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HOME Gateways To Global Markets Export Dept. L/C, Exchange, Exp. Forms, Etc. Purchasing Department Shipping Dept. Logistics, B/L, AWB, Insurance, Containers, Etc. Production Department Administration Department Product Coding U.P.C. & EAN Export-Import Maxims and Notable Quotes 1,000+ A to Y Conversion Factors: Length, Area, Volume, Mass, Pressure, Flow, Power, Temperature, Etc. General References -- Tool Steels, Plastics, Etc. Miscellaneous Conversions & Calculations D+S Network -- Trade Offers: Worldwide Buy & Sell Postings CATS -- Global Trade Forum: Q & A SHIPPING DEPARTMENT Logistics Management Cargo Insurance www.EXPORT911.com Copyright © EXPORT911 www.EXPORT911.com EXPORT911.com Table of Contents - SHIPPING DEPARTMENT Customs Brokers Freight Forwarders or Consolidators Case Sample: Freight Consolidation (1) The Forwarding Practices of Exporters Importer's Specified Forwarder or Consolidator and Its Implication Case Sample: Freight Consolidation (2) Freight Containers Container Classifications Container Dimensions and Capacity Rating, Tare Mass and Payload of Containers The Marking and Identification of Containers Table and Diagram: Dimension of General Purpose Containers Containerized Shipments Container Size, Number and Load Options o Case Sample: Container Selection (1) Maximized Use of a Container Capacity o Case Sample: Container Selection (2) Palletized Cargo in Container Shipments
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Pratik Logistics

Feb 22, 2015

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Page 1: Pratik Logistics

 

   

   

  

    HOME  

 

   

Gateways ToGlobal Markets

 

   

Export  Dept.L/C, Exchange,Exp. Forms, Etc.

 

   

PurchasingDepartment

 

   

Shipping  Dept.Logistics, B/L,AWB, Insurance,Containers, Etc.

 

   

ProductionDepartment

 

   

AdministrationDepartment

 

   

Product CodingU.P.C.  &  EAN

 

       

   

Export-ImportMaxims andNotable Quotes

 

       

 

   

1,000+  A to YConversionFactors: Length,Area, Volume,Mass, Pressure,Flow, Power,Temperature, Etc.

 

 

   

GeneralReferences-- Tool Steels,Plastics, Etc.

 

 

   

MiscellaneousConversions  &Calculations

 

 

   

D+S Network-- Trade Offers:Worldwide Buy& Sell Postings

 

 

   

CATS-- Global TradeForum:  Q & A

 

 

   

Online ShippingSchedules and

 

SHIPPING  DEPARTMENTLogistics Management

Cargo Insurancewww.EXPORT911.com

Copyright © EXPORT911

www.EXPORT911.com

 

EXPORT911.comTable of Contents - SHIPPING DEPARTMENT

Customs Brokers Freight Forwarders or Consolidators

Case Sample:  Freight Consolidation (1) The Forwarding Practices of Exporters Importer's Specified Forwarder or Consolidator and Its Implication

Case Sample:  Freight Consolidation (2) Freight Containers

Container Classifications Container Dimensions and Capacity Rating, Tare Mass and Payload of Containers The Marking and Identification of Containers Table and Diagram:  Dimension of General Purpose

Containers Containerized Shipments

Container Size, Number and Load Optionso Case Sample:  Container Selection (1)

Maximized Use of a Container Capacityo Case Sample:  Container Selection (2)

Palletized Cargo in Container Shipmentso Table:  Pallet Count

FCL, LCL, CY, and CFSo Modes of CY and CFS Container Services

Packing (Loading) and Emptying the Containers The Use of Loading Equipment Inspecting the Container Stowage of Container

 

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Cargo Tracking 

   

World ClockReconstruction

 

 

   

World TimeZone ConverterReconstruction

 

 

   

Number SetGeneratorFor Trade Shows

 

 

   

SimulatedSlot MachineFor Trade Shows

 

 

   

MortgageCalculator

 

 

   

Time-LapseCalculator

 

 

   

Due DateCalculator

 

 

   

World DistanceCalculatorUsing Latitudes&  Longitudes

 

 

   

ProtectEnvironment-- Recycling

 

 

   

Reserved forExpansion

 

 

   

Reserved forExpansion

 

 

   

300 YearsPerpetualCalendar :1800 to 2099

 

 

    Useful Links  

 

   

Canada InfoResourcesCenter/CentreGovernments,Cities, Schools,Colleges, Etc.

 

 

    Contact Us  

 

   

Copyright,Trademarks  &Disclaimer

 

 

   

FeedbacksFrom Viewers

 

        

       

       

        

       

Efficient Packing of Containers---Corrugated Cartons, Wooden Cases/Boxes and Bales

o Diagram:  Package Orientation Efficient Packing of Containers---

Palletized Cargoes (Cartons, Cases/Boxes, Bags, and Drums)and Wooden Crates

o Diagram:  Palletized Cargoo Case Sample:  Shipping Pallets

Pallet Stowing Patterns in a Container Pallet Yield in a Container

o Table:  Pallet Yield Stack Loading of Pallets Interlocking of Export Packs

o Diagram:  Interlocked Cargo Pallet Constructions and Designs RO/RO Vessels and LASH Conference Shipping Non-conference Shipping Charter Shipping Road Freight Rail Freight Air Freight

Benefits of Air Freight Landbridges

The Use of Landbridges as Alternative Routesto the Conventional Ocean Traffic

Diagram:  Microbridge Freight or Tariff Rates

Freight Rebates Conference Discounts and Contract Shippers Freight Adjustments

Weight or Measure in the Freight Cost Calculation Case Sample:  Weight or Measure

Freight Payment---Freight Prepaid and Freight Collect

Shipment Control Partial and Installment Shipments

o Case Sample:  Non-Partial Shipment Customs Closing Date Seaports of the World Booking of Shipping Space

Transhipments Landlocked Countries and Transhipping Points Shipping Order (S/O)

Export Shipping Instructions Sample Form:  B/L Application-Instructions

Dock Receipt Sample Form:  Dock Receipt (Shipping Note)

Customs Export Declaration Ocean (Marine) Bills of Lading

Sample Document:  Ocean Bill of Lading Shipper's Load and Count Clean versus Foul Bills of Lading Short Form versus Long Form Bills of Lading Received versus On Board Bills of Lading

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UnauthorizedReproductionof CopyrightMaterials Hereis PROHIBITED

 

       

 

   

EDUCATION isa way out fromlife's miseries   ..... Morris Ng

 

 

   

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Straight versus Order Bills of Ladingo Synopsis:  The Title to the Goods in an Order Bill of

Lading Other Ocean/Sea Transport Documents Stale Bill of Lading and the Guarantee for Delivery of Goods

Air Waybills Sample Document:  Air Waybill (Air Consignment Note) Master and House Air Waybills Clean versus Foul Air Waybills

Road Waybills and Rail Waybills Post Receipts and Courier's Receipts Export-Import Cargo (Marine) Insurance

Insurance Policy and Cover Note Insurance Policy versus Insurance Certificate Open Policy versus Specific Policy Advantages of an Open Policy Over a Specific Policy

Principles of Cargo (Marine) Insurance Institute Clauses (of Cargo Insurance) Other Institute Clauses Standard Cargo Insurance---

Three Basic Policies (in the Old Cargo Clauses) The New Institute Cargo Clauses

Comparison of Institute Cargo Clauses (A), (B) and (C) Terminology in the Institute Cargo Clauses Endorsement of the Insurance Clauses Duration of Insurance Clauses Insurance Premiums

Amount of Insurance Coverage Contingency Insurance Insurance Claims

Payments in the Particular Average Claimsand the General Average Claims

Insurance Application-Instructions Sample Form:  Insurance Application-Instructions

Export Credit Risk Insurance Calculate the length of time needed for a shipment

between two dates using the Time-Lapse Calculator Calculate the distance between ports and/or cities

using the Distance Calculator Check the due date or final date of a shipment

using the Due Date Calculator Check the current time of each country

using the Time Zone Converter (in Real Time) Online Shipping Schedules and Cargo Tracking

Contents on this website cannot be reproduced in whole or in part,either in its original language (i.e., English) or translated into otherlanguages, without the written permission of EXPORT911.

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Customs Brokers 

The customs broker---broker or customhouse broker or customs house broker---is an individual or company licensed to clear export and import goods through customs.

In general, the role of brokers is the same worldwide. Besides clearing of goods through customs, other export services a broker renders include booking of space for ocean, air and land freight, canvassing and providing the freight cost, and preparation of export documents and sending them to the bank for negotiation. In certain countries, it is a business practice that exporters prepare their own export documents. The broker also renders the forwarding services as a freight forwarder.

Few large exporters have their own in-house licensed customs broker.

The broker basically handles any export goods. At times, it is necessary to retain the service of a broker experienced in the exporter's line of product and the port of destination.

It is important to select a reliable customs broker. The exporter normally has to sign an authorization paper allowing the broker to handle the customs declaration. In case the broker commits an error, the exporter is held liable.

The brokerage fee varies from country to country. The broker may collect a basic service fee on top of other charges, such as documentation charges and port fees. In certain countries, the broker collects a uniform base fee, plus a small percentage of the value of shipment. In a country where the brokerage fee is not regulated, it may vary considerably among brokers. The exporter must check with

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different brokers in order to get the best offer. It is important to request the broker to show the breakdown of charges on the billing.

A good and honest broker can help new exporters with certain export routines and help them save money.

Freight Forwarders or Consolidators 

The freight forwarder---forwarder---is an individual or firm who renders cargo delivery services. In domestic (local) freight forwarding, it is the delivery of goods usually from the exporter's premises to the local customs in exporting, and vice versa in importing. The customs broker also renders local freight forwarding for exporters and importers.

International (foreign) freight forwarding is the delivery of goods from the exporter's premises (or from the port or point of origin) to the port or point of destination (or to the importer's premises).

The freight consolidator---consolidator or groupage operator---is an individual or firm who accepts less than container load (LCL) shipments from individual shippers, and then combines them for delivery to the carrier in full container load (FCL) shipment.

The services of a forwarder are usually available in a consolidator, and the forwarder often engages in the consolidation of cargo. Hence, the term forwarder is often used synonymously with the consolidator.

The forwarder provides a wide range of services. Besides all of the export services available from a customs broker, the forwarder may also arrange for the insurance, export packing and trucking.

The forwarder usually receives the forwarder's charges from the exporter. In addition, it may receive a commission from the carrier---freight company (ocean, air, truck and rail).

In the ocean shipment, the forwarder may 'buy' the shipping space, in a special arrangement with the carrier, and 'resell' the space to individual shippers, instead of receiving a commission. In such an

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arrangement, the forwarder functions as an independent distribution or logistical company known as the NVOCC (nonvessel operating common carrier) or NVO (nonvessel owner ornonvessel owning carrier), or commonly referred to as the ocean freight consolidator. The Case Sample: Freight Consolidation (1) below illustrates the function of a NVOCC or NVO.

Case Sample:Freight Consolidation (1) 

XY Consolidator 'buys' 100 containers of 20' from RS Shipping on vessel S/S AMIGO, Voyage No. 8, the route is from Port A (of the exporting country) to Port B (of the importing country), at a discounted box rate of US$1,300/container. To explain the case, it is assumed that the freight is charged on measure basis only, instead of weight or measure, and assumed that the capacity of 20' container is 33 CBM (cubic meters). As such, XY Consolidator 'buys' a total fixed shipping space of 3,300 CBM at the ocean freight cost of US$39.394/CBM.

If the shipper UVW Exports books 10 CBM of space for a product directly with RS Shipping, on the same vessel and voyage number, the LCL (less than container load) rate is US$55/CBM. If the shipper ABC Exports books a 20' container directly with RS Shipping, the FCL (full container load) flat rate is US$1,500/container, which is US$45.455/CBM. In caseABC Exports is able to load 28 CBM only due to the odd sized export packages, the freight cost is US$53.571/CBM. In general, the CBM cost of FCL is lower than the LCL.

XY Consolidator, which does not operate or own any ships, offers (i.e., 'sells' the space they 'bought') UVW Exports and other LCL shippers to transport their goods at US$54/CBM, against the US$55/CBM from RS Shipping. XY Consolidator offers ABC Exports and other FCL shippers at US$1,450/container, against the US$1,500/container from RS Shipping. In practice, the consolidator 'selling' at the same rate as the shipping company is not uncommon.

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XY Consolidator groups all LCLs of individual shippers into FCLs, and then delivers all FCLs to RS Shipping in one lot, that is 100 containers of 20' or less, if the space is not fully 'sold'.

In such a case, XY Consolidator operates as a NVOCC and issues a freight forwarder's bill of lading to each shipper, without receiving a commission from RS Shipping.

In a related case, the letter of credit from the importer may stipulate "transport documents issued by freight forwarder are not acceptable", thus the bill of lading from a NVOCC is not acceptable.

 

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The Forwarding Practices of Exporters 

Exporters use the services of a forwarder primarily for convenience. New exporters can benefit from the services of a good and honest forwarder.

In less developed countries, it is a business practice that the exporter utilizes own contacts or sources of export services like trucking and customs declaration, especially in ocean shipments, instead of relying on the forwarder, which is the practice in developed countries.

Referring to Case Sample: Freight Consolidation (1), XY Consolidator may offer UVW Exports to transport their goods at US$70/CBM, including such charges as the inland freight (cartage) and handling, from UVW Exports' premises to Port B. If UVW Exports uses its own contacts in the forwarding instead of a consolidator, the freight rate of US$55/CBM from RS Shipping plus all other charges may amount to less than US$70/CBM. Exporters should always check the options.

Importer's Specified Forwarderor Consolidator and Its Implication 

Some importers may specify the forwarder to use for their imports. The international freight forwarder either has own office or a handling agent abroad.

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Case Sample:Freight Consolidation (2) 

Further to Case Sample: Freight Consolidation (1), assuming that XY Consolidator has an office named XY Branch at the importing country of DEF Imports, and DEF Imports contracts XY Branch to handle a shipment from UVW Exports at the exporting country, the sales term is FOB Port A in the exporting country. The contract, in which UVW Exports is informed in advance by DEF Imports, calls for a delivery from Port A to DEF Imports' premises---meaning that DEF Imports has to pay XY Branch the agreed-upon CBM (cubic meter) cost to cover such charges as the ocean freight from Port A to Port B in the importing country, and the handling charge, documentation fee, and inland freight from Port B to DEF Imports' premises.

XY Branch notifies XY Consolidator of the contract and requests it to coordinate with UVW Exports. As the trade term is FOB Port A, UVW Exports must arrange and pay for the cartage from its premises to Port A, plus the brokerage fee and other charges. Under this situation, XY Consolidator may offer to handle the trucking and customs declaration for UVW Exports. The exporter (the UVW Exports) must check the options before accepting the offer. Depending on the country, the cost can be lower, or higher, when the exporter uses its own contacts.

In another instance, the importer, especially the new customer, may not inform the exporter that a forwarder will be involved in the delivery. The exporter becomes aware of such involvement only after receiving the letter of credit, in which a forwarder is specified. Such incidence must be avoided as the cost of exporting can be affected, for example, the diversion of cargo to another location designated by the forwarder, which may cost more.

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Freight Containers 

The pattern of cargo reception and shipment has changed with the use of the freight container---container, box or LO/LO (lift on/lift off). The use of containers, which started more than 40 years ago, in intercontinental traffic is now available in most seaports worldwide.

In the 1960's, many seaports either had inadequate container facility or none at all. Consequently, export shipments often relied on conventional (break-bulk) vessels. The cargoes were placed alongside a vessel for hoisting on board. The stevedores (longshoremen) were often employed to carry cargoes on and off the vessel. The loading and unloading of vessels consumed too much time, which caused dockside bottlenecks and delayed shipments. With the increased use of containers, the congestion was decentralized. The problem of congestion was transferred from the docks or piers to the container freight stations or terminals.

ISO Freight Containers

The acronym ISO stands for the International Organization for Standardization, with headquarters in Geneva, Switzerland. The ISO freight container refers to a container complying with the ISO container standards in existence at the time of its manufacture.

Container Classifications 

Containers are available in configurations to take almost every kind of cargo and mode of transportation (ocean, air, road, and rail).

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Containers for Intercontinental Use

In terms of the type of cargo for which the containers are mainly intended, they are classified as general cargo container and specific cargo container.

  General Cargo Container

(1)  General purpose (dry cargo) container

It is suitable for the widest varieties of cargo. It is fully enclosed and weatherproof, having rigid walls, roof and floor, with at least one of its walls, either end wall (end loading) or side wall (side loading), equipped with doors.

Please see Dimension of General Purpose Containers for the related information.

(2)  Specific purpose container

It is used to facilitate the packing (loading) and emptying (unloading) of container other than by means of doors at one side of the container, and for other specific purposes like ventilation.

Closed ventilated containerIt is used for the carriage of cargo, such as hides, that cannot stand

 

Dry Cargo Container 

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excessive moisture. It is similar to the dry cargo container with specially designed natural or mechanical (forced) ventilation.

Open top containerIt is similar to the dry cargo container except that it has no rigid roof, but has a movable or removable cover (e.g. a cover made of canvas, plastic or reinforced plastic material) supported on movable or removable roof bows. The open top container is used for machinery, sheet glass, and other heavy, bulky or long objects.

Platform (flat rack)It does not have a superstructure, that is, rigid side walls and load-carrying structures. The term load refers to static/dynamic form of load (not cargo load) or forces arising out of the lifting, handling, securement and transporting of container. It is equipped with top and bottom corner fittings. The corner fittings (see diagram in the Dimension of General Purpose Containers) provide means of supporting, stacking, handling and securing the container. The flat rack is used for machinery, lumber, and other heavy or large objects.

Platform based containers open sided

  Specific Cargo Container

(1)  Thermal container (reefer)

It has insulated walls, doors, roof, and floor, which limit the range of temperature loss or gain. It is used for perishable goods like meat, fruits and vegetables.

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Insulated container It does not use any device for cooling and/or heating.

Refrigerated container (with expendable refrigerant)It uses dry ice or liquefied gases. It does not require external power supply or fuel supply.

Mechanically refrigerated containerIt uses a refrigerating appliance, that is, the mechanical compressor or absorption unit.

Heated containerIt uses the heater, that is, a heat-producing appliance.

Refrigerated and heated containerIt uses the refrigerating appliance (mechanical or expendable refrigerant) and heater.

(2)  Tank container

It is used for the carriage of bulk gases and liquids like chemicals.

(3)  Dry bulk container

It is used for the carriage of dry solids in bulk without packaging, such as grains and dry chemicals. It consists of a cargo-carrying structure firmly secured within the intercontinental container framework.

(4)  Named cargo types

It consists of various types of containers, such as automobile (car) containers and livestock (cattle and poultry) containers.

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Unit Load Device (ULD)

The unit load device (ULD) is the air equivalent of the ISO container. Due to its unique shape resembling an igloo, the ULD is sometimes called the igloo (or iglu).

The air mode containers mainly are of the IATA (International Air Transport Association) types. The popular sizes of ULD include the IATA Type:

 

IATA Type

       8     lower deck container,     60.4"  x  61.5" x  64"  

       5     lower deck container, 88" x  125" x  64"

       3     main deck container, 88" x  125" x  86"

 

Several other types of ULD are also in use worldwide.

SHIPPING  DEPARTMENTLogistics Management

Cargo InsuranceTEU, twenty-foot equivalent unit, knots, cellular container ships, multimodal transport, combined transport bill of lading, through bill of lading, CBM, cubic measurements, container services, standard containers, hicube, high cube containers, cargo cubes, global shipping, import-export shipping, logistics, logistics management, logistics supports, shipping space, shipping order, S/O. Shipping permits, shipping notes, dock receipts, master ships, mother ships, feeder vessels, transhipment, transshipment, transit shipment, dead freight, seaports, ports, freight forwarders, consolidators, freight consolidators, customs brokers, customs forwarders, brokers, customhouse brokers, customs house brokers, voyage, flight, groupage operators, shipping operators, shipping firms, shipping company, air shipping, ocean shipping, carriers, freight company, transport company, ETA, ETD, ETS. Transportation, transports, ocean shipping company, freight containers, couriers, airlines, tariffs, custom tariffs, shipping dangerous goods, shipping schedules, air containers, ocean containers, shipping containers, container load, LCL, full container load, FCL, marine insurance, cargo insurance, import-export insurance, NVOCC, nonvessel operating common carriers, NVO, nonvessel owner carriers, nonvessel owning carriers, ocean freight consolidator, and steamship.  

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Page 15: Pratik Logistics

Containerized Shipments 

The use of containers in export shipments makes the transport and handling easier and faster. The crane and gantry are commonly used in handling containers. The forklift is also used at the docks and container terminals to move the 20' and shorter dry cargo containers, which are equipped with forklift pockets---fork pockets or tine pockets.

The ports worldwide handle over 100 million TEUs annually. The unit TEU (twenty-foot equivalent unit) is used to express the relative number of containers based on the equivalent length of a 20' container. For example, 100 containers of 20' is 100 TEUs, while 100 containers of 40' is 200 TEUs.

The container ships used in the international traffic are designed with the cells (compartments with cell guides) resembling a honeycomb wherein the containers are placed, thus named cellular container ships.

The ships are bigger and faster nowadays, especially those used in the deep-sea voyage (long haul). Those rated below 20 knots are common in the short-sea voyage (short haul). The knot is a unit of ship's speed, being one nautical mile per hour. One nautical mile is 1.852 kilometers. A ship that steams at 20 knots is moving at a speed of about 37 kilometers per hour.

Some cellular container ships in the 20 to 23 knot range can accommodate 2,000 to 3,000 TEUs. Some rated 24 knots have a carrying capacity of 4,000 to 4,900 TEUs and load of 56,000 to 75,000 metric tons. The length of the vessel can be about 900' (275 meters) and the beam---the widest part of a ship---can be about 125' (38 meters). The size of vessel is huge compare to a standard football field having a goal line of 300' (91.44 meters) and an end line of 160' (48.77 meters).

Convenience of Containers inMultimodal Transport and Transhipment

Containers are designed to facilitate the carriage of goods without intermediate reloading. They are fitted with devices permitting their ready handling, particularly in the multimodal transport and transhipment (the word "transhipment" is also written with two letter 's' as "transshipment").

The prefix 'multi-' means at least two or many. The term mode refers to the way or means. Multimodal transport means at least two different modes of transportation. In export shipping, it refers to delivery using a combination of usually ocean and land (rail

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or road) carriers, and using only one shipping document known as through bill of lading or combined transport bill of lading, issued usually by the ocean shipping company or its agent.

Theft, Pilferage, Damage, and Insurance

The cargo security of container shipments against theft, pilferage and damage is improved, especially in the CY/CY container service. Hence, the cargo insurance in a container shipment generally is lower than in a break-bulk shipment.

The metal seal that is provided by the carrier and used in securing the container doors is tamperproof, but it is easily removed. In some countries, the importer's customs broker may use padlocks to secure the doors of container for their client once the FCL (full container load) shipment reached the destination port.

Importer's Specified Container Shipping Company

Importers may specify in the purchase order and/or the letter of credit (L/C) the container shipping company or the vessel to use for their shipment. Big importers, such as chain stores, and large shippers may have a contract with the shipping company to deliver an annual minimum TEU (twenty-foot equivalent unit) at preferred or discounted freight rates.

Container Size, Number and Load Options 

The cargo weight and cube influence the size and number of containers needed for an order. The term cube refers to the cubic measurement of cargo.

From the analysis in the Case Sample: Container Selection (1) below, it is obvious that not all 1,500 cartons (2,250 cu. ft. or 63.713 CBM) will fit into two 20' containers or one 40' standard container. A solution is to request the importer to adjust the order to 1,365 cartons (2,047.5 cu. ft or 57.979 CBM) to make one 40' FCL (full container load), in case the high cube

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container (thehicube) is not available. The alternate solution is to use a 40' hicube. However,

not all shipping companies and sea routes have the hicube, there are legal limitations to the overall height of a vehicle in certain areas (e.g,

tunnel and underpass) and countries, and the FCL (full container load) freight rate of hicube is higher than the standard

container.

Some of the shipping companies having high cube containers include:

APL (U.S.A.) Evergreen (Taiwan) Hanjin (South Korea) Hapag-Lloyd (Germany) "K" Line (Japan) Maersk (Denmark) NYK (Japan) OOCL (Hong Kong-Taiwan) Sea-Land (U.S.A.)

Case Sample:Container Selection (1) 

An importer orders 1,500 cartons of product DX. The gross weight of each carton is 10.5 kilograms and its length-width-height is 1.5' x 1' x 1' (1.5 cu. ft. or 0.04248 CBM). The nature of product DX demands the stowage of cartons in upright position.

The cargo gross weight of 15,750 kilograms suits a 20' or a 40' container. The total cube is 2,250 cu. ft. (63.713 CBM).

The capacity of a 20' container is about 1,170 cu. ft. (33.131 CBM) and a 40' is about 2,385 cu. ft. (67.535 CBM). It seems that all 1,500 cartons will fit into two 20' containers or one 40' standard container, but the figure is misleading. It is important to consider the excess, but unusable, space generated from the stowage of odd sized cartons.

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Analysis on some possible methods of stowing product DX and the total number of cartons that will fit into a container, based on the internal dimension of the general purpose container and the Diagram: Package Orientation, is as follows:

Method of Stowing

(A) Stowing the front (length) of all cartons parallel to the side (length/deep) of container.

(B) Stowing the front (length) of all cartons parallel to the end (width/wide) of container.

(C) Crosswise stowing---alternate each row in the wide (shown below) using the methods (A) and (B), that is, a row of CA alternate with a row of CB presented below.

Container Method (A) Method (B)

 

20' x 8.5'  

StandardContainer

deep 12 rows 19 rows

wide 7 rows 5 rows

high 7 layers 7 layers

Total: 588 cartons 665 cartons

Cube: 882 cu. ft. 997.5 cu. ft.

 

Container CA CBMethod (C)

(C) = CA + CB

20' x 8.5'  

StandardContainer

deep 12 rows 19 rows  

wide 3 rows 3 rows

high 7 layers 7 layers

Total: 252 cartons 399 cartons 651 cartons

Cube:   976.5 cu. ft.

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Container Method (A) Method (B)

 

40' x 8.5'  

StandardContainer

deep 26 rows 39 rows

wide 7 rows 5 rows

high 7 layers 7 layers

Total: 1,274 cartons 1,365 cartons

Cube: 1,911 cu. ft.  2,047.5 cu. ft.

 

Container CA CBMethod (C)

(C) = CA + CB

40' x 8.5'  

StandardContainer

deep 26 rows 39 rows  

wide 3 rows 3 rows

high 7 layers 7 layers

Total: 546 cartons 819 cartons 1,365 cartons

Cube:   2,047.5 cu. ft.

Container Method (A) Method (B)

 

40' x 9.5'  

High CubeContainer

deep 26 rows 39 rows

wide 7 rows 5 rows

high 8 layers 8 layers

Total: 1,456 cartons 1,560 cartons

Cube: 2,184 cu. ft. 2,340 cu. ft.

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Container CA CBMethod (C)

(C) = CA + CB

40' x 9.5'  

High CubeContainer

deep 26 rows 39 rows  

wide 3 rows 3 rows

high 8 layers 8 layers

Total: 624 cartons 936 cartons 1,560 cartons

Cube:   2,340 cu. ft.

Packing (Loading) and Emptying the Containers 

The hand packing and emptying of containers is still common in many countries. The time required in packing or emptying a container depends on the kind, size and weight of the cargo, the means (manual or mechanical), and the number of persons doing the packing or emptying. Packing generally takes more time than emptying.

Unitized Load

Unitizing or unitization is the assembly and packing of a number of cargo, either the same or different items, into a standardized or compact unit for ease of handling by the mechanical equipment. The palletized cargo, container load and carload are examples of a unitized load.

The unitized load facilitates the loading, unloading and inventory of shipment, and improves the cargo security against theft, pilferage and damage.

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Turn-Over Rate of Containers

In the CY/CY, CY/CFS and CFS/CY container services, the carrier allows the shipper or the consignee, as the case may be, to retain (hold) the container at their premises normally for 24-48 hours only, in order to maximize the turn-over rate of the container. An overtime use charge, known as demurrage, is collected on overstayed containers. In special cases, such as when the shipper or the consignee is doing a substantial amount of business with the carrier, some carriers may allow a longer time without charging demurrage.

The Use of Loading Equipment 

Not all shippers have a container loading dock or raised bank with suitable dock plate at their premises, where the forklift and pallet truck can enter the container. The cargo is often manually or mechanically lifted from the ground onto the container that sits on the chassis (the bogie) or flatbed truck (the open truck). The inclining belt conveyor sometimes is used to move the cargo from the ground up to the container doors, and the roller conveyor is used to convey the cargo from the container doors to the inner section, particularly when packing a 40' container, which is deep.

In case the shipper's premises have a raised bank and the forklift is used, the forklift must have a lift mast that is non-rising and less than 7' 6" (i.e., less than 90 inches), in order to allow cargo to be forked into a standard dry cargo container.

Inspecting the Container 

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In the case of a CY/CY or CY/CFS container service, the shipper has to arrange for the drayage of the empty container from the carrier's container terminal to the shipper's premises. The shipper must inspect the container to ensure it will adequately protect the cargo. In a dry cargo container, the doors, walls and ceiling demand the utmost attention.

The doors must be in good working condition and the door locking bars should secure and lock properly. The load may push against the container doors during a rough sea voyage. Even though the rating of a 20' container is 24,000 kgs., the doors cannot withstand that much pressure of solid load pushed against them during conveyance.

The walls and ceiling must be free from cracks or damage to prevent water and moisture from entering. There is a chance that a dry cargo container will be carried on deck since the cellular container ship carries about one-third of the containers on deck. The possible ingress of the sea water, rain and salt-laden moisture through a damaged container may ruin the cargo.

Always inspect the container before using it. If a container was contaminated (e.g. chemical spill) in prior use, then using the same container can be hazardous. Extra caution must be taken when packing food products in a dry cargo container. Some food products may absorb odor and moisture.

Stowage of Container 

Never allow anyone to smoke inside a container. A carelessly discarded cigarette can cause a serious fire that may destroy the cargo and the ship, and may cause the loss of life.

In tropical areas, the air inside a dry cargo container is hot, humid and suffocating, especially inside a 40' container. To relieve discomfort when packing a container, it is necessary to use forced ventilation with an electric blower or fan. The air humidity is high, especially during the wet or rainy season. Forced ventilation can minimize humid air from being trapped inside a container, as the air may condense into liquid and damage the cargo when the container enters a subzero temperature area.

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The weight of cargo must be distributed evenly within the container. As a rule of thumb, the center of gravity should not be above half the height of the container, and it should be within two feet from the center of container in the front-rear direction and within one foot in the sidewise (transverse) direction.

Cargoes like video monitors and glasswares have a stacking limit or the maximum stack. Otherwise, the compression from excess weight of overlaying packages may damage the goods underneath. For this reason, heavier packages should never be stowed above lighter packages. Liquids should never be stowed above non-liquids. Keep soft packages away from other packages or objects with protrusions or sharp corners, to prevent damage cause by movement at sea and on land (rail and truck).

A ship at sea may move in different directions simultaneously. Always apply dunnage (i.e., material used to separate and protect the cargo from damage during conveyance, for example, foam, mat and fiberboard) and/or cargo securements when necessary to prevent the cargo from crashing and cascading inside the container. Cascaded cargo may lie against the container doors, posing danger to any person who opens the doors.

Packing (Loading) and Emptying the Containers 

The hand packing and emptying of containers is still common in many countries. The time required in packing or emptying a container depends on the kind, size and weight of the cargo, the means (manual or mechanical), and the number of persons doing the packing or emptying. Packing generally takes more time than emptying.

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Unitized Load

Unitizing or unitization is the assembly and packing of a number of cargo, either the same or different items, into a standardized or compact unit for ease of handling by the mechanical equipment. The palletized cargo, container load and carload are examples of a unitized load.

The unitized load facilitates the loading, unloading and inventory of shipment, and improves the cargo security against theft, pilferage and damage.

Turn-Over Rate of Containers

In the CY/CY, CY/CFS and CFS/CY container services, the carrier allows the shipper or the consignee, as the case may be, to retain (hold) the container at their premises normally for 24-48 hours only, in order to maximize the turn-over rate of the container. An overtime use charge, known as demurrage, is collected on overstayed containers. In special cases, such as when the shipper or the consignee is doing a substantial amount of business with the carrier, some carriers may allow a longer time without charging demurrage.

The Use of Loading Equipment 

Not all shippers have a container loading dock or raised bank with suitable dock plate at their premises, where the forklift and pallet truck can enter the container. The cargo is often manually or mechanically lifted from the ground onto the container that sits on the chassis (the bogie) or flatbed truck (the open truck). The inclining belt conveyor sometimes is used to move the cargo from the ground up to the container doors, and the roller conveyor is used to convey the cargo from the container doors to the inner section, particularly when packing a 40' container, which is deep.

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In case the shipper's premises have a raised bank and the forklift is used, the forklift must have a lift mast that is non-rising and less than 7' 6" (i.e., less than 90 inches), in order to allow cargo to be forked into a standard dry cargo container.

Inspecting the Container 

In the case of a CY/CY or CY/CFS container service, the shipper has to arrange for the drayage of the empty container from the carrier's container terminal to the shipper's premises. The shipper must inspect the container to ensure it will adequately protect the cargo. In a dry cargo container, the doors, walls and ceiling demand the utmost attention.

The doors must be in good working condition and the door locking bars should secure and lock properly. The load may push against the container doors during a rough sea voyage. Even though the rating of a 20' container is 24,000 kgs., the doors cannot withstand that much pressure of solid load pushed against them during conveyance.

The walls and ceiling must be free from cracks or damage to prevent water and moisture from entering. There is a chance that a dry cargo container will be carried on deck since the cellular container ship carries about one-third of the containers on deck. The possible ingress of the sea water, rain and salt-laden moisture through a damaged container may ruin the cargo.

Always inspect the container before using it. If a container was contaminated (e.g. chemical spill) in prior use, then using the same container can be hazardous. Extra caution must be taken when packing food products in a dry cargo container. Some food products may absorb odor and moisture.

Stowage of Container 

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Never allow anyone to smoke inside a container. A carelessly discarded cigarette can cause a serious fire that may destroy the cargo and the ship, and may cause the loss of life.

In tropical areas, the air inside a dry cargo container is hot, humid and suffocating, especially inside a 40' container. To relieve discomfort when packing a container, it is necessary to use forced ventilation with an electric blower or fan. The air humidity is high, especially during the wet or rainy season. Forced ventilation can minimize humid air from being trapped inside a container, as the air may condense into liquid and damage the cargo when the container enters a subzero temperature area.

The weight of cargo must be distributed evenly within the container. As a rule of thumb, the center of gravity should not be above half the height of the container, and it should be within two feet from the center of container in the front-rear direction and within one foot in the sidewise (transverse) direction.

Cargoes like video monitors and glasswares have a stacking limit or the maximum stack. Otherwise, the compression from excess weight of overlaying packages may damage the goods underneath. For this reason, heavier packages should never be stowed above lighter packages. Liquids should never be stowed above non-liquids. Keep soft packages away from other packages or objects with protrusions or sharp corners, to prevent damage cause by movement at sea and on land (rail and truck).

A ship at sea may move in different directions simultaneously. Always apply dunnage (i.e., material used to separate and protect the cargo from damage during conveyance, for example, foam, mat and fiberboard) and/or cargo securements when necessary to prevent the cargo from crashing and cascading inside the container. Cascaded cargo may lie against the container doors, posing danger to any person who opens the doors.

Efficient Packing of Containers ---Corrugated Cartons, Wooden Cases/Boxes, and Bales 

The basic information on how to efficiently pack (load) the containers is being discussed here. There are several container-loading software in the market in which

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the exporters and shippers may use to generate the efficient way of packing (loading) the containers.

The cube relation, that is, the dimension of export pack in relation to the internal dimension of container, is used to efficiently pack (load) a container.

Referring to the Diagram: Package Orientation below, a regular-shaped export pack (e.g. carton) has six different possible orientations as follows:

Export Pack Orientation

(1)     A || D       B || W       C || H

(2) A || D B || H C || W

(3) A || H B || W C || D

(4) A || W B || D C || H

(5) A || H B || D C || W

(6) A || W B || H C || D

LEGEND:

"||"  means parallel to "A" represents the external length of carton "B" represents the external width of carton "C" represents the external height of carton "D" represents the internal length (deep) of container "W" represents the internal width (wide) of container "H" represents the internal height of container

The orientation or a combination of orientations that allows the greatest number of packs or the highest multiple of packs is the most efficient method of packing.

Referring to the Case Sample: Container Selection (1), the method (A) of stowing the container is the export pack orientation (1) shown above, the method (B) is the orientation (4), and the method (C) is the combination of orientations (1) and (4). The product DX demands the stowage of cartons in an upright position. Other orientations cannot be used as the product could be damaged.

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Further to the above case sample, assume that the product DX can be stowed in any orientation. The different multiples of carton (of the product DX) that can be packed into a 40' x 8.5'standard dry cargo container, based on the external dimension of carton

A = 18"B = 12"C = 12"

and the internal dimension of 40' container

D = 473"W = 92"H = 94"

are as follows:

ExportPack

Orientation

Multiple of Carton Total No. of Cartons

 (1)     D  A =  26       26 x 07 x 07 =  1,274  

W  B =  7

H  C =  7(2)   D  A =  26       26 x 07 x 07 =  1,274  

H  B =  7

W  C =  7(3)   H  A =  5       05 x 07 x 39 =  1,365  

W  B =  7

D  C =  39(4)   W  A =  5       05 x 39 x 07 =  1,365  

D  B =  39

H  C =  7(5)   H  A =  5       05 x 39 x 07 =  1,365  

D  B =  39

W  C =  7

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(6)   W  A =  5       05 x 07 x 39 =  1,365  

H  B =  7

D  C =  39

 

Export pack orientations (3) to (6) have the highest number of cartons, thus are the most efficient way of packing. In practice, the orientations (1), (4), and a combination of (1) and (4) are often used.

Diagram:  Package Orientation

  EXPORT PACK  

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  CONTAINER  

Efficient Packing of Containers ---

Palletized Cargoes (Cartons, Cases/Boxes, Bags, and Drums)and Wooden Crates 

The cube relation, that is, the dimension of export pack in relation to the internal dimension of container, is used to efficiently pack (load) a container.

Referring to the Diagram: Palletized Cargo and Diagram: Container below, the palletized cargo or wooden crate has two possible orientations as follows:

Pallet Orientation

[1]     Y || D       Z || W            

[2] Y || W Z || D  

LEGEND:

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"||"  means parallel to "Y" represents the side of pallet "Z" represents the side of pallet "D" represents the internal length (deep) of container "W" represents the internal width (wide) of container

The different multiples of pallet that can be packed into a 40' x 8.5' standard dry cargo container, based on the pallet sizes 45" x 53" and 45" x 45", the total height of each loaded pallet of about 60", and the internal dimension of 40' container

D = 473"W = 92"H = 94"

are as follows:

Pallet Size

ExportPack

Orientation

Multipleof Carton

TotalNo. of Cartons

Y Side   Z Side  

45"  53"  [1]     D  Y =  10       10 x 01 =  10  

W  Z =  1

45"  53"  [2]   W  Y =  2           02 x 08 =  16  

D  Z =  8

45"  45"  [1]   D  Y =  10 10 x 02 =  20

W  Z =  2

45"  45"  [2]   W  Y =  2 02 x 10 =  20

D  Z =  10

 

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The     above indicates the orientation or a combination of orientations having a higher number of pallet in the given pallet size, thus are more efficient packing methods.

Diagram:  Palletized Cargo

-------------------------Cargo can be stretchwrapped with plasticfilm to protect againstdirt, theft or loss, andto stand up to roughhandling in transit.-------------------------

Diagram:  Container

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Case Sample:Shipping Pallets 

Referring to the Diagram: Palletized Cargo above, the position of the forklift pockets---for inserting the forks or tines of a forklift---is not suitable for the pallet size 45" x 53", considering the pallet orientation [2], where the Y (side of the pallet) parallel to the W (width/wide of container or the end of container), is more efficient for that size of pallet. The forklift pockets in this pallet size for a two-way double-faced pallet must be at the Y position, not at the Z position as shown in the diagram.

If the shipper uses a 45" x 53" pallet having a design similar to the given diagram, the forklift operator has to rotate the pallet inside the container by 90 degrees to position its Y side parallel to the W (width/wide of container or the end of container), which is time consuming and defeats the purpose of unitizing for speedy loading. When a forklift is inside the container, its maneuverability is reduced. While such a pallet may be forked at the Y side under the base plank (i.e., at the bottom of the pallet), instead of at the Z side through the forklift pockets, there is a risk of damaging the floors of the container and warehouse while forking. Moreover, the convenience and safety in unloading the container at the destination point must be taken into account.

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Pallet Constructions and Designs Pallet Stowing Patterns in a Container

Pallet Stowing Patterns in a Container 

The pallet stowing patterns [L], [M] and [N] presented below as viewed from the top of the container:

Pattern [L]

Pattern [M]

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Pattern [N]

Pallet Yield in a Container 

Referring to the Diagram: Palletized Cargo   and   Diagram: Container , and the pallet orientations [1] and [2] below,

Pallet Orientation

[1]     Y || D       Z || W            

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[2] Y || W Z || D  

LEGEND:

"||"  means parallel to "Y" represents the side of pallet "Z" represents the side of pallet "D" represents the internal length (deep) of container "W" represents the internal width (wide) of container

a comparison of the pallet yield in the 20' and 40' dry cargo containers, based on the total height of each loaded pallet of about 60"

and the internal dimension of 20' container

D = 232"W = 92"

and the internal dimension of 40' container

D = 473"W = 92"

is presented in the Table: Pallet Yield below:

Table:  Pallet Yield 

  20' Container

PalletStowing Pattern >> [L] [L] [M] [N]  

PalletOrientation >> [1] [2] [1] + [2] [1] + [2]  

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 TotalPallet

s

TotalPallets

TotalPallets

TotalPallets

% FloorUtilized

Pallet Size          

Y Side  Z Side  

45" 53" 5 8 89.39%

45" 45" 10 10 94.87%

44" 52" 5 8 85.76%

44" 44" 10 10 90.70%

41" 49" 5 8 9 10 94.12%

40" 48" 5 8 9 10 89.96%

40" 40" 10 10 74.96%

36" 45" 12 10 11 10 91.08%

36" 36" 12 12 72.86%

35" 44" 12 10 11 10 86.58%

34" 45" 12 10 11 10 86.02%

33" 44" 14 10 12 12 95.24%

 

  40' Container

PalletStowing Pattern >> [L] [L] [M] [N]  

PalletOrientation >> [1] [2] [1] + [2] [1] + [2]  

 TotalPallet

s

TotalPallets

TotalPallets

TotalPallets

% FloorUtilized

Pallet Size          

Y Side  Z Side  

45" 53" 10 16 87.69%

45" 45" 20 20 93.07%

44" 52" 10 18 94.64%

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44" 44" 20 20 88.98%

41" 49" 11 18 20 20 92.33%

40" 48" 11 18 20 20 88.24%

40" 40" 22 22 80.89%

36" 45" 26 20 23 22 96.79%

36v 36" 26 26 77.43%

35" 44" 26 20 23 22 92.01%

34" 45" 26 20 23 22 91.41%

33" 44" 28 20 24 24 93.43%

The     above indicates the stowing pattern is inapplicable or unnecessary due to the large-sized pallet or pallet with equal sides.

The % Floor Utilized is based on the highest Total Pallets (i.e., the highest total number of pallets in a container for the given pallet size, stowing pattern and pallet orientation).

Stack Loading of Pallets 

Referring to the Table: Pallet Yield above, the number of pallets in a container can be doubled by double stacking of pallets, but at the expense of the total height and the gross weight of each loaded pallet. Stack loading is possible only if the cargo underneath can stand up to the compression from the overlaying pallet, and the center of gravity does not exceed half the height of the container.

To prevent the cargo beneath the stack from being torn and damaged, use dunnage like plywood, compressed particle board, fiberboard, and matting, to separate the

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lower and upper pallets. L-shaped wood or steel corner supports can be used to give added strength to the packages.

To prevent the pallets from shifting and crushing inside the container, block and brace the pallets at the voids with lumber and plywood, or secure them with chains, ropes and straps to the bull rings at the upper and lower corners of the side walls of the container.

Interlocking of Export Packs 

Interlock the export packs (e.g. cartons or bags) on a pallet and inside a container wherever possible. Please see the Diagram: Interlocked Cargo below. The interlocked cargo provides load stability, giving a compact stow that reduces the potential of collapse with movement on land, air and at sea.

Diagram:  Interlocked Cargo 

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-------------------------Cargo can be stretchwrapped with plasticfilm to protect againstdirt, theft or loss, andto stand up to roughhandling in transit.-------------------------

Pallet Stowing Patterns in a Container 

The pallet stowing patterns [L], [M] and [N] presented below as viewed from the top of the container:

Pattern [L]

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Pattern [M]

Pattern [N]

Pallet Yield in a Container 

Referring to the Diagram: Palletized Cargo   and   Diagram: Container , and the pallet orientations [1] and [2] below,

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Pallet Orientation

[1]     Y || D       Z || W            

[2] Y || W Z || D  

LEGEND:

"||"  means parallel to "Y" represents the side of pallet "Z" represents the side of pallet "D" represents the internal length (deep) of container "W" represents the internal width (wide) of container

a comparison of the pallet yield in the 20' and 40' dry cargo containers, based on the total height of each loaded pallet of about 60"

and the internal dimension of 20' container

D = 232"W = 92"

and the internal dimension of 40' container

D = 473"W = 92"

is presented in the Table: Pallet Yield below:

Table:  Pallet Yield 

  20' Container

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PalletStowing Pattern >> [L] [L] [M] [N]  

PalletOrientation >> [1] [2] [1] + [2] [1] + [2]  

 TotalPallet

s

TotalPallets

TotalPallets

TotalPallets

% FloorUtilized

Pallet Size          

Y Side  Z Side  

45" 53" 5 8 89.39%

45" 45" 10 10 94.87%

44" 52" 5 8 85.76%

44" 44" 10 10 90.70%

41" 49" 5 8 9 10 94.12%

40" 48" 5 8 9 10 89.96%

40" 40" 10 10 74.96%

36" 45" 12 10 11 10 91.08%

36" 36" 12 12 72.86%

35" 44" 12 10 11 10 86.58%

34" 45" 12 10 11 10 86.02%

33" 44" 14 10 12 12 95.24%

 

  40' Container

PalletStowing Pattern >> [L] [L] [M] [N]  

PalletOrientation >> [1] [2] [1] + [2] [1] + [2]  

 TotalPallet

s

TotalPallets

TotalPallets

TotalPallets

% FloorUtilized

Pallet Size          

Y Side  Z Side  

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45" 53" 10 16 87.69%

45" 45" 20 20 93.07%

44" 52" 10 18 94.64%

44" 44" 20 20 88.98%

41" 49" 11 18 20 20 92.33%

40" 48" 11 18 20 20 88.24%

40" 40" 22 22 80.89%

36" 45" 26 20 23 22 96.79%

36v 36" 26 26 77.43%

35" 44" 26 20 23 22 92.01%

34" 45" 26 20 23 22 91.41%

33" 44" 28 20 24 24 93.43%

The     above indicates the stowing pattern is inapplicable or unnecessary due to the large-sized pallet or pallet with equal sides.

The % Floor Utilized is based on the highest Total Pallets (i.e., the highest total number of pallets in a container for the given pallet size, stowing pattern and pallet orientation).

Stack Loading of Pallets 

Referring to the Table: Pallet Yield above, the number of pallets in a container can be doubled by double stacking of pallets, but at the expense of the total height and the gross weight of each loaded pallet. Stack loading is possible only if the cargo underneath can stand up to the compression from the overlaying pallet, and the center of gravity does not exceed half the height of the container.

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To prevent the cargo beneath the stack from being torn and damaged, use dunnage like plywood, compressed particle board, fiberboard, and matting, to separate the lower and upper pallets. L-shaped wood or steel corner supports can be used to give added strength to the packages.

To prevent the pallets from shifting and crushing inside the container, block and brace the pallets at the voids with lumber and plywood, or secure them with chains, ropes and straps to the bull rings at the upper and lower corners of the side walls of the container.

Interlocking of Export Packs 

Interlock the export packs (e.g. cartons or bags) on a pallet and inside a container wherever possible. Please see the Diagram: Interlocked Cargo below. The interlocked cargo provides load stability, giving a compact stow that reduces the potential of collapse with movement on land, air and at sea.

Diagram:  Interlocked Cargo 

Page 46: Pratik Logistics

-------------------------Cargo can be stretchwrapped with plasticfilm to protect againstdirt, theft or loss, andto stand up to roughhandling in transit.-------------------------

Pallet Constructions and Designs 

Pallets are built with varied construction techniques. The materials commonly used in the construction of pallets are wood (softwood and hardwood) and plastic (high density polyethylene). Metals (steel and aluminum) are also used but less frequently.

The low cost softwood pallet---made of softwoods like pine and spruce---is used for light cargo and it is expendable. The hardwood pallet---made of hardwoods like ash and maple---costs more but has greater strength than the softwood pallet, and is good for repeated use.

The wooden pallet is often customized to suit the type, size and weight of the exporter's cargo and to meet handling and loading requirements.

The plastic pallet generally costs more than a wooden pallet of the same size, but it is chemical and moisture resistant, cleans easily, is lighter, and will not splinter.

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Hence, the plastic pallet is more durable than the wooden pallet. Nevertheless, the wooden pallet is used most often in export shipments.

Basic Pallet Designs

  Two-Way  or  Four-Way Pallets

A two-way pallet allows forking at the two opposite sides of the pallet, while a four-way pallet allows forking at all four sides. The four-way pallet is good for both pallet orientations [1] and [2].

Two-Way Pallet

 

Two-Way Pallet

 

Four-Way Pallet

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Four-Way Pallet

  Single-Faced  or  Double-Faced Pallets

A single-faced pallet has one full deck (i.e., non-reversible deck), which is often called a skid, while a double-faced pallet has two full decks (i.e., reversible decks). The double-faced pallet is ideal for stack loading, racking of palletized cargo, and conveyor use.

Single-Faced PalletSkid

 

Double-Faced Pallet

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  With Forklift Pockets  or       With Forklift or Pallet Truck Entries

Pallets with the forklift pockets allow forking with a forklift, while pallets with the forklift or pallet truck entries allow forking with either a forklift or a pallet truck. Some pallets are designed with forklift pockets that also permit forking with a pallet truck, in which the rollers beneath the forks of the pallet truck can come in firm contact with the floor of warehouse and container.

With Forklift Pockets

 

With Forklift orPallet Truck Entries

Variations of Basic Pallet Designs

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  Two-Way Single-Faced Pallet

It is usually made of wood, with forklift or pallet truck entries.

Two-WaySingle-Faced Pallet

  Two-Way Double-Faced Pallet

It is usually made of wood, with forklift pockets.

Two-WayDouble-Faced Pallet

  Four-Way Single-Faced Pallet

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It is usually made of wood or plastic. The four-way single-faced pallet made of wood may have a 'half-deck' at the bottom. The four-way single-faced pallet made of plastic usually does not have a bottom deck.

Four-WaySingle-Faced Pallet('Half-deck' bottom)

  Four-Way Double-Faced Pallet

It is usually made of plastic or wood, with forklift pockets at all four sides

SHIPPING  DEPARTMENTLogistics Management

Cargo InsuranceCharter, chartering, charter shipping, tramp, charter party, charter party contract, voyage charter, time charter, bareboat, bareboat charter, conference shipping, non-conference shipping, RO/RO vessels, LASH, lighter aboard ship, roll on, roll off, roro, barge, barge-carrier, barge-carrying vessel, floating containers, freight conference, conference, steamship conference, liner conference, independent carriers, FI, FO, FIO, free in, free out, free in and out, TEU, twenty-foot equivalent unit, knots, cellular container ships, multimodal transport, combined transport bill of lading, through bill of lading, CBM, cubic measurements. TEU, twenty-foot equivalent unit, knots, cellular container ships, multimodal transport, combined transport bill of lading, through bill of lading, CBM, cubic measurements, container services, standard containers, hicube, high cube containers, cargo cubes, global shipping, import-export shipping, logistics, logistics management, logistics supports, shipping space, shipping order, S/O. Shipping permits, shipping notes, dock receipts, master ships, mother ships, feeder vessels, transhipment, transshipment, transit shipment, dead freight, seaports, ports, freight forwarders, consolidators, freight consolidators, customs brokers, customs forwarders, brokers, customhouse brokers, customs house brokers, voyage, flight, groupage operators, shipping operators, shipping firms, shipping company, air shipping, ocean shipping, carriers, freight company, transport company, ETA, ETD, ETS. Transportation, transports, ocean shipping company, freight containers, couriers, airlines, tariffs, custom tariffs, shipping dangerous goods, shipping schedules, air containers, ocean containers, shipping containers, container load, LCL, full container load, FCL, marine insurance, cargo insurance, import-export insurance, NVOCC, nonvessel operating common carriers, NVO, nonvessel owner carriers, nonvessel owning carriers, ocean freight consolidator, and steamship.  

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RO/RO Vessels and LASH 

Besides the full container ship, the RO/RO (roll on/roll off) vessel and the LASH are other systems of water transport used in international trade.

RO/RO (Role On/Role Off ) Vessels

The RO/RO vessel (RO/RO or RORO) derived from the traditional car ferry, where motor vehicles are driven on and off by their drivers. RO/RO is popular within the European trade routes. It is also used in other trade routes like the U.S.A.-Central America route and Europe-West Africa route.

The RO/RO is equipped with ramp(s) that makes loading and unloading from the side and/or bow (front of vessel) and/or stern (rear of vessel) possible. Some modern RO/ROs are designed as a trailer/break-bulk/container carrier suitable for the deep-sea voyage (long haul), making loading and unloading of containers from the top, like a full container ship, possible using the crane. The type of cargo that can be carried on a RO/RO is flexible, including large objects.

The full RO/RO has low stowage factors, as a result of wasted space around the underside of the trailers and other motor vehicles. Therefore, the full RO/RO is not ideal for deep-sea trade. The low stowage factors, however, are compensated for by the quickness of the "turn around' time in ports in the short-sea voyage (short haul).

In general, the capital cost for a full RO/RO is lower than the full container ship or the LASH. When the cargo availability is insufficient in a port in the short-sea trade, investment in sophisticated container handling installations can be uneconomical. Therefore, the full RO/RO offers a solution to short-sea transport needs. A large area of land for parking trailers and other motor vehicles is necessary while they await loading.

LASH (Lighter Aboard Ship)

The lighter aboard ship or LASH---barge-carrier or barge-carrying vessel---is designed to carry lighters (barges), where they are lifted by crane over the stern (rear) of the vessel.

The LASH and barge come in different configurations. Some LASHes can

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accommodate over 24 barges. Each barge may carry 600 to 1,000 metric tons of cargo, which is much bigger than the ocean freight container, and can float and be towed up and down a river or canal, thus the barge is often referred to as the floating container.

The LASH is useful in moving a relatively large volume of cargo in the short-sea trade and to and from sites on rivers and canals, such as Rhine Canal in Europe, that cannot be used by the larger ocean-going vessels. The LASH keeps the load in the same vessel for the entire trip, thus reduces cargo handling, transport costs and time.

The LASH is popular in Europe, taking advantage of the extensive inland waterway systems which are the cheapest means of inland transport. The export goods from landlockedEuropean countries like Switzerland may move by LASH or other inland waterway transports to the port of Rotterdam (Netherlands) or Antwerp (Belgium), and transfer to the ocean going vessel for the deep-sea voyage.

Conference Shipping 

Conference shipping is provided by the conference carrier or member of a freight conference. The freight conference---conference or steamship conference or liner conference---is a group of operators of vessel who operate on the same routes and cooperate on shipping schedules at the standardized freight rates between ports.

Conference shipping has regular sailing schedules, thus is called the liner service.

Most ocean freight is carried by conferences. Conference carriers or their agents issue an ocean bill of lading.

Non-conference Shipping 

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Non-conference shipping is provided by the independent carrier or operator of vessel who is not a member of a freight conference, sometimes called outside shipping. Independent carriers, which carry about 25% of the ocean freight, operate on selected trade routes in competition with conference carriers.

Non-conference shipping often does not have regular sailing schedules and freight rates between ports. Consequently, it is perceived as less dependable than conference shipping.

Independent carriers or their agents issue an ocean bill of lading.

Charter Shipping 

Charter shipping is a tramp service. The term tramp, as used in the ocean shipping, refers to a cargo ship not operating on regular routes and schedules, and picking up cargo only when it is chartered (hired) from the ship operator.

While conference and non-conference shipping are for general cargoes, charter shipping usually is for bulk cargoes like oil, coal, ore, and grain. Charter shipping has the lowest freight rate per unit of weight or measure.

A charter party is required in charter shipping. A charter party---charter party contract---is a written contract between the ship operator and the charterer (shipper). The contract normally includes the ports, freight rate and time involved in the voyage(s).

The ship operator issues a charter party bill of lading. Unless a letter of credit (L/C) permits or calls for a charter party bill of lading, the bank will reject such transport document in the L/C negotiation.

Some trade terms used specifically in charter shipping are as follows:

FIFree In

The word "free" as used in the charter shipping term means not including. FI is a pricing term indicating that the charterer of a vessel (i.e., the shipper) is responsible for the cost of loading

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goods onto the vessel.

FOFree Out

FO is a pricing term indicating that the charterer of a vessel (i.e., the shipper) is responsible for the cost of unloading goods from the vessel.

FIOFree In and Out

FIO is a pricing term indicating that the charterer of a vessel (i.e., the shipper) is responsible for the costs of loading goods onto the vessel and unloading goods from the vessel.

Please see International Commercial Terms for the different trade terms used in exporting-importing.

Voyage charter

The ship is chartered for a single journey and it may involve more than one port of call. The ship operator crews and operates the ship and it is the operator's own ship's master in control of the ship.

This type of charter shipping is analogous to the limousine service where the driver, who is in control of the car in a journey, is provided by the car operator.

Time charter

The ship is chartered for a period of time. This type of charter shipping is similar to a voyage charter in the crewing and operating of the ship. The contract may call for a specific or unlimited number of voyages within the agreed time.

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Bareboat charter

The term bareboat means a ship without a crew and ship's master. The charterer (shipper) is in charge of crewing and operating the ship within a period of time, usually a number of years.

This type of charter shipping is analogous to a car leasing where the lessor (the car operator) provides the car only and the lessee provides his/her own driver.

Road Freight 

The road freight and rail freight are commonly used in the cross-border deliveries, for example, the delivery of export goods between mainland European countries and between North American countries.

About 50% to 80% of cross-border deliveries are completed using road freight. Generally, a transit distance within 1,000 kilometers using road freight is competitive compared to rail and air freight.

In road freight, like in a RO/RO (roll on/roll off) service, the cargo on a trailer may be accompanied by a driver who completes the journey to the final destination, or another driver continues the journey with the same trailer at certain juncture to the final destination, or a subsequent carrier collects the cargo and trailer or the cargo only and continues the transit to the final destination, such as in the case of a transhipment. The trailers may come in lengths of 45', 48' and 53'.

Road freight is widely used in the inland delivery of goods to the port of export. The delivery charge is called the cartage or trucking fee. The hauling charge for transporting the ocean freight container on land, normally not including the loading and unloading of cargo, is called the drayage. In practice, the term "cartage" is used synonymously with "drayage" in certain countries. The cartage, drayage and other inland transport charges (e.g. waterway freight and rail freight) are known as inland freight.

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Trucking company issues a road waybill, also known as a road consignment note.

In some countries, there are legal limitations to the overall height (e.g. 13' 6") and load (gross weight) of a vehicle on freeways and major roads. The transportation of bulk cargo may not be suitable in road freight.

TL versus LTL

TL (truckload) or FTL (full truckload) means a full trailer or truck, while LTL (less than truckload; loose truckload) means not a full trailer or truck. The TL resembles the FCL (full container load), while the LTL resembles the LCL (less than container load).

Rail Freight 

Rail freight is popular in multimodal transport and transhipment. It is widely used in landbridges.

Rail cars--- rail wagons---are available in configurations to accommodate many kinds of cargo. Flat cars---flatbed rail cars---can be 40' to 89' long and can run at 120 kms. per hour. Some rail cars are specially designed to carry road trailers in a road-rail service or TOFC (trailer on flat car) service, which is often referred to as the piggyback.

In a COFC (container on flat car) service, for example using 50 flat cars each with a 60-ton capacity, the combined flat cars may carry loads weighing up to 3,000 metric tons, which is far more than a truck or an airplane can carry. Hence, rail freight is very

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popular in the movement of ocean freight containers and in the transport of bulk cargo in long distance land travel, such as land travel between the East and West Coast ports in U.S.A. and/or Canada. The U.S.A., Canada and other countries have a double-stack train system that moves more freight. The 80' and longer container flat cars may carry 8 TEUs (twenty-foot equivalent units) when the ocean containers are double stacked.

Large shippers, who have rail sidings at their facility, may arrange directly with the rail carrier to have the rail cars moved to their facility for loading. The rail carrier will pick up the rail cars at a specified time and move them to the port of export for loading on the vessel. There is also an overtime use charge, as in the use of ocean freight containers, also known as demurrage, that is collected on overstayed rail cars.

Rail carriers issue a rail waybill, also known as a rail consignment note.

CL versus LCL

The word carload relates to the rail car. CL (carload) or FCL (full carload) means a full rail car, while LCL (less than carload; loose carload) means not a full rail car.

Air Freight 

Most air cargoes are carried on passenger airliner. About 80% to 90% of air cargoes are transported by IATA (International Air Transport Association) members. IATA standardizes the rules and regulations for air carriers throughout the world.

Air freighters like the Boeing 747-400F can carry loads weighing up to 110.67 metric tons. It can carry 30 IATA Type 2H pallets or containers (10'-high main deck

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pallet or container, dimension is 96" x 125" x 118") and 32 IATA Type 8 containers (lower deck container, dimension is 60.4" x 61.5" x 64"). The air container permits cargo transport linking air, land and ocean freight without intermediate reloading, using a multimodal transport document.

Air freight is often used for high value but low volume cargo. It is generally perceived as expensive. The higher transport charges of air freight, compared to the charges of land and ocean freight, are compensated for by various benefits (of air freight).

Airlines or air cargo companies or their agents issue an air waybill (AWB), which is often a straight waybill, that is, the buyer is named the consignee on the waybill and he/she can claim the consignment from the carrier by simply showing proof of identity. Unless the goods are consigned to a third party like a bank, or a cash payment has been received, or the buyer's integrity is unquestionable, it is risky to use a straight waybill in export shipments even if the means of payment is by a letter of credit (L/C) or a cheque (check).

Benefits of Air Freight 

Faster delivery

The ports worldwide can be reached in 1 or 2 days or in a few hours by air freight, thus reducing the risks of theft, pilferage and damage to the goods. Delivery to certain areas may take several weeks to arrive by ocean and land freight. Time sensitive or perishable goods, such as fresh seafood and flowers, often rely on the air freight.

Better security

Air freight has a tighter control over its cargo, thus it has better security that reduces the cargo exposure to theft, pilferage and damage.

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Less packaging

Air freight requires less packaging because of faster delivery and better security. Less packaging may mean saving freight, packaging and labor costs.

Lower insurance

Air freight is faster and has better security than the land and ocean freight, thus the insurance premium rate generally is lower.

Shorter collection time in anopen account trade arrangement

The time to collect payment in an open account trade arrangement most often runs from the time the customer receives the goods and not from the time the goods are dispatched. Air delivery is fast, thus the collection time is shorter.

Landbridges 

The "landbridge" is a generic term meaning use the land freight as a means of transport connection. The landbridge is a way of transporting cargo from a port or an inland point of origin in the shipper's country to an inland point or a port of final destination in the consignee's country using a combination of usually sea and land, or air and land, or air, land and sea transports, instead of relying fully on journey by water or air, using a multimodal transport document known as through bill of lading or combined transport bill of lading.

The three processes of landbridge are as follows:

Microbridge (Micro-landbridge)

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Shipment from a country's port to another country's inland destination and vice versa. For example, shipment from Asian port to U.S. Midwest destination, cargo unloads at U.S. West Coast port and connects via rail to the final destination under one bill of lading, instead of eastbound route via Panama Canal or westbound route via Suez Canal to the U.S. East Coast port and then to final Midwest destination. Please see Diagram: Microbridge below.

Minibridge (Mini-landbridge)

Shipment from a country's port to another country's port with overland journey in the first country. For example, shipment from Port of Seattle (Washington, U.S.A.) to the Port of Rotterdam (Netherlands), cargo delivers via rail to New York (New York, U.S.A.), and then to Rotterdam.

Landbridge

Shipment from a country to another country, and passes overland in a third country. For example, shipment from Kobe (Japan) to Hamburg (Germany), cargo unloads at Los Angeles (California, U.S.A.) and connects via rail to New York (New York, U.S.A.), and then to Hamburg.

The major advantage of landbridge is the speed of shipment, based on the fact that the traffic by land or air is generally faster than by sea, and that the nearest distance between the two points is a straight line. The landbridge is useful for cargo semi-sensitive to time and cost.

During winter some ports in the northern hemisphere may be closed due to heavy snow and frozen seaway. Nevertheless, the landbridge keeps the export and import cargo moving.

The volume of ocean freight flowing between the East and the West increased considerably in the past decades, especially between the Far East and North America. The growth in cargo traffic is expected to continue.

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The conventional Eastbound ocean traffic from Asia to the East Coast areas in North America flows via the Pacific Ocean---the Trans-Pacific Route. The route crosses the Panama Canal (in central Panama) into the Caribbean Sea, and then into the Atlantic Ocean. It may take 7-8 hours for ships to negotiate the 82-km. Panama Canal through six pairs of locks.

The conventional Westbound ocean traffic from Asia to the Western Europe or the East Coast areas in North America flows via the Mediterranean Sea---the Trans-Mediterranean Route. The route crosses the Indian Ocean, Red Sea (between Africa and Middle East), Suez Canal (in eastern Egypt, a 161-km. canal linking several lakes and without any locks), and then into the Mediterranean Sea, serving the Mediterranean countries and their neighboring landlocked countries. The voyage continues from the Mediterranean Sea through the Strait of Gibraltar (between Spain in Europe and Morocco in Africa) into the Atlantic Ocean, serving the East Coast areas in North America, and from the Atlantic Ocean northbound to the North Sea and Baltic Sea, serving the North Sea and Baltic countries and their neighboring landlocked countries.

An alternate ocean route to the Trans-Mediterranean Route is through the Cape of Good Hope at South Africa, that is, going around the southern tip of the African Continent, but the transit time is much longer.

Panama Canal and Dry Canalin Relation to the Landbridge Services

The panamax is the draft limits of the Panama Canal, which imposed a ship's carrying capacity limit to around 3,500 TEUs (twenty-foot equivalent units). Modern container ships exceed the panamax, that is, cannot transit the canal. The future container ships in the deep-sea voyage are expected to be much bigger than those currently in service. The landbridge service that utilizes the West Coast ports in North America becomes more important in the Trans-Pacific Route.

There were plans to build a dry canal---rail line for container traffic---linking the Pacific Ocean and the Caribbean Sea in Central American country (e.g. Nicaragua) using the landbridge service, in order to meet the increasing flow of cargo between the East Asia and the North and Latin America.

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Feeder Vessels and Transhipmentsin Relation to the Landbridge Services

As export and import traffic increases worldwide, large container ships having a load capacity of 80,000 metric tons or more are expected to service the Trans-Pacific Route and other sea routes, calling at a limited number of deep-sea ports at each end of the voyage. Consequently, the network of feeder services serve by the smaller container ship, called the feeder vessel, serving the large deep-sea ports is expected to expand. In the process, a wider application of the landbridge is indispensable, particularly in North America, and the transhipment of export goods will become more frequent in certain trade routes. The ports of Hong Kong (China) and Singapore in Asia and the port of Rotterdam (Netherlands) in Europe, for example, are popular ports of transhipment in the deep-sea voyage.

Diagram:  Microbridge 

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Double-Stack Train System MICROBRIDGE     

The Use of Landbridges as Alternate Routesto the Conventional Ocean Traffic 

Shipment to the European Portsfrom the West Coast Ports in North America

Use the minibridge (mini-landbridge) or the land-sea carriage, that is, freight container from the West Coast port send via rail to the East Coast port, and then by ship to Europe.

Shipment to the European Ports or Areasfrom the Far East and Australia and Vice Versa

Use the landbridge in North America or the sea-land-sea carriage or air-land-sea carriage, that is, ocean vessel or airplane reaches the West Coast port or area in North America and the freight container (or the air cargo transfers to

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ocean container) connects by rail to the East Coast port or area in North America, and then by ship to Europe.

Alternately, use the Trans-Siberian landbridge in the Russian Federation or the sea-land carriage or air-land carriage, that is, ocean vessel or airplane reaches the East Coast port (e.g. Port of Nachodka situated in Asia) or area in the Russian Federation and the freight container (or the air cargo transfers to container) connects via Trans-Siberian Railway to the border station in Europe, and then by rail and/or truck to the European countries.

Some exporters from Japan, Hong Kong (China) and Australia use the Trans-Siberian landbridge. Exporters also use the ocean-air service (non-landbridge service) through the Russian Federation, that is, cargo reaches the Russian East Coast port (e.g. Port of Vladivostok situated in Asia) and connect by air to Europe.

Shipment to the East Coast and Midwest Areasin North America from the Far East Ports

Use the microbridge (micro-landbridge) or the sea-land carriage, that is, ocean vessel leaves the Far East port and reaches the West Coast port in North America, such as Vancouver (in British Columbia, Canada), Los Angeles (in California, U.S.A.), or Seattle (in Washington, U.S.A.), and the freight container delivers via rail and/or truck from West Coast port to the Midwest and East Coast areas.

Shipment to the West Coast and Midwest Areasin North America from the European Ports

Use the microbridge (micro-landbridge) or the sea-land carriage, that is, ocean vessel leaves the European port and reaches the East Coast port in North America, such as Halifax (in Nova Scotia, Canada), Saint John (in New Brunswick, Canada), or New York (in New York, U.S.A.), and the freight container delivers via rail and/or truck from East Coast port to the Midwest and West Coast areas.

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Shipment to the Far East Ports from theEast Coast and Midwest Areas in North America

Use the microbridge (micro-landbridge) or the land-sea carriage, that is, freight container from the East Coast and Midwest Areas send via rail to the West Coast port, and then by ship to the Far East.

SHIPPING  DEPARTMENTLogistics Management

Cargo InsuranceFreight, import tariffs, export tariffs, tariff rates, tariffs, custom tariffs, freight conference, IATA, International Air Transport Association, conference rates, non-conference rates. contract shippers, general cargo rates, specific commodity rates, NES rates, not elsewhere specified rates, NOS rates, not otherwise specified rates, FAK rates, freight all kinds rates, box rates, through freight rate. conference carriers, non-conference carriers, charter, charter rates, voyage charter, freight rebates, rebate, TEU, twenty-foot equivalent unit, knots, cellular container ships, multimodal transport. combined transport bill of lading, through bill of lading, CBM, cubic measurements, container services, standard containers, hicube, high cube containers, cargo cubes, global shipping, import-export shipping. logistics, logistics management, logistics supports, shipping space, shipping order, S/O, shipping permits, shipping notes, dock receipts, master ships, mother ships, feeder vessels, transhipment, transshipment. transit shipment, dead freight, seaports, ports, freight forwarders, consolidators, freight consolidators, customs brokers, customs forwarders, brokers, customhouse brokers, customs house brokers, voyage, flight. Transportation charges, freight, freight Payment, freight prepaid, freight collect, shipment control, partial shipments. part shipment, installment shipments, customs closing date, earliest shipment date, latest shipment date, transit time, last shipment date. Container capacity, pallets, pallet orientation, palletized cargo, unitizing, unitization, unitized loads, demurrage, loading equipment, inspecting containers, container inspections, dunnage, stowage. container stowage, chassis, bogie, belt conveyors, roller conveyors, container packings, export corrugated cartons, export wooden cases, export boxes, export bales, container dimensions, import-export packings, import packs. export packages, import packages, import-export drums, bags, wooden cases, wooden crates, shipping pallets, pallet stowing. packing orientation, package orientation, TEU, twenty-foot equivalent unit, CBM, cubic measurements, knots, cellular container ships, multimodal transport, combined transport bill of lading, through bill of lading. 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Marine insurance, cargo insurance, import-export insurance, insurance coverage, insurance documents, insurance terms, insurance claims, credit risk insurance, credit risks. insurance policy, insurance cover note, open insurance policy, blanket insurance policy, floating insurance policy, specific insurance policy, voyage insurance policy, strikes riots civil commotions. inherent vice, jettison, piracy, all risks, A.R., with average, W.A., free of particular average, F.P.A., insurance agency, insurance agents, insurance agencies, insurance certificates, insurance policies. insurance endorsements, insurance premiums, insurance forms, Institute Cargo Clauses, Institute War Clauses, Institute Strikes Clauses, insurance application-instructions, insurance clauses, contingency insurance. marine surveyors, adjusters, insurance adjusters, survey certificates, loss certificates, subrogation form, subrogation, particular average claims, general average claims, warehouse clause. BL, B/L, bill of lading, customs declaration, shipping instructions, ocean bill of lading, marine bill of lading, shipping booking, transport documents, shipping marks. Waybills, master air waybill, MAWB, HAWB, house air waybills, road waybills, rail waybills, post receipts, courier's receipts, forwarder waybill, freight forwarder's waybill, clean air waybill. foul air waybill, unclean air waybill, dirty air waybill, claused air waybill, road consignment notes, rail consignment notes, postal receipt, parcel post receipt, certificate of posting, expedited delivery services. postal shipments, courier shipments, TEU, twenty-foot equivalent unit, knots, cellular container ships, multimodal transport, combined transport bill of lading, through bill of lading, CBM, cubic measurements. Containers and shipping information such as container dimensions, container capacity, container rating, tare mass, payloads, container tare mass, container payload, general purpose containers, dry cargo containers. reefers, refrigerated containers, tare weight, tares, container markings, container classifications, half height containers, TEU, twenty-foot equivalent unit, knots, cellular container ships, CBM, cubic measurements. container services, standard containers, hicube, high cube containers, cargo cubes, global shipping, import-export shipping, logistics, logistics management, logistics supports, shipping space, shipping order, S/O. shipping permits, shipping notes, dock receipts, master ships, mother ships, feeder vessels, transhipment, transshipment, transit shipment, dead freight, seaports, ports. freight forwarders, consolidators, freight consolidators, customs brokers, customs forwarders, brokers, customhouse brokers, customs house brokers, voyage, flight. groupage operators, shipping operators, shipping firms, shipping company, air shipping, ocean shipping, carriers, freight company, transport company, ETA, ETD, ETS. transportation, transports, ocean shipping company, freight containers, couriers, airlines, tariffs, custom tariffs, shipping dangerous goods, shipping schedules. air containers, ocean containers, shipping containers, container load, LCL, full container load, FCL, marine insurance, cargo insurance, import-export insurance. 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Freight or Tariff Rates 

The freight rates for export shipments can be obtained by contacting the carrier directly or the carrier's agent or the freight forwarder or consolidator.

The Tariff

Ocean and air carriers have freight rates published in a rate book called the tariff, which gives the rates for different kinds of cargo between specific ports worldwide.

The freight conference publishes its ocean cargo rates, while IATA (International Air Transport Association) publishes the air cargo rates. There is no price competition among members within the conferences and the IATA.

Land (road and rail) carriers also have their tariffs, but the cargo rates are often

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published independently. Hence, a wider range of rates are often applied among the competing carriers, especially in the highly competitive road transports.

Applicable Tariff Rates

The freight rate is often influenced by the volume of traffic on a given route. When an exporter contacts the carrier or carrier's agent for the freight rate, the information normally required of an exporter is the kind of cargo and its intended destination. Information such as the gross weight and total cube of the consignment, the expected date of shipment, and whether the freight will beprepaid or collect may also be required. Then, the carrier or carrier's agent refers to the tariff for the applicable freight rate.

Different Freight Rates and TerminologyUsed in International Shipments

  General Cargo Rates

The general cargo rate applies to a shipment of mixed products.

  Specific Commodity Rates

The specific commodity rate applies to the shipment of a specific product between specified ports. It is lower than the general cargo rate. In practice, most export goods are transported under the specific commodity rate.

  NES Rates

The NES rate (not elsewhere specified rate) or the NOS rate (not otherwise specified rate), sometimes referred to incorrectly as the FAK rate (freight all kinds rate), applies to a product that is not specifically listed in the tariff for a given route, that is, a product not found under the specific commodity or the general cargo classifications. The NES rate is

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higher than the specific commodity and the general cargo rates.

In case an exporter has a special product that is not listed in the tariff, he/she may apply with the carrier or the freight conference for a specific commodity rate for the product for the specified route. Once the product is listed in the tariff, the exporter can save considerable freight costs in future shipments of such product in the specified route.

  Box Rates

Most ocean freight in modern shipping is containerized. Hence, there is a trend towards the flat rate per container for FCL (full container load) shipments, known as box rate, at times also referred to as FAK rate (freight all kinds rate), instead of the weight or measure that is commonly applied in the LCL (less than container load) shipments.

The box rate is convenient in simplifying the freight cost calculation in consignments consisting of a wide range of products. The box rate is commonly used between the ocean carrier and the NVOCC (nonvessel operating common carrier), large shipper (e.g. the giant trading company), or large importer (e.g. the chain store).

  Through Freight Rates

The through freight rate is used in multimodal transport and transhipment. It covers the specified route and mode(s) of transportation to the final destination.

  Conference and Non-Conference Rates

The term conference rate refers to the rate of the conference carrier. The term non-conference rate refers to the rate of the independent or non-conference carrier. The freight rate from members of a conference is uniform, but it may differ between the conferences. The non-conference rate varies among the independent carriers. The non-conference rate is lower than the conference rate.

  Charter Rates

The charter rate used in the charter industry varies greatly among the charter operators. It is the lowest rate per weight or measure. The operator may offer a very low rate on a return trip in order to secure the cargo, for example, in the return trip from a voyage

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charter.

Freight Rate Breaks

Air carriers and some road carriers use a sliding scale of rates or a discount schedule in charging freight. The sliding scale of rates in the air freight may break at 100, 200, 300, 500, and 1000 kilograms (kgs.). As such, an air consignment of 200 kgs. to 299 kgs. has a lower rate than the 100 kgs. to 199 kgs.. The freight rate breaks in road transport may vary greatly among carriers.

Freight Rebates 

The granting of a freight rebate to the shipper is not uncommon in the highly competitive transport industry. The grant can be legal or illegal.

The commission of the freight forwarder is about 2% to 5% in ocean freight and about 10% in air freight. It is legal for the forwarder in air freight to pay back the shipper portion of the commission it earns from the carrier, but such a payback may be deemed illegal in ocean freight. For example, if an airline quotes a freight rate of US$1,000 for a consignment and the commission of a forwarder is 10% (or US$100), the forwarder may quote the shipper US$950, the US$50 (or 5% of US$1,000) difference represents the payback by such forwarder.

In countries where exporters customarily deal directly with the shipping line in ocean freight instead of dealing with the forwarder, it is not surprising that most exporters prefer to deal with the forwarder in air freight instead of dealing directly with the airline, in order to take advantage of the payback.

Conference Discounts and Contract Shippers 

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The freight conference offers discounts or rebates to the 'loyal' shipper, known as contract shipper, who gives its entire support to members of the conference. When a general cargo contract is signed between shipper and conference, the contract shipper is prohibited from participating directly or indirectly in any arrangements relating to the carriage of cargo by any vessel not operated by one of the conference carriers. The contract shipper usually enjoys a 9.5% immediate discount on the amount of freight ruling at the time of shipment. Some contracts may grant a 10% rebate, instead of an immediate discount on each shipment, after a required period (six months or more usually) of 'loyalty' to the conference.

Weight or Measurein the Freight Cost Calculation 

The freight rate on export goods is often based on W/M (weight or measure), that is, based on the weight or the volume of cargo (the cube or measurement of cargo). The rate uses the comparative relation between weight and volume of cargo. A cargo that is large in relation to its weight is charged according to its total cube, while a cargo that is heavy in relation to its size is charged according to its gross weight.

In general, light cargo is charged based on measure, while heavy cargo based on weight. Most sea consignments are charged based on measure, while most air consignments are charged based on weight.

The freight cost by weight or measure that will give the carrier the higher revenue is the rate that applies.

The unit of ton being used in the freight cost calculation may differ among carriers. It can be a metric ton (2204.6 lbs. or 1000 kgs.), a short ton (2000 lbs. or 907 kgs.), or a long ton (2240 lbs. or 1016 kgs.). The exporter must verify with the carrier which unit is being used. In practice, the most frequently used is the metric ton.

Units of Weight or Measure Commonly Usedin the Freight Cost Calculation

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LEGEND:

MT = metric ton

kg. = kilogram

lb. = poundCBM = cubic metercu. cms.    = cubic centimeterscu. ft. = cubic feetcu. ins. = cubic inches

  Weight or Measure

Mode ofTransportation

        

Ocean Freight       1 MT(1000 kgs.)

    or     1 CBM(35.3 cu. ft.)

 

 

Air Freight       1 MT(1000 kgs.)

    or     6 CBM(211.8 cu. ft.)

      1 kg.     or     6000 cu. cms.(366 cu. ins.)

      1 lb.     or     166 cu. ins. 

 

Road andRail Freight

      1 MT(1000 kgs.)

    or     3.3 CBM(116.5 cu. ft.)

      1 kg.     or     3300 cu. cms.(201.3 cu. ins.)

      1 lb.     or     91.3 cu. ins. 

Some freight carriers may use the (long ton) 2240 lbs. (as weight) or 40 cu. ft. (as measure) in the freight cost calculation.

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In ocean freight, some freight carriers may use the terms U.S. shipping ton and British shipping ton. One (1) U.S. shipping ton is equivalent to 40 cubic feet, and one (1) British shipping ton is equivalent to 42 cubic feet.

Other units may be used in the inland freight cost calculation. For example, the inland freight could be charged on a per package basis, but within a maximum allowable weight and/or cube per package. Some carriers may rate a product on a weight basis only.

In the case of irregular shaped cargo, the weight or measure applies, where the measure is determined by taking the three widest dimensions that describe the smallest cubic space enclosing the cargo.

Minimum Bill of Lading

A minimum bill of lading---minimum billing or minimum charge---is often required in a freight service.

In ocean freight, a minimum of usually 2 or 3 CBM (cubic meters) is required. The freight consolidator may specify the minimum requirement in a dollar amount, instead in CBM.

In air freight, a minimum of usually 1 kilogram is required. If a consignment is light and small, it is more economical to ship by air rather than by sea considering the benefits of air freight.

In road and rail freight, the minimum requirements vary widely among carriers.

Case Sample:Weight or Measure 

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Assuming that an ocean carrier or a freight consolidator offers an exporter US$65 W/M for the shipment of 665 cartons of product DX.

The gross weight of each carton is 10.5 kgs. and its length-width-height is 1.5' x 1' x 1', which is 1.5 cu. ft. or 0.04248 CBM per carton.

The specified weight is per 1,000 kgs.and measure is per cubic meter.

The consignment hasa weight of 6,982.5 kgs. (i.e., 10.5 kgs. x 665)and a measure of 997.5 cu. ft. (i.e., 1.5 cu. ft. x 665) or 28.25 CBM (i.e., 0.04248 CBM x 665).

Freight Cost Calculation

 

The freight cost by weight is:

  US$65  x  (6,982.5     1,000)     =     US$ 453.86

 

The freight cost by measure is:

  US$65  x  28.25     =     US$ 1,836.25

 

The measure of product DX is large in relation to its weight, that is, the freight cost by measure gives the carrier or the consolidator a higher revenue, thus the exporter pays US$1,836.25.

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Freight Adjustments 

Currency Adjustment Factor (CAF)

In times of unstable currency, the freight rate is often quoted with a currency adjustment factor (CAF) to cover an additional charge for currency appreciation. The CAF, if any, is indicated on the bill of lading. The tariff of most international carriers uses the U.S. dollar as the basis of the freight cost calculation. The CAF allows for fluctuations in the value of the dollar against the currency in which the carrier earns its revenues.

Bunker Adjustment Factor (BAF)

The term bunker refers to oil. It may also refer to a compartment on a ship for storing fuel, that is, oil in modern ships and coal in old-time steamships.

In times of unstable oil prices, the freight is often quoted with a bunker adjustment factor (BAF) to cover an oil price hike. The BAF, if any, is indicated on the bill of lading. The BAF allows for fluctuations in the cost of oil.

   

  

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Freight Payment ---Freight Prepaid and Freight Collect 

The term freight used here refers to transportation charges. The INCOTERMS (International Commercial Terms) determine whether the shipper or the consignee is responsible for paying the freight.

Freight Prepaid

Freight prepaid means the freight has been paid or prepaid by the shipper. The trade terms CFR (C&F), CIF, DAF, CPT, CIP, DDU, DDP, DES, and DEQ require a prepayment of the cost of main carriage.

In a prepaid delivery, the letter of credit (L/C) normally requires that the words "Freight Prepaid" be marked on the bill of lading (B/L), clearly indicating payment or prepayment of freight at port (or point) of origin. The mark may appear by stamp or be indicated by other means. The words "freight to be prepaid" or "freight prepayable" or similar wording that may appear on the B/L do not prove that the freight has been paid.

In a prepaid delivery by a courier, the transport document (i.e., the courier's receipt) issued by a courier or expedited delivery service must show that the courier charges have been

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paid or prepaid by the shipper.

Freight Collect

Freight collect means that the freight still has to be paid by the consignee. The trade terms FOB, FAS, EXW, and FCA require a collection of the cost of the main carriage.

In a collect delivery, the letter of credit (L/C) normally requires that the words "Freight Collect" be marked on the bill of lading, clearly indicating freight payable at destination. The mark may appear by stamp or be indicated by other means.

A collection charge usually is included in the freight rate or is collected separately. Hence, the freight charged on a collect basis is normally higher than on a prepaid basis.

Shipment Control 

Proper control of the date of shipment is very important in the exporting. A delayed shipment may mean losing the order and the customer's trust.

In the sample letter of credit (L/C) the latest shipment is March 19, 2001. The latest negotiation is 15 days after the date of shipment which would be April 3, 2001, but the L/C expires onMarch 26, 2001. Hence, the latest negotiation date would be March 26, 2001 if the shipment is on March 19, 2001, which means that the UVW Exports must present the documents to The Moon Bank within 7 days after the date of

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shipment.

The Earliest Date of Shipment

Importers may stipulate in the letter of credit (L/C) an earliest date of shipment to prevent the exporter from shipping the goods too early, thus avoiding the high inventory, warehouse congestion and financial strain.

The Latest Date of Shipment

The latest date of shipment or the last date for shipment stipulated in the letter of credit (L/C) prevents the exporter from shipping the goods too late, thus avoiding an inventory shortage. This stipulation is important especially for seasonal goods or during a currency devaluation in the importing country, in which a late shipment may render the goods unsaleable or cost more to the importer.

Disregarded Expressions as to the Date for Shipment

Expressions such as "immediately", "promptly", "as soon as possible" and the like should not be used for shipments. If they are stated in the letter of credit (L/C), the bank will disregard them.

Partial and Installment Shipments 

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Partial Shipment

The partial shipment---part shipment---is allowed, unless otherwise stipulated in the L/C.

When shipments are made on different dates and/or different ports or points of origin, but the transport documents indicate the same destination and bear the same means of conveyance for the same journey, they are not regarded as covering partial shipments. Please see Case Sample: Non-Partial Shipment below.

When shipments are made by post or by courier, if the post receipts or the courier's receipts bear the same date and place of dispatch and have been authenticated by any stamp, signature, mark, or label, they are not regarded as partial shipment.

Installment Shipment

Installment shipment means shipping an order in different batches and on different periods stipulated in the letter of credit (L/C).

In case of shipments by installment within given periods are stipulated in the L/C, failure to ship any installment within the period allowed will render the L/C unavailable or inoperative for that installment and any subsequent installments, unless the L/C stipulates otherwise.

Case Sample:Non-Partial Shipment 

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The route of vessel S/S HERMANA voyage No. 8 is from Port A to Port B (both in the seller's country) and then to Port C (in the buyer's country). The transit time between Port A andPort B is 2 days.

If the seller makes two separate shipments, one from Port A and the other from Port B, two days apart under one letter of credit (L/C) to the same buyer at Port C via the same vessel S/S HERMANA voyage No. 8, such case is not a partial shipment. However, the L/C in such shipments must indicate (if for example that the Port A and Port B are in the U.S.A.) "shipment from any U.S. ports to Port C", and neither "shipment from Port A to Port C" nor "shipment from Port B to Port C", otherwise a discrepancy will occur.

Customs Closing Date 

The customs closing date is the last date that the carrier accepts the cargo for shipment in a specified voyage at designated delivery location or closing location---the container terminal or dock.

The exporter must arrange for cargo arrival at the carrier's designated closing location before the cut-off date and time, otherwise he/she may lose the order. The delivery date and location and the customs closing date for the goods are specified in the shipping order (S/O).

The authorized delivery date can be 2 days, including the day before the closing date. In case the cargo arrives at the container terminal or dock earlier than the date specified by the carrier, the vessel may not arrive yet and the carrier may not accept the cargo. The cargo may incur warehousing charges if it is not returned to the shipper.

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Booking of Shipping Space 

The exporter can book shipping space with a carrier or carrier's agent directly or through a customs broker or forwarder. In practice, it is not uncommon for the exporter to select a carrier and shipping schedule and let the customs broker or forwarder book the space.

Choosing the Carrier

Unless the importer specifies a carrier, the exporter is free to choose a shipping company or airline which offers a competitive rate and can meet the latest date for shipment. Certain importing countries may prohibit the use of flag vessels of a hostile country and any vessels that would make a stopover in a hostile country en route to their territory.

Worldwide Seaports

Please see Seaports of the World. Some port names may be spelled differently, for example, Arkhangelsk in the Russian Federation may appear as Archangels.

The letters after the port names in Australia, Canada and the U.S.A. represent the state or province where the port is located (please see General References---Abbreviations - Provinces, States and Territories).

Checking the Ocean Shipping Schedules

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In many countries, the ocean shipping schedules (both outbound and inbound) are published in a major newspaper. In countries where newspapers do not carry shipping schedules, the exporter may contact the carrier, customs broker or forwarder for shipping information. The information is also available from private publishers of shipping schedules.

Carrier - Voyage/Flight No.

The phrase "carrier - voyage/flight no." refers to the name of the carrier and its voyage number (in the case of ocean and land freight) or flight number (in the case of air freight).

In ocean freight, the name of a carrier usually is preceded by letters S/S, SS, S.S., M/V, MV or M.V.. The S/S, SS or S.S. stands for steamship, while M/V, MV or M.V. for merchant vessel. The term steamship is still widely used despite the fact that modern ships are not propelled by steam.

ETD (ETS) and ETA

When booking shipping space, the exporter should know the ETD (ETS) and ETA of the shipment.

The term ETD is the estimated or expected time of departure from the port or point of origin; it applies to all modes of transportation. ETD is shipment on or about.

The term ETS is the estimated or expected time of sailing from the port of origin; it applies to ocean freight. ETS is sailing on or about.

The term ETA is the estimated or expected time of arrival at the port or point of destination; it applies to all modes of transportation.

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Stopover En Route to Destination

When booking a shipping space, it is important to verify whether the vessel will stopover in other port(s) to unload and load other cargoes en route to the destination. The stopover in certain ports, particularly congested ones, may extend far beyond the expected time.

Verbal Booking of Space and Dead Freight

In many countries, verbal booking of shipping space is accepted, except for dangerous goods. Sometimes, the space booked is not used and the carrier may levy a charge known as dead freight. The exporter must inform the customs broker or forwarder who booked the space on his/her behalf in advance if the space will not be used, so that other shippers may use the space and to avoid paying the dead freight charge.

Dangerous Goods

When shipping dangerous goods, a written application for shipping space is required. If a shipping order is issued for dangerous goods, it does not mean that the goods will be accepted for loading on board the vessel. When they arrive at the designated customs delivery (closing) location, the goods, shipping order and Dangerous Goods Note are submitted to the ship's master for approval before customs clearance and loading.

Transhipments 

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The prefix "trans-" means over or to the other side of. Transhipment or transshipment (written with two letter 's')---transit shipment---means a shipment destined to a port or an interior point (location or depot) is best reached by connecting shipment(s) from other port(s) and/or point(s). It is the unloading and reloading of cargo from one means of conveyance to another, in the same or different modes of transportation, during the course of carriage from the place of shipment to the place of destination stipulated in the letter of credit (L/C).

Unless otherwise stipulated in the L/C, transhipment is allowed provided that the entire carriage is covered by one and the same transport document.

Some exporters refuse to accept transhipment because of a belief that it costs more and is slower than a direct shipment. Some importers have the same belief. Contrary to this belief, by using transhipment the cost to certain destinations can be lower and it can be faster than a direct shipment. For instance, the frequency of sailing to a certain destination in a direct shipment is once every two weeks, but by transhipment to the same destination the frequency of sailing can be once or twice weekly. The point in such an instance is that the greater the supply the lower the cost and the earlier the shipment the earlier the importer may receive the goods. In other words, transhipment may save cost and time.

Most ocean freight are containerized in modern shipping. Hence, intermediate reloading of cargo is eliminated in the transhipment, which reduces the cost and time.

The transhipment charge usually is included in the through freight rates, but the shipper must verify with the carrier to ensure that no additional transhipment charge will be collected from the consignee.

Multilateral agreements make the transhipment possible. With worldwide trades and new trading partners on the rise, new routes for transhipment will emerge. For example, trades between Far East and CIS (Commonwealth of Independent States of former Eastern Bloc), the shipment traditionally passes through the Black Sea, but the transit time is shorter by transhipment via the Middle East country (e.g. Iran).

Shipments from Asia and Europe to Central and South America, and vice versa, often require transhipment at ports in North America.

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Feeder Vessel and Master Ship

In booking the ocean shipping space with a transhipment, the shipping company provides the names and voyage numbers of the feeder vessel and master ship. The master ship sometimes is referred to as the mother ship. The names and voyage numbers of the feeder vessel and master ship are entered in the ocean bill of lading.

Transhipment in Landlocked Countries

Certain countries are landlocked and so are inaccessible by deep-sea ocean vessels. Import and export goods must be transhipped in other country(ies) by means of truck and/or rail and/or inland waterway (river, canal or lake) transports. Please see some of the landlocked countries in the Landlocked Countries and Transhipping Points.

Shipping Order (S/O) 

The shipping order---shipping permit---is issued by the shipping company to a shipper with a confirmed space booking, authorizing the receiving clerk (cargo checker) at the container terminal or dock to receive a specified amount of goods from the named shipper.

A shipping order (S/O) typically contains the space booking number, names and addresses of the shipper and customs broker or forwarder, vessel and voyage number, sailing time, delivery date and location, customs closing date, and number and type of packages.

The customs broker or forwarder usually requires the packing list of a consignment in order to book the shipping space and to obtain the S/O and/or to

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prepare the dock receipt (shipping note). In some cases, the presentation of the packing list and a valid export permit is required to obtain the S/O.

The S/O accompanies the dock receipt and the deliverer of the goods presents these two and other documents that may be required in the delivery to the receiving clerk (cargo checker) at the closing location. In certain countries, only the space booking number is needed instead of a formal S/O, since the information in an S/O is found in the dock receipt.

Export Shipping Instructions 

When an exporter engages a custom broker or forwarder to handle the customs declaration, he/she must give instructions on what to do with the shipment in the shipping instructions. The format of the shipping instructions varies, but all the forms essentially contain the same information. One form is often used in different modes of transportation. 

B/L Application-Instructions(Bill of Lading Application-Instructions)

Please see the sample B/L Application-Instructions (BLAI) below that is used in ocean shipment. The letter of credit (L/C) is a confidential document. Many exporters prefer not to let the customs broker or forwarder see the L/C, and instead provide a BLAI detailing the requirements and instructions of an ocean shipment. Please refer to the Ocean (Marine) Bills of Lading for the explanations on some of the fields in the sample B/L Application-Instructions (BLAI).

The exporter may provide the BLAI to the customs broker after he/she has obtained a shipping order (S/O) or a space booking number from the carrier.

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The BLAI usually is provided to the customs broker before obtaining the S/O in cases where the packing list and valid export permit are required to obtain the S/O.

The BLAI normally is accompanied by a copy of the commercial invoice and packing list, and the Insurance Application-Instructions if the customs broker is to arrange for insurance.

Some exporters supply the original L/C or its photocopy without supplying the BLAI, and let the forwarder manage the rest of the export routines with payment of fees and charges, which may include preparing of export documents and sending them to the bank.

Shipper's Letter of Instructions

The Shipper's Letter of Instructions (SLI) are shipping instructions that are used in air shipment, and at times in ocean shipment. The SLI contains basically the same information as in a B/L Application-Instructions, and it may contain the words "The exporter authorizes the forwarder named above to act as forwarding agent for export control and customs purposes" or the like. The SLI form is available from the carrier or the forwarder.

Sample Form:B/L Application-Instructions--- Export Shipping Instructions 

B/L Application-Instructions

UVW EXPORTS88 Prosperity Street East, Suite 707Export-City and Postal Code, Export-CountryTel: (07) 1234-5678   Fax: (07) 1234-8888E-mail: [email protected]

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Shipper'sReference

Sales Confirmation No.

Commercial Invoice No.

Export/Manufacturer's License No.

Custom Brokeror Forwarder

Name

Tel. No. Fax. No.

Contact Person Ref. No.

ShippingCompanyor Agent

  Tel. No.

Shipping Orderor Booking No.

  Customs Closing Date

Deliveryor ClosingLocation

Dock & Pier No.

Container Terminal

                                                                       

  A. The CLEAN "ON BOARD" bill of lading is required.

  B. The short form (blank back) bill of lading is:

 

  Not Acceptable              Acceptable

  C. The transport documents issued by the freight forwarder are:

 

  Not Acceptable              Acceptable

  D. The charter party bill of lading is:

 

  Not Acceptable              Acceptable

  1. SHIPPER/CONSIGNOR

  2. CONSIGNEE

  3. NOTIFY PARTY

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  4. ALSO NOTIFY

  5. CARRIER - VOYAGE/FLIGHT NO.

  6. LOADING ON BOARD DATE

  7. DISPATCH/TAKING IN CHARGE DATE

  8. FROM (Port of Loading)

  9. FROM (Place of Dispatch/Taking In Charge)

  10. TO (Port of Discharge)

  11. VIA (Tranship At)

  12. THENCE TO (For Transhipment To)

  13. DESCRIPTION OF PACKAGES & GOODS:

  14. MARKS & NUMBERS:

  15. BILL OF LADING MARKED:

    Freight Prepaid              Freight Collect

Other Instructions

ETA At No. of copy of theBill of Lading required

Original

ETA On Copy

  Issued by: Date:

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Dock Receipt 

The dock receipt---shipping note---when signed by the receiving clerk (cargo checker) at the container terminal or dock is a proof of the delivery of goods.

Please see the sample Dock Receipt below. The format of the dock receipt varies, but the contents are basically the same. Some dock receipts may include the Commodity Code (of goods) field. In practice, the commodity code of goods may be entered in the "Description of Packages and Goods" field in the dock receipt.

The dock receipt is made out by the customs broker following the instructions and information contained in the shipping order (S/O), B/L application-instructions (BLAI or the export shipping instructions) and packing list.

The number of copies of the dock receipt required depends on the circumstances. Certain countries require a fixed number, where at least one signed copy is returned to the forwarding agent or the shipper as proof of delivery. The bill of lading (B/L) is issued in due course in exchange for the dock receipt.

The bill of lading (B/L) is made out word for word according to the dock receipt. Therefore, it is very important that the shipper provides the correct information in the B/L application-instructions and packing list, and that the customs broker or forwarder does not make any errors and omissions in the dock receipt, otherwise a discrepancy may occur in the B/L and the bank will reject the documents.

The phrase "only clean dock receipt accepted" in the dock receipt is to ensure that the receiving clerk (cargo checker) at the container terminal or dock puts a 'clean' or similar notation on the conditions of goods received.

The dock receipt can be clean or foul (unclean, dirty or claused). If a dock receipt is clean, the bill of lading (B/L) issued in due course will be clean, otherwise the B/L will be foul (please refer to the Clean versus Foul Bills of Lading for more information).

Mate's Receipt

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The counterpart of the dock receipt that is used in the chartering trades is known as mate's receipt. The mate's receipt is signed by the mate (the deck officer) of the vessel.

Sample Form:Dock Receipt(Shipping Note) 

DOCK RECEIPT

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Customs Export Declaration 

In many countries, export shipments valued below a minimum requirement may not require a formal customs declaration. The purposes of customs export declaration are

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to verify and regulate outgoing cargo (including re-export goods) and to collect the statistical data (of the product, quantity, value, and destination) for export references.

The format of customs export declaration forms varies from country to country. The form typically contains the information found in the commercial invoice and the bill of lading or waybill. In addition, the form may include:

the business license number and/or tax account number and/or export permit (license) number of the exporter

the business license number of the manufacturer from whom the export-trader buys the export goods

the commodity code or category of goods

the country of destination and its country code (a numeric country code may be assigned to each importing country by the customs of exporting country for compiling statistics)

the name, address and code (or license) number of the customs broker or forwarder

the customs charges

The exporter normally must sign an authorization paper (the power of attorney) allowing the customs broker or the forwarder to handle the customs declaration.

In certain countries, exporters may prepare the customs declaration forms by themselves and let the customs broker handle the rest of the customs formalities.

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Ocean (Marine) Bills of Lading 

The bill of lading (in ocean transport), waybill or consignment note (in air, road, rail or sea transport), and receipt (in postal or courier delivery) are collectively known as the transport documents.

Please see the sample Ocean Bill of Lading below. The bill of lading (B/L) serves as a receipt for goods, an evidence of the contract of carriage, and a document of title to the goods. The carrier issues the B/L according to the information in a dock receipt, or in some cases according to a completed working copy of the B/L supplied by the customs broker.

The B/L must indicate that the goods have been loaded on board or shipped on a named vessel, and it must be signed or authenticated by the carrier or the master, or the agent on behalf of the carrier or the master. The signature or authentication must be identified as carrier or master, and in the case of agent signing or authenticating, the name and capacity of the carrier or the master on whose behalf such agent signs or authenticates must be indicated.

Unless otherwise stipulated in the letter of credit (L/C), a bill of lading containing an indication that it is subject to a charter party and/or that the vessel is propelled by sail only is not acceptable.

The Date of Shipment in Ocean Freight

In cases where the bill of lading (B/L) has pre-printed wording indicating that the goods have been loaded on board or shipped on a named vessel, the issuance date of such B/L is considered to be the date of loading on board or the date of shipment.

In cases where the B/L does not have pre-printed wording indicating that the goods have been loaded on board or shipped on a named vessel, the loading on board a named vessel is evidenced by the on board notation (e.g. "on board", "laden on board" or "shipped on board") on the B/L, which must be initialled and dated by the carrier or its agent. The date of the on board notation is considered to be the date of shipment.

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Transhipment Clauses in Ocean Bills of Lading

If the bill of lading incorporates clauses stating that the carrier reserves the right to tranship, then the transhipment is allowed even if the letter of credit (L/C) prohibits transhipment.

Loading On Deck

Unless otherwise stipulated in the letter of credit (L/C), the bill of lading (B/L) must not indicate that the goods are or will be loaded on deck. Modern cellular container ships carry about one-third of the containers on deck. Consequently, the B/L may contain a provision that the goods may be carried on deck. If such provision is contained on the B/L, then the loading on deck is acceptable even if the L/C stipulates otherwise, provided that the B/L does not specifically state that the goods are or will be loaded on deck.

" Full Set ... " (as stipulated in the sample Letter of Credit)   and" Number of Original B(s)/L "

Full set means all the originals as so issued by the carrier or its agent. A set contains at least two originals. In practice, a set of three originals is the most common.

The number of original bills of lading (Bs/L) may be expressed as 3/3 (read as 'three of three') or 2/2 (read as 'two of two'). In the sample Letter of Credit the L/C stipulates "Full set 3/3 ...", which means that DEF Imports requires a full set B/L containing three originals.

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If the L/C did not contain the expression "Full set 3/3", then the number of original bills of lading required would depend on the number as so issued by the carrier. It can be a sole original B/L, that is, one original only.

The originals are marked as "original" on their face and all have equal value, that is, all have the same validity. The purpose of issuing more than one original is to ensure that the port of destination will receive the original when dispatched separately. The original Bs/L are proof of ownership of goods, one of which must be surrendered to the carrier at destination, duly endorsed by the title holder in the goods in exchange for the goods or the delivery order. When one of the originals being surrendered to the carrier, the others become invalid.

" ... two (2) non-negotiable copies "(as stipulated in the sample Letter of Credit)

The non-negotiable copy of bill of lading (B/L) should not be confused with the non-negotiable bill of lading or straight bill of lading. The non-negotiable copy of B/L simply means the unsigned copy of the B/L, which is for information purposes. The copies are marked as "non-negotiable".

The copies of the B/L can be of any number. The number depends on the requirements of the importer, importing country, shipper, carrier, Chamber of Commerce (if the L/C calls for certification of the B/L), and Consulate (if the L/C calls for consular legalization of the B/L).

In the sample Letter of Credit DEF Imports requires two copies of the non-negotiable copy of bill of lading.

" Place of Receipt "

If the place of receipt (or taking in charge) is different from the port of loading, as in the case of multimodal transport, the on board notation or the pre-printed

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wording must include the letter of credit (L/C) stipulated port of loading and the name of vessel on which the goods have been loaded.

" Container No(s). "   and   " Seal No(s). "

Please refer to The Marking and Identification of Containers. The container number is entered on the dock receipt and the bill of lading (B/L).

Under the shipper's load and count arrangement, the shipper or its agent must seal the container before transferring it to the carrier. The container that originates from a bonded factory outside the EPZ (export processing zone) or from a factory inside the EPZ is sealed before leaving the bonded factory or the EPZ.

The metal seal for the container is provided by the carrier. The seal number is entered on the dock receipt and the B/L. If a seal is broken for customs purposes, a customs inspector must supervise the breaking of the seal and the resealing of the container. The new seal number replaces the previous number that was entered on the dock receipt.

" Shipper "

Unless otherwise stipulated in the letter of credit (L/C), the bill of lading may indicate as the shipper (the consignor) of the goods a party other than the beneficiary of the L/C.

" Notify Party "   and  " Also Notify "   or   " Additional Notify Party "

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The notify party is the party that the carrier must notify when the goods arrive at the port of destination. The carrier issues an Arrival Notice informing the notify party about the cargo discharge point, number of packages and other information. The letter of credit (L/C) may require that the carrier notifies a party in addition to the notify party, usually using the words "also notify".

The notify party depends on the L/C requirement, it can be the importer, freight forwarder or bank. In the sample Letter of Credit the L/C stipulated "notify the above accountee", in other words the notify party is DEF Imports, 7 Sunshine Street, Sunlight City, Import-Country.

If the notify party and the consignee are the same party, then enter the word "SAME" or "CONSIGNEE" in the 'Notify Party' field in the bill of lading (B/L).

Sample Document:Ocean Bill of Lading 

Remarks:  Fields or items in blue color contain links to the explanation.

A RELIABLE SHIPPING LINE( NON-NEGOTIABLE UNLESS CONSIGNED TO ORDER )

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( SEE REVERSE FOR TERMS AND CONDITIONS )

Shipper's Load and Count 

The phrase "shipper's Load and count" means cargo moving under a bill of lading (B/L) where the carrier acts as a transport contractor without responsibility for loading or unloading. The carrier marks this phrase on the B/L if it does not supervise the loading or unloading of the cargo, which is the typical case in a full container load shipment. Hence, the carrier will not be held accountable for the number of units reported on the B/L. The carrier often adds the words "said to contain" or "said by shipper to contain" before the number of units of a commodity, for example, "3  40-FT. CONTAINERS SAID TO CONTAIN 4,095 CARTONS RUBBER SHOES".

Clean versus Foul Bills of Lading 

The bill of lading (B/L) is made out according to the information contained in the dock receipt, or in some cases according to the completed working copy of the B/L supplied by the customs broker. If a dock receipt is clean, the B/L will be clean, otherwise the B/L will be foul. The bank will reject a foul bill of lading, unless stipulated otherwise in the letter of credit (L/C).

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Clean Bill of Lading

The clean bill of lading bears an indication that the goods were received without damages, irregularities or short shipment, usually the words "apparent good order and condition", "clean on board" or the like are indicated on the B/L.

Foul Bill of Lading

The foul bill of lading---unclean bill of lading, dirty bill of lading or claused bill of lading---is the opposite of the clean bill of lading. It bears an indication that the goods were received with damages, irregularities or short shipment, usually the words "unclean on board" or the like are indicated on the B/L, for example, "insufficient packing", "missing safety seal" and "one carton short".

Short Form versus Long Form Bills of Lading 

Short Form Bill of Lading

In a short form bill of lading---blank back bill of lading---the terms and conditions of carriage on the reverse (back) of the bill of lading (B/L) are omitted, instead they are listed on a document other than the B/L. Unless otherwise stipulated in the letter of credit (L/C), a short form bill of lading is acceptable.

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The short form B/L saves the cost of printing (i.e., no printing on the back of the B/L) and if the terms and conditions of carriage change, there is no need to reprint the B/L form.

Long Form Bill of Lading

In a long form bill of lading the terms and conditions of carriage are printed on the reverse (back) of the bill of lading. The long form bill of lading is commonly used in international shipping.

Received versus On Board Bills of Lading 

Received Bill of Lading

The received bill of lading does not prove that the goods have been shipped. It only acknowledges that the goods have been received by the carrier for shipment. Therefore, the goods could be in the dock or warehouse.

On Board Bill of Lading

The on board bill of lading---shipped bill of lading---proves that the goods have been shipped, as evidenced by the pre-printed wording or the on board notation (e.g. "on board", "laden on board" or "shipped on board") on the bill of lading.

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Straight versus Order Bills of Lading 

Straight Bill of Lading

In a straight bill of lading---non-negotiable bill of lading---the title to the goods is conferred directly to a party named in the letter of credit (the importer usually), as such the title to the goods is not transferable to another party by endorsement. In other words, the bill of lading is not negotiable.

The letter of credit calls for a straight bill of lading usually by using such words as "consigned to [the named party]" or "issued in the name of [the named party]". The named party can obtain the goods directly from the carrier at destination. Therefore, unless the cash payment has been received by the exporter or the buyer's integrity is unquestionable, the use of a straight bill of lading is risky (please see Fly-By-Night Importers for related information).

Order Bill of Lading

In an order bill of lading---negotiable bill of lading---the title to the goods is conferred to the order of shipper or to the order of a named party in the letter of credit (the issuing bank usually).

The purpose of an order bill of lading is to protect the interest of the shipper or the named party to the title to the goods.

The title to the goods is transferable to another party by endorsement, usually on the reverse (back) of the bill of lading (B/L) by the title holder of the B/L. If the endorsement of B/L is required in the letter of credit (L/C), all the originals must be endorsed.

The letter of credit may calls for an order bill of lading that is: (1) To order blank endorsed or To order of shipper and blank endorsed, (2) To order of

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shipper and endorsed to order of[the named party], or (3) To order of [the named party (other than the shipper)].

   To order blank endorsed or     To order of shipper and blank endorsed

Unless provided otherwise, a consignment that is "to order" means to order of shipper. The "blank endorsed" means without specifying to whom the bill of lading (B/L) is transferred. In such instance, whoever bears the B/L after endorsement holds the title to the goods.

If the sample letter of credit requires a B/L that is "to order blank endorsed", as such enter the words "To Order" in the Consignee field in the bill of lading and other documents/forms.

In a "to order blank endorsed" bill of lading (B/L), technically speaking whoever bears the B/L after its issuance holds the title to the goods.

If the sample letter of credit requires a B/L that is "to order of shipper and blank endorsed", as such enter the words "To Order of UVW Exports" in the Consignee field, since the shipper in such L/C is UVW Exports.

In both the above sample cases, the B/L must bear blank endorsement of the shipper as follows:

UVW Exports(plus the authorized signature)

And, entering the words "To Order" or "To Order of UVW Exports" in either of the above cases is correct, but to avoid rejection of documents, always follow the wordings stipulated in the letter of credit as a precaution.

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   To order of shipper and endorsed       to order of [the named party]

This letter of credit (L/C) requirement resembles the "to order of shipper and blank endorsed", except that the words "To Order of [the named party]" must be indicated over the shipper's endorsement.

If the sample letter of credit requires a bill of lading that is "to order of shipper and endorsed to order of The Moon Bank", as such enter the words "To Order of UVW Exports" in the Consignee field in the bill of lading and the endorsement as follows:

To Order of The Moon Bank

UVW Exports(plus the authorized signature)

   To order of [the named party (other than the shipper)]

The named party under this letter of credit (L/C) requirement most often is the issuing bank. The L/C does not call for an endorsement, thus the exporter does not have to endorse the bill of lading.

The sample letter of credit requires a bill of lading "to order of The Sun Bank, Sunlight City, Import Country", as such enter the words "To Order of The Sun Bank, Sunlight City, Import Country" in the Consignee field in the bill of lading and other documents/forms.

Go to Top

Synopsis:The Title to the Goods in an Order Bill of Lading 

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To order blank endorsed orTo order of shipper and blank endorsed

The title to the goods is conferred to the shipper, who retains the ownership in the consignment.

The shipper presents the blank endorsed bill of lading (B/L) and other required export documents to the bank, the bank negotiates the letter of credit (L/C) and the bank becomes the title holder in the goods. In such a case the B/L is negotiable, that is, the rights of holder can be transferred to another party.

To order of shipper and endorsedto order of [the named party]

The title to the goods is conferred to the shipper, who retains the ownership in the consignment.

If the named party is the negotiating bank, the shipper's endorsement of the bill of lading (B/L) transfers the title to the goods to the negotiating bank, and the bank can transfer the title to the goods to another party by endorsement. The shipper presents the endorsed B/L and other required export documents to the negotiating bank.

If the named party is other than the negotiating bank, then the negotiating bank merely holds the B/L, not its title, on behalf of the named party.

To order of [the named party (other than the shipper)]

The title to the goods is conferred to the named party, who retains the ownership in the consignment. The shipper merely holds the bill of lading (B/L) on behalf of the named party.

The shipper presents the B/L and other required export documents to the negotiating bank, the bank holds the B/L on behalf of the named party and negotiates the letter of credit (L/C).

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The named party can transfer the title to the goods to another party by endorsement. In practice, the named party in the "to order of [the named party]" usually is the issuing bank. Therefore, unless the importer pays the issuing bank and the issuing bank endorses the B/L to order of the importer, the importer cannot obtain the goods from the carrier. Clearly, the interests of the issuing bank and the exporter (the shipper) are protected if the B/L is "to order of [the named issuing bank]".

Air Waybills 

Please see the sample Air Waybill (AWB) below. The air waybill---air consignment note or airway bill of lading---serves as a receipt for goods and an evidence of the contract of carriage, butit is not a document of title to the goods. Hence, the AWB is non-negotiable.

The goods in the air consignment are consigned directly to the party (the consignee) named in the letter of credit (L/C). Unless the goods are consigned to a third party like the issuing bank, the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor. Therefore, unless a cash payment has been received by the exporter or the buyer's integrity is unquestionable, consigning goods directly to the importer is risky.

For air consignment to certain destinations, it is possible to arrange payment on a COD (cash on delivery) basis and consign the goods directly to the importer. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB.

In air freight, the exporter (the consignor) often engages a freight forwarder or consolidator to handle the forwarding of goods. The consignor provides a Shipper's Letter of Instructions which authorizes the forwarding agent to sign certain documents (e.g. the AWB) on behalf of the consignor.

The AWB must indicate that the goods have been accepted for carriage, and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. The signature or authentication of the carrier must be identified as carrier, and in the case of agent signing or authenticating, the name and the capacity of the carrier on whose behalf the agent signs or authenticates must be indicated.

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The AWB is issued usually in set of twelve copies. Copies 1, 2 and 3 of AWB are originals and have the same validity. The originals are usually marked as:

Copy 1 - Original for CarrierCopy 2 - Original for ConsigneeCopy 3 - Original for Shipper

or

Original 1 - (For Carrier)Original 2 - (For Consignee)Original 3 - (For Shipper)

or similar expressions at the bottom of the AWB.

Copy 1 or Original 1 is to be signed by the consignor or its agent.

Copy 2 or Original 2, which is to accompany the goods through to the airport of destination, is signed by the carrier and by the consignor or its agent.

Copy 3 or Original 3 is signed by the carrier, and is handed to the consignor or its agent after the goods have been accepted for carriage. If the letter of credit (L/C) stipulates a full set of originals, the presentation of Copy 3 or Original 3 to the bank will satisfy the requirement.

The AWB also operates like a through bill of lading. It can be used in transhipment, that is, unloading and reloading from one aircraft to another aircraft during the course of carriage from the airport of departure to the airport of destination stipulated in the L/C. A set of AWB's issued by the first carrier usually includes a For Second Carrier copy and a For Third Carrier copy, which are used if required in transhipment.

The first three digits in the sample Air Waybill represented, for example, by digits '000', identifies the carrier, and constitute part of the air waybill (AWB) number (e.g. 000-12345678). The carrier's agents, such as the freight forwarder, may issue

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their own house air waybill (HAWB), the format of which may differ from the sample air waybill.

The Date of Shipment in Air Freight

The issuance date of the air waybill (AWB) is considered to be the date of shipment. If the letter of credit (L/C) calls for an actual date of dispatch, the AWB must indicate a specific notation of the date of dispatch, and the date indicated is considered to be the date of shipment. The expression "Flight/Date [For Carrier Use Only] Flight/Date" on the sample Air Waybill, for example, is not considered as a specific notation of the date of dispatch.

Transhipment Indicated in Air Waybills

If the air waybill indicates that transhipment will or may take place, then the transhipment is allowed even if the letter of credit (L/C) prohibits transhipment, provided that the entire carriage is covered by one and the same air waybill.

Split Shipment

The split shipment means that portions of a shipment covered by one air waybill enter the country at different times.

Sample Document:Air Waybill(Air Consignment Note) 

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Terminology in the Institute Cargo Clauses 

Proximately caused by

In many circumstances, it is the chain of causes that lead to the loss or damage to the subject matter insured. The loss or damage can be due to the actual or effective cause known asproximate cause.

Case Sample:Delayed Delivery and Insurance 

A consignment of commemorative items to celebrate the 50th anniversary of the company was

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insured against Institute Cargo Clauses (A) and arrived after the anniversary date in good condition.

The goods were in a vessel that collided with ice and took refuge in an intermediate port for repair. Due to the unavailability of a vessel for the on-carriage of goods and poor weather, the goods remained in the intermediate port for some time.

The goods finally arrived at the company with no physical loss or damage, but the company suffered loss proximately (i.e., actually or effectively) caused by the delay in delivery

Reasonably attributable to

Most of the risks under the Clause (B) and Clause (C) have been changed from the "proximately caused by" to "reasonably attributable to".

Malicious damage

The exclusion in the deliberate damage to or deliberate destruction of the property insured or any part thereof by the wrongful act of any person(s).

Delay

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Although the delay was caused by a risk insured against (except expenses payable under general average), the assured cannot claim the loss or damage due to the delay.

In the above Case Sample: Delayed Delivery and Insurance the company cannot take action against the insurer, but it may take action against the carrier for the delay in delivery.

Willful misconduct of the assured

If the loss or damage is the result of negligence or actions taken by the assured, he/she cannot claim such loss or damage.

General average sacrifice

The word "average" means loss. The general average sacrifice is an intentional sacrifice or expenditure reasonably incurred for the purpose of preserving the imperiled property involved in the common maritime adventure. In other words, sacrifice in the cargo for the benefit of saving the rest and the vessel. The jettison and the cargo damaged by water used to extinguish a fire aboard the vessel are examples of the general average sacrifice.

If the action taken is successful, each party to the adventure---all cargo owners and the vessel owner---bear the loss and expenses incurred based on the value of each shipment in proportion to the total value of cargo and vessel. The cargo owners whose goods are safe and sound or uninsured in the marine perils must also contribute to pay for the loss and expenses.

Jettison

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It means the cargo is thrown overboard to lighten the vessel during a storm or when a vessel grounds and can be floated at high tide with lesser load.

Piracy

The piracy is excepted in the War Exclusion in the Clause (A) only. To cover against piracy in the Clause (B) and Clause (C), the Institute War Clauses must be endorsed. The F.C.&S. Clause (Free of Capture and Seizure Clause) in the old Institute Cargo Clauses excludes the piracy.

Inherent vice or nature of the subject matter insured

The word "vice" means fault. The inherent vice means the nature or characteristic of a product which could result in damage to the product despite all care and caution by the carrier. For example, cut flowers may wilt and die, milk may turn sour, and cement may set.

War

The exclusions of war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power (for the purpose of this clause 'power' includes any authority maintaining naval, military or air forces in association with a power); capture, arrest, restraint, detainment (piracy excepted), and the consequences thereof or any attempt thereat; derelict mines, torpedoes, bombs, or other derelict weapons of war. This clause basically replaces the old F.C.&S. Clause (Free of Capture and Seizure Clause).

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Strikes, riots and civil commotions, includesterrorists or any persons acting from a political motive

The insurance does not cover loss, damage or expense caused by or resulting from: strikers, locked-out workmen, or persons taking part in labour disturbances, riots or civil commotions; strikes, lock-outs, labour disturbances, riots or civil commotions; terrorists or any persons acting from a political motive. This clause is similar to the old F.S.R.&C.C. Clause (Free of Strikes, Riots and Civil Commotions Clause) except the new clauses include an additional exclusion of terrorists or any persons acting from a political motive.

Use of any atomic or nuclear weapon

The exclusion in the use of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter. This exclusion also appeared in theInstitute War Clauses.

Ordinary leakage, ordinary loss in weight or volume,or ordinary wear and tear of the subject matter

The ordinary leakage or ordinary loss in weight or volume is a form of inherent vice. The natural processes of evaporation (liquid turns to gas) and sublimation (solid turns to gas) may be involved. For example, alcohol evaporates and the mothball (naphthalene ball) sublimates, as a result alcohol and mothballs may lose weight or volume.

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The ordinary wear and tear of the subject matter is often linked to the insufficiency or unsuitability of packing where the cargo may move and 'rub' against each other or against the container during the sea voyage because of high wind and waves. Friction (from 'rubbing') may result in wear and tear to the cargo.

Insufficiency or unsuitability of packingof the subject matter insured

The packing used here includes stowage in a container but only when such stowage is completed by the assured or his/her agent before the insurance coverage takes effect. This clause reminds the shipper to be careful in the preparation of export packs and the loading or stuffing of the container.

The assured privy to the unseaworthiness of vessel or craftand/or unfitness of vessel, craft, conveyance, or containerat the time of loading

The word "privy" means having knowledge of. If the shipper knows that the vessel, craft, conveyance, or container is unseaworthy or unfit but still uses it, then any loss, damage or expense arising from such use is excluded, that is, the insurer is not liable to pay for the loss, damage or expense. This clause encourages the shipper to be careful in his/her selection of the vessel, craft and conveyance, and emphasizes the importance of inspecting the container, particularly when the shipper will be loading the container himself/herself.

Insolvency or financial default of theowners or operators of the vessel

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This clause encourages the shipper to be cautious in his/her use of the carrier.

Export Credit Risk Insurance 

Exports not only face the risks of physical loss or damage, they may also face the risks of non-payment due to buyer's insolvency or default, government blockage of currency transfer, and other risks, known as credit risks. There are specialized organizations, often government owned, which insure credit risks. Credit risk insurance usually is applied in overseas projects and the coverage may run for a number of years.

In some countries, credit risk insurance may cover open account sales, but is subject to credit terms such as the destination country, the terms of sales, and the amount involved. Some insurers may require that the products for export have a minimum percentage of domestic content (51% or more usually) to qualify for coverage.