1、Chapter FiveChapter FiveCargo Cargo TransportationTransportationSEIB OF GDUFS2Learning objectives lAfter learning this chapter you will be able tounderstand the importance of ocean transportation and how liner freight is obtained know other modes of transportation in terms of their features,suitabil
2、ity and freight calculationbe aware of the importance of ocean bill of lading and its different typesdescribe a range of other transportation documents stipulate delivery clause in a sales contract SEIB OF GDUFS35.1 Ocean Transportationl Liner transportation l Charter transportationSEIB OF GDUFS45.1
3、.1 Liner transportation l Liner:definition a vessel with regular sailings and arrivals sailing on a fixed(regular)sailing route calling at fixed(regular)base ports adopting a comparatively fixed timetable charges at comparatively fixed freight rates freight inclusive of loading&unloading costl Liner
4、:types conference liners non-conference liners SEIB OF GDUFS55.1.1 Liner transportation l Liner Freight =basic freight rate+surcharges and additionall Calculation formula of liner freight Total Freight =Total Quantity Basic Freight Rate (1+Surcharge/Additional Rates)Basic Freight Rate:quoted by the
5、carrierSEIB OF GDUFS65.1.1 Liner transportation SEIB OF GDUFS75.1.1 Liner transportation l Surcharges Bunker Surcharge (bunker adjustment factor/BAF)Currency Surcharge (currency adjustment factor/CAF)Port Congestion Surcharge Transshipment Surcharge Port Surcharge SEIB OF GDUFS85.1.1 Liner transport
6、ation l Additional Heavy lift additional e.g.for cargo over 5 MT per unit Lengthy cargo additional e.g.for cargo over 9m per unit Bulky cargo additional e.g.for cargo over 6cbm per unit SEIB OF GDUFS95.1.1 Liner transportation l Freight calculation:Illustration Suppose:Company A exports 1000 cases o
7、f Commodity Y to London.The volume per case is 40cm x 30cm x 20cm,and the gross weight is 30kg per case.For Commodity Y,the freight rate basis is W/M,and the Freight Tariff(China London)is USD230,with a 10%port surcharge.How much is the total freight?SEIB OF GDUFS105.1.1 Liner transportation l Solut
8、ion:W:30kg=0.03 M/T M:0.4 x 0.3 x 0.2=0.024 m3 W M,“W”is the freight basis for the calculation of freight Total Freight=Total Quantity Basic Freight Rate (1+Surcharge/Additional Rates)=1000 cases 0.03 M/T USD230 (1+10%)=USD 7590 Answer:The total freight cost is USD7590.SEIB OF GDUFS115.1.2 Charter t
9、ransportationl Characteristics No fixed routes No fixed timetables Freight charged on the volume of cargo Suitable for cargo of a complete shipload(e.g.bulk cargo)l Types voyage charter:hired based on a particular voyage time charter:the hire of a ship for a period of time bare boat charter:the hire
10、 of the vessel itselfSEIB OF GDUFS125.1.2 Charter transportationlCharter party the contract between the ship-owner(carrier)and the charterer(shipper)Contentslthe contract partieslthe ship conditions:e.g.the ships name,age,nationality,tonnage lvoyage:e.g.ports of shipment&destinationlcharter freight
11、ldivision of loading&unloading costllay days,demurrage&dispatchlfreight payment termsl.SEIB OF GDUFS135.1.2 Charter transportationl Specifying loading&unloading costFour methods:I.&O.or Liner Terms/Gross Terms:In and Out F.I.:Free In F.O.:Free Out F.I.O.:Free In and Out Or F.I.O.S.T.:Free In and Out
12、,Stowed and TrimmedSEIB OF GDUFS145.1.2 Charter transportationl Lay time also called lay day,is the period of time allowed to the charterer for the loading or unloading of goods without additional charge l Methods of stipulation Days or running days or consecutive days Weather working days of 24 hou
13、rs A weather working day of 24 consecutive hours.SEIB OF GDUFS155.1.2 Charter transportationl Demurrage the amount of money paid as a penalty at an agreed rate by the charterer to compensate the ship-owner for his losses in case the charterer fails to have loading and unloading completed within the
14、lay timel Dispatch the amount of money paid as a bonus by the ship-owner to the charterer if they get loading and unloading done ahead of schedule.normally dispatch money=the demurrageSEIB OF GDUFS165.2 Other modes of transportationl Air Transportationl Rail Transportation&Road Transportation l Inte
15、rnational Multimodal Transportationl Container Transportation SEIB OF GDUFS175.2.1 Air Transportationl Types of air transportation scheduled airlines chartered carriers consolidated consignment air expressSEIB OF GDUFS185.2.1 Air Transportationl Air transportation freight rate general cargo rates mi
16、nimum charges class rates special commodity rates SEIB OF GDUFS195.2.1 Air Transportationl General cargo rates W:by weight(usu.1 kg as the unit)M:by measurement(usu.6000 cm3=1kg)W/M:by weight or by measurement,subject to the higher the heavier,the cheaper(unit freight)l e.g.45kg draws a linel minimu
17、m freight SEIB OF GDUFS205.2.1 Air Transportationl Air freight:illustration Company A wants to send one consignment to Sydney,Australia.The goods are packed in 50 cartons,each weighing 15kgs,with measurement as 50 x 40 x 30cm.The air freight rate is quoted at USD2.00/KG(W/M).How much would the total
18、 air freight cost?SEIB OF GDUFS215.2.1 Air Transportationl Solution W:15 kg M:(50 x 40 x 30)/6000=10kg W M,so W will be adopted for the calculation of air freight Total air freight =Total Quantity Basic Freight Rate =50 cartons15kg USD2.00 =USD1500 Answer:the total air freight cost is USD1500.SEIB O
19、F GDUFS225.2.2 Rail Transportation&Road Transportation l Rail transportation from a dispatching station to a destination station large capacity relatively high speed punctual and economical less prone to bad weather,but confined to railroads,therefore less flexibleSEIB OF GDUFS235.2.2 Rail Transport
20、ation&Road Transportation l Road transportation from an inland point to the sea port,airport and railway station high flexibility and distributive ability facilitating door-to-door service ideal for cargoes in small quantities,but limited in capacity vulnerable to high risk of pilferage and damage i
21、n transit relatively higher operation costSEIB OF GDUFS245.2.3 International Multimodal Transportation l only one multi-modal transportation operatorl only one carriage contractl one freight rate for the whole journey l high operating efficiencyl low operating cost l short time period for cargo move
22、mentl more and more popular in shipping practiceSEIB OF GDUFS255.2.4 Container Transportation l Definition a method of distributing merchandise in a unitized form adopting an inter-modal system providing a possible combination of sea,road and other modes of transportationl Features variety in servic
23、e involving one operator low risk of damage and pilferage substantial cost savings SEIB OF GDUFS265.2.4 Container Transportation l Types of containers dry cargo container refrigerated/reefer container tanker container car containerl Sizes of containers ISO/TC104（13 sizes of 13 series）Standard sizes(
24、most popular)l FEU 8 x 8 x 40 l TEU 8 x 8 x 20 SEIB OF GDUFS275.2.4 Container Transportation l Types of serviceAccording to place of shipment and destination CY to CY(Container Yard to Container Yard)CFS to CFS (Container Freight Station to Container Freight Station)DR to DR(Door to Door)DR to CFS(D
25、oor to Container Freight Station)CFS to DR(Container Freight Station to door)SEIB OF GDUFS285.2.4 Container Transportation According to the capacity needed FCL l for goods of full container loadl freight based on container capacity LCLl for cargo in small quantity(less than a container load)l Carrie
26、rs consolidating goods of different shippers to be delivered to the same destinationSEIB OF GDUFS295.2.4 Container Transportation Container freight FCL:determined mainly by l the capacity of the container l the place of shipment l Destination LCL:similar to those of the ocean liner service l W,M or
27、W/M l the distance of voyagel surcharges and additional if applicableSEIB OF GDUFS305.3 Transportation documentsl Bill of lading(B/L)Definitionl a document issued by an ocean carrier to a shipper with whom the carrier has entered into a contract for the carriage of goods.Functionl a receipt of cargo
28、 l an evidence of contract of carriage l a document title to the goodsSEIB OF GDUFS315.3 Transportation documentslContents on the face l Information concerning contracted parties,full particulars of the cargo,terms of carriage contract on the back l the general terms and conditionsSEIB OF GDUFS32Typ
29、es of Bill of Ladinglaccording to whether the goods have been loaded on board the carrying vessel shipped B/L l Issued after goods shipped on board the vessell Indicating date of shipment and name of the vessel received for Shipment B/LlGoods being received but not yet loaded lDifficult to anticipat
30、e date of arrival,so not favorable by buyerlWays of becoming Shipped B/LExchange for a Shipped B/L after goods are shipped on board Wording such as“Goods shipped on board S/S Red Star on May 10,2011”added and signed by the carrier or the agent on the received B/LSEIB OF GDUFS33Types of Bill of Ladin
31、gl according to the condition of the exterior packing of the received cargo clean B/L lProof that goods have been“shipped in apparent good order and condition”or“clean on board”or the likelFavored by buyers and banks for financial settlement unclean B/LlMarked as“unclean”,“foul”etc.e.g.2 cases missi
32、ng,3 cartons wet,1 case broken,cases inadequately packedlUsually unacceptable to buyers and banksSEIB OF GDUFS34Types of Bill of Ladingl according to the address of the consignee straight B/LlMade out to a designated consigneelOnly the named consignee is entitled to the cargolNot transferable open B
33、/LlNo name of a definite consigneelThe consignee box left blank or open,or bearing the wording“To bearer”lCan be transferred without endorsementlHigh risk unfavorable in international tradeSEIB OF GDUFS35Types of Bill of Lading Order B/L l Made out to the order of a named personl No definite consign
34、ee,“To order”“To order of the shipper”or“To order of the consignee”insteadl Negotiable and transferable，but need endorsement Special endorsement:signature of the endorser and name of the endorsee Blank endorsement:signature of the endorser but no name of the endorsee l Widely used in international t
35、radeSEIB OF GDUFS36Types of Bill of Ladingl according to whether transshipment is involved in transit direct B/L lport of shipment port of destinationlPreferred by the buyer transshipment B/L lport of shipment intermediate port port of destinationlInvolving additional charges,longer time and higher
36、risks in transit,therefore unfavorable to the buyerlAcceptable only when there is no direct serviceSEIB OF GDUFS37Types of Bill of Ladingl according to the perplexity or simplicity of the content long form B/L l detailed shipping contract clause printed on both the face and the back Short form B/L l
37、 simplified and abbreviated l no detailed shipping contract clause esp.on the backl not suitable for evidence of contract of carriageSEIB OF GDUFS38Types of Bill of Ladingl according to the payment condition of freight freight prepaid B/L lIssued only after freight having been paid lNormally suitabl
38、e for Sales Contracts on trade terms(e.g.CFR/CIF)where the seller is obliged to arrange contract of carriage and pay the freight.freight to be collected B/L lWording such as“Freight payable at destination”or“Freight to collect at destination”is indicatedlNormally suitable for Sales Contracts(e.g.FOB
39、)where contract of carriage is arranged by the seller on behalf of the buyer SEIB OF GDUFS39Types of Bill of Ladingl according to the validity original B/L lValid only after being singed by the shipping company or its agentlShowing“Original”and the number of the signed originals lNormally made out i
40、n a set of three originalslAn evidence showing the ownership of goodslPresented for taking the delivery of the goods at destination,one is used,the others becomes void automatically Copy B/LlBearing“Copy”“Duplicate”or“Non-negotiable”lNormally only used for reference or for recordslmade out in severa
41、l to be a full set of together with the originalsSEIB OF GDUFS40Types of Bill of Ladingl Stale B/L presented later than the latest presentation date specified in the L/C or presented later than the goods arrival at the destination UCP 600:the B/L shall be presented within 21 days after issuance,unle
42、ss otherwise stipulated in the credit necessary to add a clause that a“Stale B/L is acceptable”in the contract for short voyagesSEIB OF GDUFS41Types of Bill of Ladingl Anti-dated B/L the shipment date shown on the bill being earlier than the actual one issued at the request of the shipper to meet th
43、e time of shipment stipulated in the credit for the avoidance of a non-payment constitute a fraud SEIB OF GDUFS42Types of Bill of Ladingl Advanced B/L issued before actual loading of the goods is completed or even before the commencement of the actual loading operation issued when the time of shipme
44、nt stipulated in the L/C is almost due but the actual loading of the goods is not yet completed or the goods are not ready for shipment.issued at the request of the seller for the avoidance of a non-payment constitute a fraud SEIB OF GDUFS43Types of Bill of Ladingl On deck B/L indicating that the go
45、ods are stowed and shipped on deck carrier being responsible for the damage&losses usu.unacceptable to buyer and bank unless the credit stipulates otherwise special arrangement for insurance is needed if applicableSEIB OF GDUFS445.3 Transportation documentsl Other types of transportation documents S
46、ea Waybill Air Waybill Consignment Note(Rail Waybill)Road Consignment Note Multimodal Transportation Document(MTD)SEIB OF GDUFS455.4 Shipment clause in the sales contractltime of shipment vs.time of delivery for shipment contracts time of shipment=time of delivery for all arrival contracts time of s
47、hipment time of deliverySEIB OF GDUFS465.4 Shipment clause in contractl Stipulating methods specifying a fixed period of time or a deadlinel Shipment is to be made during January/February/March 2011l Shipment not later than 31st July,2011 setting a time period upon receipt of paymentl Shipment is to
48、 be made within 30 days after receipt of the L/C.The relevant L/C must reach the seller not later than 30th June,2011.SEIB OF GDUFS475.4 Shipment clause in contractl Issues concerning time of shipment Sufficiency in terms of l availability of goodsl availability of shipping space l Payment Normally
49、L/C should arrive at least 15 days before the time of shipment to allow time for examining and modifying L/C Flexibility:avoid“shipment on May 15th”Clarityl avoid wording like“Immediate shipment”,“Prompt shipment”,“Shipment as soon as possible”etc.SEIB OF GDUFS485.4 Shipment clause in contractl Issu
50、es concerning port of shipment and destination:close to the origin of the goods considering port facilities,regulations,specific transportation conditions,charges and possible sanctions.definite and specific being aware of different ports in the same nameSEIB OF GDUFS495.4 Shipment clause in contrac
