The evolution of Freight
Forwarding Business
Cargo/
Expedition Expedition Logistics Architect Cargo Supply Chain
VEEM Forwarder
broader Provider Movement Management
WAREHOUSE
SEA SEA 1. Forwarder
Space Domestic Multimodal Planning
Domestic International 2. Logistics
Time
Provider
3. Architect
Cargo Mov
AIR AIR
International Door to door Implementation
Domestic International
Means :
1. Shipping
Warehousing : 2. Airlines
3.Trucks
* Space
One Stop Railway
* Time Controlling
Shopping
* Loading
* Unloading
* Inventory
* Packaging Infrastructure:
* Labelling
1. Seaports
* Telly
2
2. Airports
* Barcoding
3. Terminals
* etc.
WHAT IS A FREIGHT FORWARDER
Originally - Commission agent
Today - An essential link in International
trade and transport
Definition - No internationally accepted
definition of term "Freight
Forwarder"
3
SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignor (exporter) (1)
1. Choice of route .
2. Booking of space .
3. Taking delivery of goods and issuance of
relevant documents .
4. Studying the provisions of Letter of
Credit and all Government regulations.
5. Packing. 5
SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignor (exporter) (2)
6. Warehousing.
7. Weighing and Measurement.
8. Arranging for Insurance.
9. Transport of goods to the port ;
- customs clearance;
- connected documentation formalities;
- delivery of goods to the carriers.
6
SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignor (exporter) (3)
10. Attending to foreign exchange transactions.
11. Payment of fees and other charges and freight.
12. Obtaining the signed bill of lading.
13. Arranging for transshipment en route.
14. Monitoring of movement of goods to the
consignee .
15. Assisting consignor in pursuing claims.
7
SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignee (importer) (1)
1. Monitoring of movement of goods.
2. Receiving and checking all relevant
documents.
3. Taking delivery of goods and paying
freight.
4. Arranging customs clearance and paying
duties and fees . 8
SCOPE OF
FREIGHT FORWARDING SERVICES
On behalf of the consignee (importer) (2)
5. Warehousing transshipment en route.
6. Delivering cleared goods to the
consignee.
7. Assisting consignee in pursuing Claims.
9
SPECIAL
CARGOES
Project
Cargoes
Garments
Exhibitions
10
RIGHTS,DUTIES&RESPONSIBILITIES
1. Legal Status of a Freight Forwarder
Varies from country to country depending
on the legal system prevailing in each country.
2. Standard Trading Conditions
Usually formulated in accordance with
commercial practices or legal system prevailing in
each country. 11
RIGHTS,DUTIES &
RESPONSIBILITIES (1)
3. The Forwarder as Agent
• Generally accepts liability for
his own faults or the faults of
his employee .
• Exposed to claims from third
parties for any loss or damage
or personal injury that he may
cause to them during his
operations .
• Generally does not accept
Liability for acts or omissions
of third parties.
12
RIGHTS,DUTIES&RESPONSIBILITIES (2)
4. The Forwarder as Principal
Providing consolidation and multi-modal transport
services .
Independent contractor who assumes responsibility in
his own name and accepts liability not only for his acts
and omissions but also of those whose services he
engages for the execution of the contract .
His liabilities to third parties remain the same as when
he is an agent .
In providing multimodal transportation services, the
standard trading conditions do not generally apply.
13
RIGHTS,DUTIES &
RESPONSIBILITIES
5. Freedom of contract
In the formulation of standard
trading conditions, freight
forwarders enjoy a significant
amount of freedom of contract.
While providing transport as a
carrier, he avoids strict liability
by stipulating in the standard
trading conditions that he is
not a "common carrier".
14
RELATIONSHIP WITH
INTERVENING PARTIES
1. Government and other Public Authorities:
Customs Authority
Port Authority
Banks
Ministry of Health
Consular Officers
Import/Export Trade Control Authority
Transport/Licensing Authority
15
RELATIONSHIP WITH
INTERVENING PARTIES
2. Private Parties :
a. Carriers and Other Agencies ;
• Ship Owners
• Road Operators
• Railways
• Inland Waterway Operators
b. Warehousemen
c. Insurers
d. Packaging Organization
e. Commercial banks
16
FREIGHT FORWARDER’S
RELATIONSHIP WITH VARIOUS PARTIES
Government and other public authorities
Port Import/Export Trade Control Customs
Authorities Foreign Exchange Control Authorities
Transport Licensing
Public Health Consular Authorities
Carrier and
Consignor/ other agencies
Consignee Shipowner Road Operator
Railways Inland
Freight Forwarder
Waterway Operators
Warehousemen
Packaging Agencies
Banks
Resource
Cargo Action
Insurers Liability Insurers Through Transport Clubs
17
SERVICES OF A FREIGHT
FORWARDER
Adviser / Consultant
Packing – Choice of materials used
Routing – Choice of itinerary and means of transport
Insurance – Type of coverage needed for the goods
Customs regulations – Clearing in and outbound
Transportation documentation – Accompanying documents (Carriers)
Letter of Credit stipulation – Banking requirements
Organizer for :
Import export and transit consignments
Consolidations – Group age shipments
Special and heavy transport – Project Cargoes
Imports
Unloading of cargo – from carrier’s means of transport
Breaking bulk of consolidations
Customs clearance
Exports
Pick-up
Packing and Marking
Freight/space booking – with carrier
Delivery to carrier
Issue of transport document – freight escorting documents
Supervising departure
Dispatch advice – to customer
Customs Clearance
Transit
Taking samples
Repacking
Storage in bond (under customs control)
Re – forwarding
18
Packing Order Control Department
SERVICES OF A FREIGHT
FORWARDER
Freight Forwarding
Issuance of transport document
Cargo booking
Organization of transport
Tariff department Ship chartering/slot
(railways/shipping) charter
Consolidating Order through telex or online
NVOCC – operation communication to receiver
Liner agency De-stuffing and import process
station
Transport insurance Customs clearance or transit on
forwarding
Quality control Warehousing and distribution
Space planning scheduling Local delivery
Warehousing Labeling
Truck services Special services :
Fresh food/hanging garments, etc
Issuance of export documents (data Project cargoes and turnkey projects
processing)
Packing Order control department
19
20
Payung Hukum GAFEKSI/INFA
Keputusan Menteri Perhubungan No.
KM.10 Tahun 1998, mengatur Bidang
Usaha Jasa Transportasi.
Keputusan Menteri Perhubungan No.
KP.4/AU.001/PHB, yang mengukuhkan
Pembentukan GAFEKSI.
EMKU AEMPU 1985
GAVEKSI INFFA AEMPU GAFEKSI
FIATA
INFA VISION
To Be Architect of Cargo Movement for
Logistics and Distribution Facing Global
Competition.
The Vision Contains of 4 Dimensions, these
are :
1. SYSTEM DIMENSION
As Architect of Cargo Movement, INFA
member handles cargo for logistics inbound
and outbound for the total production process
both separated and integrated manner.
2. SPACE DIMENSION
As Domestic and International Freight
Forwarder, INFA member have a broad 22
network both for National and International.
3. TIME DIMENSION
As a hard worker INFA member
engage in short, medium and long
term contract (committed to deal)
and treat the TIME as one of the
benchmark of quality services.
4. KNOWLEDGE and TECHNOLOGY
DIMENSION
As a global player INFA member
covers their activities ranging from
design system, MTO, IT, up to SCM. 23
INFA MISSION
As an association of cargo movement business, the
INFA has the mission as follows :
1. Support the government policies in view of
development of national economy, through
alleviating cargo flows for both National and
International and as National Flag Freight
Forwarder.
2. Develop Freight Forwarding Business as industry
in nature toward the backbone of national cargo
mobility.
3. Under entrepreneurial leadership, enforce the
tasks professionally toward customer
satisfaction, in parallel create the business
profitably. 24
Persyaratan Perusahaan
Forwarder
1. Organisasi.
2. SDM Profesional.
3. Jaringan.
4. Permodalan.
5. Sistim Komunikasi.
TYPES of IFF SPECIFIC EXPERTISE
SHIPPING, AIRCRAFT and INSPECTION
TRUCKING MANAGEMENT INCOTERMS (THE
PORT and AIRPORT INTERNATIONAL
MANAGEMENT CHAMBER OF COMMERCE
COMMISSION ON
PACKAGING INTERNATIONAL TRADE
CUSTOMS CLEARANCE PRACTICE)
WAREHOUSING COST CALCULATION
INLAND TRANSPORT PRICING
MULTIMODAL TRANSPORT CONTAINER HANDLING
OPERATION MARKET FORECASTING
IMPORT and EXPORT INVENTORY CONTROL
PROCEDURES
STEVEDORING
STORAGE
SURVEILLANCE
STUFFING
WEIGHING
OCEAN TRANSPORT
MARKING / LABELLING
DOCUMENTATION
CARGO HANDLING
INSURANCE
CONTRACTING
OTHERS 26
Sumber Penerimaan Freight
Forwarder (1. OUTBOUND)
1. Biaya angkutan (freight/voyage cost).
2. Penanganan di pelabuhan (handling fees).
3. Penjemputan (cortage).
4. Penimbunan (warehousing/storage).
5. Dokumentasi.
6. Pengepakan (packaging).
7. Asuransi (Insurance).
8. Biaya profesional (professional fees).
9. Biaya komunikasi.
Sumber Penerimaan Freight
Forwarder (2. INBOUND)
1. Biaya angkutan (freight/voyage cost).
2. Penyerahan (cortage).
3. Penimbunan (warehousing/storage).
4. Pengepakan kembali (re-packaging).
5. Break Bulk.
6. Custom Clearance.
7. Collection.
8. Added Value (fashion).
9. Transshipment.
PATTERN for CARGO HANDLING from
EX WORKS OVERSEAS to IMPORTER’S SITE
in INDONESIA
29
PATTERN for CARGO HANDLING from
FOB OVERSEAS to IMPORTER’S SITE
in INDONESIA
30
PATTERN for CARGO HANDLING from
EX WORKS to CFS / CY OVERSEAS
31
PATTERN for CARGO HANDLING from
INDONESIA PORT to LOCAL CONSIGNEE
32
33
34
The Shift of Production Factors
BEFORE : CURRENT :
1. Human Resource Base
a. Professionalism;
1. More dedicated to b. Entrepreneurship;
physical means such c. Global perspective;
as :
d. Knowledge and
warehouses, trucks, Technology base.
vessels, aircrafts,
2. Information System
forklifts, ports, through information
airports, terminals, technology.
etc. 3. Networking.
2. Working Capital 4. Physical Means:
3. Manpower warehouses, trucks,
4. Information System vessels, aircrafts,
(traditional) forklifts, ports,
airports, terminals,
etc.
35
5. Working Capital.
36
37
38
39
40
41
Basic Principles for Business Thought
1. EFFICIENT;
2. EFFECTIVE;
3. CHOICE BETWEEN ALTERNATIVES;
4. ENTREPRENEURSHIP.
42
TRADITIONAL PRODUCTION FACTORS
Original Factors : Conventional in
character
1. Natural Resources
(Land, Sea, Air)
2. Human Resources
(Labor Force)
Contains :
3. Skill
• Experience;
• Training;
• Education;
4. Capitals
• Tools; Comparative
• Money; Advantages
• Brain ware.
43
GLOBAL TREND FACTORS :
5. Knowledge and Technology
Base : Inconventional Factors:
a. Productive;
b. Efficient;
c. Sophisticated.
6. Information :
a. Reliable; Contains :
b. Accurate;
c. Relevance & Latest.
7. Time :
a. Punctual/just in time;
b. Fast (speed);
c. Exact.
8. Network to : Competitive
a. Consumers & Producers; Advantages
b. Domestic & International;
c. All sectors of activity 44
Inconventional Factors:
9. Management for :
a. Inventory;
b. M I S;
c. Etc. Contains :
10. System Development
such as :
a. Logistics and
Distribution;
b. One day services;
c. MTO, etc.
Competitive
Advantages
45
WAYS to OPTIMIZE PRODUCTIVITY
1. ART of LEADERSHIP :
a. Wisdom;
b. Communicative; 3. PARTNERSHIP :
c. Persuasive; a. Integration;
d. Anticipative. b. Synergy;
c. Alliance;
2. ENTREPRENEURSHIP : d. Merger;
a. Innovative; e. Franchise;
b. Breakthrough; f. Joint Venture &
c. Dare to Take Risk & Others.
Challenge;
d. Product Approach.
46
Triangular Linkage of The Company
Old Fashion New Arrival
3C 3C + 1C
1. Corporate/Compani 1. Corporate/Compani
es es
2. Consumers/Custom 2. Consumers/Custom
ers ers
3. Competitors 3. Competitors
4. CHANGES
47
KEYS OF OPERATIONAL
PERFORMANCES
FASTER DELIVERY JUST IN TIME;
CHEAPER COST COMPETITIVE;
BETTER QUALITY SERVICES;
SAVER CONTROL QUANTITY &
QUALITY
MARKETING STRATEGY
of FF BUSINESS
Consumer Satisfaction Oriented;
Concentrate on the Core Competence;
Strategic Alliance with Business Partner in
all segments of activity;
Win-Win partnership;
Total Marketing Concept;
Commercialized of each Logistics and
Distribution tasks;
Committed to Profitable Business venture.
KEY SUCCESS OF IFF
BUSINESS
JUST IN TIME
ACCURATE
IN TERM OF
VOLUME
CONSTANT RELIABILITY IMAGE
IN TERM OF
FORM
COMPETITIVE
COST
EXCELENT
SERVICES
51
52
QUALITY OF SERVICE IN TERM OF
MODE
No. Service/Mode Road Rail Sea Lake/ Air
River
1. Comfortability m l vl vl vh
2. Regularity vh m vl vl vl
3. Punctuality h l vl vl vh
4. Capacity l h vh m vl
5. Safety h m h h vh
6. Door to door vh l l vl l
Capability
7. Reliability h h h m vh
QUALITY OF SERVICE IN TERM OF
MODE (continued)
8. Speed h m vl vl vh
9. Flexibility vh l vl vl vl
10. Energy Eff. l h vh vh vl
11. Availability vh l vl vl l
12. Security vh h h h vh
13. Frequency vh h vl vl l
Notes: vl = very low; vh = very high; m =
moderate
l = low; h = high;
Multi-Strata Pyramid for Modal Evaluation
Faster Slower
Air
More Cheaper
Costly
Road
Rail
Sea/Waterway
Source: Adapted from Adjadjihoue, 1995.
Business Model: Courier, Freight Forwarder, Shipping, Trucking, Warehouse,
Carrier, Distributor, etc
DT.Jkt. 07/08/08
Who is Logistics Service Provider?
CARRIER:
Shipowners (Hanjin, Maersk, Evergreen, Cosco, APL, NOL, dll.), road
transport operator, (Greyhound, Hertz, dll.), aircraft
owners/operators (Fedex, JAL, Northwest, dll), and railways (Santa Fe,
Trans Siberian, PT.KAI, dll.;
NON-CARRIER:
Port authority (PSA, Port Klang, Laem Chabang, HK Port, Rotterdam, Hamburg,
New York,dll), ferry terminal, airport authority (CIAS, Schipol,
Suwarnabhumi, Sepang Airport, dll., warehousing (YCH, BGR, dll), CFS
(Incheon Port IFT/ICD), depot consolidation (Yeonhwa IFT), customs,
IT (Oracle);
FREIGHT FORWARDER:
FF as an architect of cargo movement or as a principal,
acting as shipper, consignee, or as his own behalf.
(Panalpina, Danzas, Schenker, Hellman, Exel, MOL, dll.). Whereas DHL, UPS, TNT, Nippon
Express, etc. were originally express delivery service.
Notes: Anybody has capability to conduct integrated logistics services which covers
DT.Jkt. 07/08/08
procurement, inventory, transportation, distribution, warehousing, etc.
Past Experience, Present Condition, &
Future Challenge of Freight Forwarder
No. SUBJECT PAST PRESENT FUTURE
1981-1990 1991-2000 2001-
1. Perspective EMKL/KU IFF CTA
2. Activity Segmental Log.&Dist. SCM
3. Business Cost Profit Profit Cntr
Orientation Center Center &Ctmr.Stf.
4. Market Passive, Reactive,
Proactive,
Strategy Individual T. WorkT. Work,
Ctmr.Frnly
5. Operation Conservat. Modern, Advance &
Pattern Nominated Free Hand Integrated
PAST, PRESENT, FUTURE
(Continued)
No. SUBJECT PAST PRESENT FUTURE
6. Management Bureaucratic Merit Flexible
Orientation System
7. Form of Warehouse, Door to System
Service Land Trans., door,MTO, Design &
Load/Unload One Stop Planning,
Custom Clr. Res.ability SCM, IT.
8. Human Clerical, Welltrained Wellexperc
Resource Technical, Wellexperc Welleducat
Experience Entreprene
urship
PERCEPTION of CARGO
MOVEMENT FLOWS
PREVIOUS CONCEPT EXPEDITION
TRANSPORTATION FREIGHT
FORWARDERS CARGO
LOGISTICS focusing solution
within internal organization;
CURRENT CONCEPT SUPPLY
CHAIN is a broader and a long
process from supply of materials up
to distribution of finished products.
DAFTAR PUSTAKA
1. The Practitioner’s Definitive Guide, Multimodal Transport, Singapore
Logistics Association & International Publishing Pte.Ltd., 2006.
2. Istopo, Capt. MSc., Unimoda dan Multimodal Transport, Angkutan Barang Terpadu Darat, Laut
dan Udara, INFA Institute, 1992.
3. Ronosentono, Idris, Drs., BSc., Pengetahuan Dasar Tata Laksana Freight Forwarding,
Infomedika, 1997.
4. Glass, A.David, Freight Forwarding and Multimodal Transport Contracts, LLP-London-
Singapore, 2004.
5. UN-ESCAP Training Manual on Logistics and Supply Chain Management, UNO, 2007.
6. Operational Aspects on Multimodal Transport Operations, UN-ESCAP, 2006.
7. INFA Institute, Module 13 Basic Freight Forwarding Course on Multimodal Transport
Operations, 2006.
8. UN-ESCAP, Commercial and Legal Aspects of Multimodal Transports, United Nations, 2006.
9. Ministry of Transport, Thailand, The Development of Multimodal Transport and Logistics
Supply Chain Management for Implementation of Action Plan, 2006.
10. Ministry of Transport, Malaysia, Chapter 25 on Logistics, 2006.
11. Prayitno, INFA Instructor, Conventions Relating to Multimodal Transport, 2008.
13. Istopo, Capt. Master Mariner, Freight Forwarder as Architect of Transport & Multimodal
Transport, INFA Institute, 2005.
14. Balitbang, Hasil Survei dalam rangka Kajian Akademis RPP Transportasi Multimoda, 2007.
15. Balitbang, Matriks, Konsep RPP Transportasi Multimoda, 2007.
16. Tas’an, Darmawan, Is Indonesia prepared to carry out Multimodal Transport Operation in the
Global Competition, 2004.
