Anthony Raj - Ijm

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International Journal of Management (IJM)
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 1, Issue 1, June-August (2010), pp. 174-186
IJM
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©IAEME
AN ANALYSIS ON THE PERFORMANCE

AND PROBLEMS OF THIRD PARTY
LOGISTICS PROVIDERS (3PL) IN INDIA
WITH SPECIAL REFERENCE TO INDIAN
MARITIME TRADE
Mr. S. Anthony Raj
Research Scholar, School of Commerce, Bharathiar University, Lecturer in
Commerce, Department of Commerce in International Business, CMS College,
Chinnavedampatty, Coimbatore – 641 049, [email protected]
Dr. S. Sudalaimuthu
Dr. S. Sudalai Muthu, Lecturer, Department of Commerce and Computer
Applications, Bharathiar University, Maruthamalai Road, Coimbatore – 641 046,
[email protected]
ABSTRACT
As the global population increases, the global demand increases. When the
demand increases, global firms and production increases, it obviously
increases the global supply. Consumption and competition increases among
the manufacturers and sellers when there is a huge supply. An old adage goes
like this, “Nothing will happen in the economy until somebody sells
something”. Might be this quote aged several decades, but the implications
are heavy in today’s LPG era.
Logistics was the discipline that was given birth at the cost of World War
II, when the military wanted to supply equipment, components, supplies, drugs
etc from their plinth to the field. Slowly but steadily the concepts developed
and followed in the war field has been dominating the market battle. The
logistics as a business discipline is popular among global distribution in the
last three decades.
Logistics and supply chain management (SCM) as an area of research has
been getting increasing attention from academicians and practitioners over
the last two decades since it may lead to reduced operational costs, improved
delivery performance and increased customer satisfaction levels, thereby
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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
6510(Online), Volume 1, Issue 1, June-August (2010)
making an organization more competitive in terms of cost, quality, delivery

and flexibility.
Key word: Third party Logistics Providers (3PL), Supply Chain Management,
Quality, Delivery.
1. INTRODUCTION
The importance of logistics and SCM is increasing also due to globalization as more
and more multi-national companies (MNC) are sourcing, manufacturing and
distributing on a global scale, making their supply chains very complex to manage.
However, outsourcing logistics activities to experienced logistics service providers
(LSP), also known as third-party logistics (3PL) providers, may enable companies get
very efficient and customized logistical support while themselves focusing on the core
organizational activities.
Today, there are many large multi-national LSPs that offer complete supply chain
solutions across many diverse countries in terms of their socio-economic and political
environments. Apart from core logistical activities such as transportation and
warehousing, LSPs also offer value-added services such as customs clearance, freight
forwarding, import/export management, inventory management,
assembly/installation, packaging and labeling, distribution, after sales support, reverse
logistics and so on. By outsourcing logistics, companies can leverage the expertise of
LSPs while concentrating on their core competencies.
In literature, logistics and Supply Chain Management (SCM) are often used
interchangeably, though there is a slight difference between the two. While SCM is
more strategic in nature, logistics is more operations-oriented. The evolution of
logistics and SCM in the 1990s can be traced back to “physical distribution
management” in the 1970s when there was no coordination among the various
functions of an organization, and each was committed to attain its own goal. This
myopic approach then transformed into “integrated logistics management” in the
1980s that called for the integration of various functions to achieve a system-wide
objective (Vrat, 1999; Seturam, 1999).
SCM further widens this scope by including the suppliers and customers into the
organizational fold, and coordinating the flow of materials and information from the
procurement of raw materials to the consumption of finished goods. The objectives of
SCM are to eliminate redundancies, and reduce cycle time and inventory so as to
provide better customer service at lower cost. The focus has shifted from the “share of
the market” paradigm to the “share of the customer” paradigm, wherein the goal is to
create “customer value” leading to increased corporate profitability, shareholder
value, and sustained competitive advantage in the long run (Evans and Danks, 1998).
While SCM deals more with the linkages in the chain, contracts and relationships,
supplier selection, information and financial flows besides materials flows, creating
new facilities such as plants, warehouses and distribution centers, and broader issues
such as society, economy, government and environment, the scope of logistics is more
or less confined to the routine job of transportation and storage of goods.
However, if one deeply ponders, one may realize that logistics is the core of SCM,
and if logistics fails, the whole chain snaps. Though logistics deals with mundane
vehicles, warehouses, layouts, material handling equipment, Motor, Vehicles Act, toll
tax, sales tax, octroi, documentation etc., and efficient management of it has the
potential to make the chain taut and agile.
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Therefore, there is growing interest in logistics, and hence in SCM, around the
world. The concept of logistics outsourcing can be traced quite far back in history. In
Europe, a number of LSPs can trace their origins back to the Middle Ages (Lynch,
2002). Tracing the evolution of logistics outsourcing in recent decades, we find that,
in the 1950s and 60s, logistics outsourcing was limited to transportation and
warehousing. The transactions were mainly short-term in nature.
2. STATEMENT OF PROBLEM AND RESEARCH GAP

Currently, the global manufacturers and sellers adopt invariably the „ethnocentric‟
models in spreading their business across territories. They need a core industry to link
them, their supplier and also their clients, who are spread across.
There are many issues pertaining to the 3PLs performance, problems and
prospects. To start with, 3PL acts as a crucial link to the Supply Chain. In this process
the exporters and importers adopt some selecting methodologies to fix 3PL for their
business. This research aims to identify the various factors for selecting the right 3PL.
Secondly, the outsourcing of logistics is a debated topic among the top level
managers. Since we all know that logistics cost is nearly 25 % of its production,
Production units need to identify the core areas of outsourcing. In this research, the
researcher tries to explore the most important areas of outsourcing 3PL.
Thirdly, the logistics cost. The Indian logistics cost is 13.6 % of its GDP. Indian
GDP during the year 2008-2009 was Rs. 55 trillion and in terms of US Dollar it was
$1.25 trillion. Similarly other countries logistics cost is also higher. The Below table
clearly gives the logistics cost of selected countries:
Table 1 Logistics of Selected Nations

Country Logistics Cost (in % of their GDP)
China 14.5
Japan 10.5
Korea 12.4
Singapore 20.0
Taiwan 13.5
France 11.7
Germany 11.8
Italy 12.6
Netherlands 12.2
Spain 12.1
United Kingdom 12.2
Sweden 12.7
Canada 11.8
Mexico 14.4
United States 8.70
Source: CII, 2008.
It is very clear from the above table, that Indian logistics cost is comparably high
as against the logistics cost of the developed economies. This is serious point of
probing. Because, they provide better infrastructure and service and charge less. But
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in India our service and infrastructures are not so well than them and we charge more
than them. So care has been taken to probe the formation of logistics cost.
Fourthly, the documentation part of the international business is a crucial part of
logistics industry. After the inception of the 3PL industry, the manufacturers like to
appoint the intermediate agencies such as CHAs‟ clearing and forwarding agents,
steamer/shipping agents, warehouse operators, and transport operators. These people
are at the rescue of manufacturers and buyers. They look after the creation of
documents and collect all the relevant documents from the concerned parties.
While doing so, they face tremendous pressures and problems. In this research, the
problems of 3PLs in terms of exports and imports have to be carefully examined.
Finally, the payment made by the 3PLs on behalf of the manufacturers and buyers.
At the operational ground, the very important expenses are met out and those are
formidable sometimes (in case of as penalties and demurrages). In this research the
payment of charges, duties and tariffs by the 3PLs on behalf of the traders and
collection the same from the parties have to be carefully examined.
3. OBJECTIVES AND HYPOTHESES OF THE STUDY

The current research aimed at bridging the gaps of the earlier researches and tries to
establish some standard measures to find a solution to bring down the logistics cost in
the future arena. Encompassing this, the following objectives are framed and
hypotheses are set:
 To analyze the seaport performance from all the major ports of India (Cargo
Traffic and Container Traffic),
 To analyze the performance of minor ports in India.
 To find the problems faced by the 3PLs in terms of export operations,
 To find the problems faced by the 3PLs in terms of import operations, and
 To find the problems faced by the 3PLs in terms of transit.
Based on the above objectives, important analysis and inferences are presented in
this article.
3.1. Research Design and Methodology

The research work is carried in three phase. The basic concepts of the research area
were obtained through professional consultations, referring to the world-wide surveys
and through the detailed analysis of Indian economic scenarios. This study conceals
different types of data which are discussed below.
3.1.1. Nature of the study

This study is a partial descriptive and analytical study. The most distinguishing
feature of this method is that the researcher has no control over the variables here. The
respondent has to only report what is happening or what has happened. Since the
study consists of surveys and fact-finding enquiries, this is said to be a descriptive or
ex post facto research. Despite the inability of the researcher to control the variables,
this study may also comprise attempts by him to discover the causes of the selected
problem. Meanwhile as an Analytical research, the researcher has used the already
available facts or information, and analysed them to make a critical evaluation of the
research topic.
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3.1.2 Research Area

There are 13 major ports in India from the coastal state of Maharashtra to West
Bengal, which covers around 7500 kilometers. The Indian major ports connect the
Arabian Sea, Bay of Bengal and the Indian Ocean. The Arabian Sea connects the
Middle East and European countries. The Bay of Bengal connects the Pacific Ocean
countries and Australasian countries. As far as the secondary data is concerned, 12
major ports data were collected and India‟s total Export and Import data were
collected from DGFT Office.
The primary data pertaining to this research was collected from the 3PLs located
in Coimbatore, Tiruppur, Chennai, Tuticorin, and Cochin. Coimbatore and Tiruppur
were selected as there are too many exporters and importers located in it. This
increases the opportunity of 3PLs to establish their branches here.
3.1.3 Primary Data and its Sources

This study mainly focuses on primary data as the logistics core industries are many.
Under the limelight of all these core areas, more than 100 questions were set and a
pilot study was undertaken by the researcher. Subsequent to careful examinations,
scrutinizes and consultations with the industrial experts, three separate structured
questionnaires were designed for:
 Questionnaire 1 meant for the Third Party Logistics providers in terms of
Export operations,
Import operations, and
transit and warehousing operations,
3.1.4 Secondary Data and its Sources

Inclusion of secondary data is obligatory for analysis and interpretation part. In spite
the global logistics industry is controlled unanimously by the private participation, it
is to assimilate that it has to be regulated and channelized by the Central Government
by various ministries such as Ministry of Commerce, Ministry of Surface Transport,
Ministry of Railways, Ministry of Road Transports & highways, Ministry of
Shipping, Ministry of Infrastructure (including Power, Communication, and others).
The direct impact of these ministries reflects in India Shipping Ministry. So the
researcher has selected 12 major ports data such as total port-wise cargo traffic, port-
wise vessel traffic and the port-wise container traffic. Ennore port, the 13th major port
data was excluded since the port commenced its operation only from 2001-2002.
To calculate the logistics performance Export and Import data were also collected
from the year 1996-‟98 to 2008-2009 (till June 2009).
These secondary data were obtained from the published annual reports of Indian
Sea Ports Association, Confederation of Indian Industry and the Directorate General
of Foreign Trade, New Delhi.
3.1.5 Period of Study

The period of study for the secondary data is 1993-2008 for container traffic, 1994-
2008 for vessel traffic and the study period for cargo traffic is 1994-2006. The Export
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and Import statistics from 225 countries from the period 1996-2008 were also
collected. The primary data was collected during the period 2006-2008.
3.1.6 Sampling design

Sampling design refers to the technique or the procedure the researcher adopts for
selecting items for the sample from the population or universe. A sample design helps
to decide the number of items to be included in the sample, i.e., the size of the sample.
For this study, the researcher has selected probabilistic sampling. The various
methodologies of sampling design are as follows.
3.1.7 Type of Universe

A universe is otherwise called „the population‟. As this study aims in identifying the
performance, prospects and problems of the 3PL, the population or universe for this
study is the 3PL operators. They are freight forwarders, clearing and forwarding
agents, truck operators, warehouse operators, shipping companies/shipping agents,
Customs House Agents etc.
3.1.8 Sampling Unit

For this study the researcher has collected data from the 3PLs located in Chennai and
Tuticorin. Out 300 respondents taken for the study 200 respondents belong to Chennai
and 100 belong to Tuticorin.
Table 3.1 Sample Split-Up

No. of Respondents No. of Respondents
Nature of Business
from Chennai from Tuticorin
Customs House Agents 33 17
Customs Broker 22 25
Freight Brokers 22 17
Shipping/Steamer Agents 28 16
In House Department 18 2
Warehouse Operator 15 5
Packers 3 1
Transport Operator 53 13
Container Operator 6 4
Total 200 100
Source: Compiled from Secondary Sources
3.9 Source List

Source list is also known as the „sampling frame‟, from which the sample is to be
selected. The source list consists of names of all the items of a universe. The
researcher has to prepare a source list when it is not available. For this research, the
researcher has to collect the name and address of the 3PL operators in Tamilnadu
(Chennai and Tuticorin). The details collected were tabulated and given in the
Appendix-I.
3.10 Size of the sample

There are about 849 registered third party logistics providers in Tamilnadu (Chennai
and Tuticorin). This population comprise of 687 Customs House Agents (CHAs). 116
registered Clearing and Forwarding Agents / Freight Brokers / Customs Brokers were
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found in Chennai and Tuticorin and 46 exclusive Steamer/Shipping agents in

Tamilnadu (Chennai Port and Tuticorin) and Cochin. Out of the 849, 300 3PLs were
selected for study. The sample percentage is 35.
3.11 Sampling Methods

The researcher desires to investigate the working efficiency and the problems of 3PLs
in India and a sample of few 3PLs is required for this purpose, the first stage would be
to select large primary sampling unit from the major 3PL players (especially from
Chennai) in the Universe. Next, certain specialised clusters may be selected and most
of the 3PLs are interviewed in the clusters districts. This represents a two stage
sampling design; with the ultimate sampling units being clusters of two areas namely
Chennai and Tuticorin.
On the other hand, if instead of taking census of all the 3PLs within the selected
areas, the researcher chooses certain centers and interviews all the 3PLs in it, this
would represent three-stage sampling design.
3.12 Statistical Tools used

For the analysis and interpretation, statistical tools such as the summary statistics
(Minimum value, maximum value, mean value, standard deviation and coefficient of
variation), simple percentage, trend projection, chi-square test, ANOVA, factor
analysis, regression, Discriminate Analysis and Garrett ranking are used.
3.2 Limitations of the Study

Even after a careful investigation this study is inseparable from the limitations. The
study is subject to suffer the following limitations:
3.2.1 In one-to-one conversation, the respondents feel very frank and share their
experiences, but when they are asked to ink the same in the questionnaire, they are
hesitant. Because of this, to some extent the researcher cannot avoid the bias opinions,
3.2.2 Because of the time constraint the researcher haven‟t covered the responses of
government officials and warehouse operators,
3.2.3 The respondents are wide spread, and so the researcher had to travel all the way
from his residence to various parts of Tamilnadu and Kerala to gather the relevant
data,
3.2.4 During the data collection time, the researcher sent questionnaires to many 3PL
operators through courier/mail. Only few respondents turned in favour, others kept
tight-lipped even after the sincere follow-ups and efforts made.
4. IMPORTANT ANALYSIS AND MAJOR FINDINGS

There are 13 major ports in India which are located in the 7500 km Indian coastal line.
The ports are Calcutta Port Trust, Haldia Port Trust, Paradip Port Trust,
Vishakhapatnam Port Trust, Chennai Port Trust, Tuticorin Port Trust, Ennore Port
Trust, Cochin Port Trust, New Mangalore Port Trust, Mormugao Port Trust, Mumbai
Port Trust, JNPT Port and Kandla Port Trust. Since the Ennore Port was established
recently and the transactions has commenced few years back, the researcher ignored
Ennore port in the analysis. In this section, the port-wise cargo traffic from the period
1994-1995 to 2005-2006 is analysed. The import and export cargo traffic are taken
into consideration.
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4.1 Cargo Traffic through the Indian Major Ports from the Period 1994-
1995 to 2005-2006
Volumes in 000 tonnes
VISAKHAPATNA
YEAR HALDIA PARADIP CHENNAI TUTICORIN COCHIN MUMBAI
M
E I E I E I E I E I E I E I
1994 –
4755 9976 6630 3273 12776 13573 9713 18738 1164 6876 1438 7193 15134 16852
„95
1995 –
4526 10865 7059 4196 13046 14738 9430 19571 1331 7955 2380 9111 16617 17064
„96
1996 –
5108 11993 7721 3847 13284 14515 9405 21423 1563 7611 2255 9487 15191 17556
„97
1997 –
6822 13374 8814 4488 14188 14836 10826 23353 1560 8414 2394 9778 12790 19307
„98
1998 –
6617 13600 8602 4507 13551 15378 9333 24314 1662 8488 2430 10251 11785 19138
„99
1999 –
4827 15876 8860 4776 14359 17323 10515 25946 2059 7934 2189 10608 10003 19516
„00
2000 –
5574 17250 13052 6848 18186 17005 12300 28548 2445 9839 2080 11037 10090 15765
„01
2001 –
6540 18468 14469 6662 16907 17867 12975 23038 3206 9811 1980 10077 9123 15932
„02
2002 –
8480 20121 16910 6991 20282 18544 14081 19606 3730 9564 2125 10897 10387 14298
„03
2003 –
9890 22676 18606 6705 21369 19306 16408 20302 3494 10184 2453 11119 10861 16469
„04
2004 –
11257 25007 21666 8438 24915 21290 19186 24745 3751 12060 3055 11045 11912 17666
„05
2005 –
14173 25005 21685 11424 25150 25495 20049 27199 3765 13374 3094 10844 11956 22684
„06
TOTAL 88569 204211 154074 72155 208013 209870 154221 276783 29730 112110 27873 121447 145849 212247
Mean 7380.75 17017.58 12839.50 6012.92 17334.42 17489.17 12851.75 23065.28 2477.50 9342.5 2322.75 10120.58 12154.08 17687.25
CV 40.905 31.214 44.360 38.626 26.554 19.398 29.841 13.905 42.108 20.269 19.204 11.220 19.459 12.514
CGR
9.53 9.18 12.82 10.16 7.51 4.94 7.51 1.73 12.77 5.16 3.56 2.80 -3.35 0.30
(%)
Source: computed from Secondary data.
4.1 Performance of Selected Major Ports in India

Table 4.1 portrays the performance (cargo traffic both in terms of Imports and
Exports) of selected major ports of India. Export and Import cargo traffic of Haldia
port shows a positive Growth rate with 9.453 percent and 9.18 percent respectively.
On comparison of the Ports in Bengal, it is found that Haldia Port Trust is bettering
Kolkata Port Trust in terms of its consistency as its coefficient of variation is less than
that of Calcutta. The one and only port in Orissa, the Paradip port Trust shown a
positive CGR in Export and Import cargo traffic (12.82 % and 10.16 % respectively).
The consistency of imports is higher than their exports as the coefficients of variation
are higher (44.36%) for exports and lower for (38.63) its imports.
The Andhra Pradesh state‟s Vishakhapatnam port recorded a positive growth of
7.5 percent and 4.94 percent respectively in Imports and Exports. The consistency
level is higher in its import with a coefficient of variation 19.39 percent and lower in
its exports with a coefficient of variation 26.55 percent. The performance of Chennai
port Trust one of the finest port in Tamilnadu shows a positive CGR with 7.51 percent
and 1.73 percent in exports and imports respectively. The results show a higher
consistency in Imports with a 13.91 percent Coefficient of Variation and a lower
consistency with a 29.84 percent Coefficient of variation.
The Tuticorin port, the most invested port by the Government of India shows a
positive growth with 12.77 percent in exports and 5.16 percent in Imports. The
exports shows a lower consistency with 42.11 percent Coefficient of variation and
imports shows a higher consistency with 20.27 percent coefficient of variation. As far
as Tamil Nadu is concerned Chennai Port is bettering than the Tuticorin Port with
lower percent of Coefficient of Variation. The Cochin Port located in the Queen of
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Arabian Sea witnessed a positive growth in both Export and Import with a positive
CGR of 3.56 percent and 2.80 percent respectively. Also the lower coefficient of
variation in imports 11.22 percent shows its consistency is higher as against its export
Coefficient of variation 19.20 percent.
Mumbai Port located in the financial capital of India indicates a negative growth
in exports with a – 3.35 percent and a positive growth of 0.30 percent. When
compared with other major ports in India, Mumbai port Trust shows a consistency in
both exports and imports with a coefficient of variation 19.46 percent and 12.51
percent respectively.
4.2 Cargo Traffic through the Indian Minot Ports from the Period 1994-
1995 to 2005-2006
YEAR Volumes in 000 tonnes
/ OTHER
NO.OF
GUJARAT MAHARASTRA GOA KARNATAKA KERALA TAMILNADU A.PRADESH ORISSA
STATES
PORTS 40 53 5 10 13 15 12 2 37
1994 –
„95
16.94 2.45 0.21 0.46 0.20 0.12 1.39 0.20 0.32
1995 –
„96
17.15 3.65 0.06 0.35 - 0.11 2.31 0.17 0.36
1996 –
„97
19.19 2.59 0.06 0.37 0.02 0.03 2.12 0.14 0.41
1997 –
„98
26.84 4.68 0.37 0.52 0.20 0.27 1.77 0.20 0.57
1998 –
„99
25.80 5.20 2.17 0.40 0.10 0.47 3.08 0.12 0.72
1999 –
„00
48.80 5.91 2.02 0.48 0.10 0.41 3.81 0.15 0.67
2000 –
„01
71.10 6.05 2.78 0.67 0.16 0.38 4.83 0.14 0.79
2001 –
„02
82.55 4.98 2.90 0.68 0.13 0.53 3.51 0.02 0.97
2002 –
„03
84.12 8.63 5.36 0.68 0.08 0.60 5.01 - 0.69
2003 –
„04
89.35 10.33 8.44 1.17 0.05 0.69 10.02 - 0.79
2004 –
„05
97.13 12.12 8.46 3.21 0.08 0.85 15.07 - 0.91
2005 –
„06
103.20 11.11 11.86 2.44 0.08 0.71 15.09 - 1.04
TOTAL 132.44 115.60 14.31 6.56 0.18 0.81 18.61 0.05 1.60
Mean 50.282 11.512 3.496 1.162 0.110 0.396 5.422 0.107 0.667
CV 81.26 235.24 130.77 137.77 51.83 66.86 104.06 76.51 50.64
CGR
(%)
20.86 28.97 63.55 14.39 + 14.10 19.21 + 9.01
Source: computed from Secondary data.
4.2 Performance of Minor Ports in selected states of India

Table 4.2 presents the traffic handled (both exports and imports together) in the minor
ports of India. The traffic handled at 40 minor ports in Gujarat shows a positive CGR
of 20.86 percent and a coefficient of variation 81.26 percent, which shows a lower
level of consistency. The cubic polynomial trend equation shows a positive growth in
the future years. There are about 53 minor ports in the state of Maharashtra. It is
found that the CGR is 28.97 percent and the coefficient of variation is 235.24 percent,
which shows a poor display of consistency. The cubic polynomial trend equation
shows a positive growth in the future years.
Minor ports in Goa show a positive growth of 63.55 percent. It shows a coefficient
of variation 130.77 percent, which infers a lower level of consistency. The cubic
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polynomial trend equation shows a positive growth in the future years. The
performance of minor ports in Karnataka shows a positive growth and lower
consistency with a 14.39 percent CGR and 137.77 percent coefficient of variation.
The cubic polynomial trend equation shows a positive growth in the future years. 15
minor ports in Tamil Nadu show a 14.10 percent CGR and a 66.86 percent of
coefficient of variation, which denotes a lower level of consistency. The cubic
polynomial trend equation shows a positive growth in the future years. 12 minor ports
of Andhra Pradesh shows a positive growth with 19.21 percent CGR and a lower
consistency with 104.06 percent coefficient of variation. The cubic polynomial trend
equation shows a positive growth in the future years. 47 minor ports in other parts
recorded a positive growth of 9.01 percent CGR and a 50.64 percent, which shows a
moderate consistency.
4.3 The First Most Critical Problem in the Export Process

The following table reveals the age distribution of the respondents of the study.
PROBLEM RESPONDENTS PERCENTAGE
Conclusion of sales contract in expected time 47 47
Securing L /C 15 15
Request for export clearance 38 38
Total 100 100
Source: Primary Data.
A question was asked to the respondent companies to identify the five most
critical problems they suffer during the export process. The above table clearly infers
that 47 companies out of 100 find it difficult in concluding the sales transaction in
expected time. 38 percent of the respondents responded that requesting the export
clearance is a bit problematic task for them. Only 15 per cent of the respondents feel
that securing a letter of credit from the importer‟s bank is a problem. Out of 24
problems discussed in this thesis, only three are spotted as the first most critical
problems for the 3PLs while processing the exports.
4.4 The Second Most Critical Problem in the Export Process

PROBLEMS RESPONDENTS PERCENTAGE
Securing L/C 24 24
Packing goods 12 12
Preparing documents for exports 28 28
Expedite examination of mandatory
38 38
documents
Total 100 100
The above table clearly infers the second most critical problems for the 3PLs. 38
per cent of the respondents feel that expedite examination of mandatory documents is
the second most critical problem of 3PLS. 28 per cent of the respondents feel that
preparing the document for export consignment is a difficult task for them. Expedite
examination of mandatory documents is the critical problem for 3PL.
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38 SECOND MOST CRITICAL PROBLEMS
Securing L/C
12 12 Packing goods
28
Preparing documents
24 for exports
4.5 The Third Most Critical Problem in the Export Process

Prepare freight forwarding instruction and other
document required for the transfer of cargo to 12 12
port of departure
Prepare documents for export 15 15
Arranging international freight 11 11
Perform preshipment inspection, if preshipment is
15 15
employed in the country
Request for clearance 9 9
Expedite physical inspection of goods 38 38
Total 100 100
Out of 100 3PL respondents, 38 per cent felt that expedite physical inspection of
goods is the third most critical problem. 15 per cent each felt document preparation
and performing preshipment inspection in the country are the most critical problem
for them. Majority of the respondents feel that expedite physical inspection of goods
is the most critical problem in terms of exports.
4.6 The Fourth Most Critical Problem in the Export Process
Arrange international freight 15 15

Perform preshipment inspection, if preshipment is
11 11
employed in the country
Expedite examination of mandatory documents 9 9
Expedite physical inspection of goods to
determine if it complies with technical or sanitary 38 38
or phytosanitary standards
Total 100 100
The above table clearly indicates the fourth most critical problem faced by the
3PL in terms of export transaction. Out of 100, 38 respondents feel that expedite
physical inspection of goods to determine the technical or sanitary or a phytosanitary
184
standard is the critical problem for them. 27 per cent of the respondents felt that
request for export clearance is the most critical problem for them. 15 percent of the
respondents feel that their main problem is while arranging international freight. 11
and 9 per cent of the respondents feel that respectively performing preshipment
inspection and expedite examination of mandatory documents are the critical problem
for them.
4.7 The Fifth Most Critical Problem in the Export Process

Arrange payment for preshipment inspection 15 15
Expedite examination of mandatory documents 12 12
Expedite physical inspection of goods 24 24
Arrange payment for export taxes, tariff, and
17 17
duties
Arrange a payment for international freight
21 21
charges
Total 100 100
Source: Primary Data
The above table clearly shows the fifth most critical problems for the 3PLs. 24 per
cent of the respondents feel that expedite physical inspection of goods is the main
problem for them. 21 per cent of them felt that arranging a payment for international
freight is the critical problem and 17 per cent of them felt that arranging payment for
taxes, tariff and duties is the most critical problem.
5. CONCLUSION
The maritime logistics trade is analysed by analysing the performance of 12 Major
ports, state-wise minor ports (187 minor ports), Container traffic and the vessel traffic
at 12 Indian Major Ports. The 3PLs‟ responsibilities are document preparation &
arrangement, document transfer, shipment advice, packing, shipping routing &
scheduling, arranging for shipping space, loading & unloading of cargo (Inland and
International), dispatch of goods and documents, arranging for customs inspection and
formalities and arrange for the payments also. In this format he very much reduces the
burdens of international traders.
In the present study it is clearly found that the Indian logistics industry is creeping
up steadily amidst stiff international competition. As major international players have
set their platform in Indian market, it is an obvious reason to study the performance
and problems of 3PLs in India. From the study, it is seen very clear that the 3PLs
operating Indian Imports and Exports are facing difficulties in terms of customs
clearance, inland & International carriage handling, consignment inspection,
documentation formalities, infrastructural facilities etc. If these problems are clearly
examined and rectified, India can better the existing scenario and no wonder Indian
logistics industry will be in the driver seat in the International Logistics arena.
185
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1. Vrat, P., 1999. Supply Chain Management in India: Problems and Challenges.
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2. Seturam, S., 1999. Corporate Profitability and Supply Chain. In: Sahay, B.S.
(ed.), Supply Chain Management for Global Competitiveness, Macmillan, 77-
93.
3. Evans, R. and Danks, A., 1998. Strategic Supply Chain Management: Creating
shareholder value by aligning supplying chain strategy with business strategy.
In: Gattorna, J. (ed.), Strategic Supply Chain Alignment, Gower, 18-37.
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(6), T47-T50.
5. Foster, T.A. and Armstrong, R., 2004. Top 25 third-party logistics providers
extend their global reach [online]. Global Logistics and Supply Chain
Strategies. Available from: http://www.glscs.com/ archives /
05.04.25_3pls.htm?adcode=90.
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bigger and broader [online]. Global Logistics and Supply Chain Strategies.
Available from: http://www.glscs.com/ archives /
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really better? [online]. Global Logistics and Supply Chain Strategies.
Available from: http://www.glscs.com/ archives
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Transportation Research, Part E, Logistics and Transportation Review, 41E
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186

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AN ANALYSIS ON THE PERFORMANCE

making an organization more competitive in terms of cost, quality, delivery

2. STATEMENT OF PROBLEM AND RESEARCH GAP

Table 1 Logistics of Selected Nations

3. OBJECTIVES AND HYPOTHESES OF THE STUDY

3.1. Research Design and Methodology

3.1.1. Nature of the study

3.1.2 Research Area

3.1.3 Primary Data and its Sources

3.1.4 Secondary Data and its Sources

3.1.5 Period of Study

3.1.6 Sampling design

3.1.7 Type of Universe

3.1.8 Sampling Unit

Table 3.1 Sample Split-Up

3.9 Source List

3.10 Size of the sample

found in Chennai and Tuticorin and 46 exclusive Steamer/Shipping agents in

3.11 Sampling Methods

3.12 Statistical Tools used

3.2 Limitations of the Study

4. IMPORTANT ANALYSIS AND MAJOR FINDINGS

4.1 Performance of Selected Major Ports in India

Source: computed from Secondary data.

4.2 Performance of Minor Ports in selected states of India

4.3 The First Most Critical Problem in the Export Process

4.4 The Second Most Critical Problem in the Export Process

38 SECOND MOST CRITICAL PROBLEMS

4.5 The Third Most Critical Problem in the Export Process

4.6 The Fourth Most Critical Problem in the Export Process

PROBLEMS RESPONDENTS PERCENTAGE

Arrange international freight 15 15

4.7 The Fifth Most Critical Problem in the Export Process

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