MARA 301-401 Final

The traditional process of loading a breakbulk ship is described in The Business of Shipping (9th edition) Chapter 19 on page 308, as follows: "The process of hoisting cargo from a dockside platform to the ship's deck was no different from that used by the Phoenicians, except that steam or electric power had been substituted for human muscles. Individual packages were stowed by hand in the appropriate ship spaces. The operation was infinitely laborious and consumed lots of time for which the ship was not paid. This violates the cardinal rule that..."

"...a ship earns money only when at sea moving cargo from one point to another."

After technical obstacles to moving containers on ships were overcome, one further development was most important in producing a truly integrated transportation system. What was it?

A single bill of lading that applied to the entire movement of goods from origin to destination regardless of number or type of participating carriers.

How many ships are required in liner service to schedule weekly sailings from each port in a loop that takes 35 days to complete?

Answer: 5 Explanation: Weekly=7 days, One loop is 35 days. Divide the loop by schedule sailings. 35/7= 5

Which of the following is an association of several liner companies combining their ships and offering them to the public as a single transportation service under government oversight in today's ocean shipping market?

Alliance.

The Carriage of Goods by Sea Act (COGSA,1936) brought U.S. law into harmony with the Hague Rules, an international convention that established uniform rules for all Bills of Lading. It remains in effect today. Which of the following statements are TRUE regarding COGSA? Check all that apply.

COGSA exempts the carrier from liability for loss or damage due to act, neglect or fault of the master, pilot, or servants of the carrier in navigation or management of the ship. COGSA exempts the carrier from liability for loss or damage due to 17 specific causes, including fire, perils of the sea, acts of God, and acts of war. COGSA establishes a limitation of carrier's liability to a maximum of $500 per package, unless a higher value has been claimed in the Bill of Lading and a higher freight rate paid. COGSA applies to all ships in foreign trade of the United States

Malcom McLean is regarded as the inventor of containerized shipping, yet he built on earlier ideas. All of the following statements are true; but which one of them was McLean's insight that truly initiated a transportation revolution?

Carriage by truck and ship could be purposefully combined to form an integrated transportation system. *

A vessel that offers transportation for any and all goods between specified ports under US law is a...

Common Carrier.

Using containers in the movement of goods dates back as far as 1911. These early attempts had certain characteristics in common. Which of the following statements are true? Check all that apply.

Containers were handled like breakbulk cargo in terms of loading and stowing them aboard ship. Stowing goods in containers reduced cargo loss and cut down on claims for lost and damaged goods. Containers rarely left the terminal.

What kind of ship was the Ideal X?

Converted T2 tanker

Which U.S. government agency regulates liner companies to protect the shipping public from monopoly and predatory pricing?

Federal Maritime Commission

As containerization developed, unforeseen problems appeared. Which of the following issues can produce major headaches for container operators? Check all that apply.

Finding the right size container to fit the cargo Tracking containers Managing empty containers

A "string" of ships is most likely to be found in which of the following trades:

General Cargo

Reverse landbridge

Goes through a water port on the opposite side of a land mass, en route to an inland destination. (Ex: shipping from LA to New York by going around North America.)

Landbridge

Major land mass connects two water routes.

Which of the following types of organization has authority to issue a Bill of Lading for an intermodal shipment that makes that organization take full legal responsibility as carrier? Choose two.

Non Vessel Operating Common Carrier (NVOCC) Vessel Operating Common Carrier (VOCC)

In shipping, what is an NVOCC

Non Vessel Operating Common Carrier.

According to Business of Shipping Chapter 20, which two major piece of legislation make it possible for an originating carrier, such as a liner company, to furnish a bill of lading to a shipper which gives that carrier full responsibility for loss or damage sustained during an entire intermodal movement under U.S. law?

Ocean Shipping Reform Act of 1998 Shipping Act of 1984

Which of the following types of ships is LEAST likely to be in a liner service?

Oil Tanker

A chartered vessel in which the entire cargo-carrying capacity of a vessel is used by a single shipper is a...

Private Carrier.

A single large, fast container ship can move the same quantity of cargo in a year as five or six older break-bulk vessels. In doing so, however, it sails less frequently. Shippers still demand frequent departure schedules, such as weekly sailings, previously provided by older ships. What strategies have shipping companies adopted to meet the shippers' demands while not losing economies of scale of operating larger ships? Check all that apply.

Raise freight rates on container shipments to pay for additional ships needed. Establish alliances with other shipping companies, combining ships in a pool and sharing each other's cargo. Establish space-chartering arrangements with each other's ships.

Shipping cargo in containers aboard a liner vessel is in some respect similar to...

Riding a bus.

Chartering a tramp ship to transport dry bulk cargo is in some respects similar to...

Taking a taxi.

As a common carrier, a liner company calling on the U.S. is required to file a document listing rates, charges, rules, regulations and practices with the U.S. government. What is this document called?

Tariff

Micro Landbridge

Terminates at an inland location short of the opposite coast. (Ex: shipping from Chicago to LA, then to China.)

Mini Landbridge

Terminates on the opposite coast of the land mass involved. (Ex: shipping from NYC to LA, then to China.)

A Bill of Lading (B/L) has several important functions in international commerce. What are they? Check all that apply.

The B/L sets forth the terms of the transportion contract between carrier and shipper for movement of goods. The B/L is a receipt for cargo, noting the apparent order and condition of the goods when received. The B/L can be a document of title to the goods, in which case it is called a "Negotiable" or "Order" Bill of Lading.

Determining responsibility for loss or damage to intermodal cargo that has been transferred between several carriers is particularly difficult. According to Business of Shipping Chapter 20, which of the following is the usual method for paying the cost of such a claim?

The consignee will be reimbursed by assessing each carrier an amount that is directly proportional to the freight money earned.

Why would an ocean carrier be willing to issue a single bill of lading across combined modes of transportation, including rail and truck, that it does not completely control?

The ocean carrier has contracts in place with the inland carriers involved, with responsibilities of each clearly defined.

The Harter Act (1893) established obligations and limitations of liability for American shipowners carrying goods under a Bill of Lading. Under the Harter Act, which of the following statements are true? Check all that apply

The shipowner is NOT responsible for damage to cargo caused by perils of the sea, acts of God or public enemies, inherent defect of the cargo, or fault of the shipper. The shipowner is obligated to exercise due diligence to properly equip, man, provision and outfit the ship and make it seaworthy and capable of performing the intended voyage. The shipowner is obligated to carefully handle and stow the cargo, and to care for and properly deliver it. The shipowner is NOT responsible for damage caused to the cargo by errors in navigation or management of the vessel.

Shippers are interested in only three details regarding an intermodal movement of its goods. What are they?

To whom claims should be presented for loss or damage during transit. Total cost of transportation between origin and destination. How quickly the container moves from origin to destination.

Each mode of transportation has its advantages and disadvantages. Match each of the following modes with the its description (cost per unit of transportation = $ per ton-mile).

Truck- Most convenient over short distances, high cost per unit of transportation Rail- High cost per unit over short distances, low cost per unit over long distances Water- Lowest cost per unit over long distances Air- Highest cost per unit over any distance

What is the legal test that defines a private carrier, as distinct from a common carrier?

With a private carrier, the entire cargo-carrying capability of the vessel is used by only one shipper.

Initially, container gantry cranes were installed aboard ships. Today, container cranes are located ashore at marine terminals where possible. What factors caused this switch? Check all that apply.

- Cranes aboard ships were heavy and reduced the amount of cargo that could be carried - Dockside cranes could be made faster and larger - Cranes aboard ship are idle while the ship is at sea NOT: There is a shortage of licensed crane operators available to sail on ships

Bill of Lading steps in sequence:

1. Importer opens a letter of credit with their bank. 2. Importers Bank confirmed, then it is sent to the Exporters Bank. 3. Exporters Bank sends notice of letter of credit to Exporter. 4. Exporter loads cargo on ship and puts it in transit. 5. Exporter ships cargo with clean Bill of Lading. 6. Exporter sends B/L, insurance cert., & payment due to their Bank. 7. Exporters Bank sends payment to Exporter and/or Importers Bank. 8. Draft sent to Importer from their Bank. 9. Importer accepts draft from their Bank. 10. Importers Bank sends B/L, Insurance cert., and payment due to Importer. 11. Importer pays for everything.

Container dimensions are now standard to make them interchangeable between ships and other transportation modes. A standard TEU is 20' x 8' x 8' but other sizes exist. Which of the following container lengths are commonly found aboard ships today? Check all that apply.

20 feet 45 feet 40 feet

It was obvious from the start that containerization offered great advantages in terms of ship turnaround and dock labor. Which of the following comparisons are correct in comparing container with breakbulk operations in runs between New York and Houston, according to the text? Check all that apply.

42 dock workers required for containers versus 126 for breakbulk operations. 14 hours of ship time required with containers versus 84 hours for breakbulk operations.

Choose which statements are correct with regard to Clean versus Foul Bills of Lading.

A Dirty or Foul B/L contains a description of apparent damage or defect regarding goods accepted for shipment. A Clean B/L notes that the goods were received in apparent good order and condition, without any further notation or amendment.

A so-called "Straight Bill of Lading", also called a "Sea Waybill," is different from a "Negotiable Bill of Lading." Choose which of the following statements apply to a Straight B/L - check all that apply.

A Straight B/L is a receipt for the goods, and sets forth the terms of the contract of carriage. A Straight B/L is non-negotiable, meaning it is NOT a document of title to the goods.

What is a Neutral Pool in the container shipping business? CHOOSE ALL THAT APPLY.

A central collecting point from which individual containers can be drawn to meet shippers' needs.

Which of the following characteristics apply to a Common Carrier? Check all that apply.

A common carrier must accept the legitimate business of all shippers within the limits of the facilities and capabilities of its vessel. . A common carrier uses a standard contract applicable to all clients Common carriers normally operate over a definite route in repetitious service between stated termini.

According the Business of Shipping Chapter 20, what is a Load Center as it relates to intermodal shipments?

A hub port in a hub-and-spoke transportation system.

Ocean shipping companies historically have been allowed to form "liner conferences" under government oversight, to set prices and service levels on certain key routes between themselves. Which best describes this privilege, which is generally illegal for land-based companies?

Limited anti-trust immunity.

What is a "pendulum route" in liner shipping?

Liner service operating across a body of water in both directions.

The Ocean Bill of Lading has developed over many centuries. By 1600, it had come into common usage. What was the primary function of a Bill of Lading at that time?

Master's receipt for number and quality of goods taken aboard ship.