Elearning-Chapter 3-Carriage of Goods in Container - RV

Trường Đại học Tôn Đức Thắng
Khoa: Quản Trị Kinh Doanh

Bộ Môn: QTKD QT
Môn: International Cargo Transportation and Insurance

Mã môn học: 706022
706022-Chapter 3-Carriage of goods in Containers

CHAPTER 3
CARRIAGE OF GOODS IN
CONTAINERS

Contents
LO1: History and development

LO2: The container
LO3: The container movement methods
LO4: Container packing and loading

LO1
History and development
Ideal X
Introduction of the intermodal container concept in the
USA (1956-1960) Malcolm McLean
Standardization of the size of the container (1960-1965)
 10’,20’,30’,40’
Introduction of ISO corner castings (1965-1967)
Adoption and integration into global distribution systems

(1967-1990)  deployment on the most important
shipping route
Exponential growth and entry of China in the global

economy (1990-2008)
Global crisis and shift in thinking (2008-2015

LO2
The container-definition
ISO 668:2013 (E)
Freight Container means an article of transport equipment:
a) of a permanent character and accordingly strong enough to be
suitable for repeated use;
b) specially designed to facilitate the carriage of goods by one or
more modes of transport, without intermediate reloading;
c) fitted with devices permitting its ready handling, particularly its
transfer from one mode of transport to another;
d) so designed as to be easy to fill and empty;
e) having an internal volume of 1 m3 (35,3ft3) or more
ISO freight container  complying with all relevant ISO container
standards in existence at the time of its manufacture
Container owners
SOC
Package (SHIPPER OWNED CONTAINER)
1 container SOC of 100 CTNS  1 Pkg
Freight container COC

(CARRIER OWNED CONTAINER)
1 container COC of 100 CTNS  100 Pkgs

ISO Standard container
Overview of the most important ISO Standards for Freight Containers
ISO 668 Classification, dimensions and ratings
ISO 830 Vocabulary
ISO 1161 Corner fittings - Specification
ISO 1496-1 Specification and testing Part 1: General cargo containers for general purposes
ISO 1496-2 Specification and testing Part 2: Thermal containers
ISO 1496-3 Specifìcation and testing Part 3: Tank containers for liquids, gases and
pressurized dry bulk
ISO 1496-4 Specification and testing Part 4: Non-pressurized containers for dry bulk
ISO 1496-5 Specification and testing Part 5: Platform and platform-based containers
ISO 3874 Handling and securing
ISO 3874:1997/Amd 1 Twistlocks, latch locks, stacking fìttings and lashing rod systems for
securing of
containers
ISO 3874:1997/Amd 2 Vertical tandem lifting
ISO 3874:1997/Amd 3 Double stack rail car operations

ISO Standard container
ISO 3874:1997/Amd 4 45 ft containers

ISO 6346 Coding, identification and marking
ISO 9669 Interface connections for tank containers
ISO 9711 Information related to containers on board vessels - Bay plan system
ISO 9897 Container equipment data exchange (CEDEX) - General communication
codes
ISO 10368 Freight thermal containers - Remote condition monitoring
ISO 10374 Freight containers - Automatic identification
ISO/TS 10891 Freight containers - Radio frequency identification (RFID) - Licence
plate tag
ISO 14829 Straddle carriers for freight container handling - Calculation of stability
ISO/TR 15069 Handling and securing - Rationale for ISO 3874
ISO/TR 15070 Rationale for structural test criteria
ISQ 17712 Mechanical seals
ISO 18185 Electronic seals
lSO 18186 RFID cargo shipment tag system
Container specification
Width  a uniform width of 2 438 mm (8 ft).

Height:
2 896 mm (9 ft 6 in) 1EEE, 1AAA and 1BBB high cube
2 591 mm (8 ft 6 in) 1EE, 1AA, 1BB and 1 CC
2 438 mm (8 ft)  1A, 1B, 1C and 1D.
less than 2 438 mm (8 ft) 1AX, 1BX, 1 CX and 1 DX

Notes
The ISO (or sea pallet) measuring 1.00 x 1.20 m

The EUR pallet measuring 0.80 x 1.20 m  used by most
supermarkets.
 Pallet wide container/RACE container  not ISO container
external width of 2.50-2.55 m  short sea (EU) + domestic (AU)
Length
Tolerance:
(-) 10 mm for 40’ and
(-) 6 mm for 20’

Modular system
Forty foot Equivalent Unit-FEU
Twenty foot Equivalent Unit-TEU
Note:
1x40’GP = 2 TEUS
1x40’HC = 2 TEUS
1x45’HC = 2.25 TEUS
Container specification-weight
Rating (maximum permissible gross weight)

Tare (weight of the empty container)
Payload (max. permissible weight of the cargo)
Payload = Rating - Tare Mass

Note:
Rating: not exceed 30,480 kgs  IMO requirements on
weighing
Tare:2 and 2.5 MTs/20’ and 3.5 and 4 MTs/40’


Container specification-Capacity/Volume
Volume-to-payload ratio

Example 1
Volume-to-payload Vs Storage factor
Consignment 1:
• 200 MTs/ 440 CBM
• Broken Storage: 10%
Consignment 2:
230 MTs/ 300 CBM
Broken Storage: 15 %

Maximum permissible payloads

Maximum permissible payloads
• Ex 2: a 30 tonne rated 20 foot container with 16

cross members may carry approximately 1.8 m.t. per
cross member.

Rule of thumb is to keep a maximum of
 4.5 MT/m for a 20’
 3.0 MT/m for a 40’
Floor loading limit

Container types- ISO Standard 1496
The ISO recognizes 5 main categories of containers:

1. General purpose containers
2. Thermal containers or reefer containers
3. Tank containers for liquids, gases and pressurized dry
bulk
4. Non-pressurized containers for dry bulk cargoes
5. Platform and platform-based containers

Part 1- General purpose containers  three categories:

Closed freight containers
Ventilated containers, including fantainers
Open top containers, including hard-top containers

Closed freight containers

DRY CARGO CONTAINER (DC)
HIGH CUBE CONTAINER (9’6” HC/HQ)
 Application: For light-weight, voluminous cargo

Particular modifications:
 Containers for garments on hangers
(GOH)
 Open side
 Containers with large flexi-tanks for the
carriage of (non-hazardous) liquids in bulk

Ventilated, fantainers:
the general purpose container +full length ventilation
galleries located along the top and bottom side rails 
cargoes with a high moisture content
Fantainer  GP container +an
electric extraction fan  onions
over long distances

Open top containers:

a general purpose container without a rigid roof 
heavy and awkward cargoes requiring top-loading

Part 2- Thermal containers  ‘reefer’ or ‘refrigerated

containers’
The porthole container, and
The integral reefer container
 For cargo which must be kept at a constant temperature
above or below freezing point.
Modification: Controlled atmosphere
(CA) containers  RF + the cooling air
 fruits and vegetables ripen and respire
at normal rates

Part 3- Tank containers  the tank shell and the

framework  15,000 to 27,000 litres
IMO type 0 food grade tank container
IMO type 1 hazardous cargo
IMO type 2 semi/ non-hazardous cargo
IMO type 5 gases and other explosives

Part 4- Bulk containers  bulk cargoes

such as dry powders and granular cargoes

Part 5- Platform containers  ‘flat racks’ or ‘flats’ 

cargo with dimensions in excess of the space available in
general purpose or open top containers

The labelling and marking of containers-
ISO Standard 6346
Identification system:

ISO Standard 6346
Size and type codes

Example 3

ISO Standard 6346
Location of mandatory and optional marks
1. Black and yellow stripes adjacent to the corner fittings
may be reduced to a length of 300 mm (12 in) min.
2. Size and type markings on the roof and on the front
end (blind end) are optional.
3. Mounting of AEI tag is optional.
4. “NET” marking is optional

4
1
2

Advantages and Drawbacks of Containerization

706022-Chapter 2-Chartering operation
Stacking

LO 3
Container movement methods
• FCL/FCL
• LCL/LCL
• FCL/LCL
• LCL/FCL

Full container load-FCL
• Liner define the term FCL/FCL

• Cargo for shipment in a container where the shipper
and the consignee are responsible for packing/seal
and unpacking the container.
• Period of responsibility: CY-CY  extended the
Hague Rules
• Carriage of containers on deck  accept liability for
loss/damage

1 B/L
1 D/O

• Movement: FCL/FCL or CY/CY

• B/L

The outbound process:

1. Check with carrier/forwarder  shipping schedule available
vessel
2. Booking Note  Booking confirmation  pick up empty
container + cont. packing list + seal
3. The container will be taken to shipper’s premises
4. Shipper will load/stowage/count the goods into the container
5. Customs clearance for export  seal
6. Container delivery (X days free)  VGM  CY before
closing time  loaded onto the ship
7. B/L instruction  B/L + freight / charges (if any)
VGM-Verified Gross Mass
Another incident occurred in June
2013, when container ship MOL
Comfort split in half whilst sailing
from Singapore to Saudi Arabia. All
crew escaped the sinking. Both
sections of the ship, as well as 4,500
containers, sank. The cause is still
unknown but is likely to have been
due, at least in part, to undeclared
overweight containers being stowed in
the wrong positions, contributing to
severe stresses on the hull.
VGM- 1 tháng 7 năm 2016  “No VGM, No loading.”
•Two permissible methods for weighing:
• Method 1: Weigh the packed container. Packed Container Weight
• Method 2: Weigh the cargo and other contents
and add tare weight of the container.
+
Cargo + Dunnage Weight Tare on the plate
•Estimating weight is not permitted. Shipper must

weigh or arrange for weighing of packed container or
its contents.

Rate based on 40’GP:
20’GP=75% x 40’GP
40’HC= 112.5% x 40’GP
Freight and charge FCL 45’HC= 126.6% x 40’GP
BASIC FREIGHT RATE:

 FAK : Freight All Kind
 CBR : Commodity Box Rate
SURCHARGE:
 CAF : Currency Adjustment Factor
 BAF : Bunker Adjustment Factor/EBS (Emergency
Bunker Surcharge)
 GRI : General Rate Increase
 PSS : Peak Season Surcharge
 LSS : Low Sulphur Surcharge
 THC : Terminal Handling Charge…
Freight All-in= Basic Freight + Surcharge
FAK

Container Transport Costs
• Ship (23%) charges that are reflecting the
shipping line operating expenses, capital costs,
and bunker fuel. This share diminishes with
economies of scale, implying that larger
containerships have lower operating costs per
unit of capacity.
• The costs related to the containers (18%)
including leasing and maintenance costs.
Containers are usually leased on a daily basis.
• Ports and terminals charges (21%), including
stevedoring.
• Inland transport (25%) costs, including trucking
and rail.
• Other costs, including container repositioning
(13%).
World’s Largest Maritime Container
Shipping Operators, 2020

Horizontal Integration: Operational
Agreements and M&A

Vertical Integration: Extending the Scope
of Operations

Three major shipping alliances

The inbound process:

1. Arrival Notice (abt 2 days before ship arrival)
2. The container is taken off the ship and put on the CY
3. Carrier’s Imp Dept.  B/L presentation  D/O  Container
Borrow Receipt  deposit (if any)
4. Port Commercial Dept.  D/O presentation  Equipment
Interchange Receipt
5. MT return  Depot

The inbound charges:

1. Lift on/off
2. THC
3. Handling charge
4. D/O fee
5. Cleaning fee
6. CIC
7. Normally: 5 free days  detention + demurrage charge
8. ….

When we should use LCL?

Less than container load-LCL
1. LCL: when a container consists of cargo belonging to more
than one consignee
2. Consolidation: or groupage  the assembly of small parcels
of cargo from several consignors at one point of origin
intended for several consignees at another point of destination,
dispatching the parcels as one consolidated consignment to the
consolidator’s agent at the destination and delivery them to
their respective consignee
3. Forwarder  groupage agent or consolidator:
To individual consignor  as carrier  issue HB/L
To actual carrier  as consignor  receive MB/L
Period of responsibility: CFS-CFS
Packing/seal and unpacking the container
Consolidation
3 HB/Ls
1 MB/L 3 D/Os
1 D/O

Outbound LCL shipment-SHIPPER
BOOKING NOTE
SHIPPING ORDER
DELIVER TO CFS  Clearly label each box
EXPORT CUSTOMS CLEARANCE
SHIPPER INSTRUCTION  B/L

Inbound LCL-Consignee
ARRIVAL NOTICE
B/L PRESENTATION  DELIVERY ORDER (D/O)
D/O PRESENTATION  PHIẾU XUẤT KHO
IMPORT CUSTOMS CLEARANCE
MANIFEST CHECKING  GOODS DELIVERY

Outbound LCL-Consolidator
BOOKING NOTE  SHIPPING ORDER
GOODS DELIVERED TO CFS  PALLETIZATION
BOOKING FCL  LOADED INTO CONTAINER  SEAL  CY
SEND S/I  B/L + MANIFEST  MB/L  ISSUE HB/L
SHIPPING ADVICE  OVERSEA AGENT

Golden rules

Inbound LCL-Consolidator
ARRIVAL NOTICE  SEND HIS OWN ARRIVAL NOTICE
MB/L PRESENTATION  D/O  PICK UP FCL AT CY  CFS
UNSTUFFING CONTAINER INTO CFS
COLLECTING HB/L  D/O

BILL OF LADING
• CFS/CFS or LCL/LCL
• HB/Ls + MB/L + MANIFEST  direct consol 
co-loader
• L/C: HOUSE BILL OF LADING ACCEPTABLE

Freight and Charges

Freight and Charges
• Handling fee/ Destination delivery charge

• B/L, D/O fee
• THC, CFS charges
• Cleaning container fee
• Demurrage charge
• AMS (Advanced Manifest System fee)/ISF
(Importer Security Filing)
• CIC (Container Imbalance Charge) hay “Equipment
Imbalance Surcharge”
• Etc…
Freight and Charges
• Unit of freight ( Freight ton/ Revenue ton)

• Ratio 1:1  1000 KGS<>1CBM
• Freight + charges
• MIN
• BEP (for FWD)

Weight/Measurement
 W/M  presents a cargo density limit  weight or measurement,

whichever is greater
 1 cubic meter of marble weighs around 2500kgs. You can reach the gross
weight limit of a 40ft dry container by loading around 9 cubic meters of
marble  Loading efficiency in terms of volume; 9cbm/ 67 cbm 40ft
container volume =13 %
 Fiberglass for insulation is a lightweight commodity. 1 cubic meter
weighs around 80kgs. You can fill the 40ft dry container by loading
around 5360 kgs of fiberglass insulation  Loading efficiency in terms of
weight: 5360 kgs fiberglass insulation weight / 22000 kgs loading limit
for 40ft container = 24%

W/M rule
1. AIR FREIGHT 1 CUBIC METER = 167 KGS

2. SEA FREIGHT 1 CUBIC METER = 1.000 KGS
3. Inland point in USA: 1 CBM = 363 KGS
4. ROAD FREIGHT 1 CUBIC METER = 333 KGS

Revenue ton (RT)
Step 1: Calculate the volume/GW of the LCL shipment
Step 2: Convert GW to the weight based volume

(ratio=1:1)
Step 3: Compare the volume with the weight

based volume  which is higher  RT

Exe.1
One shipper usually sent the 20 pallets of the cargo to Japan with
20ft container. One day, they recommended to arrange LCL
shipment for the 14 pallets (1 pallet =1 CBM) of the cargo
because of the volume reduction. If you were Cnee (the Incoterms
at this time was CIF), do you accept to use LCL i/o FCL as
shipper’s suggest?
Known as:
Ocean Freight: USD 300/ 20’, USD10/CBM
Port charge: THC: JPY 35,000/20’, THC: JPY 1,500 /CBM, CFS:
JPY 3, 980 / CBM
Exchange Rate: as USD 1 = JPY 100

Exe.2
Your Japanese company import a shipment from VN under FOB

term, the details as follows:
Cargo volume: 1.1m x 1.1m x 1.0m / pallet / G.W: 500kg / pallet
Q’ty: 10 pallets
Ocean Freight to Japan
FCL: USD 300/20′ all in
LCL: USD 10/RT
Port Charges in Japan
FCL: THC – JPY 35,000/20 ‘
LCL: THC – JPY 1,500/CBM, CFS – JPY 3,980/CBM
Do you consider to use FCL or LCL? Why ?
Further reading-Chapter 3
1. Lars Gorton, Shipbroking and Chartering practice, 4th edition,

Lloyd’s of London Press Ltd
2. John F Wilson, Carriage of goods by sea, 6th edition, Pearson
3. Gencon 1994, Bimco
4. Voyage charter party laytime interpretation rules 1993
5. 100 Câu hỏi về Hợp đồng vận chuyển hàng hóa bằng đường
biển, NXB Lao Động, 2010

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Trường Đại học Tôn Đức Thắng

Khoa: Quản Trị Kinh Doanh

Môn: International Cargo Transportation and Insurance

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

LO1: History and development

706022-Chapter 3-Carriage of goods in Containers

Introduction of ISO corner castings (1965-1967)

Adoption and integration into global distribution systems

Exponential growth and entry of China in the global

Global crisis and shift in thinking (2008-2015

1 container SOC of 100 CTNS  1 Pkg

Freight container COC

1 container COC of 100 CTNS  100 Pkgs

706022-Chapter 3-Carriage of goods in Containers

ISO 3874:1997/Amd 4 45 ft containers

Width  a uniform width of 2 438 mm (8 ft).

706022-Chapter 3-Carriage of goods in Containers

The ISO (or sea pallet) measuring 1.00 x 1.20 m

706022-Chapter 3-Carriage of goods in Containers

Twenty foot Equivalent Unit-TEU

Rating (maximum permissible gross weight)

Payload = Rating - Tare Mass

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

• Ex 2: a 30 tonne rated 20 foot container with 16

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

The ISO recognizes 5 main categories of containers:

706022-Chapter 3-Carriage of goods in Containers

Part 1- General purpose containers  three categories:

706022-Chapter 3-Carriage of goods in Containers

Closed freight containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

Open top containers:

706022-Chapter 3-Carriage of goods in Containers

Part 2- Thermal containers  ‘reefer’ or ‘refrigerated

706022-Chapter 3-Carriage of goods in Containers

Part 3- Tank containers  the tank shell and the

706022-Chapter 3-Carriage of goods in Containers

Part 4- Bulk containers  bulk cargoes

706022-Chapter 3-Carriage of goods in Containers

Part 5- Platform containers  ‘flat racks’ or ‘flats’ 

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

• Liner define the term FCL/FCL

706022-Chapter 3-Carriage of goods in Containers

706022-Chapter 3-Carriage of goods in Containers

• Movement: FCL/FCL or CY/CY

706022-Chapter 3-Carriage of goods in Containers

The outbound process: