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Table of Contents
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Definition

In the context of humanitarian organisations transport is defined as:

“The activities involved in moving supplies from point of origin to internal customers or beneficiaries”.

The aim of transport is to physically move supplies in a reliable and safe manner, on time, cost effectively and efficiently to its destination.

Policies

The rapid growth of technology and the changes in the delivery of humanitarian aid has done little to change the fact that relief supplies still have to be collected and delivered.

Historically, the transportation of supplies has been regarded as an ancillary function of little or no central importance. More recently, efficient transportation has been recognised as an essential determinant in providing consistent, quality service to beneficiaries. A good transport system fulfils three of the "rights" of supply. That is, getting the goods there at the right time, in the right condition and in a cost effective manner. Summarising this thinking into a series of actionable steps, and successfully implementing those steps, will ensure timely and effective delivery of humanitarian assistance. Goods will arrive as scheduled, at the right price, in maximised loads with no breakages or pilferage. A good transport system complements an efficient distribution system.

The Role of Transport

The role of transport is to facilitate the movement of goods. This may be from points of manufacture, storage or pre-positioning, to points of use; or between hubs and distribution points; or hubs to end use; or distribution points to end use; or return from end use back to hub and pre-positioning points or manufacturers. The source and destination may be in the same country, or one may be in a different country requiring international movement.

Transport in Emergencies

Transport management in emergencies is a complex task depending on the nature of the disaster. How it is structured is very dependent on the state of the infrastructure, security in the area of disaster, demand, nature of product etc. More and more, humanitarian organisations are beginning to tap into the joint transport services when they are offered by the Logistics Cluster during emergencies. The service is based on a collaborative approach and aims to leverage the advantages of centralised coordination and sharing of assets.

Operations - Transport Strategy

A transport strategy depends, not only on the needs within the organisation, but varies from organisation to organisation and from situation to situation. Some factors to consider when developing a transport strategy are:

  • how to identify transport service providers;
  • how to manage the function; i.e. whether to lease, outsource or manage own fleet;
  • capacity of transport modes available;
  • quantities requiring movement over a period of time;
  • nature of goods/products/supplies to be transported;
  • distances to be covered;
  • environmental issues such as climate, government legislature, infrastructure, taxes etc;
  • number of destinations, hubs and pre-positioning locations;
  • origins and routes;
  • available transport modes & their relative costs;
  • human resources;
  • terrain;
  • funding;
  • security; and
  • circumstances – such as Nature of disaster.

The above factors would be valid for both emergency and non-emergency situations.

Managing transport providers

Occasionally the need arises, or the decision is taken to use external transport providers. In this event there has to be a structured approach to the selection (see contracting) and subsequent monitoring and control of the provider or providers selected. There are a number of important issues to be considered to ensure that a reputable provider, who will provide the required level of service, at an acceptable cost, is sourced.

Point to note

The selection process adopted for the acquisition of all services is covered by the organisation's approved procurement policy, processes and procedures.

Contracting should be done in a competitive manner, on market terms, and negotiations undertaken in an open and transparent fashion, thus ensuring cost effectiveness and equal opportunities for the appropriate commercial entities.

Criteria influencing transport service providers

The criteria for selection will vary from organisation to organisation. Some factors that may influence the selection of transport service providers are:

For information on International Trade, see International Commercial Terms used in international contracts of sale: INCOTERMS 2000 , INCO terms explanation, INCOTERMS narrative, INCOTERMS practical application chart.

  • carrier characteristics and capacity;
  • proven efficiency;
  • timely delivery;
  • known integrity, reputation and reliability;
  • good relationships with others carriers;
  • responsiveness to urgent needs of the organisation (if previously contracted);
  • financial viability to cover costs of providing the service;
  • adequate communication systems to facilitate tracking to the vehicle;
  • assets to safeguard organisation cargo;
  • ability to provide a multi-modal service, if need be; and
  • presentation of timely reports and correct invoices.

Organising movement

There are two types of transport movement in an emergency:

1. Local transport movement

Local movements within a specific country will usually involve road transport. This may involve movement of bulk loads from ports, airports and railheads to warehouses and depots, bulk movements between facilities such as warehouses or depots, or delivery of smaller consignments from a local warehouse or depot to end users at a number of destinations in an area.

2. International movement

In normal circumstances the local environment will not always be able to provide all the products and services required to fulfil the needs identified in an emergency environment. logisticians therefore become responsible for sourcing externally and organising the transportation of relief supplies to affected locations. Often the relief supplies come from other countries and have to go through various processes before they are received. To ensure efficiency and to allow the logisticians to focus on their core job, the organisations seek service providers with expertise and capacity to handle certain aspects of the movement.

The common service providers are:

  • freight forwarders;
  • clearing agents;
  • inspection services.

Criteria for selection of above service providers:

  • licensed by the government to conduct customs clearance formalities and be up-to-date on changes in customs requirements;
  • offer a wide variety of services, so that you do not need to contract many different companies for different services (e.g. sea and air freight, re-packaging of damaged materials, etc.);
  • own or have access to a bonded warehouse to protect and control shipments in transit;
  • own a trucking fleet for inland transport and have access to specialised vehicles when needed such as container trucks, low-bed trailers, tankers, etc;
  • have trained, competent, experienced and trustworthy staff;
  • have a proven record of reliability, accuracy, and timeliness, as verified by references from other groups that have used their services;
  • are flexible in their availability at short notice, also outside of office hours and on public holidays;
  • have an established reputation and have been in business for a number of years;
  • have influence in the transport market, with port authorities, etc;
  • are experienced in successfully handling duty exemption arrangements for humanitarian organisations;
  • have an office in the port area or nearby;
  • are experienced in verifying goods arriving in the port: discharge, storage and loading operations, checking weights and inspecting shipping packages for visible damage;
  • are experienced in hiring porters and stevedores for cargo handling;
  • have at least a country-wide, preferably a multi-country regional network; and
  • use technology effectively, including a good telecommunications system and, preferably, a computerised tracking system that allows visibility of where shipments are at a given time;

Other related parties are:

  • customs officials;
  • port authorities;
  • customs brokers; and
  • stevedores;

Although it is advisable to use an intermediary such as a freight forwarder or clearing agent to handle international movements, it is still important to have a basic understanding of the roles of other third party service providers involved in international movement. It should be noted that these third parties may be private companies or in some cases state run organisations.

Planning and Scheduling Movement

Routine movements, taking place on a regular basis, need to be planned at the outset. Non-routine movements occurring on an ad hoc basis will have to be planned as and when the need arises.

Ideally movements should be planned and managed by a transport office. This office will be responsible for determining the appropriate routing for the goods, allocate resources (own or contracted) and inform the destination of estimated delivery time.

During the movement the transport officers will track the progress of the goods and update delivery times accordingly. They will manage the staff involved in the movement and deal with any issues that arise. They will also handle any problems that occur during the movement, liaising with contractors, freight forwarders and shippers as required. The transport office may actually produce the required documentation to cover transit, alternatively they will be responsible for collecting the required documents together for despatch.

Once movements have been planned and are initiated, it is important to maintain an information flow between all parties involved to ensure the safety and security of the goods and the adherence to service promise. In environments within which humanitarian aid organisations operate, many events can impact the efficient movement of goods. In natural disaster or conflict zones, the risk to the movement is potentially high. Having up-to-date information on the status of the movement allows problems to be quickly identified and dealt with.

See The Relief Item Tracking Application (RITA)(http://www.logcluster.org/cargo-tracking), a commodity tracking tool available on Logcluster website.

Planning Movements

Movements in a national context can usually be managed more closely than movements between or across countries. National movements can be usually planned and co-ordinated more easily.

International movements will often be managed by one or more third parties, working in different time zones and in different languages. Often, international movements are planned and managed by a freight forwarder or logistics service provider. They will work within the broad plan to meet the client requirements in terms of movement time and routing.

Planning sea movement

In planning movements by sea, port capability and the control of port activity needs to be understood in order to assess any possible constraints that could impede the movement of goods. The following factors will indicate the suitability of a port to handle the planned movements:

  • the number, type and size of ships that can be handled at one time;
  • typical vessel waiting and discharge times;
  • availability of equipment to handle different types of consignment – for example, bulk, bagged, loose, containers etc., and its state of repair;
  • availability of labour, working hours and typical discharge rates for both manually;
  • unloaded cargo and containers;
  • operational factors that may constrain activity such as the risk of congestion or the impact of the weather at certain times;
  • port documentation requirements and the efficiency of procedures for clearing cargo; and
  • storage facilities and infrastructure such as railways, roads;

Where the movement of goods is to an area under the control of the local public authority, a clear understanding of the requirements covering movement of goods must be gained from the appropriate authority prior to initiating any movement.

Route Planning and Scheduling

For effective route planning and scheduling, the transport officers need to be involved in the development of the distribution plan or at least be aware of it and understand it. Vehicle routing and scheduling process needs to fulfil the following objectives:

  • maximising vehicle payload (by maximising vehicle fill out and back) and maximising vehicle utilisation (by maximising number of loaded journeys per vehicle);
  • minimising distance (e.g. by minimising overlapping deliveries) and minimising time (e.g. by minimising non moving time); and
  • meeting customer requirements, in terms of cost, service and time and meeting legal requirements, in terms of vehicle capacity and driver's hours.

See Route Planning Techniques.

The nature of the movement can be split into two basic types:

  • primary movements are those that involve typically bulk movements between two specific locations. This may be, for example, between two warehouses in a network or from a port or railhead to a warehouse; and
  • secondary distribution relates to movements that may involve multiple deliveries within a defined area, such as a regional or local warehouse to extended delivery points. In both cases, the emphasis is on achieving full utilisation of the resources used; filling the vehicle to capacity minimising the distance travelled and optimising the hours which the driver is being paid to work.

Mode of Transport

A mode of transport is the means by which goods and material are transferred from one point to another. The basic modes of transport are:

1. Air
2. Sea
3. Road
4. Rail

See below a mode comparison matrix for different modes.

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Table 1: Criteria of different modes of transport, from Fritz Institute

In emergencies, the criteria of speed and reliability must be examined when considering the choice of mode. Different modes have quite different characteristics and will meet the speed/reliability/cost criteria to varying degrees. The appropriate mode must be carefully selected if it is to match all the requirements. Multi-modal solutions may provide the most effective and efficient transport option.

Whilst the physical characteristics of certain goods and supplies may determine a specific mode of transport, most goods will be capable of being moved by a variety of modes. Customer requirements and constraints on the organisation providing the transport must be considered. In humanitarian aid situations, it is often environmental factors, such as the destruction of roads and railways that have a significant impact on mode selection.

It is important to fully recognise the operational characteristics of the mode or modes that have been selected. It is also necessary to consider the type of vehicle or equipment that will be used within that mode.

Prior to making a decision on the mode of transport, it would be useful to create a matrix ranking of influential factors for choosing transport modes. Some factors to consider in the rating:

Mode Selection Criteria

Four key criteria:

  • the speed which the mode exhibits;
  • the reliability that the mode demonstrates in its ability to fulfil service requirements;
  • the flexibility that the mode exhibits; and
  • the comparative unit costs, which the modes incur.

Speed and reliability will have a major impact on the ability to deliver humanitarian aid effectively and efficiently to where it is needed.

Other considerations in the selection of a transport mode are:

  • required delivery date;
  • cost of transport service;
  • reliability and service quality;
  • shipment size;
  • transit time;
  • number of transhipment points;
  • item type;
  • possibility of damage; and
  • range of services.

Matching Operational Factors to the Selection Criteria

It is important to use a structured approach to mode selection. It is important to understand the following points :

  • opportunities and constraints in the choice of mode will be identified from careful analysis of all relevant operational factors;
  • modes that realistically cannot be considered should be ruled out of the decision process immediately;
  • geographical factors should be considered, as they may remove the opportunity to use a particular mode; and
  • lack of appropriate infrastructure may also remove the opportunity to use a particular mode.

- Air Tranport

(see also Operational Environment)

In emergencies, and especially flooding and conflict situations where road access is difficult, air transport is often the alternative.

Air transport can be provided through:

  • schedules air carriers using world airlines and other global logistics service providers or
  • air charters; where it is possible to charter planes/helicopters or perhaps to have the use of military aircraft to allow a totally dedicated movement to take place. It is possible to move goods without being constrained by commercial timetables and specific airport locations. The charter may be totally ad hoc, that is, a ‘one-off’ charter to achieve a particular humanitarian objective. Alternatively it may be a regular event, monthly for example, in order to transport routine supplies or perhaps members of staff. Logisticians should all be familiar with their internal guidelines on the use of military assets.

Factors that influence the decision to charter and the nature of the aircraft chartered:

  • availability of different types of aircraft;
  • the nature, quantity, weight, size and volume of the cargo Institute All Rights Reserved;
  • aircraft equipment available for handling at origin and destination;
  • the distance to be travelled and possible constraints on certain airspace;
  • ability of certain airports to handle particular types of aircraft regarding take off and landing;
  • possible noise restrictions at certain airports;
  • securing landing and over-flight permission.

Sending Goods by Air

The air waybill (AWB) is the most important document related to airfreight. Its completion is regulated by IATA definitions. Each AWB has a unique identifying number, the first part of which is the IATA airline code number. The AWB is the carrier’s receipt by air, evidence of the contract of carriage and is usually non-negotiable. It is made out to a named consignee who is the only party to whom the carrier can deliver.

Packaging and labelling for air transport is an important consideration. Transport by all-freight aircraft will usually take place using some form of unit load device, so reducing the need for packaging. However, the method of loading and unloading and onward transit may still require a strong and durable packaging medium.

Ultimately it is the nature of the goods being transported that will determine the precise nature of the packaging.

- Road Transport

Use of organisation's own vehicles (own account)

If an organisation decides to acquire its own vehicles, there are a number of areas to be considered. The type of vehicle, in terms of the chassis-cab and the body type, needs to be determined. The nature of the operation may also require that mechanical handling aids need to be incorporated into the overall vehicle specification

Advantages

The advantages of owning vehicles include:

  • vehicles can be built specifically to carry a particular product. Special equipment for materials handling can be attached;
  • the driver can be specially trained and will fulfil the 'ambassador' role for the organisation;
  • vehicles can carry the company livery, perhaps the aid organisations logo and, where appropriate, the Red Cross; and
  • management retains total control over the vehicle and its operation.

A major disadvantage

Management of the transport function can occupy a great deal of management time, requires specific expertise and significant capital investment. In contrast, third party carriers can often provide more cost-effective transport facilities but careful consideration must be given to the level of service required.

Third party advantages and disadvantages

Even if an organisation owns its vehicles, there may well be occasions when a need arises for additional capacity, to meet peak activity or other short term needs. This can be met by the use of vehicles supplied by a commercial transport provider (third party).

The advantages of using third party transport include:

  • organisations can use commercial providers to meet fluctuating demand requirements;
  • variable loads and journeys can be catered for;
  • the haulier may be able to offer a more cost-effective and a more efficient service; and
  • responsibility for administration of vehicles and drivers is no longer the responsibility of the organisation, allowing staff to concentrate on more productive areas. There is no requirement for capital to be invested in transport.

Disadvantages

A measure of control is lost with third party operations. Performance feedback and communication with customers needs to remain a strong feature and be controlled by the contracting organisation.

Selecting vehicle types

It is important to be able to select the appropriate vehicle for the purpose required even if, at a later stage, it is necessary to revise this choice to reflect availability in the field.

See below a description of the main body types and combinations that are available.

Selecting the body type

The specification of the vehicle body will vary according to the goods or materials being carried and security. There are many variants of body type available; a description of the main body types is shown below.

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Table 2: Selecting the body type.

Platforms

The simplest and cheapest body type is the platform or flat bed. It provides all round access to the load, but offers little security or protection from the weather. Loads also need to be restrained. This will generally involve roping and sheeting, which is a time consuming operation.

Van body

The van or box body reduces the payload of the vehicle, but provides protection for a perishable product and added security. Construction will depend upon the needs for insulation, waterproofing or strength. Access is usually provided by a rear door. Sometimes a door will be built into one, or both, of the body sides.

Curtain sided bodies

Curtain sided bodies overcome the disadvantages of access, since the curtains can be pulled back to reveal the full length of the platform. This improves the speed of loading as well as unloading. Advantages of load restraint and weather protection are maintained, while body weight is less than the box body. Other variants will replace the curtains with sliding panels.

Tankers

Tankers are designed to carry powders or liquids. They require a pumping mechanism and piping to discharge the load.

Bulk carriers

Bulk carriers are generally built as box bodies without the roof. They will require a tipping mechanism to allow the load to be discharged.

Drawbars

A rigid master truck with a drawbar trailer is the usual configuration. The bodies may be of the demountable type. Drawbars offer increased cubic capacity for bulky lighter loads.

Road transport documentation

Whether the vehicles being used are owned, hired or are managed by a third party, it is important to ensure that all local laws relating to the licensing, insurance and regulation of vehicles are being adhered to :

  • normally a licence to operate the vehicle on a public highway is required;
  • for larger trucks there may be an additional licence fee to be paid;
  • vehicles should be insured to at least the minimum required by law; different organisations will have internal policies regarding the extent to which their own vehicles should be insured; and
  • vehicles may also require documentation relating to the maximum permissible weights in terms of gross vehicle weight, axle weight and payload.

Transport contract and considerations for a transport contract (see Procurement Annexes).

Drivers are also required to hold the appropriate licence for the class of vehicle they are driving.

- Sea transport

Sea transport is convenient for bulky pre-planned consignments. In the early days of emergency situations, sea transport is not used to service immediate needs in rapid on-set disasters but more to pre-position or serve post disaster and longer term needs. The key document used in shipping is the bill of lading (B/L). Logisticians should familiarise themselves with it.

Bills of Lading

The B/L is the transport waybill for a sea freight consignment. It is usually issued in a set of three originals and several non-negotiable (N/N) copies. The B/L is signed on behalf of the ship owner by the person in command of a ship or the shipping agent, acknowledging the receipt on board the ship of certain specified goods for carriage. It stipulates the payment of freight and the delivery of goods at a designated place to the consignee therein named.

The B/L is the major shipping document and has three roles.

  • It affirms the contract of carriage and sets out the terms thereof. It is evidence of the contract between the consignor and the shipping line, and on the reverse details the conditions of carriage.
  • It is the carrier’s receipt for the carriage of goods by sea and is signed by the master or another duly authorised person on behalf of the ship owner, acknowledging receipt on board the ship of certain specified goods that he undertakes to deliver at a designated place.
  • Possession of the original B/L gives the title to the goods being carried. It is a negotiable document of title to the goods. The consignor must make sure that at least one original B/L reaches the consignee in good time (since he will receive the goods only against presentation of at least one original B/L). The carrier usually establishes three original B/L, which are sent to the consignee under two separate registered mails (it is also possible to send one by ship's bag).

The B/L states to whom and on what terms the goods are to be delivered at destination. Without an original B/L the goods will not be released. The usual way to get the goods without the presentation of the original B/L is the establishment (by the consignee's bank) of a bank guarantee covering the value of the goods. Such guarantee can only be cancelled by remittance of the original B/L to the bank. It is sometimes possible, at the discretion of the carrier, for the consignee, holding a copy B/L to sign a Letter of Indemnity in return for delivery of cargo. On receipt of the B/L it should be passed to the party responsible for clearing the goods. Once the vessel has docked and the goods have been unloaded, the B/L and appropriate customs documents will be required to obtain release of the goods for onward transport.

Terms of the B/L

There are three different entries possible in the box headed “CONSIGNEE”:

  • To bearer: this means that any person having possession of the B/L may collect the goods; such person is not required to disclose their identity or to explain how they came into possession of the B/L. The mere fact that they have possession of and present the B/L is sufficient. Issuing B/L "to bearer" is not common practice and carries significant risk.
  • To order: this is the form of B/L used most frequently in commercial transactions. As long as the shipper holding the B/L has not endorsed it, he is entitled to dispose of the goods. By endorsing it, he transfers his rights to the endorsee, that is, the person to whom the B/L is assigned by endorsement. Title to the goods is thereby transferred to the new holder of the B/L who may in turn assign it by endorsement to somebody else.
  • To a named party (straight B/L): in contradiction to a B/L "to order", the straight B/L (one in which it is stated that the goods are consigned to a specified person) does not entitle the shipper to dispose of the goods. That right is vested exclusively in the receiver who alone has the right to collect the goods, upon presentation of the B/L and proof of his identity.

The Straight B/L may be assigned by means of a document instrument in writing, evidencing the assignment, which the assignee must present to the master of the vessel together with the original B/L when he collects the goods.

On a straight B/L, the term "to the order of" printed on standard B/L must be crossed out, and the deletion initialled by both the shipper and the Master.

A Clean B/L is a B/L, which contains nothing in contradiction to qualify the receipt on board of the ship, the goods in "apparent good order and condition". Goods may sometimes be ‘received alongside’, which can result in a delay prior to the physical loading of the goods onto the vessel.

An Unclean B/L is a B/L containing notation that goods received by carrier were defective.

The Through B/L is issued when a shipper wishes the carrier or shipping line to arrange for transport to a destination beyond the port of discharge. The through B/L, in addition to the agreement to carry goods from port to port, includes a further journey (by sea or land) from the port of ship's destination to a distant place (for instance, a destination inland instead of a port). See INCOTERMS 2000 , INCO terms explanation, INCOTERMS narrative, INCOTERMS practical application chart.

- Rail transport

Rail transport is a safe land transportation system when compared to other forms of transportation. Rail transportation is capable of high levels of passenger and cargo utilization and energy efficiency, but is often less flexible and more capital-intensive than highway transportation is, when lower traffic levels are considered. Rail transport costs less than air or road transport. It is very suitable for the movement of large load sizes over longer distances, but it has the following disadvantages:

  • it lacks the versatility and flexibility of motor carriers since it operates on fixed track facilities. It provides terminal to terminal, rather than point to point delivery services;
  • though it offers an effective method of bulk haulage, it is slow.

Documentation for movement by rail is controlled through the rail waybill. The rail waybill is a non negotiable document. It contains the instructions to the railway company for handling, dispatching and delivering the consignment. No other document is required expect for international transport across borders, where enquiries should be made locally as to the proper documentation needed.

- Other modes of transport

Other modes of transport especially valid for emergency situations and remote under-developed areas are:

Animal

The goods being moved must be packaged in relation to the weight that the particular animal being used can carry. For information, the table below shows the animals used most frequently in such situations and their approximate work rates. These may vary locally because of climatic or other local conditions.

Barges and boats

Where road and rail transport is not possible due to lack of infrastructure it may be necessary to transport goods by river. This mode of transport also suits bulk shipments of commodities. This will often be done using motorised barges or similar vessels. Goods can be loaded and unloaded using jetties and quayside facilities. In some cases they may be unloaded from seagoing vessels direct for onward transit.

What size and type of barge (self-propelled or dumb) that may be required will be determined by availability. Barges are used frequently in the Rhine/Danube basin, the Mississippi basin and Mekong Delta and the coastal waters of south-east Asia. It provides a relatively cheap and simple means of transport which is not dependent on sophisticated port handling facilities. Barges have been adapted in the United States and Europe so that they form part of a multi-modal transport system where barges are integrated with road and rail movement. Also barges are part of the lighter aboard ship (LASH) / barge system and refers to the practice of loading barges (lighters) aboard a larger vessel for transport. It was developed in response to a need to transport lighters, a type of unpowered barge, between inland waterways separated by open seas. Lighters are typically towed or pushed around harbours, canals or rivers and cannot be relocated under their own power. The carrier ships are known variously as LASH carriers, barge carriers, kangaroo ships or lighter transport ships.

Administration - Safety and security of goods to be moved

Legislation and regulatory frameworks for transport usually include a specific requirement for vehicle safety. Most humanitarian organisations also lay down safety and security policies that need to be followed. Requirements will include the vehicle weight, the way it is loaded and how the load is distributed.

Drivers and operators of vehicles are responsible for using a vehicle on the road with a safe and secure load. Legislation will often state that, in transit, the drivers have full responsibility for the safety of their load, even if they did not load it personally. Even if, in some countries, the legislation is not implemented, respected or followed, every effort must be made to ensure that the organisation’s drivers are following the legislation that has been laid down.

Avoiding in-transit theft

A thief intending to steal a loaded vehicle requires:

  • knowledge of an attractive load;
  • the opportunity to access it;
  • time to steal it and to get away before detection;
  • a market for the goods; and
  • limited or negligible perception of risk.

Main sources of vehicle theft are from depots, from overnight parking areas and from the roadside. Theft can be committed by:

  • stealing an unattended vehicle;
  • hi-jacking the vehicle;
  • threatening or bribing drivers.

Drivers are central to prevention of this type of loss, and their integrity is essential.

Consequently, careful recruitment and selection of drivers is critical. Training will impress upon them the need for care, and procedures to follow to avoid risk of theft. Driver identification cards can be used for added security and to avoid thieves gaining access to vehicles by misrepresentation when parked on third party premises. However, there is little to prevent deliberate collusion by drivers. Vigilance is essential and attention to any pattern of discrepancies on loads.

Insurance

Insurance is required for both the load and the vehicle. Insurance for the load may be covered by the overall shipping terms, if the road transport is performing an onward shipment for example. In other cases the load may be covered by a blanket insurance policy. It is advisable to confirm the insurance status and requirements with the sender/owner of the goods to be moved. Necessary precautions must be taken to avoid theft and loss.

The risk of using a transport provider in the required area must be assessed and the appropriate insurance taken out. In moving goods through the use of third party providers, as part of a humanitarian aid initiative, there will be potential risks attached in terms of theft or loss of the goods. It is necessary to understand the level of insurance that the provider will offer to cover the goods it carries on behalf of its clients. Often if any insurance cover is offered, it will be fairly nominal. It is important, therefore, to ensure that the goods that the third party provider is carrying are properly insured.

The cost of this may be influenced by the reputation of the haulier. In setting up contracts with providers, it is important that the situation on insurance be clarified and if appropriate, incorporated in the contract terms. If there is any doubt as to the cover provided, advice from the organisation's office handling insurance should be sought. If insurance costs differ for transportation provided by different hauliers, these should be included in the overall cost comparison matrix.

Things to look out for:

  • type of insurance: Who and what is covered and to what extent;
  • duration;
  • scope: in-country coverage only? What happens when the vehicle crosses borders?
  • how are high risk areas covered, if at all; and
  • reimbursement process and how long it takes.

References

WFP manuals/guidelines

...

Common Terms in General Transport

There are several key concepts that used across all forms of transport:

Shipper 

The person or legal entity that is sending the goods from point of origin. The shipper does not have to be the owner of the cargo. The shipper can also be referred to as the sender. 

Carrier

The person or legal entity that either owns the vehicle or vessel upon which cargo is transported - or "carried" - or has legal responsibility for physically stewardship of the cargo between two points. 

Receiver

The person or legal entity that is duly authorised to receive cargo on the receiving end. Receivers are also sometimes called "consignees," however the term consignee has specific legal meaning in customs proceedings, while a receiver is more generic could take possession of cargo through a variety of means, domestic or international.

Agent A person or legal entity who is legally and contractually designated to act on behalf of a shipper, carrier or receiver. Agents can act in a variety of functions, from handling goods to processing documentation.
Service ProviderAny contracted third-party entity that offers a service, usually on a for profit basis. A service provider may be involved in a variety of activities, including being an acting agent or a contracted carrier.
"Take Possession" When physical goods are transmitted into the direct care and stewardship of one party, be it a transporter, a warehouse, or customs, that party is said to have "taken possession" of the cargo. Taking possession does not mean the party holding the cargo then owns the cargo, they are only physically holding it for their part of the transport process.
IntermodalAny form of transport that changes between two or more modes of transport. Intermodal transport can be facilitated through the use of containerised shipment, however cargo can also be transported through intermodal means simply by directly loading and offloading through a variety of means. 
Material Handling Equipment (MHE)MHE is any form of mechanical equipment used to facilitate the loading and offloading of cargo, or the movement of cargo around an open space such as a port or a warehouse. MHE includes forklifts, cranes, pallet jacks, and more. 
IncotermsIncoterms -  "International commercial terms" - are mutually agreed upon international shipping terms that designate responsibilities, risks and limitations of shippers, carriers and receivers. Incoterms generally are only applicable and enforceable for international shipments.

The Role of Transport

In the humanitarian context, transport is defined as:

“The activities involved in moving supplies from point of origin to internal customers or beneficiaries”.

The role of transport is to facilitate the movement of physical goods. In the humanitarian context, this might include:

  • Transport from manufacturing facilities, donors, and storage or pre-positioning locations
  • Delivery to regional warehouses, country level warehouses, offices and distribution points 
  • Carriage between warehouses, hubs and field locations

The source and destination may be in the same country, or one may be in a different country requiring international movement.

The rapid growth of technology and the changes in the delivery of humanitarian aid has done little to change the fact that relief supplies still have to be collected and delivered via some physical form of the transmission. Even though new technologies have enhanced the speed at which cargo can be transported or monitored, the basic concepts surrounding transportation have remained largely the same for many years.

Historically, the transportation of supplies has been regarded as an ancillary function of little or no central importance. More recently, efficient transportation has been recognised as an essential determinant in providing consistent, quality service to beneficiaries. A good transport system fulfils the "rights" of supply chain management. That is:

  • The right good.
  • Delivered to the right recipient.
  • In the right quantities.
  • In the right condition.
  • At the right location.
  • In the right time.
  • For the right price.

In an ideal scenario, goods will arrive as scheduled, at the right price, in maximised loads with no breakages or pilferage.

Summarising this thinking into a series of actionable steps, and successfully implementing those steps, will ensure timely and effective delivery of humanitarian assistance. A good transport system complements an efficient distribution system.

Developing a Transport Strategy

A transport strategy in a humanitarian context varies from one organisation to another and from one situation to another. and is largely dependent on the needs of the response. Some factors to consider when developing a transport strategy are:

  • How to identify transport service providers.
  • How to manage transport – self managed or third-party provided.
  • Capacity of transport modes available.
  • Quantities of goods requiring movement over time.
  • Nature of goods/products/supplies to be transported.
  • Distances to be covered.
  • Environmental issues such as climate, government legislature, and infrastructure.
  • Number of destinations, hubs and pre-positioning locations.
  • Origins, routes, and destinations.
  • Available transport modes & their relative costs.
  • Human resources available.
  • Security along the transport route.
  • Special circumstances, such as the nature of disaster.

The above factors would be valid for both emergency and non-emergency situations.

Transport management in emergencies can be a complex task depending on the nature of the disaster. Humanitarian organisations have increasingly begun to use the joint transport services as a strategy in emergencies, such as those implemented by the Logistics Cluster during emergencies. A joint transportation service is based on a collaborative approach and aims to leverage the advantages of centralised coordination and sharing of assets.

Organizing Transport

In emergency contexts, transport can logically be divided between domestic/local transport and international transport. The general concepts around domestic and international transport remain largely the same, however special considerations are required for both.

Domestic transport movement - Local movements within a specific country will usually involve road transport, however rail, air, river and even at time sea transport can occur in domestic movement. This may involve movement of palletised/bulk loads from ports, airports and rail-yards to warehouses and depots, palletised/bulk movements between facilities such as warehouses or depots, or delivery of smaller consignments from a local warehouse or depot to end users at a number of destinations in an area. Domestic transport requires actors to follow all local laws and safety regulations.

International movement - International transport requires the transmission of physical goods across a legally defined international border or boundary, and in most normal circumstances requires undergoing standard customs procedures.  The local market will not always be able to provide all the products and services required to fulfil the needs identified in an emergency response. Response agencies will therefore source goods externally and organise the transportation of relief supplies to affected locations. To ensure efficiency and compliance with import regulations the organisations seek service providers with expertise and capacity to handle certain aspects of the movement.

Managing Transport Service Providers

Humanitarian response organisations have increasingly begun to rely on external transport providers. An external transport provider is defined as any third-party who can carry or identify vessels that can carry cargo through commercial means. In the event third-party transport providers are contracted, there has to be a structured approach to the selection process, similar to other forms of procurement, and subsequent monitoring and control of the provider or providers selected. There are a number of important issues to be considered to ensure that a reputable provider, who will provide the adequate level of service, at an acceptable cost, is sourced.

The selection process adopted for the acquisition of all services is covered by the organisation's approved procurement policy, processes and procedures. Ideally, contracting should be done in a competitive manner, on market terms, and negotiations undertaken in an open and transparent fashion, thus ensuring cost effectiveness and equal opportunities for the appropriate commercial entities.

There has also been an increasing level of attention to the ethical standards of contractors, including their facilitation and participation what would be considered violations of state and national laws, human rights abuses, or their involvement with parties to conflict. 

General Transport Service Provider Selection Criteria

The criteria for selection will vary from organisation to organisation. Some factors that may influence the selection of transport service providers are:

  • Carrier characteristics and capacity.
  • Proven efficiency.
  • Timeliness of delivery.
  • Known integrity, reputation and reliability.
  • Good relationships with other carriers.
  • Financial viability to cover costs of providing the service.
  • Ability to provide a multi-modal service, if need be.
  • Presentation of timely reports and correct invoices.
  • Licensed by the government to conduct customs clearance formalities and be up-to-date on changes in customs requirements.
  • Own or have access to a bonded warehouse to protect and control shipments in transit.
  • Own a trucking fleet for inland transport and have access to specialised vehicles when needed such as container trucks, low-bed trailers, tankers, etc.
  • flexible in their availability at short notice, also outside of office hours and on public holidays.
  • Have influence in the transport market, with port authorities, etc.
  • Experienced in successfully handling duty exemption arrangements for humanitarian organisations.
  • Have an office in the port area or nearby.
  • Have at least a country-wide, preferably a multi-country regional network.
  • Use technology effectively, including a good telecommunications system and, preferably, a computerised tracking system that allows visibility of where shipments are at a given time.

Typical Service Providers

Although it is advisable to use an intermediary such as a freight forwarder or clearing agent to handle international movements, it is still important to have a basic understanding of the roles of other third-party service providers involved in international movement. 

Private Transport Companies - Private companies that own and operate vehicles such as trucks or planes directly. Many private transport companies have direct sales and customer service components, in particular small scale, local transport companies. Other companies, such as major air lines may not have the time or capacity to manage direct customer sales, and prefer to go through brokers or forwarders. A direct relationship with a transport company can certainly save costs, but for any services that require complex intermodal solutions that may not all be owned by the same company, or in situations where customer service is inadequate, contracting forwarders might be the best solution. 

Freight Forwarders – Commercial third-party companies or individuals that act as brokers between transport companies, customs agents, logistics providers, and other commercial services that might support packaging/handling, warehousing, transportation, or any other aspect of moving material goods from one place to another. Unless a requesting agency has well defined transport routes and a detailed understanding of the shipping market, freight forwarders are essential for identifying and pricing transport options, especially in chaotic post emergency settings. Forwarders have contacts within the transport communities and know how where to look for the best shipping options.

Clearing Agents – Commercial third-party companies or individuals who specialise in understanding import and export regulations, and help facilitate the flow of material goods through customs. Though clearing agents may be used for import or export, the majority of their services are employed for getting goods into countries. Import and export regulations are complex and the failure to comply can result in fines or other difficulties. Many countries require an official licensing process for clearing agents, and unless organisations have specific expertise in customs agents should always be consulted for imports of any kind.

Inspection Services – Private third-party services that conduct inspection on goods in transit. This may include physical counting, damage inspection, laboratory testing, inspection of batch/lot/expiration, validating specifications, etc. Inspection services may be required for importation, but many agencies employ inspection services during upstream transport, especially at the point of procurement.

Third Party Logistics Provider (3PL) – Commercial third-party logistics providers that can assume a portion of or the entire supply chain. 3PLs can act on behalf of contracting agencies for a variety of services, including warehousing, kitting, procurement, quality inspections, transport and even developing supply chain strategies without providing a physical service. 3PLs tend to be more expensive, but can offer holistic solutions to agencies who may need additional support.

The aforementioned service providers are all for profit companies, and as such the regular procurement process for each respective agencies should still be applied. It is generally recommended that agencies obtain multiple quotes, review performance, and incrementally conduct new bid analysis. 

Other related parties frequently encountered with cargo operations are:

  • Customs Officials – Agents designated by the national authority of countries to facilitate the lawful transmission of items into incorporated national territory.
  • Airport / Sea Port Authorities – Government lead or appointed authorities who oversee the safe and efficient operation of ports of entry, including coordinating positioning and movement of vessels and aircraft and ensuring security measures are enacted on behalf of the national authority in question.
  • Ground Handling Agents– Government run or privately contracted services who manage ground handling at airports and seaports. Ground agents are usually sub contracted and coordinated by forwarders or the airlines, however occasionally humanitarian agencies may need to liaise directly with them to solve problems.

Planning and Scheduling Movement

Routine movements, taking place on a regular basis, need to be planned at the outset. Non-routine movements occurring on an ad-hoc basis will have to be planned when the need arises. Ideally movements should be planned and managed by a transport office or dedicated focal point responsible for determining the appropriate routing for the goods, allocate resources (own or contracted) and inform the destination of estimated delivery time. During movement designated focal points will track the progress of the goods and update delivery times accordingly and will manage the staff involved in the movement and deal with any issues that arise. They will also handle any problems that occur during the movement, liaising with contractors, freight forwarders and shippers as required. The transport office may have to produce the required documentation to cover transit, alternatively they will be responsible for collecting the required documents together for dispatch.

Once movements have been planned and are initiated, it is important to maintain an information flow between all parties involved to ensure the safety and security of the goods and the adherence to service as promised. In environments within which humanitarian aid organisations operate, many events can impact the efficient movement of goods. In natural disaster or conflict zones, the risk to the movement is potentially high. Having up-to-date information on the status of the movement allows problems to be quickly identified and dealt with. Movements in a national context can usually be managed more closely than movements between or across countries. National movements can be usually planned and coordinated more easily while international movements will often be managed by one or more third parties, working in different time zones and in different languages. Often, international movements are planned and managed by a freight forwarder or logistics service provider working within the broad plan to meet the client requirements in terms of movement time and routing.

In addition to identifying the primary methods of transport, aid agencies should consider the smaller intermediary steps. As an example, even though an agency may be able to identify an international air transport method into a country, will there be available trucks to adequately pick up and transport cargo from the airport of reception? The same applies for multiple steps in the process, including the ability to identify adequate warehouse space, the ability to understand and comply with import regulations, and generally be able to accommodate all steps of the supply chain, not just the one step in question. Frequently, aid organisations are operating in a “push” model early in a disaster, and persons associated with organizing upstream transport are not necessarily taking directions from or even communicating with the persons engaged in downstream planning. Proper planning throughout all stages is vital to a good transport strategy.

Standard Documentation

Outside of highly specialised forms of documentation utilised for different modalities of transport, there are several widely accepted documents used in virtually all methods of transport. The purpose of utilising widely accepted documents is enact some form of traceability and accountability for cargos in transit between all parties who may handle or store the cargo. Widely accepted cargo tracking documentation methods should not be confused with the wide variety of specific documentation required for customs clearance. Customs clearance documents are generally required to certify conformity with national laws, help facilitate tariff revenue, and may be different from country to country. At the very least, agencies should consider using some form of the below documents for all shipments, even domestic shipments between their own managed facilities:

Waybill – A waybill is the ultimate informal “contract” between the sender, the carrier and the receiver of goods. A waybill should contain all relevant information for the shipment itself, including:

  • The contents of the shipment.
  • The point of origin and destination.
  • Names of the shipper/sender, the carrier/driver, and the intended recipient.
  • Dates of the transaction.
  • Important information pertaining to the goods; special handling requirements, delivery instructions, etc.

When issuing waybills, one copy should stay with the sender, and at least two copies should travel with the carrier. When cargo is delivered on the receiving end, one of the copies travelling with the carrier should stay with the receiving party providing a transparent paper trail of what should have been on the vessel/vehicle and when it arrived to whom. Ideally, the sender will fill out and generate the waybill, the transporter will cross check contents and confirm the items are correct, and the receiver will cross check and confirm again, noting any discrepancies. Some aid agencies prefer to receive a copy of the waybill signed by the receiver before closing the books on that individual shipment. If a third-party transporter is used, agencies may withhold payment until the countersigned waybill is received in good order. Waybills may also sometimes be referred to as “cargo manifests.”

Packing List – The packing list is a more detailed document that contains key information on the consignment itself. Packing lists might contain:

  • Detailed piece counts per line item.
  • Unit dimensions.
  • Batch/Lot numbers or dates of production/expiry.
  • Kit contents and components.
  • Part numbers.

Depending on the nature of the consignment, packing lists could be multiple pages long and have high volumes of information. A detailed packing list will help senders, carriers and receivers accurately identify the quality and status of the consignment. A waybill may only contain an overview of the goods, while placing more emphasis on data surrounding who and when the consignment changed hands. A packing list should contain as much or as little information required to successfully convey the full state of the goods in the consignment.

Invoice / Proforma Invoice – Invoices and Proformas are typically only applied when goods are coming from a vendor, or when goods are physically transported across a national border. For domestic movements, the invoice largely contains financial information relevant to the consignment, and should designate if goods have been paid for or not. Proformas are largely only used when attempting to obtain duty free status during import, and as such aid agencies will only likely be producing proformas during the customs phase.

Cargo Insurance

Insuring cargo while in transit can be complex for aid agencies, especially when multiple forms of transport are involved across multiple countries, and into areas of heightened risk, such as natural disasters or protracted armed conflicts. For many agencies, the single largest expenditure of their response activities is the pipeline of relief items heading to affected populations, and proper care should be invested into maintaining this pipeline through risk mitigation measures. Generally there are two approaches organisations use for insuring cargo:

  • Relying on insurance provided by the third-party transporter
  • Developing a self-managed insurance plan

The risk of using a self-managed or third-party transport provider in the required area must be assessed prior to the appropriate insurance being taken out. In moving goods – especially to and within high risk contexts - there will be potential risks of theft or loss of the goods.

Third-Party Transporter Insurance

Transporter provided insurance can be useful in that it provides coverage for short term gaps, for specific activities that self-insurance isn’t designed for, or last mile activities that have enhanced risks. Cargo may be covered by the overall shipping terms of a contract with the third-party transporter, but it is strongly advised that all organisations relying on third-party transporter provided insurance to confirm the insurance status and requirements with the sender/owner of the goods to be moved. Shippers should understand the level of insurance that the provider will offer to cover the goods it carries on behalf of its clients; often if any insurance cover is offered, it will be fairly nominal and only cover a portion of the real cost of the items.

To ensure that freight insurance is properly applied, the full real value of the cargo must be declared to the third-party transporter prior to shipping and the costs and inclusion of insurance must be transparent, being included on any invoicing, and partially expressed through the Incoterms when in use. Many shippers also include the value of the transportation itself as part of the “value” of goods, as any loss or damage due to accident or negligence on behalf of the transporter will also result in the lost cost of the transport service itself. If a catastrophic loss should occur, ideally the shipper will be able to recover the full value without external litigation. Shippers should express a desire to insure cargo through the carrier/third-party when soliciting transport from brokers and forwarders to ensure service is available up front, and normally third-party or carrier provided insurance is negotiated through the forwarder.

There may be instances where organisations develop long term transport contracts with third-party providers, through which the shipper may not know the full value of every shipment over the contracted period. Such arrangements might be common in landside trucking contracts, which might go for a year or more over a changing response. If organisations wish to utilize insurance provided through the transporter in this case, they will need to develop a strategy to account for potential values of future cargo. This might include designating a maximum ceiling of coverage for any given movement that is roughly equal to or higher than any possible load, or develop a scheme through which cargo value is declared per movement and the third-party transporter adjusts billing accordingly. organisations should never assume long term contractors will factor different insurance needs into quoting, and should be transparent in the bid process to avoid confusion later on.

Individual cost of third-party provided insurance may be influenced by the reputation of the transporter. In setting up contracts with providers, it is important that the type of insurance be clarified and incorporated in the contract terms. If there is any doubt as to the cover provided, advice from the organisation's office handling insurance should be sought. If insurance costs differ for different transporters, these should be included in the overall cost comparison matrix.

Key elements organisations should consider:

  • Type of insurance: What is covered and to what extent, and where do responsibilities start and stop for the transporter?
  • Duration of insurance coverage
  • The overall process for reimbursement and payment

For long term, open-ended contracts:

  • Scope: does the insurance cover all potential contexts of operation? What if a transport requires operating in more than one country?
  • Does the insurance accommodate changing risk conditions?

Self-Managed Insurance

Some humanitarian agencies have opted to develop a global self-managed insurance schemes in the form of self-insurance or some form of “blanket insurance.”

A self-insurance scheme for cargo requires a fairly robust accounting system, whereby organisations intentionally add costs to budgets for cargo movement, but simply keep a small portion of that money in a separate, global pot which can be paid out in case of cargo loss. Self-insurance is useful in that it is quick and efficient and doesn’t require dealing with outside brokers, however it requires a great deal of internal control and analysis. Smaller agencies or agencies that have fluctuating size and types of activities may not be able to adequately predict their global self-insurance needs, and may end up facing substantial global losses.

A method of obtaining global blanket cargo insurance might come from soliciting large international insurance brokerages, who may be able to provide a flat or relatively fixed rate for cargo insurance based on their estimation of risk of any individual agencies’ activities. Global cargo insurance might end up being slightly more expensive per kilogram, but saves substantial amount of time identifying insurance solutions for every transport. The specifics of a global insurance plan would be negotiated based on the need of the requester. As an example, if an aid agency maintains a large fleet of self-managed cargo vehicles in many high-risk countries, there may be a need to develop a high annual global premium to cover all risks associated with cargo movement. On the other hand, if an aid agency is largely only doing international transport using regular carriers, then insurance may be issued on a case by case basis.

Incoterms

International Commercial Terms (Incoterms) used in international contracts of sale are widely agreed upon, pre-defined commercial terms for defining limits of risk, cost and liability for any form of international transport, detailing the roles and responsibilities of the shipper, the carrier and the receiver/consignee. Incoterms are negotiated and set by the International Chamber of Commerce (ICC), and are connected to various forms of international trade law and maritime time. Incoterms were established in the 1920s, and are now generally updated every ten years, with the most recent update in 2020.

Incoterms function as a short hand for all parties involved with an international shipment, and allow for different parties to quickly reference and understand where their obligations lie. The shipper in this context may be the supplier of goods, or it may be the party purchasing the goods and arranging for transport. The contracted carrier transporting the goods may only function as a broker or intermediary, but  will be able to reference Incoterms when dealing with the shipper to fulfil its obligations. organisations that are planning international procurement and shipment should seek to include Incoterms in both their procurement and transportation contracts. 

Incoterms cover all forms of international transport, however there are special inclusions for sea shipping only. the current reference point for shippers is Incoterms 2020, however sellers and carriers may agree on older versions of Incoterms insofar as all parties are aware of what terms they are referencing when talking about procurement and transport. 

Incoterms 2020 for All Forms of Transport:

Image Added

A general description of all-mode Incoterms:

EXW 

Ex-Works

Buyer takes possession of goods at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.). The seller is not obligated to load the goods on any collecting vehicle, nor does it need to clear the goods for export (where such clearance is required).

FCA

Free Carrier

Seller turns over possession of the goods to the carrier or another entity designated by the buyer at the seller’s premises or another named place. The named place of transfer must be clearly identified; the risk passes to the buyer at that point.

CPT

Carriage Paid To

Seller turns over possession of the goods to the carrier or another entity designated by the seller at an agreed place. The seller must contract for and pay the costs of carriage necessary to bring the goods to the agreed place of transfer.

CIP

Carriage and Insurance Paid To

The seller turns over possession of goods to the carrier or another entity designated by the seller at an agreed place. The seller must contract for and pay the costs of carriage necessary to bring the goods to the agreed place of transfer. The seller contracts insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. Under CIP the seller is required to obtain only minimum cover insurance. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

DAP

Delivered at Place

The seller transfers goods to the possession the buyer on the arriving means of transport (truck, vessel, aircraft) ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to the named place, including insurance.

DPU

Delivered at Place Unloaded

The seller transfers possessions of goods to the buyer, once unloaded, at a named place of destination. The seller bears all risks involved in bringing the goods to, and offloading them at the named place of destination, including insurance.

DDP

Delivered Duty Paid

The seller delivers and transfers possession of the goods to the buyer, cleared for import on the arriving means of transport (truck, vessel, aircraft) ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.


Incoterms for Seaborne Freight Only:

Image Added

A general description of seaborne freight only Incoterms:

FAS

Free Alongside Ship

The seller turns over possession when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onward.

FOB

Free on Board

The seller turns over possession of the goods on board the vessel nominated by the buyer at the named port of shipment. The risk of loss or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onward, including insurance.

CFR

Cost and Freight

The seller turns over possession of the goods on board the vessel. The risk of loss of or damage to the goods passes to the buyer when the goods are on board the vessel, however the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

CIF

Cost, Insurance and Freight

The seller turns over possession of the goods on board the vessel. The risk of loss of or damage to the goods passes to the buyer when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage, however the seller is only required to obtain minimum cover insurance. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

Mode of Transport

A mode of transport is the means by which goods and material are transferred from one point to another. The basic modes of transport are:

  1. Air
  2. Sea / River-way
  3. Road
  4. Rail

See below a mode comparison matrix for different modes.


Road

Rail

Sea/River-way

Air

Relative Speed

Moderate

Moderate

Slow

Very High

Reliability

Good

Good

Limited

Very good

Cost per kg

Medium

Low/Medium

Low/Very Low

High

Flexibility

High

Low

Low

Medium

Other Considerations

Extensive Network

Limited and fixed infrastructure

Restricted Network

Limited Network

Short and medium distances from neighbouring country to operation site; internal transport for short and medium distances

Large consignments from port of discharge to inland operation site; ecological

Large quantities; less urgent; pre positioning phase; long distances with no time constraint

Emergency phase; expensive goods; fragile or perishable goods; cold chain; no alternative option; small shipments; e.g. diplomatic pouches; long distance with time constraint.

Advantages

Relatively fast; no transshipment; direct delivery; flexible; cost

Economical; large loading capacity; range and speed (context depending)

Economical; large loading capacity; no restriction on loading capacity; cheap

Fast; reliable; limited losses; direct; easy tracking and tracing

Disadvantages

Roads may be dangerous or blocked; sometimes driver nationality or vehicle registration not acceptable

Difficulty finding freight cars; frequent delays; transshipping required; inflexible; limited tracking

Slow; transshipping at ports; use as a second means of transport at high volumes; higher theft risk in ports; not flexible

Expensive; restricted to journey’s between airports; restricted loading capacity; special considerations (dangerous goods, size limits, packing, etc.)

In emergencies, the criteria of speed and reliability must be examined when considering the choice of mode. Different modes have quite different characteristics and will need to meet the speed/reliability/cost criteria to varying degrees. The appropriate mode must be carefully selected if it is to match all the requirements. Multi-modal solutions may provide the most effective and efficient transport option.

Whilst the physical characteristics of certain goods and supplies may determine a specific mode of transport, most goods will be capable of being moved by a variety of modes. Customer requirements and constraints on the organisation providing the transport must be considered. In humanitarian aid situations, it is often environmental factors, such as the destruction of roads and railways that have a significant impact on mode selection.

It is important to fully recognise the operational characteristics of the mode or modes that have been selected. It is also necessary to consider the type of vehicle or equipment that will be used within that mode. Prior to making a decision on the mode of transport, it would be useful to create a matrix ranking of influential factors for choosing transport modes. Some factors to consider in the rating:

  • Required delivery date 
  • Cost of transport service
  • Reliability and service quality
  • Shipment size and item type
  • Anticipated transit time
  • Number of transshipment points
  • Range of different services offered by a third-party provider 
  • Modes that realistically cannot be considered should be ruled out of the decision process immediately
  • Geographical factors should be considered, as they may remove the opportunity to use a particular mode
  • Lack of appropriate infrastructure may also remove the opportunity to use a particular mode

Packaging 

Shippers should be aware of several potential problems when packaging cargos for any form of transport:

  • Breakage.
  • Moisture.
  • Pilferage.
  • Excess weight.
  • Spoilage/Expiration.
  • Temperature sensitive items. 

Any and all packaging should meet the needs of the shipped item, the recipient, the duration of the transport, and the method of shipping. Packaging should:

  • Meet shipping regulations.
  • Ensure proper handling.
  • Conceal the identity of the contents (where appropriate).
  • Help receivers identify shipments.
  • Insure compliance with environmental and safety standard.

Not only does the cargo need to be adequately packed but instructions be given to all parties handling the cargo at some stage of the venture to ensure safe delivery.

Packaging Types and Terms

  • Outer Packing/Outer Packaging - The outer most enclosure that contains or prevents unintended release of contents 
  • Over-Packaging/Overpacking - Items that are packaged in more than one layer or enclosure. Example: A box within a box, or multiple sacs within a larger carton. Over-packaging is common in handling of dangerous goods
  • Handling Unit - The lowest unit at which cargo is handled, usually at the box or carton level.
  • Unit of Accounting - the lowest level inventory unit that is tracked and accounted for. 
  • Shipping Unit - the lowest unit at which cargo is handled for shipping - may be the same as the handling unit, or may be accounted for at the pallet/Unit Load Device level. 
  • Common Package Types:
    • Bale/Bundle 
    • Carton/Box
    • Roll
    • Pallet
    • Set/Kit
    • Crate
    • Drum
    • Bag/Sack
    • Loose/Bulk/Individual Unit

Labelling

Labelling for transport is an important consideration. Knowing that cargo is often broken down or shipped loose means that shippers must adequately mark cartons to facilitate tracking of cargo, especially for cargo transported by air. Insurance brokers also have the right to dishonour a claim of damage to goods, due to inadequate packing and marking for the selected mode of transport. It is strongly advised that all cargo intended for air transport be labelled at the level of the carton or handling unit, and should have some - if not all - of the corresponding data:

  • Shipper.
  • Logo of agency.
  • Intended Destination.
  • Items in package (if required)
  • Packing List Number/Consignment Number.
  • Weight and measurement of the package.
  • Package contents (if appropriate to list externally without fear of pilferage).
  • Numbered “Package 1 of X”.
  • Special handling requirements (temperature control, fragile, etc).
  • Dangerous goods contained within.

Properly labelled packages will help reduce loss while in transit. Professional freight forwarding services tend to be extremely good at keeping large consignments together throughout the course of an air movement. Depending on the arrangement with the forwarder, large consignments can be split into multiple smaller shipments, and will be re-consolidated prior to delivery. In emergencies however, movement can be chaotic and cargo frequently delayed or lost. The more visible and easily identifiable relief cargo is, the more likely it is to reach its final destination.

The International organisation of Standardisation (ISO) has designed graphic symbols that are placed on packing units to instruct cargo handlers how to handle the cargo. These symbols are used worldwide and is a common language understood by all.

Any and all cargo containing dangerous goods being packaged for transport should be properly labelled according to the equivalent standard of the method of shipping. Information on proper labelling of dangerous goods of can be found in the dangerous goods section of this guide.

Templates and Tools

INCOTERMS 2020

TEMPLATE - Waybill

TEMPLATE - Packing List

TEMPLATE - Proforma Invoice

TEMPLATE - Cargo Manifest (Flights)

Full Template Package