Last Updated 03 Jul 2021

In a Globalised Economy, No Nation is Self-Sufficient

Category Trade
Essay type Research
Words 1518 (6 pages)
Views 506

Introduction

Globalization has lead to an increase in the integration of national markets and the interdependence of Countries worldwide have opened their boundaries for a wide range of goods, services, and commodities. Today, in a globalised economy, no nation is self-sufficient. Every nation is involved at different levels in trade to sell what it produces, in order to gain what it lacks and also to produce more effectively than their partners. Maritime history, the study of human activity at sea, covers a broad thematic element of history that often uses a global approach.

Freight forwarders typically arrange cargo movement to an international destination. Also referred to as international freight forwarders, they have the expertise that allows them to prepare and process the documentation and perform related activities pertaining to international shipments. Some of the typical information reviewed by a freight forwarder is the commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, or transhipment. Much of this information is now processed in a paperless environment.

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A freight forwarder who does not own vessel, but functions as a carrier by issuing its own bills of lading and assuming responsibility for the shipments is called an NVOCC Non Vessel Operating Common Carrier. Firm that ship cargo on behalf of its client. NVOCC functions like any other carrier, issuing its own bills of lading or air waybills. There are numerous benefits of using a Non Vessel Operating Common Carrier. They can also help a company save time and resources because of their understanding and immense knowledge of the cargo shipping industry.

This knowledge includes information on what the most effective and efficient routes of delivery are, based on specific destinations. They have expertise in most of the constituents of cargo shipping, packaging, pickup and delivery. This knowledge is institutional in providing a cargo with the best possible standards in accordance with international standards of delivery. Non-vessel operating common carriers are considered to be one of the "intermediaries" in the shipping industry.

The latest law in this area has defined the NVOCC as "a common carrier which does not own or operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with the ocean carrier Latest law has defined the NVOCC as "a common carrier which does not own or operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with the ocean carrier. " NVOCC operators buy space from ocean carriers for consolidated shipments from a variety of clients.

Documentation, logistical planning and warehousing of cargo from the port to final destination also are taken care of as part of the services provided. It was in 1951, when first intermodal modern day container was built and in 1955 first intermodal transport was operated. For the purpose to stream line the movement of container from origin to destination, there were intermediaries at each stage in the system. Ocean Freight Forwarder, Custom Clearance Agents, Trucking Agency, Railway Booking and Wagon Lease Agency, Container Freight Station, Port Clearance Agents, etc. Components Each time of the following three stages, i. . Inland Transportation at origin, Seaway and Finally Inland Transportation at destination, a new Bill of Lading was issued and cargo was insured. With International Trade increasing in 1970’s, efficiencies from containerisation led to trade of large volume and increased ocean carrier’s attention to ship with Full container load (FCL). That was the time when NVOCC emerged into the business. NVOCC’s are considered as one of the “intermediaries” in maritime industry. NVOCC’s went a way ahead in the business and provided end to end logistic solution even to small shippers. Business Model for NVOCC follows as shown below.

At the origin, a NVOCC plays a role of consolidator as well as packaging agency, whereby they take part parcels from various shippers and consolidate in one full load container. Increase in efficiency and low time turn out time in transportation from inland depots to gateways of port. Another concept of Multicity Consolidation (MCC) is also leveraged by NVOCC’s. Once the cargo is placed in Container Freight Stations (CFS) or ware house at ICD’s, Cargo to a same destination is consolidated in one FCL. In this way NVOCC’s filled a transportation niche, particularly for inland ports, as onsolidator for smaller shippers ignored or abandoned by the ocean carrier. NVOCC Bill of lading: NVOCC's releases MULTIMODAL House Bill of Ladings (HBL) once they run a door-to-door service. They issue this HBL against shipper/final consignee whilst the Steam Ship Line issues a Master B/L (MBL) against the forwarder at origin and the forwarder at destination. NVOCCs play an important part in international trade. It is important that safeguards are in place to ensure the security of blank Bills of Lading, and there are systems in place to track them if they are misused.

A NVOCC, who does not charter an entire ship, concludes contracts of carriage with several shippers/freight forwarders concerning individual packages or containers. When the NVOCC has accumulated an appropriate number of orders, he concludes a contract of carriage with a carrier who actually will perform the transportation. The NVOCC makes money by obtaining a better price from the carrier than he (the NVOCC) charges his shippers. The main duty of a carrier consists of the unconditional and unlimited obligation to transport the goods from the port of loading to the port of destination.

The commitment to fulfil the transport obligation is the only and decisive criterion for a carrier. The salient features of NVOCC (Exports Sea) are as below:

  1. Register Individual shipment, Shipping Bill wise.
  2. Club multiple shipping bills under one HBL.
  3. Club multiple HBLs under one Master B/L.
  4. Prepare and print Master and House Bill of Lading.
  5. Specify B/L Charges for various charge heads for both payment and receipts and in any currency.
  6. Prepare Challan report for HBL. ?Prepare and send Consol Manifest.
  7. A unique Alert system which updates the user on current status of shipments based on shipment life cycle defined.
  8. These alerts can be mailed directly to the customer.
  9. Prepare and send Shipping Advice to customer.
  10. Prepare and Print Container Load Plan (CLP).
  11. Shipped On board (SOB) or Shut Out report preparation.
  12. Track transhipment details of containers at various Cargo Hubs.
  13. Various Customer Service reports. Can be sent directly through email from system.
  14. Prepare and print various types of Invoices e. g. Services and Freight, Brokerage, Lifting Shifting etc. including to Overseas Agent.

The salient features of NVOCC (Imports Sea) are as below:

  1. Record various details for Import Shipment. Maintain various stages of shipment in its life cycle.
  2. A unique Alert system which updates the user on current status of shipments based on shipment life cycle defined. These alerts can be mailed directly to the customer.
  3. Keep track of various charges related to a shipment e. g. Freight, Fuel Surcharge, Ex-Works etc.
  4. Prepare, print and send Cargo Arrival Notice (CAN) to Importer for collection of charges which are linked to Accounts.
  5. Receive or Send Delivery Order (DO) as the case may be.
  6. Checks for shipment under Bank Release Order (BRO) and controls issue of DO. Overseas Agent's inward invoice/Credit/Debit Note can be booked into system for each shipment with profit sharing.
  7. A complete Foreign Remittances module for payment and receipts with RBI and bank covering letters/forms.

The salient features of NVOCC (Accounts) are as below:

  1. Complete accounting package to suit specifically the needs of freight forwarding/NVOCC business with multi location and multi division activity.
  2. Managing the accounts of individual profit centres combined with common accounting books.
  3. Prepare/ view trial balance/ profit and loss/ balance sheet for individual profit centres as well as entire company. Prepare and print all types of vouchers e. g. Cash/Bank payment and receipts and Journal vouchers.
  4. Receipts and payments can be booked against particular invoices with TDS deducted details.
  5. Book Trade Bills i. e. related to a particular shipment e. g. Transport or Freight Debit notes.
  6. Facility for Non Trade bills where tracking can be had for each item in a bill e. g. stationery items, Telephones etc. with separate recording of Service Tax Charged.
  7. Complete Cheque Book Management module for tracking of checks bank wise and also cancelled and post dated cheques. Merge Data of different Branches in Head Office.
  8. Complete Security module for rights of each user to operate a certain part of software.
  9. Data can be exported to TALLY accounting Package.

Working of NVOCC’s at Various stages:

  1. Warehousing & In plant
  2. Logistics
  3. Receipt
  4. Unloading into warehousing
  5. Inspection
  6. Storage including stacking
  7. Preservation
  8. Order execution
  9. Dispatch and loading into own/customers’ vehicle
  10. Yard Management
  11. Receipt of Cargo Inspection
  12. Storage
  13. Inventory
  14. Management
  15. Order execution
  16. Billing
  17. Dispatch to Customers
  18. Value Added Services
  19. Unpacking/Repacking Grading / Sorting
  20. Break-bulk Labelling / Bar Coding Heat Sealing / Shrink Wrapping
  21. Assembly related services
  22. Quality Check Information
  23. Related Services MIS on stock, dispatch KPI related MIS
  24. Invoicing related MIS
  25. Preparation / submission of Excise returns
  26. Invoicing Order
  27. Processing Invoice
  28. Printing Related Statutory
  29. Documentation Inventory
  30. Management Re-order
  31. Level Assessment & finalization
  32. Stock-aging & FSN analysis Distribution (Secondary Transportation)
  33. Transportation to Customers’ premises
  34. Unloading at Customers’ premises
  35. Transit Insurance (as required)
  36. Reverse Logistics Transport Load
  37. Optimisation

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In a Globalised Economy, No Nation is Self-Sufficient. (2018, Oct 17). Retrieved from https://phdessay.com/in-a-globalised-economy-no-nation-is-self-sufficient/

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