CII IL - RL Institute

Certificate Program in Logistics & Supply Chain Management

Subject : CONTAINER TRADE
Topic : Introduction to Trade and Overview of Cost
 Understanding Trade
 External Trade overview
 Features and Functions of Internal trade
 Importance of Internal Trade
 Features and Challenges of Foreign Trade
 Importance of Foreign Trade
 Benefits and Limitations of Foreign Trade
 Overview of Costs – Exports
 Overview of Costs - Imports
 Understanding Trade
Trade refers to buying and selling of goods and services. It involves
transfer or exchange of goods and services for money or money's
worth. The producers produces the goods, then moves on to the
wholesalers, then to the retailers and finally to the ultimate (final)
consumer.

Trade is essential for satisfaction of human wants, Trade is conducted

not only for the sake of earning profit; it also provides service to the
consumers. Trade is an important social activity because the society
needs uninterrupted supply of goods forever increasing and ever
changing but never ending human wants. Trade has taken birth with the
beginning of human life and shall continue as long as human life exists
on the earth. It enhances the standard of living of consumers. Thus we
can say that trade is a very important social activity.
 External Trade (Foreign Trade)
Foreign trade is nothing but trade between the different countries of
the world. It is also called as International trade. External trade or
Inter-Regional trade. It involves exchange of goods and services
between two or more countries. It consists of imports, exports and
entrepot. Foreign trade basically takes place for mutual satisfaction of
wants and utilities of resources.

The foreign trade can be divided into three groups:

Import Trade
It refers Purchase of goods by a firm in one country from a firm in
another country. The inflow of goods in a country is called import trade
Export Trade
It refers to sale of goods by a firm in one country to a firm in another
country. The outflow of goods from a country is called export trade.
Entrepot Trade
It is also known as re-export. It refers to purchase of goods by a firm
from one country and then selling them to a firm in another country.
Many times goods are imported for the purpose of re-export after some
Features and Functions of Internal (Domestic)
Trade
Features
 Trade within a nation
 Free Exchange of Goods and Services
 Single Currency
 Simplified Trade Procedure
 Simplified Taxes
 Simplified Methods of payments Functions
 Low transport costs  Buying and Assembling
 Free mobility of resources  Inspecting
 Less uncertainties and  Grading
 Less documentation  Branding
 Packing and Labeling
 Market Research
 Sales Promotion, Advertising,
 Warehousing,
 Transporting
 Insuring, Financing, New Developments

It has Wholesale Trade and Retail Trade in the Internal Trade

 Importance of Internal (Domestic) Trade
1) Optimum utilization of Resources :
It involves buying and selling of goods within the domestic market. Goods are produced by
manufacturers. They require resources, such as materials, manpower, machine, etc., to produce
goods. therefore there are proper utilization of resources.
2) Employment :
Internal Trade facilitates production and consumption. So it provides considerable employment
to skilled and unskilled workforce in the industry. It is also require a number of middleman like
wholesalers and retailers
3) Expands Aids-to-trade :
There are a number of aids-to-trade, such as banking, insurance, advertising, etc. the growth of
internal trade helps to expand the aids-to-trade. the expansion in aids-to-trade not only
generates employment, but also facilitates more business.
4) Standard of Living :
Internal trade provides employment to millions of people. this results in increase in the income
of the society. the increase in income generates more purchasing power.
5) Spread-effects :
Because of the internal trade a number of supporting industries comes into existence. For
instance, because of the trade in textile industry, a number of other related industries come into
existence, such as textile machinery industry, dies industry, etc.
6) Developing of Backward areas :
Internal trade facilitates production in backward areas, may be because of government
incentives or because of the availability of cheap labour or raw material.
7) Revenue to the government :
Internal trade brings tax revenue to the Government in form of excise duty charged on
production, corporate tax charged on profits, custom duty on imports, etc.
8) Economic Development :
All the above factors, i.e. higher employment, higher production, expansion of aids-to-trade,
External Trade (Foreign / International Trade)
Features
 Trade outside a nation
 Mobility of Resources
 Heterogenous Markets
 Different National Groups
 Different Political Units
 Different National Policies Challanges
 Different Currencies  Customs Formalities
 Different currencies
 Trade and Non-Trade Barriers
 Difficulties of distance
 Diverse Culture, Traditions and Languages
 Risks and Uncertainties
 Foreign Exchange Regulations
Importance of International / Foreign Trade

 Distribution of Labour and Specialization across the nations

 Optimum allocation and Utilisation of Resources
 Equality of Prices
 Availability of Multiple Choices
 Ensures quality and standard goods
 Raises Standard of Living
 Generate employment
 Facilitate economic Development
 Assistance during natural calamities
 Maintains balance of payment position
 Brings reputation and helps earns goodwill
 Promotes World Peace
 Benefits and Limitations of Foreign Trade

Benefits Limitations
1. Optimum Allocation 1. Exhaustion of Resources
2. Gainst of Specialization 2. Blow of Infant Industry
3. Enhanced Wealth 3. Dumping
4. Larger Output 4. Diversification of Savings
5. Welfare contour 5. Declining Domestic Employment
6. Cultural Values 6. Over Interdependence
7. Better International Politics
8. Dealing with Scarcity
9. Advantageous Competition
10. Larger Size of Market
 Overview of Cost - Exports
Export Price :
Once the Ex- works / purchase price has been • Incentives / Benefits to Export
decided the additional expenses that have to • There is no sales tax applicable on the
be added are as under : final product
• Loading charges from work to truck/ rail/ air • There is no excise applicable on the final
• Freight charges to port of shipment product
• Clearing and forwarding charges • Duty free import of raw materials,
• Dock charges / wharf age/ terminal components and consumables is permitted
handling charges etc. under the advance licensing scheme.
• Freight charges to the destination port • Income tax benefit under 80HHC
• Insurance charges • Special import license
• Insurance (both to port of shipment and • Credit of duty under the duty Entitlement
destination) Pass Book Scheme
• Commission • Any other special subsidy announced by
• Interest charges
the government
• Guarantee/Warrantee costs
 Overview of Cost - Imports
• Basic Customs Duty (BCD)
• A tax on imported goods that varies based on the item's HS code. The peak
customs duty in India is around 10%.

• Integrated Goods and Services Tax (IGST)

• A tax levied on the value of imported goods plus customs duty. IGST is levied
in the state where the imported goods are consumed.

• Social Welfare Surcharge (SWS)

• An additional charge of 10% levied on the aggregate of duties and cesses
applied.

• Countervailing Duty (CVD)

• Charged on goods that have benefited from government subsidies and/or tax
breaks in the country of manufacture.

• Anti-Dumping Duty (ADD)

• Charged on goods that are imported at a much lower value than their normal
market price.

Other import costs include: freight, wharf charges, documentation charges, and
 Trade

[Link]
 End of the topic
“Introduction to Trade and Overview of Cost”
 CII IL - RL Institute
Certificate Program in Logistics & Supply Chain Management

Subject : CONTAINER TRADE

Topic : Container Trade Regulations and Compliance

Trade
 Containerized Trade
Why Container used in International Trade?
Containers are commonly utilized for the shipment of goods in the context of international
trade, both for exporting and importing purposes. This is because containers are well-suited
for multimodal transportation, which is often required in international trade

For instance, containers can seamlessly transit between sea transportation (ships) and land
transportation (trucks), facilitating efficient and versatile movement across various modes of
transportation. There are two units of capacity measurement commonly found in the trade:
the twenty-foot equivalent unit (TEU) and the forty-foot equivalent unit (FEU), based on the
standard container sizes of the same length.

Twenty-foot containers are designed to carry more weight than voluminous cargo. For
examples, minerals, metals, machinery, sugar, paper, cement, and steel coils all of which are
heavy cargo.
Forty-foot containers are designed to carry voluminous cargo rather than heavy cargo. For
examples, furniture, pipes, paper scrap, cotton, and tobacco, all of which are voluminous
cargoes.

There are two types of container shipping: Full Container Load (FCL) and Less than Full
Container Load (LCL).
 Container Trade Compliance
International shipping regulations apply to the entire global shipping industry,
which includes shipping lines, agents, seaports, customs authorities, freight
forwarders, and more.

The International Maritime Organization (IMO) is the primary regulatory body for
the global shipping industry. The IMO develops the regulations, and local entities
implement them.

Here are some of the ways that the IMO's regulations are enforced:
• Flag state enforcement

• International surveyors inspect ships to ensure compliance with IMO

regulations.

• Port State Control

• Officials in countries that a ship visits can inspect foreign ships to ensure
compliance. If a ship doesn't comply, Port State Control officers can detain it in
port.
 International Container Trade Regulations
• International Convention for Safe Containers (CSC)
• This convention requires that containers used for international transport have
a valid safety approval plate (CSC plate). The owner is responsible for the
container's maintenance and must have it periodically examined.
•
• Code of Safe Practice for Cargo Stowage and Securing (CSS Code)
• This code was adopted by the International Maritime Organization (IMO).
•
• ISO standards
• The International Organization for Standardization (ISO) has revised relevant
standards to incorporate the latest advances in container handling and
securing equipment. Some of the key ISO standards for shipping containers
include ISO 668, ISO 1496, ISO 6346, ISO 1161, and ISO 3874.
•
• Container weight limitations
• Containers must meet the weight limitations marked on them. Weight should
be distributed equally inside the container, and heavy items should be stowed
on the bottom for stability.
 Container Safety
The International Convention for Safe Containers (CSC)
The International Convention for Safe Containers (CSC), established in 1972 by
the International Maritime Organization (IMO), sets minimum standards for
shipping container construction and testing. Its main goal is to ensure
global well-being in container transport, covering structural strength, secure
closure, and proper identification markings

The IMDG Code for dangerous goods

When transporting hazardous materials at sea, strict adherence to guidelines is
vital. These guidelines are encapsulated in the IMDG Code, formerly the “IMCO
Code,” reflecting the transition from the Intergovernmental Maritime
Consultative Organization (IMCO) to the current International Maritime
Organization (IMO) in 1969.
The IMDG Code, merged with the INF Code in 2010, addresses the cautious
carriage of dangerous goods.

The Customs Convention on Containers

Also referred to as the Geneva Convention, the Customs Convention on
Containers aims to streamline global trade by simplifying customs procedures
for containerized goods.
International Trade Safety Regulations
International Trade Documentation Regulations
 Commercial documents: These include invoices and packing lists.
 Transport documents: These include bills of lading, air waybills, and sea
waybills.
 Legal documents: These include certificates of origin, export declarations,
import licenses, and consularized documents.
 Insurance documents: These include insurance policies and insurance
certificates.
 Banking documents: These include letters of credit, drafts, and collection
letters of instruction.
 Fumigation certificates: These are issued by licensing authorities to indicate
that shipments have been properly fumigated.
 Shipper's Letter of Instruction (SLI): This document provides all the information
needed to move goods, and may include a limited Power of Attorney.
 Packing lists: These provide details of the contents of each package or
container being shipped.
 Certificate of origin (COO): This states where a product was produced,
manufactured, or processed.
 Commercial invoice: This provides information for customs authorities to
assess if goods can move in or out of a country.
 Bill of entry: This states the quantity and value of the products being purchased
 Container Trade Regulations for Sustainability
• Marpol Annex VI
• This regulation is part of the International Convention for the Prevention of
Pollution from Ships (MARPOL) and aims to reduce airborne emissions from ships.

• Ship Energy Efficiency Management Plan (SEEMP)

• This plan is a regulation from the International Maritime Organization that helps
reduce CO2 emissions from ships. It includes methods to monitor and manage a
ship's energy efficiency.

• Taxonomy Regulation
• This EU-wide regulation classifies economic activities based on how environmentally
sustainable they are.

• International Sustainability Standards Board (ISSB)

• This board was established in 2021 to create financial reporting standards for
sustainability.

• Task Force on Climate-related Financial Disclosures (TCFD)

• This is a worldwide standard for climate-related financial risk
disclosures. Companies, banks, and investors use it to provide sustainability
information to stakeholders.

• Packaging and labeling requirements

 Negative Impact of non compliance
If there were no container trade regulations in international shipping,
there could be many negative consequences, including:

• Supply chain issues: Container trade regulations help prevent supply

chain bottlenecks and delays. Without regulations, there could be
longer voyages, late arrivals, and trade imbalances.
•
• Shipping costs: Regulatory barriers can increase shipping rates.
•
• Environmental impact: Container ships can release pollutants,
invasive species, and greenhouse gases into the environment.
•
• Safety risks: Without regulations, there could be risks to the safety of
seafarers and shore-side workers.
•
• Cargo liability: There could be cargo liability claims.
•
• Damage to ships: There could be damage to ships and chassis.
•
• Stability issues: There could be stability and stress risks for ships
 End of the topic
“Container Trade Regulations and Compliance”
 CII IL - RL Institute
Certificate Program in Logistics & Supply Chain Management

Subject : CONTAINER TRADE

Topic : Cargo Handling and Stowage, Container Ports

and Terminals
 Definitions
Cargo handling refers to the overall activities in warehouses and logistics centers, such as
loading and unloading cargo, transporting cargo, warehousing, picking, and sorting.

Stowage is the amount of room available for stowing materials aboard a ship, tank or an
airplane.
In container shipping, stowage planning refers to the arrangement of containers on board a
container vessel.

Stowing is the process of arranging and securing cargo on a ship, aircraft, or

other transportation equipment to ensure it's transported safely and efficiently.
Stowing involves:

• Planning
• Using available space strategically, considering factors like cargo compatibility, weight
distribution, and regulatory requirements

• Securing
• Ensuring cargo is properly secured so it doesn't shift or move during transit

Proper stowing is important for: Maximizing space, Preserving the condition of the cargo, and
Maintaining the stability and safety of the carrying vessel
 Types of Cargo
•Containerized cargo
General cargo that is transported in containers on ships. The load is measured in Twenty-foot equivalent units (TEU).

•Reefer ship
A cargo ship that transports goods that need to remain refrigerated during transport.

•General cargo
A common type of cargo that can be transported by ocean freight. It can include raw materials or finished products that
don't require special handling.

•Ro-Ro ship
A cargo ship that carries cargo on wheels, such as cars or trucks. Ro-Ro stands for "Roll on - Roll off".

•Tanker
A truck or ship that carries a variety of cargo, including milk, gases, and other substances.

•Bulk carrier
A cargo ship that transports bulk cargo, such as ore, food staples, and similar items. Bulk carriers have large box-like
hatches on their decks for loading.

•Dry bulk
A type of solid cargo that is transported in large unpackaged units. It is measured in tons of deadweight tonnage (dwt)
Modes of Cargo Handling
 Principles of Cargo Handling
Principles of Cargo Handling The IATA Cargo Handling Manual
 Safety First and every time (CHM) is a complete set of
 Efficiency of Operations standards for everyone involved
 Accuracy and Attention to Details in cargo operations. The CHM
 Adaptability to different cargo helps airlines and cargo handlers
 Use of appropriate Handling equipment to operate more effectively
 Integration with Logistics Technology together, to improve efficiency
 Environmental Responsibility and safety in air cargo
 Continuous Improvement operations. The CHM enables:
Cargo handling agents to follow
clear standards.
Cargo Stowage and Securing Code (I M O)
 C S S Code
Background
The accelerations acting on a ship in a seaway result from a combination of longitudinal,
vertical and predominantly transverse motions. The forces created by these accelerations give
rise to the majority of securing problems. The hazards arising from these forces should be
dealt with by taking measures both to ensure proper stowage and securing of cargoes on board
and to reduce the amplitude and frequency of ship motions.

Purpose
The purpose of the CSS Code is to provide an international standard to promote the safe
stowage and securing of cargoes by:
• drawing the attention of shipowners and ship operators to the need to ensure that the ship
is suitable for its intended purpose;
• providing advice to ensure that the ship is equipped with proper cargo securing means;
• providing general advice concerning the proper stowage and securing of cargoes to
minimize the risks to the ship and personnel;
• providing specific advice on those cargoes which are known to create difficulties and
hazards with regard to their stowage and securing;
• advising on actions which may be taken in heavy sea conditions; and
• advising on actions which may be taken to remedy the effects of cargo shifting.
In providing such advice, it should be borne in mind that the Master is responsible for the safe
conduct of the voyage and the safety of the ship, its crew and cargo.
 C S S Code
General Principles
 All cargoes should be stowed and secured in such a way that the ship and
persons on board are not put at risk.
 The safe stowage and securing of cargoes depend on proper planning,
execution and supervision.
 Personnel commissioned to tasks of cargo stowage and securing should be
properly qualified and experienced.
 Personnel planning and supervising the stowage and securing of cargo should
have a sound practical knowledge of the application and content of the Cargo
Securing Manual.
 In all cases, improper stowage and securing of cargo will be potentially
hazardous to the securing of other cargoes and to the ships itself.

 Decisions taken for measures of stowage and securing cargo should be based
on the most severe weather conditions which may be expected by experience
for the intended voyage.
 Ship-handling decisions taken by the master, especially in bad weather
conditions, should take into account the type and stowage position of the
cargo and the securing arrangements.
 Stowage Planning
Factors Influencing Container Stowage
Planning
 Weight Distribution
 Cargo Type
 Design of Vessel
 Port Calls and Discharge Sequence
 Stability and Trim

The Significance Of Container Stowage

Planning
 Maximize Space Utilization
 Time Efficiency
 Cargo Security
 Maintenance
 Regulation Compliance
 Cost Effectiveness
 Ports and Terminals
Ports and terminals are vital infrastructure for global supply chains and transport
networks. A port is a waterfront facility that provides shelter for vessels and a
place to load and unload goods. A terminal is a location within a port that
specializes in a specific throughput, such as loading and unloading containers,
oil, gas, or bulk cargo.

• Ports
• Ports can be natural or manmade harbors that cover many square
kilometers. They are essential for connecting people and goods to neighboring
and international cities.

• Terminals
• A port can have one or more terminals, each with its own purpose. Terminals
can specialize in specific types of trade, such as maritime transshipment.
 Major Ports in India
Major Ports in India List
[Link]. Seaports States Major export Zone
1. Chennai port Tamil Nadu Rice, textile, leather, goods, etc Eastern Coast
2. Ennore Port Tamil Nadu Iron ore, petroleum, coal, and chemicals Eastern Coast
3. Kolkata Port West Bengal Jute, steel, iron ore, etc Eastern Coast
Jawaharlal Nehru Textile, chemicals, pharmaceuticals,
4. Maharashtra Western Coast
port carpets, etc
Textile, manganese, machinery, leather,
5. Kandla Port Gujarat Western Coast
chemical products, etc
6. Kochi Port Kerala Tea, Coffee, Spices, etc Western Coast
Andaman and
7. Port Blair Fish Bay of Bengal
Nicobar Islands

8. New Mangalore Port Karnataka Iron ore Western Coast

9. Mormugao Goa Iron ore Western Coast

Textile, manganese, machinery, leather,
10. Mumbai Port Maharashtra Western Coast
chemical products, etc
11. Paradip Port Odisha Iron ore, iron, and aluminium Eastern Coast
12. Tuticorin Port Tamil Nadu Salt, fertilizer, petroleum, coal, etc Eastern Coast
Vishakhapatnam
13. Andhra Pradesh Coal, alumina, oil, and coals Eastern Coast
Port
 Minor Ports

Minor Ports: 189

States/Union Territories No of Minor Ports
Gujarat 40 ; Maharashtra 53 ; Goa 5 ; Karnataka10; Kerala 13 ; ; Diu & Daman 2
Lakshadweep Islands 10 Pondicherry 1; Tamil Nadu 15; Andhra Pradesh 12 ; Orissa 2
West Bengal 3 Andaman & Nicobar 23
 Types of Port Terminals

types of port terminals include:

• Break-bulk. Concerns cargo that is carried in
drums, bags, pallets, or boxes. ...
• Dry bulk. Relates to cargo that is not packaged
and transported in large quantities that are
limited by ship size or existing demand. ...
• Liquid bulk. ...
• Containers. ...
• Ro-Ro. ...
• Passengers.
 End of the topic
“Cargo Handling and Stowage, Container Ports and
Terminals”