1.sea Transport.

MODULE I: SEA TRANSPORT
FIATA Diploma in Freight Forwarding 1

MODULES OBJECTIVES
By complete this chapter, learners should

▪ Be familiar with the system of international sea transport such as world seaports, world sea
routes and types of vessels.
▪ Understand clearly who has the right to book shipping space for every incoterm rule
respectively.
▪ Be able to differentiate three types of chartering and procedure of booking.
▪ Familiar with the sea transport documents and apply to make them.
▪ Understand the basic regulations of international sea transport.
▪ Understand transport cost structure and elements.
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Contents
Chapter 1: Overview of Sea Transport
Chapter 2: Major Cargo Transported By Sea
Chapter 3: Marine Transport Geography
Chapter 4: Means of Sea Transport
Chapter 5: Marine Transport Operation 1: Liner Services
Chapter 6: Marine Transport Operation 2: Tramp
Chapter 7: Cost And Documentation
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CHAPTER 1: OVERVIEW OF SEA TRANSPORT
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1.1. Definition
1.2. Roles of sea transport in international trade
1.3. Advantages and disadvantages of sea transport
1.4. Applying incoterms rules in sea transport
1.5. Essential components of sea transport system
5
1.1. Definition
Sea transport is any movement of goods
and/or passengers using seagoing vessels
on voyages which are undertaken wholly
or partly at sea.
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1.1. ROLE OF SEA TRANSPORT IN INTERNATIONAL TRADE

THE DOMINANT SUPPORT OF GLOBAL TRADE
7

THE DOMINANT SUPPORT OF GLOBAL TRADE
- Large quantities of cargo over long distances
- Carrying the majority of all goods traded internationally
* Making up 80% of the world’s trade in terms of volume (300 mil tons, USD 10 bil = 4/5 world
merchandise trade. Dry cargo: 2/3 of the total)
* Annual growth: 4-5%
8
THE ADVANTAGES OF SEA TRANSPORT
LARGE
CAPACITY
458.46 m
Seawise Giant Oil tanker 564,650 DWT
(1,504.1 ft)
9

THE ADVANTAGES OF SEA TRANSPORT
Large throughput of sea routes, ports and continuity of its traffic
LARGE
CAPACITY
10
THE ADVANTAGES OF SEA TRANSPORT Large capacity
Large throughput of sea routes, ports

and continuity of its traffic
Very convenient because it utilizes

natural waters
Can be used for transporting almost

every kind of cargo
11
MAIN ADVANTAGE: ITS ECONOMIES OF SCALE
To transport the 19,224 TEU capacity of the MSC Oscar you would need:
12
MSC Oscar was the biggest container ship until

March 2017.
What is the new champion?
13
THE DISADVANTAGES OF SEA TRANSPORT
Exposed to risks of ocean disasters
Having long lead time
Incurring the highest entry cost in the

transport sector
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“INTERNATIONAL COMMERCIAL TERMS”
• First published in 1936 by ICC.

• Revised 6 times before 2010 Release.
• “Incoterms 2010” to become effective on Jan, 2011
17
INTERNATIONAL CHAMBER OF
COMMERCE (ICC)
International
Founded 1919 in representatives
Paris from
over 120 countries
18
WHAT ARE THE INCOTERMS COMMONLY USED FOR?
❖ Simplify some terms of an international sales

agreement.
❖ Apply to contract of sales.
19
WHAT DOES EACH INCOTERM REFER TO?
Standardizes rules
Outlines costs
Each Term
Defines responsibility
Determines delivery point
20
HOW CAN THE INCOTERMS BE CATEGORIZED?
INCOTERMS CAN BE CATEGORIZED IN 2 GROUPS
Rules for Any Mode of

Rules for Sea and Inland
Transport: 7 rules
Waterway Transport: 4 rules
EXW, FCA, CPT, CIP, DPU, DAP,
FAS, FOB, CFR, CIF
DDP
21
THE INCOTERMS BEGINNING WITH E

• EXW
THE INCOTERMS BEGINNING WITH F

• FCA, FAS, FOB
THE INCOTERMS BEGINNING WITH C

• CPT, CIP, CIF, CFR
THE INCOTERMS BEGINNING WITH D

• DPU, DAP, DDP
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23
24
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Having the right to choose ports of loading, ports of

discharge, sea routes or the carrier/shipping company.
Getting more competitive freight rates and enhanced

shipment. For example, importing under FOB term
instead of CIF.
Having an opportunity to utilize their national fleet. This

is actually a form of indirect export of national sea
transport services
26
Most nations value the notion of having their own merchant fleets for reason of
different nature such as, for economic, national defense reasons, and for reasons of
national pride.
Direct and indirect subsidies to their national flag carriers (cargo policies reserving a
large part of the nation’s cargo for those carriers registered under the national flag
and meet specified minimum requirements of ownership, operation and manning by
citizens of that nation.
27
UNCTAD Liner code - the 40-40—20 Market Sharing

Formula (MSF) was published by the UN to help
developing countries to take part in chartering
market and transporting exports and imports by
dividing the right of transport among exporter,
importers and the cross traders (3rd party)
UNITED NATIONS CONFERENCE ON

TRADE AND DEVELOPMENT
28
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CONTENT
- Containerised Cargo
- Liquid Bulk
- Dry Bulk
- Breakbulk
- Ro-Ro
- Hazardous
- IMDG Code
30
CONTAINERISED CARGO General Transport Characteristics
COMMODITY
• Commodity maybe defined as a raw material or

product that is traded, such as ores, grain, coffee,
etc.
CARGO
• Commodity becomes Cargo when it enters the

transportation realm.. Cargo is what is
transported.
31
Wheat – Commodity and Cargo
Chrome Ore – Commodity and Cargo

32
You may have also heard the term “Cargo

Operation or Handling”, never You may have also heard the terms “Commodity
“Commodity Operation or Handling”.. This Brokers”, “Commodity Traders”, and “Cargo
is because cargo is what is being Brokers”. Commodity brokers connect sellers
transported and handled on board the and buyers for any specific commodity and
ships, in port and on the roads. Cargo Brokers connect “Commodity Traders”
who trade in commodities and Ship owners for
As long as a “commodity” is being the carriage of the commodities.
transported, it is referred to as “cargo”.
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OIL PRODUCT BULKY GOODS OTHER DRY CARGO
Oil/oil products, chemical, Dry cargo transported in bulk Other dry cargo transported
LPG, LNG, asphalt,… (grain, minerals…) by container, refrigerated
transported by tanker ships, heavy lift…
34

Each type of cargo has its own specifications that influence method of transport and specific place
of production and consumption
WHEAT
ARGRICULTURAL – GRAIN CROPS BARLEY
MAIZE
RYE
OATS
RICE
SEEDS
COPRA
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ARGRICULTURAL – GRAIN CROPS

Usually in bulk forms and cargo sizes vary from 10.000 tons up to Panamax size or larger ships.
Bagged grains and rice are shipped in smaller sizes (10.00-15.000 tons). Bulk grain mainly by bulk
carriers. Bagged grain by twin decker.
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Major trade routes ARGRICULTURAL – GRAIN CROPS

from USA
Canada to Europe
Far East and

Argentina to Russia
Australia to Middle
East and Japan
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MINERALS
TIN
SALT
COAL
38
CONCENTRATES
COPPER
CEMENT
COAL
39
Other dry cargo can be transported by parcel sizes such as tea, coffee, cocoa, tobacco,
cotton, wool, jute, rubber and clothes. They can be baled or boxed and stuffed in containers
40
Generally, there is an increasing practice to transport many kinds of cargo stuffed into containers. It
depends on the quantity of cargo, lead time requirement, nature of cargo and flexible sailing schedule.
41
Handling and Securing Requirement
24-hours advance manifest to USA
• Requirement:
The Automated Manifest System, most often referred to as AMS, is an electronic transmission
system for documentation to U.S. Customs before cargo arrives in the U.S. Originally, the system
was deployed to reduce the time it takes to import cargo to the U.S., but more recently it has
been used to keep cargo under inspection to ensure safety of U.S. imported goods. Without
meeting all necessary AMS customs requirements for documents and deadlines, you could end
up paying a ton of fines and having your cargo held at customs; you could be charged up to
$5,000 per instance of violation. All that said, filing all necessary AMS documents should be an
easy and quick process if you know what you need and when you need it. Here is a checklist of
items to make sure you report to AMS before your cargo arrives in the U.S.
Timeline:
✓ At least 24 hours prior to cargo loading if that vessel is calling a US port direct.
Penalty:
✓ Cargo will not be loaded on board if SI is not submitted to carrier on time.
42
• AMS Customs Requirements and Checklist

▪ Shipper’s and consignee’s complete names and addresses.
▪ A precise description of cargo, including weight and piece count.
▪ Port where the cargo is loaded.
▪ Last foreign port before the vessel departs for the U.S.
▪ Vessel name, number, country of documentation, Standard Carrier Alpha Code
(SCAC), and voyage number.
▪ Scheduled date of arrival at first U.S. port.
▪ First foreign port where the carrier takes possession of cargo.
▪ Hazardous material code.
▪ Container number.
▪ Container seal number -serial number of the last seal applied when the container is
loaded
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24-hours advance manifest to other countries
Europe: ENS - Entry Summary Japan (Effective: March Mexico

2014) Brazil
Declaration (Effective: January
1st 2011) at MBL level
Turkey (effective: China (Effective: Australia Canada: ACI – Advance

January 1st, 2012) June 1st, 2018) at Commercial Information
MBL level
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Handling Tools
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Handling Tools
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General Transport Characteristics

LIQUID BULK
- Flammability
- Explosive
- Electrical contamination
- Fast Volatility
- Dilation
- Poisoning
- Freezing characteristics = > heat
47

LIQUID BULK
48
LIQUID BULK
1. Density (d420)
2. Pour point
3. Viscosity index
4. Basic sediment and water (BS&W)
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Handling and Securing Requirement LIQUID BULK
1. Preservation Requirements
• Storage tank made from soil: plastering a layer of clay around 0.5-
0.7m to protect water. Low cost but not tight, volatile tanks, used
for heavy oils.
• Reinforced concrete storage tanks: round, conical tanks. Preserving

virgin oil, heavy oil. The tank has the ability to limit evaporation but
is expensive.
• Steel tanks: the most common, containing pristine oil and all kinds
of oil products. Including floating tanks on the ground, semi-
submersible tanks, underground tanks (deep in the ground).
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2. Loading and unloading requirements
✔ Before pumping, must connect the ground wire, then connect the
conduit. After pumping, remove the conduit first and disconnect the
ground wire.
✔ Conduit has suitable length, with padding isolating the oil pipeline
from the wharf foundation.
✔ It is forbidden to bring fire near ship tunnels or oil tanks. Must
immediately stop pumping if it has thunderstorms.
✔ Pump the oil into the basement first to balance the ship
✔ Pump speed must be monitored by a professional worker because
when the speed increases → the pressure increases.
✔ The amount of pumped oil is not too full (swollen oil will spill out),
not too little (oil vapor concentration in the area on a large surface
→ causing a fire)
✔ For crude oil, it is necessary to heat before the ship enters the port.
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3. Transport requirements
- When transporting use specialized ships.
- Requirements for ship basement cleaning:
Pump hot water into the tunnel then dry it, the oil tank expands, avoiding sticking.
Conduct ventilation to melt the oil gas.
Use strong water to flush the tunnel wall, scrub clean then dry.
- Requirements when the ship runs:
Do not knock on the deck with metal.
If the outside temperature is high, water must be sprayed on the deck to reduce the temperature.
Check that oil does not stand in the direction of the wind.
Wear a gas mask, fasten the seat belt when entering the cleaning and inspection bunker.
On the oil tank, no shoes or hard soles are allowed
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Handling Tool LIQUID BULK
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General Transport Characteristics DRY BULK
Many types of containers, shipped Transport characteristics

unpacked in bulk, including: Physical and chemical properties vary by type
1. Food Thermal conductivity; Metamorphic
2. Salt dehumidification, absorption of flavors of other
3. Sugar substances dissolve; Coagulation; Corrosion to
4. Chemical fertilizers metals; flying dust, toxic ... But the common
5. Cement transport characteristics are as follows:
6. Iron ore + Self-classification
7. Coal + Separation
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Handling and Securing Requirement DRY BULK
HANDLING SECURING
▪ Ability to capsize: Due to its self-

detachment characteristics; Large natural
inclination angle (30-500) –ore
▪ Exothermic, sweat and moldy Worm and International Convention 1960
contamination
▪ Hull Corrosion
▪ Reduce the height of the floating center
(heavy goods)…
55
Handling and Securing Requirement DRY BULK
▪ Venture: low temperature and humidity

▪ Temperature measurement and toxic exhaust (coal)
▪ Away from heat sources with leading thermal conductivity
▪ Heat Cooling
▪ Store in a sealed store, dry place with water soluble
Handling Tool
56
General Transport Characteristics BREAKBULK
Breakbulk (General cargo) are goods that are transported and stored in individual bags or in
groups. Depending on the physical and chemical properties, the goods may or may not be packed.
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Breakbulk Classification
⮚Based on the form of transportation and mechanization of handling:
▪ Crates, boxes, bags, bales ..., ▪ Goods shipped on pallets
▪ Single unit without packaging: vehicles, ▪ Self-driven goods
machinery and equipment. ▪ Containerized goods
▪ Long lines: steel bars, rails ...
➢ Based on storage and transport conditions:
▪ Group 1: Exposing transport and storage
▪ Group 2: Humidity-proof and heat-proof goods: transport and storage in vehicles and closed storage
▪ Group 3: Transport and store at appropriate temperature (perishable goods)
Breakbulk Characteristics
▪ Various size, shape, density and packaging
▪ Completeness and uniformity
▪ Various physical and chemical properties
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Transportation
▪ Breakbulk in ocean shipping are transported by specialized ships (Ro-Ro, containers ...)
▪ Method of loading in a ship basement
Breakbulk loaded into ship basement must:
▪ Guaranteed loading techniques,
▪ Maximum tonnage and cargo capacity of the ship,
▪ Ensuring safe when ships run on the sea and on the river
The method of loading depends on the specific type of goods:
▪ Place in crate: Based on the structure, size and nature of the goods inside
▪ Place in carton: Based on specific construction and conditions
▪ Place in packages: Take full advantage of the capacity of the basement, need to be sure to make sure not to move
▪ Machinery and equipment: stacking (if packed in bales); 50-100mm thick wooden padding (precious equipment)
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Handling and securing requirement BREAKBULK
Manual handling
Sacks, Cartons, Crates, Port of Jakarta Port of Jakarta
Drums, Pallets, Bags – Sunda Kelapa – Sunda Kelapa
60

Handling and securing requirement
Loading and unloading common goods
- Cycle equipment or continuous equipment
- Carrying tools: Universal (cable ties and hooks); specialized (cable for cargo
boxes, electromagnets unloading sleepers ...)

Preserving common goods at the port
Warehouse requirements:
+ Ability to preserve goods through the largest warehouse
+ Ensure unloading process timely, uninterrupted, convenient all day and night
+ Warehouse architecture in accordance with preservation requirements
+ Safe and hygienic working conditions
+Creating favorable conditions for mechanization of loading and unloading, transportation and loading.
+ Warehouse is high, clean, flat, with drainage ditches, with necessary fire tools
Method of loading and unloading in the warehouse
- Line up: depends on the shape, size and purpose
- Queue: there are 2 methods is on the board and not on the board
- Line up in bundles and packages.
- Metal products, machinery and equipment
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Handling Tool
Unitisation: pallets, boxes General Cargo: Break Bulk Cargo
63
Lumber, Paper, Steel, Cars General Cargo: Neo Bulk Cargo
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General Transport Characteristics RO-RO
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66
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General Transport Characteristics HAZARDOUS
• Concept
• Classification
• DG PG (packing group)
• UN and PSN numbers
• Trademarked
• Loading and unloading, transporting

and storage
68
General Transport Characteristics HAZARDOUS
• Class 1 : Explosives
• Class 2 : Gases
• Class 3 : Flammable Liquids
• Class 4 : Flammable Solids
• Class 5 : Oxidizing
• Class 6 : Poisonous and Infectious substances
• Class 7 : Radioactive substance
• Class 8 : Corrosives
• Class 9 : Miscellaneous
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Handling and Securing Requirement HAZARDOUS

Divided into 3 groups:
• Packing Group I: high danger
• Packing Group II: medium danger
• Packing Group III: low danger
There are several groups of dangerous goods (Group 2, Subgroup 6.2 and
Group 7) without PG.
Marking and Labelling
• Marking: UN number, proper shipping names, UN specification marks,
UN 3077 and UN 3082
• Labelling: usually means a dangerous icon (and a sales label) display
on small package (under 50 litters).
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Marking and Labelling

• Marking: UN number, proper shipping names, UN specification marks, UN 3077 and UN 3082
• Labelling: usually means a dangerous icon (and a sales label) display on small package (under)
1. Orientation label (optinal)

2. Primary class label
3. Stadardized UN certification (according
to standard)
4. Shipping name
5. UN number
6. Subsidiary class label
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Loading and unloading, transport and storage

• Preservation Requirements
• Loading and unloading requirements
• Shipping Requirements
Storage of the tunnel must be dry, clean.
• Store in specialized warehouses.
• Paint white window, shielded iron (anti-microbial especially mouse).
• In the warehouse there is lightning protection device, explosion proof.
• Control of temperature, humidity in warehouse
• According to the instructions on the package.
• Do not align the different kinds of goods.
• Stacking must be flat.
• Ventilation gates ensure ventilation.
• The term of preservation is not too long.
In the warehouse does not proceed with repair, welding packaging → Capable of born sparks.
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Closed containers & portable tanks

Non-containerized Packages & IBCs
0 = no segregation necessary
0 = no segregation necessary unless required by the
A = away from – no segregation necessary
individual schedules
S = separated from – in open areas, longitudinally and
A = away from – minimum 3 m separation required
laterally, minimum 3 m separation required, in sheds or
S = separated from – in open areas, minimum 6 m separation
warehouses longitudinally and laterally, minimum 6 m
required in sheds or warehouses, minimum 12 m separation
separation required unless separated by an approved
required unless separated by an approved fire wall
fire wall
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▪ At the port of departure: receipt paper shipped within 10 days to browse

and reply to the shippers said.
▪ Transport dangerous goods in priority before.
▪ Port shall confirm the time for shippers bringing goods into the port at least
24 hours in advance.
▪ Police or port inspection and certification of the contents: names, brand
packaging specifications, volume, ...
▪ Do not focus too long row at pier.
▪ Port of discharge: notice time for shippers unloading to the loading port.
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▪ Check tool loading, unloading and transportation.

▪ Workers must be equipped with exclusive and timely disinfection.
▪ Within the scope of the provisions not arising fire.
▪ Unloading must be carried out during the day, cool.
▪ When unloading must mesh securely between broadside and jetty or
between broadside together, for each exclusive right to use the net
thickness is not permitted cranes exceeding 50% demand of the
equipment
▪ Do not use tracked vehicles, wheeled armored .
▪ Not unloading cargoes at the same time hydrophobic.
▪ Stop unloading when it rains.
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IMDG Code HAZARDOUS
WHAT IS IMDG CODES ?

▪ An abbreviation of International Maritime Dangerous Goods Code
▪ Accepted as an international guideline to the safe transportation or shipment of dangerous
goods or hazardous materials by water1968
on vessel.
▪ First published by International Maritime Organization (IMO) in 1965 and is now updated
every two years.
▪ The provisions of the Code may affect a whole range of industries and services.
▪ Intended to protect crew members and to prevent marine pollution in the safe transportation
of hazardous materials by vessel.
▪ Recommended to governments for adoption or for use as the basis for national regulations.
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IMDG Code HAZARDOUS
What subjects are covered by IMDG codes ?

▪ Classification ▪ Shipping documents
▪ Identification (description) ▪ Packing
▪ A list of dangerous goods ▪ Container traffic
▪ Labelling ▪ Stowage
Classify
Class 1: Explosives Class 6: Toxic and infectious substances
Class 2: Gases Class 7: Radioactive material
Class 3: Flammable liquids Class 8: Corrosive substances
Class 4: Flammable solids Class 9: Miscellaneous dangerous substances
Class 5: Oxidizing substances andorganic peroxides and articles
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IMDG Code HAZARDOUS
1968
HARZARD LABELS
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IMDG Code HAZARDOUS
MAIN IMDG CODE PACKING PROVISIONS

▪ Packaging must bear normal transport actions
▪ No chemical reaction with contents
▪ Well closed: leakage prevention
▪ No spill of contents.
▪ Consolidation of different commodities
▪ Labelling
▪ Information on documents
▪ Requirements for transport equipment
▪ Transport and handling procedures.
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IMDG Code HAZARDOUS
UPDATE OF IMDG CODE

The IMDG Code is evolving and is updated every
1968
two years to take account of:
▪ New dangerous goods which have to be
included.
▪ New technology and methods of working
with or handling dangerous goods.
▪ Safety concerns which arise as a result of
experience
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Chapter 3: MARINE TRANSPORT GEOGRAPHY
84
Objectives
❖ The student should be aware of the major seaports in the world and be able to
name the top ranked seaports.
❖ The student should know about major sea routes in the world and some special
canals such as Panama, Suez.
❖ The student should understand the main geography terms.
Contents
3.1. Introduction
3.2. Geography terms
3.3. The Suez canal and the Panama canal
3.4. Major sea ports in the world
3.5. Major sea routes in the world
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3.1. Introduction to the geography of transport systems

The fundamental purpose of transportation is to fulfil the demand for mobility of
passengers, freight or information between different geographical locations, with
the greatest convenience. As globalisation and networking increase in the logistics
industry, transport systems have to constantly improve to meet these demands.
Transportation is a multi-dimensional service, which plays an important role in the
ever-changing advances that affect regional, national and global markets. It is both
a factor and a consequence of economic activities, and an indispensable
component of the global economy.
86
Introduction to the geography of transport systems

Globalization
87
Introduction to the geography of transport systems
88
3.2. The geography terms LATITUDE - LONGITUDE
89
LATITUDE - LONGITUDE
90
TIME ZONES
91
The geography terms
TIME ZONES
Due to the earth's eastward rotation on its axis, and revolution around the sun, the world is
divided into 24 time zones. The width of each zone is approximately 15° longitude, and the time
difference between adjacent zones is one hour. That is, countries in a particular zone share the
same local time, while those in adjacent zones are either one hour ahead or behind. In places
such as Newfoundland and South Australia, however, the difference is a half-hour.
Time zones are defined with reference to the time at the Greenwich Meridian, known as
Greenwich Mean Time (GMT), or Universal Time Coordinated (UTC). Countries east of Greenwich
have to add hours to GMT, while countries to the west have to subtract hours.
92
The geography terms
Distance and measuring a ship’s speed

What’s a knot?
• 1 knot = 1 nautical mile per hour

• 1 nautical mile = 1 minute of latitude
• A nautical mile is slightly longer than a land mile
• 1 nautical mile = 1.151 land miles
93
The geography terms
TIDES
94
The geography terms OCEANS AND SEAS
95
3.3. The Suez canal and the Panama canal MARITIME ROUTES : MAN-MADE WATERWAYS
96
The Suez canal
97
The Panama canal
98
The Panama canal
The Panama Canal Atlantic Ocean

Pa
ci
fic
Cristobal Colon O
ce
Atlantic an
Gatun Locks
Ocean
Gatun Dam
Gatun Lake Panama Canal Railway
Actual:
Panama City
Pedro Miguel Locks
• Traffic Lanes: 2
Miraflores Locks • Length: 86 km.
m a • Passage time: 8 hours
na
Pa Gaillard Cut • Locks: 305 x 33.5 m.
8 4 0 8 Miles
Balboa • Depth: 12.5 – 13.7 m.
3rd traffic lane for vessels up to 12,000 TEU
99
3.4. Major sea ports in the world
DIFINITION
A seaport is located on the coast where ships
can dock for transferring cargo out of the
ships. The location of the ports is based on the
ability to provide access to land and ensure
adequate depth of water for a ship to enter
and dock.
100
Major sea ports in the world
THE MAIN FUNCTION OF SEAPORT

• To ensure safety for seagoing vessels entering,
operation in and leaving the seaport
• To provide facilities and equipment necessary for
seagoing vessels to anchor, load and unload cargo, and
embark and disembark passengers
• To provide cargo transportation, loading and unloading,
warehousing and preservation service in the seaport
• To provide shelter, repair, maintenance of necessary
services to seagoing vessels and other crafts in
emergency cases
• To provide other services to seagoing vessels, people
and cargo.
101

TOP SEAPORT IN THE WORLD 2019
Rank Port Country TEUs (million)
1 Shanghai China 43.30
2 Singapore Singapore 37.20
3 Ningbo-Zhoushan China 27.54
4 Shenzhen China 25.77
5 Guangzhou China 23.24
6 Busan South Korea 21.99
7 Qingdao China 21.01
8 Hong Kong China 18.36
9 Tianjin China 17.30
10 Rotterdam Netherlands 14.81
102

MAJOR SEAPORTS IN THE REGION
North America
West coast: mainly pacific cargo from/to Asia Pacific.
▪ Los Angeles , Long Beach, San Francisco, Seattle, Oakland, Portland, Tacoma (US)
▪ Vancouver (Canada)
▪ East coast: cargo from Europe, Mediterranean or Africa via the Atlantic, and cargo from South
America
▪ New York, Boston, Charleston, Houston, Louisiana, New Orleans, Miami, Jacksonville,
Savannah, Philadelphia (US)
▪ Montreal (Canada)
103
Europe
Rotterdam (the Netherlands),
Antwerp (Belgium), Hamburg,
Bremen (Germany), Le Havre
(France), St. Petersburg,
Vladivostok (Russia), London,
Liverpool, Southampton (UK),
Sources: Port authorities, IHS Market:

Ports & Terminals, Alphaliner
104
Asia
Shanghai, Shenzhen, Qingdao,
Dalian, Ningbo, Tianjin, Xiamen,
Guangzhou (China)
Singapore (Singapore)
Hong Kong (China)
Nagoya, Osaka, Kobe, Nagoya,
Tokyo, Yokohama, Shimizu (Japan)
Busan (Korea), Kaohsiung,
Keelung, Taichung (Taiwan)
Sydney, Melbourne, Brisbane,
Adelaide (Australia)
Sources: Port authorities, IHS Market:

Ports & Terminals, Alphaliner
105
Vietnam
Cat Lai, TCIT, VICT
CMIT, TCTT, Gemalink
Haiphong, , Dinhvu
106
FAR EAST TO EUROPE
Far East to Europe:

connects the North West
Europe with Far East (East
and SouthEast Asia)
107

FAR EAST TO EUROPE
108
TRANS-ATLANTIC
Trans-Atlantic:
between the Eastern
seaboard of North
America and Europe
109
TRANS-PACIFIC
Trans-Pacific: busiest
liner routes between
North America (West
Coast USA and
Canada) and the Far
East (East and South-
East Asia)
110
Shipping Lanes and

Strategic Passages in
Pacific Asia
Source: http://people.hofstra.edu
111
The Strait of Malacca
Source: http://people.hofstra.edu
112

FAR EAST TO MEDITERRANEAN
113

FAR EAST TO MEDITERRANEAN
Oil transited (millions of
Black 1.0 barrels per day)
Sea
Shipping Lanes 3.0 Bosporus 2002-2003 figures
in the Middle East Med Turkey

iterr
anea
n Iran
Iraq
Suez Canal: Suez 3.8 Hormuz
PG
• L = 163 km. Egypt
15.5
• W = 80 – 135 m. Saudi Arabia

• No locks
Re
dS
Oman
Sudan
ea
Yemen
Planned <2010:
3.3
increased depth Ocean
Bab el-Mandab n
for largest vessels India
PG: Persian Gulf
114
115
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Objectives
• The student should be aware of the general features of a merchant ship.
• The student should understand the differences among types of vessels
• The student should be aware of the basic knowledge of the world merchant fleet such as the
biggest shipping companies and the biggest vessels.
Contents
4.1. Merchant ship
4.2. Types of ships
4.2.1. Conventional ship
4.2.2. Container ship
4.2.3. Bulk carrier
4.2.4. Tanker (liquid bulk cargo vessels)
4.2.5. RO/RO (Roll On/Roll Off) ship
4.3. World merchant fleet
117
4.1. Merchant ship

DEFINITION
Merchant ship is any ship used for transporting cargoes and passengers for commercial
purposes (The Bremen Institute of Shipping Economics and Logistics). According to this
definition, merchant ships include only ships used for transporting cargoes and passengers.
Other ships such as military, fishing and researching ships are not considered merchant ships.
REGISTRATION OF A SHIP
International law requires that every merchant ship be registered in a country and flying under
the flag of registration.
118
Merchant ship
CLASSIFICATION OF SHIPS
Classification is a certificate of quality

of the ship. Classification is provided
by Classification Societies. These
classification societies publish rules
and regulations which are principally
concerned with the strength of the
ship, the provision of adequate
equipment, and the reliability of the
machinery.
119
Merchant ship
DRAUGHT OF A SHIP
Draught is the vertical distance between a ship's
waterline and the lowest point of its keel.
120
4.2. Types of ship MEANS OF TRANSPORT CLASSIFICATION
Bulk carriers Container ships Cruise ships A multi-purpose ships
Ocean liner Refrigerated ships Roll-on/roll-off ships Tanker
121
Types of ship MEANS OF TRANSPORT CLASSIFICATION
Barge Cable layer Coastal trading vessels Dredger
Ferries Tugboat Special Cargo Ships Special Cargo Ships
122
Types of ship MPC (Multi-Purpose Carrier)
A multi-purpose carrier (MPC) is a

seagoing ship that is built for the carriage
of a wide range of cargoes. Examples of
these cargoes are: wood, steel, building
materials, rolls of paper and bulk cargo
A multi-purpose dry cargo ship of 9800 DWT
123
Types of ship MPC (Multi-Purpose Carrier)
Multi-purpose carrier can be divided
into four categories:
✓ Vessels with cargo gear
✓ Vessels without cargo gear
✓ Coastal trade liners
✓ Sea-river vessels.
124
Types of ship Bulk Carrier
125
126
TYPES OF BULK CARRIERS

• Handy size, 15,000-35,000 tons dead weight
(tdw), often with own cargo gear (precious ore,
sand, scrap, clay, grain and forest products). Ideal
for small shipments, serving ports of limited
draft and berth length
• Handymax/ Supramax: Handymax less than

50,000 DWT. Supramax: between 50,000 to
60,000 DWT. They form the majority of ocean
going cargo vessels in the world.
127
CAPESIZE: 80,000dwt SUEZMAX are named after the PANAMAX

to 170,000 tdw, no Suez Canal with a capacity between 50,000 dwt to
cargo gear (coal, ore). ranging between 120,000 to 79,999 dwt (max 4.400
Too large to pass 200,000 DWT. They are TEU), no cargo gear (grain
through the Panama designed to pass through the and ore). Primarily used
Canal. majority of the ports in the in transporting coal,
world. crude oil and petroleum
Currently the permissible limits products in the
for Suezmax ships are 20.1 m Caribbean and Latin
(66 ft) of draught with the American regions.
beam no wider than 50 m New panamax: max
(164.0 ft), or 12.2 m (40 ft) of 12.000 TEU (160.000
draught with maximum allowed dwt)
beam of 77.5 m (254 ft).
128
1
5
4
Closed grab leaking cargo
Cross section of a typical bulker

1. Cargo hold 3. Double bottom
2. Hatch cover 4. Lower hopper tank, for water ballast
3. Upper hopper tank for water ballast or oil
129
Types of ship Ro-Ro/Lash
• RO-RO: Roll on/Roll off

• Ro-Ro ships are vessels designed to transport vehicles and other wheeled vehicles.
130
Types of ship Ro-Ro/Lash
✔ The lighter aboard ship (LASH) system refers

to the practice of loading barges (lighters)
aboard a larger vessel for transport.
✔ It was developed in response to a need to
transport lighters, a type of unpowered barge,
between inland waterways separated by
open seas.
✔ Lighters are typically towed or pushed around
harbors, canals or rivers and cannot be
relocated under their own power.
131
Types of ship Tanker

• Tankers, also called liquid bulk cargo vessels, carry liquid bulk cargoes such as
crude oil and oil products, liquid chemicals and gas, and liquid foodstuffs.
Gas tankers
TYPES OF TANKERS
Crude oil tankers
Product tankers
Chemical tankers
132
Types of ship Tanker – Gas Tankers
Gas tankers are ships that are used to

carry liquefied gas.
Gas tankers have to be well insulated and
often are steam turbine ships, the boil-off
of the cargo can be used as fuel for the
boilers.
In general there are two kinds of
liquefied gases:
Liquefied Petroleum Gas (LPG)
Liquefied Natural Gas (LNG).
133
Types of ship Tanker – Crude Oil Tankers
Used to carry the crude oil from a loading

port near an oil field or from the end of
the pipeline to a refinery.
Have a limited number of tanks, usually
approximately 15 tanks plus two slop
tanks.
Receive their cargoes through pipes from
on shore facilities or from a single
mooring buoy, via a hose or via a flexible
pipeline arm mounted on the jetty.
The 1st crude oil tanker to cross Northern
The sailing routes and the number of Sea Route using only LNG
ports that a large crude oil tanker can call
at are often limited.
134
Five classes of crude oil tankers
Ultra Large Crude Carrier (ULCC): 300,000 dwt – 500,000 dwt
Very Large Crude Carrier (VLCC), 150,000-299,999 dwt
Suez max tanker (old max Suez draught), ca. 120,000-149,999 dwt
AFRA max, ca. 80,000 dwt – 119,999 dwt
Panamax tanker, 50,000 dwt to 80,000 dwt
Costal tanker< 50,000 dwt
135

FIVE CLASSES OF CRUDE OIL TANKERS
136
Types of ship Container Ship
▪ A container ship is a cargo vessel

designed to transport containers.
▪ The capacity of a container ship is
indicated in TEU (twenty-foot
equivalent unit).
▪ Container ships can be loaded in
open-air holds (open top) or in holds
with hatch covers in which other
containers are stacked.
▪ The largest container ships now able
to transport over 23,000 TEUs.
FIATA Diploma in Freight Forwarding 137

A container ship is a cargo vessel designed to

transport containers.
The capacity of a container ship is indicated in TEU

(twenty-foot equivalent unit).
Container ships can be loaded in open-air holds

(open top) or in holds with hatch covers in which
other containers are stacked.
The largest container ships now able to transport

over 18,000 TEUs.
138
139
140
▪ Many container ships do not have handling equipment as most major terminals are
equipped with stern gantries.
▪ Below deck, containers are stacked one over the other in slots
▪ On deck, the number of container floors (or ship container shelves) is limited for reasons
of stability and visibility
Loading and Unloading

▪ Container ships are loaded and discharged at container terminals.
▪ Loading and discharging of containers has become largely automated requires large
investments in respect of materials like cranes and internal transport at the terminal.
▪ Compared to the general cargo stevedore, the amount of operational people at a container
stevedoring company is smaller while the amount of administrative people is larger.
141
Types of ship Conro
The ConRo (or RoCon) vessel is a

hybrid of a RORO and a container
ship. This type of vessel has a
below-deck area used for vehicle
storage while stacking
containerized freight on the top
decks. ConRo ships can carry a
combination of containers, heavy
equipment, oversized cargo, and
automobiles.
142
Types of ship Condock
Condock III – IMO 8215613
143
Types of ship Bacon Liner
BACO Liner 2 - Barge - Container – Carrier, IMO 7904621
144
4.3. World merchant fleet
FLEET OWNERSHIP BY COUNTRY

93% of global shipbuilding occured in
China, Korea, Japan.
As of January 2020, the top five ship-
owning economies combined accounted
for 52 per cent of world fleet tonnage.
Greece held a market share of 18 per cent,
followed by Japan (11 per cent), China (11
per cent), Singapore (7 per cent), and
Hong Kong SAR (5 percent). Generally, half
of the world fleet is owned by Asian
companies.
145
World merchant fleet
FLEET MARKET SIZE BY REGION

Half of the world’s tonnage was
owned by Asian companies.
Owners from Europe accounted
for 41 per cent and from
Northern America for 6 per cent.
Companies from Latin America
and the Caribbean, Africa and
Oceania all had shares of just
over one per cent or less.
146
THE BIGGEST SHIPPING COMPANIES IN THE WORLD
Alphaliner -2020
147
THE BIGGEST CONTAINER VESSELS IN THE WORLD 2020
No.01 - HMM Algeciras No.02 - HMM Oslo

24000 TEU, 400 m long, 33.2 m depth 23792 TEU, 400 m long, 16.5 m depth
148
No. 03 - MSC Gulsun No. 04 - MSC Mina

23756 TEU, 400 m long 23656 TEU, 400 m long
149
N0. 05 - CMA CGM Jacques Saadé No. 06 - OOCL Hong Kong

23000 TEU, 400 m long 21413 TEU, 399.87 m long
150

No. 07 - COSCO Shipping Universe No. 08. CMA CGM Antoine De Saint Exupéry
151
No. 09. Madrid Maersk No. 10 - Ever Golden

152
153
Objectives
❖ student should understand the main features of liner shipping, and the shipments that are
carried by liner services.
❖ have a clear picture of the different players as well as organizations that may be engaged in
liner shipping, e.g. liner alliance, outsiders and understand the differences between them.
❖ should understand liner service and the structure of a liner agent.
❖ should have a clear picture of the booking process, shipping schedule.
❖ should further understand the essential documents in liner shipping.
❖ The student should understand the main types of tramp shipping.
❖ The student should have a clear picture of the procedure of voyage chartering and related
parties.
❖ The student should further understand the essential documents and terms in voyage
chartering.
154
Contents
5.1. DEFINITION & DEVELOPMENT OF LINER SERVICE
5.2. TYPES OF LINER SERVICE:
• END-TO-END SERVICE
• PENDULUM
• ROUND THE WORLD SERVICE ROUTES
5.3. LINER SHIPPING COMPANY & LINER AGENT
5.4. LINER OPERATIONS
• TERMS OF CARGO HANDLING: LILO
• THE PROCEDURE OF LINER BOOKING
• SURCHARGE/LOCAL CHARGE
• CLOSING TIME (CONTAINER YARD CUTOFF)
155
5.1. DEFINITION & DEVELOPMENT OF LINER SERVICE
Chartering can be divided into two categories: liners and tramps. Those that offer common carriage
services on a regularly scheduled basis on a regular trade route are called liners; those that operate
on an irregular basis according to the availability of cargo are called tramps.
A liner is defined as the one that operates and manages the liner service, in which the cargo is
carried by liner vessels.
In liner shipping, the carrier runs a regular service between more or less fixed ports and usually on a
fixed time schedule, accepting all general cargo shipped between the ports covered by his service.
156
DEFINITION & DEVELOPMENT OF LINER SERVICE
In 19th century: History of Liner Trade

▪ Tramp ships mainly accommodated the needs of industry for raw material imports and exports =>
not enough for export requirements of manufacturing industries.
▪ Ship remained in ports until they had a full cargo and only then commenced the voyage => this
uncertainty in sailing did not meet the new needs of industrialization.
▪ In 1816, the American Black Ball Line started to operate and established a regular service of
sailing ships between New York and Liverpool, leaving New York on the 1st day of every month
fully loaded or not.
▪ The coming of steam power was to reinforce the success of the liner concept (first experimental
steamships were launched between 1818 and 1820)
157

Liner Routes
▪ First British deep sea liner service was to the West Indies and Central America in 1839
▪ By 1865, Europe was connected with every other continent by liner service and liner shipping met
the demands of a growing world trade
▪ The opening of Suez Canal I 1869: one of the most important development in ocean routes
(reduced the distance b/w London and Bombay by ½ and to Hong Kong by a third)
Today’s 3 most important liner trade routes:
▪ Transpacific: busiest liner routes between North America (West Coast USA and Canada) and the
Far East South Asia (Japan to Singapore)
▪ Trans Atlantic: between the Eastern seaboard of North America and Europe
▪ Europe/Asia connects the North West Europe with Far East and South East Asia.
158
159
Source: UNCTAD secretariat calculation, based on data from MDS Transmodal, World Cargo Database, May 2019
160
As of December 2018; Source: Alphaliner

161
DEFINITION & DEVELOPMENT OF LINER SERVICE Cooperation among Liner Operators
LINER CONFERENCE
▪ Design and economies of scale: prior to the advent of containers, there was very little development
in the basic design of liners (merely the evolution of propulsion machinery and hull design) => no
scope for any major reduction in freight rates
▪ Containers provided room for massive economies of scale.
▪ Countries in SEA and Far East were developing new merchant fleets (backed by their very high
growth economies while large scale cheap ship building) => shipowens from this region could enter
liner trades, often outside the conference system.
162
MODERN CONFERENCE
▪ Conferences still exist in many trades, but cannot exercise the power they once had. Their
activities are constantly the subject of scrutiny by anti-cartel regulatory bodies in the US and
Europe
▪ Tariffs are still produced and regularly updated. However, in most trades, a large measure of
negotiation of freight rates is possible (just for basic freight, not other charges and fees).
▪ Mega Carriers and super alliances are dominating the liner market.
163
MODERN
CONFERENCE
July 2020
164
5.2. TYPES OF LINER SERVICE
165
TYPES OF LINER SERVICE
PENDULUM
In its most ambitious form a pendulum
service is a RTW service that omits the
Panama Canal allowing the largest size of
vessel to be used. It would operate from
the Eastern Seaboard of USA (ECUS) via
Europe to the Far East and vice versa.
Compared with an RTW service it loses the
ability to carry cargo between, for
example, ECUS and and the Far East
because its transit time is too long.
Pendulum differs from End to End in that it
combines two or more main trade routes.
166

ROUND THE WORLD SERVICE ROUTES
North America
Europe Asia
Africa
167

ROUND THE WORLD SERVICE ROUTES
This is an alternative to the end to end service. The ship never turns round, it just keeps sailing until
it completes a circumnavigation and returns to its starting point i.e., the ship will not have to report
the ports through which she has traveled for loading the cargo. Transatlantic, Transpacific and Far
East To Europe route are the examples of such service. The expected economy of this operation is
that the vessel will have the opportunity to carry cargo on every leg of the voyage including ports
that are intermediary to the main voyage legs. Ideally the service operates both west about and east
about the world. One obvious limitation is that such a service is restricted to using PANAMAX
tonnage (the largest size of vessel that can transit the Panama Canal). This type of services have
declined in importance now day.
168

HUB AND SPOKE SYSTEMS
It is a type of service that is offered between the hub port and the gateway port. The mainline ship
will call at key ports (hubs) on its route. From these hubs, it will operate feeder services to other
local areas and ‘spoke’ services to serve other accessible trade routes. This concept is used to allow
east / west service vessels to link to north / south trades. Almost all deep sea container services
today use the hub and spoke concept to some extent and the major players support their worldwide
services by this method.
169
TYPES OF LINER SERVICE END-TO-END SERVICE
170
TYPES OF LINER SERVICE END-TO-END SERVICE
The Liner Operator has a choice to select any one type of service option or combination of more
than one type. One of the characteristics of the liner service is that the vessel sailed from the
starting point to call on the various loading ports to the discharging ports and then to return over
the same route to its starting point. Traditional way of serving liner trade route was to cover a
range of loading ports at one end of the route and range of discharging ports at the other. At
certain trade routes, there may be some differences as to the individual ports called because of the
availability of export cargo from a particular port that may have no demand for imports or vice-
versa.
171
TYPES OF LINER SERVICE Main Maritime Shipping Routes
172
5.3. LINER SHIPPING COMPANY & LINER AGENT

WHAT IS A LINER SHIPPING COMPANY?
▪ A liner service (derived from the term “liner traffic”) is defined as one that operates to a regular
sailing schedule, transporting goods along a definite route, to fixed ports to call.
▪ A liner, therefore, is a vessel that is engaged in this kind of transportation; they are generally of a
similar capacity
TOP 10 WORLD’S LARGEST SHIPPING COMPANIES BY TEU
1. A.P. Moller – Maersk Group 6. Ocean Network Express (ONE)

2. Mediterranean Shipping Company (MSC) 7. Evergreen Marine Corp
3. COSCO 8. Yang Ming Marine Transport Corporation
4. CMA CGM Group 9. Pacific International Line (PIL)
5. Hapag-Lloyd 10. Hyundai M.M.
173
LINER SHIPPING COMPANY & LINER AGENT What is a liner agent?
▪ A liner company or tramp ship operator representative who facilitates ship arrival,
clearance, loading and unloading, and fee payment while at a specific port
▪ A basic organization structure for a shipping agent:
174
5.4 LINER OPERATION
175
LINER OPERATION The Procedure of Liner Booking
Book shipping space
Receive released container
Prepare cargoes and stuff into containers
Perform customs clearance and other export duties
Deliver cargoes to the carrier
Receive bill of lading
176
LINER OPERATION Surcharge/Local Charge
FREIGHT SHIPPING RATES AND CONTAINER COSTS

▪ The total price for a shipment consists of various components: a basic rate, mandatory
surcharges and extra services.
▪ Below you’ll find a short description of each of the main components. Enabling you – if needed –
to better understand the price structure and even the breakdown on your invoice.
Types of rates
Pricing in liner shipping
Commodity rates Class rates Freight-all-kinds (FAK) rates
• apply when a large • reduce the number of • apply to shipments

quantity of a product is transportation rates instead of products. The
shipped between two required by grouping products shipped can be
locations on a regular products into classes for of any types.
basis. pricing purposes.
177
COMPONENTS OF A RATE
The Basic Ocean Freight - BAS Value Added Services - VAS

▪ The Basic Ocean Freight (BAS) is a ▪ Value Added Services are extra services
transportation rate for moving cargo. that shipping lines offer to
▪ The rate is price determined by varying accommodate additional requirements.
factors such as the different origin- ▪ Examples of Value Added Services are:
destination combinations and the cargo Container Cleaning, Garments on
type (Dry cargo or Reefer cargo). Hangers, Out of Gauge, Controlled
Atmosphere, Cold Treatment, ect.
178
OCEAN FREIGHT RATE
179
TYPICAL LOCAL CHARGES IN VIETNAM

Outbound local charges
***Applied by COSCO
CONTAINER LINES
180
TYPICAL LOCAL CHARGES IN VIETNAM

Inbound local charges
Currency: VND
Charges 20' (GP/RF) 40' (GP/HQ) 20'RF 40’RF Remarks
1,800,000 2,770,000
THC 1,800,000 2,770,000
D/O 660,000 per B/L
100,000 200,000 Depend on

Cleaning fee – – 300,000 500,000 the kind of
300,000 500,000 cargo
***Applied by COSCO CONTAINER LINES
181
LINER OPERATION Closing Time (Container Yard Cutoff)
Closing Time or A Container Yard (CY) cutoff date is the date by which a container must be gated-in
(checked-in) at the container yard before its scheduled sailing.
CY cutoff dates are determined by the carrier, but are typically 2 days before the scheduled sailing.
182
183
CONTENTS
6.1. Introduction to three types of Chartering
➢ Tramp (Voyage Charter)
➢ Time Charter
➢ Bareboat (Demise Charter)
6.2. Related parties:
➢ Ship owner/carrier
➢ Charterer
➢ Broker
6.3. Tramp Operation
➢ Term of Cargo Handling: FIO, FILO/LIFO, FIOS, LILO
6.4. Procedure
6.5. Charter party terminologies
184
6.1. INTRODUCTION TO THREE TYPES OF CHARTERING
Responsibility Demise/Bareboat Time chartering Voyage chartering

chartering
Employing crew members Charterer Ship owner Ship owner
Directing crew members Charterer Charterer Ship owner
Revenue depends on: Hire rate and duration of hire Quantity of cargo and
freight rate
Capital Brokerage Ship owner Ship owner Ship owner
Wages, provisions, Charterer Ship owner Ship owner
Maintenance, stores &
Supplies
Lube oil
Insurance, water
Operation expenses Charterer Charterer Ship owner
185
INTRODUCTION TO THREE TYPES OF CHARTERING

FEATURES OF TRAMP CHARTERING
▪ Also called charter shipping
▪ Carry most of the cargo in terms of quantity or volume in sea transport worldwide.
▪ Do not have ships sailed according to a fixed schedule
▪ Mainly deal with bulk cargo and mostly loads with single type of goods such as Grain, Coal, Ore,
Mineral oils, Chemicals....
▪ Popular ships are bulk carriers or general cargo ships with wide hatch/hold for easy
loading/unloading.
▪ Charter party’s terms and conditions are agreed prior to voyage(s) and the charter party will be
terminated when the voyage is completed.
▪ Freight is negotiated and agreed by both sides. Freight can depend on shipping markets (time and
area) and can be different, depending on the negotiation on the loading/unloading charges at
both ends.
186
INTRODUCTION TO THREE TYPES OF CHARTERING
CHARTERING CENTERS OF THE WORLD

▪ London (The Baltic Exchange)
▪ New York
▪ Other charter centers (Hamburg, Genoa, Singapore, etc.)
6.2. CHARTER PARTY
What is a charter party?
▪ Charter party (C/P) is the written agreement between the owner and the charterer in tramp
shipping.
▪ Together with the bill of lading issued under a chartering, the charter party is the most
important document governing the commercial and legal relationships between the parties.
Voyage charter parties
Types of Charter Parties

Time charter parties
Bareboat charter parties
188
CHARTER PARTY Charter party standard forms
▪ Charter parties are almost always made out on standard forms

▪ The purpose of standard charter parties is to standardize a number of clauses frequently used by
varying parties in different trades, and to help the parties in drafting the contract.
▪ The standard forms are often gradually revised and amended. It is therefore important to agree and
mention which edition of the standard form is to be used.
BIMCO plays an important role in the drafting of standard forms and has produced a large number of
approved documents.
Standard forms produced by BIMCO:
Voyage charter party:
▪ Main standard forms: Gencon (two parts: box and text), Welcon, Baltcon, Polcoalvoy, Sovcoalvoy,
Scancon, and Nuvoy.
Time charter party:
▪ Main standard forms: Baltime, Linertime, Gentime.
189
CHARTER PARTY Company standard forms
▪ With respect to the tanker market, the charter party forms are dominated by the
large oil companies, which have all drafted their own forms.
▪ In voyage charters the examples are such as BP-voy, STB-voy, Shellvoy, etc.
▪ In time charter forms are as such: BP-time, Mobil-time, and Shelltime.
Other standard forms

In voyage charters:
▪ C (ore) 7, for ore shipments
▪ Baltimore Form C (CBF), for grain shipments from the United States and Canada
▪ North American Grain Charter Party (Norgrain), also applicable to grain shipments
▪ American-Welsh (Amwelsh) Tankvessel Voyage Charter Party for tanker shipments
In time charters:
▪ New York Produce Exchange, drafted by American broker interests (NYPE 93)
190
CHARTER PARTY
PARTIES INVOLED IN CHARTER SHIPPING
Ship Owner
The ship owner is the owner of a ship
Charterer
The charterer is the person who hires (charters) the ship for a previously agreed voyage or
time period.
Shipbroker
who has helped to bring them together.
191
6.3. TRAMP OPERATION Terms of Cargo Handling

• FIFO = Free In/Free Out
• FIOS = Free In/Out (Loading/Discharging is at consigner’cost)
• FILO = Free In/Liner Out
• LIFO = Liner In/Free Out
• LILO = Liner In/Liner Out
192
6.4. PROCEDURE
PARTIES INVOLED IN TRAMP CHARTERING
193
6.5. CHARTER PARTY TERMINOLOGIES
Berth terms or liner terms

▪ Loading and discharging takes place as is usual in liner shipping.
Lay time
▪ The number of days that as per charter party is allowed for loading and discharging
Lay days/cancellation or lay/can
▪ The period in which the ship must be ready for loading, as stipulated in the charter party.
▪ A ship is, for example, chartered with “lay/can 10/28 June”. The charterer is under no
obligation to start loading before the 10th of June, while the 28th of June is the final date
(cancelling date) on which the ship must be ready for loading.
194
CHARTER PARTY TERMINOLOGIES MAIN TERMS AND CONDITIONS

Laytime
Statement of Facts: an extract form the port operations log kept by the charterer’s agent and contains
times of all relevant events, including:
▪ Arrival of ship
▪ Tendering of NOR
▪ Commencement of laytime
▪ Commencement of cargo operations
▪ Periods of suspension of laytime, with reason in each case (so that risks of stoppage can be
apportioned)
▪ Termination of cargo operations
▪ Termination of laytime
Time must be accurately recorded. The SOF should be approved by all parties and will normally be
presented by the agent to the Master for his signature.
SOF is used by the agent in drafting up the Laytime Statement, from which any amount of demurrage
or despatch money payable will be calculated.
195
CHARTER PARTY TERMINOLOGIES
Time Sheet
▪ It is a document in which the facts provided in the “statement of facts” are interpreted in terms
of the conditions stipulated in the charter party. The allowed laytime and when it starts is
determined.
▪ The result of the “time sheet” is the number of days, hours and minutes that the ship has been
used for, respectively, loading and/or discharging.
▪ This information forms the basis for calculating the “despatch money” or “demurrage”, if
applicable.
196
197
CONTENTS
7.1 COST
✓ COST BASED ON VESSEL VALUE
✓ SALARY AND SALARY BASED ITEMS
✓ FUEL AND FRESH WATER
✓ CHARGES AND FEES AT PORT
✓ OTHER FEES
7.2 THE RULES OF INTERNATIONAL CARRIAGE OF GOODS & INTERNATIONAL ORGANIZATION
7.3 BILL OF LADING (1): TYPES OF B/L
✓ FUNCTION OF B/L AND SEAWAY BILL
✓ DIFFERRENT BETWEENB/L AND SEAWAY BILL
7.4 BILL OF LADING (2): CONTENTS OF B/L
198
7.1. COST
Cost Based On Vessel Salary And Salary Fuel And Fresh Charges And
Other Fees
Value Based Items Water Fees At Port
Capital Depreciation Salary for crew Fuel Tonnage dues Ship register
Repair Cost members ➢Fuel oil Port dues Transit
➢Overhaul Social Insurance, ➢Lubrication Pilot Canal fee
➢Regular repair Health Insurance, oil Tug boat Others
➢Cheap material Unemployment Fresh water Cargo dues
Ship insurance Insurance (SHUI); Trade
➢Hull insurance Union Fund
➢Shipowner's Administration
liability insurance Foods
Pocket money
199
Total Cost
Trip Cost: 5
 C =  Ci i =1
▪ Cost based on vessel value, salary (depending on calculation method): calculated by period
▪ The remaining amounts: calculated by trip
Unit Transportation Cost C

ST =
Q
200
Cost
• Trip Cost:
C=Ci
• Unit Transportation Cost: ST =

C
Q
• Unit Turnover Cost:

St.hl= C/  Q.L
201
7.2 THE RULES ON INTERNATIONAL CARRIAGE OF GOODS & INTERNATIONAL ORGANIZATIONS
202
203
HAGUE-VISBY RULES
Period of responsibility
▪ Refers to the period over which the carrier undertakes to deliver the goods
in the same condition as they were received.
▪ According to the Hague-Visby Rules, this covers the period “…. from the
time the goods are loaded on to the time they are discharged from the ship”
204
THE RULES ON INTERNATIONAL CARRIAGE OF GOODS & INTERNATIONAL ORGANIZATIONS
HAGUE-VISBY RULES
▪ A set of rules governing the international shipment of goods, resulting from the United Nations
International Convention on the Carriage of Goods by Sea adopted in Hamburg in 1978.
▪ A uniform legal base for the transportation of goods on oceangoing ships.
▪ Drafted to replace the Hague and Hague-Visby Rules
205
Three rules contain different provisions concerning the carrier’s liability
Hague Rules (1924) Hague-Visby Rules (1968) Hamburg Rules (1978)
Period of Cargo loaded - discharged Cargo loaded - discharged
Acceptance of cargo – delivery of cargo
responsibility to/from the ship to/from the ship
Loss of or damage to 1) Loss of or damage to goods; 2) delay in
Liability Loss of or damage to goods
goods delivery
1) loss or damage: SDR835 per package or
unit, or SDR2.5/kg of gross weight,
SDR666.67 per package or
whichever is higher;
Liability unit, or SDR2/kg of gross
£100 per package or unit 2) delay:
limitation weight, whichever is
2.5 times of the freight in proportion of the
higher
cargo in delay, but not excessive of the
freight for the entire consignment
1 year, from delivery;

2 years, from delivery; possibility to extend
Time bar 1 year, from delivery possibility to extend with
with notice
agreement
206
ROTTERDAM RULES - COMPELLING REASONS

Pursuit of Harmonization
❖ Lack of a universal system:
▪ Hague Rules – 1924
▪ Visby Protocol – 1968
▪ Hamburg Rules - 1978
▪ Domestic gap-filling legislation and Regional attempts
❖ Achieve a global regime
Pursuit of Modernization
❖ No current regime takes into account modern container transport
❖ No current regime provides for electronic commerce
207
ROTTERDAM RULES – ORIGIN OF THE CONVENTION

UNCITRAL Working Group on Electronic Data Interchange – 1994 and 1995
▪ Electronic bills of lading and transport documents
❖ 29th Session of UNCITRAL – 1996
▪ Proposal to include in work programme a review of current practices and laws in
international carriage of goods by sea
▪ Aimed at establishing uniform rules where there were gaps
▪ And to achieving greater uniformity where rules existed
❖ Comité Maritime International (CMI)
▪ Work already underway
▪ Very important to the process: fundamental to involve industry early
❖ From 1996 – 2001, CMI and UNCITRAL secretariat worked together
▪ Information-gathering, consultations with industry
▪ Industry extremely interested
208

2000: Transport Law Colloquium – CMI & UNCITRAL
Problems identified:
❖ Gaps in existing law:
▪ Functioning of bill of lading and sea waybill
▪ Relationship of transport documents to rights and obligations of seller and buyer of
goods
▪ Legal position of financing entities
❖ Multimodalism
❖ Electronic commerce
❖ Clarification of roles, responsibilities, duties and rights of all parties
❖ Clearer definition of delivery
❖ Rules for non-localized damage to cargo
❖ Provisions to prevent fraudulent use of bills of lading
❖ Examine liability regime and limitations thereon
209

34th Session of UNCITRAL – 2001
❖Consultations had indicated that work could usefully commence towards
an international instrument that would:
▪ Modernize the law of carriage
▪ Take into account the latest technological developments
▪ Eliminate legal difficulties that had been identified
❖UNCITRAL established the Working Group on Transport Law to consider
the project
▪ Consider the preliminary text received from CMI
▪ Broad mandate: including liability issues and the feasibility of door-
to-door coverage
210

34th Session of UNCITRAL – 2001
❖ Report suggested the following additional issues should be considered in any future
instrument:
▪ Scope of application - Chapter 2
▪ Period of responsibility of the carrier – Chapter 4
▪ Obligations of the carrier – Chapter 4
▪ Liability of the carrier – Chapter 5
▪ Obligations of the shipper – Chapter 7
▪ Transport documents – Chapter 8
▪ Freight – deleted – Art. 42 “freight prepaid”
▪ Delivery to the consignee – Chapter 9
▪ Right of control – Chapter 10
▪ Transfer of rights – Chapter 11
▪ Right of suit against the carrier – deleted
▪ Time for suit – Chapter 13
211
ROTTERDAM RULES –MAIN INNOVATIONS

More Balanced Carriers’ Liability
▪ Due diligence extended to an ongoing obligation (Art. 14)
▪ Onus of proof clearly on carrier regarding cause of damage and that it
was not caused by its fault (Art. 17(2))
▪ Errors in navigation and management of the ship deleted as excuses for
liability, and fire exception has been restricted (Art. 17(3))
▪ Deck cargo no longer outside regime (Art. 25)
▪ Increase in monetary amounts for limitation on liability (Art. 59(1)
Direct Liability of Maritime Performing Party (Art. 19)
212
ROTTERDAM RULES –MAIN INNOVATIONS

Controlling Party, Right of Control and Transfer of Rights
▪ Not dealt with in previous maritime transport conventions
▪ Important for providing instructions to carrier during the carriage
▪ Decoupled from transport document – important key to e-
commerce
Limitation amounts on carrier liability
▪ Hague: per package limitation only
▪ Hague-Visby: 666.67 SDRs per package and 2 SDRs per kilo
▪ Hamburg: 835 SDRs per package and 2.5 SDRs per kilo
▪ Rotterdam: 875 SDRs per package and 3 SDRs per kilo
213
ROTTERDAM RULES – PROVISION OF CONCERN TO IRU

Clear conflict of convention provision in article 82
▪ Where there is an actual conflict with inland conventions, like the CMR, the RR give way
Article 26 limited network system
▪ Similar approach to contractual approach currently used (UNCTAD/ICC Rules)
Per package limitation on carrier’s liability
▪ Clearly applies to each package of goods carried in a road vehicle - definition of ‘vehicle’ in art.
1(27)
Per package limitation on carrier’s liability
▪ Number of goods must be enumerated in transport document – no change from rule in Hague-
Visby and Hamburg Rules
▪ So-called ‘non-ordinary shipments’ counting entire road vehicle as a single package no longer
allowed
Definition of maritime performing party clarified
▪ Clearly excludes road and rail carriers from the scope of the RR
214
ROTTERDAM RULES – STRONG SUPPORT FROM

▪ International Chamber of Shipping (ICS)
▪ Bimco
▪ International Group of P&I Clubs
▪ World Shipping Council (WSC)
▪ US Shippers’ Organization (National Industrial Transportation League)
▪ European Community Shipowners’ Associations (ECSA)
▪ American Bar Association
▪ European Parliament
▪ Arab League Workshop
215
ROTTERDAM RULES – CONCLUSION

▪ Industry-driven project
▪ Global solution
▪ Comprehensive instrument
▪ Modernizes
▪ Harmonizes
▪ Preserves existing unimodal transport regimes
▪ Commercial and Legal Predictability and Transparency
▪ Enhanced efficiency
▪ Reduced transaction costs
216
INTERNATIONAL ORGANIZATIONS
▪ Baltic and International Maritime Council (BIMCO)

▪ International Maritime Organization (IMO)
WHAT IS BIMCO?
▪ BIMCO is an abbreviation of The Baltic and International

Maritime Council.
▪ Established in 1905 for the shipping industry, headquartered
in Copenhagen, Denmark
▪ BIMCO is a major international organization in relation to
charter shipping in the freight market, dealing with various
matters of interest to international shipping
217
BIMCO’s MISSIONS:
Bimco’s mission is to provide a first class service to its membership representing all segments of the
shipping industry by:
▪ Facilitating access to quality information and advice.
▪ Developing standard contracts and clauses.
▪ Promoting fair business practices, free trade and open access to markets.
▪ Enhancing the proficiency and qualifications within the industry through its educational
programmes.
▪ Pro-actively participating in all developments which serve to enhance harmonisation and help to
maintain a level playing field within the international shipping industry.
218
BIMCO’s OBJECTIVES:
The BIMCO’s main objective is to protect its global membership through the
provision of quality information and advice, and while promoting fair
business practices, facilitate harmonization and standardization of
commercial shipping practices and contracts.
219
INTERNATIONAL MARITIME ORGANIZATION (IMO)
WHAT IS IMO?
▪ IMO – the International Maritime Organization
▪ IMO is the United Nations specialized agency with responsibility for the safety and security of
shipping and the prevention of marine pollution by ships.
▪ IMO is located in London, UK
220
INTERNATIONAL MARITIME ORGANIZATION (IMO)
HISTORY OF IMO
▪ IMO (Formerly known as IMCO-International
Maritime Consultative Organization) was established
under a 1948 United Nations convention that entered
into force on 17 March 1958. MAIN COMMITTEES OF IMO
▪ IMO currently has 171 Member States and three ▪ Maritime Safety Committee
Associate Members.
▪ Marine Environmental Protection
▪ To date there are 77 international non-governmental Committee
organizations in consultative status with IMO
▪ To date there are 63 intergovernmental organizations ▪ Legal Committee
which have signed agreements of co-operation with ▪ Technical Co-operation committee
IMO
▪ Facilitation committee
221
7.3 BILL OF LADING (1) : TYPES OF B/L
According to whether there are notes on the B/L
▪ Clean B/L: A clean B/L shows that the goods have been shipped on board a vessel in apparent
good order or condition.
▪ Unclean B/L: Unclean B/L are generally marked “insufficiently packed”, “carton old and stained”,
“packed in damaged condition” etc
According to whether the B/L is transferable

Order B/L: The delivery of the goods to the order of a specified person “or assigns”, and may be
negotiated by endorsement or endorsement in blank.
An order bill of lading indicates that the bill is made out to the order of any person named in such a
bill. This kind of bill may be transferred after endorsement. When the bill is made out “to order of
shipper” it is necessary for the shipper to endorse the bill either in blank or in full, to the consignee
to whom he wishes the delivery of the goods is to be made. If the shipper does not endorse such a
bill, he reserves the right to dispose of the goods to himself. Often used in trade.
222
TYPES OF B/L According to the modes of transport
▪ Direct B/L: is evidence that the goods are shipped and carried by the steamer and transported
from the port of loading direct to the port of destination without transshipment during the
voyage. The buyer usually prefers such a B/L, because the possible cargo damage or losses is
usually caused by transshipment.
▪ Transshipment B/L: is a document showing that when there is no direct service between two
ports, the goods are transited by another steamer during the voyage, generally at the port of
transshipment mentioned in the B/L , to the port of destination where an ocean-going liner
does not call during its voyage.
▪ Through B/L: is issued when the entire voyage involves more than one carrier. The first carrier
issues the bill and collects the freight for the entire voyage, and arranges transshipment and
forwarding of the goods at the intermediate port. The shipper prefers this kind of B/L because
of the trouble having been saved to deal with other carriers by himself.
223
TYPES OF B/L According to the contents of B/L
▪ A Long Form B/L refers to the bill of lading on the back of which all the detailed terms and
conditions about the rights and obligations of the carrier and the consignor are listed as an
integral part of the bill.
▪ A short form B/L: omits the terms and conditions on the back of the B/L.
Other kinds of B/L:

▪ Master B/L
▪ House B/L
▪ Surrendered B/L
▪ Seaway Bill
▪ etc.
224
TYPES OF B/L Master B/L & House B/L

▪ Master B/L: A Master Bill of Lading (MBL) is issued by the Shipping Line (Carrier) to the NVOCC
Operator, or Freight Forwarder.
▪ House B/L: A House Bill of Lading (HBL) is issued by an NVOCC Operator, or Freight Forwarder to
their customers.
Function of B/L & Seaway Bill
BILL OF LADING SEAWAY BILL
Negotiable document NOT a Negotiable document. NO ORIGINAL ISSUED
Evidence of Contract of Carriage, Receipt of Evidence of Contract of Carriage and Receipt of
Goods Goods
Document of Title NOT a Document of Title
Usually issued as 3 originals (signed and
stamped and negotiable) + 3 non-negotiable NO ORIGINAL ISSUED
copies
To a direct customer or To Order Cannot be consigned To Order
225
CONTENT OF B/L
The basic contents of Bill of Lading are stipulated according to the International Convention for
the Unification of Certain Rules of Law Relating to Bill of Lading (Hague Rules)
▪ Shipper ▪ Port of discharge

▪ Consignee ▪ Name of vessel/voyage No. /Sailing date
▪ Notify party ▪ Marks and numbers
▪ B/L No. and Numbers of B/L ▪ Number and kind of package
▪ Name and principal place of business of the ▪ Description of goods
carrier ▪ Gross weight/net weight and
▪ Place of Receipt (applicable only when measurement
document used as Multimodal Transport B/L) ▪ Freight and charges
▪ Port of Loading ▪ Date and place of issue of the B/L and the
▪ Place of Delivery (applicable only when number of originals issued
document used as Multimodal Transport B/L) ▪ Signature of carrier
226
Clauses on the back of the B/L
• Obligations and responsibility of the carrier;

• Exceptions;
• Claim and action clauses;
• Duty and obligation of the consignor;
• Transportation clauses for special goods;
• Other clauses.
Notice bill of lading discrepancies according to documentary credits
• Port of Loading different than Letter of Credit

• Port of Discharge different than Letter of Credit
• Late shipment
• GW is different in B/L from GW stated in the PKL
• Partial shipment effected
• Transshipment effected
• Unclean B/L presented
• Carrier not identified
• B/L not signed as per UCP
227
END OF MODULE I
228

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MODULE I: SEA TRANSPORT

FIATA Diploma in Freight Forwarding 1

By complete this chapter, learners should

1.2. Roles of sea transport in international trade

1.3. Advantages and disadvantages of sea transport

1.4. Applying incoterms rules in sea transport

1.5. Essential components of sea transport system

1.1. ROLE OF SEA TRANSPORT IN INTERNATIONAL TRADE

1.1. ROLE OF SEA TRANSPORT IN INTERNATIONAL TRADE

1.1. ROLE OF SEA TRANSPORT IN INTERNATIONAL TRADE

THE ADVANTAGES OF SEA TRANSPORT

1.1. ROLE OF SEA TRANSPORT IN INTERNATIONAL TRADE

1.1. ROLE OF SEA TRANSPORT IN INTERNATIONAL TRADE

THE ADVANTAGES OF SEA TRANSPORT Large capacity

Large throughput of sea routes, ports

Very convenient because it utilizes

Can be used for transporting almost

MSC Oscar was the biggest container ship until

THE DISADVANTAGES OF SEA TRANSPORT

Exposed to risks of ocean disasters

Having long lead time

Incurring the highest entry cost in the

1.4. Applying incoterms rules in sea transport

“INTERNATIONAL COMMERCIAL TERMS”

• First published in 1936 by ICC.

WHAT ARE THE INCOTERMS COMMONLY USED FOR?

❖ Simplify some terms of an international sales

WHAT DOES EACH INCOTERM REFER TO?

Determines delivery point

HOW CAN THE INCOTERMS BE CATEGORIZED?

INCOTERMS CAN BE CATEGORIZED IN 2 GROUPS

Rules for Any Mode of

THE INCOTERMS BEGINNING WITH E

THE INCOTERMS BEGINNING WITH F

THE INCOTERMS BEGINNING WITH C

THE INCOTERMS BEGINNING WITH D

Having the right to choose ports of loading, ports of

Getting more competitive freight rates and enhanced

Having an opportunity to utilize their national fleet. This

UNCTAD Liner code - the 40-40—20 Market Sharing

UNITED NATIONS CONFERENCE ON

CONTAINERISED CARGO General Transport Characteristics

• Commodity maybe defined as a raw material or

• Commodity becomes Cargo when it enters the

CONTAINERISED CARGO General Transport Characteristics

Wheat – Commodity and Cargo

Chrome Ore – Commodity and Cargo

You may have also heard the term “Cargo

CONTAINERISED CARGO General Transport Characteristics

OIL PRODUCT BULKY GOODS OTHER DRY CARGO

CONTAINERISED CARGO General Transport Characteristics

CONTAINERISED CARGO General Transport Characteristics

ARGRICULTURAL – GRAIN CROPS

CONTAINERISED CARGO General Transport Characteristics

Major trade routes ARGRICULTURAL – GRAIN CROPS

Far East and

CONTAINERISED CARGO General Transport Characteristics

CONTAINERISED CARGO General Transport Characteristics

CONTAINERISED CARGO General Transport Characteristics

CONTAINERISED CARGO General Transport Characteristics

Handling and Securing Requirement

• AMS Customs Requirements and Checklist