BY

ALGHANIMGROUP OF SHIPPING&TRANSPORT ALGHANIM GROUP OF SHIPPING & TRANSPORT

KUWAIT
TEL: 2421701
FAX:2428678 FAX:2428678
Web Site : [Link]
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RESERVED
OBJ ECTIVE
This course has been designed to
provide participants with overview of
shipping industry. It will also provide shipping industry. It will also provide
participants with good understanding of
elements of commercial shipping to elements of commercial shipping to
enhance their career prospect
TOPICS
SHIPPING TERMINOLGY
SEA TRANSPORT
MARITIME GEOGRAPHY
CARGO VESSEL TYPES
VESSEL SIZE GROUPS VESSEL SI ZE GROUPS
THE LINERS
LINER CONFERENCES
CHARTERI NG CHARTERI NG
SHIPPING DOCUMENTATION
BILL OF LADING
MULTIMODAL TRANSPORT
MARINE INSURANCE & GENERAL AVERAGE
S G O G SHIPPING TERMINOLGY
A
Act of God:
Accidents of a nature beyond human control such as flood, lightning or hurricane usually
quoted as 'force majeure'. q j
Agency Fee:
Fee payable by a ship-owner or ship operator to a port agent.
Agent: Agent:
A person or organization authorized to act for or on behalf of another person or
organization.
In the shipping field, an Agent is a corporate body with, which there is an agreement to
perform particular functions on behalf of them at an agreed payment. An Agent is either a
part of a shipping corporation or an independent body part of a shipping corporation or an independent body
Average:
In marine insurance: a loss or damage to or in respect of goods or equipment.
Average Adjusters:
In general average affairs average adjusters are entrusted with the task of apportioning
the loss and expenditure over the parties interested in the maritime venture and to
determine which expenses are to be regarded as average or general average. p g g g g
B
Ballast
Materials solely carried to improve the trim and the stability of the vessel. In vessels usually
water is carried as ballast in tanks specially designed for that purpose water is carried as ballast in tanks, specially designed for that purpose
Bill of Lading (B/ L, plural: Bs/ L)
A document which evidences a contract of carriage by sea.
Break Bulk Cargo Break Bulk Cargo
General cargo conventionally stowed as opposed to unitized, containerized and Roll On-Roll
Off cargo.
Bulk Cargo g
Unpacked homogeneous cargo poured loose in a certain space of a vessel or container e.g.
oil and grain.
Bulk Carrier
Si l d k l d i d h k d d h i Single deck vessel designed to carry homogeneous unpacked dry cargoes such as grain,
iron ore and coal.
C
CAF:
Currency Adjustment Factor
Cargo: Cargo:
Goods transported or to be transported, all goods carried on a ship covered by a B/L.
Carrier:
The party undertaking transport of goods from one point to another
Carrier Haulage:
h l d h h f d b h d h d The inland transport service, which is performed by the sea-carrier under the terms and c
conditions of the tariff and of the relevant transport document.
Certificate of Classification:
A certificate, issued by the classification society and stating the class under which a vessel A certificate, issued by the classification society and stating the class under which a vessel
is registered.
C
Certificate of Origin
A certificate, showing the country of original production of goods. Frequently
used by customs in ascertaining duties under preferential tariff programs or in used by customs in ascertaining duties under preferential tariff programs or in
connection with regulating imports from specific sources.
Charter Party
A contract in which the ship-owner agrees to place his vessel or a part of it at
the disposal of a third party the charterer for the carriage of goods for which the disposal of a third party, the charterer, for the carriage of goods for which
he receives a freight per ton cargo, or to let his vessel for a definite period or
trip for which a hire is paid.
Charterer:
The legal person who has signed a charter party with the owner of a vessel or The legal person who has signed a charter party with the owner of a vessel or
an aircraft and thus hires or leases a vessel or an aircraft or a part of the
capacity thereof.
Claim
A charge made against a carrier for loss, damage or delay c a ge ade aga st a ca e o oss, da age o deay
C
Classification Society
An Organisation, whose main function is to carry out surveys of vessels, its purpose being
to set and maintain standards of construction and upkeep for vessels, their engines and to set and maintain standards of construction and upkeep for vessels, their engines and
their safety equipment. A classification society also inspects and approves the construction
of P&O Nedlloyd containers.
Clean Bill of Lading
A Bill of Lading which does not contain any qualification about the apparent order and A Bill of Lading which does not contain any qualification about the apparent order and
condition of the goods to be transporte
Consignee
The party such as mentioned in the transport document by whom the goods, cargo or
containers are to be received.
Consignment
A separate identifiable number of goods (available to be) transported from one consignor to
one consignee via one or more than one modes of transport and specified in one single
transport document.
C
Consignor:
Shipper
Consolidate Consolidate
To group and stuff several shipments together in one container.
Consolidated Container
Container stuffed with several shipments (consignments) from different shippers for
delivery to one or more consignees delivery to one or more consignees.
Container Depot
Storage area for empty containers.
Container Freight Station (CFS)
f l h h ( ) C d f h f l d ( ff ) A facility at which (export) LCL cargo is received from merchants for loading (stuffing) into
containers or at which (import) LCL cargo is unloaded (stripped) from containers and
delivered to merchants.
C
Container Terminal
Place where loaded and/or empty containers are loaded or discharged into or from a means
of transport. p
Container Yard (CY)
A facility at which FCL traffic and empty containers are received from or delivered to the
Merchant by or on behalf of the Carrier.
Note: Often this yard is used to receive goods on behalf of the merchant and pack these in Note: Often this yard is used to receive goods on behalf of the merchant and pack these in
containers for FCL traffic.
Currency Adjustment Factor (CAF)
Adjustment applied by shipping lines or liner conferences on freight rates to offset losses or
gains for carriers resulting fromfluctuations in exchange rates of tariff currencies gains for carriers resulting from fluctuations in exchange rates of tariff currencies.
D
Damaged Cargo Report
Written statement concerning established damages to cargo and/or equipment.
Dangerous Goods
Goods are to be considered dangerous if the transport of such goods might cause harm,
risk, peril, or other evil to people, environment, equipment or any property whatsoever.
Dead freight Dead freight
Slots paid for but not used.
Deep Tank
Tank fitted and equipped for the carriage of vegetable oil (e.g. palm oil and coconut oil)
and other liquids in bulk By means of oil tight bulkheads and/or decks it is possible to carry and other liquids in bulk. By means of oil-tight bulkheads and/or decks it is possible to carry
different kinds of liquid in adjacent tanks. Deep tanks may be equipped with heating
facilities in order to carry and discharge oil at the required temperature
D
Delivery Order
A carrier's delivery order (negotiable document) is used for splitting a B/L (after surrender) A carrier s delivery order (negotiable document) is used for splitting a B/L (after surrender)
in different parcels and have the same function as a B/L.
Demurrage
1. A variable fee charged to carriers and/or customers for the use of Unit Load Devices
(ULD's) owned by a carrier beyond the free time of shipment (ULD's) owned by a carrier beyond the free time of shipment.
2. Additional charge imposed for exceeding the free time, which is included in the rate and
allowed for the use of certain equipment at the terminal.
D
Detention Charge
Charges levied on usage of equipment exceeding free time period as stipulated in the pertinent inland
rules and conditions
Direct Delivery Direct Delivery
Direct discharge from vessel onto railroad car, road vehicle or barge with the purpose of immediate
transport from the port area (usually occurs when ports lack adequate storage space or when ports are not
equipped to handle a specific cargo).
Disbursement Disbursement
Sums paid out by a ship's agent at a port and recovered from the carrier
Double bottom
Construction of the bottom of a ship whereby a generally watertight space is formed between the shell and
an inner bottom placed at a sufficient height above the baseline to allow access and to reduce risks due to
grounding or colliding.
Draft
The draft of a vessel is the vertical distance between the waterline and the underside of the keel of the
vessel. During the construction of a vessel the marks showing the draft are welded on each side of the
vessel near the stem, the stern and amidships.
Dunnage
Stowage material, mainly timber or board, used to prevent damage to cargo during carriage.
E
Endorsement
The transfer of the right to obtain delivery of the goods of the carrier by means of the
consignee's signature on the reverse side of a bill of lading. If the name of the new g g g
consignee (transferee) is not stated, the endorsement is an open one which means that
every holder of the document is entitled to obtain delivery of the goods.
Equipment
Material resources necessary to facilitate the transport and handling of cargo. Transport Material resources necessary to facilitate the transport and handling of cargo. Transport
equipment does under the given circumstances not have the ability to move by its own
propulsion (e.g. sea container, trailer, unit load device, pallet).
Estimated Time of Arrival (ETA)
The expected date and time of arrival in a certain (airport The expected date and time of arrival in a certain (airport.
Estimated Time of Departure (ETD)
The expected date and time when a certain (airport is left.
Export License po t ce se
Document granting permission to export as detailed within a specified time
F
FTL
Full Truck Load, an indication for a truck transporting cargo directly from supplier to
receiver.
Feeder
A vessel normally used for local or coastal transport (for carriage of cargo and/or
containers) to and from ports not scheduled to be called by the main (ocean) vessel,
directly connecting these ports to the main (ocean) vessel. directly connecting these ports to the main (ocean) vessel.
First Carrier
The carrier who actually performs the first part of the air transport (air cargo).
Flat Rack Container
A container with two end walls and open sides.
F
Force Majeure
Circumstance which is beyond the control of one of the parties to a contract and which
may, according to the terms and conditions, relieve that party of liability for failing to y g p y y g
execute the contract.
Free In Liner Out (FILO)
Transport condition denoting that the freight rate is inclusive of the sea carriage and the
cost of discharging, the latter as per the custom of the port. It excludes the cost of loading
and, if appropriate, stowage and lashing. and, if appropriate, stowage and lashing.
Free In and Out (FIO)
Transport condition denoting that the freight rate excludes the costs of loading and
discharging and, if appropriate, stowage and lashing.
Freight All Kinds (FAK) Freight All Kinds (FAK)
Single freight which is charged irrespective of the commodity.
Freight Invoice
An itemised list of goods shipped and services rendered stating fees and charges.
F
Freight Manifest
A (cargo) manifest including all freight particulars.
Freight Prepaid
Freight and charges to be paid by the consignor.
Freight Ton
A unit for freighting cargo according to weight and/or cubic measurement A unit for freighting cargo according to weight and/or cubic measurement.
Full Container Load (FCL)
A general reference for identifying container loads of cargo loaded and/or discharged at
merchants' premises.
Fumigation
To expose certain spaces to the action of fumes in order to disinfect or kill vermin. For
containers done in line with national legislation.
G
Gantry Crane
A crane or hoisting machine mounted on a frame or structure spanning an intervening space, which often
travels on rails.
Garments On Hangers
Clothes in containers on hangers and hung from rails during transit, reducing the handling required for the
garments.
General Cargo g
Cargo, consisting of goods, unpacked or packed, for example in cartons, crates, bags or bales, often
palletized. General cargo can be shipped either in break-bulk or containerized.
General Purpose Container
A container used for the carriage of general cargo without any special requirements for the transport and
or the conditioning of the goods.
Gross Tonnage (GRT)
The measure of the overall size of a vessel determined in accordance with the provisions of the
international convention on measurement of vessels usually expressed in register ton.
Gross Weight
The weight of a shipment including materials necessary for blocking etc (air cargo) The weight of a shipment including materials necessary for blocking etc. (air cargo).
Gross Weight of Container
Total weight of container including cargo (in kilograms).
H
Hague Rules
International convention for the unification of certain rules, relating to Bills of Lading (1924). These Rules
include the description of responsibilities of Shipping Lines
Hague Visby Rules Hague-Visby Rules
Set of rules, published in 1968, amending the Hague Rules.
Hamburg Rules
United Nations Convention on the carriage of goods by sea of 1978 adopted in 1992.
Haulage
The inland carriage of cargo or containers between named locations/ points.
Heavy Lift
Single commodity exceeding the capacity of normal loading equipment and requiring special equipment
and rigging methods for handling.
Hinterland
The inland area served by a certain port.
House to House Transport
The transport of cargo fromthe premises of the consignor to the premises of the consignee The transport of cargo from the premises of the consignor to the premises of the consignee.
Hull
Outer shell of a vessel, made of steel plates or other suitable material to keep water outside the vessel.
I
Insurance Certificate
Proof of an insurance contract
Intermodal Transport
The movement of goods (containers) in one and the same loading unit
or vehicle which uses successively several modes of transport without or vehicle which uses successively several modes of transport without
handling of the goods themselves in changing modes.
International MaritimeOrganization(IMO) International Maritime Organization (IMO)
An United Nations agency concerned with safety at sea. Its work
includes codes and rules relating to tonnage measurement of vessels,
load lines, pollution and the carriage of dangerous goods. load lines, pollution and the carriage of dangerous goods.
Its previous name was the Inter-Governmental Maritime Consultative
Organization (IMCO).
J
J etty
A mole or breakwater running out into the sea to protect A mole or breakwater, running out into the sea to protect
harbors or coasts. It is sometimes used as a landing-pier.
K
Knot
Unit of measurement for the speed (of a vessel) equal to a nautical p ( ) q
mile (= 1,852 meters) per hour.
L
Latitude
The angular distance of a position on its meridian north or south from
the equator measured in degrees ('a vessel at 25 degrees north the equator, measured in degrees ( a vessel at 25 degrees north
latitude').
Less than Container Load (LCL) ( )
For operational purposes a LCL (Less than full container load) container
is considered a container in which multiple consignments or parts
thereof are shipped.
Letter of Indemnity Letter of Indemnity
Written statement in which one party undertakes to compensate
another for the costs and consequences of carrying out a certain act.
The issue of a letter of indemnity is sometimes used for cases when a
shipper likes receiving a clean Bill of Lading while a carrier is not shipper likes receiving a clean Bill of Lading while a carrier is not
allowed to do so. Within P&O Nedlloyd the issue of letters of indemnity
are contrary to the company's instructions.
L
Lighterage
The carriage of goods within a port area by a barge, e.g. from a vessel to a quay.
Lightweight Lightweight
Weight of an empty vessel including equipment and outfit, spare parts required by the regulatory bodies,
machinery in working condition and liquids in the systems, but excluding liquids in the storage tanks,
stores and crew.
Liner In Free Out (LIFO) ( )
Transport condition denoting that the freight rate is inclusive of the sea carriage and the cost of loading,
the latter as per the custom of the port. It excludes the cost of discharging.
Liner Terms
Condition of carriage denoting that costs for loading and unloading are borne by the carrier subject the
custom of the port concerned.
Lloyd's Register of Shipping
British classification society.
Longitude
The angular distance of a position on the equator east or west of the standard Greenwich meridian up to a gua d a o a po o o qua o a o o a da d da up o
180o east or west.
M
Manifest
Document, which lists the specifications of goods, loaded in a means of
transport or equipment for transportation purposes.
As a rule cargo the agents in the place of loading draw up manifests.
Note: For a shipping company a manifest represents a cumulation of Bills of
Lading for official and administrative purposes Lading for official and administrative purposes.
Mate's Receipt
A document signed by the chief officer of a vessel acknowledging the receipt of g y g g p
a certain consignment on board of that vessel. On this document, remarks can
be made as to the order and condition of the consignment.
M l i d l T Multimodal Transport
The carriage of goods (containers) by at least two different modes of transport.
N
Negotiable
In terms of documents, 'negotiable' means that e.g. a Bill of Lading is handed
over/transferred in the right manner (viz proper endorsement) to another person either over/transferred in the right manner (viz. proper endorsement) to another person either
endorsed in blank or endorsed to a person and that person acquires, by this transfer certain
rights vis-?is the goods e.g. is entitled to take possession of the goods.
Non Vessel Operating Common Carrier (NVOCC) p g ( )
A party who undertakes to carry goods and issues in his own name a Bill of Lading for such
carriage, without having the availability of any own means of transport.
Notice of Readiness
Written document or telex issued by the master of a vessel to the charterer's advising them
the moment when a vessel is ready to load or discharge.
O
Owner
The legal owner of cargo, equipment or means of transport. g g , q p p
P
P & I Club:
A mutual association of ship-owners who provide protection against liabilities by means of
contributions contributions
Particular Average:
A fortuitous partial loss to the subject matter insured, proximately caused by an insured
peril but which is not a general average loss. Particular average only relates to damage
and/or expenses which are exclusively borne by the owners of a vessel which has sustained
damage as a result of e g heavy weather or by the owners of the cargo which has been damage as a result of e.g. heavy weather or by the owners of the cargo, which has been
damaged in transit.
Port of Discharge
The port where the cargo is actually discharged (unloaded) from the sea (ocean) going
vessel vessel.
Port of Loading
The port where the cargo is actually loaded on board the sea (ocean) going vessel.
Pre-carriage
The carriage of goods (containers) by any mode of transport from the place of receipt to
the port (place) of loading into the ocean vessel (main means of transport).

Q
Quotation
Amount stated as the price according to tariff for certain services to be p g
provided or issued to a customer with specification on conditions for
carriage.
R
Rate
1. The price of a transport service.
Rebate
That part of a transport charge which the carrier agrees to return.
Roll-on Roll-off (RoRo)
Systemof loading and discharging a vessel whereby the cargo is driven on System of loading and discharging a vessel whereby the cargo is driven on
and off by means of a ramp.
R
Reefer Container
A thermal container with refrigerating appliances (mechanical compressor A thermal container with refrigerating appliances (mechanical compressor
unit, absorption unit etc.) to control the temperature of cargo.
Register Ton
The unit of measurement for the internal capacity of a vessel whereby one The unit of measurement for the internal capacity of a vessel whereby one
register ton equals 100 cubic feet (2.83 cubic meter). The gross (bruto)
tonnage comprises all spaces below the main (tonnage) deck and the
enclosed spaces above the main (tonnage) deck less exempted spaces.
The net tonnage consists of the gross tonnage less exemptions like ballast g g g p
tanks, engine room, living quarters etc. The register tonnage is mentioned on
the tonnage certificate.
Revenue
A f i i f h i i f i Amounts of income stemming from the provision of transport services.
S
Salvage
The saving or rescue of a vessel and/or the cargo from loss and/or g / g /
damage at sea.
Schedule Schedule
A timetable including arrival/departure times of ocean- and feeder
vessels and also inland transportation. It refers to named ports in a
specific voyage (journey) within a certain trade indicating the voyage p y g (j y) g y g
number's). In general: The plan of times for starting and/or finishing
activities.
S
Seaworthiness
Fitness of a vessel to travel in open sea mostly related to a particular p y p
voyage with a particular cargo.
Ship's Protest Ships Protest
Statement of the master of a vessel before (in the presence of)
competent authorities, concerning exceptional events which occurred
during a voyage. g y g
S
Shipment
A separately identifiable collection of goods to be carried.
Shipper
The merchant (person) by whom, in whose name or on whose behalf a contract of carriage
of goods has been concluded with a carrier or any party by whom, in whose name or on
whose behalf the goods are actually delivered to the carrier in relation to the contract of g y
carriage.
Stowage
The placing and securing of cargo or containers on board a vessel or an aircraft or of cargo
i i in a container.
Stowage Plan
A plan indicating the locations on the vessel of all the consignments for the benefit of
stevedores and vessel's officers.
T
Tare Weight of Container
Mass of an empty container including all fittings and appliances associated with that
particular type of container on its normal operating condition p yp p g
Tariff
The schedule of rates, charges and related transport conditions.
Twenty Foot Equivalent Unit (TEU)
U it f t i l t t t t f t t i Unit of measurement equivalent to one twenty foot container
Time Charter
A contract whereby a vessel is let to a charterer for a stipulated period of time or voyage,
for a remuneration known as hire, generally a monthly rate per ton deadweight or a daily
rate.
The charterer is free to employ the vessel as he thinks fit within the terms as agreed, but
the ship-owner continues to manage his own vessel through the master and crew who
remain his servants.
Time Sheet Time Sheet
Statement, drawn-up by the ship's agent at the loading and discharging ports, which details
the time worked in loading and discharging the cargo together with the amount of laytime
used.
Tweendeck Tweendeck
Cargo carrying surface below the main deck dividing a hold horizontally in an upper and a
lower compartment.
U
Ultra Large Crude Carrier (ULCC)
A vessel designed for the carriage of liquid cargo in bulk with a loading g g q g g
capacity from 250.000 till 500.000 DWT.
V
Very Large Crude Carrier (VLCC)
A vessel designed for the carriage of liquid cargo in bulk with a loading capacity
from50 000 till 250 000 DWT from 50.000 till 250.000 DWT.
Vessel
A floating structure designed for the transport of cargo and/or passengers
Voyage Voyage
A journey by sea from one port or country to another one or, in case of a round
trip, to the same port.
Voyage Charter
A contract under which the ship owner agrees to carry an agreed quantity of A contract under which the ship-owner agrees to carry an agreed quantity of
cargo from a specified port or ports to another port or ports for a remuneration
called freight, which is calculated according to the quantity of cargo loaded, or
sometimes at a lump sum freight.
Voyage Number
Reference number assigned by the carrier or his agent to the voyage of the
vessel.
W
War Risk
Perils of war or warlike operations, such as capture, seizure, arrests, restraints of kings,
princesses and people hostilities civil war mines torpedo's War risks are not covered princesses and people, hostilities, civil war, mines, torpedo's. War risks are not covered
under a policy for marine perils and must therefore be covered under a separate policy for
war risks.
bill Waybill
Non-negotiable document evidencing the contract for the transport of cargo.
Wharf
A place for berthing vessels to facilitate loading and discharging of cargo.
SEA TRANSPORT
SEA TRANSPORT
Definition:
Transport goods and commodities by ship Goods is measured in tons but transport is Transport goods and commodities by ship. Goods is measured in tons but transport is
measured by tons / miles (the weight carried multiplied by the length of the voyage). The
value of a commodity is not its price or its cost but its utility , can be invariable increased
by transport for example, coal which is underground has no value , but ounce transported
to a person freezing in winter it can have considerable value
Characteristic Of Sea Transport:
1. Sea transport is slow ships carrying raw material (tramp) move at
around 13 14 knots container ships speed 18 25 knots around 13-14 knots- container ships speed 18-25 knots.
2. Sea transport is cheap because e it can take advantage of economics of scale, large
ships can reduce the cost per unit carried
3. Sea transport connect land which separated by water
SEA TRANSPORT
Pattern of seaborne trade:
World seaborne trade increased strongly in 2004,reaching 6.76 billion tons of
loaded goods. The annual growth rate, calculated with the provisional data
available for year 2004, reached 4.3 per cent. Total maritime activities measured
l d bll l d h bll in ton-miles increased to 27,635 billion ton-miles, compared with25,844 billion
ton-miles in 2003. The world merchant fleet expanded to 895.8 million
deadweight tons (dwt) at the beginning of 2005, a 4.5 per cent increase.
Development of international seaborne trade, selected years
Million of Tons
International seaborne trade for selected years
Million of Tons loaded
SEA TRANSPORT
Shipping markets:
World seaborne trade in cargo (things to be moved) splits into three markets. g ( g ) p
[Link] Liner Market:
This deals with general cargo which is usually relatively expensive compared with bulks and the liner
ships run on scheduled routes with fixed tariff and condition
[Link] Dry Cargo Tramp Market:
Tramps, in shipping terms relates to the way the ship tramps from place to place where the market
drawn it .Tramps carry mainly ship load of bulk materials , the main commodities or Grain, Coal etc .
The freight rates and conditions are negotiable as per Charter parties.
[Link] Tanker Market:
Tankers are specialized trumps being designed to carry liquids in bulk. The oil trade routes are limited.
This market contains 2 main groups ,Large tankers carry the crude oil and smaller carry the refined
products .
SEA TRANSPORT
(Billions of ton-miles)
C GO SS S CARGO VESSEL TYPES
CARGO VESSEL TYPES
Until the 20th Century, ships generally, were all-purpose cargo vessels, with very little specialisation (with
the exception of tank vessels which first appeared in the 1880s). All cargoes were carried in general
purpose holds, or on deck. Modern commercial vessels are designed and built to carry specific cargo types.
The names we give to the various vessel types reflect the type of cargo for which they are designed and The names we give to the various vessel types reflect the type of cargo for which they are designed and
built to carry. For example, a "bulk carrier" is specially designed to carry cargo "in bulk" and the hatch
cover and hold design is focused on the carriage of raw dry cargo goods, such as coal, grain, iron ore and
bauxite, which are simply poured into cavernous holds then grabbed and bulldozed out at the port of
discharge.
Tankers carry liquid cargo in tanks the most obvious example is the well-known oil tanker, but even within
this generic type each tanker is specially designed to carry a particular type of liquid cargo not just crude this generic type, each tanker is specially designed to carry a particular type of liquid cargo, not just crude
oil. Other liquid cargoes would include petroleum products, chemicals and yes, even wine! 2 recent hybrid
designs of tanker carry Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG), both of which
need to be kept under pressure and at low temperature to maintain the cargo in a liquefied state. A further
hybrid is the Floating Production, Storage and Offloading unit (FPSO), which is usually a large tanker
(maybe a converted old VLCC, but now brand new specialized FPSOs are being built) specifically designed
f th il i d t ki ff h h h f ilit t d t ff h il i d d for the oil industry, working offshore where an onshore facility to process and store offshore oil is deemed
impractical.
Container ships (a revolutionary idea in the past 50 years) carry their cargo in standard size containers,
normally either 20 ft units (TEU) or 40 ft units (FEU), for speed of loading and discharge. A modern
container ship can discharge a cargo in as many hours as it used to take in the equivalent number of days.
This "brainchild" of Malcolm McLean, (a former New J ersey truck driver) found no interest among ship
i h 1940 d 1950 h b il hi h Wi hi 10 h i owners in the 1940s and 1950s, so he built his own to prove the concept. Within 10 years, the container
ship revolution had started. From just a few hundred containers, modern ships can carry many thousands.
CARGO VESSEL TYPES
BULK CARRIERS
BULK CARRIERS
Bulk carriers ("bulkers"), are the great work
horses of the shipping world carrying rawdry horses of the shipping world, carrying raw dry
cargoes in huge cavernous holds, such as
coal, iron ore, grain, sulphur, scrap metal.
l h h d d f h Currently there is a huge demand for these
vessels, driven by the extraordinary
expansion of the Chinese economy Imports expansion of the Chinese economy. Imports
of iron ore into China have boosted the
earnings of bulk carrier owners as freight
h h h h f rates have gone through the roof into
uncharted territory.
TANKER
TANKER
Tankers are designed to carry liquid cargoes (not just
oil) although the carriage of crude oil has brought the oil) although the carriage of crude oil has brought the
tanker unwelcome attention and largely unjustified
criticism. Oil tankers come in two basic flavors, the
crude carrier, which carries crude oil, and the clean crude carrier, which carries crude oil, and the clean
products tanker, which carries the refined products,
such as petrol, gasoline, aviation fuel, kerosene and
paraffin Tankers range in all sizes fromthe small paraffin. Tankers range in all sizes, from the small
bunkering tanker (used for refueling larger vessels)
of 1000 DWT tons to the real giants: the VLCC (Very
Large Crude Carrier) of between 2-300 000 DWT and Large Crude Carrier) of between 2 300,000 DWT and
the ULCC (Ultra Large Crude Carrier) of over 300,000
DWT
REEFER
REEFER
Refrigerated Cargo Carrying Vessels
("Reefers") are purpose built to carry fruit ("Reefers") are purpose built to carry fruit,
meat and other food products across the sea
in a fresh and clean manner in a fresh and clean manner.
Perhaps the most famous of these types of
vessels are the banana carriers, trading vessels are the banana carriers, trading
between the Caribbean and Europe. They are
sleek and fast, as their trade demands, with
cooling (refrigeration) equipment to keep
their cargoes fresh
LNG CARRIER
LNG CARRIER
The LNG carrier (Liquefied Natural Gas) and its
cousin the LPGcarrier (Liquefied PetroleumGas) are cousin the LPG carrier (Liquefied Petroleum Gas) are
products of the late twentieth century. LNG and LPG
are the preferred fuel types of certain countries for
h i i d i l d J i h their industrial power needs. J apan is one such
country, and so LNG needs to be transported to
J apan, but is not the easiest of cargoes to be J apan, but is not the easiest of cargoes to be
transported. In its natural state, LNG is a gas, so to
transport it, it needs to be either pressurised into a
liquefied form or kept as a liquid by reducing the liquefied form, or kept as a liquid by reducing the
temperature (simple application of Boyle's Law in
physics!). p y )
CAR CARRIERS
CAR CARRIERS
The car carrier or more correctly the
P.C.C. (Pure Car carrier) or P.C./T.C.
(Pure car/truck carrier), could never be (Pure car/truck carrier), could never be
described as a beauty of the seas, yet
in it's rectangular design is purpose in it s rectangular design, is purpose
built to carry large numbers of cars.
CONTAINER SHIPS
CONTAINER SHIPS
The Containership or "Box ship" is the great success story of the last 40 years.
General cargo was historically carried in dry cargo vessels, without any
particular specialisation Cargo loading and unloading was always a slow particular specialisation. Cargo loading and unloading was always a slow,
laborious task, due to the varying shapes, sizes, weights and fragility of the
numerous cargoes being carried on any one vessel. The idea of standardising
the carrying box, or container at 20 feet long was a breakthrough that allowed
for vessels to be designed to carry these standard sized boxes, and for dockside
l b d d l f k d h f h equipment also to be designed to lift, stack and store these specific [Link],
from a "back of the fag-packet" idea was born the container ship. Initially, these
were small vessels of up to 10,000 DWT, carrying no more than a few hundred
TEU (Twenty foot Equivalent Units), but have grown in size as the success and
economies of these vessels have become more obvious Today's container ships economies of these vessels have become more obvious. Todays container ships
are being built to take 8,000 T.E.U., with plans to build 10 - 12,000 TEU ships.
These vessels are built for speed, and can reach upwards of 28 knots, moving
cargoes around the world. Globally storing and returning empty boxes has
become an industry in itself! become an industry in itself!
Through-transport or inter-modal transport, means that these containers can be
offloaded from a ship, and rapidly loaded onto trains.
DRY CARGO VESSELS
DRY CARGO VESSELS
Until vessels started to be built to carry specific cargoes, all
vessels were simply general or dry cargo vessels, i.e. built to
d ll ith i d d b l carry any and all cargoes either in drums and bales or on
pallets. Such cargoes were put in general holds with no
specialisation. The role of the general/dry cargo vessel began to
wane with the arrival of bulk carriers and tankers but the wane with the arrival of bulk carriers and tankers, but the
decline of these general vessels has accelerated since the arrival
of containerisation (in the 1960's). Not only are container ships
able to carry greater volumes of cargo in standard shaped cargo
t i th ti t l di d di h i h b containers, the time spent loading and discharging has been
dramatically reduced. Whereas a dry cargo vessel may take 3 -
4 days to load or discharge, a container ships the same in a
matter of hours Although general/ dry cargo vessels remain as matter of hours. Although general/ dry cargo vessels remain as
the largest (in pure numbers) of cargo carrying vessels, they are
often smaller (rarely above 50,000 Gross tons) than the
specialized vessels that are slowly replacing them.
RO-RO VESSELS
RO-RO VESSELS
The Ro-Ro, or more fully the Roll on - roll off vessel,
comes in a number of shapes and sizes but generally comes in a number of shapes and sizes, but generally
in two types; the passenger ro-ro and the Cargo ro-
ro.
P h b i h Passenger ro-ros have become common sights
wherever people want to travel over water with their
vehicles. It is probably the only type of cargo vessel vehicles. It is probably the only type of cargo vessel
that most people have traveled on. Usually a rear
door (but sometimes a bow door) allows for vehicles
to be driven on and off stored on the car deck below to be driven on and off, stored on the car deck below
the passenger accommodation areas.
LIVESTOCK CARRIERS
LIVESTOCK CARRIERS
The carriage of live animals around the
world is performed by specialist vessels,
designed (or adapted) to transport designed (or adapted) to transport
large numbers of cattle and sheep in
secure but humane conditions The secure but humane conditions. The
trade is largely from Australia to the
Middl E t &/ S E A i O d Middle East &/or S.E. Asia. One modern
vessel may carry up to 125,000 sheep.
Vessel Size Groups (in
d d i h ) deadweight tons)
Major ship size groups include:
Handy andHandymax: Traditionally the Handy and Handymax: Traditionally the
workhorses of the dry bulk market, the Handy and
more recent Handymax types remain popular ships y yp p p p
with less than 60,000 dwt. The Handymax sector
operates in a large number of geographically
dispersed global trades mainly carrying grains and dispersed global trades, mainly carrying grains and
minor bulks including steel products, forest products
and fertilizers. The vessels are well suited for small
i h l h d d f i i d l ports with length and draft restrictions and also
lacking transshipment infrastructure. This category is
also used to define small-sized oil tankers. also used to define small sized oil tankers.
Panamax: Represents the largest acceptable size to transit the
Panama Canal, which can be applied to both freighters and tankers;
lengths are restricted to a maximumof 275 meters and widths to lengths are restricted to a maximum of 275 meters, and widths to
slightly more than 32 meter. The average size of such a ship is about
65,000 dwt. They mainly carry coal, grain and, to a lesser extent,
minor bulks, including steel products, forest products and fertilizers.
Capesize: Refers to a rather ill-defined standard which have the
common characteristic of being incapable of using the Panama or Suez
canals, not necessarily because of their tonnage, but because of their
size. These ships serve deepwater terminals handling raw materials, p p g ,
such as iron ore and coal. As a result, "Capesize" vessels transit via
Cape Horn (South America) or the Cape of Good Hope (South Africa).
Their size ranges between 80,000 and 175,000 dwt. Due to their size
there are only a comparatively small number of ports around the world there are only a comparatively small number of ports around the world
with the infrastructure to accommodate such vessel size.
Aframax: A tanker of standard size between 75,000
and 115,000 dwt. The largest tanker size in the AFRA and 115,000 dwt. The largest tanker size in the AFRA
(Average Freight Rate Assessment) tanker rate
system.
Suezmax: This standard which represents the Suezmax: This standard, which represents the
limitations of the Suez Canal, has evolved. Before
1967, the Suez Canal could only accommodate tanker
ships with a maximumof 80 000 dwt The canal was ships with a maximum of 80,000 dwt. The canal was
closed between 1967 and 1975 because of the Israel
- Arab conflict. Once it reopened in 1975, the
Suezmax capacity went to 150 000 dwt An Suezmax capacity went to 150,000 dwt. An
enlargement to enable the canal to accommodate
200,000 dwt tankers is being considered.
VLCC: Very Large Crude Carriers, 150,000 to 320,00
dwt in size. They offer a good flexibility for using dwt in size. They offer a good flexibility for using
terminals since many can accommodate their draft.
They are used in ports that have depth limitations,
mainly around the Mediterranean, West Africa and mainly around the Mediterranean, West Africa and
the North Sea. They can be ballasted through the
Suez Canal.
ULCC: Ultra Large Crude Carriers 300 000 to ULCC: Ultra Large Crude Carriers, 300,000 to
550,000 dwt in size. Used for carrying crude oil on
long haul routes from the Persian Gulf to Europe,
America and East Asia via the Cape of Good Hope or America and East Asia, via the Cape of Good Hope or
the Strait of Malacca. The enormous size of these
vessels require custom built terminals.
S THE LINERS
THE LINERS
It started through the last century when
steamships appeared and started offering steamships appeared and started offering
scheduled services between ports. They then
tended to offer a faster and more highly tended to offer a faster and more highly
quality service than the selling ships and
despite their higher freight rate tended to despite their higher freight rate tended to
attract shippers with high value cargo who
were prepared to pay extra for speed and
predictable delivery dates
THE LINERS
In the sixtieth the conventional general cargo ship
was increasingly replaced by the container ship was increasingly replaced by the container ship .
Then containerization has had effect and it will
continue to have on shipping industry .Container pp g y
ships have a larger , faster, and a quicker turn
around than the ships they replace. The containers
are introduced to reduce the cargo handling cost are introduced to reduce the cargo handling cost
which has increased for more than any shipping cost
and to increase productivity comparing port time for
l hi d i hi general cargo ships and container ships
LINER FREIGHT RATES
Liner freight rates are relate to a tariff of
f somewhat or some sort .They are, far less
volatile that those in tramp shipping .
In many cases that any increases in the tariff
may only take place after period of notice .
To over come short run variation in cost
such as changes in bunker prices or in rate of such as changes in bunker prices or in rate of
exchanges, liner operators generally resort
surcharges typical of which are BAF ANDCAF surcharges typical of which are BAF AND CAF
CO C S LINER CONEFERENCES
LINER CONEFERENCES
Conferences are organization of shipping lines operating on particular route. For
example, the Transpacific West Bound Freight Agreement operates on the route
fromthe US to Far east route and the Indian sub-content from the US to Far east route and the Indian sub content.
The conferences are formal agreement between shipping lines on route setting
prices and sometimes pooling profits or revenues, managing capacity, a locating
routes and offering loyalty discounts
Conferences can be either open or closed to accept new members
Conferences issue a freight tariff
Conferences may also allocate output among their members by either cargo
t S ili t quotas or Sailing quotas
Conferences employ policing agencies to check on adherence to the tariff
LINER CONEFERENCES
Conference Practice
The conferences set prices ,often based on loyalty arrangement they use two p , y y g y
kind of loyalty contracts; The contract rates and differ rebate .The shipper sign
in agreement to deal in exclusively with the conference and in turn receive
discounts on the freight rate
h f b l h f The conferences response to an entrant by lowering the rate on one of its
vessels to compete with the entrant until entrant lost money and left the market
I th l t d d th f h l t th i i t d d li i In the last decade ,the conferences have lost their importance and decline in
the number of the members
C G CHARTERING
CHARTERING
Charterparty A charterparty is a contract of lease of a ship in whole or in part for a long
or short period of time or for a particular voyage. It has been said that its origin lies in the
mediaeval Latin "carta partita" or "charta partita" or "charta divisa", where an agreement p p g
was torn into two pieces and one half was given to each party. Proof of the whole contract
was no doubt difficult if one party was obstinate - modern methods of photocopying the
contract for each party seem preferable. A charterparty is part contract of hire
(affreightment) and part contract of transport (carriage). The proportion of
"affreightment" decreases as one moves from a demise charter, to a time charter and
h h hl h f " " f d h then to a voyage charter, while the proportion of "carriage" increases from a demise charter
through a time charter to a voyage charter. Affreightment is essentially placing a ship at
the disposal of another party, while transport is essentially the carrier taking charge of
goods. Hire is the consideration paid under demise and time charterparties; freight is the
consideration paid under voyage charterparties and bills of lading.
a) Charterparty by demise A charterparty by demise is a contract by which the ship-
owner places a ship in the hands of the chartered who assumes possession and control.
The consideration paid by the chartered is hire which is payable at specified intervals
during the term of the charter. Under a demise charterparty, the ship-owner appoints the
master and the crew, although they are paid and controlled by the demise chartered. aste a d t e c e , at oug t ey a e pad a d co t o ed by t e de se c a te ed
A bareboat charter is a demise charter whereby the bareboat chartered names, pays and
controls the master and the crew.
Among the most common forms of demise charter are the "Baltic and International
Maritime Council Standard Bareboat Charter" (Code Name: "Barecon '89"); and the "BIMCO
Standard Charter" (Code Name: "Barecon 2001") forms of BI MCO Standard Charter (Code Name: Barecon 2001 ) forms of BI MCO
CHARTERING
b) Consecutive voyage charter A
consecutive voyage charter party is a voyage
charterparty for a determined number of
consecutive voyages.
c) Slot charter - A charterparty whereby the
shipper leases one or more "slots," each
capable of holding a 20-foot container,
aboard a container ship.
CHARTERING
d) Space charter It is a contract whereby a
f f capacity of carriage is put at the disposal of
the shipper for the carriage of his goods
d d f d l during a period of time under particular terms
and conditions. Whether it is a contract of
h f hire or a contract of carriage or even a
contract of agency like a freight
f d ' d d forwarder's contract, depends on its terms.
CHARTERING
e) Time charterparty A time charterparty is a contract
whereby the ship-owner places a fully equipped and manned
hi t th di l f th h t d f i d f ti f ship at the disposal of the chartered for a period of time for a
consideration called "hire" payable at specified intervals during
the term of the charter. Among the most common forms of time
charterparty are the NewYork Produce Exchange (NYPE) and charterparty are the New York Produce Exchange (NYPE) and
Baltime. A "time charter for a trip" is a time charter for a
particular voyage or voyages, rather than for a period of years,
days or months, with hire payments made at periodic intervals
( d ti h t t ) th th "f i ht" b i (as under a time charter party), rather than "freight" being
payable, at the completion of the voyage, on the quantity of
cargo carried
CHARTERING
Main terms
Ships name and other details to identify her Ships name and other details to identify her
Many other detail of the ship including total deadweight grain
and bale cubic ,draft, number of decks hold and hatches,
number and lifting capacity of derricks ,crane etc
Rate of hire expressed in days or months
The period in months or years The period in months or years
Delivery place
Re-delivery place y p
Delivery time ex: not before certain date
CHARTERING
f) Voyage charterparty A voyage charterparty is a
contract whereby the ship-owner places all or part of contract whereby the ship-owner places all or part of
the carrying capacity of a ship at the disposal of the
charter (the voyage chartered) for the transport of
d d f goods agreed upon, on one or more voyages, for a
consideration called "freight" based on the quantity
of cargo carried, and usually payable at the end of of cargo carried, and usually payable at the end of
the voyage. Among the most commonly used form is
the "Baltic and International Maritime Council
UniformGeneral Charter formof BIMCO Uniform General Charter form of BIMCO.
CHARTERING
Main Contract term:
Ships name and other details to identify her Ships name and other details to identify her
The cargo and the quantity the ship carry
The loading and discharge ports
R t f f i ht Rate of freight
Lay days and canceling ex: loading not to commence not
before a certain date with charterers having the option to
cancel the charter if the ship is later than the second date.
The rates of loading and discharging
Demurrage and dispatch Demurrage and dispatch
Charter party forum to be used
Total commission in involve
SHIPPING SHIPPING
DOCUMENTATION
Documentation used in international
trade performs a number of separate
functions and these can be divided into functions and these can be divided into
the following categories: instruction;
financial; identification; authorisation financial; identification; authorisation.
In this section we will be dealing with
th d t hi h d i those documents which are used in
international trading activity.
BILL OF LADING
FUNCTION
It is evidence that a contract of carriage exists
between shipper (exporter) and ship owner between shipper (exporter) and ship owner.
It is a receipt for goods, showing prima facie that
they have been received into the charge of a y g
carrier.
It is a document of title which allows title to the
goods to be t ansfe ed b endo sement and goods to be transferred by endorsement and
delivery of the bill of lading.
Main details to be incorporated in Main details to be incorporated in
the bill of lading
name and address of the shipper
the name of the vessel the name of the vessel
description of cargo, including identifying
marks numbers and types of packages marks, numbers and types of packages,
contents, gross weights and volume;
port of shipment port of shipment
port of discharge;
details of freight, including whether it is to details of freight, including whether it is to
be "prepaid" (at port of despatch) or
"payable at destination" (freight collect);
Main details to be incorporated in Main details to be incorporated in
the bill of lading
Consignors name and address which may be that of the
buyer. Alternatively bills of lading may be made out to show
"t d " i th i b "t th d f " "to order" in the consignee box or "to the order of..."
Notify party's name and address - often an agent acting on
behalf of the consignee at the port of destination. However,
the consignor's details may be entered in the "Notify party" the consignor s details may be entered in the Notify party
box where "order" bills of lading are applicable
terms of sale;
the date on which the goods are received for shipment or the date on which the goods are received for shipment or
shipped on board the named vessel;
number of original bills issued;
Signature of shipping line or its appointed agent Signature of shipping line or its appointed agent.
Principal notations on bills of p
lading
Clean bills and claused bills
A "clean" bill of lading is one in which no notation is shown on
the document relating to cargo having been received by the line
or shipped in any other than good condition and correct or shipped in any other than good condition and correct
quantity. Thus, standard printed bills of lading usually bear the
wording "Shipped (or received for shipment) in apparent good
order and condition". If no clause to the contrary is entered, the
bill id t b l I th h th i t d bills are said to be clean. In the case where the cargo is noted
to be wet, damaged or otherwise in doubtful condition or
quantity, bills of lading will be issued "claused" (or "dirty"),
showing the defect in the cargo. It follows that if goods are showing the defect in the cargo. It follows that if goods are
shipped under a claused bill, consignees may reject them or,
alternatively, banks may not accept such bills of lading for
payment purposes.
Received bills and shipped pp
bills
As has already been said above, a bill of
lading constitutes a receipt for goods lading constitutes a receipt for goods
delivered into the charge of a shipping line.
Thus the standard wording on a printed bill of Thus the standard wording on a printed bill of
lading may state "Received for shipment..."
and will be signed and dated by the line or its and will be signed and dated by the line or its
agents. Although this shows that the goods
have moved out of the exporter's charge into
that of the carrier, it does not show that
actual shipment has taken place.
Through bills of lading
The "through" bill of lading concept
allows door-to-door shipments to be
covered by a bill of lading. This became covered by a bill of lading. This became
necessary following the development of
containerisation Thus this type of bill containerisation. Thus, this type of bill
may cover ocean shipment, plus inland
t t b th d transport by other modes,
Combined transport bills p
of lading
Similar to a through bill of lading, the combined
transport bill of lading allows for the contract of transport bill of lading allows for the contract of
carriage to be covered by a single document and a
clearly defined single set of conditions of carriage to
i l d h f d d/ il hi i h include the use of road and/or rail shipment at either
end of the sea leg. This document will, when issued,
extend the carrier's liability as set out in the extend the carrier s liability as set out in the
combined transport bill of lading to the other
transport modes. Freight forwarders operating as
non vessel owning carriers (NVOCS) will most usually non-vessel owning carriers (NVOCS) will most usually
issue this type of document.
Groupage and house bills p g
of lading
The concept of groupage - combining a number of individual
consignments into a complete container load for shipment - has
b d l d b f i ht f d been developed over many years by freight forwarders
operating services between two inland points in different
countries working in conjunction with an overseas office or
partner An ocean bill of lading for a container load of groupage partner. An ocean bill of lading for a container load of groupage
is issued by the shipping lines showing the sending forwarder as
the shipper and the receiving forwarder as the consignee. The
forwarder thereafter issues his own house bills to individual
t Th h bill b th t lli d t exporters. These house bills become the controlling document
for the release of the cargo at destination and enable the
exporter, if required, to negotiate these with his customer in
return for payment of the goods return for payment of the goods.
Groupage and house bills p g
of lading
It is important to note that a "house" bill of
lading does not have the same status as an
ocean bill issued by a shipping line as it is not
d f l h f h a document of title, in the same sense of the
word, as an ocean bill. However, it is capable
f d f bl of negotiation, and is often acceptable to
banks for letter of credit purposes when this
h b l d h d h has been stipulated in the credit at the time it
is opened.
Negotiation of bills of g
lading
The bill of lading is a negotiable document
f which allows title to goods to be transferred
by endorsement and delivery. This facility
h h gives one or other parties to the transaction
control over title to the goods and for this
l f d f l reason letters of credit often stipulate certain
types of bill of lading in order for this control
b d h b f to be exercised. Three basic types of
endorsement are possible:
Endorsement by consignee
In this case the bill of lading is completed as below:
Shipper box in bill of lading: Actual shipper (exporter) pp g pp ( p )
Consignee box in bill of lading: Actual consignee (buyer)
Notify box in bill of lading: Consignee's agent at port of arrival.
Completion of the bill of lading in this manner allows either the Completion of the bill of lading in this manner allows either the
consignee to present himself in person to the line to take
delivery of the goods or to endorse the bill of lading on the
reverse side to allow his agent to do so and to deliver the goods
t hi Th th i i t l h t k th to him. Thus the consignee exercises control over who takes the
goods in charge at the destination port.
"To order" bills of lading
Bills of lading made out "to order" are completed as below:
Shipper box in bill of lading: Actual shipper (exporter) pp g pp ( p )
Consignee box in bill of lading: "To order"
Notify box in bill of lading: Actual consignee (buyer)
In this instance the shipper must stamp and sign the bill of In this instance, the shipper must stamp and sign the bill of
lading in order for title to the goods to be transferred to the
consignee. Thus the bill of lading is useless to the consignee
without this endorsement. This is a useful safeguard against
bill b i id t ll t itt d t b di tl Cl l bills being accidentally transmitted to buyers directly. Clearly,
should this happen the buyer would not be able to take delivery
of the goods and the bill of lading would have to be returned to
the shipper for endorsement and presentation to the bank Bills the shipper for endorsement and presentation to the bank. Bills
of lading completed in this manner are also said to be "To order
blank endorsed".
To order of (bank)
In this case, the bill of lading is completed as follows:
Shipper box in bill of lading Actual shipper (exporter) Shipper box in bill of lading Actual shipper (exporter)
Consignee box in bill of lading To the order of (bank)
Notify box in bill of lading True consignee (buyer) Notify box in bill of lading True consignee (buyer)
The bank is the party which carries out the
endorsement in this instance and which, therefore, , ,
exercises control over the goods. Thus, if the bank
wishes to ensure that the buyer has actually paid for
the goods before he takes delivery the bank may the goods before he takes delivery, the bank may
endorse the bill of lading when payment is made.
Sea waybills
Sea waybills offer a non-negotiable alternative to the bill of
lading. Generally speaking, they embody the Hague-Visby Rules.
With f ti th t ti bl d With a few exceptions they are not negotiable and are,
therefore, not usable as a means of transferring title to goods.
They are useful for companies that trade internationally with
themselves between geographical areas where payment for themselves between geographical areas where payment for
exports is not a problem. A freight forwarder might use them to
control groupage cargo. The sea waybill can thus be sent
forward with the goods allowing the consignee to take
i di t d li Th l l t ti ff d t th hi immediate delivery. The legal protection offered to the shipper
under a sea waybill is thought by some to be inferior to that
offered under a bill of lading. However, being a relative new
innovation there has been insufficient time to test themin law innovation, there has been insufficient time to test them in law.
Letter of guarantee
Letter of guarantee A written
d ki l f i d i undertaking, or letter of indemnity,
usually provided by a bank, promising
h ld h i h l to hold the carrier harmless, up to a
certain sum, for claims that may arise
from the delivery of goods to a
particular person who is unable to
surrender the original bills of lading in
return for the goods. g
Letter of indemnity
Letter of indemnity A written undertaking by a
shipper to indemnify a carrier for any liability which shipper to indemnify a carrier for any liability which
the carrier may incur for having issued a clean bill
of lading when, in fact, the goods received were not
as stated on the bill of lading .Such a letter is as stated on the bill of lading .Such a letter is
usually a central document in a fraud, whereby the
shipper and carrier knowingly misrepresent to third
parties the actual order and condition of the goods at parties the actual order and condition of the goods at
the time of shipment or the bad order of the packing,
or whereby they issue duplicate bills of lading to
replace lost or stolen originals Letters of indemnity replace lost or stolen originals. Letters of indemnity
should not be condoned by courts and are generally
held ineffective as against third parties.
MARI TI ME GEOGRAPHY
MARITIME GEOGRAPHY
Definition:
Studying seas and costal area which you have to find your way round to pickup and deliver your cargoes. y g y y y p p y g
The distance in shipping are always given in nautical miles which equal to 1852 meters
Latitude and Longitude:
Latitude Is used for measuring how far North or South and Longitude how far east and west. Time is also g g
Is function of Longitude this for every 15 you move east you advance your watch one hour and vice versa
for westerly movement
Weather
Ports
Water depth and tides
Time zone Time zone
Domains of Maritime
Circulation
Domains of Maritime
Circulation
Oceanic masses and rivers are the two major
f components of maritime circulation. Oceanic
masses account for 71% of the terrestrial
f h f l surface. The four major oceans relevant to
maritime circulation are: the Pacific (165
ll k ) h l (8 ll millions square km), the Atlantic (82 million
square km), Indian (73 million square km)
d h d (2 ll and the Mediterranean (2.5 million square
km).
O S O MULTIMODAL TRANSPORT
MULTIMODAL TRANSPORT
Introduction:
During 2004 total estimated 100 million TEUs Shipments of containerized cargoes has been moved world During 2004, total estimated 100 million TEUs Shipments of containerized cargoes has been moved world
wide.
The world fleet of fully cellular container ships continued to expand substantially in 2004 in terms of both
numb of ships and their TEU capacity; by the beginning of 2005 there were 3,206 ships with a total
capacity of 7,165,352 TEUs, an increase of 5 per cent in the number of ships and 11.3 per cent in TEU
capacity over the previous year, Ship sizes also continued to increase.
Containerized cargoes are packed ounce at the factory door than at every change in transport mode, there
by reducing direct cost as well as the ship time at the port
Multimodal transport:
The containerization of cargo allowed cargoes to be easily and safely transferred from one mode of g g y y
transport to another. Merchants and their agents physical involvement in the carriage of goods was
reduced to handing them over at the point of departure, and ensuring someone would receive them at the
destination.
International multimodal transport is defined in the 1980 Multimodal Convention as
h i f d b l diff d f h b i f l i d l the carriage of goods by at least two different modes of transport on the basis of a multimodal transport
contract from a place in one country at which the goods are taken in charge by the multimodal transport
operator to a place designated for delivery situated in a different country.(24)
This definition should be read together with the definition of the multimodal transport operator
any person who concludes a multimodal transport contract and who acts as principal, not as an agent of the
consignor or the carrier participating in the multimodal transport operations and who assumes consignor or the carrier participating in the multimodal transport operations, and who assumes
responsibility for the performance of the contract.
MULTIMODAL TRANSPORT
The constituent elements of a multimodal carriage of goods are thus:
contract between consignor and multimodal transport operator
whereby the multimodal transport operator agrees to arrange
d ibili f and accept responsibility for
the transport of the consignors goods from X place to Y place
by more than one mode of transport
ith th i ht t b t t ll f th l f i t with the right to subcontract some or all of the legs of carriage to
another carrier
MULTIMODAL TRANSPORT
THE APPLICABLE LAW :
The law with regard multimodal transport, it has to
be demonstrated what law actually governs this
type of carriage Relating to: type of carriage. Relating to:
1. the loss or damage of goods carried or which ought g g g
to have been carried in a ship
2. the carriage of goods in a ship, or any agreement
for or relating to such carriage for or relating to such carriage
3. any container and any agreement relating to any
container
MULTIMODAL TRANSPORT
Different modes of carriage are governed by different laws. A multimodal
contract of carriage will thus often be subject to different regimes of liability.
For example carriage by road from Vienna to Hamburg and by sea to London
ill b bj t t th H Vi b R l f th i d th CMR will be subject to the Hague Visby Rules for the sea carriage and the CMR
Convention for the road carriage. Liability depends on whether the leg during
which the damage occurred can be identified. The provisions of these Rules
also form the basis of many combined transport bills of lading in use today.
The Rules divide liability according to whether the place of damage is known
or unknown. If the place of loss is known then the applicable mandatory
carriage regime applies. If there is no mandatory carriage regime, or the
place of loss is unknown then the systemof liability contained in the Rules is place of loss is unknown, then the system of liability contained in the Rules is
used. This system of liability is drawn from the Hague Visby Rules. No
convention creating a uniform system of liability is presently in operation
MULTIMODAL TRANSPORT
International Conventions:
CMR (Convention on the International Carriage of Goods by Road, 1956)
COTIF/CIM(Carriage of Good by Rail Convention 1970) COTIF/CIM (Carriage of Good by Rail Convention, 1970)
Hague Rules, 1924
Hague Visby Rules (Hague Convention as amended by the 1968 and 1979 Protocols)
Hamburg Rules (UNCITRAL Convention on the Carriage of Goods by Sea, 1978)
Inter American Convention on the International Carriage of Goods by Road 1989 Inter-American Convention on the International Carriage of Goods by Road, 1989
Multimodal Transport Convention (UN Convention in the International Multimodal
Transport of Goods, 1980)
UN Convention on Safe Containers, 1972
WarsawConvention (Convention for the Unification of Certain Rules relating to Warsaw Convention (Convention for the Unification of Certain Rules relating to
International Carriage by Air, 1929 as amended by the Hague Protocol, 1955)
the Guatemala Protocol 1971
the Montreal Protocol 1975
MULTIMODAL TRANSPORT
SDR=Special Drawing Rates
THE WAY FORWARD
The ultimate goal of the carriage of goods is the promotion of trade by allowing business
the opportunity to get it's products to any market on the planet at a reasonable price.
Multimodalism seeks to achieve that goal by reducing the consignors'/consignees' g y g g g
(merchants') risk in transporting their goods. This is achieved, firstly by minimizing the
chance of the cargo being physically damaged and secondly by reducing the chance that
the merchant will be unable to recover in the case where cargo is damaged through the
fault of the carrier.
The reduction of the risk of cargoes being physically damaged is achieved by packing the
goods in a strong steel container and by standardising the vessels, vehicles and cranes
which handle these containers.
h h h ll d d h h ' k d d h h In the event that the cargo is actually damaged , the merchants' risk is reduced in that he
can look to a single person, the multimodal transport operator, to make good his loss. In
this respect the multimodal transport contract was a giant leap forward for merchants
allowing complete control over who accepts responsibility for the safe carriage of cargo.(88)
This single contractual carrier (MTO) responsibility significantly reduces a merchants risk of
h i f i h f h i i having to recover from a company with no assets, or from having to recover in an
inconvenient jurisdiction.
S C MARINE INSURANCE
MARINE INSURANCE
Marine insurance
A broad termincluding ocean and inland marine insurance The A broad term including ocean and inland marine insurance. The
Nationwide Marine Insurance Definition, published by the National
Association of Insurance Commissioners, includes imports, exports,
domestic shipments, means of communications, and personal and domestic shipments, means of communications, and personal and
commercial property floaters as marine insurance
Ocean marineinsurance Ocean marine insurance
Coverage for these types of ocean transportation exposures: ships or
hulls; goods or cargo; earnings (such as freight, passage money,
commissions or profit); and liability (known as protection and commissions, or profit); and liability (known as protection and
indemnity). This insurance may be purchased by the vessel owner or
any party interested in or responsible for insurable property by reason
of maritime perils of maritime perils.
MARINE INSURANCE
transportation insurance
Insurance that covers merchandise or goods in the course of Insurance that covers merchandise or goods in the course of
transit by air, rail, truck, barge or ship from a starting location
to a final destination.
door-to-door coverage
Transit insurance that covers a shipment of merchandise from the
i i l i t f f t t it fi l d ti ti original point of manufacture to its final destination.
MARINE INSURANCE
Marine insurance provides coverage against four types of losses corresponding to the four
major classes of ocean marine insurance
Hull & Machinery Insurance covers ship-owners either on basis of voyage policy or a
time policy against total loss (actual or constructive), damage to the ship in particular
average and general average sacrifice, expenses to prevent loss by way of sue and labor
charges salvage charges and general average contributions and against collision liability charges, salvage charges and general average contributions and against collision liability
(either three fourths or four fourths) and expenses associated with claims.
The cover is against ordinary risks (perils of the sea and other named perils) or against the
named perils in the war and strike clauses.
BASIC COVERAGE: BASI C COVERAGE:
Hull and Machinery including Liability
Disbursements
Increase Value
Managers Commission Managers Commission
Chartered Freight
Charter Hire
Insurance Premiums
Return Premium Return Premium
MARINE INSURANCE
Protection and Indemnity:P&I coverage is essentially liability insurance that protect the
ship-owner for the loss of income that would have been earned upon completion of the
voyage. y g
BASI C COVERAGE
personal injuries to third parties, passengers, crew, stevedores, persons on another ship,
l f f d b personal injuries arising out of carriage of cargo or containers, repatriation and substitution
of crew, loss of effects, shipwreck unemployment indemnity, stowaways and refugees and
life salvage;
navigational and operating claims such as collisions (either one fourth or four fourths),
damages to fixed and floating objects, pollution, wash damage, towage, liability under damages to fixed and floating objects, pollution, wash damage, towage, liability under
contracts for hire of cranes, wreck removal and quarantine;
cargo claims including collision liability to cargo carried in an entered ship and general
average and salvage;
miscellaneous liabilities which include fines and confiscation, inquiring expenses, expenses
arising frominterference by local authorities and costs of sue and labor arising from interference by local authorities and costs of sue and labor.
MARINE INSURANCE
Marine Cargo Insurance
aims to indemnify the Assured fromlosses or physical damages aims to indemnify the Assured from losses or physical damages
occurred to the goods during the insured voyage as mentioned
in the certificate of insurance and provided said losses or
d d b th i diti d damages are covered by the insurance conditions as agreed
between the Assured and Underwriters and consigned in the
insurance contract.
MARINE INSURANCE
BASI C COVERAGE
(1) Total or Constructive Total Loss of the whole consignment hereby insured (1) Total or Constructive Total Loss of the whole consignment hereby insured
caused in the course of transit by natural calamities--heavy weather, lightning,
tsunami, earthquake and flood. In case a constructive total loss is claimed for,
the Insured shall abandon to the company the damaged goods and all his rights
and title pertaining thereto. The goods on each lighter to or from the seagoing
vessel be deemed a separate risk vessel be deemed a separate risk.
"Constructive Total Loss" refers to the loss where an actual total loss appears to
be unavoidable or the cost to be incurred in recovering or reconditioning the
goods together with the forwarding cost to the destination named in the policy
would exceed their value on arrival.
(2) l i l d b id h i b i (2)Total or Partial Loss caused by accidents-the carrying conveyance being
grounded, stranded, sunk or in collision with floating ice or other objects as fire
or explosion.
(3)Partial loss of the insured goods attributable to heavy weather, lightning and
/ or tsunami, where the conveyance has been grounded, stranded, sunk or burnt , / o tsu a , e e t e co eya ce as bee g ou ded, st a ded, su o bu t ,
irrespective of whether the event or events took place before or after such
accidents.
(4)Partial or total loss consequent on falling of entire package or packages into
sea during loading, transshipment or discharge.
(5)Reasonable cost incurred by the Insured in salvaging the goods or averting or (5)Reasonable cost incurred by the Insured in salvaging the goods or averting or
minimizing a loss recoverable under the policy, provided that such cost shall not
exceed the sum Insured of the consignment so saved.
MARINE INSURANCE
(6)Losses attributable to discharge of the insured goods at a port of
distress following a sea peril as well as special charges arising from
loading, warehousingandforwarding of the goods at an intermediate loading, warehousing and forwarding of the goods at an intermediate
port of call or refuge.
(7)Sacrifice in and Contribution to General Average and Salvage
Charges.
(8)Such proportion of losses sustainedby the ship-owners as is to be (8)Such proportion of losses sustained by the ship-owners as is to be
reimbursed by the cargo owner under the Contract of Affreightment
"Both to Blame Collision" clause.
[Link] Average(W.A.)
Aside fromthe risks coveredunder F P A condition as above this Aside from the risks covered under F.P.A. condition as above, this
insurance also covers Partial losses of the insured goods caused by
heavy weather, lightning, tsunami, earthquake and/ or flood.
[Link] Risks
Aside fromthe risks coveredunder the F P A andWA conditions as Aside from the risks covered under the F.P.A. and W.A. conditions as
above, this insurance also covers risks of loss of or damage to the
insured goods whether partial or total, arising from external causes in
the course of transit.
MARINE INSURANCE
Freight insurance: When a vessel is lost this coverage
indemnifies the ship-owner for the loss of income that would
h b d t th d f th have been earned at the end of the voyage.
Th f ll i i f ti i d t bt i i The following proper information required to obtain insurance
quotation:
C d i ti d if h d Cargo description and if hazardous
Quantity and packaging
Loading port and destination
Ocean vessel (including date of build, flag and size)
Value of the goods being shipped
Expected date of shipment p p
MARINE INSURANCE
Cargo Claims Documents :
I nsurance Certificate or Policy
Bill of Lading
Shipper's Invoice Shipper s Invoice
Packing List
Survey Report
Ship's Short-landing/ Discrepancy Certificate(s). Ships Short landing/ Discrepancy Certificate(s).
Copies of correspondence exchanged with the Carrier
G G GENERAL AVERAGE
GENERAL AVERAGE
Average: A term in marine insurance referring to a loss. A particular
average is a partial loss.
Particular Average :A fortuitous partial loss to the subject matter
insured, proximately caused by an insured peril but which is not a
general average loss. Particular average only relates to damage and/or general average loss. Particular average only relates to damage and/or
expenses which are exclusively borne by the owners of a vessel which
has sustained damage as a result of e.g. heavy weather or by the
owners of the cargo, which has been damaged in transit.
General Average Abbreviation: G/A Intentional act or sacrifice
which is carried out to safeguard vessel and cargo. When a vessel is in
danger, the master has the right to sacrifice property and/or to incur
bl di M k f h l b fi f reasonable expenditure. Measures taken for the sole benefit of any
particular interest are not considered general average.
GENERAL AVERAGE
A legal principle which traces its origins in ancient maritime law, general average
is still part of the admiralty lawof most countries General average requires is still part of the admiralty law of most countries. General average requires
three elements which are clearly stated by Mr. J ustice Grier in Barnard v.
Adams:
"Ist. A common danger: a danger in which vessel, cargo and crew all
participate; a danger imminent and apparently 'inevitable,' except by voluntarily
incurring the loss of a portion of the whole to save the remainder.
"2nd. There must be a voluntary jettison, jactus, or casting away, of some 2nd. There must be a voluntary jettison, jactus, or casting away, of some
portion of the joint concern for the purpose of avoiding this imminent peril,
periculi imminentis evitandi causa, or, in other words, a transfer of the peril
from the whole to a particular portion of the whole.
"3rd. This attempt to avoid the imminent common peril must be successful". p p
GENERAL AVERAGE
general average bond :
A bond prepared by the general average adjuster binding the owner of A bond prepared by the general average adjuster binding the owner of
the goods to pay a proportion of the general average.
CUSTOMERS NEED