09-Feb-23

CHAPTER 2: INTERNATIONAL
MARITIME TRANSPORT

MsC. Bui Thi Bich Lien

CONTENTS

1 Introduction

2 Shipping facilities

3 Liner service

4 Bills of lading

5 Chartering

6 Charter Parties

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Shipping

Carriage of goods by container is suitable for

using these terms of Incoterms 2020
 FOB, CFR, CIF
 DPU, FAS, FOB
 FCA, CPT, CIP
 None of the above

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Based on Incoterms 2020, which terms are

suitable for transportation of goods by sea
 FOB, FAS, CFR, CIF
 FAS, FCA, CIF, DPU, DDP, DAP
 FOB, FAS, FCA, CIF, CFR, CIP, CPT
 None of the above

1. Introduction of Int’ shipping

1.1. Why ship?

1.2. The theory of trade
1.3. The different shipping market
1.4. Who trades?

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1.1. Why ship?

The sea road is not too costly to invest

Sea transport is suitable for almost commodities
in international trade
 In terms of economics
 In terms of technical
The capability of carrying is large
The sea freight is relatively low
Sea transport is not speedy
High risk when transporting by sea

However
Sea transport depends on natural conditions
 Geographic condition
 Weather and climate (storms, snow…)

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1.2. The theory of trade

Exporter (consignor, shipper) sells commodities
to importer (consignee, receiver): trade
Distribution of resources is uneven: absolute
advantage and comparative advantage
Factor of production: Land, Labour, Capital,
Enterprise.
Economies of scale
Globalisation

The Demand
 World Economy
 Industrial Production and Raw Material and Energy
Consumptions
 Seaborne Commodity Trades
 Seasonal Fluctuations, Harvests, Winter in Northern
Hemisphere, Stock Building, Structural Changes, Energy
Intensity
 Average Hauls
 Iron Ore shifts from Australia to Brazil or Wheat from Australia
to North and South America
 Transport Costs
 Prices CFR China for bulk fertilizers Ex-USA versus Ex-Jordan
 Political Events
 Korean War, Suez Crisis in 1956, Six Days war in 1967, Iraq-
Kuwait war in 1991, Closure of 17 Nuclear Power Plants in Japan

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[Link]

The Supply

 World Fleet
 Average Economical Life Time (25 years)
 Shipbuilding Output
 Very important industries in The Far East
 Scrapping and Losses
 The Age of the Fleet, Technical Obsolescence, Scrap
Prices, Expectations for Earnings
 Fleet Productivity
 Operating Speed, Deadweight Utilization, Port Congestion
 Freight Rates
 The freight has a direct impact on Ship Owners cash flow
which in turn influences the supply for triggering the
activity for New Buildings or Scrapping.

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1.3. The different shipping market

Liner trade
- Consignment from a number of different
shippers
- Almost now carried in containers

Tramp trades
- Bulk dry cargo
- Bulk liquids

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1.4. Who trades?

Shipowner
Ship managers
Charterer
COA: contract of affreightment
Shipbroker
Charter’s agent
Forwarding agent
Freight forwarder

Container transportation is usually operated

under:
 Voyage charter
 Time charter
 Liner
 None of the above

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Owners
Selling Transport Capacity
 Ship Owners
 Pools
 Operators
 Management Companies
 Cargo Owners
 Financial Institutions
 Yards

Charterers
Buying Transport Capacity
 Cargo Owners
•Selling CIF or C&F
•Buying FOB
 Traders
 Operators
 Shipowners

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Brokers
 Exchange of information
 Positions/Cargoes/Fixtures/Analyses
 Extensive contact network
 Owners/Cargo Owners/Traders/Brokers
 Intermediary
 Negotiating skills
 General knowledge about
trades/cargoes/players/markets
 General knowledge about charterparties
 Drawing up original charterparties in accordance with
agreed terms and conditions
 Follow up/Operations
 Not fix and forget

2. Shipping facilities

2.1. Vessel
2.2. Types of vessel
2.3. Ship market
2.4. Sea port

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 (Dimensions of ship)
LOA: m, ft (1foot = 0,3048m)
- Lenght over All
- Lenght Between Perpendicular
(Beam): m, ft
 Draft: m, ft
- Light draught
- Loaded draught
- Plimsoll mark

Vessel
Loadlines (draft): distance between the bottom
of the ship to the level of water on the ship
side (water line)
- Samuel Plimsoll: 6 marks
 TF: Tropical Zone, Fresh water
 F: Fresh Water
 T: Tropical Zone (salt water)
 W: Winter
 S: Summer ( in other zones)
 WNA: Winter North Alantic

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Vessel
Date of birth
Flag of ship
Register of ship
Tonnage: GRT, NRT
Displacement : light displacement, loaded
displacement
Deadweight (DWT): DWAT, DWCC
Stowage

2. Vessel
Vietnamese Maritime Code- Article 11:
“Vessel is floating object operating in the sea”
2.1. Characteristics of merchant ship
 (Name of Ship): Titanic, Hoa sen, Cần Giờ, SG1029
 (Shipowner): Shipping company
- Actual Shipowner
- Norminal Shipowner
 (Flag of Ship)
- Normal Flag
- Flag of Convenience
- Open register system

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 (Displacement): LT

M ([Link])
D = ---------------
35

- Light Displacement:
+ Equipment, boiler, ..
+ Crew members and luggage
- Heavy Displacement:
+ LD
+ Supply
+ Cargo on board

 (Carring Capacity):
+ Deadweight Capacity – DWC:
DWC = HD – LD
+ Deadweight Cargo Capacity – DWCC:
(Register Tonnage): m3, [Link], RT
(1 RT = 100 [Link] = 2,83 m3)
+ Gross Register Tonnage – GRT
+ Net Register Tonnage – NRT

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 (Cargo Space – CS): [Link], m3.

+ Bale Space, Bale Capacity – BS
BS = (length x width x height) hold
+ Grain Space, Grain Capacity: 105-110% BS
 (Coefficient of Loading - CL):

CS (m3/Cf)
CL = -----------------
DWCC
+ CL for grain
+ CL for bale

 (Stowage Factor – SF): volume and weight

C ([Link])
SF = ------------
S
+ SF < 40 [Link] - (Deadweight Cargo).
+ SF> 40 [Link] - (Measurement Cargo):
+ SF > 70 [Link] – Big Cargo
+ SF < CL: not take advantage of GRT
+ SF > CL: not take advantage of DWCC

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 (Class of Ship):
+ Lloyd’s Register of Shipping, London - Anh;
+ American Bureau of Shipping, New York - Mỹ;
+ Bureau Viritas, Paris - Pháp;
+ Norske Veritas, Oslo - Nauy;
+ Germanischer Lloyd, Berlin - Đức;
+ Korean Register of Shipping...

Vessel Types

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Shipping markets Shipping markets

Crude oil / products Cruise

Dry Cargo
Car carriers

Chemical

Livestock
Container

LNG/LPG Heavy lift

Offshore markets

Rig

Seismic

Supply

Subsea

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Tanker for oil * Container Vessel

• ULCC • Post Panamax
• VLCC • Panamax
• Suezmax • Sub Panamax
• Aframax • Handy
• Panamax • Feedermax
• Product (LR1/LR2/MR) • Feeder

Bulk Carrier
• UltraLrgOreCarrier
• Cape Size Luiqid Natural
• Panamax Gas (LNG)
• Handymax
• Handysize

Liquid Petroleum
Gas (LPG)
Tanker for • Fully
chemicals refrigerated
• Semi
refrigerated

Rig / Subsea Offshore Vessel

• Fixed platform • Seismic
• Jackup rig • Drilling
• Semi-submersible • Supply
• Drill ship • Anchor Handling Supply Vsl
• Tension leg platform • Production / FPSO

Reefer vessel Cruise / Passenger vessel

• Refridgerated cargo

RoRo / PCTC / PCC

• Roll on / Roll off
• Pure Car Truck Carrier
• Pure Car Carrier

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[Link]

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Tankers – The refining process

Afra/Pana/Product/
Chemical/LPG
(coated tanks/stainless steel)

ULCC/VLCC/Suez
(uncoated tanks)

Chemical Tanker Market

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PCTC / PCC / RoRo

PCTC Deep-sea vessels Capacity

3500 - 6200 cars

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The ship Markets

 Gas (LNG & LPG)

 Chemical
 Car
 Reefer
 Container
 Liner Services
 Parcel Services
 Tugs and Offshore Supply
 Cruise
 Fishing

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LNG = Liquified Natural Gas

 - 160 degrees celcius
 Few players
• Gas Majors, Bergesen, Exmar, Golar LNG, Qatar,
Japanese
 Newbuilding abt USD 200/250 million per ship
 Present fleet about 240 ships
 Abt 35 ships delivered in 2007, a further 100 before end
2009
 Strong demand from USA and Japan
 Long term contracts
 Export projects in Qatar, Nigeria and Australia
 Import terminals in USA, UK, Italy and Mexico

LPG = Liquified Petroleum Gas

 VLGC > 60.000 cbm
 LGC - 40/60.000 cbm
 MGC – 20/40.000 cbm
 Handy – 12.000 cbm (NH3, VCM, PPL, Butane, Propane,
Ethylen (-104)
 Present fleet about 1,050 ships
 58 ships on order

 More players
• 10-55.000 cbm (Skaugen, Unigas, Greeks,)
• 60-80.000 cbm (Bergesen, Exmar, AP Møller, Japanese
 Main trades AG/East (Japan-China) and AG/West
 1-2 years contracts, renewals
 T/C market 2-3 years, used to be 5-10 years

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Chemical
 The Chemical Tanker Market
 Odfjell (23%), Stolt (22%), Jo Tankers (9%), Others
(46%)
 2,690 vessels/1,000-60.000 dwt/10-52 tanks/545
diff products
 Chemical Logistics
 Established routes/services
 Offering multi-modular transportation
arrangements
 Aquiring assets (terminal) and systems
 Commodities
 Chemicals/Lubricants/Vegoil/CPP

Car
 Total of about 622 pure car carriers (PCC) world wide
 221 new vessels on order
 Average fleet age 15 years
 Average vehicle capacity is 4,222 cars (largest over 8000 cars)
 No asset play
 Firm market over the last years
 Strong performance of Japanese and Korean auto
manufactures
 Up to 9 million cars being moved overseas per year
 Contracts of 1-2 years (50-100.000 cars/year)
 7-8 major players (HUAL and EUKOR Car Carriers) + Japanese
 RORO ships moving into the car market – upto 3000 cars

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Reefer
 1235 reefer ships worldwide (small & big)
 Limited new building – average age 24 years
 Max age often 25 years, vessels being scrapped – soon
balance?
 Few operators (Cool Lauritzen, Sea Trade, Star Reefers)
 Few charterers (Chiquita, Dole, Del Monte, Noba)
 Southern Hemisphere to US and Continent
 Poor market last years - Strong competition from reefer
containers
 Seasonal trade advantage for dedicated reefers over
containerships

Container Ships/Cargoes
 TEU/FEU = 20/40 Equivalent Units (8ft x 8ft or 8,5ft x 20 or 40ft)
 ISO = Internal Standardisation Organisation
 Carrying Capacity
• Feeder - 100 - 400 TEU
• 1st generation - 400 - 1000 TEU
• 2nd generation - 1000 - 1600 TEU
• 3rd generation - 1600 - 3500 TEU
• 4th generation - 3500 - 6000 TEU
• 5th generation ->6000 teu – ships up to 110.000 dwt
• Post-panamax > 8000 TEU
 Type of Containers
• General cargo
• Tank (liquid, often dangerous cargoes)
• Reefer (cooled or frozen cargoes)
 4,208 fully cellular ships, 60% of existing capacity is on orderc

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Parcel Services
 Established routes/services
 Commitment to serve an industry
 Specialized tonnage – holds/open hatch/cranes
 Long-term freight contracts – 1-3 years
 Owned or long-term agreements with terminals
 Have port captains and technical staff attending in
port in order to secure effective handling
 Integrated transportation systems
 From mill to receiver

Liner Services/General Cargo Ships

 General Cargo Ships (upto 30.000 dwt)
 Established routes (”Lines”) calling same ports
 Have their own agents in the different ports/countries
booking up cargoes
 Main marketing/sales office at the headquarter
 Moving general, bagged, palletized, bulk cargoes
 RO-RO Vessels
 Cars and lorries
 Trains
 Containers

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The Liquid Markets

 CRUDE OIL TANKERS (Jan 2004)

 ULCC Ultra Large Crude Carrier 320.000+ 12

 VLCC Very Large Crude Carrier 200/320.000 508

 Suezmax Max loaded through Suez 120/200.000 361

 Aframax Average Freight Rate Assessment

80/120.000 738

The Dry Markets

 DRY BULK CARRIERS (Sept 2007)

 Handysize 10/40.000 2796

 Handymax 40/60.000 1558
 Panamax 60/80.000 1307
 Large Bulk Carriers 80/120.000 158
 Capesize 120/200.000 646
 Very Large Bulk Carriers 200.000+ 92

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Iron Ore Seaborne Trade 789 mill tons

 THE LARGEST IRON ORE EXPORTERS
• Australia/New Z
• S. America (Atlantic coast)
• India
• Africa
• Sweden

 THE LARGEST IRON ORE IMPORTERS (mill mt)

• China 385
• Japan 140
• Europe 127
• USA 5

Coal Seaborne Trade 761 mill mt

 THE LARGEST COAL EXPORTERS
• Australia/New Z
• China
• Indonesia
• South Africa

 THE LARGEST COAL IMPORTERS (Mill Tons)

• Japan 139
• Korea + Taiwan 100
• Europe 191
• USA 30

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Grain Seaborne Trade 220 mill tons

 THE LARGETS GRAIN EXPORTERS (Mill tons)
• USA 89
• Argentina 24
• Australia 24
• Canada 19

 THE LARGEST GRAIN IMPORTERS

• Other Far East
• Americas
• Africa
• Japan

Minor Bulk – Seaborne Trade (2007)

 Bauxite/Alumina 82 Mill mt
 Phosphates 84
 Cement 142
 Sugar 46
 Soyabeans 71
 Steel products 270
 Forest products 175

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3. Cargo in shipping
TYPES OF OCEAN
CARGO

WITH MARK & COUNT WITHOUT MARK & COUNT

(General cargo) (Bulk cargo)

BREAK-BULK NEO-BULK UNITISED DRY LIQUID

Bags Containers
Barrels Oil
Autos Grains
Drums Chemicals
Logs Coal
Pallets
Bundled steel Sugar
Boxes
Crates

BULK
1. Cargo that is loaded and
carried in bulk, without
mark or count, in a
loose unpackaged form,
having homogenous
characteristics.

• Hàng hóa được xếp và

vận chuyển dạng rời,
không bao gói và có tính
chất đồng nhất

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NEO-BULK
Certain types
of cargo that
are often
moved by
specialized
vessels.
Example:
autos, logs.

BREAK-BULK
1. Packaged cargo that is
loaded and unloaded on
a piece-by-piece basis,
that is, by number or
count.
2. This can be
containerized or
prepared in groups of
packages covered by
shrink wrap for
shipment. Example:
coffee, rubber, grain,
etc.

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