Shipping Course

BY ALGHANIM GROUP OF SHIPPING & TRANSPORT KUWAIT TEL: 2421701 FAX:2428678 Web Site : www.alghanimgroup.com COPY RIGHT RESERVED

OBJECTIVE This course has been designed to provide participants with overview of shipping industry. It will also provide participants with good understanding of elements of commercial shipping to enhance their career prospect

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SHIPPING TERMINOLGY SEA TRANSPORT MARITIME GEOGRAPHY CARGO VESSEL TYPES VESSEL SIZE GROUPS THE LINERS LINER CONFERENCES CHARTERING SHIPPING DOCUMENTATION BILL OF LADING MULTIMODAL TRANSPORT MARINE INSURANCE & GENERAL AVERAGE

S SHIPPING G TERMINOLGY O G

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Act of God: Accidents of a nature beyond human control such as flood, lightning or hurricane usually quoted as 'force majeure'. q j Agency Fee: Fee payable by a ship-owner or ship operator to a port agent. Agent: A person or organization authorized to act for or on behalf of another person or organization. In the shipping field, an Agent is a corporate body with, which there is an agreement to perform particular functions on behalf of them at an agreed payment. An Agent is either a part of a shipping corporation or an independent body Average: In marine insurance: a loss or damage to or in respect of goods or equipment. Average Adjusters: In general average affairs average adjusters are entrusted with the task of apportioning the loss and expenditure over the parties interested in the maritime venture and to p are to be regarded g as average g or general g average. g determine which expenses

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Ballast Materials solely carried to improve the trim and the stability of the vessel. In vessels usually water is carried as ballast in tanks, tanks specially designed for that purpose Bill of Lading (B/L, plural: Bs/L) A document which evidences a contract of carriage by sea. Break Bulk Cargo General cargo conventionally stowed as opposed to unitized, containerized and Roll On-Roll Off cargo. Bulk Cargo g Unpacked homogeneous cargo poured loose in a certain space of a vessel or container e.g. oil and grain. Bulk Carrier Si l deck Single d k vessell designed d i d to carry homogeneous h unpacked k d dry d cargoes such h as grain, i iron ore and coal.

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CAF: Currency Adjustment Factor Cargo: Goods transported or to be transported, all goods carried on a ship covered by a B/L. Carrier: The party undertaking transport of goods from one point to another Carrier Haulage: The h inland l d transport service, which h h is performed f d by b the h sea-carrier under d the h terms and dc conditions of the tariff and of the relevant transport document. Certificate of Classification: A certificate, issued by the classification society and stating the class under which a vessel is registered.

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Certificate of Origin A certificate, showing the country of original production of goods. Frequently used by customs in ascertaining duties under preferential tariff programs or in connection with regulating imports from specific sources. Charter Party A contract in which the ship-owner agrees to place his vessel or a part of it at the disposal of a third party, party the charterer charterer, for the carriage of goods for which he receives a freight per ton cargo, or to let his vessel for a definite period or trip for which a hire is paid. Charterer: The legal person who has signed a charter party with the owner of a vessel or an aircraft and thus hires or leases a vessel or an aircraft or a part of the capacity thereof. Claim A ccharge a ge made ade aga against st a ca carrier e for o loss, oss, damage da age o or de delay ay

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Classification Society An Organisation, whose main function is to carry out surveys of vessels, its purpose being to set and maintain standards of construction and upkeep for vessels, their engines and their safety equipment. A classification society also inspects and approves the construction of P&O Nedlloyd containers. Clean Bill of Lading A Bill of Lading which does not contain any qualification about the apparent order and condition of the goods to be transporte Consignee The party such as mentioned in the transport document by whom the goods, cargo or containers are to be received. Consignment A separate identifiable number of goods (available to be) transported from one consignor to one consignee via one or more than one modes of transport and specified in one single transport document.

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Consignor: Shipper Consolidate To group and stuff several shipments together in one container. Consolidated Container Container stuffed with several shipments (consignments) from different shippers for delivery to one or more consignees. consignees Container Depot Storage area for empty containers. Container Freight Station (CFS) A facility f l at which h h (export) ( ) LCL C cargo is received d from f merchants h for f loading l d (stuffing) ( ff ) into containers or at which (import) LCL cargo is unloaded (stripped) from containers and delivered to merchants.

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Container Terminal Place where loaded and/or empty containers are loaded or discharged into or from a means p of transport. Container Yard (CY) A facility at which FCL traffic and empty containers are received from or delivered to the Merchant by or on behalf of the Carrier. Note: Often this yard is used to receive goods on behalf of the merchant and pack these in containers for FCL traffic. Currency Adjustment Factor (CAF) Adjustment applied by shipping lines or liner conferences on freight rates to offset losses or gains for carriers resulting from fluctuations in exchange rates of tariff currencies. currencies

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Damaged Cargo Report Written statement concerning established damages to cargo and/or equipment. Dangerous Goods Goods are to be considered dangerous if the transport of such goods might cause harm, risk, peril, or other evil to people, environment, equipment or any property whatsoever. Dead freight Slots paid for but not used. Deep Tank Tank fitted and equipped for the carriage of vegetable oil (e.g. palm oil and coconut oil) and other liquids in bulk. bulk By means of oil-tight oil tight bulkheads and/or decks it is possible to carry different kinds of liquid in adjacent tanks. Deep tanks may be equipped with heating facilities in order to carry and discharge oil at the required temperature

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Delivery Order

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A carrier carrier'ss delivery order (negotiable document) is used for splitting a B/L (after surrender) in different parcels and have the same function as a B/L. Demurrage

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A variable fee charged to carriers and/or customers for the use of Unit Load Devices (ULD's) owned by a carrier beyond the free time of shipment shipment. Additional charge imposed for exceeding the free time, which is included in the rate and allowed for the use of certain equipment at the terminal.

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Detention Charge Charges levied on usage of equipment exceeding free time period as stipulated in the pertinent inland rules and conditions Direct Delivery Direct discharge from vessel onto railroad car, road vehicle or barge with the purpose of immediate transport from the port area (usually occurs when ports lack adequate storage space or when ports are not equipped to handle a specific cargo). Disbursement Sums paid out by a ship's agent at a port and recovered from the carrier Double bottom Construction of the bottom of a ship whereby a generally watertight space is formed between the shell and an inner bottom placed at a sufficient height above the baseline to allow access and to reduce risks due to grounding or colliding. Draft The draft of a vessel is the vertical distance between the waterline and the underside of the keel of the vessel. During the construction of a vessel the marks showing the draft are welded on each side of the vessel near the stem, the stern and amidships. Dunnage Stowage material, mainly timber or board, used to prevent damage to cargo during carriage.

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Endorsement The transfer of the right to obtain delivery of the goods of the carrier by means of the g signature g on the reverse side of a bill of lading. g If the name of the new consignee's consignee (transferee) is not stated, the endorsement is an open one which means that every holder of the document is entitled to obtain delivery of the goods. Equipment Material resources necessary to facilitate the transport and handling of cargo. Transport equipment does under the given circumstances not have the ability to move by its own propulsion (e.g. sea container, trailer, unit load device, pallet). Estimated Time of Arrival (ETA) The expected date and time of arrival in a certain (airport. (airport Estimated Time of Departure (ETD) The expected date and time when a certain (airport is left. Export po t License ce se Document granting permission to export as detailed within a specified time

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FTL Full Truck Load, an indication for a truck transporting cargo directly from supplier to receiver. Feeder A vessel normally used for local or coastal transport (for carriage of cargo and/or containers) to and from ports not scheduled to be called by the main (ocean) vessel, directly connecting these ports to the main (ocean) vessel. First Carrier The carrier who actually performs the first part of the air transport (air cargo). Flat Rack Container A container with two end walls and open sides.

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Force Majeure Circumstance which is beyond the control of one of the parties to a contract and which y according g to the terms and conditions, relieve that party p y of liabilityy for failing g to may, execute the contract. Free In Liner Out (FILO) Transport condition denoting that the freight rate is inclusive of the sea carriage and the cost of discharging, the latter as per the custom of the port. It excludes the cost of loading and, if appropriate, stowage and lashing. Free In and Out (FIO) Transport condition denoting that the freight rate excludes the costs of loading and discharging and, if appropriate, stowage and lashing.

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Freight All Kinds (FAK) Single freight which is charged irrespective of the commodity.

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Freight Invoice An itemised list of goods shipped and services rendered stating fees and charges.

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Freight Manifest A (cargo) manifest including all freight particulars.

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Freight Prepaid Freight and charges to be paid by the consignor.

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Freight Ton A unit for freighting cargo according to weight and/or cubic measurement. measurement Full Container Load (FCL) A general reference for identifying container loads of cargo loaded and/or discharged at merchants' premises. Fumigation To expose certain spaces to the action of fumes in order to disinfect or kill vermin. For containers done in line with national legislation.

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Gantry Crane A crane or hoisting machine mounted on a frame or structure spanning an intervening space, which often travels on rails. Garments On Hangers Clothes in containers on hangers and hung from rails during transit, reducing the handling required for the garments. General Cargo g Cargo, consisting of goods, unpacked or packed, for example in cartons, crates, bags or bales, often palletized. General cargo can be shipped either in break-bulk or containerized. General Purpose Container A container used for the carriage of general cargo without any special requirements for the transport and or the conditioning of the goods. Gross Tonnage (GRT) The measure of the overall size of a vessel determined in accordance with the provisions of the international convention on measurement of vessels usually expressed in register ton. Gross Weight The weight of a shipment including materials necessary for blocking etc. etc (air cargo). cargo) Gross Weight of Container Total weight of container including cargo (in kilograms).

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Hague Rules International convention for the unification of certain rules, relating to Bills of Lading (1924). These Rules include the description of responsibilities of Shipping Lines Hague Visby Rules Hague-Visby Set of rules, published in 1968, amending the Hague Rules. Hamburg Rules United Nations Convention on the carriage of goods by sea of 1978 adopted in 1992. Haulage The inland carriage of cargo or containers between named locations/ points. Heavy Lift Single commodity exceeding the capacity of normal loading equipment and requiring special equipment and rigging methods for handling.

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Hinterland The inland area served by a certain port.

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House to House Transport The transport of cargo from the premises of the consignor to the premises of the consignee consignee.

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Hull Outer shell of a vessel, made of steel plates or other suitable material to keep water outside the vessel.

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Insurance Certificate Proof of an insurance contract Intermodal Transport The movement of goods (containers) in one and the same loading unit or vehicle which uses successively several modes of transport without handling of the goods themselves in changing modes. International Maritime Organization (IMO) An United Nations agency concerned with safety at sea. Its work includes codes and rules relating to tonnage measurement of vessels, load lines, pollution and the carriage of dangerous goods. Its previous name was the Inter-Governmental Maritime Consultative Organization (IMCO).

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Jetty A mole or breakwater, breakwater running out into the sea to protect harbors or coasts. It is sometimes used as a landing-pier.

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Knot Unit of measurement for the speed p (of ( a vessel)) equal q to a nautical mile (= 1,852 meters) per hour.

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Latitude The angular distance of a position on its meridian north or south from the equator, equator measured in degrees (('a a vessel at 25 degrees north latitude'). Less than Container Load (LCL) ( ) For operational purposes a LCL (Less than full container load) container is considered a container in which multiple consignments or parts thereof are shipped. Letter of Indemnity Written statement in which one party undertakes to compensate another for the costs and consequences of carrying out a certain act. The issue of a letter of indemnity is sometimes used for cases when a shipper likes receiving a clean Bill of Lading while a carrier is not allowed to do so. Within P&O Nedlloyd the issue of letters of indemnity are contrary to the company's instructions.

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Lighterage The carriage of goods within a port area by a barge, e.g. from a vessel to a quay. Lightweight Weight of an empty vessel including equipment and outfit, spare parts required by the regulatory bodies, machinery in working condition and liquids in the systems, but excluding liquids in the storage tanks, stores and crew. Liner In Free Out (LIFO) ( ) Transport condition denoting that the freight rate is inclusive of the sea carriage and the cost of loading, the latter as per the custom of the port. It excludes the cost of discharging. Liner Terms Condition of carriage denoting that costs for loading and unloading are borne by the carrier subject the custom of the port concerned. Lloyd's Register of Shipping British classification society. Longitude The a angular gu a distance d a of o a position po o on o the equator qua o east a or o west of o the standard a da d Greenwich meridian d a up to o 180o east or west.

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Manifest Document, which lists the specifications of goods, loaded in a means of transport or equipment for transportation purposes. As a rule cargo the agents in the place of loading draw up manifests. Note: For a shipping company a manifest represents a cumulation of Bills of Lading for official and administrative purposes. purposes Mate's Receipt A document signed g byy the chief officer of a vessel acknowledging g g the receipt p of a certain consignment on board of that vessel. On this document, remarks can be made as to the order and condition of the consignment. Multimodal M l i d l Transport T The carriage of goods (containers) by at least two different modes of transport.

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Negotiable In terms of documents, 'negotiable' means that e.g. a Bill of Lading is handed over/transferred in the right manner (viz. (viz proper endorsement) to another person either endorsed in blank or endorsed to a person and that person acquires, by this transfer certain rights vis-?is the goods e.g. is entitled to take possession of the goods. Non Vessel Operating p g Common Carrier ((NVOCC)) A party who undertakes to carry goods and issues in his own name a Bill of Lading for such carriage, without having the availability of any own means of transport. Notice of Readiness Written document or telex issued by the master of a vessel to the charterer's advising them the moment when a vessel is ready to load or discharge.

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Owner The legal g owner of cargo, g , equipment q p or means of transport. p

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P & I Club: A mutual association of ship-owners who provide protection against liabilities by means of contributions Particular Average: A fortuitous partial loss to the subject matter insured, proximately caused by an insured peril but which is not a general average loss. Particular average only relates to damage and/or expenses which are exclusively borne by the owners of a vessel which has sustained damage as a result of e.g. e g heavy weather or by the owners of the cargo cargo, which has been damaged in transit. Port of Discharge The port where the cargo is actually discharged (unloaded) from the sea (ocean) going vessel. vessel Port of Loading The port where the cargo is actually loaded on board the sea (ocean) going vessel. Pre-carriage The carriage of goods (containers) by any mode of transport from the place of receipt to the port (place) of loading into the ocean vessel (main means of transport).

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Quotation Amount stated as the p price according g to tariff for certain services to be provided or issued to a customer with specification on conditions for carriage.

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Rate The price of a transport service. Rebate That part of a transport charge which the carrier agrees to return. Roll-on Roll-off (RoRo) System of loading and discharging a vessel whereby the cargo is driven on and off by means of a ramp.

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Reefer Container A thermal container with refrigerating appliances (mechanical compressor unit, absorption unit etc.) to control the temperature of cargo. Register Ton The unit of measurement for the internal capacity of a vessel whereby one register ton equals 100 cubic feet (2.83 cubic meter). The gross (bruto) tonnage comprises all spaces below the main (tonnage) deck and the enclosed spaces above the main (tonnage) deck less exempted spaces. The net tonnage g consists of the gross g tonnage g less exemptions p like ballast tanks, engine room, living quarters etc. The register tonnage is mentioned on the tonnage certificate. Revenue A Amounts off income i stemming i from f the h provision i i off transport services. i

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Salvage The saving g or rescue of a vessel and/or / the cargo g from loss and/or / damage at sea. Schedule A timetable including arrival/departure times of ocean- and feeder vessels and also inland transportation. It refers to named ports in a specific p voyage y g (journey) (j y) within a certain trade indicating g the voyage y g number's). In general: The plan of times for starting and/or finishing activities.

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Seaworthiness Fitness of a vessel to travel in open p sea mostlyy related to a particular p voyage with a particular cargo. Ship s Protest Ship's Statement of the master of a vessel before (in the presence of) competent authorities, concerning exceptional events which occurred during g a voyage. y g

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Shipment A separately identifiable collection of goods to be carried. Shipper The merchant (person) by whom, in whose name or on whose behalf a contract of carriage of goods has been concluded with a carrier or any party by whom, in whose name or on whose behalf the g goods are actuallyy delivered to the carrier in relation to the contract of carriage. Stowage The placing and securing of cargo or containers on board a vessel or an aircraft or of cargo i a container. in i Stowage Plan A plan indicating the locations on the vessel of all the consignments for the benefit of stevedores and vessel's officers.

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Tare Weight of Container Mass of an empty container including all fittings and appliances associated with that particular type p yp of container on its normal operating p g condition Tariff The schedule of rates, charges and related transport conditions. Twenty Foot Equivalent Unit (TEU) U it off measurementt equivalent Unit i l t tto one ttwenty t ffoott container t i Time Charter A contract whereby a vessel is let to a charterer for a stipulated period of time or voyage, for a remuneration known as hire, generally a monthly rate per ton deadweight or a daily rate. The charterer is free to employ the vessel as he thinks fit within the terms as agreed, but the ship-owner continues to manage his own vessel through the master and crew who remain his servants. Time Sheet Statement, drawn-up by the ship's agent at the loading and discharging ports, which details the time worked in loading and discharging the cargo together with the amount of laytime used. Tweendeck Cargo carrying surface below the main deck dividing a hold horizontally in an upper and a lower compartment.

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Ultra Large Crude Carrier (ULCC) A vessel designed g for the carriage g of liquid q cargo g in bulk with a loading g capacity from 250.000 till 500.000 DWT.

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Very Large Crude Carrier (VLCC) A vessel designed for the carriage of liquid cargo in bulk with a loading capacity from 50.000 50 000 till 250.000 250 000 DWT. DWT Vessel A floating structure designed for the transport of cargo and/or passengers Voyage A journey by sea from one port or country to another one or, in case of a round trip, to the same port. Voyage Charter A contract under which the ship ship-owner owner agrees to carry an agreed quantity of cargo from a specified port or ports to another port or ports for a remuneration called freight, which is calculated according to the quantity of cargo loaded, or sometimes at a lump sum freight. Voyage Number Reference number assigned by the carrier or his agent to the voyage of the vessel.

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War Risk Perils of war or warlike operations, such as capture, seizure, arrests, restraints of kings, princesses and people people, hostilities hostilities, civil war, war mines, mines torpedo's. torpedo's War risks are not covered under a policy for marine perils and must therefore be covered under a separate policy for war risks. Waybill bill Non-negotiable document evidencing the contract for the transport of cargo. Wharf A place for berthing vessels to facilitate loading and discharging of cargo.

SEA TRANSPORT

SEA TRANSPORT „

Definition: Transport goods and commodities by ship ship. Goods is measured in tons but transport is measured by tons / miles (the weight carried multiplied by the length of the voyage). The value of a commodity is not its price or its cost but its utility , can be invariable increased by transport for example, coal which is underground has no value , but ounce transported to a person freezing in winter it can have considerable value

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Characteristic Of Sea Transport: 1. Sea transport is slow – ships carrying raw material (tramp) move at around 13 13-14 14 knotsknots container ships speed 18 18-25 25 knots. knots 2. Sea transport is cheap because e it can take advantage of economics of scale, large ships can reduce the cost per unit carried 3. Sea transport connect land which separated by water

SEA TRANSPORT „

Pattern of seaborne trade: World seaborne trade increased strongly in 2004,reaching 6.76 billion tons of loaded goods. The annual growth rate, calculated with the provisional data available for year 2004, reached 4.3 per cent. Total maritime activities measured in ton-miles l increased d to 27,635 billion b ll ton-miles, l compared d with25,844 h billion b ll ton-miles in 2003. The world merchant fleet expanded to 895.8 million deadweight tons (dwt) at the beginning of 2005, a 4.5 per cent increase.

Development of international seaborne trade, selected years

Million of Tons

International seaborne trade for selected years

Million of Tons loaded

SEA TRANSPORT „

Shipping markets: World seaborne trade in cargo g (things ( g to be moved)) splits p into three markets. 1.The Liner Market: This deals with general cargo which is usually relatively expensive compared with “bulks” and the liner ships run on scheduled routes with fixed tariff and condition 2.The Dry Cargo Tramp Market: Tramps, in shipping terms relates to the way the ship tramps from place to place where the market drawn it .Tramps carry mainly ship load of bulk materials , the main commodities or Grain, Coal etc… . The freight rates and conditions are negotiable as per Charter parties. 3.The Tanker Market: Tankers are specialized trumps being designed to carry liquids in bulk. The oil trade routes are limited. This market contains 2 main groups ,Large tankers carry the crude oil and smaller carry the refined products .

SEA TRANSPORT (Billions of ton-miles)

C GO VESSEL CARGO SS TYPES S

CARGO VESSEL TYPES „

Until the 20th Century, ships generally, were all-purpose cargo vessels, with very little specialisation (with the exception of tank vessels which first appeared in the 1880s). All cargoes were carried in general purpose holds, or on deck. Modern commercial vessels are designed and built to carry specific cargo types. The names we give to the various vessel types reflect the type of cargo for which they are designed and built to carry. For example, a "bulk carrier" is specially designed to carry cargo "in bulk" and the hatch cover and hold design is focused on the carriage of raw dry cargo goods, such as coal, grain, iron ore and bauxite, which are simply poured into cavernous holds then grabbed and bulldozed out at the port of discharge. Tankers carry liquid cargo in tanks the most obvious example is the well-known oil tanker, but even within this generic type type, each tanker is specially designed to carry a particular type of liquid cargo, cargo not just crude oil. Other liquid cargoes would include petroleum products, chemicals and yes, even wine! 2 recent hybrid designs of tanker carry Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG), both of which need to be kept under pressure and at low temperature to maintain the cargo in a liquefied state. A further hybrid is the Floating Production, Storage and Offloading unit (FPSO), which is usually a large tanker (maybe a converted old VLCC, but now brand new specialized FPSOs are being built) specifically designed f th for the oilil industry, i d t working ki offshore ff h where h an onshore h facility f ilit to t process and d store t offshore ff h oilil is i deemed d d impractical. Container ships (a revolutionary idea in the past 50 years) carry their cargo in standard size containers, normally either 20 ft units (TEU) or 40 ft units (FEU), for speed of loading and discharge. A modern container ship can discharge a cargo in as many hours as it used to take in the equivalent number of days. This "brainchild" of Malcolm McLean, (a former New Jersey truck driver) found no interest among ship owners in i the h 1940s 1940 and d 1950s, 1950 so he h built b il his hi own to prove the h concept. Within Wi hi 10 years, the h container i ship revolution had started. From just a few hundred containers, modern ships can carry many thousands.

CARGO VESSEL TYPES

BULK CARRIERS

BULK CARRIERS „

Bulk carriers ("bulkers"), are the great work horses of the shipping world, world carrying raw dry cargoes in huge cavernous holds, such as coal, iron ore, grain, sulphur, scrap metal. Currently l there h is a huge h demand d d for f these h vessels, driven by the extraordinary expansion of the Chinese economy. economy Imports of iron ore into China have boosted the earnings of bulk carrier owners as freight rates have h gone through h h the h rooff into uncharted territory.

TANKER

TANKER „

Tankers are designed to carry liquid cargoes (not just oil) although the carriage of crude oil has brought the tanker unwelcome attention and largely unjustified criticism. Oil tankers come in two basic flavors, the crude carrier, which carries crude oil, and the clean products tanker, which carries the refined products, such as petrol, gasoline, aviation fuel, kerosene and paraffin Tankers range in all sizes, paraffin. sizes from the small bunkering tanker (used for refueling larger vessels) of 1000 DWT tons to the real giants: the VLCC (Very Large Crude Carrier) of between 2-300 2 300,000 000 DWT and the ULCC (Ultra Large Crude Carrier) of over 300,000 DWT

REEFER

REEFER „

Refrigerated Cargo Carrying Vessels ("Reefers") are purpose built to carry fruit fruit, meat and other food products across the sea in a fresh and clean manner. manner Perhaps the most famous of these types of vessels are the banana carriers, trading between the Caribbean and Europe. They are sleek and fast, as their trade demands, with cooling (refrigeration) equipment to keep their cargoes fresh

LNG CARRIER

LNG CARRIER „

The LNG carrier (Liquefied Natural Gas) and its cousin the LPG carrier (Liquefied Petroleum Gas) are products of the late twentieth century. LNG and LPG are the preferred fuel types of certain countries for their h i iindustrial d i l power needs. d Japan J is i one such h country, and so LNG needs to be transported to Japan, but is not the easiest of cargoes to be transported. In its natural state, LNG is a gas, so to transport it, it needs to be either pressurised into a liquefied form, form or kept as a liquid by reducing the temperature (simple application of Boyle's Law in p y physics!). )

CAR CARRIERS

CAR CARRIERS „

The car carrier or more correctly the P.C.C. (Pure Car carrier) or P.C./T.C. (Pure car/truck carrier), could never be described as a beauty of the seas, yet in it it'ss rectangular design, design is purpose built to carry large numbers of cars.

CONTAINER SHIPS

CONTAINER SHIPS „

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The Containership or "Box ship" is the great success story of the last 40 years. General cargo was historically carried in dry cargo vessels, without any particular specialisation. specialisation Cargo loading and unloading was always a slow, slow laborious task, due to the varying shapes, sizes, weights and fragility of the numerous cargoes being carried on any one vessel. The idea of standardising the carrying box, or container at 20 feet long was a breakthrough that allowed for vessels to be designed to carry these standard sized boxes, and for dockside equipment also l to be b designed d d to lift, l f stackk and d store these h specific f shapes.So, h from a "back of the fag-packet" idea was born the container ship. Initially, these were small vessels of up to 10,000 DWT, carrying no more than a few hundred TEU (Twenty foot Equivalent Units), but have grown in size as the success and economies of these vessels have become more obvious obvious. Today's Today s container ships are being built to take 8,000 T.E.U., with plans to build 10 - 12,000 TEU ships. These vessels are built for speed, and can reach upwards of 28 knots, moving cargoes around the world. Globally storing and returning empty boxes has become an industry in itself! Through-transport or inter-modal transport, means that these containers can be offloaded from a ship, and rapidly loaded onto trains.

DRY CARGO VESSELS

DRY CARGO VESSELS „

Until vessels started to be built to carry specific cargoes, all vessels were simply general or dry cargo vessels, i.e. built to carry any and d allll cargoes either ith in i drums d and d bales b l or on pallets. Such cargoes were put in general holds with no specialisation. The role of the general/dry cargo vessel began to wane with the arrival of bulk carriers and tankers tankers, but the decline of these general vessels has accelerated since the arrival of containerisation (in the 1960's). Not only are container ships able to carry greater volumes of cargo in standard shaped cargo containers, t i the th time ti spentt loading l di and d discharging di h i has h been b dramatically reduced. Whereas a dry cargo vessel may take 3 4 days to load or discharge, a container ships the same in a matter of hours. hours Although general/ dry cargo vessels remain as the largest (in pure numbers) of cargo carrying vessels, they are often smaller (rarely above 50,000 Gross tons) than the specialized vessels that are slowly replacing them.

RO-RO VESSELS

RO-RO VESSELS „

The Ro-Ro, or more fully the Roll on - roll off vessel, comes in a number of shapes and sizes sizes, but generally in two types; the passenger ro-ro and the Cargo roro. P Passenger ro-ros have h become b common sights i h wherever people want to travel over water with their vehicles. It is probably the only type of cargo vessel that most people have traveled on. Usually a rear door (but sometimes a bow door) allows for vehicles to be driven on and off, off stored on the car deck below the passenger accommodation areas.

LIVESTOCK CARRIERS

LIVESTOCK CARRIERS „

The carriage of live animals around the world is performed by specialist vessels, designed (or adapted) to transport large numbers of cattle and sheep in secure but humane conditions. conditions The trade is largely from Australia to the Middl East Middle E t &/ &/or S.E. SE A Asia. i One O modern d vessel may carry up to 125,000 sheep.

Vessel Size Groups (in d d i h tons)) deadweight

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Major ship size groups include: Handy and Handymax: Traditionally the workhorses of the dry bulk market, the Handy and y types yp remain popular p p ships p more recent Handymax with less than 60,000 dwt. The Handymax sector operates in a large number of geographically dispersed global trades trades, mainly carrying grains and minor bulks including steel products, forest products and fertilizers. The vessels are well suited for small ports with i h length l h and d draft d f restrictions i i and d also l lacking transshipment infrastructure. This category is also used to define small small-sized sized oil tankers.

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Panamax: Represents the largest acceptable size to transit the Panama Canal, which can be applied to both freighters and tankers; lengths are restricted to a maximum of 275 meters, meters and widths to slightly more than 32 meter. The average size of such a ship is about 65,000 dwt. They mainly carry coal, grain and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. Capesize: Refers to a rather ill-defined standard which have the common characteristic of being incapable of using the Panama or Suez canals, not necessarily because of their tonnage, but because of their size. These ships p serve deepwater p terminals handling g raw materials,, such as iron ore and coal. As a result, "Capesize" vessels transit via Cape Horn (South America) or the Cape of Good Hope (South Africa). Their size ranges between 80,000 and 175,000 dwt. Due to their size there are only a comparatively small number of ports around the world with the infrastructure to accommodate such vessel size.

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Aframax: A tanker of standard size between 75,000 and 115,000 dwt. The largest tanker size in the AFRA (Average Freight Rate Assessment) tanker rate system. Suezmax: This standard, standard which represents the limitations of the Suez Canal, has evolved. Before 1967, the Suez Canal could only accommodate tanker ships with a maximum of 80,000 80 000 dwt. dwt The canal was closed between 1967 and 1975 because of the Israel - Arab conflict. Once it reopened in 1975, the Suezmax capacity went to 150 150,000 000 dwt dwt. An enlargement to enable the canal to accommodate 200,000 dwt tankers is being considered.

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VLCC: Very Large Crude Carriers, 150,000 to 320,00 dwt in size. They offer a good flexibility for using terminals since many can accommodate their draft. They are used in ports that have depth limitations, mainly around the Mediterranean, West Africa and the North Sea. They can be ballasted through the Suez Canal. ULCC: Ultra Large Crude Carriers Carriers, 300 300,000 000 to 550,000 dwt in size. Used for carrying crude oil on long haul routes from the Persian Gulf to Europe, America and East Asia Asia, via the Cape of Good Hope or the Strait of Malacca. The enormous size of these vessels require custom built terminals.

THE LINERS S

THE LINERS „

It started through the last century when steamships appeared and started offering scheduled services between ports. They then tended to offer a faster and more highly quality service than the selling ships and despite their higher freight rate tended to attract shippers with high value cargo who were prepared to pay extra for speed and predictable delivery dates

THE LINERS „

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In the sixtieth the conventional general cargo ship was increasingly replaced by the container ship . Then containerization has had effect and it will pp g industryy .Container continue to have on shipping ships have a larger , faster, and a quicker turn around than the ships they replace. The containers are introduced to reduce the cargo handling cost which has increased for more than any shipping cost and to increase productivity comparing port time for generall cargo ships hi and d container i ships hi

LINER FREIGHT RATES „

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Liner freight rates are relate to a tariff of somewhat or some sort .They are, far f less volatile that those in tramp shipping . In many cases that any increases in the tariff may only take place after period of notice . To over come short –run variation in cost such as changes in bunker prices or in rate of exchanges, liner operators generally resort surcharges typical of which are BAF AND CAF

LINER CONEFERENCES CO C S

LINER CONEFERENCES Conferences are organization of shipping lines operating on particular route. For example, the Transpacific West Bound Freight Agreement operates on the route from the US to Far east route and the Indian sub-content sub content. The conferences are formal agreement between shipping lines on route setting prices and sometimes pooling profits or revenues, managing capacity, a locating routes and offering loyalty discounts „ „ „ „

Conferences can be either open or closed to accept new members Conferences issue a freight tariff Conferences may also allocate output among their members by either cargo quotas t or S Sailing ili quotas t Conferences employ policing agencies to check on adherence to the tariff

LINER CONEFERENCES „

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Conference Practice The conferences set p prices ,often , based on loyalty y y arrangement g theyy use two kind of loyalty contracts; The contract rates and differ rebate .The shipper sign in agreement to deal in exclusively with the conference and in turn receive discounts on the freight rate The h conferences f response to an entrant b by lowering l the h rate on one off its vessels to compete with the entrant until entrant lost money and left the market IIn th the llastt d decade d ,the th conferences f have h lost l t their th i importance i t and d decline d li in i the number of the members

C CHARTERING G

CHARTERING „

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Charterparty A charterparty is a contract of lease of a ship in whole or in part for a long or short period of time or for a particular voyage. It has been said that its origin lies in the partita" or "charta p partita" or "charta divisa", where an agreement g mediaeval Latin "carta p was torn into two pieces and one half was given to each party. Proof of the whole contract was no doubt difficult if one party was obstinate - modern methods of photocopying the contract for each party seem preferable. A charterparty is part contract of hire (affreightment) and part contract of transport (carriage). The proportion of "affreightment" decreases as one moves from a demise charter, to a time charter and then h to a voyage charter, h while h l the h proportion off "carriage" " " increases from f a demise d charter h through a time charter to a voyage charter. Affreightment is essentially placing a ship at the disposal of another party, while transport is essentially the carrier taking charge of goods. Hire is the consideration paid under demise and time charterparties; freight is the consideration paid under voyage charterparties and bills of lading. a) Charterparty by demise A charterparty by demise is a contract by which the shipowner places a ship in the hands of the chartered who assumes possession and control. The consideration paid by the chartered is hire which is payable at specified intervals during the term of the charter. Under a demise charterparty, the ship-owner appoints the aste a and d the t e ccrew, e ,a although t oug tthey ey a are e pa paid da and d controlled co t o ed by tthe e de demise se cchartered. a te ed master A bareboat charter is a demise charter whereby the bareboat chartered names, pays and controls the master and the crew. Among the most common forms of demise charter are the "Baltic and International Maritime Council Standard Bareboat Charter" (Code Name: "Barecon '89"); and the "BIMCO Standard Charter Charter" (Code Name: "Barecon Barecon 2001") 2001 ) forms of BIMCO

CHARTERING „

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b) Consecutive voyage charter A consecutive voyage charter party is a voyage charterparty for a determined number of consecutive voyages. c) Slot charter - A charterparty whereby the shipper leases one or more "slots," each capable of holding a 20-foot container, aboard a container ship.

CHARTERING „

d) Space charter It is a contract whereby a capacity off carriage is put at the disposal off the shipper for the carriage of his goods d during a period d off time under d particular l terms and conditions. Whether it is a contract of h or a contract off carriage or even a hire contract of agency like a freight f forwarder's d ' contract, depends d d on its terms.

CHARTERING „

e) Time charterparty A time charterparty is a contract whereby the ship-owner places a fully equipped and manned ship hi att th the di disposall off the th chartered h t d for f a period i d off time ti for f a consideration called "hire" payable at specified intervals during the term of the charter. Among the most common forms of time charterparty are the New York Produce Exchange (NYPE) and Baltime. A "time charter for a trip" is a time charter for a particular voyage or voyages, rather than for a period of years, days or months, with hire payments made at periodic intervals ( under (as d a time ti charter h t party), t ) rather th than th "freight" "f i ht" b being i payable, at the completion of the voyage, on the quantity of cargo carried

CHARTERING „ „ „

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Main terms Ships name and other details to identify her Many other detail of the ship including total deadweight grain and bale cubic ,draft, number of decks hold and hatches, number and lifting capacity of derricks ,crane etc… Rate of hire expressed in days or months The period in months or years Delivery place Re-deliveryy p place Delivery time ex: not before certain date

CHARTERING „

f) Voyage charterparty A voyage charterparty is a contract whereby the ship-owner places all or part of the carrying capacity of a ship at the disposal of the charter (the voyage chartered) for the transport of goods d agreed d upon, on one or more voyages, for f a consideration called "freight" based on the quantity of cargo carried, and usually payable at the end of the voyage. Among the most commonly used form is the "Baltic and International Maritime Council Uniform General Charter form of BIMCO. BIMCO

CHARTERING „ „ „ „ „

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Main Contract term: Ships name and other details to identify her The cargo and the quantity the ship carry The loading and discharge ports R t off ffreight Rate i ht “Lay days and canceling” ex: loading not to commence not before a certain date with charterers having the option to cancel the charter if the ship is later than the second date. The rates of loading and discharging Demurrage and dispatch Charter party forum to be used Total commission in involve

SHIPPING DOCUMENTATION „

Documentation used in international trade performs a number of separate functions and these can be divided into the following categories: instruction; financial; identification; authorisation. authorisation In this section we will be dealing with th those d documents t which hi h are used d in i international trading activity.

BILL OF LADING FUNCTION „

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It is evidence that a contract of carriage exists between shipper (exporter) and ship owner owner. It is a receipt for goods, showing prima facie that theyy have been received into the charge g of a carrier. It is a document of title which allows title to the goods to be transferred t ansfe ed by b endorsement endo sement and delivery of the bill of lading.

Main details to be incorporated in the bill of lading „ „ „

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name and address of the shipper the name of the vessel description of cargo, including identifying marks numbers and types of packages marks, packages, contents, gross weights and volume; port of shipment port of discharge; details of freight, including whether it is to be "prepaid" (at port of despatch) or "payable at destination" (freight collect);

Main details to be incorporated in the bill of lading „

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Consignor’s name and address which may be that of the buyer. Alternatively bills of lading may be made out to show "t order" "to d " iin th the consignee i b box or "to "t th the order d of..." f " Notify party's name and address - often an agent acting on behalf of the consignee at the port of destination. However, the consignor consignor'ss details may be entered in the "Notify Notify party" party box where "order" bills of lading are applicable terms of sale; the date on which the goods are received for shipment or shipped on board the named vessel; number of original bills issued; Signature of shipping line or its appointed agent. agent

Principal p notations on bills of lading Clean bills and claused bills A "clean" bill of lading is one in which no notation is shown on the document relating to cargo having been received by the line or shipped in any other than good condition and correct quantity. Thus, standard printed bills of lading usually bear the wording "Shipped (or received for shipment) in apparent good order and condition". If no clause to the contrary is entered, the bill are said bills id to t be b clean. l In I the th case where h the th cargo is i noted t d to be wet, damaged or otherwise in doubtful condition or quantity, bills of lading will be issued "claused" (or "dirty"), showing the defect in the cargo. It follows that if goods are shipped under a claused bill, consignees may reject them or, alternatively, banks may not accept such bills of lading for payment purposes.

Received bills and shipped pp bills „

As has already been said above, a bill of lading constitutes a receipt for goods delivered into the charge of a shipping line. Thus the standard wording on a printed bill of lading may state "Received for shipment..." and will be signed and dated by the line or its agents. Although this shows that the goods have moved out of the exporter's charge into that of the carrier, it does not show that actual shipment has taken place.

Through bills of lading „

The "through" bill of lading concept allows door-to-door shipments to be covered by a bill of lading. This became necessary following the development of containerisation Thus containerisation. Thus, this type of bill may cover ocean shipment, plus inland t transport tb by other th modes, d

Combined transport p bills of lading „

Similar to a through bill of lading, the combined transport bill of lading allows for the contract of carriage to be covered by a single document and a clearly defined single set of conditions of carriage to i l d the include h use off road d and/or d/ railil shipment hi at either ih end of the sea leg. This document will, when issued, extend the carrier's carrier s liability as set out in the combined transport bill of lading to the other transport modes. Freight forwarders operating as non vessel owning carriers (NVOCS) will most usually non-vessel issue this type of document.

Groupage p g and house bills of lading „

The concept of groupage - combining a number of individual consignments into a complete container load for shipment - has b been developed d l d over many years by b freight f i ht forwarders f d operating services between two inland points in different countries working in conjunction with an overseas office or partner An ocean bill of lading for a container load of groupage partner. is issued by the shipping lines showing the sending forwarder as the shipper and the receiving forwarder as the consignee. The forwarder thereafter issues his own house bills to individual exporters. t Th These h house bills bill become b the th controlling t lli document d t for the release of the cargo at destination and enable the exporter, if required, to negotiate these with his customer in return for payment of the goods goods.

Groupage p g and house bills of lading „

It is important to note that a "house" bill of lading does not have the same status as an ocean bill issued by a shipping line as it is not a document d off title, l in the h same sense off the h word, as an ocean bill. However, it is capable off negotiation, and d is often f acceptable bl to banks for letter of credit purposes when this h been has b stipulated l d in the h credit d at the h time it is opened.

Negotiation g of bills of lading „

The bill of lading is a negotiable document which allows title to goods to be transferred f by endorsement and delivery. This facility gives one or other h parties to the h transaction control over title to the goods and for this reason letters l off credit d often f stipulate l certain types of bill of lading in order for this control to be b exercised. d Three h basic b types off endorsement are possible:

Endorsement by consignee „ „ „ „ „

In this case the bill of lading is completed as below: Shipper pp box in bill of lading: g Actual shipper pp (exporter) ( p ) Consignee box in bill of lading: Actual consignee (buyer) Notify box in bill of lading: Consignee's agent at port of arrival. Completion of the bill of lading in this manner allows either the consignee to present himself in person to the line to take delivery of the goods or to endorse the bill of lading on the reverse side to allow his agent to do so and to deliver the goods t hi to him. Thus Th the th consignee i exercises i control t l over who h takes t k the th goods in charge at the destination port.

"To order" bills of lading „ „ „ „ „

Bills of lading made out "to order" are completed as below: Shipper pp box in bill of lading: g Actual shipper pp (exporter) ( p ) Consignee box in bill of lading: "To order" Notify box in bill of lading: Actual consignee (buyer) In this instance, instance the shipper must stamp and sign the bill of lading in order for title to the goods to be transferred to the consignee. Thus the bill of lading is useless to the consignee without this endorsement. This is a useful safeguard against bill being bills b i accidentally id t ll transmitted t itt d to t buyers b directly. di tl Clearly, Cl l should this happen the buyer would not be able to take delivery of the goods and the bill of lading would have to be returned to the shipper for endorsement and presentation to the bank bank. Bills of lading completed in this manner are also said to be "To order blank endorsed".

To order of (bank) „ „ „ „ „

In this case, the bill of lading is completed as follows: Shipper box in bill of lading Actual shipper (exporter) Consignee box in bill of lading To the order of (bank) Notify box in bill of lading True consignee (buyer) The bank is the party which carries out the endorsement in this instance and which,, therefore,, exercises control over the goods. Thus, if the bank wishes to ensure that the buyer has actually paid for the goods before he takes delivery delivery, the bank may endorse the bill of lading when payment is made.

Sea waybills „

Sea waybills offer a non-negotiable alternative to the bill of lading. Generally speaking, they embody the Hague-Visby Rules. With a few f exceptions ti they th are nott negotiable ti bl and d are, therefore, not usable as a means of transferring title to goods. They are useful for companies that trade internationally with themselves between geographical areas where payment for exports is not a problem. A freight forwarder might use them to control groupage cargo. The sea waybill can thus be sent forward with the goods allowing the consignee to take i immediate di t delivery. d li The Th legal l l protection t ti offered ff d to t the th shipper hi under a sea waybill is thought by some to be inferior to that offered under a bill of lading. However, being a relative new innovation there has been insufficient time to test them in law. innovation, law

Letter of guarantee „

Letter of guarantee A written undertaking, d ki or letter l off indemnity, i d i usually provided by a bank, promising to hold h ld the h carrier i harmless, h l up to a certain sum, for claims that may arise from the delivery of goods to a particular person who is unable to surrender the original bills of lading in g return for the goods.

Letter of indemnity „

Letter of indemnity A written undertaking by a shipper to indemnify a carrier for any liability which the carrier may incur for having issued a clean bill of lading when, in fact, the goods received were not as stated on the bill of lading .Such a letter is usually a central document in a fraud, whereby the shipper and carrier knowingly misrepresent to third parties the actual order and condition of the goods at the time of shipment or the bad order of the packing, or whereby they issue duplicate bills of lading to replace lost or stolen originals originals. Letters of indemnity should not be condoned by courts and are generally held ineffective as against third parties.

MARITIME GEOGRAPHY

MARITIME GEOGRAPHY „

Definition: Studying y g seas and costal area which you y have to find your y wayy round to pickup p p and deliver your y cargoes. g The distance in shipping are always given in nautical miles which equal to 1852 meters

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Latitude and Longitude: g how far North or South and Longitude g how far east and west. Time is also Latitude Is used for measuring Is function of Longitude this for every 15° you move east you advance your watch one hour and vice versa for westerly movement

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Weather

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Ports

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Water depth and tides

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Time zone

Domains of Maritime Circulation

Domains of Maritime Circulation „

Oceanic masses and rivers are the two major components off maritime circulation. Oceanic masses account for 71% of the terrestrial surface. f The h ffour major oceans relevant l to maritime circulation are: the Pacific (165 millions ll square km), k ) the h Atlantic l (82 (8 million ll square km), Indian (73 million square km) and d the h Mediterranean d (2.5 (2 million ll square km).

MULTIMODAL O TRANSPORT S O

MULTIMODAL TRANSPORT „

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Introduction: During 2004 2004, total estimated 100 million TEUs Shipments of containerized cargoes has been moved world wide. The world fleet of fully cellular container ships continued to expand substantially in 2004 in terms of both numb of ships and their TEU capacity; by the beginning of 2005 there were 3,206 ships with a total capacity of 7,165,352 TEUs, an increase of 5 per cent in the number of ships and 11.3 per cent in TEU capacity over the previous year, Ship sizes also continued to increase. Containerized cargoes are packed ounce at the factory door than at every change in transport mode, there by reducing direct cost as well as the ship time at the port Multimodal transport: The containerization of cargo g allowed cargoes g to be easilyy and safelyy transferred from one mode of transport to another. Merchants and their agents physical involvement in the carriage of goods was reduced to handing them over at the point of departure, and ensuring someone would receive them at the destination. International multimodal transport is defined in the 1980 Multimodal Convention as

the h carriage i off goods d by b at least l two different diff modes d off transport on the h basis b i off a multimodal l i d l transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country.(24)

This definition should be read together with the definition of the multimodal transport operator

any person who concludes a multimodal transport contract and who acts as principal, not as an agent of the consignor or the carrier participating in the multimodal transport operations operations, and who assumes responsibility for the performance of the contract.

MULTIMODAL TRANSPORT The constituent elements of a multimodal carriage of goods are thus: „ „ „ „ „ „

contract between consignor and multimodal transport operator whereby the multimodal transport operator agrees to arrange and d accept responsibility ibili for f the transport of the consignors goods from X place to Y place by more than one mode of transport with ith the th right i ht to t subcontract b t t some or allll off th the llegs off carriage i to t another carrier

MULTIMODAL TRANSPORT „

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THE APPLICABLE LAW : The law with regard multimodal transport, it has to be demonstrated what law actually governs this type of carriage carriage. Relating to: the loss or damage g of goods g carried or which ought g to have been carried in a ship the carriage of goods in a ship, or any agreement for or relating to such carriage any container and any agreement relating to any container

MULTIMODAL TRANSPORT „

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Different modes of carriage are governed by different laws. A multimodal contract of carriage will thus often be subject to different regimes of liability. For example carriage by road from Vienna to Hamburg and by sea to London will ill be b subject bj t to t th the H Hague Vi Visby b Rules R l for f the th sea carriage i and d the th CMR Convention for the road carriage. Liability depends on whether the leg during which the damage occurred can be identified. The provisions of these Rules also form the basis of many combined transport bills of lading in use today. The Rules divide liability according to whether the place of damage is known or unknown. If the place of loss is known then the applicable mandatory carriage regime applies. If there is no mandatory carriage regime, or the place of loss is unknown, unknown then the system of liability contained in the Rules is used. This system of liability is drawn from the Hague Visby Rules. No convention creating a uniform system of liability is presently in operation

MULTIMODAL TRANSPORT „

International Conventions: „ „ „ „ „ „ „

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CMR (Convention on the International Carriage of Goods by Road, 1956) COTIF/CIM (Carriage of Good by Rail Convention, Convention 1970) Hague Rules, 1924 Hague Visby Rules (Hague Convention as amended by the 1968 and 1979 Protocols) Hamburg Rules (UNCITRAL Convention on the Carriage of Goods by Sea, 1978) Inter American Convention on the International Carriage of Goods by Road, Inter-American Road 1989 Multimodal Transport Convention (UN Convention in the International Multimodal Transport of Goods, 1980) UN Convention on Safe Containers, 1972 Warsaw Convention (Convention for the Unification of Certain Rules relating to International Carriage by Air, 1929 as amended by the Hague Protocol, 1955) the Guatemala Protocol 1971 the Montreal Protocol 1975

MULTIMODAL TRANSPORT

SDR=Special Drawing Rates

THE WAY FORWARD „

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The ultimate goal of the carriage of goods is the promotion of trade by allowing business the opportunity to get it's products to any market on the planet at a reasonable price. goal byy reducing g the consignors'/consignees' g g Multimodalism seeks to achieve that g (merchants') risk in transporting their goods. This is achieved, firstly by minimizing the chance of the cargo being physically damaged and secondly by reducing the chance that the merchant will be unable to recover in the case where cargo is damaged through the fault of the carrier. The reduction of the risk of cargoes being physically damaged is achieved by packing the goods in a strong steel container and by standardising the vessels, vehicles and cranes which handle these containers. In the h event that h the h cargo is actually ll damaged d d , the h merchants' h ' riskk is reduced d d in that h he h can look to a single person, the multimodal transport operator, to make good his loss. In this respect the multimodal transport contract was a giant leap forward for merchants allowing complete control over who accepts responsibility for the safe carriage of cargo.(88) This single contractual carrier (MTO) responsibility significantly reduces a merchants risk of h i to recover from having f a company with i h no assets, or from f having h i to recover in i an inconvenient jurisdiction.

MARINE INSURANCE S C

MARINE INSURANCE „

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Marine insurance A broad term including ocean and inland marine insurance insurance. The Nationwide Marine Insurance Definition, published by the National Association of Insurance Commissioners, includes imports, exports, domestic shipments, means of communications, and personal and commercial property floaters as marine insurance Ocean marine insurance Coverage for these types of ocean transportation exposures: ships or hulls; goods or cargo; earnings (such as freight, passage money, commissions or profit); and liability (known as protection and commissions, indemnity). This insurance may be purchased by the vessel owner or any party interested in or responsible for insurable property by reason of maritime perils. perils

MARINE INSURANCE „

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transportation insurance Insurance that covers merchandise or goods in the course of transit by air, rail, truck, barge or ship from a starting location to a final destination. door-to-door coverage Transit insurance that covers a shipment of merchandise from the original i i l point i t off manufacture f t to t it its fi finall destination. d ti ti

MARINE INSURANCE „

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Marine insurance provides coverage against four types of losses corresponding to the four major classes of ocean marine insurance Hull & Machinery Insurance covers ship-owners either on basis of voyage policy or a time policy against total loss (actual or constructive), damage to the ship in particular average and general average sacrifice, expenses to prevent loss by way of sue and labor charges salvage charges and general average contributions and against collision liability charges, (either three fourths or four fourths) and expenses associated with claims. The cover is against ordinary risks (perils of the sea and other named perils) or against the named perils in the war and strike clauses. BASIC COVERAGE: Hull and Machinery including Liability Disbursements Increase Value Managers’ Commission Managers Chartered Freight Charter Hire Insurance Premiums Return Premium

MARINE INSURANCE w

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Protection and Indemnity:P&I coverage is essentially liability insurance that protect the ship-owner for the loss of income that would have been earned upon completion of the y g voyage. BASIC COVERAGE personal injuries to third parties, passengers, crew, stevedores, persons on another ship, personall injuries arising out off carriage off cargo or containers, repatriation and d substitution b of crew, loss of effects, shipwreck unemployment indemnity, stowaways and refugees and life salvage; navigational and operating claims such as collisions (either one fourth or four fourths), damages to fixed and floating objects, pollution, wash damage, towage, liability under contracts for hire of cranes, wreck removal and quarantine; cargo claims including collision liability to cargo carried in an entered ship and general average and salvage; miscellaneous liabilities which include fines and confiscation, inquiring expenses, expenses arising from interference by local authorities and costs of sue and labor. labor

MARINE INSURANCE „

Marine Cargo Insurance aims to indemnify the Assured from losses or physical damages occurred to the goods during the insured voyage as mentioned in the certificate of insurance and provided said losses or d damages are covered d by b the th insurance i conditions diti as agreed d between the Assured and Underwriters and consigned in the insurance contract.

MARINE INSURANCE BASIC COVERAGE „

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(1) Total or Constructive Total Loss of the whole consignment hereby insured caused in the course of transit by natural calamities--heavy weather, lightning, tsunami, earthquake and flood. In case a constructive total loss is claimed for, the Insured shall abandon to the company the damaged goods and all his rights and title pertaining thereto. The goods on each lighter to or from the seagoing vessel be deemed a separate risk. risk "Constructive Total Loss" refers to the loss where an actual total loss appears to be unavoidable or the cost to be incurred in recovering or reconditioning the goods together with the forwarding cost to the destination named in the policy would exceed their value on arrival. (2) (2)Total l or Partial i l Loss caused db by accidents-the id h carrying i conveyance being b i grounded, stranded, sunk or in collision with floating ice or other objects as fire or explosion. (3)Partial loss of the insured goods attributable to heavy weather, lightning and /or tsu /o tsunami, a , where e e the t e conveyance co eya ce has as been bee grounded, g ou ded, stranded, st a ded, sunk su or o burnt bu t , irrespective of whether the event or events took place before or after such accidents. (4)Partial or total loss consequent on falling of entire package or packages into sea during loading, transshipment or discharge. (5)Reasonable cost incurred by the Insured in salvaging the goods or averting or minimizing a loss recoverable under the policy, provided that such cost shall not exceed the sum Insured of the consignment so saved.

MARINE INSURANCE „

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(6)Losses attributable to discharge of the insured goods at a port of distress following a sea peril as well as special charges arising from loading, warehousing and forwarding of the goods at an intermediate port of call or refuge. (7)Sacrifice in and Contribution to General Average and Salvage Charges. (8)Such proportion of losses sustained by the ship-owners as is to be reimbursed by the cargo owner under the Contract of Affreightment "Both to Blame Collision" clause. 2.With Average(W.A.) Aside from the risks covered under F.P.A. F P A condition as above, above this insurance also covers Partial losses of the insured goods caused by heavy weather, lightning, tsunami, earthquake and/or flood. 3.All Risks Aside from the risks covered under the F.P.A. F P A and W.A. W A conditions as above, this insurance also covers risks of loss of or damage to the insured goods whether partial or total, arising from external causes in the course of transit.

MARINE INSURANCE „

Freight insurance: When a vessel is lost this coverage indemnifies the ship-owner for the loss of income that would h have been b earned d att the th end d off the th voyage. The following Th f ll i proper information i f ti required i d to t obtain bt i insurance i quotation:

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Cargo description C d i ti and d if hazardous h d Quantity and packaging Loading port and destination Ocean vessel (including date of build, flag and size) Value of the goods being shipped Expected p date of shipment p

MARINE INSURANCE Cargo Claims Documents : „ „ „ „ „ „ „

Insurance Certificate or Policy Bill of Lading Shipper's Shipper s Invoice Packing List Survey Report Ship's Ship s Short Short-landing/Discrepancy landing/Discrepancy Certificate(s). Copies of correspondence exchanged with the Carrier

G GENERAL AVERAGE G

GENERAL AVERAGE Average: A term in marine insurance referring to a loss. A particular average is a partial loss. Particular Average :A fortuitous partial loss to the subject matter insured, proximately caused by an insured peril but which is not a general average loss. Particular average only relates to damage and/or expenses which are exclusively borne by the owners of a vessel which has sustained damage as a result of e.g. heavy weather or by the owners of the cargo, which has been damaged in transit. General Average Abbreviation: G/A Intentional act or sacrifice which is carried out to safeguard vessel and cargo. When a vessel is in danger, the master has the right to sacrifice property and/or to incur reasonable bl expenditure. di Measures M taken k for f the h sole l benefit b fi off any particular interest are not considered general average.

GENERAL AVERAGE „

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A legal principle which traces its origins in ancient maritime law, general average is still part of the admiralty law of most countries. countries General average requires three elements which are clearly stated by Mr. Justice Grier in Barnard v. Adams:

"Ist. A common danger: a danger in which vessel, cargo and crew all participate; a danger imminent and apparently 'inevitable,' except by voluntarily incurring the loss of a portion of the whole to save the remainder. "2nd. 2nd. There must be a voluntary jettison, jactus, or casting away, of some portion of the joint concern for the purpose of avoiding this imminent peril, periculi imminentis evitandi causa, or, in other words, a transfer of the peril from the whole to a particular portion of the whole. "3rd. This attempt p to avoid the imminent common peril p must be successful".

GENERAL AVERAGE „

general average bond : A bond prepared by the general average adjuster binding the owner of the goods to pay a proportion of the general average.

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