Marine Transportation

1. MARINE
TRANSPOTATION

2. Introduction
The maritime industry which is also known as deep – sea shipping industry, has a long history,
the growth in international trade has been accompanied with a corresponding growth in the
capacity of marine vessels and the emergence of liner shipping which offers a highly
economical mode of transportation across geographical distances.
Although ocean carriers vary widely in terms of their construction and capacities they are
classified into three types:
• Tramps
• Liners
• Private fleet
Ships are also classified as per their size and weight carrying capacities.

3. International Maritime History
The development of shipping can be divided into three phases:
 The first phase was of sail ships

4.  The second Phase was of steam engine

5.  The third phase was of motor ships

6. Indian Maritime History
• India has been a traditional maritime nation
• India has great ship building capacity in the yards of Kerala, Gujarat and Kutch.
• The trend was initiated by Europeans such as Dutch , the Portuguese and the Danes and the
British brought clipper boats and steam boats to India
• The iconic British India steam navigation company had its global headquarter in India
• The Independence movement, planted the seeds for the Indian national shipping fleet and
services and formed the basis for current merchant marine.
• Throughout India shipping was dominated by British companies who had an unfair monopoly
with Indian merchant and Indian passengers being unfairly treated.
• V. O. Chidambaram -Swadeshi steam Navigation ltd
Morarjee and walchand families - Scindia Navigation ltd

7. Indian Companies failed to grow due to several reasons:
 Recession in shipping markets
 Introduction of containerization and shift towards larger ships
 Huge investments required for owning and operating ships
 Government taxation policies
 Failed to adopt new strategies

8. • Hull
• Beam
• Main engine
• Weather deck
• Lower hold
• Tween deck
• Bunkers
• Auxiliary engine
• Gross register tonnage
• Net register tonnage
• Deadweight tonnage
TERMS ASSOCIATED WITH SHIPS

9. Derricks and Cranes Bulbous bow Propeller shaft and propeller
Ballast Plimsoll line

10. Classification Societies and registries of shipping
Ships must be registered and their design must be approved classified on the basis of their quality
and monitored for maintenance. Ships have to adhere to the following convention:
• International convention on Load line
• International convention for the Safety of Life at sea
• International Tonnage convention
• International Convention on maritime Pollution prevention

11. Vessel Ownership
 Vessels of a particular country carry foreign flags
 Flying a foreign flag is called the flag of convenience
 Benefits of flying a foreign flag are:
• The ability to transfer vessels in and out at will
• No tax on income
• No manning requirements
• Vessels can be built and repaired anywhere in the world
• No government safety inspections of vessels

12. TYPES OF THE SHIP

13. TYPES OF THE SHIPS
• Nature of the Cargo
• Size of the Vessels
• Based on Types of services

14. GENERAL CARGO SHIP
• A ship with one or more decks, having ability to carry a variety of commodities in
different forms such as boxed, palletized, refrigerated, and with the possibility to
accommodate bulk materials such as grain.

15. CONTAINER SHIPS
• a large ship that transports its cargo in truck-size containers that can be transferred
from ship to train to truck without unloading and reloading the contents

16. COMBI SHIPS
• Combination of Container ship and General Cargo Ship
• Containers can be loaded under or over the deck
• It resembles General Cargo Ship

17. HEAVY LIFT-SHIPS
• A heavy-lift ship is a vessel designed to move very large loads that cannot be handled
by normal ships

18. BULK CARRIERS
• Bulk carriers are a type of ship which transports cargoes in bulk quantities. The cargo
transported in such ships is loose cargo i.e. without any specific packaging to it and
generally contains items like food grains, ores and coals and even cement

19. LIQUID CARGO CARRIER
• Tankers are ships carrying liquid cargoes in bulk; crude oil, oil products, chemicals,
liquefied gases, molten Sulphur, even orange juice. The nature of their cargo requires
special forms of construction and outfitting
• ULCC : ultra large crude carrier (ULCC) has a DWT of anything between 2, 50,000 to
5, 00,000 tons.
• VLCC : A very large crude carrier (VLCC) has a dead weight tonnage or cargo
carrying capacity ranking up to 2,50,000 tons

20. ULTRA LARGE CRUDE CARRIER & VERY
LARGE CRUDE CARRIER

21. OIL BULK ORE CARRIER
• An ore-bulk-oil carrier, also known as combination carrier or OBO, is a ship designed
to be capable of carrying wet or dry cargoes. The idea is to reduce the number of
empty (ballast) voyages, in which large ships only carry a cargo one way and return
empty for another

22. GAS CARRIERS
• A gas carrier (or gas tanker) is a ship designed to transport LPG, LNG, CNG, or
liquefied chemical gases in bulk

23. CLASSIFICATION OF SHIPS BY SIZES
• Not all ships are the same and they cannot all sail in the same places. We already
looked at the types of ships based on the cargo they transport. We are now going to
talk about the different sizes of cargo ships, something that also determines which
commercial routes they can take on or at which ports they can dock.

24. HANDYMAX
• The Handy and the newer version, the Handymax, are boats traditionally used for dry
cargo and at least 45,000 DWT. A Handymax is normally 150-200 m long (length).
They are the most common types of cargo ships and can enter in any port, thanks to
their size

25. PANAMAX
• The names from here on are more intuitive. Panamax ships have the maximum
acceptable size to travel through the Panama Canal. The New Panamax supports
larger sizes, since they use the measurements of the new locks following its extension
in 2016.
• According to these measurements, we have a Panamax with a length of 294 m long by
32.3 m wide (beam) and a draft of 12 m. A height of 57.91 m also needs to be added to
this.

26. SUEZMAX
• We continue with physical limitations, due to how the Suezmax boats are
manufactured in order to pass through the Suez Canal. These are medium-sized
vessels with a capacity of between 120,000 and 200,000 DWT. In this case, there are
no limitations in terms of length and width and they only need to conform with a draft
of 20 m and the maximum height set by the Suez Canal bridge, i.e. 68m

27. SEAWAYMAX
• Suitable for passing through the San Lorenzo sea route and therefore gain access from
the Atlantic to the Great Lakes region of North America.
• The Dimension restriction which governs the design is length of 225 m, width of 24 m,
and draft of 7.92 m, the maximum Hight should be 35.5 m.

28. CAPESIZE
• This standard refers to vessels whose size does not allow them to travel through the
Panama and Suez canals. They are bulk carriers that serve materials such as iron ore
or coal to deep-water terminals and have to pass through the Cape Horn in South
America or the Cape of Good Hope in South Africa. They can transport between
80,000 and 175,000 DWT and they are very scarce, as are the ports with
infrastructure to receive them.

29. BASED ON SHIPPING SERVICES
• The two major classification of Shipping services are
a) Tramp Shipping
b) Liner Shipping

30. TRAMP SHIPPING
• A Tramp Service or tramper, on the other hand, is a ship that has no fixed routing or
itinerary or schedule and is available at short notice (or fixture) to load any cargo from
any port to any port..

31. LINER SHIPPING
• is a service that operates within a schedule and has a fixed port rotation with
published dates of calls at the advertised ports.. A liner service generally fulfils the
schedule unless in cases where a call at one of the ports has been unduly delayed due
to natural or man-mad causes..

32. CHARTERING
• And like in all kind of business, there are at least two parties involved, one of which
provide a service or product to the other for a price.
a) Ship owner who has the ship and provide the space on the ship to carry the
cargo.
b) Shipper who has the cargo and wants a ship to transport the cargo

33. TERMS USED IN CHARTERING
• Lay day
• Notice of readiness
• FI/FO (Free in and Free out)
• Dead Freight
• Owner’s broker

34. FACTORS THAT MUST BE KEEP IN MIND
WHILE CHARTERING SHIPS
• Draft Restrictions
• Port handling facilities
• Load
• Sea lane Restrictions
• Lightening possibilities and cost
• International Market conditions
• Vetting of Brokers
• Lead from Port to Inland point
• Inland transport options

35. VOYAGE CHARTER
• A voyage charter is the hiring of a vessel and crew for a voyage between a load port
and a discharge port. The charterer pays the vessel owner on a per-ton or lump-sum
basis. The owner pays the port costs (excluding stevedoring), fuel costs and crew costs.
a) Basic Freight in USD per Ton
b) Dispatch Chargers Per day

36. TIME CHARTER
• A time charter is the hiring of a vessel for a specific period of time; the owner still
manages the vessel, but the charterer selects the ports and directs the vessel where to
go. The charterer pays for all fuel the vessel consumes, port charges, commissions,
and a daily hire to the owner of the vessel.

37. TRIP TIME CHARTER
• A trip time charter is a comparatively short time charter agreed for a specified route
only

38. BAREBOAT CHARTER
• A bareboat charter or demise charter is an arrangement for the chartering or hiring of
a ship or boat, whereby no crew or provisions are included as part of the agreement;
instead, the people who rent the vessel from the owner are responsible for taking care
of such things.

39. CONTRACT OF AFFREIGHTMENT
• Contracts of Affreightment (COA) are used when a shipowner or ship operator agrees
to transport a given quantity over a fixed period of time.

40. CHARTERING BROKERS
• Broker finds Cargo for Ships or Ships for Cargo

41. DIFFERENT TYPES OF BROKERS
• Charter’s Broker
• Sale and Purchase Broker
• Owner’s Broker

42. brokers, ship owners, and large charterers are registered in a
freight exchange called Baltic Exchange in London. Baltic exchange
provides information on all open offers, trends, etc., and also have
indices for trends of freight of various cargoes and sizes of ships.
Some of the indices on Baltic Exchange:
• Baltic Handymax index (BHMI)
• The Baltic Panamax index (BPI)
• The Baltic Capesize index (BCI)
• The Baltic dry index (BDI)
BALTIC EXCHANGE

43. LINER AND CONTAINER SHIPPING
• The Advantages of container shipping is the frequency and definitive schedule,
ability to cover shipments to any part of the world through same ships by means of
hub and spokes.
• Containers have been designed for all types cargoes: Liquid , Bulk, general and
Over-dimensioned cargo.

44. SIX GENERATIONS OF CONTAINER SHIPS
In the mid 1950’s container ships undertook six general waves of change:
• Converted Tanker
• Cellular Container ships
• Panamax Class
• Post Panamax
• Post Panamax Plus
• New Panamax

45. SERVICE ROUTES
Classification service routes:
• End-to-End
• Pendulum
• Round the world

46. HUB AND SPOKE APPROACH
• Before the advent of containerization, direct shipment from one origin to a destination was
always preferred, as transshipment would mean multiple handling of goods making them
susceptible to damage.
• Containerization allowed goods to be accepted for transport to far-off ports through hubs.
• Instead of operating company specific feeders, some clever operator started operating common
carrier feeders to the hub ports from regional ports catering to all the lines and hence
demonstrating flexibility, agility and economy.

47. CONSOLIDATORS AND LESS THAN CONTAINER
LOAD SERVICES
• In the early days of containerization, less than container load (LCL) cargoes were a
preferred choice for ship owners as the freight yield per container was very high.
• However, as the ships became larger, competition started becoming global, and the number
of transactions per ship per call per port became so large that the cost of customer service
and customer relationship management of LCL cargoes and smaller FCL clientele was more
than offsetting the increased yields from these segments.
• Therefore, shipping lines preferred to exit the LCL space completely and LCL arena was
occupied by even more specialized operators known as consolidators who are neutral to
shippers as well as their agents.

48. SHIP OWNER STRATEGY—VERTICAL
INTEGRATION
• Ocean shipping alone does not seem to sustain shipping companies because of
prolonged recession in freight rates as well as poor global growth of international
trade.
• Therefore, many ship owners have vertically diversified into port and terminal
operations in one end and into logistics services at the other end.

49. CONTAINER LOGISTICS
• As container shipping involves movement of cargoes in containers and containers to be provided
to the merchant, huge logistics is involved in owning, moving, and organizing container
availability.
• The gap in supply and demand of any containers is met by shipping lines by repositioning
empty containers between nearest places of shortages and surpluses.
Cabotage
Containers which are surplus in inland stations are moved to ports
with domestic cargoes using rail or road transport so that money
can saved as compared to moving empties as such, is also called
cabotage.

50. LEASING
Leasing companies tend to keep stock at places of shortage so that they can supply lines
when they fall short but charge a hefty pick-up charge to compensate for having inventory.

51. CONTAINER AND LINER SHIPPING TARIFF
• Initially, container shipping followed the original break-bulk system of charging
freight by weight or volume of commodities, but later matured by structuring box
rates.
• As containerization is also associated with more activities such as
vanning/devanning and yard movement as compared to break-bulk liner shipping,
costs relating to land side charges are collected in local currency.

52. FREIGHT STRUCTURE FOR LESS THAN
CONTAINER LOAD AND BREAK BULK
CARGOES
1916151

53. FREIGHT STRUCTURE FOR LESS THAN
CONTAINER LOAD AND BREAK BULK CARGOES.
• Internationally, the currency of ocean freight is in US dollars and the shore side
charges are in local currency.
• Formula = basic freight in USD per cubic metre or 1000 kgs, whichever is higher.
• Cubic meter indicates volume and it is normally length * breadth * height in meter.
• Extreme dimensions are taken into account.

54. SHORE SIDE COSTS IN LCL
• It’s the cost of all activities such as vanning and stuffing of containers at
container freight station, moving it to container yard at the terminal and
moving from yard alongside the ship.
• The cost is fixed on average basis as per experience of various lines and
prevailing tariffs of CFS, terminals, transporters, etc.
• Transport from inland to port is also included and its collected by the shipping
line.
• Terminal charges are calculated in rupees per cubic metre or rupees per
tonne.

55. FULL CONTAINER LOAD FREIGHT CHARGES
• FCL rates are normally designated as USD per 20’ and USD per 40. the rates
may vary from line to line.
• In many routes, the rates are quoted as (FAK) freight all kinds box rate,
irrespective of the value of commodities.
• US lines quote commodity category box rates. Shipping lines prefer to collect
freight as per what the commodity can bear.

56. TERMINAL HANDLING CHARGES.
• THC are charges levied on offloading of the trucks carrying FCL containers,
stacking in the yard, and moving it alongside the ship for exports vice versa for
imports.
• This cost is recovered from the merchant as THC.
• It is collected in local currency.
• THC for a 40 feet container is double that of 20 feet in India.
• In UK and Europe it is the same.

57. FREIGHT RATES FOR SPECIAL
CONTAINERS
• Freight rates for special containers such as open top, flat racks, and refrigerated
containers are higher.
• Open tops and flat racks waste space.
• Standard rates for the cargo in gauge, which fits in within the dimensions of the
containers and special rates for cargos which are over dimensional.
• Cost of providing special containers which are very few and requiring more
investment and many times requiring empty repositioning.

58. SURCHARGES
• In addition to the rates quoted for the cargos based on volume or weight, the freight
also includes certain surcharges, which acts as a protection against any
unfavourable changes to the ships owner or operator.

59. BUNKER ADJUSTMENT FACTOR OR
BUNKER SURCHARGE
• Ships normally run on heavy fuel oil and the auxiliary engine (for lighting and
energy) runs on either light diesel oil or normal diesel oil.
• As the price of the oils goes up, the lines recover this increase in the form of
surcharge.
• This amount is determined on the basis of distance.
• Its charged on per container basis.

60. CURRENCY ADJUSTMENT FACTOR
• When a ship operates in certain trade routes, while it spends its expenses in various
currencies, the revenue is universally in dollars.
• If the currencies if expense strengthens against dollar, the lines have to pay more in
terms of dollars.
• To protect this potential reduction in revenue, a surcharge called currency
adjustment factor is levied in the freight.

61. PEAK SEASON SURCHARGE
• This charge is levied on containers moving from Asia to US during the period of
June to October.
• Purchase demand in the US is more during thanks giving , summer and Christmas.
• Shipping lines are supposed to induct additional capacity at a cost but the shipping
capacity is deployed even normally.
• This surcharge is levied as a measure to collect additional revenue in the depressed
freight market.

62. PORT CONGESTION SURCHARGE
• Whenever the ports are congested with ships and cargoes and lines are liable to pay
additional costs, a surcharge called port congestion charge is levied.
• Some of the issues could be berthing or unberthing, shortage of pilots, draft
restrictions, shut-out of containers, congestion of containers, pendency of
containers and ICD movements, mixed trains and efficiency of inter-terminal
trucking, port capacity and infrastructure to handle available traffic.

63. ADVANCE MANIFEST SURCHARGE
• US Customs now require cargo manifest to be filed with them before the
incoming ship leaves the last port of call.
• This must be filed with both forwarders' and line's bill of ladings.
• The filing on US customs site can be done directly as well as by availing
outsourced services.
• The cost of such activity is recovered as advance manifest surcharge (AMS).

64. INTERNATIONAL SHIP AND PORT FACILITY
SECURITY SURCHARGE
• ISPS Code is an amendment to the Safety of Life at Sea.
• it prescribes responsibilities of governments, shipping companies, shipboard
personnel, and port or facility personnel to detect security threats and take
preventative measures against security incidents affecting ships or port facilities
used in international trade.
• As maintaining security involves a lot of additional activity and expense to the
ports, terminals, and ships, the shipping lines charge an ISPS surcharge.

65. OTHER SURCHARGES
• From time to time, shipping lines may impose some more surcharges such as
war risk surcharge and Gulf of Aden surcharge (piracy risk surcharge).
• Each shipping lines have their own different types of shore side charges and
these are easily accessible from their websites.

66. ROLE OF VARIOUS ENTITIES IN SHIPPING
BUSINESS
• Some of the main agencies or the service providers for facilitating the shipping
trade are the port agents, surveyors, and brokers who have a very defined and
important role to play.
• The role of these three service providers is discussed here.

67. ROLE OF THE AGENT
• Coordination with port management for berthing, operating and sailing.
• Catering to the needs of the ship in terms of crew's needs for the voyage.
• Catering to the operational needs such as supply of fuel, water, and so on, for the
voyage and routine and periodic maintenance needs.
• To load and or unload the goods to and from the ship respectively and subsequent
documentation, freight collection accounting, tax administration, coordination with
destination, and liaison with customs authorities.
• marketing of shipping services and booking of cargos.

68. THE AGENCY FUNCTIONS ALSO CAN BE DIVIDED
INTO SOME BROAD HEADS AS FOLLOWS:
• Husbanding agency
• Commercial agency
• Husbanding agency is the combination of functions mentioned in the first three
sections of the list as discussed earlier.
• The commercial agency is the performance of the last two sections of the same
list.

69. MODERN-DAY SHIPPING ORGANIZATIONS
• The practice of lean management systems along with IT enablement has
enabled large companies to reduce their overheads to a minimum and focus on
busines and financial management.
• A large company manages its container operation by only having minimum
marketing and pricing managers with total booking and documentation
outsourced, with terminal operations along with vessel planning being
conducted by terminals, using third party husbanding agents.

70. STEVEDORES
• Stevedoring is the function of loading or unloading of goods from shore to ship
and vice versa.
• stevedores' function-they provide skilled labor (such as supervisors, signal men
winch/crane/equipment operators) etc., and semi-skilled men along with load
planning team.
• However, with gradual automation, many Indian ports faced surplus labor.

71. ROLE OF SURVEYORS
• to report his or her findings regarding the quality and quantity of the goods.
• required to check the tanks/holds of the vessel for fitness to carry cargo in case
of many commodities.
• ascertain the quantity loaded on the vessel.
• ascertain the quantity landed and check the quality for any losses or damages
during transit.

72. DUTIES AND RESPONSIBILITIES OF A SURVEYOR
• The main duty of a surveyor is to test and verify the quality of goods.
• monitor the goods in transit.
• and certify the quantity so as to minimize the risks.
• Surveyors are supposed to be independent and, should give authenticated,
unbiased, and professional reports.

73. CHANGING LANDSCAPE OF SHIPPING
• Container ships have reached a size of 18,000 TEUs.
• Chinese ports are the largest ones in the world.
• The Panama Canal has been widened and deepened for larger ships to transit
from Pacific Ocean to Atlantic Ocean and vice versa.
• IT-enabled services have enabled large ships to discharge and deliver cargoes
without any documentary and regulatory issues.