view to overcome the shortcomings experienced on account of the multiplicity of control and clearances; absence of world class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the SEZ policy was announced in 2000. This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Central and the State level, with the minimum possible regulation. SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provision of the Foreign Trade Policy and fiscal incentives were made effective through the provision of relative statutes.
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Growth of SEZ over the years Year Value (Rs. Crore) 13,854 18,314 22 840 34,615 66,638 Growth Rate ( over previous year ) 39% 32% 25% 52% 92%
2003-2004 2004-2005 2005-2006 2006-07 2007-08
SECTOR GROWTH: Gem & Jewellery, Trade & Service, Computer/Electronic Software & Hardware are the major share of the SEZs. Its share was 82.5% out of the total exports. The other is Textile, Chemicals, Engineering, etc. and these sectors share was 17.5%. Some of the like Ceramics, tobacco had minimal share in the total exports. Sector wise breakup of Physical Exports from SEZ
Govt. SEZs Biotech Computer/ Electronic software Electronics hardware Electronics Engineering Gems and Jewellery Chemicals & Pharmaceuticals Handicrafts Plastic and rubber Leather, footwear and sports goods
State Govt/Pvt SEZs
2663.38 1408.53 518.71 886.81 15979.98 1069.49
1046.24 6313.34 421.87 7025.93 20.33 30.33 302.69
SEZs notified under SEZ Act. 159.45 275.64 3399.45 343 0.15 333.23
Total
159.45 3985.26 11121.32 518.71 1651.68 23006.06 1423.05 30.33 657.66 237.02
354.97 190.79
46.23
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Ceramics Food and Agro Industry Non-conventional Energy Trading and service Textiles and garments Tobacco related products Misc Total
24 645.58 126.01 14073.22 1135.69 9.5 314.66 39275.31 6793.75 101.16 8.98 103.23 22167.85 431.59 5194.51
24 645.58 126.01 20866.97 1316.61 18.48 849.48 66637.68
79.76
Total employment in SEZs: 3, 36,235 persons Total incremental employment generated in SEZs since Feb 2006: 2, 01,531 persons Total investment in SEZs as of 31.12.2008: Rs. 77210 Crores
The procedure for Procedure in India 1. Collecting documents such as Invoice, Packing List, MAW(Master Airway Copy) or MBL(Master Bill of Lading), etc 2. Making the Bill Of Entry and registering it 3. Forward all the collected documents with the Bill of entry and send it to the concerned SEZ, for passing purpose from Custom Officers 4. Inform the concerned party for delivery into SEZ 5. Escorting and Examination report is taken on the site, at the time of delivery Various Schemes under SEZ are: ARE Bill of Export o DEPB(Duty Entitlement Pass Book) o AAS(Advance Authorization Scheme) o EPCG(Export Promoting Capital Goods) Imports DTA(Domestic Tariff Area) Sale Zone to Zone
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Our Visits: Mumbai o JNPT, Nava Sheva Nhava Sheva (also called Jawaharlal Nehru Port) is the largest port in India, handling close to 50% of the country's port traffic. The main goods exported are cotton shirts, knitted t-shirts, sporting goods, carpets, other textile articles like embroidery machines and etc., boneless meat, and medicaments. The main imports are chemicals, machinery, plastics, electrical machinery, vegetable oils and aluminum and other non-ferrous metals. It has access to neighboring Mumbai and to the hinterland of Madhya Pradesh, Maharashtra, Gujarat, Karnataka and most of North India. The port was developed to relieve pressure of the port of Bombay (Mumbai) in Bombay proper and has three terminals: JNPCT, NSICT and GTI (Gateway Terminal of India). NSICT is Indias first privately managed container terminal. It is run by Dubai Ports World. Currently it is managed under a Build-Operate-Transfer agreement set up with the Jawaharlal Nehru Port Trust (JNPT) of the Government of India. It is located south east of Mumbai The role of Container Freight Stations (CFS):CFS is a place where containers are stuffed, de-stuffed and aggregation/ segregation of export/import cargo take place. With the growing volume of international trade, the need for expeditious clearance of goods at the port within the minimum possible time has been gaining importance. This is more so when the ports are facing congestion at their premises. Further, for optimal utilization of existing infrastructure, space, equipment, goods that are landed at ports need to be evacuated straight away without any loss of time. Accordingly the concept of Container Freight Stations (CFS) has grown in importance along with the development and growth of ports. A CFS is an extended arm of Port/ ICD/ Air cargo Complex, where import/ export goods are kept till completion of their examination and clearance. The imported goods can be immediately shifted from the port to CFS which also helps in the reduction of port congestion. All the activities related to clearance of goods for home consumption, warehousing, temporary admissions, reexport, temporary storage for onward transit and outright export and transhipments take place from such stations. Therefore, clearance of goods from CFS is an important point of consideration for trade in respect of export/ import Cargo as it is the final Customs contact point.
We have been to the following CFSs: Dronagiri, MAERKS, GDL, ULA and TransIndia.
Serene Properties Pvt Ltd: Serene Properties Pvt Ltd or Airoli Special Economic Zone (SEZ) is Constructed or developed by the Raheja Builders. It is the 3rd working SEZ other than, SEEPZ and Hirananadani SEZ. Serene Properties Pvt Ltd and Hirananadani SEZ are specialized IT, ITES SEZ i.e for Computer/Electronic Software and Hardware sector and SEEPZ is a multipurpose SEZ. Serene Properties Pvt Ltd is developed in 50 acres of land in Airoli. This SEZ is under development from last one and a half year, there is only one full fledged working unit i.e Cap Gemini. There are many other companies who have booked their units. Even talks are going on with Wipro who are interested in taking two building; the SEZ is very strategically located as it is near to the highway and opposite to the railway station. In Serene Properties Pvt Ltd, we met Mr Anil, he was the person incharge of the Customs of the Serene Properties Pvt Ltd, and was the employee of SSS Sai Shipping Services Pvt Ltd, from him we understood the working of the Customs and the documentation for the Exports and the Imports and the working of the SEZs in India. Serene Properties Pvt Ltd is not completely developed so there is no proper custom house in the SEZ, all the custom work is taken care by our company i.e SSS Sai Shipping Services Pvt Ltd, and we are the Custom House Agent of the Raheja Builders who is the developer so it was decided that it the time the Custom Office is not properly build the custom work will be done by our company. The required Custom assessment is done by the Custom Officers of SEEPZ SEZ. Serene Properties Pvt Ltd is very well developed SEZ with all the required facilities for the units starting from 24hrs electricity to parking and club house.
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Jodhpur Concor (The multimodal logistics professionals) Container Corporation of India Limited was incorporated in March 1988 under the Companies Act, and commenced operation from November 1989 taking over the existing network of 59 ICDs from the Indian Railways Indian Railway's strategic initiative to containerize cargo transport put India on the multi-modal map for the first time in 1966. Given the continental distances in India (almost 3000 km from North to South and East to West), rail transport could be the cheaper option for all cargo over medium and long distances, especially if the cost of inter-modal transfers could be reduced. Containerized multi-modal door-to-door transport provided the ideal solution to this problem. It was this idea that saw the Indian Railways entering the market for moving door-to-door domestic cargo in special DSO containers starting in 1966. Though the first ISO marine container had been handled in India at Cochin as early as 1973, it was in 1981 that the first ISO container was moved inland by the Indian Railways to India's first Inland Container Depot (ICD) at Bangalore, also managed by the Indian Railways. Expansion of the network to 7 ICDs by 1988 saw increase in the handling of containers, and along the way, a strong view had emerged that there was a need to set up a separate pro-active organization for promoting and managing the growth of containerization in India.
Visiting the CONCOR was a different experience on the whole. We had a chat with one of the officers in charge over there. We got to know the basic working of CONCOR. Also we learnt that since the Laloo Prasad government has allowed around 12 private players in this line, CONCOR faces competition from them. It had its monopoly in this field, before this. From its humble beginning, it is now an undisputed market leader having the largest network of 59 ICDs/CFSs in India. It has currently started double stack container (DSC) train which can carry 180 TEU (20-foot equivalent unit) From the Jodhpur CONCOR, most of the export goods are sent either to Mundra or to Nava Sheva. Most of the goods include heavy materials like wooden handicrafts and guar gum.
Inland Container Depots (ICD)
Inland Container Depots (ICDs) are facilities located inland or remote from port(s) which offer services for handling, temporary storage and customs clearance of containers and general cargo that enters or leaves the ICD in containers Their primary purpose is to allow the benefits of containerization to be realized on the inland transport leg of international cargo movements The company is planning to add more rail linked ICDs at various strategic locations, apart from developing a national network of CFSs and ICDs, catering to the movement of the EXIM and domestic containerized cargo across the country
Thar dry port (Pvt. ICD) The Thar Dry Port is owned by Hasti Petro Chemical and Shipping Limited (HPCSL); the company which is recognized through its well established chain of ICDs. Thar Dry port is one of its kinds in offering the ICD servicing. Pioneering to be 1st privatized ICD; it plans to expand its service stream from single operational location at Jodhpur to multiple strategic locations through global network. Over here we saw the complete procedure from the start to the end. How first we have to complete all the document work at the custom office (located inside the ICD itself), then complete the formalities at the entry gate. Then the container (in case of FCL) or the truck (in case of LCL) is allowed inside the ICD. Then its checked and the goods are stored inside the container for further transport. This ICD is the first fully computerized one, for providing on-hand information generated from the software to our clients (exporters/importers, shipping lines).
Govt. ICD We also visited one government ICD at Jodhpur. Such ICDs are maintained by the central or the state government. This one in comparison to the private ICD at THAR was a small one. Over here the work procedure also is slower than the private one. It is yet to have the IDE system. It will have one in the next 5-6 months.
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Jaipur Concor The Jaipur CONCOR is a much bigger in size and operation than its Jodhpur counterpart. While Jodhpur CONCOR concentrates mainly on exports, the Jaipur CONCOR handles both the imports and the exports. Exports here include handicrafts, guar gum, etc. Imports here include scrap, china wood, etc.
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CONCLUSION Logistics business indicate that in this highly competitive and high-cost, low-margin business, I found out that we have to not only focus on differentiating the services rendered by their companies, but market the differentiating factors of their services appropriately to the clients. They also need to make their cost structures transparent, and convince clients to foot the bill towards investments in quality assets and new technologies such as RFID and GPS (Global Positioning System) leading to improved, and differentiated, delivery of service. Since clients usually prefer a singlepoint solution to all their logistical problems, we need to broaden the range of their service offerings, internationalize operations and cover as many industry verticals as possible. We may focus on key customer accounts gradually moving away from accounts generating low, even negative, profitability. However, small-to-mediumsized companies that seem to have high growth potential should not be ignored in the process. In order to become a single point of contact for clients, logistics companies may pursue acquisitions or alliances, which, however, pose the challenge of integration of diverse cultures. Attracting, recruiting, training, motivating and retaining management talent are also a great challenge that logistics managers need to take on. We found that logistics managers perceived internationalization of operations, industry focus or specialization, investment in information systems, availability of skilled logistics professionals, integration of supply chains, customer focus and breadth of service offerings as the most important factors for success as a LSP. However, the survey identified significant gaps between expectations and actual achievements of LSPs with respect to internationalization of operations, skilled logistics professionals and integration of supply chains, which should be seriously looked into by managers. The survey also established relationships among a set of performance metrics and key success factors to identify significant predictor and criterion variables. One of the most important observations was that collaborative relationships with clients and investments in assets are necessary but not sufficient conditions for success in logistics. The findings of the survey may provide a useful guideline to logistics managers for allocation of scarce resources. As far as the Indian logistics industry is concerned, logistics managers of user firms need to realize that, with supply chains getting more and more complex, outsourcing part or all of their logistical activities to experienced LSPs will help reduce their overheads, streamline supply chains, reduce costs and improve service delivery. The organizational interests should be put above vested interests, if any. They need to realize that organized LSPs are professionals, who will maintain confidentiality of sensitive client information. The Indian government should also focus on developing infrastructure and encourage public-private partnerships in investments in infrastructure. Highway projects such as golden quadrilateral and east-west, north-south corridors connecting all four metros
are already underway. Private investments in inland containerized transportation by railroad, which was a monopoly of Container Corporation of India Limited (CONCOR), a subsidiary of Indian Railways, until recently, have been allowed. 100% FDI is also allowed in Free Trade and Warehousing Zones (FTWZ) to create necessary trade-related infrastructure to facilitate import and export of goods and services. The government may create logistics SEZs (Special Economic Zones) or logistics hubs with concessions in land and tax rates. Incentive schemes may also be extended for construction of modern automated warehouses and cold chains. Access to cheap capital should be made available to LSPs for investments in infrastructure, enabling them to extend longer credit periods to their clients and supplementing their working capital. The government may create a uniform tax structure and do away with multiple check points and documentation requirements, which would lead to speedier delivery of cargo. To generate awareness, the government may organize seminars, workshops, exhibitions and meetings to bring in representatives of logistics users, service providers and government under one roof, and also sponsor courses in leading Indian institutes to attract talent. Growth of the logistics industry in India will not only contribute to the GDP, but also generate employment
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Introduction: Logistics is the management of business operations which includes acquisition, storage, transportation and delivery of goods along