Study of Shipping Industry in Singapore: An Export Logistics Perspective

Abstract

Shipping, in simple terms means the process of transporting goods from one place to another. This process of transportation may take place through air, land or water. For the purpose of this project though, shipping would refer to the transportation of goods through water. The process in general gets underway with the buyer and the seller interacting, negotiating and entering into an agreement/contract based on the mutually agreed upon terms. These terms would typically include the description and the quantity of goods, the date by which the goods need to be delivered, the price and the documentary requirements. After the agreement is struck, the seller usually contacts the forwarding agents who are responsible for moving the goods from the seller's premises to the ship. In some cases though, the shipper might play the role of the Forwarding agent too if it has the necessary expertise in the area. The Forwarding agent then contacts the shipping line and based on the terms and conditions mutually agreed upon, an agreement is reached for the goods to be transported from the source port to the destination port by the shipping line. A custom clearing agent is then assigned by the shipper for the handling of the custom related documentation or even this may be taken care of by the forwarding agent. Thereafter the goods are moved by the forwarding agent to the source port or the shipping line. The goods can be picked from the shipper's premises or may have already been moved from the shipper's premises to the forwarding agent's premises in which case they are further moved from the agent's premises to the source port of the shipping line. Once the goods are loaded on the ship, they are transported to the destination port where a similar process happens while the goods make their way to the buyer's premises. This project focuses on the export logistics part of the shipping process.The complete process of export logistics (movement of goods from shipper's premises to the source port/ship) can be broken down into three key areas: Warehousing, Planning and Consolidation, and Containerization. Warehousing of goods is done either at the shipper's premises or the freight forwarders premises depending on the terms of shipment and the load type. Once the empty container arrives at the warehouse, the warehouse operator makes arrangements to stuff the containers with the goods to be shipped. On many occasions the goods to be transported from a single seller are not sufficient in quantity to fill a complete container (boxes which carry the goods and are actually kept on the ship). In such cases, usually the forwarding agent, who is handling goods from many such sellers, clubs the goods together (subject to certain conditions) and then puts them in the container which is to be sent to the ship. This consolidation of goods is usually done based on the destination of the goods i.e. goods which are meant for a destination are clubbed together or consolidated. Irrespective of whether the goods from a single seller are sufficient to fill up a complete container or not, they have to be physically moved inside the appropriate container before the container is moved to the source port/ship. Based on the nature of goods and other conditions, various types of containers are used in shipping. The most common type of containers used is the 20 feet containers. Once the container is stuffed with the goods the freight forwarder takes care of transporting the container from the warehouse to the dispatch port. Here on the shipment process is taken over by the port to port operations.