OBJECTIVE OF THE STUDY

To know the present scenario in Indian shipping line.

To know the relation between the CHA and exporter as well as importer.

To know the documentation process done by the CHA.

 INTRODUCTION

In view of the rapidly and constantly changing business environment globally and
fastevolving trade and commerce scenario in India vis-à-vis global market, there
isincreasing requirement of reliable and dependable integrated logistics
solutionsproviders who can provide comprehensive, professional and dependable
logisticssupport to the industry, keeping the same in mind and with the vision to
providequality and professional comprehensive logistics solutions to the
international &domestic trade.
In the development of any country’s economy, exports play a crucial role. Export
isthe most important aspect of earning foreign exchange. A country should have to
beequipped with natural resources, so that it can sell these resources into
theinternational market.
With the opening up of the Indian economy, the international trade has been
increased
significantly as there are less restriction on exports and imports.
More and more multinationals are registering their entry into the Indian market.
Theimported products are now in well reach of Indian customers. The living
standard hasbeen improved. This results in substantial amount of growth in both
exports andimports.
The procedure of both the exports and imports are time consuming and
complicated.In this regard there are several logistic companies and custom house
agents providingtheir services on the behalf of the exporters and importers to
facilitate the tradebetween them. These custom house agents and logistics
companies take over theresponsibility of sending the goods from the exporter’s
premises to the importerpremises, which also includes the most important aspect of
custom clearance.
 Overview of Indian Shipping Industry

India has 12 major ports and 185 minor/intermediate ports. Over 90 percent
byvolume and 70 percent by value of India’s overseas trade, aggregate of exports
andimports, is carried out through maritime transport along its 7617 km long coast
line.India has the largest merchant shipping fleet among the developing countries
and itsmerchant shipping fleet ranks 18th in the world, in terms of fleet size.
Another silverlining is the average age of the India’s merchant shipping fleet is
only 12.7 years ascompared to the international average of 17 years .but, India’s
share, sadly, constitutesonly 1.45% of the world’s cargo carrying capacity.
As on April 1, 2005, India has a total of 686 ships comprising 8.01 Million
GrossTonnage (GT) and 13.28 Million Dead Weight Tonnage (DWT). The
shippingcorporation of India (SCI), the country’s largest carrier, owns and
manages 82 shipswith 2.54 million GT and accounts for 40 percent of national
tonnage. India is alsoamong the few countries that offer fair and free competition
to all shipping companiesfor obtaining cargo. There is no cargo reservation policy
in India.
Indian shipping has remained a deferred subject till independence. Only
afterindependence, the development of shipping has attracted the state policy. The
subjectof shipping, in the beginning, has been dealt with by the ministry of
commerce, till1949 and subsequently, in 1951, it has been shifted to the ministry of
transport andshipping. In 1947, the government of India has announced the
national policy onshipping, aiming at the total development of the industry. In
order to accelerate thedevelopmental efforts, the necessity for a centralized
administrative organization hasbeen felt. Accordingly in September necessity for a
centralized administrativeorganization has been felt. Accordingly in September
1949, the directorate general ofshipping with its headquarters at Bombay has been
established with the objectives ofpromotion and development of Indian shipping
industry.
Introduction to Gujarat port:

Along the 1600 kms. of coastline of Gujarat, there are 41 ports, of which Kandla is
a major port. Out of remaining 40 ports, 11 are intermediate ports and 29 are minor
ports under the control of Gujarat maritime board.
Gujarat, situated on the western coast of India, is a principal maritime state end
owed with favorable strategic port location. The prominence of Gujarat is by virtue
of having nearly 1600 kms long coastline, which accounts for 1/3rd of the coastline
of India and being the nearest maritime outlet to Middle East, Africa and Europe.
In 1991, government of India initiated various economic, trade and industrial
reform ,through the policy of liberalization to enhance industrial and trading
activities. The rationalization of import duties and stress on export promotion has
seen import sin creasing by 24% and exports by 25%. Gujarat state is one of those
frontline states that can take up the policy of liberalization and privatization
announced by the government of India through the process of globalization Gujarat
itself is experiencing a phenomenal interest in investments both from mega-
industrial sectors within the country and also from top multi-national abroad.
Investments to the tune of $30 billion are already in the pipeline. From analysis
ofthe present investments and those that are flowing in, one can perceive a
particular trend which is manifesting itself - investments are converging in and
around potential port sites. Investments of over Rs.16,000 crores are taking place at
Hazira, Rs.15,000crores are planned at Vargas, Rs.20,000 crores are planned in
areas near Pipavav andnear Jamnagar port locations. The logic of locating these
industries is rather clear, viz.The large business houses want to import industrial
raw-materials and want access to the international market through sea routes,
which is definitely more viable and feasible as against the surface transport or air
transport.
Export of salt and import of coal are other major potential cargo apart from the
existing items of import and export. As indicated earlier, the massive spurt in
industrialization also opens up scope for import of industrial raw materials and
export of finished goods to the global market through ports. The vast coastline of
Gujarat, also offers tremendous potential for marine fisheries and subsequent
processing and exports. Over and above this, any development in the hinterland
state has a direct impact on Gujarat ports.
In all over India, Gujarat ports are handling more cargo then other states and by the
year by year cargo handling is increasing. From the below data we can find that
Kandla port is handling more cargo than all over India
rationalization of import duties and stress on export promotion has seen imports In
Gujarat, ports are playing major role for growth of state GDP (Gross Domestic
Product) below are the figure for the year 2006-2007
 Shipping Company:

Shipping Company is companies which invest his capital in purchase of ships

andprovide transport service through the sea to its customers is known as
shippingcompany.”
Basically the shipping companies provide services in two ways

1. Tramp Ships

2. Liner Ships

Tramp Ships:-

Tramp ship or general trader, does not operate on a fixed sailing schedule, but
merely trades in all parts of the world in search of cargo, primarily bulk shipments.
It is a chartered ship prepared to carry anything anywhere. Its cargoes include coal,
grain, timber, sugar, ores, fertilizers, etc like which are carried in complete
shiploads.
Tramp tankers are specialized vessels. They may be under charter or be operated
by an industrial company, that is oil company, motor manufacturer, etc to suit their
own individual/market needs.
Liner Ships:-

Liner ship operates on a fixed route between two ports or two series of ports.
Theyoperate on a regular scheduled service. They sail on scheduled dates/times
whetherthey are full or not. The cost of using the service (freight) can be quoted
from a fixedtariff.
Container ships in deep sea trades and roe ship in the short sea trades feature

prominently in this field

 Different Types of Ships

1. Container ships
2. Roll-on/roll-off ships
3. Break-bulk ships
4. Crude carries
5. Dry-bulk carriers
6. Gas carriers

Container ships:-

Container ship is also known as a ‘BOX SHIP

Container ships cater to only containerized cargo and generally have cranes on
Board. They can store up to 4 tiers of containers below the main deck and up to 3
Tiers above deck Roll – on / Roll - off Ships:-
Roll-on/roll-of ships were created to accommodate cargo that was self
propelled, such as automobiles or trucks, or cargo that could be wheeled into aship,
such as railroad cars. They are essentially floating garages. It takes long timeto
load such vehicles over the rail it is preferable to load them by rolling them ontothe
ship.
Roll-on/Roll-of ships therefore have a portion of their hull that opens up and
acts as a ramp on which the vehicles are driven before being parked on the
manydecks of the ship and secured with chains. The hull opening is either on the
side ofthe ship or on its stern (rear).This ship have an advantage in that specialized
liftingequipment is not required, even for the heaviest of loads, since the cargo
rollsunder its own power or pulled by a tractor.
Break-BulkShips:-

 Break-bulk cargo ships are multipurpose ships that can transport

shipments ofunusual sizes, unitized on pallets, in bags, or in crates.
 Due to increasing role of RORO (Roll-on/Roll-off) ships,
container ships,break-bulk ships share of international trade is decreasing.
 The advantage of break-bulk ships is that they can call at just about
any port topick up different kinds of cargo loads, giving them a flexibility
that container shipsdo not yet have.
 The main problem with a break-bulk ship stems from its labor-
intensive loading and unloading because each unit of cargo handles
separately
 Crude Carriers: -

 Crude carriers are the bulk ships dedicated to the transport of

petroleum products,whether unrefined or refined, such as gasoline or
diesel fuel.
 The crude carriers are also known as VLCC (Very Large Crude
Carriers) andULCC (Ultra Large Crude Carriers).
 VLCCs and ULCCs are such large ships that they can call on only a
few ports in

the world; since their draft, when loaded, can reach 35 meters(115
feet) they need very deep ports for berthing
Dry-Bulk Carriers

 Dry-bulk carriers operate on the same basis as oil tankers in that they
are chartered
for a whole voyage.
 Dry-bulk ships have several holds in their hull, in which non-
unitized cargo is
placed.
 Dry bulk ships carry agricultural products, such as cereals, as well
as coal, ores,
scrap iron, dry chemicals, and other bulk commodities.
 Dry-bulk ships are generally small enough to fit through the PANAMA
CANAL.
Gas Carriers:-

 Another important bulk trade is the transportation of Liquefied

Natural Gas(LNG) and of Liquefied Petroleum Gas (LPG). These types of
carriers have a very distinctive shape. These ships hold several spheres of
compressed gasses, only part of which are visible above their main deck.
The LNG and LPG trades tend to be slightly different than the average
bulktransport, as they are used in a particular trade for long periods of time, on
long-term contracts-called time charter parties and therefore nearly have a sailing
schedule, not unlike liner ships.
 Containerization:
‘Containerization’, the term very familiar to present day shipping industry is a
completely unknown concept, a few decades back. Malcolm McLean, owner of a
huge trucking company in USA, who has first conceived the idea of
containerization by transporting containers though ‘ideal-x’ in 1956 and initiated a
revolution in the history of shipping industry.
Before containerization, cargo has to be loaded first into the truck and later truck is
to driven to the port, unload the goods at the port and them into the ship at the port.
This has been a cumbersome process and, in consequence, consumed a lot of time.
For completing the exercise, ships are detained in the port for about ten days for
the entire process of unloading and loading. With the arrival of containerization,
shippers havestarted stuffing into containers, at their own place, and containers are
brought to thecontainer yard (inland container depot) for shipment. This process
has greatlyfacilitated in two, after unloading the containers and loading them again
into the ship.The process of containerization has decongested the ports that are
heavily crowded.
Shipping is truly the lynchpin of global economy and international trade. More
than90% of world merchandise trade is carried by sea and over 50% of that volume
iscontainerized. In today’s era of globalization, international trade has evolved to
thelevel where almost no nation can be self-sufficient and global trade has fostered
aninterdependency and inter-connectivity between countries. Shipping has
alwaysprovided the most cost-effective means of transportation over long distances
andcontainerization has played a crucial role in world maritime transport.
What is meant by containerization?
Containerization is the practice of carrying goods in containers of uniform shape
andsize for shipping. Almost anything can be stored in a container, but they
areparticularly useful for the transport of manufactured goods. It is a method
ofdistribution of goods using containers. The use of containers has, indeed,
facilitatedcarriage of goods using containers. The use of containers has, indeed,
facilitatedcarriage of goods. Exporters need to go to the seaport for export of
goods. Instead thegoods sent to inland container depot/ container freight station for
sending to thedestination.
Since 1950s, containers have revolutionized sea-borne trade, and now carry
around90% of all manufactured goods by sea. The transporters in developed
countries havestarted making use of containerization, early now; developing
countries have startedmaking use of containerization, early. Now, developing
countries too are taking agreater advantage in using containers for transportation of
goods. Different countriesare giving logistic support, giving the necessary boost to
improve the requiredinfrastructure to containerization, for encouraging export
industry.
Containerization is to contribute about 22.66% to total cargo by 2010-11.
The robust growth of India’s manufacturing industry has pushed up
India’scontainerization. India’s containerization has over 70% of total exported
cargo, andaround 40% imported cargo. The Government of India has pursued a
policy ofdeveloping a number of Inland Container Depots and Container Freight
Stations tofacilitate modal interchange and distribution of cargo and most
importantly to avoidawkward customs procedures from the waterfront.
Containerization at major ports ofIndia contributed about 11% of total cargo
handled at those ports in 2000-01; itincreased to 16% in 2005-06 and is estimated
to further increase to 22.7% by 2010-11.
Challenges Container port demand and capacity imbalance:
In view of the buoyant global merchandise trade scenario, container port demand
hasbeen growing rapidly. Globalization has spurted merchandise trade, which is
ready forbig stride. During the last four years, world container traffic has been
growing at over9.2% per annum, while container port capacity is growing at an
average 4.5% perannum. There will be requirement for additional port capacity to
be built if the currenttrend and port utilization level is maintained by 2010. The
projected global containerdemand and container port capacity illustrates that there
will be a huge differencebetween container port demand and capacity in the next
four to five years. This is oneof the major challenges for global container trade.
Extra capacity should be built tomeet the growing demand.
Types of containers-:

There are different types of containers. The popular types are:

1.General purpose containers-:

There are the most common type of containers and are the ones with which
mostpeople are familiar. Each general-purpose container is fully closed and has
widthdoors at one end for access. Both liquid and solid substances can be loaded in
thesecontainers. Based on length of the container, the container is generally known
as a 20ft container or 40 ft container, in practice. Hazardous or dangerous cargo
can not beloaded into general-purpose containers.

2.Reefer containers (refrigerated) -:

These play an important role in South - Africa’s exports of perishable products,

andare designed to carry cargoes at temperatures reading down to deep frozen.
Forrefrigeration, they are fitted with electrical equipment for supply of
necessaryelectricity

.3.Dry bulk containers-:

These are built especially for the carriage of dry powders and granular substances
in
bulk.

4.Open top/open sided containers-:

These are built for heavy and awkward pieces of cargo. These containers are
idealwhere height of the cargo is in excess of height of the standard general
purposecontainers.

5.Liquid cargo containers-:

These are ideal for bulk liquids, such as wine, fruit concentrates, vegetable
oils,detergents and various other non-hazardous chemicals. Bulk liquid bags,
designed tocarry specific commodities, can fit into these containers.

6. Hanger containers-:

They are used for the shipment of garments on hangers.

Custom House Agent:

“Custom House Agent” means a person licensed, temporarily or otherwise, under

theregulations made under sub-section (2) of section 146 of the Customs Act,
1962.

A person is permitted to operate as a customs house agent, temporarily

underregulation 8(1) and permanently under regulation 10, of the Customs House
AgentsLicensing Regulations, 1984.

The services rendered by the custom house agent are not merely limited to
theclearing of the import and export consignment. The CHA also renders the
service ofloading/unloading of import or export goods from/at the premises of
theexporter/importer, the packing, weighment, measurement of the export goods,
thetransportation of the export goods to the customs station or the import goods
from thecustom station to the importers premises, carrying out of various statutory
and otherformalities such as payment of expenses on account of de-stuffing/
pelletisationterminal handling, fumigation, drawback/ DEEC processing, survey
/amendment fees,dock fees, repairing and examination charges, landing and
container charges, statutorylabour etc this expenses paid on behalf of importer and
exporter. The CHA isordinarily reimbursed by the importer/ exporter for whom the
above services arerendered.
 Company profile

Shakti forwarders Pvt. Ltd. formerly known as Shakti Enterprise was established
in1992.A leading custom house agent, for import and export, Shakti Forwarders
hasestablished its basis at four different places across india. We have offices
located atmumbai, kandla, delhi and vapi.
Major items handled by Shakti Forwarders are as follows:
Exports: sanitary ware, stainless steel utensils, readymade garments, soya,
engineering goods, sesame seeds, groundnuts, rice, textiles etc.
Imports: non ferrous and ferrous metal scrap, consumer goods, soap raw material,
chemicals, fabrics, capital goods, rubber products, dates, dry fruits, auto parts etc

AN ESTIMATE OF OUR WORK PAR MOUNTH

NO.OF CONTAINERS

LOCATION IMPORT EXPORT CONSIGNMENT IN AIR

CARGO

MUMBAI/JNPT 225-250 35

GANDHIDHAM 25O 30 50

VAPI 50

DELHIICD 50

At Gandhidham Branch the estimate of 400 containers per month in 2010

The different steps involved in export department are as follows:

Step 1:
Exporter sends the following document to Shakti Forwarder:
 Letter of credit: Assures exporter his payment promise to pay a seller
(beneficiary) upon receipt of goods by a buyer if certain conditions outlined in the
letter have been met.
It is a method of payment for goods in the buyer establishes which his credit witha
local bank, clearly describing the goods to be purchased, the price,
thedocumentation required, and a time limit for completion of the transaction.
Uponreceipt of documentation, the bank is either paid by the buyer or takes title to
thegoods themselves and proceeds to transfer funds to the seller.
Types of letter of credit
Clean letter of credit: negotiated against a clean draft without any documents
Documentary letter of credit: documents specified in the letter of credit must
accompany the draft
Revocable letter of credit: can be cancelled or revoked any time without the
consent or notice to the beneficiary
Irrevocable letter of credit: cannot be amended, revoked or modified by the issuing
bank without the express consent of all parties concerned

Thus the issuing bank has definite undertaking to honor drafts drawn under that
credit, provided that the conditions in letter of credit are met.
Confirmed letter of credit: Issuing bank sends letter of credit to the bank located in
beneficiary’s country with a request to add confirmation to the credit
Confirmation involves legal undertaking on the part of the confirming bank that it
will duly honor payment or acceptance on presentation of documents
Back to back letter of credit:
 SECONDARY CREDIT: In favour of a domestic supplier. The original credit
backs the secondary credit and facilitates the purchase of goods froma local
supplier by the original beneficiary of L/C
 Red clause letter of credit : Allows exporter to withdraw a predetermined
amount so that he is able to pay his suppliers and purchase relevant letter of credit
Packing list: A list which shows number and kinds of packages being shipped,
totalsof gross, legal, and net weights of the packages, and marks and numbers on
The packages. The list may be requested by an importer or may be required by
animporting country to facilitate the clearance of goods through customs.
Invoice: One of the common to both international and domestic transactions is the
bill(invoice) that the exporter sends to the importer. However, the content of
aninternational invoice is more complex and should be prepared slightly differently
for aforeign customer than for a domestic one.
Step 2:
On the basis of invoice, Shakti Forwarder preparing Annexure – A, Annexure – C,
Annexure – D and SDF ( Statutory Declaration Form ) along with the invoice.
Step 3:
Send these annexure to the custom house. The custom prepares the shipping bill in
four copies on the basis of these annexure

Step 4:
Custom calculate the duty (CESS) on the value of the goods.
Using the Treasury Challan the duty can be paid. Cargo can enter the port
premises.
Step5:
Custom examined the cargo by using the sample. (Customs examined the cargo
onlyafter the duty is paid) in case of more than one container in one B/L than A.C
givesome container no. randomly for examination and that container must be de-
stuff byCHA.
Step 6:
The duplicate shipping bill and wharf age duly paid is given to the container
agent.The container agent hand over the duplicate shipping bill to the vessel agent
who ishere uses it for the purpose of filling EGM (Export General Manifest).
The container agent gives the wharf age form paid is given to the container
agentgrants the loading permission. (But in case of the break bulk cargo, the CHA
itselfsubmits the wharf age paid form to the port authority, so that loading can be
allowedin the vessel).
Step 7:
In the case of break bulk, after loading the cargo the chief officer issues the mate
receipt, on the basis of which captain of the vessel issues the bill of lading.
Step 8:
Besides all the CHA sends the phytosanitary certificates/pre inspection certificate
to the exporter so that with all documents he can submit this to the bank
In case of charter, after processing and shipment of the goods following
documents
are sent back by the CHA to exporte