Maritime Logistics Process Handout PDF

Types of services Liner Service A service provided by a ship that operates on a regular schedule, traveling from a group of ports to another group of ports. Liner ships travel on a regular voyage, following a pre-established schedule, and with determined ports of call. A scheduled voyage may include...

Types of services Liner Service A service provided by a ship that operates on a regular schedule, traveling from a group of ports to another group of ports. Liner ships travel on a regular voyage, following a pre-established schedule, and with determined ports of call. A scheduled voyage may include only two ports. Commonly, a series of ports in one region of the world (e.g., Rotterdam, Netherlands; Felixstowe, UK) to another (e.g., Boston, USA; Baltimore). Types of services Example https://www.hmm21.com/cms/company/korn/index.jsp https://www.hpnt.co.kr/homepage/webpage/ https://www.vesselfinder.com/ Tramp Service An oceangoing vessel that does not operate along a definite route or on a fixed schedule, but rather calls at any port where cargo is available - Charter services A maritime company rents a ship to move cargos between a specific port of origin and destination. For the case of bulk cargo, such as petroleum, iron ore, grain or coal The whole contents of the ship are usually traded Maritime logistics process This part introduces the key processes and documents used in the shipping process, at origin (at time of export) and at destination (at time of import) in liner shipping service 1. Processes and Documents – Sailing Schedule 1) One of the first parts of the shipping process is to identify when goods must be shipped from origin for them to arrive at destination at the desired time. 2) Carriers publish their vessel sailing schedules on the internet, making it easy for customers to access the information. 3) Sailing schedules show ETD (Estimated Time of Departure) and ETA (Estimated Time of Arrival). * Given the nature of shipping, exact departure and arrival times are not guaranteed but punctuality is a key service element for shipping lines. Maritime logistics process 4) Voyage - A liner vessel will sail according to a fixed schedule in a rotation between a number of fixed ports. - Each round trip is called a voyage and is given a voyage number to avoid any confusion regarding which exact vessel sailing the carrier, customers and other parties in the shipping process are referring to, e.g. during the booking process. 5) Cut-off - To make sure that vessels depart on time, carriers will stipulate a Cut-off time to the customers. - The Cut-off or Closing time is the deadline before which a shipper must deliver his cargo to the carrier’s terminal or depot prior to departure Maritime logistics process 2. Processes and Documents – Origin Flow (1) Booking: Customer needs transport and contacts the shipping line, advising details of the shipment to be moved. (2) Booking Confirmation: The shipping line checks equipment and vessel space availability and advises if the shipping line accepts the shipment. (3) Empty Dispatch: The shipping line allocates an empty container. Shipper loads the container and it is taken to the port or carrier yard. (4) Receipt: The shipping line confirms that the container has been received at the port terminal Maritime logistics process (5) Shipping Instructions: Shipper advises details to the shipping line of cargo loaded in the container and confirms shipping information. (6) Invoice preparation: Shipping line prepares documentation for the shipper and advises prepaid charges. (7) Vessel Manifest: shipping line prepares documentation and submits details to Customs about the containers planned for loading. (8) Vessel Departure: Container is loaded and the vessel departs. The shipper pays prepaid charges to the shipping line and the B/L is released. Maritime logistics process 3. Processes and Documents – Origin Documents 1) Booking Confirmation - The booking confirmation is a message sent by email or fax by the carrier to the customer, advising that his booking has been accepted. - The booking confirmation restates the booking details such as ETD, vessel sailing, origin, destination, equipment size, etc. 2) Dock Receipt 수취증 - A Dock Receipt is a document, stamp or message issued by the carrier or terminal operator to confirm that the container has arrived at the terminal or container yard. - The dock receipt states the time of arrival to the terminal and confirms that the container was received in good order and condition (if not, carrier must make sure to make notation on the receipt). Maritime logistics process 3) Shipping Instructions 선적지시서 - Shipping Instructions (S/I) is information provided by the customer to the carrier about the shipment, in particular a description of the goods (type, volume, etc.) and a confirmation of the container and seal number as well as the final sender/receiver name and address. Maritime logistics process 4) Vessel Manifest 화물적하목록 - The Vessel Manifest is an official document submitted by the carrier to Customs authorities before vessel departure, advising what will be or has been loaded onboard the vessel. - The manifest provides details of e.g. cargo types and shipper/consignee details and is prepared by the agent in the port of loading. Maritime logistics process 5) Commercial Invoice – Prepaid Charges 상업송장 - 선불 - At origin, the carrier will prepare an invoice to the shipper covering the relevant prepaid charges. - An invoice is a formal demand for payment and includes payment terms, description of cargo and breakdown of charges. Maritime logistics process 6) Bill of Lading (B/L, 선하증권) - A legal document that establishes evidence and the terms of a contract between a shipper, a transportation company, and the agents providing and receiving the cargo. - It serves as a document of title, a contract of carriage, and a receipt for goods. 3 original documents are issued. - When signed, the carrier acknowledges that it has received the cargo in good condition in the right quantity when the carrier took custody of it. - So it is a receipt of goods (화물수취증)issued by the carrier to the shipper. - The B/L also evidences a contract (운송계약서) of carriage between the shipper and the carrier. Maritime logistics process - It also acts as the “key to the cargo”. - At destination the carrier will release the container to the party who submits an original B/L document (a person who presents an original B/L document at destination obtains the goods from the carrier) - The B/L is a so-called Document of Title (권리증권) which means that goods can be sold during transit and as long as the new owner obtains an endorsed original B/L (this is also called negotiable B/L), he/she can receive the goods from the carrier at destination. Maritime logistics process Sea Waybill (SWB) - If the shipper requests it, the carrier may issue a so-called Sea Waybill (SWB) instead of a Bill of Lading. - The Sea Waybill works much the same way as the B/L but it is not a document of title. - In practical terms this means that goods shipped on a Sea Waybill can only be released to the consignee that is listed on the document. Maritime logistics process - That means as long as a person can present proper identification that he/she represents the consignee named in the Sea Waybill, the goods will be released to that person at destination (whereas on a B/L, goods are released to the person who presents an endorsed original B/L document to the carrier at destination). - Sea Waybills are often used where no sale of goods is expected during transit and where the shipper and consignee trust that payment can take place and legal ownership for the goods can change without the use of an original B/L document. Maritime logistics process 4. Processes and Documents – Free Time - After arrival at the port of discharge, the customer must collect his container from the terminal within an agreed number of days, referred to as ―Free time. - Typical free time is 2-5 days but carriers may agree with some customers to extend this period. * Demurrage 체화료 - If the container is still at the terminal after expiry of the free time, the customer will be liable to pay so-called ―Demurrage‖ charges to compensate the carrier for the cost of storing the container at the terminal. - It is important to remember that the container cannot leave the carrier’s terminal or container yard at destination for delivery to the consignee until the consignee has submitted an original Bill of Lading. Maritime logistics process Although all containers have the same physical construction and appearance, multiple types of container services can be identified. The differences between such loads are not of a physical nature but are identified by ascertaining who the consignor(s) and consignee(s) of such container is/are: FCL /FCL Container Load - the goods stuffed in this container are from one supplier and are consigned to one importer. This container will be delivered to the consignee directly once cleared by customs. FCL/LCL Container Load – the goods stuffed in this container originate from a single supplier, but is consigned to different importers. The container will be delivered to a depot/warehouse for unpacking. Maritime logistics process LCL/FCL Container Load – The goods stuffed in this container are from more than one supplier and are consigned to one importer. The container will be delivered directly to the consignee once cleared by customs. LCL/LCL Container Load the goods stuffed in this container are from more than one supplier and are consigned to more than one importer. Separate Bills of Lading are issued for each individual consignment. The container will be delivered to a depot/warehouse for unpacking. * FCL – Full Container Load * LCL – Less than Container Load Service Components of Logistics The logistics service characteristics that are usually most important and discussed include Transit time Reliability Accessibility Capability Security Service Components of Logistics TRANSIT TIME It is the planned travelling time of a product to the final destination. It can impact the inventory levels held by sellers and buyers. Usually, the longer the transit time the higher the inventory levels required and the higher the related inventory carrying costs and potential stock out costs. Shorter transit times reduce the potential losses from stock outs. * Stock out cost is the cost of not meeting customer demand which can be the profit on the sale of the product or the longer run cost associated with losing the customer Service Components of Logistics e.g., the supply of clothing produced in the Pacific Rim might require 45 days transit time from manufacturer’s shipping point to a specific retail store. While the clothes are in transit for 45 days, either a buyer or a seller incurs the cost of financing the inventory for the 45 days. If the transit time is reduced to 15 days by use of air transportation, the in-transit inventory financing costs will be reduced by two-thirds. longer the transit time increases the potential cost for stock outs. a stock out of clothing at the retail store could mean a maximum of 45 days without inventory with sales and the related profits lost during this period. Service Components of Logistics RELIABILITY It refers to the consistency of the expected transit time of carriers. Meeting pickup and delivery schedules enables shippers and receivers to optimize service levels and minimize stock out costs. Unreliable transit time requires the freight receiver to either increase inventory levels to guard against stock out conditions or incur stock out related costs. Service Components of Logistics ACCESSIBILTY It refers to the ability of a carrier to move freight between a specific origin and destination. If the carrier cannot provide that direct service it will affect inventory cost with longer transit times and higher total transportation costs usually associated with additional transportation services (pick up and/or delivery charges). The motor carrier usually has the advantage in providing direct point-to-point service and is frequently the complementary service required by other carriers for complete point to point service Service Components of Logistics CAPABILITY This refers to the ability of the carrier to provide effective service for specific products and/or to meet the special service characteristics of the freight and market needs. Typically, this is the first step in evaluating the potential for using a particular mode of transportation for a movement. Based on the physical and marketing characteristics of the freight, shippers might have unique demands for the transportation, facilities, and communication For example, products requiring controlled temperature and necessitate the use of a refrigerated vehicle; time sensitive shipments that need state-of-the-art communications systems to monitor their exact location and arrival times Service Components of Logistics SECURITY It is concerned with the safety of the freight while it is in-transit or what is commonly referred to as loss and damage. Shipments that are damaged or lost in transit can cause increased cost in the areas of inventory and/or stock outs. A damaged shipment will usually not be accepted and the buyer faces the possibility of losing a sale or stopping the production process. Increasing inventory levels to protect against stock out costs relating from a damaged shipment causes increased inventory carrying costs