Transcript module-4 - Amity

Module IV: Air & Ocean
Transport and Chartering
Module IV: Air & Ocean
Transport and Chartering
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The General Structure of shipping industry,
Characteristics of Shipping Industry,
Liner and Tramp Operations and Significance,
World Seaborne Trade and World Shipping,
Composition of World Seaborne Trade,
Liner Freighting Practice,
Principles – Freight Structure,
Voyage Charter,
Time Charter,
Problems of Shipping Industry,
Shipping Policy,
International Air Transport System,
Air Freight Rates,
India’s Export – Import Trade by Air,
Problems and Prospects, Law Relating to Carriage of
Goods
Shipping:
 Shipping is a global service industry that by
general acknowledgement provides the lifeline
of international trade.
 Suffice it to say that, due to the morphology of
our planet, 90% of international trade takes
place by sea.
 Technological developments in ship design and
construction, and the ensuing economies of
scale of larger ships, have also promoted trade –
particularly those of developing countries – by
making economical the transportation of goods
over long distances.
 This has expanded markets for raw materials
and final products and has facilitated the
industrialization of many countries around the
world.
Shipping Industry: Sectors
Traditionally, the shipping industry is
categorized in two major sectors
(markets):
1. The bulk shipping sector – engaged
mainly in the transportation of raw
materials such as oil, coal, iron ore and
grains – and
2. The liner shipping sector (involved in the
transportation of final and semi-final
products such as computers, textiles and
a miscellany of manufacturing output).
Types of Ships
Various Ships--Tankers
Aframax
ULCC
LNG
VLCC
Difference Bulk & Linear
Shipping:
From a market structure point of view, the two
sectors are as different as they could be
 Bulk shipping uses large and unsophisticated ships,
such as tankers and bulk-carriers, to transport goods
in bulk on a contract basis.
 The service requires minimal infrastructure, and in
this respect, it resembles a taxi service whereby the
contractual relation between passenger and driver
(cargo owner and ship owner) expires upon the
completion of the trip.
 The industry is highly competitive with prices
(freight rates) fluctuating wildly even in the course
of a single week.
Drivers in the Shipping industry
 The primary demand and supply driver in the
shipping industry is freight rates, which determines
the revenue of shipping companies.
Other drivers of the shipping industry are:
 Trade growth
 Geographical concentration of trade
 Threat of wars, piracy, storms and hurricanes
 Government sanctions on shipment
 Access to and suitability of other modes of shipment
The supply drivers of the industry include:
 Demand for oil and dry bulk
 Climatic conditions (rains, storms and tides)
 Government restrictions on shipment
Difference between a Liner
shipping service and Tramp :
Some of you might have heard the terminology Tramp
service or Tramper or Tramp vessel and also the
terminology Liner Service.. What is the difference between
the two..??
 Liner Service – is a service that operates within a schedule
and has a fixed port rotation with published dates of calls at
the advertised ports.. A liner service generally fulfills the
schedule unless in cases where a call at one of the ports has
been unduly delayed due to natural or man-mad causes..
Example : The UK/NWC continent service of MSC which has a
fixed weekly schedule calling the South African ports of
Durban, Cape Town and Port Elizabeth and carrying cargo to
the UK/NWC ports of Felixstowe, Antwerp, Hamburg, Le
Havre and Rotterdam..
 A Tramp Service or tramper on the other hand is a ship that
has no fixed routing or itinerary or schedule and is available
at short notice (or fixture) to load any cargo from any port
to any port..
Example : A ship that arrives at Durban from Korea to discharge
cargo might carry some other cargo from Durban to the
Oakland in the West Coast of USA which in an entirely
different direction.. From Oakland say for example it could
carry some cargo and go to Bremerhaven
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World Seaborne Trade
and World Shipping,
Seaborne trade:
 Seaborne trade continues to expand,
bringing benefits for consumers across
the world through competitive freight
costs. Thanks to the growing efficiency of
shipping as a mode of transport and
increased economic liberalisation, the
prospects for the industry's further
growth continue to be strong.
 There are over 50,000 merchant ships
trading internationally, transporting every
kind of cargo. The world fleet is registered
in over 150 nations, and manned by over a
million seafarers of virtually every
nationality.
Large Loads:
 As time progresses, so does the size,
science and structure of ships.
 Today, they are relied upon for an
assortment of tasks that still cannot
be done as successfully through
other means.
 The primary advantage of ships is
their ability to carry tons of
merchandise and equipment.
 They transport many of the world's
finite resources, including oil and
coal.
Low Cost
 The secondary advantage of liners
and tramps is their low cost.
Transporting goods across the sea is
much cheaper than carrying them
through the air, mostly due to the
massive quantities that can be
delivered at once with a tramp or
liner. Shipping via air cargo would
require several planes --- costing
much more in fuel --- to equal the
load of a ship.
Time:
 Unfortunately, liners and tramps have
disadvantages too.
 Although ships are better than planes for
cargo loading, they are much slower than
airplanes.
 Liners and tramps can travel for days and
even weeks to deliver cargo.
 In many industries where time is of the
essence, this can be a central issue.
 Although rare, problems with sinking or
crashes can occur.
 Tankers that carry oil can cause a
significant environmental impact if a
catastrophic event takes place
Advantages & Disadvantages of
Liners & Tramps :
 With all the different types of transportation,
shipping still remains one of the top methods.
 Shipping can be arranged either through a
regular liner or through tramp services, which
do not have a fixed schedule.
 Able to suit different needs and functions, these
two services have long been the lifeblood of the
vast transportation market.
 Liners carry goods in large quantities from
merchants and consigners.
 Tramp ships, on the other hand, often carry
cargo on a more random, per-load basis.
Composition of World
Seaborne Trade:
sea trade.pdf
 Marini time shipping.pdf
 rmt2011_en.pdf
What Is Chartering ?
 Chartering/Shipping is an activity
within the shipping industry. In some
cases a charterer may own cargo and
employ a shipbroker to find a ship to
deliver the cargo for a certain price,
called freight rate
Two types of charter:
1. Voyage charter
2. Time charter
Voyage charter:
 There are many different reasons which
influence a charterer's decision as to
whether to charter on a voyage basis or to
take ships on time charter.
 advantage
Voyage charter gives the charterer a fixed
price per ton of material and passes almost
all the risks, especially risks of delays due
to bad weather, strikes etc onto the
shoulders of the shipowner.
The charterer does, however, have to pay for
the privilege of being risk-free.
Time Charter:
advantage
 Time charter gives the charterer
considerable flexibility as to where to send
the ship and is spared the problems of
demurrage.
 Time charter does, however, mean that if
bad weather delays the ship or if workers in
a chosen port decide to strike, the daily
rate of hire still has to be paid.
Choosing voyage or time
charter
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Thus, if the charterer has a single commodity from one or a
limited number of loading places to go to a single or limited
number of discharging places, and the rates of loading and
discharging are well established, then voyage charter is the
obvious choice.
If, however, the charterer has many different commodities
from/to a variety of places so complex that it would be
difficult if not impossible to include them all in a voyage
charter, then time charter is a better idea.
This is typified by time charter on a 'trip' basis where one
could well see the business being quoted "Delivery Kobe,
trip across Far East/West Coast North America redelivery
Los Angeles - Vancouver Range expected duration 90 days"
Another regular reason for time chartering is when a liner
company seeks temporarily to supplement its own fleet in
order to cope with a seasonal increase in business.
Time charter is often regularly used by container lines to
cater for their 'feeder' business and there is a whole
segment of the market devoted to relatively small container
ships to fill the requirements of the feeder industry.
Law Relating to Carriage of
Goods
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In the commercial life of any country, the need for carrying goods from one
place to another cannot be over emphasised. Also, goods are to be moved
from one country to another. For these purposes, a contract of carriage is to
be entered into. The persons, organisations or associations which carry
goods are known as carriers. Goods may be carried by land (including
inland waterways), sea or air. Accordingly, the law relating to carrying of
goods is contained in the following enactments:
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1. In case of carriage of goods by land:
(i) The Carriers Act, 1865. (ii) The Railways Act, 1989.
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2. In case of carriage of goods by sea:
(i) The (Indian) Bills of Landing Act, 1856.
(ii) The Carriage of Goods by Sea Act, 1925.
(iii) The Merchant Shipping Act, 1958.
(iv) The Marine Insurance Act, 1963.
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3. In the case of carriage of goods by air:
The Carriage by Air Act, 1972.
The law relating to carrying of
goods is contained in the following
enactments:
 1. In case of carriage of goods by land:
(i) The Carriers Act, 1865. (ii) The Railways
Act, 1989.
 2. In case of carriage of goods by sea:
(i) The (Indian) Bills of Landing Act, 1856.
(ii) The Carriage of Goods by Sea Act, 1925.
(iii) The Merchant Shipping Act, 1958.
(iv) The Marine Insurance Act, 1963.
 3. In the case of carriage of goods by air:
The Carriage by Air Act, 1972
 Law of Carriage of Goods.mht
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practical annotation.flv