Shipping: Logistics and International Freight

• Module focus: Logistics and International Freight Forwarding
• Chapter focus: Shipping

Role of Shipping

• Accounts for 80% of the volume of goods in international trade
• Suitable for transporting all kinds of goods

Characteristics of Shipping

• High capacity for trade volume, adaptability to cargoes of varying sizes, weights, and shapes, low unit transportation cost, and minimal fuel consumption per ton
• Choice of transport route is influenced by various natural and maritime conditions
• Low speed and punctuality compared to road or air transportation create certain risks

Merchant Vessels: Concept

• Freight and passenger ships serve commercial purposes
• Scope focuses on freight vessels

Merchant Vessels: Classification based on use

• Passenger ships: transport people
• Cargo ships: transport goods
  • Dry cargo ships: transport solid cargo, with or without packaging
  • Liquid cargo ships: transport liquid cargo

Types of Dry Cargo Vessels

• General cargo ships, bulk cargo ships, combined ships, container ships, ship carrying barges, and frozen cargo ships

Types of Liquid Cargo Vessels

• Tankers (oil, other liquids) and liquefied gas ships

Size of Ships

• Very Large: capacity exceeding 350,000 dead weight tons (DWT).
• Large: capacity from 200,000 to 350,000 DWT.
• Medium-sized: capacity from 10,000 to 200,000 DWT.
• Small: less than 10,000 DWT

Flags

• Conventional flag: signifies ships nationality
• Flag of convenience is used to lower costs and reduce regulations via registration in a foreign country

Mode of Business

• Liner service: operates according to a schedule and fixed port rotation, with publicly available dates
• Tramp service: lacks fixed routing and is available on short notice to load cargo from any port

Technical Specifications

• Ship's name: designated name given to a ship during registration
• Flag: nationality
• Shipowner: the legal owner, distinguishing them from a charterer
• Length/Beam: dimensions
  • Length over all (LOA): total length, defines ship size for operational and regulatory purposes
  • Beam: width at the waterline, affects stability and maneuverability
• Draught: vertical distance from hull bottom to waterline
  • Unit meters or feet, indicates the depth a ship can enter ports
  • Light draft: the ship without load
  • Loaded Draft: The ship with load
• Displacement: weight of the ship and its contents
  • Measured indirectly by calculating water displaced
  • Light Displacement (LD) and Heavy Displacement (HD)

Carrying Capacity

• Refers to the maximum cargo a vessel can safely carry without affecting its integrity
• Deadweight Capacity (DWC): weight of all cargo, fuel, etc. onboard (displacement minus lightweight tonnage)
• Deadweight Cargo Capacity (DWCC): portion of DWC available for cargo (DWC minus water, fuel and stores)

Gross/Net Registered Tonnage

• Gross Registered Tonnage (GRT): total enclosed volume of all spaces in a ship (100 cubic feet equals one ton)
• Net Register Tonnage: ship's internal volume available for cargo, excluding engine rooms, crew, and navigation areas

Cargo Space - CS

• Refers to volume within a vessel specifically for storing and transporting cargo, measured in cubic meters or feet
• Packaged Cube: usable volume for general cargo in bales, pallets, crates etc, and is calculated as Length x Width x Height
• Bulk Cube: the area of the cargo hold available loose cargo

Coefficient of Loading - CL

• Shows the connection between Cargo space and Deadweight Cargo Capacity, indicating efficiency of cargo stowage
• Calculate: Weight of Cargo/ Volume of Cargo Space
• Types: bulk, packaged, and liquid cargo

Stowage Factor - SF

• Shows the relationship between volume and weight, measured in cubic meters per metric ton Calculate: volume of cargo (m3)/weight of cargo (tons)
• Measurement Cargo: SF <= 40 c.ft/ton, dense & heavy; metals, machinery etc.
• Deadweight cargo is over 40 c.ft/ton and lighter cargo for example, consumer goods, cotton, textiles

Seaport: Definition

• A land facility for receiving sea transported personnel or material
• Authorized as a port of entry or departure

Seaport: Roles

• To serve ships and cater to cargo

Responsibilities of Seaports

• ensure safety, provide facilities and equipments for vessels to anchor
• provides cargo and preservation, shelters, repairs and general assistance

Requirements For Efficient Port

• Well-equipped infrastructure to support operations
• Logistics and connectivity for distribution
• Technology and automation to aid processes
• 24/7 availability qualified workforce
• Customer satisfaction and efficiency

Port Facilities

• Equipment supports ship entry and exit
  • Includes wharfs, canals, and signaling
• Equipment supports cargo handling
  • Incorporates cranes, forklifts and conveyor belts

Port performance indicators

• Throughput (Cargo volume): Measures the total amount of cargo (in tons, TEUs, or containers) handled by the port over a given period.
• Handling time: The average time it takes for a vessel to unload and reload before departing from the port.
• Ship Waiting Time: The average time ships spend waiting to dock at the port.
• Container Dwell Time: Refers to the average time a container spends at the port before being moved out. • Port Capacity Utilization: Indicates the percentage of a port's total capacity that is being used.
• Labor Productivity: Measures the amount of cargo handled per worker or per unit of labor input

Liner Charter

• Operates on a regular schedule, transporting goods along a route with fixed ports
• Goods handled: Containerized, Reefer, and Breakbulk Cargo
• All relationships regulated under Bill of Lading (B/L)
• Cargo owner accepts all conditions set by carrier
• Liner freight is fixed and outlined in liner bound tariff

Advantages of Liner Shipping

• Suitable for general goods due to high capacity, reliability through fixed schedules, convenience for small shipments, and cost predictability from stable freight rates

Disadvantages of Liner Shipping

• Higher costs compared to bulk, limited flexibility with fixed routes, potential for raised prices to offset costs, and surcharges for operational factors
• Shippers authorize a customs broker to find appropriate vessel
• Negotiated terms with carrier
• Cargo moves to loading port with bill of lading.

Ocean Bill of Lading (B/L): Definition

• The primary document used in international maritime transport and is issued upon loading
• Issued by the carrier to the shipment once they have received the packages
• Representative of the carrier signs

B/L Functions

• Serves as a contract of carriage, evidence of shipment receipt, title certificate and is negotiable

Number of Issues for Bills of Lading

• one set that includes about 3 originals and some copies showing it isn't negotiable
• seller must present for payment

B/L Classification

• Based on Negotiability:
• Order B/L: Transferable by endorsement.
• Straight B/L: Non-negotiable, specifies consignee.
• B/L to Bearer: Payable to whoever holds the bill.
• Based on Issuing Time:
• Shipped on Board B/L: Issued after loading.
• Received for Shipment B/L: Issued upon receipt of goods for shipping.
• Based on Transport Itinerary:
• Direct B/L: For direct shipments.
• Through B/L: Involves multiple ships.
• Multimodal Transport B/L: Covers multiple transport modes.

B/L: Types based on Negotiable Ability

• Order B/L: made out to the order of a specific person, transferable by endorsement
• Endorsement: transfers cargo ownership

Endorsement Types

• Straight, order, blank, and without recourse

Clean B/L

• Issued when goods are received in good condition

Unclean/Claused B/L

• Highlights issues with delivered goods.

Direct B/L

• For shipments from one port to another.

Throught B/L

• Involves multiships

Multimodal Tranpsort B/L:

Involves more than one method of transportation

Sea Waybill: Others

• Sea Waybill (Giấy gửi hàng đường biển): is used when the shipper decides to release ownership of the cargo immediately
• It is a Similar to the function of a B / L, the only difference is that there is no non-negotiable function.

B/L Surrendered

• B/L Surrendered (Vận đơn đã xuất trình tại cảng gửi) * the rapid speed of vessels can result in their arrival at a port before the Original Bill of Lading (B/L) is issued and reaches the importer
• B/L flow: The carrier sends email with the receiver to surrender the B/L and pick up the delivery, this allows for speedy trade transactions and reduces risks of lost documents

First side of B/L:

• Details about the shipper, consignee.
• Details about the vessel and place of loading,signature

Reverse side of B/L:

• Details carrier regulations, definitions and exemptions

B/L: Samples

• There are samples given with a ton of specifications

Legal Systems in Shipping: International Conventions

• Hague Rules:, relating to bills of lading. Hague-Visby Rules amends the Haugue Rule, SDR Protocol 1979, Hamburg Rules relating to carriage of goods by sea

Legal System

• There is a maritime code in Vietnam 2015

Carrier's Liability to Goods: Three Part Regulation

1. Includes lsses in the cargo and encompasses liability includes period of time.
2. Limit = the amount of compensation * regulated by 3 rules H/HV/H

Hague and Hague Visby Rules:

• In order to be liable, must
• Provide seaworthy ship, Trading liability,issue a bill of lading

Hamburg Rules:

• More liability towards carrier than the haugue rules
• the carrier is held even when there faults because of events
• There are liabilities as listed with general care for the goods

Period of Liability

• Covers hague from the line over the time and for Hamburg, responsibility throughout

Limitation of liability

• This helps specify that each shipping unit should be considered its own legal liability and has varying forms, usually with different monetary amounts

SDR, Haugue and Hamburg rules

• These help to dictate what the maximum price is based on weight and volume and what laws are used when shipping the goods

Legal Systems Summary

• Hague and Hamburg are standard, Hamburg has greater liability

Claims and Action

• There is notice that the carrier is held liable for damages and actions and must provide documentation.

Action:

• The action is only available if documents have occurred

Voyage Charter: Deffinition

• The method that a ship is chartered for a voyage between specific ports with specified cargo at a negotiated rate of freight, which means the charger pays for space

Voyage Details: General

• Vessels are generally slower than liner ones, may carry grain, ore, timber. The details are usually regulated by Voyach Charter Party and B/L

Voyage Carter Party

Defined has a legal document that outlines the role in transportation which includes security, transport of goods and other clauses . General

Voyage Charter Clauses - General List

• Quantity of cargo and parties names. Expected time

Types of Voyages Charter

• Single Trip: Vessel hired for carriage from one port, one trip.
• Round Trip: Hired to transport goods.
• Consecutive Voyage: Vessel transport one direction then to another.

Charter Details Breakdown

• Usually the parties have a written agreement and it specifies the carrier and ship owners name, there also maybe additional terms and agreements written

General specifications which affect the good and regulations

• Name of cargo: Clearly states the name of cargo; And/or (eg. 1000 MT rice and/or maize)
• It will have weight, and packing types

Ship and the Specification

• Has name, ship name, age and the specification that tell the capacity and function of goods
• Also should have the depth for regulations for the harbour for entry

Regulate the time

• Regulate the time for ship being at port and ready for loading and there are methods involved on specific days
• It involves porting and proving that the loading can occur. There are custom elements at the port that are noted