a study on p&o nl log

Management of Logistics: A Study of P&O Nedlloyd Logistics

What is Logistics?

Logistics is the process of planning, implementing, and controlling the efficient

and effective and storage of goods, services and related information, from the

point of origin to the point of consumption, with the purpose of conforming to

customer requirements.

Logistics looks at fulfilling the need for total movement management, right from

the point of material procurement to the location of finished product distribution.

Logistics is basically concerned with the task of ensuring that products and

services available easily to customers at those destinations where they desire.

Logistics, therefore, involves the scientific and systematic integration of

information, transportation, inventory, warehousing, material handling and

packaging.

Importance of Logistics

Logistics Management deals with the coordination of resources in an

organisation. Optimum allocation of organisational resources is called for with the

aim of getting maximum returns at a reduced cost. It focuses on the organisation

as a whole and not on an individual units and departments, while deciding on the

allocation of resources. In countries like India, several resources are scarce.

Logistics Management helps in the efficient use and deployment of these scarce

resources.

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The cost of Logistics Management is found to be high by certain industries.

Because of this high cost, they are reluctant to implement logistics management.

But it adequate attention is paid to logistics, cost reduction can be effected in

various departments. This is because logistics suggests the use of efficient

means of transport, locating areas where cheaper materials are available,

determining the correct quantities to be despatched to market areas so that there

is no scarcity or surplus felt in those areas.

In this project, we will study how P&O Nedlloyd Logistics helps companies in

effective utilisation of their resources.

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AN INTRODUCTION TO P&O NEDLLOYD

P&O Nedlloyd Container Line, one of the premier global shipping lines and

international logistics provider, is a joint 50:50 joint venture between Peninsular

and Oriental Steam Navigation Company and Royal Nedlloyd NV. It was started

in December 1996.

P&O Nedlloyd is the world's third largest container shipping company by capacity

operating with 166 vessels, totalling 782,977 TEUs (Twenty-foot Equivalent Units

i.e. containers). P&O Nedlloyd's global liner network offers 80 service routes and

providing connections to 239 main ports.

Our product is a worldwide, port-to-port or door-to-door service using the most

extensive global network in the industry. P&O Nedlloyd has over 70 established

trade lanes and provides connections to more than 250 main ports serving 120

countries worldwide. These elements, combined with well- developed feeder

lines, extensive inland transport capabilities and first - rate port facilities, from the

base of our product.

Such amenities are essential for those wishing to compete internationally in

today's container shipping market. What distinguishes P&O Nedlloyd's product

from its competitors is the personal touch provided by our experienced and

dedicated staff. This is the heart of our product.

The P&O Nedlloyd product relies on essential hardware and software. Our

essential hardware consists of the ships and containers we use to deliver our

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product. However quantity is only half the picture. High quality equipment is not

only important because of the cost savings it provides, but also because it results

in better-protected cargo and a more reliable product.

P&O Nedlloyd's aim is to be an industry leader in terms of experience, capability

and results. Our strategy is to follow up opportunities to build on economies of

scale, putting the emphasis now on smart operations; product enhancement and

IT based improvements.

The company is head quartered in London and Rotterdam.

Since its formation in December 1996, P&O Nedlloyd has increased its volume

by over 40 per cent and continues to build solidly for the future. In 2002, P&O

Nedlloyd's turnover was US$4.7 billion.

These elements, combined with well-developed feeder lines, extensive inland

transport capabilities and first-rate port facilities, form the base of the product.

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Partnership of Equals

P&O Nedlloyd was created in late 1996 by the merger of two already large,

container-shipping lines, P&O Containers and Nedlloyd. This was a radical but

apparently successful response to chronic over-capacity in the world's container

shipping markets.

Unusually, the new company was set up as true partnership of equals, in which

P&O and Royal Nedlloyd both held a 50 per cent share. This year there seems to

have been some uncertainty over its future ownership, with the Dutch partner

expressing keenness to see a separate stock market listing for the business; but

day-to-day operations remain unaffected.

The company now claims to be the second-largest player in its market. It had 136

managed container ships at the last count, plus many more available through

alliances, and its freight container strength was 700,000 TEU (the term stands for

"twenty-foot equivalent unit"). Its staff strength was 8,000, and its turnover was

$4.1 billion.

In terms of global reach, the combined operation claims to serve almost every

country (140 in all) on every continent. It has 500 of its own offices, plus many

more agencies, and services 70 trade "lanes".

Royal Nedlloyd used to have wide-ranging interests in a range of road freight

operations, but in latter years has disposed of most of them. P&O, by contrast,

still wholly-owns P&O Trans European, whose brands include Ferrymasters, as

well as controlling a market-leading group of ferry operating companies linking

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various British ports with Ireland and the Continent.

HISTORY OF THE ORGANISATION

P&O Nedlloyd has rapidly developed its own identity, but it does have

distinguished antecedents. The founding companies of P&O Nedlloyd have a

long and pioneering past; their beginnings go far back into the early 19th Century

and the very early days of the steam ship, when they initiated trading links

between North Europe and the Mediterranean/Balkan region.

19th Century

In 1837 the Peninsular Steam Navigation Company as it was then known signed

its first commercial contract for carrying mail by sea between England, Portugal

and Spain. By 1842 services extended to India carrying passengers and other

goods as well as mail. In 1845 P&O added port calls at Singapore and Hong

Kong to their Network.

In 1856 the Koninkllijke Nederlandsche Stoomboot-Maatschappij (KNSM) was

launched by a group of enterprising Dutch men largely in response to the

shipping shortages caused by the Crimean War. Alongside KNSM two other

Dutch companies Stoomvaart Maatschappij Nederland (SMN) and Koninklijke

Rotterdamsche Lloyd (KRL) were formed to carry passengers and mail between

North Europe and Indonesia.

20th Century

At the turn of the Century SMN and KRL extended their services into the Far

East and KNSM into South America. In 1908 they founded the Nederlandsche

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Scheepvaart Unie (NSU), aimed at co-operating where mutually beneficial.

By the beginning of the 20th Century P&O had developed into the premier UK

shipping company with interests in passenger and cargo shipping mainly on

eastern routes focused on India, East Asia, parts of Africa and Australia & New

Zealand. Through a process of mergers and acquisitions their fleet expanded to

nearly 500 vessels in the 1920’s.

In the 1920's the NSU created a new company the Vereenigde Nederlandsche

Scheepvaart Maatschappij (VNS) to reflect the growth in the new deep-sea

operations in the Far East and new trading links between Europe, Middle East

and South East Asia.

In total the P&O and NLL fleet numbered 950 vessels.

Following the end of the Second World War, both companies responded rapidly

to the growth in World Trade in the 1950's and 60's. The changing environment

led to further inter company rationalisation. In the 1960's P&O were founder

members of Overseas Containers Ltd (OCL). OCL developed the concept of

door-to-door operations and launched the World's first panamax containerships.

In 1970 various Dutch shipping companies joined forces in order to be prepared

for the start of containerisation and the 'new' Nederlandsche Scheepvaart Unie

was formed. In 1977 this was renamed the Royal Nedlloyd Group, Nedlloyd

Lines being the ocean shipping arm. In 1985 OCL became P&O Containers.

Throughout the 1980's and 90's both P&O Containers and Nedlloyd Lines

steadily expanded and broadened their route networks to include new and rapidly

growing Atlantic and Pacific Trades.

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Royal Nedlloyd continued to re-examine its structure to focus its efforts on core

markets and expand into logistics. In the process they pioneered many new

initiatives such as the Hub & Spoke approach with mainline/feeder operations

that remain a mainstay of the business today.

Prior to the merger P&O Containers and Nedlloyd Lines co-operated on several

ventures including the Transatlantic Vessel Sharing Agreement, the European

Rail Shuttle and North Sea Ferries. As our history has shown partnerships have

come naturally to both companies in an industry that for years has brought

people of different cultures and backgrounds together in the spirit of mutually

beneficial trade. This spirit of co-operation was crystallised in the first cross

border merger of two premier container-shipping companies.

P&O Nedlloyd is now building upon the history of success shared by P&O and

Royal Nedlloyd with new and innovative services to customers. In 1998 P&O

Nedlloyd introduced some of the largest container ships in the Industry, the

'Southampton Class' that are deployed on the Europe/Asia Trades. Since then,

P&O Nedlloyd has continued to make investments in network and service

enhancements. P&O Nedlloyd's fleet will continue to be renewed and

strengthened by the delivery of new ships. Now the company is involved in

substantial development of E-Commerce products such as track and trace

facilities, integrated website booking and electronic Bill of Lading systems.

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COMPANY PROFILE

P&O Nedlloyd Container Line Limited was formed in December 1996, as a 50:50

joint venture of P&O and Royal Nedlloyd, representing the liner shipping interests

of the two companies. It is one of the three largest container carriers world-wide,

with routes connecting all parts of the globe and a yearly turnover of around US$

4.5 billion.

P&O Nedlloyd has over 70 established trade lanes and provides connections to

more than 250 main ports serving 120 countries worldwide. P&O Nedlloyd's fleet

numbers 148 owned and chartered vessels, and the company has a container

fleet of some 700,000 owned and leased TEUs which together move over 3

million TEU per year.

These elements, combined with well-developed feeder lines, extensive inland

transport capabilities and first-rate port facilities, form the base of our product.

P&O Nedlloyd is committed to a comprehensive programme of eCommerce

product development in order to provide a high-quality service to those of our

customers who choose to conduct business with us in this way. Our strategic aim

is to enable our customers to do business with us entirely by electronic means

throughout all the processes of the shipment cycle, from schedule enquiry and

booking right through to payment of freight and other charges.

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“E-enabling” the container fleet - P&O Nedlloyd advances on

many fronts

Customers of P&O Nedlloyd, the world's second-largest container shipping line,

were due to be able to start making freight bookings online through its Web site.

It is just one of a series of e-commerce developments by the group. Already one

can find out about its sailing schedules online. A shipper can also track his

cargoes and print bills of lading.

Further, one is able to benefit from more advanced tracking and tracing, under

which it s possible to receive automatic email alerts at critical points in the

voyage. Eventually it will also be possible to settle invoices online, although that's

still in development.

And if using some of the company's value-added services (stock management,

vendor management and so on), there is a sophisticated online monitoring

service available to, and it is about to gain some greatly improved functionality.

To the outside world, this all comes under the general heading "E-Commerce".

To P&O Nedlloyd, however, it has meant developing a whole range of solutions -

some bespoke, some bought in, some shared with other organisations.

Patrick Burrows, general manager for marketing systems in the business

systems division, calls it a "quiet revolution", and adds: "Shipping lines have

probably not been very forthright in promoting what they're doing in this field."

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In some cases, he implies, this may be because they have been slow to develop

in the e-commerce sector. He has an intriguing comparative chart, which shows

that some lines still have virtually no Internet capability. Perhaps predictably,

P&O Nedlloyd is well advanced in all the key measures charted.

One of the main tasks for the organisation has been keeping its e-commerce

initiatives coordinated and synchronised, and ensuring that they follow a logical

implementation timetable. Sometimes this can be tricky; for example, the

company has already had to divide its support between two different approaches

to giving its customers Internet access.

Sophisticated range

What the division offers is a range of fairly sophisticated logistics services,

including for instance warehousing, purchase-order management, consignment

tracking and some land-based distribution services. In essence, it aims to bring

the benefits of outsourced domestic distribution to the global arena. A typical

instance of this would be managing procurement, storage and call-off processes

in the Far East for a customer importing goods into Britain.

Essentially, Log-Net allows P&O to create, receive and publish information which

their customers can view over the Internet. Its capabilities include tracking of

purchase orders, shipments and containers (customers can drill down to the

point of seeing what's inside a specific container). It helps customers with

timescale planning and critical path analysis, and they can work out transport

costs per unit.

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The system is being offered as an additional service to customers, says Neil

Vanderhook, business systems manager for the value-added services division.

Views can be tailored to individual customers, and functions can be turned on or

off as required. Reports can be configured to customer requirements and output

in more than a dozen formats.

Although using the Web to display information, the current version of Log-Net is

not purely a Web-based product. It is a Powerbuilder application linking to a

Sybase database, and data is fed to the Internet via a WebTrack application

server. P&O Nedlloyd does not rely purely on the Internet for its own global

access to the system; it distributes data over its existing corporate wide-area

network, which links its main management hubs together. Internally, the

company is a supporter of the Citrix client-server model, which makes use of

relatively modestly configured PCs as "dumb terminals".

However, the company is currently beta-testing a new, fully Web-enabled

incarnation of Log-Net, which can be set up as a customer-configurable Web

portal. Unlike the existing read-only version, this will be truly interactive. It will be

multi-lingual and WAP-enabled, and suppliers will be able to place bookings

directly online.

Elsewhere in the organisation, P&O Nedlloyd is already quietly getting on with

becoming e-enabled. For instance, it has its own intranet, P&ONL World, which

keeps the widely-dispersed group informed on a wide range of corporate issues.

Features include interactive training, shipping news and timetables,

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communications links and vessel positioning. The site looks well-designed and

professional, and would pass at a glance for quite a lively public Web site.

Its main public site, www.ponl.com, has been through a series of upgrades and

redesigns, and also gives a good account of itself.

The group has also started to explore the opportunities presented by e-

procurement. It has already taken in share in Oceanconnect.com, a maritime

procurement portal, and has run an auction for marine parts.

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P&O Nedlloyd launches P&O Logistics

P&O Nedlloyd has consolidated its portfolio of Value Added Services into a new

division called P&O Logistics. The new division is an adjunct to the liner shipping

business and started operations on July 1st, 2002.

Since 1999 'Value Added Services' has described a range of products offered

worldwide by specialists within the P&O Nedlloyd organisation. This diverse suit

of services ranges from simple Customs clearance to complex supply chain

solutions that include warehousing and distribution. P&O Nedlloyd Logistics will

continue to provide and develop these services but with greater autonomy and

customer focus.

P&O Nedlloyd Logistics places a coherent divisional structure around the existing

specialist activities. The distinction between logistics activities and the core

shipping business enables P&O Nedlloyd Logistics to design optimal solutions for

customers using a wide range of suppliers including the neutral use of ocean

freight carriers.

P&O Nedlloyd Logistics also provides a vehicle to enable the continued

development of the logistics business through both organic growth and

acquisition where true synergy benefits can be gained.

P&O Nedlloyd has developed a specialist logistics focus on the Retail, Fast

Moving Consumer Goods, Industrial and Chemicals market sectors. This

commitment will continue to develop and deepen under P&O Nedlloyd Logistics.

With a strong background in worldwide maritime logistics the division

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concentrates on maritime intensive supply chains, linking all the other transport

modes and creating value by integrating primary overseas sourcing with

secondary delivery & distribution.

P&O Nedlloyd Logistics provides a full range of specialist international supply

chain management services. Our worldwide organisation gives customers the

ability to source and distribute products globally.

Leading names in Retail, Fast Moving Consumer Goods, Industrial and Chemical

sectors are all supported by our best in class systems and dedicated staff.

P&O Nedlloyd Logistics concentrates on maritime intensive supply chains,

integrating primary sourcing with secondary delivery and distribution, providing

visibility and adding value for our customers.

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SERVICES THAT P&O NEDLLOYD LOGISTICS CATERS TO:

Supply chain Management

P&O Nedlloyd Logistics forms collaborative partnerships with customers to build

best in class international supply chains. Through the wide skill base and

practical knowledge of the P&O Nedlloyd Logistics specialists our customers are

offered solutions that best suit their individual requirements.

We design, re-engineer and manage all the essential elements of integrated

supply chains. Our aim is competitive advantage for our customers.

P&O Nedlloyd Logistics focuses on maritime intensive supply chains in the

Retail, FMCG/Foodstuffs, Industrial and Chemical sectors that deliver:

Partnership - developing a collaborative approach

Visibility - ensuring control through knowledge

Velocity - increasing efficiency and compressing lead times

Agility - creating flexibility and responsiveness

P&O Nedlloyd continuously improves and enhances supply chain solutions long

after initial implementation and this requires a depth of understanding that can

only be achieved through close and genuine collaboration with customers.

Our global reach and network of offices means we have experts on the ground all

over the world assisting and monitoring the flow of goods from vendors to DCs,

through CFS and all the way into destination warehouses. We give control and

the ability to source and sell products globally.

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Our supply chain solutions are modular in design, allowing rapid implementation

and tailoring to customer requirements. They are provided using specialist IT

systems and managed subcontractors, including ocean carriers other than P&O

Nedlloyd.

We provide a world of experience in international supply chains.

Warehousing and distribution

P&O Nedlloyd Logistics can provide warehousing and distribution as an

extension of a customer's ocean freight shipment process. Recognising

customers may need to hold stock closer to market or prior to shipment we can

make arrangements to meet specific requirements including shipments routed via

other carriers. These services include:

Selection of optimum warehouse location

Customs bonded facilities

Controlled delivery ex port to warehouse

Receipt & Storage

Cross docking / Transloading

Order Picking

Value Adding Functions (labelling, cartoning, re-packaging)

Despatch

Commercial Distribution

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Waste Disposal

These warehousing and distribution functions can also be performed as part of

more complex Supply Chain Solutions.

Project Management

P&O Nedlloyd Logistics provides fully integrated project management solutions

by land, sea and air for the carriage of:

Heavy lift cargoes

Abnormal loads

Turnkey projects

Commercial construction projects

Source-to-site management is routine for P&O Nedlloyd Logistics ensuring a

seamless and efficient process. Customers have the advantage of one point of

entry for managing the entire project process and complete pipeline visibility.

We have direct access to a comprehensive portfolio of world-wide containership

services. In addition, we can charter in specialist ships and aircraft to meet the

needs of your particular project.

Cost effective solutions are achieved through combining the considerable buying

power and the technical skills (such as "FF&E" - Fixtures, Fittings and Equipment

expertise) of P&O Nedlloyd Logistics.

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Our network of global offices, specialist experience and equipment, allows P&O

Nedlloyd Logistics to fulfil projects with confidence and to your complete

satisfaction.

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SECTORS CATERED TO BY P&O NEDLLOYD LOGISTICS

Retail

Leading retailers throughout the world use P&O Nedlloyd Logistics to design,

optimise and support the management of their integrated supply chains. Through

our proven systems and practical experience we enable our customers to obtain

a competitive advantage in their sector of the retail market.

Working at purchase order or item level we liaise directly with vendors to track

and monitor the status of individual orders, ensuring visibility of goods across the

globe and timely delivery.

Visibility of orders is presented by giving access to our sophisticated logistics

management platform, LOG-NET, via the web or through integrated information

provision to customer systems.

Our origin consolidation capabilities allow the consolidation of orders into full

container loads, including multi-country consolidation - which enables goods to

be collected from a variety of countries and consolidated into the same container

for onward shipment - giving our customers the option of more frequent orders of

smaller quantities.

This service is extended to garments on hangers (GOH) consolidation which

safeguards the arrival of garments at destination, avoiding reprocessing and

enabling the garments to go straight to stores. Our consolidation capabilities

include skills in planning and loading containers using the bar system, string

system and combined GOH and flat pack.

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P&O Nedlloyd Logistics world-wide network allows our customers to be flexible in

their sourcing patterns as we provide retail supply chain solutions from world-

wide locations. With continuous improvement we design, manage and optimise

retail supply chains.

FMCG / Foodstuffs

International trade in Fast Moving Consumer Goods and Foodstuffs is an area of

particular specialisation for P&O Nedlloyd Logistics. Our considerable

international presence in the new world wine trade has expanded to include

many other commodities retailed through supermarkets and handled by the

world's major FMCG companies.

Our diverse portfolio of services and our ability to implement world class supply

chain solutions means that we can significantly increase the visibility and control

of our customers supply chains.

Through our web enabled systems and knowledgeable staff we are able to

provide a range of services that can be picked to suit the particular requirements

of the customer, from cargo handling to complete supply chain redesign.

Working with the many participants in this trade, whether they are suppliers,

producers, distributors, importers, supermarkets or retail outlets, we provide

international logistics solutions to our customers making their supply chains work

harder and with greater control.

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Industrial & Chemical

P&O Nedlloyd Logistics provides imaginative international logistics solutions for

leading companies in the industrial and chemical sectors.

Our worldwide network of offices and expertise fulfil the requirements of

companies manufacturing for the global market. Apart from linking all the

continents, we also integrate order management, tracking systems, freight

management, regional warehousing and distribution along with all the other

activities required for servicing international markets.

Through our logistics management systems we give you visibility and control of

your orders from production to delivery.

Our floating warehouse concepts are part of an innovative approach that

minimises your inventories whilst improving product availability on a global scale.

We work in collaboration with producers, suppliers and end customers to build

optimal supply chains using the practical experience of our organization.

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“HUBS” – INFORMATION CENTRES OF PONLogistics

P&O Nedlloyd's global business is IT-enabled and totally dependent upon it. It

has several global software applications, accessible from any of its business

offices. The Company had 7 'hubs', or 'data centres' spread over US, Europe,

Asia and Australia; which had been operating and supporting these applications.

These hubs also provided a wide range of regional applications, which were

either derivatives of the core global systems, or services, which had been

developed to suit the business needs of a particular region.

Over past few years, for business as well as technical reasons, PONL moved

away from the decentralized multi-hub strategy to a centralized single hub

strategy. Presently, there are two hubs where all there IT operations are

concentrated; the European Hub at London and Asia Pacific hub at Sydney. The

European Hub is responsible for ensuring the availability of systems and Global

support to P&O Nedlloyd businesses 24 hours a day, 365 days per year.

Activities earlier done by London hub are carried out from Pune, remotely

through a communications links. The London hub would continue to house the

hardware to provide the support for its IT-enabled operations.

Pune has two divisions: -

ISSC - Shared Services Centre, Operations are spread between Pune &

Chennai.

BSD - Business Support Division

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BSD comprises of 4 IT centres: -

GASC - Global Application Support Centre

OOC - Offshore Operations Centre

GSMC - Global Services Management Centre

BTS - Business Testing Support

OOC supports P&O Nedlloyd data centre hosted in London. This data centre is

amongst the top 500 data centres in the world in terms of size and complexity.

The technology is state of the art, supporting high-end mission critical systems.

We have approximately 150 Production Oracle databases ranging in size from

100 MB to 150 gigabytes (GB) and totaling to about 15 TB. On top of this, there

are over 200 other databases in use for Test, Integration Test, System Test or

User Trial environments.

The objectives of setting up an Offshore Operations Centre (from the viewpoint of

P & O Nedlloyd) were:

Introduce a single hub strategy by moving away from the decentralized

multi-instance.

Provide 24 * 7 support for all tasks.

Provide performance and capacity management for the considerable sized

global applications.

Improve unit costs.

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Further improve Service Levels by moving procedural activities to the

OOC.

Following functions are conducted in the OOC

1. Data Base Administration

2. Unix Administration

3. Service Management

4. Operations Management

5. AS 400 ADMINISTRATION

The Business Systems Division (BSD) has been recently restructured,

combining two separate Divisions (Information Technology and Business

Systems Divisions). The organization development activities in the project life

cycle have been consolidated into a 'Development Group'; the corresponding 'on-

going' service delivery and support activities have been consolidated into a

'Service Delivery Group'. Procedures and processes have been established for

the hand-over of responsibility from the Development Group to the Service

Delivery group when set criteria are met. The revised organization chart for BSD

will be issued shortly.

As part of re-organization, BSD have set up Business Processes and Support

organization, operating within the Service Delivery Group. This organization will

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have primary responsibility for Business Testing and support (BTS) and the

maintenance of Corporate Reference Data and codes.

All PONL business systems testing and support activities for global applications

would be consolidated into one business unit within BSD, namely BTS.

Whilst the overall objective is to improve the effectiveness and efficiency of these

activities, one of our major objectives is to reduce the cost of providing these

services. This is to be achieved by a combination of introducing best practice

standards for all our activities and the centralization of activities in Pune. The

overall coverage of the activities will be achieved by both our London and Pune

operations.

However, the challenge of this position is firstly to achieve our initial priorities and

then to plan for transfer of further responsibilities and activities from London.

We have formed a team to progress the establishment of a business systems

testing and support facility in Pune for:

The development and release testing of applications;

The business process and application support of applications

Driven by its mission to achieve sustained profitability combined with high

customer service, P&O Nedlloyd has launched "smart operations" based on

super efficient back-office systems. Towards this end, it as established a world-

class Offshore Center - Indian Shared Services Center (ISSC) - at Pune &

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Chennai. ISSC’ s primary task is to undertake & consolidate all back office

functions for the company's worldwide operations on a 365 X 24 X 7 footing.

Objectives: ISSC basically performs back-office functions for the business and its

paramount objectives are:

Locate functions in the most cost-effective location: transfer must be

invisible to the front end.

Gain efficiencies by consolidation of functions from several offices to one.

Process refinement & improvement.

Working in ISSC

Back office operations for PONL global.

Work is 24 x7x 365 days

Weekly offs, after every five days (initially), not necessarily on

Saturday/Sunday.

Public Holidays are linked with overseas holidays, not necessarily specific

to Indian holidays

Sophisticated & high-tech environments/platforms, & state of the art

infrastructure

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Scope of ISSC

The PONL-ISSC project was initiated in the month of April 2001.

The functions that have hither to been transferred include -

Data Management

Operations Support

Logistics

Finance

Export Documentation

Import Documentation

Dangerous Cargo

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THE ROAD TO SOUTH ASIA

Offices located at all major South Asian Ports.

Above Offices Control Various Ports & ICDs.

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SOUTH ASIA ORGANISATION

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Pierre Menezes, Regional Manager,South Asia

Radhika Butail,SAM LOGNET/Data Integrity

Shekhar KotianSAM Operations

Adolph ColacoManager,Business Dev.,India

Finance

Hoshi ZaroliwallaSouth Asia Finance

Sandeep NairSAM FOS/ Products(LCL/Air)

TBASAM Operations/Products(Warehousing & Distribution)

Shekhar KotianManagerServices/OperationsIndia

Fayyaz KhundkarManagerBangladesh

Capt. K. RizviManagerPakistan

Nigel FernandoManagerSri Lanka


LOCATIONS WITHIN INDIA

The Main Gateways in India are at:

Old Bombay Seaport

Mulund CFS

Nhava Sheva, Jawaharlal Nehru Port Trust

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P&O NEDLLOYD: CAPABILITIES IN INDIA

1. Buyers Consolidation : This refers to consolidation of goods for a single

buyer, from a number of suppliers, in order to fill the entire container load.

2. LCL: or Less than Container Load. The exporter does not have enough

cargo to fill the entire container, he is thus only charged for the amount of

space he utilises. In this method, the freight charges definitely increases,

however, total cost of shipping goods reduces as the exporter pays only

for the amount of space utilised by him. Thus, in this case, a number of

LCL shipments are clubbed together and shipped on the same container.

3. LCL Overflow : When a number of LCL shipments are clubbed together,

the excess goods, which do not fit on the container, are known as LCL

Overflow.

4. Consolidation : It is also known as Third Party Logistics. This is the

process whereby the shipping company itself, consolidates cargo from a

number of exporters, onto one container, to one particular destination.

5. Consignment Handling : Handling of the goods from the time they are

received from the exporter, to the time they are properly and safely

shipped.

6. Purchase Order / Vendor Management

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7. Direct Shipment (Ocean/Air) : All the shipments of goods and materials

come directly from the suppliers to the retail stores. The path / route which

each shipment has to take is specified. The duty of the supply chain

manager in this case is only to decide on the quantity of goods that have

to be sent to the retail store and then, depending on the type and quantity

of goods, he has to decide on the mode of transport. P&O Nedlloyd only

makes use of Ocean and Air for Direct Shipments. Direct shipment

intermediate warehouses, and its operation and coordination is simple.

8. Customs Clearance : The process of collecting documents from the

exporters, getting the shipping bills passed by the customs, receiving

goods in the port, getting them examined and out of charge by the

customs to load in the containers is known as customs clearance.

9. Local Collection & Distribution: This includes collection of goods from the

factory premises and transporting them to the port of loading, and then

loading the goods onto the ship or airplane, as the case maybe. This also

includes distribution of products to the local retailers, within the country.

10.Warehousing and distribution : P&O Nedlloyd Logistics can provide

warehousing and distribution as an extension of a customer's ocean

freight shipment process. Recognising customers may need to hold stock

closer to market or prior to shipment we can make arrangements to meet

specific requirements including shipments routed via other carriers. These

services include:

Selection of optimum warehouse location

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Customs bonded facilities

Controlled delivery ex port to warehouse

Receipt & Storage

Cross docking / Transloading

Order Picking

Value Adding Functions (labelling, cartoning, re-packaging)

Despatch

Commercial Distribution

Waste Disposal

These warehousing and distribution functions can also be performed as

part of more complex Supply Chain Solutions.

11.Project Handling : P&O Nedlloyd undertakes the handling of projects such

as Heavy Lift Cargoes, Abnormal Loads, Turnkey Projects,

Communication Construction Projects.

12.Packaging Solutions : Packaging controls costs of customer service,

inventory control and handling costs. P&O Nedlloyd makes use of two

types of packaging, namely, Consumer Packaging & Industrial

Packaging.

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Consumer packaging focuses on customer convenience, market appeal,

retail shelf utilization, and product protection. In consumer packaging,

emphasis is more on marketing.

Industrial packaging empasises more on logistics. Industrial products

are normally grouped into cartons, bags, bins or barrels for handling

efficiency.

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NORTH INDIA

There are a number of Inland Container Depots (ICD’s) in the northern part of the

country. These ICD s are located at the following places:

Jodhpur

Moradabad

Delhi

Ludhiana

Jaipur

Kanpur

Delhi has one of the largest ICD in the country, namely, ICD Tughlakabad (ICD

TKD) that has an annual throughput of 2,00,000 TEU’s. The time taken in transit

to ICD TKD from Nhava Sheva in Mumbai is 48 hours by rail, and approximately

6 days by road.

COMMODITIES

Delhi specialises in Garments, Handicrafts, Stones, Rice and Carpets.

Jaipur & Jodhpur specialise in Polyfilms, Footwear, Furniture, Handicrafts

& Artware, Guargum.

Moradabad specialises in Brass.

Kanpur in leather footwear and saddlery.

Ludhiana in bicycle parts, knitted garments, cotton yarn and acrylic yarn.

Panipat in cotton piece goods and floor coverings.

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WEST INDIA

The locations of the Inland Container Depots in West India are as follows:

Mumbai

Pune

Marmugoa

Kandla

Ahmedabad

Indore

Nagpur

Mumbai is the commercial capital of India and the regional headquarter for the

Middle East, South Asia and Africa region for P&O Nedlloyd.

At Nhava Sheva, Mumbai, P&O Nedlloyd owns a warehouse by the name of

Gateway Distriparks Ltd., where the company stores all the goods to be loaded

onto containers to be shipped.

Pune is the back-office for all operations. Activities earlier done by the London

Hub are now carried out by the Pune back-office.

COMMODITIES

Mumbai specialises in garments, textiles, yarn etc.

Ahmedabad in Dyes, chemicals, denim and yarn.

Kandla in Guargum, rice, seafood and granite.

Pune in automotive products, machinery and pharmaceuticals.

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SOUTH INDIA

Inland container depots (ICD’s) are present at each of the following locations:

Bangalore

Mangalore

Cochin

Tuticorin

Coimbatore

Tirupur

Chennai

Hyderabad

Vishakapatnam

Chennai is the controlling hub of all the operations in South India.

COMMODITIES

Chennai specialises in tires, granite, leather goods, tobacco and shoes.

Bangalore in coffee, gherkins and mushrooms.

Tirupur in knitted garments and hosiery.

Cochin in seafood, cashews, coir and spices.

Hyderabad in pharmaceuticals and granite.

Coimbatore in tea, machinery, mushrooms and garments.

Tuticorin in garnet sand, knit garments and dried flowers.

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EAST INDIA & NEPAL

East India and Nepal house the Inland Container Depots in the following places:

Haldia

Kolkata

Biratnagar

Birganj

Kathmandu

The two main ports in East India are Haldia and Kolkata. Of the two, Haldia is

more preferred. All cargo from Nepal moves to Kolkata and Haldia through

Birgunj or Biratnagar.

COMMODITIES

Kolkata specialises in Jute, cast iron goods and manhole covers.

Nepal specialises in carpets, garments, handicrafts (exports), woolen

garments, cosmetics, acrylic, FMCG’s (imports).

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BANGLADESH

P&O Nedlloyd has owned offices at Dhaka, Khulna and Chittagong. Bangladesh

has two major seaports, Mongla and Chittagong.

P&O Nedlloyd ICD’s are present at Dhaka, Chittagong and Mongla. The ICD in

Dhaka at Kamalpur is connected to Chittagong by rail.

The commodities that Bangladesh specialises in are readymade garments, jute

goods, frozen shrimps and handicrafts.

P&O Nedlloyd offers the following services in Bangladesh:

Buyers Consolidation.

LCL

LCL Overflow.

Consolidation.

Purchase Orders and Vendor Management.

Direct Shipment (Ocean).

P&O Nedlloyd makes available a 4500 sq. ft. warehouse which is on lease from

KNT, and a 7000 sq. ft. warehouse on rent from Iqbal Enterprises.

By providing the above-mentioned services and facilities, P&O Nedlloyd ensures

the satisfaction of their customers.

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SRI LANKA

Colombo is one of the hubs in the South Asia region, for P&O Nedlloyd. P&O

Nedlloyd has an owned office at Colombo, which is in Joint Venture with John

Keels Group.

Sri Lanka specialises in garments and accessories, luggage, fashion items, tents,

tea, fibre activated carbon.

The services that P&O Nedlloyd offers in Sri Lanka are:

Buyers Consolidation

LCL

LCL Overflow

Consolidation

Consignment Handling

Purchase Order / Vendor Management

Direct Shipment (Ocean)

Direct Shipment (Air)

Customs Clearance

Local Collection & Distribution

Warehousing & Distribution

Other than these services, P&O Nedlloyd owns a Container Freight Station called

TRANSWARE LOGISTICS (PVT.) LTD. This station has a 40,000 SQ.FT. , Fully

bonded warehouse, with In-House Customs and BOI Verifications. It houses a 24

x 7 Operations and Security system. The station carries out MCC Operations,

GCH operations, a QA Centre, and Bar-Code Scanning.

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PAKISTAN

P&O Nedlloyd has Inland Container Depots (ICD’s) in each of the following

locations:

Rawalpindi

Peshawar

Sialkot

Faisalabad

Lahore

Multan

Lahore is the most important ICD in Pakistan. It is a dry port. Two trains operate

weekly to and from Karachi. Lahore caters to road hauls.

The commodities that Pakistan specialises in are:

Lahore in Garments and Yarn.

Faisalabad in Textile & Cotton Piece goods.

Sialkot in Sports Goods.

Multan in Cotton Yarn & Fabric.

Rawalpindi in Textiles.

Peshawar in Handicrafts.

P&O Nedlloyd in Pakistan offers the following services:

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Buyers Consolidation

LCL

LCL Overflow

Consolidation

Purchase Orders / Vendor Management

Direct Shipment (Ocean)

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CASE EXAMPLE

P&ONEDLLOYD LOGISTICS & CUMMINS.

Earlier this year, P&O Nedlloyd Logistics and Cummins came together to begin a

business venture. To go ahead with this venture, P&O Nedlloyd Logistics created

the following supply chain, in order to meet the needs of their new customers,

Cummins.

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Customer

Managing Organisation

Ocean / Air Freight

Freight Management

Local Collection & Distribution

Consignment Handling/Processing

Purchase Order / Vendor Management

Customs Clearance

Consolidation

Storage & Warehousing


P&O Nedlloyd Logistics also formulated a Product Strategy that it had to offer to

Cummins. The product offering was such:

Air / Ocean Cargo:

PONL Ocean Shipment (base level product)

Tracking

Documentation

Direct Shipment

Consolidation: Phased Deliveries

Distribution & Haulage

DIT (Delays In Transit)

Sequenced Deliveries.

Consignment Handling:

Shrink Wrapping

Palletization

Carton labeling

Re-Pack

Pick & Pack

Cargo Digital Pictures

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P.O. / Vendor Management:

Cursory Quality and Control Inspection

P.O. Track and Trace

P.O. Management

Vendor Management

Postponement

Customs Clearance:

Air / Ocean Freight

Clearance for imports and exports.

Local Collection & Distribution:

Haulage

Consolidation (Ocean Cargo)

De – Control

FCL Overflow Handling (LCL)

MCC (Multi – Country Consolidation)

Consolidation (Air)

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For its local collection and distribution, the goods would be collected from the

factory premises and transported by road or rail to the port of loading. Once

received at the port of loading, the goods could either be stored in the P&O

Nedlloyd Logistics warehouse, or packed into containers straightaway. Next, the

goods are loaded either onto ships or airplanes where they are discharged to

their final location.

On receipt of the goods at the Port of Destination, P&O Nedlloyd makes

arrangements for the goods to be distributed either by rail or by road to retailers

across the country.

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FUTURE OF LOGISTICS

The movement of goods from point of manufacture to the end user relies upon

the four basic transport modes: road, rail, water and air. Each mode has evolved

independently of the others, and each has its roots embedded in its own

particular social and industrial history. The four sectors have become industries

in their own right with their own infrastructure, cultures, jargon and identity.

It is, therefore, not surprising that these industries — road haulage, the railways,

shipping and aviation — are often seen taking robust positions to lobby for, and

protect, their particular interests. Today, however, there is a greater awareness

of the benefits of integrating one transport mode with another: this has resulted in

providers of one type of distribution service moving across into what was the

traditional domain of others.

Since 1997, there have been radical changes in the way freight transport and

distribution is organised. Today, the principles of logistics are applied to the

distribution industry to achieve savings and efficiencies. These changes have

come about as a result of competitive market forces, through political, economic

and social pressures, and as a result of technological advances. Another

important influence has been the evolution of supply-chain management (SCM),

which has forced managers to optimise the flow of goods by employing more

efficient logistical practices.

The future holds many further developments as the business of freight logistics

evolves and as greater economies and efficiencies are achieved. The sector is,

therefore, at a dynamic and exciting stage in its evolution, presenting both risk

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and opportunity for those involved.

The report explains the evolving relationship between the supply chain and the

business of freight logistics. It reports on the way in which the different transport

modes serve that market, how they compete and integrate with one another and

how their respective infrastructures are also developing.

Other influences are also at work. To stay ahead, companies are continuously

rethinking their strategies, acquiring and merging with others, and forming

alliances with customers in ways that would have been unimaginable a decade

ago.

The globalisation of both the production and retailing of goods has had the effect

of internationalising the freight-logistics business. Today's logistics providers

must build both a global network of their own offices or partner companies, and

an effective communication system for the flow of data and information. Software

that facilitates the control of goods in transit and delivers savings and efficiencies

within the supply chain is now available.

Security has also taken on a new significance as managers question perceived

wisdoms concerning cargo safety and the interruption of the supply chain by acts

of terror or theft of cargo.

Finally, the problems of pollution and congestion are increasingly influencing the

way in which goods are transported and distributed. Regulation and legislation

will increasingly dictate these issues, but there are also real savings to be made

by adopting a more sustainable approach to distribution. Both service providers

and users are scrutinising their logistics policies with a view to achieving such

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gains, whether through better utilisation of existing arrangements or by the more

radical solution of modal shift.

We expect both the movement towards consolidation amongst logistics providers

and the integration of logistics providers' services into the activities of their

customers' supply chains to continue. SCM itself will advance as inefficiencies

are squeezed out of the system. Internet-based IT, such as the evolving freight

portals, will also contribute to greater efficiencies. In addition, both EU and

national transport policy, responding to social and environmental imperatives, will

offer incentives and impose stricter controls to set the business of freight logistics

on a more sustainable course.

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a study on p&o nl log

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