AN ANALYSIS ON CONTAINERIZED CARGO SERVICES AT COIMBATORE CITY CONCEPT

Logistics Management has bee identified as the primary challenge for organizations desiring to exploit logistics capabilities to gain and maintain customer loyalty. The concept, based on total cost analysis and total quality control, ties together all logistics activities and views the results as a system that strives to minimize total distribution cost, while achieving desired customers levels through providing satisfaction to customers and retaining customer loyalty. The fusion of information logistics and transportation technologies provides rapid crisis response to track and shift assets, even while en route and to deliver tailored logistics packages and sustainment directly at the strategic, operational and tactical levels of operations. In 1991, the Council of Logistics Management modified its 1976 definition of physical distribution management by first changing the term to logistics and then changing the definition as follows: Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.

LOGISTICS AND THE VALUE CHAIN CONCEPT

To gain competitive advantage, for creating and sustaining superior performance, Michael E. Porter describes how a company can put generic strategies (cost leadership, differentiation and focus) into practice. The value chain concept (adopted from Michael E. Porters Model) identifies five primary activities namely [(1) Inbound Logistics (2) Operations (3) Outbound Logistics (4) Marketing and Sales (5) Service] backed by support activities namely [(1) Company infrastructure (2) Organization, People and Methods (3) Systems and Technology and (4) Procurement] all together form the activities which creates value to the product / service of the business form.

OBJECTIVES OF THE STUDY

1. To study the containerized cargo movement in Coimbatore city. 2. To study the share of containerized goods in global trade. 3. To find out the problem faced by the agents in handling containerized cargo. 4. To trace out the composition and direction of containerized cargo from Coimbatore city.

REASONS FOR THE STUDY

Containerization, which today comprises 85% of the general cargo market in the world, made its humble beginning using a modified World War II T -2 tanker. It provides today the most cost effective and efficient service and has constantly adapted itself to the needs of the shipping

world. In International trade, containerization is a term which is inevitable. It is true that, developing countries like India, uses more number of containers in the present context. The most outstanding contribution of containerization is the suitability and capability of containers for door to door transportation internationally. Containerization helps to increase many fold productivity in cargo handling by displaying labor. Moreover, when unit load is bigger, manual operation is not possible, mechanical methods are introduced which involves capital investments.

RESEARCH METHODOLOGY
The study was empirical in nature and was carried out to find the role of Containerized cargo in Coimbatore City. Tools for data collection A standardized questionnaire method was adopted in collecting data for the above study purpose. The sampling frame for this study was respondents acting as ( AGENTS CUSTOMS HOUSE AGENTS).Convenience sampling technique was selected as a sample design. The study is exclusively conducted in Coimbatore City only. The study aims at finding out the problems faced by the agents in handling containerized cargo.

TOOLS AND TECHNIQUES

Tools and techniques like Simple percentage method and Chi square test were used for data analysis. Formula for Chi square test is as follows: Chi square test is an important test among the several test of significance. Chi square specially written as x2 is a statistical measure used the contest of sampling analysis for comparing variance of a theoretical variance. The test is in fact a technique through the use of which it is possible for all the research to (1) Test the significance between two attributes and (2) Test the significance population variance. Formula for Chi square test (x2) =
[O E] E 2

LIMITATIONS OF THE STUDY

The study was conducted in Coimbatore City only and the sample size of the respondents is limited to One Hundred and Fifty only.

CONTAINERISATION

The system is a long established one and was carried out in a somewhat primitive form in the North Atlantic Coastal Track in the 1930s, when the vessels were called Van Ships. The concept gained momentum in 1955, when an American named Malcolm McLean devised a new way to ship goods. Lorry body was detached from the drivers cab and lifted on the deck of the ship, thus completely taking away the work of workers to handle the individual item inside the cargo compartment. Malcolm McLeans first ship, an oil tanker called the Ideal X, made its initial voyage from New York to Houston in 1956 with lorry bodies on its deck. Computerization plays an important role in the operation, controlling the delivery and pick up of containers from the truckers as well as the movement and positioning of all containers in the terminal.

CONTAINER MEANING
Container as the meaning implies is equipment used to store and carry goods. In shipping, the term was used to refer to any type of box used to carry cargo. Presently also a container is known as Box or Van in many countries, particularly in the U.S.A.

CLASSIFICATION OF CONTAINERS
Containers are classified on the basis of a) By raw material b) By size c) By use

CONTAINER MARKINGS
For identification, containers have markings showing (1) Owner code, serial number and check digit (2) Country code and type code (3) Maximum gross and tare weight Each container has an identification code or container number --- a combination of the 4 letter characters than identify the owner (the operator of container) and the 7 numeric characters that identify the container. The container number can be found on the outer and inner side walls. The container number is entered on the bill of lading to facilitate the identification and tracking of the container and the cargo.

LEASING OF CONTAINERS
Containers are taken on lease by carriers from container manufacturing companies or leasing companies who own containers. There are four types of leasing arrangements. They are as follows:

(1) Trip lease (2) Financial lease (3) Master lease (4) Long term lease

CONTAINER DIMENSIONS AND CAPACITY

Containers intended for intercontinental use have external nominal dimensions of: Length 9.8125ft (2.991 m) as 10 ft; 19.875 ft (6.058 m) as 20 ft; 29.9375 ft (9.125 m) as 30 ft and 40 ft (12.192 m) Width 8 ft (2.438 m) Height 8.5 ft (2.591 m) and 9.5 ft (2.896 m) All above dimensions have permissible tolerances. The 20 ft (20) & 40 ft (40) containers are very popular in ocean freight. The demand for the high cube container is increasing. The popular high cube container has a normal height of 9.5 ft (9.5 or 9.6).

ANALYSIS AND INTERPRETATION

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 130 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. Hence, an effort is made to study the role of containerized cargo with reference to Coimbatore City. The study aims at finding out the problems faced by the agents in handling containerized cargo

Table No.1.1 Frequency of the total container traffic handled in International market (in TEUs) YEAR
1997

TEUs
424741

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: www.concorindia.com

491481 576790 664490 753368 1031925 1251618 1376516 1556714 1715661 1977399 1854959 2085486

The above table shows the total container traffic handled in the International Market. The entry on expanding scale in international transport of goods represents a major change in the traditional transport process and hence clearly concluded the rapid usage of containers in the International Market.

Table No.1.2 Frequency of the total container traffic handled in Domestic market (in TEUs) YEAR
1997 1998 1999 2000 2001 2002 2003 2004

TEUs
278801 230238 225156 238661 291360 326775 351238 350501

2005 2006 2007 2008 2009 Source: www.concorindia.com

351460 373848 389605 470370 524580

The above table shows the total container traffic handled in the domestic market. The container traffic handled is increasing year by year. This may be due to Outsourcing logistics activities to experienced logistics service providers which enable companies get very efficient and customized logistical support while themselves focusing on the core of organizational activities.

Table No.1.3 Table showing the type of services rendered Description

Containerized goods Conventional goods Containerized & Conventional goods Break Bulk All types of service Source: Primary data From the table, it could be inferred that 97.3% of the respondents carry containerized goods while 0.6% of the respondents opt for the other services and hence could be concluded that most of the respondents carry containerized goods. Using Chi Square test, the computed value was 3989 and the table value stood at 9.48. Since the Computed value is more than the table value, the null hypothesis is rejected and hence conclude that majority of the agents mostly render containerized cargo services to their customers.

No of Respondents
146 1 1 1 1

%
97.3 0.6 0.6 0.6 0.6

Table No.1.4 Table showing the mode of containerized movements Description No of Respondents %

LCL FCL Both Others (Break Bulk) Source: Primary data

3 7 139 1

2 4.6 92.6 0.8

It is clearly evident from the above table that the maximum number of agents prefers both FCL & LCL mode of Containerized movement because consolidation becomes easy for shippers / consignees of small parcels.

Table No.1.5 Table showing the years of service rendered to clients Description
1 to 5 years 5 to 10 years 10 to 15 years More than 15 years Source: Primary data It is concluded that 92.6% of agents are rendering service to their clients between 1 & 5 years. This is due to the reason that many Multinational Logistics Companies are targeting on the Indian Market and more specifically Coimbatore because there is tremendous potential for Export opportunities.

No of Respondents
139 1 8 2

%
92.6 0.8 5.3 1.3

Table No.1.6 Table showing the type of Industry concentrated by the agents Description
Engineering Textiles Electronics Chemicals

No of respondents
9 135 3 1

%
6 90 2 0.7

Others Source: Primary data

1.3

It is concluded that 90% of the agents are concentrating on textile products followed by engineering goods. This is due to the system that supports the transport activities regarding the mobility of the goods transported in the containers.

Table No.1.7 Table showing the export destination Description

Europe USA Far East Middle East Others Source: Primary data It is clear from the above table that most of the agents are dealing with European continent followed by USA and Far East Countries. After abolition of Quota restrictions, exports to Europe, USA has increased more specifically from Coimbatore as many exporters are keen in concentrating on these markets. Using Chi Square test, the computed value was 15877 and the table value stood at 9.48. Since the Computed value is more than the table value, the null hypothesis is rejected and hence conclude that majority of the agents carry the goods on behalf of their clients to Europe.

No of Respondents
131 5 5 4 5

%
87.3 3.3 3.3 2.8 3.3

Table No.1.8 Table showing the opinion of agents about the cost Description
Good Fair Average Source: Primary data For the purpose of analysis simple percentage method is used. From the above table, it is inferred than 90.6% of the agents opinion is good about the cost while handling with the containers.

No of Respondents
136 12 2

%
90.6 8 1.4

Table No 1.9 Table showing the opinion of agents about safety Description
Excellent Good Fair Source: Primary data 91.3% of the agents opinion was good with regard to the safety while using the container.6% of the agents opinion was excellent with regard to the safety while using the container.

No of Respondents
9 137 4

%
6 91.3 2.7

Table No.1.10 Table showing the opinion of agents about the time involved Description
Excellent Good Fair Source: Primary data Most of the agents opinion is good with 88% while using the container with regard to time involved. A Web system has been developed for data acquisition, data storing, data processing and data retrieval in order to optimize business process and also to save time.

No of Respondents
12 132 6

%
8 88 4

Table No.1.11 Table showing the growth rate of container movement Description
Increasing Decreasing Source: Primary data From the above table, 100% of the respondents (agents) agreed that the container movement is in an increasing trend in the current scenario. In the past five years, maximum containership size has increased from 4000 TEUs to more than 8oo TEUs per ship, with even larger vessels capable of carrying 10000 and 12000 TEUs now on the drawing board.

No of Respondents
150 -

%
100 -

Table No.1.12 Table showing the preference of stuffing of goods by the agents Description
Factory Warehouse ICD Port Source: Primary data The above table clearly shows the preference of agents for stuffing of goods. It is evident from the above table that 92% of the agents prefer to stuff the goods in ICD. Using Chi Square test, the computed value was 4356 and the table value stood at 7.815. Since the Computed value is more than the table value, the null hypothesis is rejected and hence conclude that majority of the respondents prefer to stuff the goods in the ICD. ICDs in India carry out several functions such as stuffing, de stuffing, locking, sealing, providing trailers, chassis, railway flats, repair handling equipment, storage facilities for reefer, customs examinations and processing of customs documents, issuance of combined transport documents by carriers.

No of Respondents
6 4 138 2

%
4 2.7 92 1.3

Table No.1.13 Table showing the problems while stuffing the goods into the container Description
Cargo damage Mishandling Packing breakage Damage while loading and unloading Others Source: Primary data 85.3% of the agents faced the problem of damage of cargo while stuffing the goods into the container. 8% of the agents faced the problem of damage while loading and unloading the cargo. Using Chi Square test, the computed value was 3037.8 and the table value stood at 9.48. Since the Computed value is more than the table value, the null hypotheses is rejected and hence

No of Respondents
128 4 4 12 2

%
85.3 2.6 2.6 8 1.5

conclude that majority of the respondents feel that while stuffing the goods into the container, the cargo gets damaged.

Table No.1.14 Table showing the type of containers used by the agents Description
General Purpose only General Purpose and Flat Container General Purpose and Thermal Container Break Bulk Source: Primary data The above table clearly shows the type of containers used by the agents in Coimbatore city. It is concluded that most of the agents (92%) use only General purpose container while 4% of the agents use General Purpose and Thermal Container (which requires insulated storage) in Coimbatore city.

No of Respondents
138 5 6 1

%
92 3.3 4 0.7

Table No.1.15 Table showing the size of the container preferred by the agents Description
TEUs FEUs Both Based on requirement Break Bulk Source: Primary data The above table clearly shows the size of container preferred by the agents. It is concluded that 33.3% of agents prefer TEUs, 30% of agents prefer both TEUs and FEUs and 26.6% of agents prefer containers based on the requirement. This is because cost of obtaining TEUs is much cheaper than FEUs and all attributes help in reaching the cargo in much quicker time to the receiver, thus improving the bottom line of all the players in the supply chain.

No of Respondents
50 10 45 40 5

%
33.3 6.6 30 26.6 3.5

Table No.1.16 Table showing the Accessibility of containers Description

Yes No Source: Primary data The above table shows that 90% respondents get container access on time and 10% respondents do not get container access on time.

No of Respondents
135 15

%
90 10

FINDINGS
1. There has been a rapid increase in the usage of containers in International Trade. 2. 84% of the respondents carry containerized goods. 3. Maximum number of respondents (92.6%) prefers both LCL and FCL mode of containerized cargo. 4. 92.6% of respondents are servicing to their clients between 1 and 5 years. 5. 90% of the agents are specialized in handling textile products followed by engineering products. 6. 87.3% respondents are concentrating on European markets followed by USA and Far East. 7. Majority of the respondents felt good with regard to cost of using the container. 8. Most of the respondents have given excellent feed back with regard to safety measures while using the container. 9. 88% of the respondents felt good with regard to time keeping while using the container. 10. All respondents agree to the fact that the growth of container movement is on an increasing trend. 11. 92% respondents prefer ICD for stuffing the goods. 12. 85.3% of the agents face the problem of damage to the cargo while stuffing the goods into the container. 13. 92% of the agents use only general purpose containers. 14. 33% of the respondents prefer TEUs with regard to size of the container. 15. 90% of the respondents get access to container on time.

SUGGESTIONS
1. The Infrastructural bottlenecks should be reserved and use of state of the art technology should be facilitated. 2. It is suggested that appropriate packing is necessary in order to ensure safety of the goods. 3. The role of computers play an important role and the overall performance using computers need to be developed. 4. The freight rates must be made comparatively less in order to ensure more movement of containers. 5. Planning in advance will be the best way of access of containers. 6. The transportation trailers must be made available to ensure containerized cargo movement. 7. For easy tracking of container, facilities need to be improved for the EDI process. 8. Container market needs to be strengthened which will lead to development of Indian Market worldwide.

CONCLUSION
The study emphasizes the importance of distributing merchandize in a unitized form. Container serves to prevent or reduce damages and risk and encourages trade development and provides quicker payment of export Invoices. The most outstanding contribution of containerization is the suitability and capability of containers for door to door transportation internationally. The problems faced by the agents were analyzed and suggestions were made to overcome the same. Finally containerization is a system and it will show benefits only when it is properly administered.

BIBLIOGRAPHY
BOOKS
1. Dr. Krishnaveni Muthiah (2006), Logistics Management & World Seaborne Trade, Mumbai: Himalaya Publishing House. 2. Dr. C.R.Kothari (2002), Research Methodology Methods & Techniques (Second edition), New Delhi: Wishwa Prakashan. 3. Donald J. Bowersox & David J. Closs (2007) Logistics Management Tata McGraw-Hill Publication; pp 3 to pp 20 4. Vinod V. Sople (2007) Logistics Management Pearson Publication; pp 2 to pp 13. 5. Dr. K.V. Hariharan Containerization and Multimodal transport. 6. Indian Logistics Industry (2008) published by Cushman & Wakefield 7. S.K.Bhattacharya (2010), Logistics Management Definition, dimension and Functional Applications New Delhi: S.Chand 8. Logistics Management Dr.G.Chandrasekaran in Global Marketing (2010) published by

WEBSITES
www.google.com www.logisticsmanagement.com www.concorindia.com www.researchindia.com www.questia.com