TRANSPORTATION

& INSURANCE
Lecturer: Nguyen Tran Le (MSc.)
lent@hub.edu.vn
 Main contents
 Part 01: Transportation
 Chapter 01: General introduction about transportation

 Chapter 02: Carriage of goods by sea

 Chapter 03: Carriage of goods by air & by rail

 Chapter 04: Carriage of goods in container & International Multimodal Transport

 Chapter 05: Freight Forwarding Operations (Procedures & Documentations)

 Part 02: Insurance

 Chapter 06: General introduction about maritime insurance

 Chapter 07: Insurance conditions & compensations

2
SLIDE MAIN TITLE
Part 01
SLIDE SUB TITLE
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TRANSPORTATION
Chapter 02

CARRIAGE OF GOODS BY SEA

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.1 – Specifications & roles of sea transportation

2.2 – Material & technical facilities of sea transportation
2.3 – Shipping market & vessel chartering operations
2.3.1 – Shipping market
2.3.2 – Vessel chartering operation
2.3.2.1 – Liner service operation
2.3.2.2 – Tramp shipping operation

4
 Chapter’s objective

 Main roles & specifications of sea transportation.

 Material & technical facilities of sea transportation: Routing, Sea ports, vessel.

 Liner / Voyage Charter / Time charter / Bareboat charter

 Advantages & disadvantages of each vessel chartering method.

 Having a thorough understanding of Bill of Lading (for Liner Trade) & Charter parties (for
Tramp shipping)

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.1 – Specifications & roles of sea transportation:

2.1.1 – Specifications of sea transportation:

Advantages Disadvantages

 Natural routings.
 Carriage in long distance, with large volume  High potential risks, mostly depend
capacity. on natural & maritime conditions.
 Transportation with low ocean freight.  Slow speed.
 Suitable with all kinds of goods in  Long transit time.
international trade.  Long time for despatch. (thời gian giải
 Low fuel consumption per one DWT phóng hàng khỏi tàu chậm).
(Deadweight tonnage).
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.1 – Specifications & roles of sea transportation:

2.1.2 – Roles of sea transportation:

 One of the most important modes of transportation.

 Considerable contribution to extend trade relationships with other countries.
 Change the commodity & market structure in international trade.
 Affect to the Balance of payment.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.1 – Routing:

• Connected one port to other ports.

Based on operating range Based on main usage purposes

 Domestic Navigation Line:  Regular Navigation Line: Tuyến

Tuyến đườ ng hà ng hả i nộ i đườ ng hà ng hả i định tuyến
địa  Irregular Navigation Line: Tuyến
 International Navigation đườ ng hà ng hả i khô ng định
Line: Tuyến đườ ng hà ng hả i  Special Navigation Line: Tuyến
quố c tế đườ ng hà ng hả i đặ c biệt

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.2 – Sea ports:
 A place for vessels berthing, loading & unloading cargoes.
 Serving both vessels & cargoes on the vessels.
 Main traffic nodes / traffic centers.

Vessel serving
• Entrance, berthing, towage services, fresh
water supply service, vessel repair service,…
Functions
Cargo serving
• Loading & unloading service, transit,
warehousing, packaging, distribution,
recycling, customs procedures, etc.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.2 – Sea ports:
 Classifications:
Usage purposes / Type of
Trade & cargo handling
cargo
 General cargo port  Domestic port
 Specified cargo port  Export - Import port
 Military port  Transshipment port
 Container port
 Fishing port
Ownership & Operation
 Naval port
 Port of Refuge  National port
 ICD: Inland Clearance  Private port
Depot (cảng cạn)
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.2 – Sea ports:

What is the
difference between
Depot & ICD ?

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.3 - Vessels:
- Carriage of goods for commercial purposes.

- Ship’s name: Tên tà u

- Built in: Tuổ i tà u
- Flag: Cờ tà u
- Port of Registry: Cả ng đă ng ký
Technical & Economic
- Dimension of Ship including Length over all (LOA) and Breadth
characteristics
extreme (BE).
- Draft/Draught: Mớ n nướ c củ a tà u
 Max Draft
 Min Draft

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.3 - Vessels:

- Displacement Tonnage (DT): [Trọ ng lượ ng củ a tà u] The weight of the

volume of water displaced/occupied by the vessel, measured in Metric Ton (MT).
 Light displacement (LD) or Light Ship weight (LSW): the actual weight of a
vessel ready for service but empty, not including cargoes.
Technical & Economic  Heavy displacement (HD): the actual weight of a vessel after full loaded.
characteristics (cont.)
- Deadweight Tonnage (DWT): [Trọ ng tả i toà n phầ n] (measured in Tonne -
MT) is the maximum weight a vessel can carry (including goods, fuel, fresh water,
supplies, crew, etc.) in maximum permissible draft.
DWT = HD – LD

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.3 - Vessels:
- Carriage of goods for commercial purposes.

- Register Tonnage: [Dung tích đă ng ký] measured in m3, cubit feet (c.ft) or
Register Ton
1 RT = 100 cubit feet = 2,832 m3
Technical & Economic  Gross Register Tonnage – GRT or GT: is a common measurement of
characteristics (cont.) the total internal volume of a vessel including: holds, tanks, stores, crew
accommodation, and any close areas. (Dung tích đăng ký toàn phần)

 Net Register Tonnage – NRT or NT: represents all space available for
cargoes & passengers. (Dung tích đăng ký tịnh)

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.2 – Material & technical facilities of sea transportation:

2.2.3 - Vessels:
- Some important documents related to vessels:
Certificate of Nationality (giấy chứng nhận quốc tịch tàu)
Certificate of Ship-owner (giấy chứng nhận quyền sở hữu tàu)
Certificate of class (Giấy chứng nhận cấp hạng tàu)
Certificate of Tonnage (Giấy chứng nhận trọng tải)
Certificate of Seaworthiness (Giấy chứng nhận tàu đủ khả năng đi biển)
Crew list
Log Book (Nhật ký hàng hải)
Engine Book (Nhật ký máy tàu)
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.1 – Shipping market:
 Concepts:

 Shipping market: is the area of international trade (involving maritime shipping services)
that transport cargoes and passengers.
 Vessel chartering market: mainly focuses on maritime shipping services such as: supply-
demand on carriage service, forwarding service, vessel chartering service, etc…

 Some main factors shape & influence the chartering market:

 Fleet Supply  Seasonal pressures

 Cargo Demand  Bunker prices

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:

 Chartering: is an activity within the shipping industry whereby a ship-owner hires out the use of the vessel to a
charterer (người thuê tàu).

 Vessel chartering operations: is the operation/transaction of transportation product between the cargo-
owner (shipper) by himself (as a Charterer) or by 3rd party on behalf of the cargo-owner [e.g. Broker (người
môi giới), Forwarder (người giao nhận) or Consolidator (người gom hàng)] and the Ship-owner or the
carrier to charter (hire) partly or wholly a certain type of vessel for ocean transportation of a certain
commodity from one port to another.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:

 3 main factors affect the chartering freight charges:

 The type of the commodity transported. determines which type of the ship the charterer
requires.
 The commodity parcel size (conventional shipment size of cargo).
 The route and loading and discharging port facilities (e.g. draught restrictions, cargo-handling
equipment).

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:

 2 important modes of vessel chartering operations:

LINER (Phương thức thuê tàu chợ)

VOYAGE CHARTER (Phương thức thuê tàu chuyến)

TIME CHARTER (Phương thức thuê tàu định hạn)

TRAMP
SHIPPING
DEMISE CHARTER (Phương thức thuê tàu trần)
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:

 Contracts of affreightment:

- Cargo vessels are usually under contracts by which the ship-owner, in return for a sum of money –
the freight – agrees to carry goods by sea, or to furnish the services of a vessel for the purpose of such
carriage. Such contracts, commonly called contracts of affreightment, comprising such differing types
as contracts for the lease (charter) of a vessel:
 Bare boat or demise charters.
 Voyage and Time charterparties.
 Bills of Lading.
Source: Cases & Materials on the Carriage of Goods by Sea
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 Contracts of Affreightment
Maritime contracts of Bareboat (Demise)
carriage Charter

LINER service
Carriage of Goods
(Bill of Lading) Whole
vessel

Carriage of TRAMP
Passengers Shipping
(Charter-parties) Specific
part of
vessel
Towage

Voyage Time Portion of

Other (standard vessel
form) contracts
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Concept:

 Liner service: is a service, provided by a shipping line as a carrier, that operates according to a fixed
schedule and has a fixed port rotation with published dates of calls at the advertised ports .

 Liner chartering: is an operation in which the Glossary

cargo-owners or the shippers, directly carry out or
indirectly through Brokers, Forwarders to book
spaces on a vessel in advance from the carriers /
Shipping Lines.
- Liner: Tàu chợ
- Shipping Line / Shipping company / Line-service company: Hãng tàu.
- Freight rate: Giá cước  Freight Tariff: Biểu cước tàu chợ
- Surcharge: phụ phí
- Bill of Lading: Vận đơn đường biển
- Ports of call: Các cảng tàu cập để xếp, dỡ hàng
- Endorse = Indorse (v): ký hậu

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Features:

LINER TRADE
Thuê tàu chợ

 Sailings are regular and repeated from and to
designated ports on a fixed trade route.
 Goods carried are usually high value & in large volume.
 Freight rates are stabilized & available in freight tariffs.
In case of increase, they are announced in advance.
 Simple procedure in chartering operation by a
standard Liner contract of carriage or Bill of Lading
issued by a liner-service or a shipping company.
 Shippers must strictly follow the fixed schedule, inflexibility
to arrange their cargoes in terms of time and place of delivery.
 Shippers are conformed to all terms and conditions
mentioned in Bill of Lading.
 Freight rates are stable, however, they are always in a high
level & included many surcharges.
 Lack of flexibility in carriage of goods by liner trade in case
desired ports of call are out of vessel’s schedule.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Process: (1) Shipper, once having demands on carriage of
goods by sea, will contact Broker/Forwarder.
(2) On behalf of shipper, Broker/Forwarder will find
(5
SHIPPER ) CARRIER / the best carrier to meet shipper’s requests & book
SHIPOWNER spaces in advance from this carrier.
(1 (3) If space is available, the carrier then issues &
L
B/

) (6
(2 sends the Booking Note to Broker/Forwarder.
(4 ) (3
) ) (4) Broker/Forwarder will send the Booking Note to
BROKER / )
FORWARDER Booking note shipper for him to arrange cargoes for shipping.
(5) Shipper will deliver cargoes to the carrier.
(6) After departure of vessel, the carrier will issue
BILL OF LADING (B/L) to Broker/Forwarder.
 Chapter 02: CARRIAGE OF GOODS BY SEA

 Sample Booking Note from ONE Line

Số booking

Người gửi hàng

Ngày khởi hành

Tên tàu dự kiến

Nơi nhận hàng

Cảng xếp hàng
Cảng dỡ hàng
Nơi giao hàng
Ngày dự kiến
Loại cont / Số lượng hàng đến

Nơi lấy cont. rỗng

và nơi hạ cont. sau
khi đóng hàng

Doc cut-off và
Các thông tin đặc biệt Closing time
của hàng hóa

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

 Ocean BILL OF LADING (B/L): Vận đơn đường biển

 Concept:
Ocean Bill of Lading is an important documentation for the carriage of goods by sea which the carrier
or agent of the carrier (on behalf of the carrier) issues to shippers or forwarders after loaded cargo on
board the vessel or after received cargo for shipment.
o A Bill of Lading is issued for goods shipped on board the vessel (or received for shipment).
o Bills of Lading are usually made out & signed in sets of two or three original copies known as
negotiable copies, and one of which can give title to the goods.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Ocean BILL OF LADING (B/L):

1 Receipt
As a receipt for goods shipped

As an evidence of the
 Main functions of B/L: 2 Evidence contract of carriage

As a document of title to
Title the goods
3

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Ocean BILL OF LADING (B/L):

 Main functions of B/L:

• Shipping • Number of • Apparent

marks / quality packages, order and
marks for pieces, condition of
 As a receipt for goods shipped identification • Quantity / the goods.
of the goods. weight

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

- A Bill of lading is not the contract.

- Only the evidence of the contract.
 As an evidence of the contract of carriage

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

 3 purposes for which possession of the B/L may be

regarded as equivalent to possession of the goods:

The holder can

The holder of transfer the
the B/L is ownership of The B/L can be
entitled to the goods used as
 As a document of title to the goods

1)

2)

3)
delivery the during transit security for a
goods at the merely by debt.
POD. endorsing B/L.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

 Main purposes of B/L:

- A basis for customs & import-export procedure.

- One of an important document in a set document, accompanied with Commercial invoice for payment
requests to the importer.
- Negotiable document for cargo owner-ship transfer.
- It is the only evidence to file a claim against the shipping company in the event of non-delivery,
defective delivery or short-delivery of the cargo at the destination.
- A document for monitoring sales contract performance from both sides.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

1 2
Non-negotiable
Negotiable B/L
B/L
- The ownership of B/L can be -Original copy B/L is not
transferrable by endorsement. necessary or required.
- Original copy B/L is required -Copy of B/L with stamp
to release cargo from the of the shipping line or
buyer’s side at POD.
authorization letter is
required for cargo release.
-Sea way B/L
-Telex release
-Surrender B/L

33
 The content of ocean B/L:
1. In front of the B/L

• B/L No.: Số vậ n đơn

• Shipper - ngườ i gử i hà ng
• Consignee - ngườ i nhậ n hà ng
• Notify party – Bên thô ng bá o
• Vessel – tà u
• Place of receipt - nơi nhậ n hà ng để xuấ t.
• Port of loading - cả ng xếp hà ng
• Port of discharge - cả ng dỡ hà ng
• Place of delivery – nơi giao hà ng
• Goods - Hà ng hó a
• Freight and Charge - Cướ c phí
• Number of Original B/L(s) - số bả n vậ n đơn gố c
• Date and Place of issue - Ngày và nơi phá t hà nh B/L
• Signature - chữ ký

2. Back of B/L:
- Basis legal laws of B/L
- Articles about liabilities & exemption from liabilities
of the carrier.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Classification of B/L:
 A “Shipped on Board” B/L: - Indicates that goods are actually shipped on board / loaded on board.

 A “Received for shipment” B/L: - When goods have been handed over to carrier / agent of the carrier for
shipment, but they have not yet been placed on board of the vessel.

 Through B/L: – If ocean transport forms only part of the complete journey and overland transport has to be
used as well, a “Through” B/L can be issued to cover all stages of the journey.

 Direct B/L: - When there is direct service between 2 ports, without any transshipment.

 “Transshipment” B/L: This is issued if the goods have to be off-loaded and re-loaded on to a second vessel
because there is no vessel available to complete the full journey to the port of destination. The transshipment
port will be shown on the B/L.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Classification of B/L (cont.):

 Stale B/L: - If the original bill of lading reaches the consignee after the arrival of the vessel at the destination, it
is known as a “stale Bill of Lading”.

 Clean B/L: – The B/L indicates that the carrier has received the goods in apparent good order and condition, a
clean B/L is one which bears no superimposed clause or a notation that expressly indicates the defective
condition of the goods or the packaging.

 Unclean B/L: This is a B/L which contains a superimposed clause expressly declaring that the goods or
packaging is defective. In this case, the ship owners can refuse to accept liability to deliver the goods in good
order and condition. This type of B/L is not acceptable to banks.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

 Classification of B/L (cont.):

 Multi-modal Transport B/L: - When different modes of transport are used; usually issued when goods stuffed
at shipper’s premises and delivered at consignee’s premises.

 Freight Prepaid B/L: - When freight is paid at the time of shipment or paid in advance, the B/L is marked,
“Freight prepaid”.

 Freight Collect B/L: - When the freight is to be collected from the consignee on the arrival of the goods, the
B/L is marked, “Freight collect”.

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 Chapter 02: CARRIAGE OF GOODS BY SEA
 MASTER B/L & HOUSE B/L:

MASTER VS HOUSE
B/L B/L

Issued by Issued by
 Shipping line/carrier to NVOCC  NVOCC to customers
Issuer
Issued on Issued on
 Pre-printed B/L form of actual shipping line  Pre-printed B/L form of NVOCC

Shipper Shipper Shipper

 NVOCC or its agent.  Actual shipper / exporter
Consignee Consignee Consignee
 NVOCC or agent at destination  Actual receiver / importer
Notify Party Notify Party Notify Party
 Same as Consignee or any other party  Same as Consignee or on behalf of actual
consignee
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

 MASTER B/L & HOUSE B/L:

Freight Forwarding
company

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Chapter 02: CARRIAGE OF GOODS BY SEA

Some largest NVOCC …

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Classification of B/L (cont.):
Based on the transfer
method of the
ownership of the
goods on B/L
 Straight B/L: (Vận đơn đích danh) only the consignee mentioned on B/L, who
can uniquely receive the goods.
 To bearer B/L: (Vận đơn vô danh)
 To order of Shipper
 To Order B/L: (Vận đơn theo lệnh)  To order of Consignee
 To order of Bank

 “To order B/L” is widely used in international shipping, it can be

transferrable by ENDORSEMENT method (ký hậu vận đơn).

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Endorsement (Ký hậu): is an important procedure in international shipping, it is used for transferring the title
(ownership) of goods on B/L from one beneficiary to another beneficiary.

 The party who signed on Endorsement B/L, accepted to relinquish his ownership of goods on B/L & transfer to new beneficiary.
 In order for Endorsement to be effective, the Endorser must sign & stamp on the back of B/L to transfer his ownership of
goods to beneficiary. In addition, the beneficiary also has the obligation to sign & stamp on the back of B/L as well to confirm
his ownership of goods transferred by the endorser.

Straight Endorsement “To order of” Endorsement Blank Endorsement

(Ký hậu đích danh) (Ký hậu theo lệnh của…) (Ký hậu vô danh, để trống)

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation
 Surrendered B/L & Telex Release:
 Widely used in international shipping.
 Only applicable for straight B/L.
 Used in case when Original B/L is not requested at discharge port (destination port) or B/L was
issued to shipper at loading port, however, it comes later than (after) the arrival of the vessel at
destination port.
 Agent of shipping line at loading port must issue telex release in system to confirm cargo release
under Surrendered B/L.
 Seaway B/L: Giấy gử i hà ng đườ ng biển
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.1 – LINER SERVICE operation

Sample of Surrendered B/L of

ONE shipping line

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

 Tramp shipping concept:

- As opposed to Liner service, tramp shipping (tramp trade) operates without following any definite schedules,
irregular shipping, mainly on non-standard routes with non-advertised itinerary ports of call.
- Tramp ships are used to transport variety of cargoes with low value & do not require fast delivery (e.g. bulk
cargoes, break-bulk cargoes, specialized of dry cargo, liquid cargo, mixed cargo, etc.)
- Cargo-owners (or charterers) can charter a vessel wholly or partly from the ship-owner.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

 Main features:

 Routing & schedule of tramp trade will be arranged as the requests from the charterer.

 Freight rate & shipping conditions can be mutually negotiable from both sides.

 Large volume of cargo per one single voyage.

 Rights, duties and responsibilities of ship-owners and charterers are determined by the charter-parties.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

 Main features:
Tramp shipping

 Freight rate of tramp trade is cheaper than liner trade.

 Chartering freight rate is fluctuant, un-stable and un-
 High flexibility & freely for both sides to deal &
predictable.
negotiate about carriage conditions & clauses.
 Complex vessel chartering procedure.
 Fast shipping due to few ports of call.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

1 Voyage charter

2 Time charter 2020

3 Bareboat (Demise) charter

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

1 Voyage charter

 Applicable for routings which are out of liner trade’s regular routings.
 Large volume of cargoes to be transported.
 Manners of voyage charter:
(1) Single voyage chartering
(2) Round/Return Voyage chartering
(3) Contracted voyage(s) with large volume of cargo.
(4) Consecutive Single voyage chartering
(5) Consecutive Return voyage chartering
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3.2.2 – TRAMP SHIPPING operation

1 Voyage charter

 Main features:

 The ship-owner charters out the whole vessel or a part of a vessel to the charterer.

 The charterer should be responsible for the arrangement of the cargo, payment of freight calculated according to
the quantity of the cargo loaded or carried and other expenses concerned.

 The ship-owner possesses and controls the vessel and takes charge of the operation of the vessel and the
manning and management of crew.

 The ship-owner should bear the operational expenses of the vessel.

 Rights, duties and responsibilities of ship-owners and charterers are determined by the charter-parties.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation
(1) Shipper/Charterer will contact brokers for tramp
1 Voyage charter
shipping demand.
(5 (2) The brokers will then contact carriers to find the best
)
Shipper/Charterer (4 CARRIER carrier to meet customer’s demand, as well as
)
negotiate for terms & clauses under charter-parties.
 Process

(3) After the brokers got full information from the carrier,
(1 (2 they will inform (2) to shipper/charterer for making
) )
decision.
BROKERS
(4) Charter-parties will be signed between Shipper /
(3 Charterer and the carrier.
)
(5) Shipper/Charterer will make all necessary
arrangements to deliver cargo to the carrier. 51
 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

1 Voyage charter

 Forms:

 Uniform General Charter Party GENCON – latest revision in November, 1994 is the most popular
and widely used on a global basis for all kinds of trades and for numerous types of cargoes.
 GENCON is published by BIMCO (The Baltic & International Maritime Council) & British Chamber
of Shipping) as revised in 1922, 1976 & 1994.
 CONGENBILL: is a charter party bill of lading for shipments of general cargo under the GENCON
charter party. The latest edition of this bill of lading is CONGENBILL 2016.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

1 Voyage charter

 Main contents of voyage charter-parties:

(1) All parties under voyage charter-parties: Shipowner – Charterer – Broker - Carrier.
(2) Vessel Clauses : All information about vessel (Name, Flag, Specifications, etc. )
(3) Obligations of ship-owner & charterer.
(4) Cargo clauses : Commodity, specifications, quantity, packing & marking, etc.
(5) Freight Clauses: Freight rate, Time & method of payment, etc.
(6) Clauses of Loading port/Discharge port: Mutually negotiate & agree from both sides.
(7) Clauses of Laytime (thời gian làm hàng), Dispatch & Demurrage (thưởng phạt xếp dỡ)
(8) Special provisions (if any)

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 Chapter 02: CARRIAGE OF GOODS BY SEA

1 Voyage charter

 Main contents of voyage charter-parties (cont.):

(9) Clauses of loading & discharge cost: [FI, FO, FIO, FIS, FIT, FIOST, Liner Term]

I (In): xếp hàng lên tàu

O (Out): dỡ hàng xuống tàu

F (Free)
S (Stowed): phí sắp xếp hàng hóa trong hầm

T (Trimmed): phí san bằng hàng hóa trong hầm tàu

 Liner term

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

2 Time charter

 Concept:
 The terms of a time charter differ radically from those of a voyage charter because of the difference of function.
 In the time charter the ship-owner is placing his vessel (including shipmaster and crew) for an agreed period of
time at the disposal of the charterer who is free to employ it for his own purposes within the permitted contractual
limits.
 As the charterer controls the commercial function of the vessel, he is normally responsible for the resultant
expenses of such activities and also undertakes to indemnify the ship-owner against liabilities arising from the
master obeying his instructions.
(Source: Carriage of goods by Sea (Prof. John F Wilson) – 7 th edition)
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

2 Time charter

 Concept:

The time charter means that the ship-owner provides a designated

manned vessel to the charterer, and the charterer employs the
2020
vessel for a specific period against payment of hire instead of for a
certain number of voyages or trips. Time charter generally does not
include loading and unloading costs in the charter rate.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

2 Time charter

 Period of time charter:

 Time charter per a period of time (Several months or years: ~ 6 months – 1 year)

 Time charter per a single voyage

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

2 Time charter
 Features:
 The vessel is place at the disposal of the charterer for an agreed period of time within the permitted contractual limits.
 The charterer must find cargoes for shipping by himself under many different voyages during contractual period.
 Time charter-parties is the main contract between the ship-owner and the charterer.
 The charterer should be responsible for the operation of the vessel and bear the variable operational costs such as bunker
costs, port charges, handling charges, etc.
 The ship-owner should bear the fixed operational costs such as: costs relating to the vessel capital, ship’s maintenance and
stores, insurance premium, etc.
 Rental amount will be paid to the ship-owner by the charterer in return for time charter, not freight rate.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

2 Time charter

 The charterer will bear many fluctuated costs during

 The charterer gains full initiative in shipping goods
chartering period.
with large volume.
 Large volume of cargoes in stability for shipping demand.
 Chartering cost is cheap. The charterer can re-lease the
 Ship-owner is unable to increase rental cost in case freight
vessel to another party for the interest.
rate of the market is on the rise.
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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

2 Time charter

 Forms:

There are two major forms:

 “NYPE93” Time Charter Party: New York Produce Exchange form issued by the Association of
Ship Brokers and Agents (U.S.A.), Inc.

 “BALTIME 1939” - BIMCO Uniform Time-charter (as revised 2001)

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 Chapter 02: CARRIAGE OF GOODS BY SEA
2.3 – Shipping market & vessel chartering operations:
 Distinctive features of voyage charter & time charter:

VOYAGE TIME
VS
CHARTER CHARTER

Use of vessel Use of vessel

 Using vessel for one/many voyage(s)  Using vessel for a period of time
Operation Operation
 Actual operation is left to the shipowner  Actual operation is left to the charterer

Operation costs Operation costs

 Are borne by the ship-owner.  Are borne by the charterer.
Remuneration Remuneration
 Freight is fixed in proportion to cargo quantity  Rental is fixed in the proportion to the time occupied

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

3 Bareboat (Demise) Charter

 Concept:

- The bareboat charter ordinarily means that the vessel is put at the disposal of the charterer for a long
period employment without any crew.
- The charterer thus will take over almost all of the ship-owner’s functions except for the payment of capital
cost. This means that the charterer will have the commercial as well as the technical responsibility for the
vessel and will pay for maintenance, crew costs and insurance, etc.

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 Chapter 02: CARRIAGE OF GOODS BY SEA

2.3 – Shipping market & vessel chartering operations:

2.3.2 – Vessel chartering operations:
2.3.2.2 – TRAMP SHIPPING operation

3 Bareboat (Demise) Charter

 Forms:

- There is only one standard form of bareboat charter party used: The BARECON 2001 form designed
by BIMCO.
- There are a number of clauses, which are commonly found in time charter parties.

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End of chapter 02

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