Question No. 2 - IBO - 05 - International Marketing Logistics - Master of Commerce (M.Com)

Solutions to Assignments 

IBO - 05 - International Marketing Logistics

Master of Commerce (M.Com) - 1st Year

Question No. 2

(a) Discuss briefly the various constraints faced by Indian shipping industry. 

Transportation of shipment through means of shipping companies has numerous advantages like cost-effectiveness and being environmentally friendly. Shipping companies in India have not been able to realize their fullest capacity due to a few constraints. Let’s us check out a few challenges faced by shipping companies in India which deter growth in the logistics sector:

1. Institutional Challenges

The rigidity of the Indian bureaucracy and its reluctance to give up control adds to the delay. Multiple involvements of the central, state and local governments with overlapping powers add to the chaos. Lack of a single window clearance system has made it challenging for shipping companies in India.

2. Infrastructural Challenges

Capacities of all major and minor ports in India need to be increased urgently. Due to transhipment points in other countries, the cycle time of Indian cargoes has rendered the uncompetitive on a global scale. Besides this development of road network, electricity and overall infrastructural development is also the need of the hour.

3. Financial Challenges

Shipping companies in India do not have access to any lucrative government schemes that have been available to other channels. The burden of taxes like Customs Duty on Bunkers, Landing Fees, Income Tax etc. without negligible exemptions have made it difficult for shipping companies to thrive.

4. Slow Process

The shipment procedures undertaken by shipping companies is quite cumbersome in comparison to other modes of transportation. This, in turn, wastes valuable shipping time and labour time which goes into the logistic process.

5. Vessel Size

The sizes of vessels are getting bigger owing to the rise in demand for shipping services. While it might sound like an improved trend, many ports in India are still struggling to keep up, and many of these large vessels cannot be called on into most of the ports.

(b) What is Maritime Fraud? State the various factors that lead to commitment of maritime frauds.

Maritime fraud occurs when one of the parties involved in an international trade transaction like the buyer, seller, shipowner, charterer, ship’s master or crew, insurer, banker, broker or agent illegally secures money or goods from another party to whom, on the face of it, he has undertaken specific trade, transport and financial obligations. To check the c/p frauds all care should be taken by the master while issuing any b/l under that c/p to provide the true description of goods on the b/l. If any letter of authority is given to the agent for signing the B/L then such letter of authority should clearly mention the description of the goods so that he may not make any false declaration on behalf of the master

'Maritime fraud is a generic term commonly used to describe the obtaining of money, or services, or property in the goods, or a pecuniary advantage by one or more parties to a transaction from the other party or parties, by unjust or illegal means