Int. Logistics/Transportation

Plimsoll Marks

"Lloyd" • classification societies are organizations that determine technical and safety guidelines for vessels include Plimsoll mark

Liner Carrier (Liners)

- Common carriers - If you want to travel from Miami to London, you'll look at all the flight companies traveling that route - Liners are used similar to a bus service - Sail on a regular schedule between groups of ports - Must have adequately sized fleet; Fairly large shore establishment

5 Cargo types

- Container load (CL) & Less-than-container load (LCL), - Bulk Cargo - Break-bulk, (general packaged), cargo - Neo-bulk cargo - Project cargo

Ship Carters

- Most are chartered on a trip basis or a time basis - # of different types of charter agreements - 2 of the most important are time charters and voyage charters • for time charters, the ship owner agrees to charter the ship for a period of time • for voyage charters, the ship owner agrees to charter the ship for a specific voyage

Bulk Cargo

- Must be contained by the "holds" of the vessel - Examples: petroleum, grain, coal, sulfur - Loaded by shovel, pump, bucket, or scoop - Bulk means free form - The only thing containing the packaging, is the the vessel

Project Cargo

- Nor specific type of item but related cargo needed for single, certain purpose - Often spread over a number of voyages - Sometimes requires special transportation equipment

Neo-bulk Cargo

- Some characteristics of bulk & break-cargo - Examples: Steel, cars, logs (open top containers) - usually moved by specialized vessels - Cars more in a special vessel called Ro/Ro (Roll on/Roll off)

Ro/Ro (Roll on/roll off)

- Transportation over water of trucks, trailers, and other vehicles, - Its the ideal transport mode for short distances, examples:(Rotterdam and England) - Usually the main Ro-Ro terminals are situated close to the port entrance - Train Ferries: is the transportation over the water of train, cars, (examples: Bosphorus)

Private/Specialized Carriers

- Used by the company who owns them. Walmart has their own private carrier that only moves their own products. - Many oil companies have their own private fleet - Only large shippers may have their own- Mostly operated by oil companies because they need the whole vessel - 18k to 500k tons of liquid, deals with bulk liquid cargoes - Quick loading and discharge

Tramp Carriers (General Traders)

- Vessels are used b a need by need basis - Similar to renting a car - Charted or leased vessels - Do not operate on a fixed schedule, just whenever they are needed - Generally much smaller than liner companies - Trend is towards long term charters

Break-Bulk Cargo

- Who created the container? Malcom Mclean - Examples: packaged sugar -Must be loaded individually, not in an intermodal container not in bulk - May be in bags, boxes, crates, barrels, etc. - Smaller quantities than bulk - Containers allow us to be more efficient • Lower cost, lower lead time

Fixture/Charter Party

- the terms on which the cargo is to be carried, including: • Dates on which the vessel will be avaialble for loading • Loading and discharging ports • Time allowed for loading and unloading • Demurrage rates - Terms of payment - Penalties for non-performance

Fixture or charter party

Fixture or charter part sets out the terms on which the ship is to be chartered • a good charter part will provide clear guidance on precisely who is legally responsible for the costs of any unanticipated events

Lecture 10

International Water Transportation 3 - Liner Shipping

Lecture 9

International Water Transportation-2 Bulk ocean shipping

Lecture 8

Ocean shipping/ships

3 Types of Ocean Carriers

Private, Tramps, & Liners

Determination of Charter Rates - What are the key variables affecting worldwide demand for shipping capacity?

Related to demand for commodities

TEU

TEU = 20 ft equivalent • 3,000 TEU capacity = capacity to hold 3,000 20ft containers - Now you see more FEU which means 40 ft equivalent unit

4 Vessel Types

Tankers, LNG, Ore/Bulk ships, Combination (oil & dry bulk) ships

2 Types of Charters

Voyage & Time

Tramp Carriers

• Also known as Bulk Carriers • transport liquid and/or dry bulk goods often in full shiploads

Combination (oil/dry-bulk) ships

• Also known as combi • Built that way usually because the original owner was uncertain about future markets

Hedging on Charter Rates

• Baltic exchange - organization that specializes in providing maritime information • Baltic Dry Index (BDI) - average of dry bulk fixture across key trade lanes in the world - represents u.s. dollars • When you sign a contract (fixture) try to get a low rate but its not likely - its likely you will tie your rate to this index

LNG

• Compressed to 1/630 of its gaseous volume • Usually carry 4 huge spheres • Temperatures mainted at -260 degrees F

2 ways to measure DWT:

• Gross tonnage • Net tonnage

Ore/Bulk ships

• Large compartments to carry loads of ore, grain or coal • Usually the entire ship carries one type of cargo • Some carry their own load/discharge equipment

Bulk shipping

• Most of the bulk cargos are drawn from the raw materials trades • 2 main categories of bulk cargos are liquid bulk and dry bulk - Petroleum is the major liquid bulk - 5 major dry bulk cargos are iron ore, grain, coal, phosphates, and bauxite

Ships are specialized depending on:

• Products that are carried (liquid bulk, dry bulk, etc) • Ports that are served (availability of container cranes) • The shipping lanes (Panama canal)

Voyage Charters

• Provides transport for a specific cargo from Port A to B for a fixed price per ton • Ship owner pays all operating costs for the voyage • If the voyage is not completed within the terms of the charter party, then there ay be a claim filed - The shipper will file a claim if the ship owner is at fault ( it took too long to make the voyage) - The ship owner will file a claim if the shipper is at fault (it took too long to load a vessel at port)

Dead Weight Tonnage/Ton (DWT)

• Refers to all of the weight (in tons) that a vessel can carry, including oil/supplies & fresh water

Tanker

• Ship with higher world's registered tonnage • Largest vessels in use • Largest tankers carry crude oil

Time Charters

• Shipper will sometimes want to charter a ship for certain length of time (a month or 5 years) • with a time charter, operating expenses are are split between the ship owner and the charterer - the ship owner pays the general operating cost of the vessel (crew, maintenance, repairs), while the charterer pays the cost specific to the voyages that are undertaken while the ship is chartered (bunker fuel, port, and canal charges)

Liners

• Transport mainly "general cargo" consisting of containerized or break-bulk (palletized) goods over regular routes

- Why charter vessels instead of buying?

• capital cost; less expensive to hire some pay to move your goods - they do not need vessel throughout the year (agricultural industry)

What are the key variables affecting worldwide supply of shipping capacity?

• demand for vessels = demand for intro of new vessels in the market • Agricultural/seasonal weather/harvesting, issues particularly for agricultural commodities

Bare boat charter

• excepetion is the bare boat charter, where the charter assumes both the general operating expenses and the voyage expenses for the ship

Fixture or charter party

• information that may be in a charter part includes: - details of the ship and the contracting parties including: • the name of the ship and the contracting parties • Details of the ship • The ships position • Brokerage fees including who pays them - Description of the cargo to be carried

Demurrage rates

• penalty for non compliance for loading and unloading - vessel speed is also added in the contract which is related to departure and arrival - going faster uses more fuel = higher cost

Ship Charters

• when a ship is chartered, its said to be "fixed" • therefore, a charter agreement is sometimes called a "fixture" or a "charter party" • Fixtures are generally negotiated with the help of ship brokers, who bring together ship owners with available capacity and shippers with freight that needs to be shipped • You can get the vessel rented for one voyage or for several months • You pay one fee per ton & the vessel company pays for repairs, crew, etc. • If you rent for years, you have to pay for fuel, cannel charges, etc. (similar to a taxi)