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| Me, in front of a Container ready to move to Chennai Harbour |
Tuesday, October 11, 2011
Central Warehousing Corp - Container Freight Station Chennai.
Monday, October 10, 2011
Dry Cargo Chartering Market
I caught the Lalbagh Express at 0630 from Bangalore to Chennai. Reached at around 1200hrs.
Today the lecture was on Introduction to Shipping - Dry Cargo Chartering Market, delivered by Mr Sukumar.
Voyage Charter
In this mode of charter, the merchant charters the ship to carry an agreed quantity of cargo from port A to port B. Payment is by means of freight rate which is usually expressed by Dollars per tonne, or it may be for a lumpsome amount rather than on per tonne basis. The rate may be arrived at by negotiation, it also depends of the strength or weakness of the prevailing market. The voyage charter may be for a single voyage or multiple voyages of the same ship on a consecutive voyage basis. This is called as contract of affreighment.
Time Charter
In this type of charter, the charterer hires the vessel for a period of time instead of paying a rate of freight/tonne. In other words, its an agreed rate per day. The ship owner will operate the ship and also arrange for the crew. The charterer usually decides the port of call. The charterer pays for all the fuel and the expenses incurred during the voyage. He becomes a disponent owner.
The advantage of time charter is flexibility
Another type of charter is Bare Boat Charter where the ship owner does not take part in operating the ship.
Today the lecture was on Introduction to Shipping - Dry Cargo Chartering Market, delivered by Mr Sukumar.
- The different sectors within the shipping business are usually referred to as markets.
- The bulk trades are essentially driven by the laws of supply and demand on a global basis. Thus they are usually referred as perfect competition.
- The shipping hire charges depends on the market, the rates are fixed differently for various commodities.
- There was a time when the only significant market place for dry cargo chartering was London and it was known as Baltic Exchange.
Voyage Charter
In this mode of charter, the merchant charters the ship to carry an agreed quantity of cargo from port A to port B. Payment is by means of freight rate which is usually expressed by Dollars per tonne, or it may be for a lumpsome amount rather than on per tonne basis. The rate may be arrived at by negotiation, it also depends of the strength or weakness of the prevailing market. The voyage charter may be for a single voyage or multiple voyages of the same ship on a consecutive voyage basis. This is called as contract of affreighment.
Time Charter
In this type of charter, the charterer hires the vessel for a period of time instead of paying a rate of freight/tonne. In other words, its an agreed rate per day. The ship owner will operate the ship and also arrange for the crew. The charterer usually decides the port of call. The charterer pays for all the fuel and the expenses incurred during the voyage. He becomes a disponent owner.
The advantage of time charter is flexibility
Another type of charter is Bare Boat Charter where the ship owner does not take part in operating the ship.
Thursday, October 6, 2011
Disbursement Account in Shipping
Tuesday was a different day. DA-Desk, a firm from UAE (with Head Office at Sharjah) visited our institute, Indian Institute of Logistics, Chennai. DA-Desk is the largest independent provider of port cost management services to the shipping industry. Focused in port disbursement control, DA-Desk offers effective process management, early error detection and a near paperless workflow.
A seminar was organised in the M.A. Chidambaram Conference Hall which is located in the SICCI headquarters at Esplanade, Chennai. Mr Diesel and Mr. Malcolm represented DA-Desk. A majority of the staff at the firm are from India, it was therefore natural for them to come headhunting here. Though their immediate aim for this visit was to get in to an agreement with IIL for a three months internship program at the firm, it was for laying a framework of sourcing HR from the institute. Though the impression was that they were doing the institute a favor, they surely were not here to fulfill their CSR obligations. In this cut-throat competition, firms need to provide the best and most cost effective services at competitive prices to their customers for customer retention and garnering additional customers. Sourcing a optimum manpower would be a natural step in cutting down costs to survive. Starting the internship program would help the firm in positioning itself as a potential employer, leading a win-win situation for both. The firm would benefit by a steady inflow of quality workforce, the students would benefit by increase in the number of potential employers. It is business, and that's how it should be done. After all, you also need to reply to your stakeholders. The institute can then boast of providing career assistance to students thus enhancing its appeal as a good place to study.
The seminar started with Capt.V.J.Pushpa Kumar giving the introductory lecture. He invited 5 students to light up the lamp, and explained the importance of this gesture to the guests. He then gave an overview of the institute and its growth from inception. He is a good orator. When he delves on a topic, you feel as if you are embarking on a dreamy voyage where all the facts and issues explained by him start unfurling and you feel the events are happening right in front of you. He later on invited the guests to share their views with the audience. Mr. Diesel gave a presentation on the working of a disbursement account as far as the shipping industry was concerned, and the role the firm played. He explained that the usual focus of the ship owners was to concentrate primarily on the tangible costs associated with the ship's movement. The firm played a crucial role by focusing on the intangible issues, like the cost and issues that are related to port calls. It resulted in considerable savings through error detection and time saving for personnel. It also resulted in improved cash flow via firm payment policies and timeline management.
Accountability and transparency for each transaction and better operational scalability were the additional benefits accruing out of the association with the firm. Many students doing their MBA opted for the internship with them. A few students posed questions during the question answer session. Out of the students, a student wanted to know the starting salary package one could expect from the firm. Though the question was directed at Mr. Diesel from DA-Desk, Capt Pushpa Kumar intervened. He reasoned that the curiosity of a job salary meant the student was more concerned about the immediate future and did not have a broad overview. He continued that the institute believed more in grooming a student for a career and not only for a job. Thinking long term would help the student gain knowledge and expertise that would help him in big way. He stressed that idealism, and not realism, should be the guiding factor for the students. The fact which came out clear from his reply was that the students should not think about getting a job right away as sooner or later they would definitely land a job, if they are deserving and have completed their studies and the internship properly. This is something which he stresses all along. What he could not appreciate that realism, though helpful in the long run, does not address your immediate concerns. Higher education is not cheap, and not everybody has lakhs as spare cash to invest and do nothing. A large no. of people struggle to meet such big ticket expenses and naturally, they look for immediate solutions. If the studies are being financed from a bank loan, surely the bank doesn't adopt this realism approach. They would need to start the repayment process right away. Even if I had to fund the higher education of my son, I'd obvisously like to start paying back the loan amount as soon as possible. Mr. Diesel also chipped in with his inputs but that did not explain anything. He only said that all staff live in company-provided accommodation in Sharjah, Ajman and in Dubai. Transport to and from work is provided, as is medical cover, annual leave flights and paid vacation periods. He did say that the salary with them was 2-3 times of what could be expected in India. He did not specify what he meant by the "salary in India". Here for the same job a person could be paid anything from Rs. 10,000 to Rs. 100,000. India is such a vast country with so many different environments that it is practically impossible to create any benchmark. May be the student did have his family background in mind. The question was justified, the answer, plain ambigous. The IIL Kochi campus was also a part of the proceedings by way of two-way video conferencing.
It was something new for me as I had never been into this aspect of Logistics. I have been into warehousing, transportation, retail issue, inventory management, demand forecasting, purchase but not this. In spite of the information being new, it was well presented and easy to grasp. One thing which I liked about DA-Desk's approach is their focus. Instead of trying to concentrate on a large no. of issues, and competing some big guns, they have focused on a niche segment and tried to dominate it. A smart approach.
Overall, a good initiative by The Indian Institute of Logistics, Chennai.
A seminar was organised in the M.A. Chidambaram Conference Hall which is located in the SICCI headquarters at Esplanade, Chennai. Mr Diesel and Mr. Malcolm represented DA-Desk. A majority of the staff at the firm are from India, it was therefore natural for them to come headhunting here. Though their immediate aim for this visit was to get in to an agreement with IIL for a three months internship program at the firm, it was for laying a framework of sourcing HR from the institute. Though the impression was that they were doing the institute a favor, they surely were not here to fulfill their CSR obligations. In this cut-throat competition, firms need to provide the best and most cost effective services at competitive prices to their customers for customer retention and garnering additional customers. Sourcing a optimum manpower would be a natural step in cutting down costs to survive. Starting the internship program would help the firm in positioning itself as a potential employer, leading a win-win situation for both. The firm would benefit by a steady inflow of quality workforce, the students would benefit by increase in the number of potential employers. It is business, and that's how it should be done. After all, you also need to reply to your stakeholders. The institute can then boast of providing career assistance to students thus enhancing its appeal as a good place to study.
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| Its me, in M.A. Chidambaram Conference Hall |
Accountability and transparency for each transaction and better operational scalability were the additional benefits accruing out of the association with the firm. Many students doing their MBA opted for the internship with them. A few students posed questions during the question answer session. Out of the students, a student wanted to know the starting salary package one could expect from the firm. Though the question was directed at Mr. Diesel from DA-Desk, Capt Pushpa Kumar intervened. He reasoned that the curiosity of a job salary meant the student was more concerned about the immediate future and did not have a broad overview. He continued that the institute believed more in grooming a student for a career and not only for a job. Thinking long term would help the student gain knowledge and expertise that would help him in big way. He stressed that idealism, and not realism, should be the guiding factor for the students. The fact which came out clear from his reply was that the students should not think about getting a job right away as sooner or later they would definitely land a job, if they are deserving and have completed their studies and the internship properly. This is something which he stresses all along. What he could not appreciate that realism, though helpful in the long run, does not address your immediate concerns. Higher education is not cheap, and not everybody has lakhs as spare cash to invest and do nothing. A large no. of people struggle to meet such big ticket expenses and naturally, they look for immediate solutions. If the studies are being financed from a bank loan, surely the bank doesn't adopt this realism approach. They would need to start the repayment process right away. Even if I had to fund the higher education of my son, I'd obvisously like to start paying back the loan amount as soon as possible. Mr. Diesel also chipped in with his inputs but that did not explain anything. He only said that all staff live in company-provided accommodation in Sharjah, Ajman and in Dubai. Transport to and from work is provided, as is medical cover, annual leave flights and paid vacation periods. He did say that the salary with them was 2-3 times of what could be expected in India. He did not specify what he meant by the "salary in India". Here for the same job a person could be paid anything from Rs. 10,000 to Rs. 100,000. India is such a vast country with so many different environments that it is practically impossible to create any benchmark. May be the student did have his family background in mind. The question was justified, the answer, plain ambigous. The IIL Kochi campus was also a part of the proceedings by way of two-way video conferencing.
It was something new for me as I had never been into this aspect of Logistics. I have been into warehousing, transportation, retail issue, inventory management, demand forecasting, purchase but not this. In spite of the information being new, it was well presented and easy to grasp. One thing which I liked about DA-Desk's approach is their focus. Instead of trying to concentrate on a large no. of issues, and competing some big guns, they have focused on a niche segment and tried to dominate it. A smart approach.
Overall, a good initiative by The Indian Institute of Logistics, Chennai.
Wednesday, October 5, 2011
Why We Should Operate Ships!
The first lecture on Monday, Oct 03 2011 was on one of the basic issues of shipping. Why to operate ships? It was delivered by Mr. D A Sukumar.
The reasons are many, but they can be broadly put in 3 main groups.
Foreign exchange is one of most potent weapons in modern day scenario. If we do not have our own ships, we have to hire ships for our needs. Hiring a ship is not chump change, the charges are phenomenal in some cases; the more specialised cargo we have, the more are the hire charges. Since all transactions take place in US Dollars, it is quite a drain on the available resources. The hire charges for bulk carriers with 100,000 to 200,000 DWT are heavy. Chine is believed to be coming up with more than 500,000 DWT container carrier in the near future. Such large ships would carry a very high hiring charges. The situation is entirely different if we have our own ships. Not only we would save on paying foreign exchange, it would also be able to earn in case it has spare capacity to rent out. Supposing you could lay your hands on such consignment, waiting to be shipped to various countries in Europe, you can imagine the revenue that can be generated.
Trade & Prestige
Being your own boss sure does let you cash in on income generatig opportunities. And yes, it is big business. Being a leader in any trade provides a dominant position. Countries like the US, UK, Australia etc dominate the world trade.
Strategic Needs
Having a large fleet of ships, be it dry bulk carriers, general carriers, tankers, reefer ships, passenger ships etc can help in fulfilling strategic needs. In case of hostilities, natural calamities, the resources can be utilized for saving or retrieving life and equipment in a speedy way.
The reasons are many, but they can be broadly put in 3 main groups.
- Foreign exchange
- Trade & prestige
- Strategic needs
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| Hyundai i10 Cars waiting to be shipped to Europe |
Trade & Prestige
Being your own boss sure does let you cash in on income generatig opportunities. And yes, it is big business. Being a leader in any trade provides a dominant position. Countries like the US, UK, Australia etc dominate the world trade.
Strategic Needs
Having a large fleet of ships, be it dry bulk carriers, general carriers, tankers, reefer ships, passenger ships etc can help in fulfilling strategic needs. In case of hostilities, natural calamities, the resources can be utilized for saving or retrieving life and equipment in a speedy way.
My First Day At Chennai
Though I had applied for this course around 2 weeks ago, the confirmation came only at the last minute. By the time I was ready for reservation for the journey to Chennai, there was no seat available in any one of the trains, and any class. The main reason for the rush was that August 15 was a holiday and it was the last of the holidays. Finally had to use the Tatkal facility to get a seat in Shatabdi Express.
I caught the Shatabdi at 06 AM and reached Chennai Central by 1045 hours. The first thing I noticed on getting down at Chennai Central was the heat, in fact it looked like I was hit by a blast of hot air. The difference was more noticeable since I got out from air conditioned coach. It took a few minutes to get used to it. I came out of the railway station and looked back at the Chennai Central main building. I was seeing it after a gap of 24 years, and it still was in the same majestic state (the last I visited Chennai was way back in 1987, and then it was known as Madras Central). To be honest, there is not much of a difference between this photo taken in 1920 and the other one which is of recent times.
I crossed the main road in front of the station and reached Park suburban railway station. It took me another hour and a half to reach my destination at Tambaram, which is around 45 minutes journey from Park station. The first thing I noticed was that there was still a raw mango though it was already mid August. See yourself. India is such a vast country that you never stop getting amazed by the difference in climates, cultures, people, their eating habits etc.
I caught the Shatabdi at 06 AM and reached Chennai Central by 1045 hours. The first thing I noticed on getting down at Chennai Central was the heat, in fact it looked like I was hit by a blast of hot air. The difference was more noticeable since I got out from air conditioned coach. It took a few minutes to get used to it. I came out of the railway station and looked back at the Chennai Central main building. I was seeing it after a gap of 24 years, and it still was in the same majestic state (the last I visited Chennai was way back in 1987, and then it was known as Madras Central). To be honest, there is not much of a difference between this photo taken in 1920 and the other one which is of recent times.
I crossed the main road in front of the station and reached Park suburban railway station. It took me another hour and a half to reach my destination at Tambaram, which is around 45 minutes journey from Park station. The first thing I noticed was that there was still a raw mango though it was already mid August. See yourself. India is such a vast country that you never stop getting amazed by the difference in climates, cultures, people, their eating habits etc.
Travel to Chennai
A Brief Introduction
I'm full time employed in the Logistics sector and stay in Bangalore. I had to move to Chennai for undergoing Logistics and Shipping course. It is a six months course and is being conducted at Indian Institute of Logistics, Chennai.
I stay at Chennai from Monday to Friday and come back to Bangalore, either late night on Friday itself or early morning on Saturday. The journey from Bangalore to Chennai is 362 kms, and usually takes around 6 hours, sometimes lesser.
With the help of this blog, I will put my experiences, and hope that someday somebody may go through it.
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