1 chapter vii international transportation types of international transportation types of...
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CHAPTER VIICHAPTER VII INTERNATIONAL INTERNATIONAL
TRANSPORTATIONTRANSPORTATION Types of International Transportation Types of International Cargo Ocean Freight Costs Ocean Bill of Lading Non-Negotiable Sea Waybill Multimodal Transport Document Letter of Credit and Ocean Bill of Lading Parties Responsible for Shipping Arrangements Arrival Notice
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Truck and RailTruck and Rail
Primary carriers among countries in the same continent such as the USA, Mexico, & Canada. EU countries
Containerized piggyback service on rail Combined transportation of ocean and
inland to domestic final destination
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Air TransportationAir Transportation
Most expensive but fastest mode of transportation
High valued goods Fragile goods Perishable goods Shorter transit time: Speedy delivery Less burden on inventory: Just-in-time
delivery
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Air TransportationAir Transportation
Air freightAir freight
By weight or volume By weight or volume Steep progressive rate structure Steep progressive rate structure Depending on commodities Depending on commodities
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Air TransportationAir Transportation Air freight carriers Air freight carriers
Airlines: Airlines: Own or lease air planes Own or lease air planes
Operate air planesOperate air planes Air freight consolidators Air freight consolidators
• Air freight wholesalers for less than Air freight wholesalers for less than container load (LCL) container load (LCL)
• Small shippers pay the consolidator less Small shippers pay the consolidator less than they would pay the airline themselves than they would pay the airline themselves
• More waiting time for consolidation More waiting time for consolidation • Freight forwarding service by freight Freight forwarding service by freight
consolidatorconsolidator• Export customs clearance service by freight Export customs clearance service by freight
consolidatorconsolidator
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Air TransportationAir Transportation
Air freight carriersAir freight carriers
International couriersInternational couriers
• Documents and small packages Documents and small packages • House to house service House to house service • One to three day guaranteed delivery One to three day guaranteed delivery • DHL, UPS, Federal Express, Emery, US DHL, UPS, Federal Express, Emery, US
Postal ServicePostal Service
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Ocean TransportationOcean Transportation
Least expensive transportation mode Least expensive transportation mode
Faster, more fuel-efficient vesselsFaster, more fuel-efficient vessels
Shipping linesShipping lines Own or lease the cargo vessels Own or lease the cargo vessels Operate the cargo vessels Operate the cargo vessels Belongs to Conference or Non-conferenceBelongs to Conference or Non-conference
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Ocean TransportationOcean Transportation
NVOCC's (Non-Vessel Operating Common Carriers) Do not own or operate the vessels Freight consolidators and wholesalers: Less
freight than shipping lines for small shipments Specialized in LCL cargoes-- Small shipments
in a container without expensive export crating Have a warehouse or terminal for receiving
and consolidating small shipments Have own rate tariffs filed with the Federal
Maritime Commission Issue a negotiable ocean bill of lading
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General CargoGeneral Cargo
Packaged cargo transported not in container
Fiberboard (Cardboard) box, crate(wooden box), fiber drum, steel drum, wooden barrel, bag or sack, and bale
Loaded in the cargo holds Refrigerated holds for frozen meat or fresh
fruit
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Bulk CargoBulk Cargo
Cargo without package
Dry bulk cargo: Coal, grain, ore, gravel loaded into the holds by cranes or clamshells or conveyor system
Liquid bulk cargo: Gasoline, edible oil, liquidified natural gas (LNG) or liquidified petroleum gas (LPG) loaded into the tank by piping system
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Container CargoContainer Cargo
Packaged cargo transported in a container
House to house service Shipper's load and count notation on the
B/L Unloaded to Container Freight Station
(CFS) in the case of more than one cargo owner and Container Yard (CY) in the case of one cargo owner
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Container CargoContainer Cargo Container size (Outside dimension)Container size (Outside dimension)
Standard: • 20 Footer: W.8' x H.8' 6" x L.20'
• 1,172 cubic feet (33.2 cubic meters)• 24 M/T (Tare 2.23 M/T & Cargo 21.77M/T)
• 40 Footer: W.8' x H.8' 6" x L.40' • 45 Footer, 48 Footer, and 53 Footer
High Cube: • 40 Footer: W.8' x H.9' 6" x L.40' • 45 Footer: W.8' x H.9' 6" x L.45' • 48 Footer, 53 Footer
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Container CargoContainer Cargo Specialized container
Tanker container Reefer container
Advantages of containerization No need for expensive crating Prevents theft at the dock Fast loading & unloading leading to savings on
both time and money Savings on freight through consolidation of
small shipments
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Ocean Freight CostOcean Freight Cost Basis Ocean Freight (Pure freight): Rate
tariff published & filed with the FMC Terminal Handling Charges (THC): Ancillary
Charges for moving cargoes on the pier, loading or unloading. Separately charged since 1991
Surcharges: Additional charges or add-on costs • Currency Adjustment Factor (CAF): When US
dollar drops, CAF goes up. • Fuel Adjustment Factor (FAF):Bunker charge.
When price of bunker c fuel increases, FAF goes up
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Ocean Bill of LadingOcean Bill of Lading Negotiable Bill of Lading: Order Bill of
Lading • Made out "To order" or To the order of ----."
• Cargoes are released only on presentation of an original bill of lading duly endorsed by the shipper or consignee named in the bill of lading
Non-Negotiable Bill of Lading: Straight B/L • Consigned to the importer. Cargoes are
released only to the consignee. Endorsement not needed
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Non-Negotiable Sea Waybill Non-Negotiable Sea Waybill & Air Waybill& Air Waybill
Cargoes are released only to the consignee on the Sea Waybill without surrendering an original Sea Waybill.
Often used When consignee, or importer does not need to
sell the goods during transit Specially convenient in the case of a very
short transit time.
Processing shipping documents through exporter’s bank and importer’s bank take several days
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Multimodal Transport Multimodal Transport DocumentDocument
Multimodal (Through, Combined or Intermodal) Bill of Lading
Covers two or more transportation modes: truck or rail – vessel-truck or rail
Covers all transportation from the place dispatched, taken in charge or shipped on board to the place of final destination
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
Ocean Bill of Lading must conform to conditions of the Letter of Credit (UCP 600)
To be accepted by banks, a bill of lading must appear to
indicate the name of the carrier and be signed by the carrier or its agent, or master or its agent
indicate that goods have been shipped on board on a named vessel at the port of loading stated in the Letter of Credit
by either pre-printed wording or an on board notation with the date of shipment
Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
Shipment date: the date of B/L issuance or On Board notation date
If the bill of lading contains the indication “intended vessel,” an on board notation is required indicating the date of shipment and the
name of actual vessel.
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
To be accepted by banks, a bill of lading must appear to (continued) indicate shipment from the port of
loading to the port of discharge stated in the Letter of Credit
be the sole original or the full sets of originals as so issued
contain the terms & conditions of carriage
contain no indication subject to a charter party
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
If the Letter of Credit calls for a multimodal bill of lading, it must appear to
indicate that goods have been dispatched, taken in charge or shipped on board at the place stated in the Letter of Credit with the date dispatched, taken in charge or shipped on board
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
A multimodal bill of lading (continued) It must also appear to
indicate the place of dispatch, taking in charge or shipment and the place of final destination stated in the Letter of Credit, even if
• it states, in addition, a different place of dispatch, taking in charge or shipment or final destination or
• it contains the indication “intended” as to the vessel, port of loading or port of discharge
meet other terms & conditions of a standard bill of lading
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading Banks accept a bill of lading which
bears a clause of “shipper’s load and count” or “said by shipper to contain” in container shipment
indicates as the shipper or consignor of the goods a party other than the beneficiary of the Credit (3rd party B/L)
indicates that transshipment will or may take place if cargo shipped in Container, Trailer or LASH (Lighter Aboard Ship) barge and covered by one B/L even if the L/C prohibits transshipment
bears a reference to charges additional to the freight.
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
Banks reject a bill of lading which states that the goods are or will be
loaded on deck indicates a defective condition of the
goods or the package: Not clean B/L shows a transshipment, if it is
prohibited by the Credit, unless it is a multimodal transport document or the cargo is shipped in Container, Trailer or LASH
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading Common discrepancies in Bill of Lading
Less than a full set of original Bill of Lading presented
Changes not initialed by the signor of the B/L Not properly endorsed No "On Board" notation indicating the date
of shipment and the name of the actual vessel, if the B/L contains the indication “intended vessel.”
Date of the B/L later than latest shipment date in the L/C
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Letter of Credit and Ocean Bill of Letter of Credit and Ocean Bill of LadingLading
Common discrepancies in Bill of Lading (continued)
Stale B/L not presented to the negotiating bank within specified time after shipment stipulated in the L/C (Presentation date/period)
Different markings from L/C Different description of the goods from L/C in
general terms Not clean (foul) B/L with a notation of
defective goods or packages On-deck shipments
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Parties Responsible for Shipping Parties Responsible for Shipping ArrangementsArrangements
Under a CFR or CIF Transaction Exporter is responsible for shipping
arrangement, loading, paying freight or freight & marine insurance premium
Exporter may ship by the least expensive vessel even though it is the slowest. Long voyage is a waste of time and money.
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Parties Responsible for Parties Responsible for Shipping ArrangementsShipping Arrangements
Under FOB Transaction Importer is responsible for shipping
arrangement, paying ocean freight and marine insurance premium
Exporter responsible for loading the cargo on the carrier
Exporter may ship by the most convenient vessel even though its freight is higher than other vessels.
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Parties Responsible for Shipping Arrangements
First, import on a CFR or CIF basis Second, if you can get a better freight rate, then
change to the FOB FOB ties up line of credit less than CFR or CIF,
specially when the freight portion is very high.
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Arrival NoticeArrival Notice Carrier unloads Containers with one cargo
owner to C.Y. (Container Yard) and Containers with more than one owner to C.F.S. (Container Freight Station)
Arrival Notice to “Notify Party” in the B/L indicating ETA and wharf demurrage starting date, generally 8th day after vessel arrival for CY cargos 13th day for CFS cargos excluding
weekend & holidays Much shorter free period for reefer
containers
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