Sea Freight an

overview
S.L.Ganapathi

Sea Borne Trade

Barring urgent and valuable freight most of international

trade is carried by sea. Even landlocked countries have
seaports of neighbours as gateways
Global Seaborne trade is around 7.5 billion tonnes
Indias seaborne international trade is 600 million tonnes
India s international air cargo traffic is 2.19 million
tonnes

Types of Ships- Dry Cargo

Ships
--------------

General Cargo break bulk ships

Container ships
Combi ships
Ro- Ro ships ( Roll on Roll off )
Pure Car Carriers ( PCC)
Heavy Lift ships
Special Vessels like Chip Carrier/Refrigerated Goods carriers
etc
--- Bulk Carriers

Fuelling Ships (Bunkers)

Table of fuel oils

Name
Alias
Alias
Type
Chain Length
No. 1 fuel oil No. 1 distillate
No. 1 diesel fuel Distillate 9-16
No. 2 fuel oil No. 2 distillate
No. 2 diesel fuel Distillate 10-20
No. 3 fuel oil No. 3 distillate
No. 3 diesel fuel Distillate
No. 4 fuel oil No. 4 distillate
No. 4 residual fuel oil
Distillate/Residual
12-70
No. 5 fuel oil No. 5 residual fuel oil
Heavy fuel oil
Residual 12-70

No. 6 fuel oil No. 6 residual fuel oil

Heavy fuel oil

Residual 20-70

PLIMSOLL LINE

Tonnages and Capacity

Gross Register Tonnage(GRT) represents the total internal volume of a

vessel, where a register ton is equal to a volume of 100 cubic feet (2.83168
m3), which volume, if filled with fresh water, would weigh around 2,800 kg or 2.8
tonnes
Net register tonnage (NRT) is the volume of cargo the vessel can carry; i.e.,
the gross register tonnage less the volume of spaces that will not hold cargo
(e.g., engine compartment, helm station, crew spaces, etc., again with
differences depending on which port or country is doing the calculations). It
represents the volume of the ship available for transporting freight or
passengers
Dead Weight Tonnage(often abbreviated as DWT for deadweight tonnes) is the
displacement at any loaded condition minus the lightship weight. It includes the
crew, passengers, cargo, fuel, water, and stores. Like Displacement, it is often
expressed in long tons or in metric tons.

Capacity in Volume
Bale Cube (or Bale Capacity)- The space available for cargo
measured in cubic feet to the inside of the cargo battens, on the
frames, and to the underside of the beams. It is a measurement of
capacity for cargo in bales, on pallets, etc., where the cargo does
not conform to the shape of the ship.
Grain Cube (or Grain Capacity)- The maximum space available for
cargo measured in cubic feet, the measurement being taken to the
inside of the shell plating of the ship or to the outside of the frames
and to the top of the beam or underside of the deck plating. It is a
measurement of capacity for cargo like grain, where the cargo flows
to conform to the shape of the ship.

Terms associated with Bulk Carriers

Handymax - a bulk carrier, typically between 35,000 and 60,000 DWT.

A Handymax is typically 150-200 meters (492-656 feet) in length,
though certain bulk terminal restrictions such as those in Japan mean
that many handymax ships are just under 190 meters in overall length
(LOA). Modern handymax designs are typically 52-58,000 dwt in size,
have 5 cargo holds and 4 cranes of 30 mt lifting capacity.
Panamax is determined principally by the dimensions of the canal's
lock chambers, each of which is 33.53 metres (110 ft) wide by
320.0 metres (1050 ft) long, and 25.9 metres (85 ft) deep. The usable
length of each lock chamber is 304.8 metres (1000 ft). The available
water depth in the lock chambers varies, but the least depth is at the
south sill of the Pedro Miguel Locks, and is 12.55 metres (41.2 ft) at a
Miraflores Lake level of 16.61 metres (54 feet 6 in). The height of the
Bridge of the Americas at Balboa is the limiting factor on a vessel's
overall height.

Contd

Suezmax is a term for the largest ships capable of

fitting through the Suez Canal fully loaded, and is
almost exclusively used in reference to tankers.
Since the canal has no locks, the only serious
limiting factor is draft (maximum depth below
waterline). The current channel on the canal allows
for 16 m (53 ft) of draft, meaning many supertankers
are of too deep a draft to fit through.
The term Seawaymax refers to vessels which are
the maximum size that can fit through the canal
locks of the St Lawrence Seaway. Seawaymax
vessels are 740 feet in length, 78 feet wide,
(maximum 226 m length, 24 m beam) and have a
draft of 26 feet (7.92 m).

Contd

Capesize ships are cargo ships too large to traverse either the
Suez Canal or Panama Canal (i.e., larger than both panamax and
suezmax vessels). To travel between oceans, such vessels must
round the Cape of Good Hope and Cape Horn. Capesize vessels
are typically above 150,000 deadweight tons, and ships in this
class include VLCC and ULCC supertankers and bulk carriers
transporting coal, ore, and other commodity raw materials. The
term is most commonly used to describe bulk carriers rather than
tankers, however. A standard capesize bulker is around 175,000
tons deadweight, although larger ships (normally dedicated to ore
transportation) have been built, up to 400,000 dwt. The massive
dimensions (and generally very deep drafts) of such large vessels
mean that only the largest deep water terminals can handle them.

Summary
Term

Definition

Handymax Dry cargo vessel of about 45,000 d.w.t.

Handysize Dry cargo vessel of about 25,000 d.w.t.
Panamax

A vessel that is designed to transit the Panama Canal.

Suezmax

Tanker of about 120,000 to 200,000 d.w.t.

Supramax Dry Cargo Vessel of about 52,000 d.w.t.

ULCC

Ultra Large Crude Carrier

Tanker larger than 300,000 d.w.t.

VLCC

Very Large Crude Carriers

Tankers between 200,000 and 300,000 d.w.t.

Aframax

An oil tanker smaller than 120,000 dwt and with a

breadth above 32.31 m usually above 80,000 dwt

Liquid Carriers
Oil Bulk Ore Carriers
Tankers --- Crude Tankers of variuous
sizes Handy Max to Ultra Large Crude
carriers
Product Tankers
Chemical /Vegetable Oil Tankers

Gas Carriers
Liquid Natural Gas Carriers
Liquid Petroleum Gas Carriers
Other Gas carriers

Types of shipping

Tramp Shipping

Liner Shipping

Contracts of Affreightment

Hybrids

Break Bulk Ship

Bulk Carrier

Geared Container Ship

Gearless containership

Heavy Lift Ship

Crude Oil Tanker

Gas Carrier

Product Tanker

Ro-Ro Ferry

Car Carrier

Definitions

Tramp Shipping
Ships which chase cargoes they go where the cargoes are available
Generally for bulk movement of grains/fertilizers/ores/coal etc which needs to be
moved in millions of tonnes
A) to meet the supply chain demand
B) to ensure unit cost of transport becomes low in proportion to low value of such
goods
Such ships are large sized to ensure optimal unit cost of transportation
The Freighting system for these movements are
Chartering i.e. Voyage Charter and/or Time Charter/Contract of affreightment
The document covering contracts is called Charter Party
Charter Party Bill of lading to cover each specific movement

Charters
Voyage Charter
Contract for movement of one specific parcel from one or two load ports to one or two discharge ports
Freight rate USD per tonne

Time Charter
Wet Charter
Bare Boat Charter- crew will be of that of charterer.
Trip time charter
The ship is chartered on a per diem rate for a period
USD per day

Contract of affreightment
it is a contract for carrying an amount of cargoes between two places over a period
There is some latitude for ship-owners a number of ships of a certain types with a flexible time
period to carry out the contract

Draft & Ullage

Draft is the depth of water under the ships water line- measuring of draft also is a way of quantity
loaded on the ship. This method is called draft survey

Ullage is the empty space above the liquid level in tanks of Tankers. Measuring ullage along with
temperature and pressure and calculating the quantity loaded is more accurate way of survey

Characteristics of Voyage Charter

Lay days- The window in which ship should report for loading
Notice of Readiness
FI/FO (Free in/Free Out)
Load & Discharge rates
Ship to specify the holds/hatches available for loading
Demurrage/dispatch charges
Dead Freight
Draft and speed
Statement of Facts/Lay days statement and dispatch/demurrage
calculation

REFER GENCON CHARTER PARTY ATTACHED WHICH IS THE

CONTRACT BETWEEN MERCHANT AND SHIPOWNER

Factors to be kept in mind while

chartering vessels
Draft Restrictions Load/ Discharge Ports
Port handling facilities
Load/ Discharge Ports
Sea lane restrictions (e.g. Panama size)
Lightening possibilities and costs
International market conditions
Vetting and empanelment of brokers
Lead from port to Inland point
Inland Transport Options

Liner shipping

Ships which operate on specific routes and scheduled

dates
Generally for smaller parcels of value goods which can
sustain a higher freight
Break Bulk ships in which goods were loaded in sea
worthy packing now mostly replaced by container
vessels and container mode of transport
Movement covered by Liner Bill of Lading or Multimodal
Transport document-(this will be discussed in detail in
documentation section of the course)

Liner Shipping

Liner shipping: Ideal for those who have small volumes or high value products,
which do not justify chartering of ships. If high value cargo is shipped on chartered
vessels in large quantity the cost of inventory goes up drastically. Liner ships offer
regular reliable shipping service to the trade with fixed schedule.
Liner ships
Ply on a regular scheduled services between groups of ports.
Offer cargo space irrespective of volume, to all shippers who require them.
Sail on scheduled dates, irrespective of whether they are full or not.
Carry general cargo and unitized cargo in containers
Liner shipping is the common arrangement for general cargo and containers,
whereas all other trades are usually accommodated through tramp shipping.
However, this divide is not strict, as liner operators may charter tramp ships to
complement their fleets in times of peak demand, and tramp operators may
occasionally engage in regular liner services for limited periods.
Today in view of many advantages of containers 95 per cent of Liner ships are
container ships-containers have been designed to carry all shapes and weights of
cargoes

Liner Versus Tramp

Item

Liner

Tramp

Commodity

General Cargo

Bulk Materials

Ships

Container ships/Break bulk

ships

Bulk carriers/Tankers/Gas
Carriers/OBOs

Contract

Liner

Charter party

Bill of Lading

Liner

Charter party

Loading /Discharging costs

Part of Freight/responsibility
of ship

Separate- the responsibility

is that of shipper/receiver

Shippers/ Receivers

A large number

One or small numbers

Size of ships

Barring large container

vessels of sizes are not that
big

Can go up to 600,000
tonnes in case of ULCC

Freight Indices

The Baltic Handymax Index (BHMI), is calculated from the

weighted, average rates on major timecharter routes, with two
trial voyage routes, as assessed by a panel of brokers.
The Baltic Panamax Index (BPI), is calculated from the
weighted, average rates on major routes, both voyage and
timecharter, as assessed by a panel of brokers.
The Baltic Capesize Index (BCI), is calculated from the
weighted, average rates on major routes, both voyage and
timecharter, as assessed by a panel of brokers.
The Baltic Dry Index (BDI), is the average of the Baltic
Handymax Index (BHMI), the Baltic Panamax Index (BPI) and
the Baltic Capesize Index (BCI). The BDI provides a good
general indicator of movement in the dry bulk market, and
continues the established time series of the Baltic Freight Index
(BFI) which was introduced in 1985.

The Baltic Dry Index (BDI) as at

2006 Oct 25

Source: http://www.rubbernet.com.sg/annual_patterns.htm

CARGO ORDER
ACCT; PRESIDENT OF INDIA
25,000 TONNES + 5PCT MOLOO, UREA IN BULK
1 S.P., 1 S.B. JUBAIL 1 S.P, 1S.B. WCI
LAYCAN; 5-10 DECEMBER
LOAD 5000/DISCH 2500 SHEX EIU BENDS
SDBC, MAX 20yrs Min. 4X25T CRANES
RATNA USHA FERTICON C/P DATED 05-08-2006 WITH LOGICAL
AMENDMENTS
3.75 PCT TTL HERE INCL. 2.5 ADDCOM
OFFERS TO BE SUBMITTED BY 1000 HRS I.S.T. TMRW
PLEASED TO HEAR
BROKER DETAILS

. YOUR CARGO ORDER, WE ARE PLEASED TO

OFFER FIRM AS FOLLOWS FOR YOUR REPLY BY
1300 HRS. I.S.T. TDY:ACCT. PRESEDENT OF INDIA
25,000 + 5 PCT CHOPT UREA IN BULK
I S.P. I S.B. JUBAIL I S.P, I S.B. WCI
LAYCAN : 5-10 NOV. LIKELY E.T.A. 071200GMT
M.V. STARDUST- BLT MAY, 2002 DESCRIBUED AS
BELOW:SDBC ,4X2\5 T CRANES, 5HO/HA,
F.O. 28T/DAY, D.O. 2.5T/DAY
FRT USD 18.50 PMT BSS 1/1. USD I.O PMT EXTRA
ON ENTIRE QUANTITY IF 2ND DISPORT USED
DEMM. USD 13500 PDPR/HALF DESPATCH
3.75 PCT TTL INCL. 2.5 PCT. ADDCOMM
OWISE TRANSCHART C/P STARDUST 14.05.06
WITH LOGIOCAL
AMENDMENTS.

Shipping Agency
Shipping has traditional agency functions however
over a period of time has turned into deeply
outsourced business
Owners Agency
Charterers Agency
Port Agency
Commercial/ Marketing Agency
Ship/Crew Managment

Liner shipping

Ships which operate on specific routes and scheduled

dates
Generally for smaller parcels of value goods which can
sustain a higher freight
Break Bulk ships in which goods were loaded in sea
worthy packing now mostly replaced by container
vessels and container mode of transport
Movement covered by Liner Bill of Lading or Multimodal
Transport document-(this will be discussed in detail in
documentation section of the course)

Liner Shipping

Liner shipping: Ideal for those who have small volumes or high value products,
which do not justify chartering of ships. If high value cargo is shipped on chartered
vessels in large quantity the cost of inventory goes up drastically. Liner ships offer
regular reliable shipping service to the trade with fixed schedule.
Liner ships
Ply on a regular scheduled services between groups of ports.
Offer cargo space irrespective of volume, to all shippers who require them.
Sail on scheduled dates, irrespective of whether they are full or not.
Carry general cargo and unitized cargo in containers
Liner shipping is the common arrangement for general cargo and containers,
whereas all other trades are usually accommodated through tramp shipping.
However, this divide is not strict, as liner operators may charter tramp ships to
complement their fleets in times of peak demand, and tramp operators may
occasionally engage in regular liner services for limited periods.
Today in view of many advantages of containers 95 per cent of Liner ships are
container ships-containers have been designed to carry all shapes and weights of
cargoes

Liner Versus Tramp

Item

Liner

Tramp

Commodity

General Cargo

Bulk Materials

Ships

Container ships/Break bulk

ships

Bulk carriers/Tankers/Gas
Carriers/OBOs

Contract

Liner

Charter party

Bill of Lading

Liner

Charter party

Loading /Discharging costs

Part of Freight/responsibility
of ship

Separate- the responsibility

is that of shipper/receiver

Shippers/ Receivers

A large number

One or small numbers

Size of ships

Barring large container

vessels of sizes are not that
big

Can go up to 600,000
tonnes in case of ULCC

Containerization:
With the introduction of containers the entire transport industry underwent drastic
change.
Design of ships changed. Ship owners acquired Gearless Cellular Ships.
Size of ships increased dramatically. With lower operating cost, shipping lines could
compete with other carriers.
Turn around time of ships improved.
Ports underwent major change by building deep-water berths and container terminals.
Traditional cargo handling equipments in the port were replaced with most modern Rail
Mounted Quay Cranes, Rubber Mounted Gantry Cranes, Reach Stackers and Large
Size Fork lifts.
Road transport vehicles were split in to two parts i.e. Tractor or Prime Mover or Horse
and trailer.
Rail companies also took advantage of containerization by introducing services like
Trailer on Flat Car (TOFC) and Container on Flat Car (COFC). This change assisted Rail
Companies to regain their business from road transporters.
Shipping lines and rail companies promoted Inland Container Depots or Container
Bases or Dry Ports at landlocked industrial towns. This resulted in Multi Modal
Operations and Door-to-Door service.

Feeder/Voy

ETA

ETD

ETA

Connects

ETD

ETD

ETD

ETA

ETA

Nhava

Nhava

Singapore

SVC

Singapore

HongKong

KAOSHIUNG

SanPedro

Seattle

dd-mmm

dd-mmm

dd-mmm

dd-mmm

dd-mmm

dd-mmm

dd-mmm

OOCLSANFRANCISCO-085

23rdNovember

24thNovember

02ndDecember

APLSEOUL-050

KCS

04thDecember

08thDecember

APLLATVIA-008

SAX

04thDecember

24thDecember

27thDecember

BASLEEXPRESS-005

LP4

07thDecember

SINGAPORE-006

30thNovember

01stDecember

09thDecember

APLRIYADH-047

KCS

18thDecember

22ndDecember

APLNINGBO-025

SAX

12thDecember

31stDecember

APLNEWJERSEY-026

CMX

15thDecember

17thJanuary

BASLEEXPRESS-005

LP4

12thDecember

APLGERMANY-172

07thDecember

08thDecember

16thDecember

APLDOHA-045

KCS

25thDecember

29thDecember

APLSAVANNAH-004

SAX

18thDecember

07thJanuary

APLOREGON-026

CMX

22ndDecember

17thJanuary

APLIRIS-179

14thDecember

15thDecember

23rdDecember

APLSEOUL-051

KCS

01stJanuary

05thJanuary

APLNEWYORK-006

SAX

25thDecember

14thJanuary

17thJanuary

OOCLCHICAGO-008

CMX

29thDecember

APLIOLITE-177

21stDecember

22ndDecember

30thDecember

APLBAHRAIN-043

KCS

8thJanuary

12thJanuary

APLPHOENIX-005

SAX

1stJanuary

21stJanuary

24thJanuary

APLAUSTRIA-033

CMX

5thJanuary

EMIRATESPEARL-349

28thDecember

29thDecember

06thJanuary

APLRIYADH-048

KCS

15thJanuary

19thJanuary

APLTURKEY-034

SAX

08thJanuary

28thJanuary

31stJanuary

Container Lines- Hub and spoke

operations

Container ships are growing by size to keep pace with

competition and with constant endeavor to reduce unit
cost
These ships cannot call at many ports because of costs
and time- yet they have to be near full
Hence feedering of containers is done to hub ports
In the Far-East Europe trade Singapore and Colombo
are hub ports for Indian cargoes
Recently Maersk Line has introduced a direct service
from Chennai to USA and Chennai port is being used
as hub for containers from Chittagong and Kolkata

MULTI-MODAL TRANSPORT
What is multi modal transport?
Inter-modal or multi-modal transport became integral part of shipping industry and undoubtedly goes hand
in hand with containerization.
As per U. S. Department of Transportation, "Intermodal used to denote movements by cargo containers
interchangeably between transport modes, i.e. motor, water and air carriers, and where the equipment is
compatible within the multiple system".
Business Environment
In competitive Business environment, liner-shipping companies are striving to achieve a competitive edge
over- their rivals in the markets.
Liner companies are becoming more and more marketing / customer oriented. The multi-modal transport
operator issues one Bills of Lading covering entire journey and shoulders the responsibility for the whole
transport operation in all its stages. Future of shipping companies depends to a great extent, on their ability
to fulfill the customers' needs.
International Multi-modal transport system
The International multi-modal transport system, one company offers combined, or multi-modal transport
services.
The transport operation utilizes at least two modes of transport.
The transport operation is from the exporter's stores to the consumer's stores.
Due to the pressing necessity to provide an International system for multi-modal transport, UN UNCTAD
submitted a proposal for- the International Multi-modal Transport Convention, which was adopted during its
session, held in Geneva in 1980. This convention stipulates that a contract should be concluded between
the shipper and the multi-modal transport operator, by which the latter undertakes to carry out an
International transport operation, whether he himself carries out the operation, or whether- it is carried out
through other parties.