SHIPPING

(TRAFFIC AND
LOGISTICS)
PROCEDURE
LOGISTICS PROCEDURES

CONTENTS

1. ‐ PURPOSE
2. ‐ SCOPE
3. ‐ REFERENCES
4. ‐ DEFINITIONS
5. ‐ RESPONSIBILITIES
6. ‐ INSTRUCTIONS
6.1. COMPLIANCE WITH THE REQUIREMENTS
STATED IN THE AGREEMENT
6.2. INTERFACES WITH PURCHASING
6.3. INTERFACES WITH EXPEDITING
6.4. INTERFACES WITH THE SITE
6.5. SUPERVISION OF FREIGHT FORWARDER
6.6. EXECUTION OF TRANSPORTATION POLICY
6.7. SHIPMENT
6.8. ACTIVITIES FOR CUSTOM CLEARANCE AND
INLAND TRANSPORTATION OF
MATERIALS / EQUIPMENT
6.9. LOCAL MARKET PROCUREMENT.
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1. PURPOSE
To delineate requirements to ensure that goods (materials, equipment, and documentation)
are transported to the site by the most economical, safe and efficient means to meet the
Project schedule requirements.

2. SCOPE
This Procedure addresses the movement of goods from the location of manufacture to the
site and all Traffic and Logistic activities on the Project including appropriate instructions
in purchase orders, supervision of the Freight Forwarder, and interfaces between the
partner’s office, In‐country Offices, site and the Client.

These activities include the development of transportation policy, planning / scheduling as

well as maintaining updated status of the movement of goods and progress reporting.

3. REFERENCES

‐ Traffic & Logistics ‐ Procedure Manual.

4. DEFINITIONS
“AWB” means Air Way Bill
“ETA” means Estimated Time of
Arrival “ETD” means Estimated Time
of Departure
“FOB” means Free on Board (as per INCOTERMS 1990)
“FREE CARRIER” means the goods loaded on trailer, railway truck, or river barge.
“AT SUPPLIERS” means the liability and responsibility of the Supplier at Supplier’s
workshop (as per INCOTERMS 2000)
“GOODS” means all Project materials, equipment and documentation to be transported to
the delivery point and/or the site by Freight Forwarder, including but not limited to, all
spare parts, supplies and construction materials provided by the Suppliers.
“INCOTERMS” refers to the International Chamber of Commerce (ICC) Glossary of Terms
for Shipping. “LOGISTICS” means the planning and establishing of the most economical
and timely method for the movement of goods in accordance with Project requirements.

“MATERIAL RELEASE” means the CONTRACTOR Material/Equipment Release Form,

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PSQ 231. Notification by the Supplier Quality Representative to confirm that the goods have
been inspected and quality surveillance has been completed.
“MRR” means the Material Receiving
Report “PPM” means Project Procurement
Manager
“READY FOR SHIPMENT NOTICE” means the notification issued by Suppliers to
confirm that the goods or any part thereof, according to any agreed phased delivery schedule,
are complete and ready for shipment from the Suppliers’ or the Sub‐suppliers’ premises.
“RELEASE FOR SHIPMENT NOTICE” means the notification issued to confirm that the
goods can be shipped
“SCN” means Shipping Control Number
“TRAFFIC” means the movement and shipment of goods from the point of origin to final
destination at the site. This activity includes the necessary control of such movements and
reporting of status

5. RESPONSIBILITIES

The Project Traffic Supervisor shall be responsible for planning, arranging, monitoring
and controlling prompt, efficient and cost‐effective movement of goods to the site.
Specifically, the Project Traffic Supervisor shall be responsible for:
 Logistics Planning;
 Liaison with PPM, Expediting, site personnel and the Client;
 Supervision of the Freight Forwarder;
 Assisting the Client in preparing a Duty Exemption List;
 All Project freight movements;
 Obtaining approval of air freight costs;
 Reporting progress of freight movements

6. INSTRUCTIONS

6.1Compliance with the Requirements stated in the AGREEMENT.

The Specific Project Procedure shall reflect the requirements included in the
AGREEMENT, concerning traffic and logistics, such as the following:
 Regulations/requirements for importation of goods;
 Port(s), airport(s), or railroad terminal(s) to be used;
 Documentation requirements for duty free and expeditious Customs clearance or
payment of duties;
 In‐country physical, Governmental or Local Authority restrictions for various modes
LOGISTICS PROCEDURES

of transportation;
 Requirements and responsibilities for obtaining Governmental/Local Authority permits
or authorizations related to in‐country transportation;
 Interface with and involvement of the manufacturers’ local (In‐country) agents,
including special requirements for segregation of Bills of Lading for each individual
local agent;
 Insurance policies applicable to the Project and claims reporting requirements;
 Interfaces with the Client, local clearance and/or transportation agents;
 In‐country weight or size restrictions at the port(s), airport(s), railroad terminal(s) or
other special requirements;
 Restrictions or preferences, concerning transportation, imposed by external
organizations, e.g. financial institutions.

If the AGREEMENT does not contain the types of information mentioned above, the Project
Traffic Supervisor will contact the Client and/or other appropriate personnel and establish the
Project requirements.

The Project Shipping Supervisor and/or the Project Shipping and Logistics group personnel
shall perform the following:
 Plan, organize and control directly and through supervision of the Freight Forwarder,
the overall shipping program for the Project, to ensure the safe, economic and timely
arrival of goods at the site;
 Establish and incorporate, in the Specific Project Procedure, overall traffic
philosophy and transportation policy for the Project;
 The transportation policy shall be flexible enough to incorporate subsequent changes
and shall include provisions for priority deliveries to meet the Project schedule. The
Specific Project Procedure shall specify responsibilities for providing various
transportation‐related insurance and details of the insurance policies in effect on the
Project;
 Provide instructions, to be attached to purchase orders, concerning invoicing, packing
and marking;

 Provide clear shipping instructions to the Manufacturers (by attachments to

purchase orders) and ongoing communications prior to and at the time of issuance
of the “Ready For Shipment Notice” by the Manufacturers. To enable purchase of
goods on terms most favorable to the Project, the Project Traffic Supervisor shall
provide the PPM with information relating to freight rates, routings and shipping
terms;
 Prepare and submit letters and/or other necessary documentation to personnel
LOGISTICS PROCEDURES

responsible for Customs clearance, e.g. the Client, prior to arrival of goods at the
port/airport of importation to enable them to provide a request for Customs clearance
to in‐country Customs officials for duty‐ free clearance;
 Negotiate freight rates directly with the carrier selecting most economical, safe and
timely method of shipment, within budgets;
 Pre‐plan shipments, including obtaining dimensions and weights of any large or
oversized items,
e.g. in excess of 12 meters long x 2.5 meters wide x 2.5 meters high, 22 metric
tones or other Project specific requirements. Prepare shipping forecasts for
discussions with carriers, forwarding/ clearing agents and haulers;
 Regularly obtain information from carriers relating to the most efficient and effective
means of transportation;
 Arrange for the certification and legalization of shipping documents as required by
customs, via the Freight Forwarder;
 Obtain schedule of sailing available and pre‐determine the target vessels, compatible
with the Purchase Order specified delivery dates and/or other Project requirements
such as those dictated by the Project financing organizations (e.g. Exam bank);
 Make shipping forecasts and advise the Freight Forwarder, clearing agents, site and the
Client;
 Prepare, maintain and issue a monthly shipping forecast in a standard Project format;
 Prepare, maintain and issue a monthly shipping progress report;
 Obtain approval from the Project Manager and the Client (if required), when cargo is to
be airfreight;
 Obtain approval from Project Engineering and the manufacturer for deck stowage of
goods on ocean vessels;
 Arrange for the importation of all materials and equipment procured and for obtaining
all necessary licenses and documents as required. Assist the Client in preparing and
submitting a Duty Exemption Listing for all Project materials;

 Evaluate, certify and arrange for payment of anticipated expenses by the Freight
Forwarder of any customs duties, fees or charges caused by the importation of
equipment or materials for the Project;
 Interface with other Support Offices

The Project Shipping Supervisor shall interface and maintain close communications with
other departments concerning the movement of all Project goods taking place in the
jurisdiction of other department.

6.2 Interfaces with Purchasing

The Project Shipping Supervisor shall obtain the following documentation for all Purchase
LOGISTICS PROCEDURES

Orders:
 Facsimile copy of Commitment;
 Copy of Purchase Order;
 Copy of each Purchase Order revision;
 Estimated weights and dimensions provided by the Manufacturers at the bid stage

All orders shall be placed on a FCA (export packed) basis with an option for delivery to
FOB/FAS (INCOTERMS 2000) nearest Port of Exit.

6.3 Interfaces with Expediting

The Project Traffic Supervisor shall liaise with the Expediting personnel and obtains
necessary information relating to delivery of goods for pre‐planning of shipments.

As soon as goods are ready, the Project Expediting Supervisor shall provide, to the Project
Traffic Supervisor, the “Release for Shipment” of individual consignments, the
manufacturers’ packing lists, locations of goods and telephone/fax numbers for the
manufacturers’ contact personnel.
The Project Traffic Supervisor shall provide regular up‐date of shipping status to the
Project Expediting Supervisor and other Project personnel, as required.

6.4 Interfaces with the Site

The Project Traffic Supervisor shall keep the site closely advised of all impending
shipping movements including, providing advance copies of documents as required.

The site personnel shall advise the Project Traffic Supervisor of the safe receipt of goods, via
a copy of the MRR.
If the goods or documentation do not arrive in a timely manner, the Project Traffic
Supervisor shall be notified.
If goods are damaged in transit, the Project Shipping Supervisor shall be notified, via a copy
of the Over, Short or Damage report.

6.5Supervision of the Freight Forwarder

The Shipping Supervisor shall forward to the Freight Forwarder one copy of the Material
Status Report plus any subsequent amendments. Additionally, copies of the Project packing,
marking and shipping instructions, procedures as well as any special requirements (e.g.
segregation of Bills of Lading for each individual local agent of the manufacturer) shall be
provided.
Clear instructions shall be provided to the Freight Forwarder on the collection, movement
and delivery of goods as well as supervision and monitoring actions to be taken.
LOGISTICS PROCEDURES

6.6Execution of Transportation Policy

Traffic and Logistics personnel shall compare the cost of the “Add on Price/” supplied by the
Vendor for delivery to the F.O.B. Port of Export with the Price obtained from the Freight
Forwarder.
The Project Traffic Supervisor shall recommend the most cost effective and schedule
efficient option, consistent with the delivery requirements.

The Project Shipping Supervisor shall liaise with Expediting on delivery dates for goods and
makes provisional bookings through the Freight Forwarder to ensure that vessel space is
available. The Project Shipping Supervisor shall advise the manufacturer, prior to final
release of the consignment, the Shipping Control Number applicable to the consignment.
A copy of the notification shall be issued to the Freight
Forwarder. The SCN shall be marked on the packages and
documentation.
As soon as the consignment is finally released, Expediting shall advise the Project Shipping
Supervisor. On receipt of the official release, the Project Shipping Supervisor shall notify
the Freight Forwarder that the goods are ready for calling forward, together with
delivery priority, destination and mode of transportation.

The Freight Forwarder shall confirm the designated mode of transport and call the
material forward. Shipping shall confirm, with Expediting and Manufacturer (if necessary),
that all necessary documents,
e.g.shipping invoices, packing lists, material certificates and certificates of origin are available.

A copy of the call forward fax shall be provided to the Project Shipping Supervisor.

The Freight Forwarder shall prepare documentation to meet the transit needs, from source
to destination, allowing smooth and timely movement and ensure that necessary documents
accompany the shipment.

Particular attention shall be given to ensuring that the description of the goods on the
shipping documentation matches exactly that used on the duty exemption listing.
As soon as the shipment departs, the Freight Forwarder shall provide status information to
the Project Shipping Supervisor and to designated Project personnel at the destination.
Typical information to be transmitted shall be as follows:
 SCN;
 Purchase order number;
 Material description;
 Number of pieces;
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 Total weight/total volume;

 Weights and dimensions of any single pieces weighing more than 22 tones or over
normal road dimensions;
 Name of the Vessel/Flight Number/ETD/ETA/Bill of Lading/AWB Number

The Project Shipping Supervisor shall track the shipment, ensuring that delivery is
completed. Any difficulties experienced during the delivery of goods or documentation
shall be reported to the Project Traffic Supervisor for consideration and action. Heavy or
abnormal size pieces requiring special attention shall be identified as early as possible; to
avoid unacceptable delays to schedule, due to enforced routing by physical, Governmental
and/or Local Authority restrictions.

Special attention shall be given to these pieces so that their transportation can be pre‐planned
and permits/authorizations obtained to allow immediate placement on transportation vehicles
as soon as goods are received. The Freight Forwarder shall raise invoices, based on the
Shipping Control Number, separating out individual items as detailed in the instructions
provided by CONTRACTOR.

The Project Traffic Supervisor shall audit the invoices, accuracy and content‐wise.
The Project Traffic Supervisor shall regularly update its computer with shipment details.

6.7Shipment
This involves the selection of transport contract(s) by the Shipping Coordinator, which will
provide transportation, which will best match with the construction schedules for all the
project materials. Procurement team in conjunction with Field Expediters co‐ordinate
shipment of Materials / Equipment to site in accordance with the overall master schedule.
The fastest and most effective means of transportation at competitive cost will be utilized.

The shipping section will handle all shipping documents required for transportation, custom
clearance and marine insurance. The shipping section will be given Information and
documents necessary for filling any losses and damages that may occur. It is their
responsibility to initiate claims and follow through until a settlement is reached. The
Project Procurement Manager shall be well informed in order to arranging replacement or
repairs.

6.8Activities for Custom clearance and inland transportation of materials / equipment

Employing the services of reputable and competent Clearing Agents will effect custom
clearance of materials/equipment and subsequent transportation from sea and airports to
job‐site. On arrival of the materials/equipment at the sea or sea ports, Duty Payment
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Requests are generated by Clearing Agents for the payment of custom duties, surcharges,
import VAT, all other receipted payments to government agencies/shipping company charges.
The Clearing Agents fees shall be paid on successful delivery of materials/equipment to site.
Bidder will set aside funds (provisional sum) in the contract while also noting that there
could be exemption from import duties and taxes. For heavy lifts and backward loads,
Supplier/Vendors are usually required to advise on methods of transportation and handling of
such loads. Clearing Agents with facilities to transport and handle such loads to site. The
Clearing Agents will be supervised to work within stipulated schedule tied to the
Construction schedule.

6.9Local market procurement

With the identification of goods and services to be acquired for the project during the
detailed Engineering design, it will be possible to generate a list of goods and services
available locally. Using the necessary procurement procedures and other requirements
including quality, bids are solicited from approved Bidder list and processed into Purchase
Orders. During the construction phase, as much as possible, any goods and services
identified by the Construction Manager that can be performed by local Suppliers/Vendors
will equally be processed into Purchase Orders or Service contracts.
LOGISTICS PROCEDURES

Subcontractin
Procurement
g
Coordinator
Coordinator

Material Proc Planning and

Coordinato Reporting
r
Material
Tracking
Coordinator

Procuremen Logistics
t

MATERIALS EXPEDITING TRANSPORT

SERVICE
INSPECTIO
S
N

Procurement Co‐
ordination

INTERFACE BTW LOGISTICS & PROCUREMENT