Transcript CHAPTER I INTRODUCTION Classical Theories of International

CHAPTER VII
INTERNATIONAL TRANSPORTATION
 Types of International Transportation
 Types of International Cargo
 Ocean Freight Costs
 Ocean Bill of Lading
 Non-Negotiable Sea Waybill
 Multimodal Transport Document
 Letter of Credit and Ocean Bill of Lading
 Parties Responsible for Shipping Arrangements
 Arrival Notice
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Truck and Rail
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Primary carriers among countries in the
same continent such as the USA,
Mexico, & Canada. EU countries
Containerized piggyback service on rail
Combined transportation of ocean and
inland to domestic final destination
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Air Transportation
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Most expensive but fastest mode of
transportation
High valued goods
Fragile goods
Perishable goods
Shorter transit time: Speedy delivery
Less burden on inventory: Just-in-time
delivery
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Air Transportation
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Air freight
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By weight or volume
Steep progressive rate structure
Depending on commodities
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Air Transportation
 Air freight carriers
 Airlines:
 Own or lease air planes
 Operate air planes
 Air freight consolidators
• Air freight wholesalers for less than
container load (LCL)
• Small shippers pay the consolidator less
than they would pay the airline themselves
• More waiting time for consolidation
• Freight forwarding service by freight
consolidator
• Export customs clearance service by freight
consolidator
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Air Transportation
 Air freight carriers
 International couriers
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Documents and small packages
House to house service
One to three day guaranteed delivery
DHL, UPS, Federal Express, Emery, US
Postal Service
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Ocean Transportation
Least expensive transportation mode
Faster, more fuel-efficient vessels
 Shipping lines
 Own or lease the cargo vessels
 Operate the cargo vessels
 Belongs to Conference or Non-conference
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Ocean Transportation
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NVOCC's (Non-Vessel Operating Common
Carriers)
 Do not own or operate the vessels
 Freight consolidators and wholesalers: Less
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freight than shipping lines for small shipments
Specialized in LCL cargoes-- Small shipments
in a container without expensive export crating
Have a warehouse or terminal for receiving
and consolidating small shipments
Have own rate tariffs filed with the Federal
Maritime Commission
Issue a negotiable ocean bill of lading
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General Cargo
Packaged cargo transported not in
container
 Fiberboard (Cardboard) box, crate(wooden
box), fiber drum, steel drum, wooden
barrel, bag or sack, and bale
 Loaded in the cargo holds
 Refrigerated holds for frozen meat or fresh
fruit
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Bulk Cargo
Cargo without package
 Dry bulk cargo: Coal, grain, ore, gravel loaded
into the holds by cranes or clamshells or
conveyor system
 Liquid bulk cargo: Gasoline, edible oil, liquidified
natural gas (LNG) or liquidified petroleum gas
(LPG) loaded into the tank by piping system
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Container Cargo
Packaged cargo transported in a container
 House to house service
 Shipper's load and count notation on the
B/L
 Unloaded to Container Freight Station
(CFS) in the case of more than one cargo
owner and Container Yard (CY) in the case
of one cargo owner
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Container Cargo
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Container size (Outside dimension)
 Standard:
• 20 Footer: W.8' x H.8' 6" x L.20'
• 1,172 cubic feet (33.2 cubic meters)
• 24 M/T (Tare 2.23 M/T & Cargo 21.77M/T)
• 40 Footer: W.8' x H.8' 6" x L.40'
• 45 Footer, 48 Footer, and 53 Footer
 High Cube:
• 40 Footer: W.8' x H.9' 6" x L.40'
• 45 Footer: W.8' x H.9' 6" x L.45'
• 48 Footer, 53 Footer
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Container Cargo
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Specialized container
 Tanker container
 Reefer container
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Advantages of containerization
 No need for expensive crating
 Prevents theft at the dock
 Fast loading & unloading leading to savings on
both time and money
 Savings on freight through consolidation of
small shipments
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Ocean Freight Cost
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Basis Ocean Freight (Pure freight): Rate
tariff published & filed with the FMC
Terminal Handling Charges (THC): Ancillary
Charges for moving cargoes on the pier, loading
or unloading. Separately charged since 1991
 Surcharges: Additional charges or add-on
costs
• Currency Adjustment Factor (CAF): When US
dollar drops, CAF goes up.
• Fuel Adjustment Factor (FAF):Bunker charge.
When price of bunker c fuel increases, FAF
goes up
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Ocean Bill of Lading
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Negotiable Bill of Lading: Order Bill of
Lading
• Made out "To order" or To the order of ----."
• Cargoes are released only on presentation of
an original bill of lading duly endorsed by the
shipper or consignee named in the bill of
lading
 Non-Negotiable Bill of Lading: Straight B/L
• Consigned to the importer. Cargoes are
released only to the consignee. Endorsement
not needed
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Non-Negotiable Sea Waybill &
Air Waybill
 Cargoes are released only to the
consignee on the Sea Waybill without
surrendering an original Sea Waybill.
 Often used
 When consignee, or importer does not need to
sell the goods during transit
 Specially convenient in the case of a very
short transit time.
 Processing shipping documents through
exporter’s bank and importer’s bank take
several days
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Multimodal Transport Document
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Multimodal (Through, Combined or
Intermodal) Bill of Lading
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Covers two or more transportation modes:
truck or rail – vessel-truck or rail
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Covers all transportation from the place
dispatched, taken in charge or shipped on
board to the place of final destination
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Letter of Credit and Ocean Bill of Lading
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Ocean Bill of Lading must conform to
conditions of the Letter of Credit (UCP 600)
To be accepted by banks, a bill of lading
must appear to
 indicate the name of the carrier and be
signed by the carrier or its agent, or
master or its agent
 indicate that goods have been shipped
on board on a named vessel at the port
of loading stated in the Letter of Credit
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by either pre-printed wording or an on
board notation with the date of shipment
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Letter of Credit and Ocean Bill of Lading
 Shipment date: the date of B/L issuance or
On Board notation date
 If the bill of lading contains the
indication “intended vessel,” an on
board notation is required
 indicating the date of shipment and the
name of actual vessel.
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Letter of Credit and Ocean Bill of Lading
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To be accepted by banks, a bill of lading
must appear to (continued)
 indicate shipment from the port of
loading to the port of discharge stated
in the Letter of Credit
 be the sole original or the full sets of
originals as so issued
 contain the terms & conditions of
carriage
 contain no indication subject to a
charter party
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Letter of Credit and Ocean Bill of Lading
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If the Letter of Credit calls for a
multimodal bill of lading, it must appear
to
 indicate that goods have been
dispatched, taken in charge or
shipped on board at the place stated
in the Letter of Credit with the date
dispatched, taken in charge or
shipped on board
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Letter of Credit and Ocean Bill of Lading
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A multimodal bill of lading (continued)
It must also appear to
 indicate the place of dispatch, taking in
charge or shipment and the place of
final destination stated in the Letter of
Credit, even if
• it states, in addition, a different place of
dispatch, taking in charge or shipment or
final destination or
• it contains the indication “intended” as to
the vessel, port of loading or port of
discharge
 meet other terms & conditions of a
standard bill of lading
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Letter of Credit and Ocean Bill of Lading
Banks accept a bill of lading which
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bears a clause of “shipper’s load and count”
or “said by shipper to contain” in container
shipment
indicates as the shipper or consignor of the
goods a party other than the beneficiary of
the Credit (3rd party B/L)
indicates that transshipment will or may take
place if cargo shipped in Container, Trailer or
LASH (Lighter Aboard Ship) barge and
covered by one B/L even if the L/C prohibits
transshipment
bears a reference to charges additional to the
freight.
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Letter of Credit and Ocean Bill of Lading
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Banks reject a bill of lading which
 states that the goods are or will be
loaded on deck
 indicates a defective condition of the
goods or the package: Not clean B/L
 shows a transshipment, if it is
prohibited by the Credit, unless it is a
multimodal transport document or the
cargo is shipped in Container, Trailer
or LASH
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Letter of Credit and Ocean Bill of Lading
Common discrepancies in Bill of Lading
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Less than a full set of original Bill of Lading
presented
Changes not initialed by the signor of the B/L
Not properly endorsed
No "On Board" notation indicating the date of
shipment and the name of the actual vessel,
if the B/L contains the indication “intended
vessel.”
Date of the B/L later than latest shipment
date in the L/C
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Letter of Credit and Ocean Bill of Lading
Common discrepancies in Bill of Lading
(continued)
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Stale B/L not presented to the negotiating
bank within specified time after shipment
stipulated in the L/C (Presentation
date/period)
Different markings from L/C
Different description of the goods from L/C in
general terms
Not clean (foul) B/L with a notation of
defective goods or packages
On-deck shipments
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Parties Responsible for Shipping
Arrangements
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Under a CFR or CIF Transaction
 Exporter is responsible for shipping
arrangement, loading, paying freight
or freight & marine insurance premium
 Exporter may ship by the least
expensive vessel even though it is the
slowest. Long voyage is a waste of
time and money.
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Parties Responsible for Shipping
Arrangements
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Under FOB Transaction
 Importer is responsible for shipping
arrangement, paying ocean freight and
marine insurance premium
 Exporter responsible for loading the
cargo on the carrier
 Exporter may ship by the most
convenient vessel even though its
freight is higher than other vessels.
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Parties Responsible for Shipping
Arrangements
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First, import on a CFR or CIF basis
Second, if you can get a better freight rate, then
change to the FOB
FOB ties up line of credit less than CFR or CIF,
specially when the freight portion is very high.
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Arrival Notice
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Carrier unloads Containers with one cargo
owner to C.Y. (Container Yard) and
Containers with more than one owner to
C.F.S. (Container Freight Station)
Arrival Notice to “Notify Party” in the B/L
indicating ETA and wharf demurrage
starting date, generally
 8th day after vessel arrival for CY cargos
 13th day for CFS cargos excluding
weekend & holidays
 Much shorter free period for reefer
containers
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