inward and outward clearance of ships.docx
Post on 28-Apr-2015
378 Views
Preview:
TRANSCRIPT
A STUDY ON CHALLENGES FACED BY ACT SHIP AGENCY FOR INWARD
AND OUTWARD CLEARANCE OF SHIPS IN
COCHIN PORT
Summer Placement Project
Submitted by
DILSHYAM DK(Reg no:11P37S0005)
Under the guidance of Ms. S.KANIMOZHI (BCA, MBA)
in partial fulfillment of the requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION
of Bharathiar University, Coimbatore.
2011-2013
HAPPY VALLEY INSTITUTE OF MANAGEMENT STUDIES
PARTNER INSTITUTION OF BHARATHIAR UNIVERSITYCOIMBATORE-64110
1
ABSTRACT
The Aim of the Study is to find out the procedures followed by the Ship Agency when a Ship is
Arriving and Departing from the port. Normally the Shipping Agency is the Sole responsible for
the ships which are entering into the concerned port and they will take care of all the activities
which are required for the clearance of the ships. Therefore this research will help to find out the
step by step process of Shipping Agency. Some of the major objectives of the thesis are To Find
out the overall activities followed by the ship agency for the Inward and Outward Clearance of
the Ships and to find out the Challenges faced by them during this Clearance process.
The research purpose applied in this research is Descriptive and the approach used is Qualitative.
The data will be collected by both primary and secondary data. The Primary Data will be
collected by Direct Observation from the Ship Agency. Secondary Data will be collected through
Internets, Books and Journals. This Research may help the people those who want to know about
the overall process happening in the Shipping Agency. And can keep this record for the future
study about this topic.
KEYWORDS : Inward and Outward Clearance, Agency, forwarding, challenges, Ship Agents,
Information Technology, Electronic Data Interchange.
2
TABLE OF CONTENTS
CHAPTER TITLE PAGE
NO
I INTRODUCTION
1.1 Background 5
1.2 Company profile
1.2.1 About ACT 6
1.2.2 About Cochin Port 10
1.3 Problem of Statement 13
1.4 Objectives of the Study 14
1.5 Limitations 15
1.6 Research Questions 16
II THEORATICAL FRAMEWORK
2.1 Literature Review 17
2.1.1 About Shipping 17
2.1.2 The need for the Ship Agent 24
2.1.3 Qualification For The Good Ship Agent 25
2.1.4 Duties And Responsibilities Of Ship Agents 27
3
2.1.5 Liabilities And Claims Of The Ship Agent 29
2.1.6 Problems Faced By The Ship Agents 32
2.1.7 Global Challenges Facing The Agent 36
2.2 Conceptual Framework 38
III RESEARCH METHODOLOGY
3.1 Research Purpose 39
3.2 Research Approach Used 39
3.3 Research Strategy 39
3.4 Data Collection Methods 40
IV EMPIRICAL FINDINGS
4.1. Arrival Of Vessel Into Port 42
4.2 Conditions For Acceptance Of Vessel Into Port 49
4.3. Departure Of Vessel From Port 50
4.4. Challenges Faced In Clearance 54
V RECOMMENDATIONS 55
VI CONCLUSION 56
VII REFERENCE 57
4
1. INTRODUCTION
1.1. BACKGROUND: Shipping plays an important role in the transport sector of India's economy. According to EXIM
India’s survey. Approximately, 90 per cent of the country's trade by volume (70 per cent in terms
of value) is moved by sea. The shipping has developing year by year. Import and Export in India
is mainly depends on the shipping industry. If import and export falls, it will directly affect
shipping. India has the largest merchant shipping fleet among the developing countries and ranks
20th amongst the countries with the largest cargo carrying fleet with 8.83 million GT.
Development in the shipping industry and the Import and Export in India, will lead to increase in
the arrival and departure of Ships into India ports. The Inward and Outward of ships into port
needs many Pre-Preparations. All the activities relating to that will be carried out by the Shipping
Agency.
A Shipping agency or Shipping agent is the Designation for a person or Agency, responsible for
handling shipments and cargo at ports worldwide on behalf of shipping company. The Shipping
Agency will be the sole responsible for the ships which are entering and departing from the
concerned port and will take care of all the activities which are required for the clearance of the
ships. They need to prepare many documents for the clearance of Ships and have to get it cleared
from the customs as well as from the port authority. The agency is facing few challenging in this
clearance process and it will be mentioned here. The Shipping agencies in India are also
increasing rapidly. The role of a Ship Agent is also rising due to the increase in the arrival and
departure of ships into port.
5
1.2. COMPANY PROFILE:
The Research is about the Ship agency activities in the Cochin port during the inward and
outward clearance of ships. Therefore the company profile will include both the Cochin port and
the Ship Agency.
1.2.1 ABOUT ACT INFRA PORT LTD:
A C T GROUP is a complete service provider sea trade and Logistics, headquartered at Port of
Kandla, Gujarat, India. They provide complete package of shipping services at all major ports for
different category of cargo. They are one of the leading Custom House Agents(CHA), licensed
stevedores, warehouse owners for both liquid and dry cargo, shipping agents, ship brokers and
affreightment agents operating at all Western and Eastern ports of India.
A C T has its own fleet of trailers, tankers, loaders, excavators, cranes, forklifts etc. Permanent
field staff of more than 500 personnel covering Western and Eastern Indian ports to provide
excellent services and ensures the cargo reaches its destination with complete care. The group
has competent, experienced and dedicated professionals at managerial and supervisory level to
stride into the future.
VISION:
“To develop a comprehensive growth oriented logistics business in all the sphere of sea
and/or inland trade.”
MISSION:
“To offer logical, price sensitive, comprehensive services to their clients facilitating
growth and minimizing risks.”
6
MANAGEMENT GUIDELINES:
To seek talent from diverse culture & nurture them to strive for international competition. To
take challenge in uncharted waters for the growth of one and all.
HISTORY:
A C T GROUP formed in 1982 and since then operating successfully.
Their continued growth is attributable to strong company management and financial stability.
Their commitment to service excellence has established us as one of India’s leading shipping
service providers.
Their innovative leadership in the introduction of systematic approach will continue to
strengthen their growth and enhance their service excellence as the world moves forward in the
changing environment friendly atmosphere and rapid paperless electronic commerce.
They offers a total service covering door to door shipping, freight forwarding to all parts of the
world, customs clearance, transportation, storage and distribution, import/export documentation.
Therefore no matter from where the cargo originates and we are there to move the cargo to their
final destination by sea or rail or road or air. Their network ensures the cargo is delivered safely
on time every time.
They believe in the innate power and drive of professional management to shape their own
destiny and the destiny of the nation. Foremost in their mind was to improve upon the logistics
system to give their clients an unblemished and satisfactory support system. They provide and
supply systematic approach towards the services for their clients to make their business smooth
and productive. Their efforts are to bring positive changes in client’s balance sheet, that change
creates a ripple effect on generating more business and growth. Success lies in the hands of
competitive team.
7
SERVICES OFFERED:
CUSTOM HOUSE AGENT :
They are operating as Licensed Custom House Agent since 1982, at all Western and Eastern
ports of India. They are also present at various ICD’s and CFS’s located at all the major
locations. They annually handle more than 5 million metric tons of cargo consisting liquid,
bulk/break bulk, project cargo and containerized cargo. They have custom approved trained
& experienced staff to deal with customs/port related matters and to provide excellent
services.
STEVEDORING :
They are one of the leading licensed stevedores operating at all Western and Eastern ports of
India. They handle all types of cargo i.e. Bulk(including Sugar, Coal, Fertilizers, Raw
materials for Fertilizers), Break bulk(Iron & Steel), Project cargo including Heavy lifts,
Containers etc. For efficient &expeditious handling of cargo, they possess all types of gears
and equipments like pay loader, excavators, cranes, forklifts etc. They are experienced in
handling project cargo and Iron & Steel materials.
CLEARING AND FORWARDING :
They manage and provide services related to receiving the goods from the factories or
premises of the principal or his agents, warehousing, redistribution of goods, maintaining
records of the receipt, dispatch of goods and daily update the stock available at the
warehouse to clients. Their experience of more than three decades in this field not only
allows them to take almost all the pitfalls of the industry but also guide them to provide tailor
made solutions for any type of need.
8
SHIPPING AGENCY :
A C T group as a Shipping Agent, provide multifaceted services to cater to the requirements
of the ship and its crew. They locally represent leading vessel owners & operators like M/S.
Mitsui O.S.K. Lines, Japan, M/S. Oldendorff carriers and M/S. oldendorff Express lines,
Germany, M/S. CPM corporation, China and M/S. Spur Shipping, Singapore. They are also
member of International Shipping Body (BIMCO).
OTHER SERVICES OFFERED:
CHARTERING AND SHIPBROKING
TANK TERMINAL OPERATION
TRANSPORTATION
FREIGHT FORWARDING
WAREHOUSING AND REDISTRIBUTION
SEZ FACILITY
They are the first licensed Government of India approved SEZ service providing unit. In the field
of material management and logistic support, they have created the SEZ facility at Kandla
Special Economic Zone, just 9kms from the major Indian port of Kandla. They have both bonded
and none bonded warehouses for Import/Export facilities.
9
1.2.2 ABOUT COCHIN PORT :
Cochin Port is a major port on the Arabian Sea – Indian Ocean sea-route and is one of the
largest ports in India. The port lies on two islands in the Lake of Kochi: Willington
Island and Vallarpadam, towards the Fort Kochi river mouth opening onto the Arabian Sea.
The International Container Transshipment Terminal (ICTT), part of the Cochin Port, is the
largest container transshipment facility in India.
The port is governed by the Cochin Port Trust (CPT), a government of India establishment. The
modern port was established in 1926 and has completed 86 years of active service.
The Kochi Port is one of a line of maritime-related facilities based in the port-city of Kochi. The
others are the Cochin Shipyard, the largest shipbuilding as well as maintenance facility in India;
the SPM (single point mooring) facility of the Kochi Refineries, an offshore crude carrier
mooring facility; and the Kochi Marina.
HISTORY:
The Cochin port was formed naturally due the great floods of Periyar in 1341 AD, which choked
the Muziris port (Kodungallur), one of the greatest ports in ancient world. Ever since, Cochin
became one of the major ports with extensive trading relations Romans, Greeks and Arabs, all
lured by the traditional spice wealth of the state. The port further attracted European colonialists
like Portuguese, Dutch and finally British who extended their supremacy over Kochi Kingdom
and the port city of Fort Kochi. The traditional port was near Mattancherry (which still continues
as Mattancherry Wharf).
The need of a modern port was first felt by Lord Willing don during his governorship of Madras
Province of British India. The opening of the Suez Canal made several ships pass near the west
coast and he felt the necessity of modern port in the southern part. He selected the newly joined
Sir Robert Bristow who was a leading British harbor engineer with extensive experience with
maintenance of the Suez Canal.
10
Bristow took the charge of chief engineer of Kochi Kingdom's Port Department in 1920. Ever
since then, he and his team were actively involved in making a Greenfield port. After studying
the sea currents, observing tidal conditions and conducting experiments, he was convinced about
the feasibility of developing Cochin. He believed that Cochin could become the safest harbor if
the ships entered the inner channel.
The construction of the dredger 'Lord willing don' was completed in 1925. It arrived at Cochin in
May 1926. In 1932, the Maritime Board of British India declared Port of Cochin as a major port.
The port was opened to all vessels up to 30 feet draught. During the World War 2, the port was
taken over by the Royal Navy to accommodate military cruisers and war ships. It was returned to
civil authorities on May 19, 1945. After Independence, the port was taken over by the
government of India. In 1964, the administration of the port got vested in a Board of Trustees
under the Major Port Trusts Act. The port was listed as one of the 12 major ports of India.
ORGANISATIONAL STRUCTURE:
Cochin Port Trust is an autonomous body under the government of India and is managed by
Board of Trustees constituted by the government. The board is headed by the chairman who acts
as the chief executive officer. The chairman is assisted by the deputy chairman who in turn is
assisted by department heads and officials of the following port departments:
General Administration
Traffic
Accounts
Marine
Civil Engineering
Mechanical Engineering
Medical
11
FACILITIES:
The port is administered by a statutory autonomous body known at the Cochin port trust. The
chairman, deputy chairman and 17 other trustees representing various interests interlinked with
the port such as Shipping agents, shippers, labor, customs, state government, etc Constitute the
board which looks after the administration of the port Facilities offered by the port are,
- Berths for handling cargo and passenger ships,
- Cargo handling equipments,
- Storage accommodation,
- Dry dock,
- Bunkering facilities,
- Fisheries harbor etc.
The entrance to port is through the Cochin gut between the peninsular head land and vypeen and
fort Cochin. The port limits extend up to the entire back waters and the connecting creeks and
channels. The approach channel up to the Cochin gut is about 10 km long with a designed width
of 200 meters and maintained dredged depth of 13.80 meters.
From the gut the channel divides into Mattancherry channel and Ernakulum channel, leading to
west and east of Wellington Island respectively.
- Well equipped container terminal with CFS.
- 16 berths including 3 oil jetties.
- Alongside draft of 9.14 meters to 12 meters.
- Vast estate covering 692.96 acres.
- 1 dry dock
12
1.3 PROBLEM OF STATEMENT:
Of late the application of Information technology has been positively impacting in all the
Industries. Particularly, in the shipping also it is affecting a lot. Due to the growing changes in
the Information and Technology, Ship Agent is facing many issues/challenges in the recent days.
The Ship Agency is challenged for its existence due to their poor performance of its role which
will lead to dissatisfactions of their customers. The ship agency is facing some other challenges
such as Heavy work load to the employees, delay in getting the documents for clearance, lack of
training, etc.
Shipping is an international business meaning that it requires fast and efficient logistic chain
from the ship owner, cargo owner, port authority, agent, shipper and the final consumer.
Therefore the Ship Agents should be fast enough to respond to the growing technology.
Otherwise they have to suffer a lot to survive in this field.
13
1.4 OBJECTIVES OF THE STUDY:
The purpose of this study is to find out the overall activities in the ship agency. The main aim of
this study is to prepare a clear report about the procedures followed by the ship agency during
the Inward and outward clearance of ships in port. And also to know the List of Documents
needed for the clearance of the Ships in and from Cochin port. And the ship agency is also facing
some issues in this clearance process of ships.
This research may help the people those who want to know about the overall process happening
in the Shipping Agency and also the procedures for clearing the ship. And this record may help
for future study about the same topic.
14
1.5 LIMITATIONS:
Research is confined to Cochin ship agency only.
In Depth study was not possible due to the time constraints.
There is no comparison conducted between any of the companies.
It covers only the Inward and Outward procedures followed by the ship agency.
15
1.6. RESEARCH QUESTIONS:
Choosing the research Question is major criteria in the research process. The Research question
should match its research objective. The research formulated for this study is as follows,
“To understand what are all the procedures followed by ACT ship agency when a ship is arriving and departing from the port?”
For clear understanding about the research, the researcher has formed some sub-questions. It
will help to find out the different aspects of the research. The questions are as follows:
1. What are all the documents to be submitted for Custom Clearance?
2. What are all the challenges faced by agency when clearing a ship?
16
2. THEORETICAL FRAMEWORK
2.1. LITERATURE REVIEW:
2.1.1 SHIPPING:
International Trade means Exchange of goods or services across various borders. The trade can
be either Import or Export. If any country produces excess quantity of goods than their
consumption, they will prefer to export those goods to other countries to earn more profit. In the
same way, if any country is in need of particular product that is not available in their country,
will import those goods from other country which having those goods. The import and export
can be carried out by either by sea and air ways. Most of the goods are imported and exported by
means of ship. Shipping plays an important role in the transport sector of India's economy
(EXIM INDIA, 2011). Shipping is now becoming a unavoidable thing in Indian trade.
There are many parties involved in the shipping business. Each and every person are playing a
crucial role in the shipment of goods. Some of the parties involved in that are Shipper, Freight
Forwarder, Liner, Ship Management, Ship Agency, Charterer, Consignee etc. Each one’s role
will differ according to their nature of work. These major parties in these can be grouped into
three sections. The sections are as follows,
1. Ship interests
2. Cargo interests
3. Ancillary services
1. SHIP INTERESTS:
Ship interests, who mean those who are all concentrating mainly on Ships. They will not
concentrate mostly on the cargos that the ship is carrying. They want their ships to be maintained
well in order to get more cargos than they actually carry. Normally he Ship Agents will be
appointed by any of the parties under the ship interests. The parties are,
a) Ship owner
b) Ship management
17
a) SHIP OWNER:
Ship owner means the one who owns a ship or who have share in the particular ship. Ship owner
is the person who normally appoints the Ship agent. That agent will act on behalf of the owner in
all the ports wherever the ship travels.
b) SHIP MANAGEMENT :
Ship management, as the name suggests, deals with the process of managing a ship. Ship
management is done by independent companies which use ships of some other companies or
independent owners. The ship management can also have the right to appoint the ship agent. The
ship management can never control the ship in the place where the ships travelling. Therefore
they will appoint a ship agent in almost every port where the ship is visiting. The ship
management company manages ships for the owner and pays him the yearly amount which is
settled between the owner and the ship management company. The owner of the ship signs a
contract and leases the ship to the ship management company for a defined duration of time. The
owner can lease the ship completely or he can render some of the services provided by the ship
management companies. (Monica, December 10, 2010)
The ship management company should do the supervision of the maintenance
of machinery on board the ship. The process should also include different
surveys and repair work of the ship.
The ship management company should provide adequate crew for manning
the ship.
The company should negotiate the contracts for bunker and lube oil.
The ship management company pays the expenses on behalf of the owner.
18
2. CARGO INTEREST:
Cargo Interests are the persons who merely concentrate on the cargos that the ship is carrying
and not the ship. The cargo interests can be the person who buys the goods or sells the goods or
who are all involved in the shipment of the goods. They are
a) Shipper b) Chartererc) Freight forwarder
a) SHIPPER:
A person or company who enters into a contract with a liner conference, shipping line or ship
owner for the carriage of goods. The shipper could be the seller of the cargo, the buyer of the
cargo or some third party that solely arranges the transportation of the cargo. A shipper is a
person who is entrusted with the responsibility of transportation of goods and commodities. In
the shipping industry, a shipper’s role is very vital and something that can never be overlooked.
(Sharda, January 12, 2011)
b) CHARTERER:
A person or organization that contracts to acquire a vessel, for a voyage or a period of time, to
carry his cargo. Chartering is an activity within the shipping industry. In some cases a charterer
may own cargo and employ a shipbroker to find a ship to deliver the cargo for a certain price,
called freight rate.
A charterer may also be a party without a cargo who takes a vessel on charter for a specified
period from the owner and then trades the ship to carry cargoes at a profit above the hire rate, or
even makes a profit in a rising market by re-letting the ship out to other charterers. Depending on
the type of ship and the type of charter, normally a standard contract form called a charter party
is used to record the exact rate, duration and terms agreed between the ship owner and the
charterer. (N.Lopez in 2007)
19
TYPES OF CHARTERERS:
BAREBOAT CHARTERER:
By this type of charter, the ship owner leases his entire vessel and the charterer has the
responsibility of operating it as though it were his own vessel. The ship owner has, for the
period covered by the charter party, lost control of his vessel. The charterer pays all
expenses: fuel, stores, provisions, harbour dues, pilotage, etc. And employs and pays the
crew. The charterer is responsible for the upkeep, preservation and safety of the vessel.
Before delivery to the charterer the vessel is surveyed by representatives of both parties and
the same is done on redelivery also.( Aleem Charter Parties)
VOYAGE CHARTERER:
This is a charter party for the carriage of a full cargo, not for a period of time, but at a
stipulated rate per ton, for one voyage only, between named ports to be named on arrival in a
given area. It is a frequently used charter party of which there are many varieties, and most
commodities and trades have a particular type to suit their purposes. (Aleem Charter Parties,
Pg. No. 63)
TIME CHARTERER:
Where vessels are hired for a specific period, the responsibilities of the parties differ
substantially from those involved in voyage chartering. Under a time charter, the charterer
employs and directs the vessel in accordance with the terms of the Charter party and for the
specified period, he bears the risk of speedy performance of the vessel and any delays during
the voyages or the cargo handling. It is the most effective way to gain more money because
the owner will get money consistently till the time period gets over. (Aleem Charter
Parties, Pg. No. 63)
20
c) FREIGHT FORWARDER:
A freight forwarder, forwarder, or forwarding agent, is a person or company that organizes
shipments for individuals or corporations to get large orders from the manufacturer or producer
to market or final point of distribution. An increasing importance is being placed upon the freight
forwarder, as he takes over many of the functions of the traditional ship owner/carrier yet retains
interested in the cargo.
Many of the larger exporting companies maintain an in house shipping and distribution
department which negotiates contracts of freightment or carriage of goods for the company with
the shipping line that trades to the area of the world where the company’s goods are destined.
Traditionally, the freight forwarder filled the need for expertise, with their knowledge of
export/import documentation and procedure, plus their wide experience in dealing with shipping
companies with regard to contracts and documents. The freight forwarder can offer services that
come under four distinct headings
Purely as a shipper’s agent procuring transport and shipping services on
behalf of the exporter and under his direction
As a forwarder offering a total expertise package to the exporter with regard
to routeing and choice of mode together with ancillary documentation and
perhaps packing service. With regard to transport he remains an agent for the
exporter and bills of lading are made out in the shipper’s name and to the
shipper’s account.
As a principal, usually multi-modal transport operator, taking responsibility
for the goods irrespective of who actually carries them. In many cases he may
be the actual carrier for at least part of the transit. He issues the transport
documents, combined bill of lading.
As a specialist provider of ancillary self standing services, such as, custom
clearance, warehousing, packing and port agency. (ISSA BALUCH in 2000)
21
3. ANCILLARY SERVICES:
a) Ship Brokersb) Ship agents
a) SHIP BROKERS:
Shipbrokers are the people who act as intermediaries between the ship owners and the charterers
who charter these ships for the transport of their cargo or intermediaries of a permanent
transaction like buying and selling of ships. They are specialists in their trade and abide by the
letter of the law in all their transactions.
The dynamic nature of the business means that Ship Brokers must be in touch with the market,
so that they are well positioned to close a contract between two parties when the opportunity
arises. Working hours can be demanding with Ship Brokers expected to be alert to the different
trading zones of Asia, Europe and the Americas. They may also have to commit to on-call
periods out of office hours to ensure the 24/7 coverage needed in this fast-moving and
competitive industry.
There are also innumerable brokerage firms that have been established all across the world and
have separate departments that specialize to deal in sale and purchase, heavy containers, dry
cargo chartering, tanker chartering and also often in demolition sales and research. The major
areas of interest are numbered like the container broking, dry cargo broking, tanker broking and
sales and purchase broking. Sales and purchase is an activity wherein the shipbrokers handle and
manage the buying and selling of the existing ships as well as the new ones. For this process the
broker will get money as brokerage from both the parties. They will be specialized in the
activities such as the buying and selling of the ships. (Krishna Prasad in the year 2006)
22
ROLE OF SHIP BROKERS:
- Finding ships for cargoes and cargo for ships
- Source of Information
- Market trends and an adviser to owners and charterers
- A dispute resolver.
b) SHIP AGENTS:
Sell defines ship agent in a legal perspectives, “as a legal relationship that exist
between two parties that enter into agreement, whereby one of the parties, called the Agent
agrees to represent or act for the other called the principal, subject to the principal’s right to
control the agent’s conduct concerning the matters entrusted to him.”
According to ALAN BRANCH in 2007, “A ship agent is a person who acts for, or on behalf of
another in such a manner that the principal is logically responsible for all acts carried out under
such agency”.
Basically the ship’s agent represents the ship owner or master at a particular seaport, either on a
permanent or temporary basis. This includes notification of arrival and departure of the vessel,
acceptance of vessel for loading, discharge, repairs, storing, arranging berths, tugs, harbor pilots,
launches, ordering stevedores, cranes, equipments, etc
Port requirements such as requirements of the master, covering bunkers, stores, provisions, crew
mail & wages, cash, laundry, engine and deck repair and completion of customs, immigration
and port health formalities, cargo surveys, collection of freights, collection and issue of Bill of
Lading. The agents also have a marketing and sales role in accord with the guidelines laid down
by the principal.
23
2.1.2 THE NEED FOR THE SHIP AGENT:
The need for a ship agent is explained by JOHN.K.MOCHI in the year 2000.
The need and significance of the ship agent can be easily understood when someone looks at the
functions and the liabilities entrusted to him by the ship owner. The ship owner need a
representative who will take care of his ship in the foreign port with good knowledge of the local
situation, such as marketing and port conditions and capable of handling all the necessary work
for the ship owner. According to Alan Branch, ship agent is a person who acts for, or on behalf
of another in such a manner that the principal is logically responsible for all acts carried out
under such agency”.
However with the introduction of the container transport and computerization in 1960´s has
greatly affected the coefficient degree of the need and the size of the ship agent in our modern
times. Mergers and acquisition of the shipping lines like Maesrk acquiring Sealand, P & O
merges with Neddloyds etc all these has a great impact on the ship agent in terms of sizes and
revenue.
In those long past days, the business of shipping agency was extremely profitable resulting from
the high level of freight. Implying that both the principal and agent made good amount of money.
However, since the ship agent most important resources are training, experience, marketing
knowledge, etc. That still applies today in a world of increasing globalization and modern means
of communication. The ability to call up data on a screen does not completely eliminate or totally
replace the commercial initiative and creativity that the ship agent offers to the ship owner.
Basing on this, the author is convinced that the ship agent will continue to be an indispensable
link in the maritime chain.
24
2.1.3 QUALIFICATION FOR THE GOOD SHIP AGENT:
According to JOHN.K.MOCHI in 2000, many countries in the world do not impose
professional qualification for ship agents. Generally speaking there are no mandatory
qualification requirements; indeed many agents do not even know the existence of some code of
conduct for the ship agent. It has been confirmed that many ship agents operate without having
to be member of any association or having to comply with any sort of standards.
Like in Tanzania, there is no specific requirement one has to posses for becoming a ship agent
but what is important he has to be registered with the Customs Authority together with the
Ministry of Trade and Transport. The purpose for this registration is mainly for tax collection
and distance monitoring. However, apart from lack of uniformity in qualifications, there are
some implied requirements to be attained by ship agent.
These requirements include;
_ Sounding financial base.
_ Sounding professional shipping matters,
_ Technical knowledge
_ Reliable office
_ Marketing knowledge and
_ Knowledge of the Local procedures.
Having examined the existing standards, which lacks uniformity? UNCTAD (United Nations
Conference on Trade and Development) decided to prepare a set of draft minimum standards as
a non- mandatory model to be applied to the ship agency business. The UNCTAD minimum
standards have been prepared in close consultation with organization involved in ship agency
matters. The minimum standards stipulate that, in order to be professionally qualified, the
shipping agent must:
Have obtained the necessary experience in the profession by working for
at least three years in a responsible capacity with a qualified shipping
agent;
25
Be of good standing and be able to demonstrates his good reputation and
competence, by positive screening and signified approval of at least two
agents of good repute who are in his business and his geographical area of
activity: and
Have passed such professional examination(s) as required by relevant
national authorities / professional associations.
The scope and details of such examinations shall be determined by the
said authorities/ professional associations.
The financial qualifications required by the minimum standards are aiming at preventing the
operation of financially unstable individuals or entities, by requesting shipping agencies to have
adequate financial resources and to be adequately insured against professional liabilities.
The minimum standards promote a high level of business ethics and professional conducts. The
agents required to:
Discharge his duties to his principals with honesty and integrity
Apply a standard of competence in order to perform in conscientious,
diligent and efficient manner.
Observe all national laws and other regulations relevant to the duties he
undertakes.
26
2.1.4 DUTIES AND RESPONSIBILITIES OF SHIP AGENTS:
According to Ralph Amissah in his study (1988) The duties of the shipping agent to his
principals are covered under the contract called the Agency Agreement. The contact can be in a
formal document or can be implied as a matter of common law or by customs, or by statute.
However, in general the agent undertakes the following duties.
The agent is required to exercise skill and knowledge to the best of his ability for the benefit of
the principal; he is supposed to perform duties to the satisfaction of the principal. Again he the
agent should avoid errors, omissions negligence and other risks or some mistakes that may
consequently cause loss to the principal. The agent should avoid any act that may low down the
reputation of his principal, he should always try to defend and protect his principal’s interest
The Agent has a duty to keep his principal informed of any development e.g. when securing
cargo, any market possibilities, changes in the port both infrastructure and superstructure,
changes in port restrictions, any changes with regards to port tariffs, change in the Bunkering, so
when the agent fails to inform his principal of such development then the duty to keep the
principal informed has been breached. In some occasion breach of this duty may warranty the
principal to terminate agency contract and may lead for him to appoint someone else who is
more capable.
In tanker market, competition is very violent hence principals are heavily relying on the agent.
While at the agent port the vessel may be fixed for the next employment to load and the lay day’s
date are based on the latest information received from the agent. If the agent fails to keep the
ship owner closed advised of possible delays, the ship owner may lose the next cargo and
revenues. The same can occur if cargo discharge or loading order is issued locally to the agent
and the agent fails to advise the principals of changes in quantity and or quality of cargo. The
agents also have to take intense care while followings the above mentioned activities,
27
A. The duty for contracting signature
B. Accounting for the fund
C. Cargo canvassing
A) THE DUTY FOR CONTRACTING SIGNATURE:
Care should be taken when the agent is signing contract or any other document on behalf of the
principal. The very commonly document signed by the agent is the Bills of Lading, the Agent is
keenly required to understand the meaning and implication of what he is signing, cost, risk and
impact to be involved thereafter.
It is on this ground that the ship agent is required to have knowledge in commercial law or
maritime law which covers some backgrounds of INCOTERMS e.g. FAS i.e. Free Along Side
Ship, (named port of shipment) FOB, (Free On Board, named port of shipment) CIF- (Cost
Insurance and Freight, named port of destination) When issuing Bill of lading he should be able
to differentiate the meaning of stamped phrases like, Received for shipment Bill of Lading or
Cargo loaded on Board Bill of Lading. When signing the relevant document, the Agent should
sign as agent for a named principal, in this manner the agent ensuring that he is contracting on
behalf of the principal.
B) ACCOUNTING FOR THE FUND:
The Agent has the duty to account for the fund advanced by the principal. When vessel calls at
the agent’s port, normally he request estimated port charges to be advanced to him prior to the
arrival of the ship. Thus, the use of the principal’s fund should be reported immediately after the
vessel has sailed. If the agent fails in this regard, he may be considered as trustworthy, creating
the impression of lasting ship agent.
C) CARGO CANVASSING:
The agent also has the duty of marketing and sells principal’s service, monitoring of cargo
entering or leaving the territory weather direct or transshipment.
28
2.1.5 LIABILITIES AND CLAIMS OF THE SHIP AGENT:
According to the study “STANDARD PORT AGENCY CONDITIONS” .The liabilities and
claim of the shipping agents are mainly resulting from his main duties. The author shall only
discuss fewer liabilities and claims basing from his book research and experience. Most of the
liabilities discussed hereunder are those caused by agent own fault (negligence). They are
a) Claim from negligence
b) Liabilities resulting from booking cargoes, quoting rates
c) Liaising with other parties
d) Liabilities resulting from releasing of import cargo
e) Liabilities resulting from improper care in issuing documents
f) Liability claims resulting from fake crew .
a) CLAIM FROM NEGLIGENCE :
If the agent fails to arrange for the ship to berth, or for the stevedore to attend loading or
discharge the ship, he has failed to perform his duties and would become liable for any losses
suffered by his principal or by his customers.
Consider a case when an agent receives fax or telex message from a charterer asking if a
particular ship was suitable for that port. Having received this message the agent just checked
port draft restrictions and replied that the ship was suitable and the ship was fixed for that port.
29
Unfortunately he had overlooked the fact that the ship was too long, and that the vessel could not
berth accordingly. So when the ship was streaming to the said port then the error was realized. In
this particular situation the cargo had to be diverted to the nearest port, unloaded and then
shipped in a shorter ship to the previous port. So the agent in this particular case is fully liable for
the extra cost involved due to his negligence, he would have to reimburse the substantial costs
incurred by his principal.
b) LIABILITIES RESULTING FROM BOOKING CARGOES, QUOTING RATES :
One of the most important tasks of the agent is to find and book cargo for his principal’s ship.
The agent in this respect he must be careful to book the cargo and quote the rate under the terms
and conditions of the principal concert.
Some forwarding companies do attempt to their own terms on the ocean carriers, sometimes
under the guise of the quality assurance requirement. In this respect the agent should take care
not to accept booking on terms that his principal has not been specifically agreed upon. If the
agent is not careful then he might find himself liable and paying substantial amount of money so
as to cover the loss incurred.
c) LIAISING WITH OTHER PARTIES :
The agent should liaising between the cargo interests, the ship service provider etc. a failure by
the agent to pass on an instruction correctly may lead to a consequential losses. For example,
when dealing with refrigerated or cargo which need fumigation care should be taken accordingly.
To be on safe side the agent need to put necessary instructions in writing to the relevant
authorities.
d) LIABILITIES RESULTING FROM RELEASING OF IMPORT CARGO:
One of the greatest moment of which the agent exposes himself to a higher liability claim, is
when he releases cargo to a consignee or receiver, when a container has to be delivered directly
over the ship’s rail into consignee’s possession, the agent needs to be careful. The agent has to
30
ensure that original bill of lading or the approved original bank indemnity, which has been
approved by his principal, is in the hands of the agents before the cargo is being released to the
consignee. When agent releases cargo without original bill of lading or approved instructions
from the principal in this regard the agent is said to commit professional negligence, and that the
agent will be liable for wrongful delivery or any other losses resulted thereof.
e) LIABILITIES RESULTING FROM UNPROPER CARE IN ISSUING DOCUMENTS:
Transposition of container numbers may subsequently lead to a wrong destination of those
container(s), and thus the agent will be liable for paying reposition cost of those container(s)
indeed if cargo lost or damaged (or even confiscated by customs) the agent may be fully liable
for the value of goods in question. Issuing of incorrect address may cost the agent dearly,
consider cargo bound for San Diego has been sent to Santiago, iron ore for Coaching went to
Kaohsiung, refrigerated cargo for Birmingham Alabama has been mistakenly shipped for
Birmingham England.
Extra care needs to be maintained when preparing cargo manifest, bills of lading and other
related documents. Negligence and other minor errors like those mentioned above may cost the
agent huge sum of money.
f) LIABILITY CLAIMS RESULTING FROM “ FAKE CREW “ :
It has been learnt that some organization pretends to be principals or ship owners with malicious
motives. BIMCO (1999), that illegal immigrants posing as ship’s crew have increasingly using
unwitting ship agents to gain entry into a number of countries. The agent is rendered liable for all
costs incurred by the crew, and for any fines or any sanctions that may be levied by local
immigration authorities for failure to exercise due diligence.
The business of agency is especially susceptible because it relies to an extent on trust. The only
way to check the validity of a company is to investigate it fully before to agreeing to represent it,
something which is not always possible given the level of competition on agency business.
31
2.1.6 PROBLEMS FACED BY THE SHIP AGENTS: According to JOHN.K.MOCHI (2000). State owned shipping agency basically could have faced
with only two major problems, first problems related to Liner business which can be said as
more work load for lower reward; lower levels of cash flow; less control over his or her own
future and greater investment in technology. At the same time the Liner Principal expect the
Agent to work in partnership bringing the sense of change of corporate culture and greater
degree of mutual understanding.
For non-liner, the agent faces the problem of identifying where control really lies i.e. the cargo
owner or the ship owner; the information required focuses on the cargo, as well as the vessel. In
such business there are conflicts between the owner, who pays the fees and the chatterer who
nominates him, demands from owner for discounts and chatterer for rebates and for need for
wider marketing and intelligence work. The political and the institutional factors will influence
the challenges faced by the ship agents.
Thus these are general problems which might face the Liner Agent and non-liner agent in his day
to day operations. However the situation is more detailed for a state owned ship agent. The
problems of the shipping agency can be divided into four major group that includes
a) Political problems.
b) Institutional Problem.
a) POLITICAL PROBLEMS:
The major problems caused by the ship agency are caused by the political factors. The political
forces influence a lot in the process of ship agency. These are the problems, which affected the
company due to political influences, and others are due to Company formulation, some of them
are as follows;
32
FORMULATION OF THE COMPANY :
The formulation of a company is mainly depends upon the political decisions. If we take the case
of NASACO (National Shipping Agencies Company Limited) which was a Tanzania ship
agency. By the virtue of law, NASACO was empowered to monopolize all shipping agencies
business. Monopolists have unique feature of raising the prices of goods or services for the
purpose of enrichment. So, NASACO as a single provider of the agency services had a problem
of higher commission rates and higher agency fees while service provided where critically low
and of poor standard.
Another problem with such political formulated organization includes the possibility of existing
mismanagement of finances leading to self enrichment, since officials exercise substantial
amount of power so under such environment it is easy to bend rules in favor of certain groups or
individuals.
MIXING POLITICS AND SHIPPING BUSINESS :
Shipping industry is competitive businesses it mostly requires freedom of decision and
sometimes ad hoc solution and responsibilities. Thus combining management team with
politicians and workers may distort decisions. This is because history has proved that politics
affects economic business. But to some academicians, there is nothing wrong for management
team that comprise of managers, politicians and workers in fact this can be assumed as a
participate management concept in large spectrum.
Chief Executive Officer of the Company is a political appointee of the ruling party in which case
he has to dance whatever the party is singing. It is prudent to agree that for any business to
prosper needs to be free in her decision without political yoke or intervention and unnecessary
bureaucratic constraints it must have the authority and implement them and take full
responsibility for success or failure as the case may be.
33
b) INSTITUTIONAL PROBLEM : These are problems relating to management as a whole, some of these could be sighted as
follows;
LACK OF ACCOUNTABILITY :
The concept gives the idea of reporting and feedback system. Those who acts on behalf of the
other persons or group should report back to the group or person this is one of the basic principle
of quality management in an organization. NASACO as a public enterprise lacked this important
component. At the other end of the business i.e. in a Private Sector accountability is very
obvious, for directing and supervising production.
Finally, the owners are accountable to the customers, and collect profit the excess of revenue
over cost in exchange for organizing and monitoring the whole process. From the customer point
of view a classic profit seeking agency relationship prevails, but with layers of more complex
contracts within it. The Chief Executive officer and other managers are accountable to the Board;
the Board is accountable to the Shareholders. Thus there is a clear line of accountability from
management to the Board and finally to the Shareholders. So NASACO as a Public Enterprise
had little to do with this concept of accountability.
POOR MARKETING EFFORTS :
One of the important duties of the shipping agent is to conduct cargo canvassing or cargo
promotion. Due to the fact that NASACO was the sole Shipping Agency by that time, little
attention was being paid in this due regard. It was obvious that the Agent was not fulfilling one
of his obligations of which he was duty bound. To the ship-owners it was disappointing since the
agent was paid reasonable remuneration and other fees. Some of the vessels used to sail with
ballast water simply because the Agent could not secure cargo for the vessels.
34
WRONG PERCEPTION :
The Company had no clear mission statement, it had wrong perception that ”Customers will
always buy the company service whether they are satisfied or not”. This was absolutely wrong in
its totality especially in the competitive market.
CONFLICTS OF INTEREST AMONG SHIPPING LINES :
Putting all shipping lines together under one roof was not proper since there is a strong conflict
of interests among shipping lines such combinations were P&O Nedlloyd, Msc, PIL, MOL,
Hyundai, GSL etc such environment apart from creating conflicts it also invites corruption
among the shipping lines for cargo lobbying against each other.
STAFF RECRUITMENT :
The personnel recruitment’s policy did not comply on required personnel attitudes and qualities
desired for competitive global shipping business. Such recruitment policy was based on the fact
that employment was for life. Boarding officers who had direct contact with the master and the
crew onboard needed to have academic and professional qualities as a tool of giving good
company’s external image. Selecting a unqualified person may cause many problem to the firm.
LACK OF COMMUNICATION FACILITIES :
We all agree that shipping is International business of which the players need to contact each
other by various facilities due to vast distance exist among those participants. Ship owner may be
far away say in Western Europe but his ship may be sailing in the waters of East Africa. In this
regard, the owner would be anxious to know the prevailing situation of his ship, crew on board,
and the carried cargo. So he will spend most of his time making phone calls, telex and other
sophisticated means of communication just to inquire for the actual position of his ship.
It is important then for the agent to have reliable communication facilities since he can
communicate with the owner and give him all the required information, So, communication
facilities are very important for any ship agent who aspires to be successful.
35
2.1.7 GLOBAL CHALLENGES FACING BY AGENT:
According to Ralph Amissah in his study (1988), below are some of those challenges of which
the ship agents and other intermediaries like shipbrokers are facing, these challenges creates a
sort of limitation to these agents.
a) E-COMMERCE:
Information Technology is changing our business environment in a way few could ever have
thought possible and even fewer were prepared for the changes. In the modern world today due
to technological changes especially on the IT and internet in particular, ship agent seems to be
limited in his daily operational functions.
Consider a case prior to internet, the functions of the ship agent as before the arrival of the ship,
the agent had a numerous obligations including that of informing the port authority for the
arrangement of pilotage, tugs, security, cargo owners, customs, ship clearance, co- ordinate port
operations, signing the bills of lading, cargo canvassing and pays all the expenses of the ship in
the port etc.
In this particular case the agent uses paper, telex, telephone, or fax to communicate and
discharge his due obligations in a due and diligence manner to the relevant parties. So ship
owners and or cargo owners had to appoint ship agent in various port so as to carry out those
mentioned tasks. But with the introduction of Internet and e- commerce, (i.e. making business
electronically) maritime and shipping industry seems to take a different image.
One shall have to agree that with internet which is high level of technology at the moment
making the shipping activities to become faster and relatively transparent than before leading to
reasonable economies of scale, quality and safety measures has also been tremendously
improved.
36
b) DECLINE IN FREIGHT RATE :
For some reasons including that of improvement in ship technology leading for the ships to be
faster. Decline of the freight rate has impacts to the ship agent, this is due to the fact that, one of
the source of his income is derived from the cargo booking computed on the basis of freight
commission. Thus if the freight rate is higher than the agent will have higher commission and
viz. versa., So, given the fact that there is a decline of the freight it is automatically that the
revenue received to the ship agent will be also low thus fluctuation on freight rate has impact to
the ship agent too.
c) MERGERS, ACQUISITION, ALLIANCES AND TAKE OVER :
There has been a great pace of shipping lines to merge or to form alliances and take over, some
of the purpose for this is being an attempt to achieve better slot utilization and lower operating
cost. With alliance it is possible to serve more ports more often 55 and be more responsive to
customers with dramatically less investment than it would have taken for single shipping line
indeed tracking and tracing of containers in the multiple port, from the port of loading to the
retailing centers becomes more easier.
So, when they merged together means that they will consolidate their services and provide as one
entity, hence keeping two ship agents in each port will be economically not accepted
d) ELECTRONIC DATA INTERCHANGE(EDI) :
In the olden days, a hard copy of the manifest used to be handed over to the captain of the ship
and also a hard copy of the same used to be couriered or posted to the relevant discharge ports.
Then as technology improved, there was the process by which the manifest was sent to the
relevant discharge ports by email. The manifests thus received by the discharge port agents were
manually captured into their respective computer systems. With the advent of EDI, the above can
now be avoided and precious time can be saved. When sent as an EDI message, the data can be
37
instantly downloaded into the recipient’s system thereby avoiding manual capture which in turn
will avoid any typographical errors and also saves a lot of time.
2.2 CONCEPTUAL FRAMEWORK
38
INWARD AND OUTWARD CLEARANCE OF SHIPS
Prepare Documen
ts
Submit Documen
ts
Approval of
Documents
Entry of ShipsCUSTOMS DOCUMENTS
1. Deck Cargo
2. Arrival Report
3. Authorization Letter
4. Nil List
5. General Declaration
6. Stores List
7. Crew List
8. Crew’s Effect List
PORT DOCUMENTS
1. Deputy Conservator
letter
2. FA and CAO
3. Deputy conservator
letter
4. Arrival Report
5. Captain’s under taking
6. Marine Form 1
7. Marine Form 2
3. RESEARCH METHODOLOGY
3.1 RESEARCH PURPOSE:
Descriptive research attempts to describe systematically a situation, problem, phenomenon,
service or program, or provides information about the living condition of a community, or
describes attitudes towards an issue. Descriptive research is also known as statistical research.
Although the data description is factual, accurate and systematic, the research cannot describe
what caused a situation
The main purpose of the study is to describe the procedures followed in ship agency when a ship
is arriving and departing from the port and the overall process in the shipping agency. Therefore
the method followed is Descriptive research.
3.2 RESEARCH APPROACH USED:
With a qualitative research approach, a researcher focuses on gaining a better understanding of
the research problem through detailed information about the subject matter. One essential aim of
this research approach is to have a complete and detailed description of the subject through the
application of reasoning. Qualitative research often involves interviews and observations without
formal measurement.
Since the purpose of the study is to understand the overall operations in the shipping agency and
to find out the challenges faced by them in inward and outward clearance of ships into port,
Qualitative Approach is applied in this research. Hence this approach allows flexibility in all
aspects of the research process and flexible in explaining the nature of a problem.
39
3.3 RESEARCH STRATEGY :
This research based on descriptive method, therefore the research is focused on the strategies
such as,
a) Interview and
b) Direct Observation
3.4 DATA COLLECTION METHODS:
It is very important to choose the appropriate data collection method for a particular study in
order to complete the research successfully. The purpose of data collection is to obtain
information to keep on record, to make decisions about important issues, or to pass information
on to others. There are two types of data available. They are
1. Primary Data.2. Secondary Data.
PRIMARY DATA: Primary data is information collected by the researcher directly through instruments such as
surveys, interviews, focus groups or observation. Tailored to his specific needs, primary research
provides the researcher with the most accurate and up-to-date data. Normally Primary data has
been collected from first-hand-experience.
In this research the primary data will be collected by Interview and Observation from the
Shipping Agency. The ways in which interviews can be conducted in an open interview, pre
coded, direct interview and semi structured interview. In my dissertation, the researcher takes in
direct interviews. It is combination of open and pre coded interview, the main motive is to take
the direct interview the importance issues that need to be covered by the respondent.
40
The respondent can answer the questions in a practical manner and to encourage the respondent
to getting the more valuable data in a sensible way. It also very much helpful for discriminate
and deepen understanding of the particular issues.
SECONDARY DATA:
Secondary data refers to the data that are collected by another researcher for another purpose or
study; so it is collected from external sources such as magazines, articles etc. Secondary data is
easier to acquire than primary data. Even though primary data is difficult to acquire, they are a
lot more trustworthy compared to secondary data.
In this research, the secondary data will be collected through books, journals, internet and
articles.
41
4. EMPIRICAL FINDINGS
4.1. ARRIVAL OF VESSEL INTO PORT:
Ship arrival and departure procedures vary from port to port, but some of the necessary formalities
will follow on the same or similar lines everywhere. A ship agent will be appointed by the owner or
charterer in every port, to take care of each and every requirements of the ship. Like the same ACT
is also a representative of ship owner in Cochin port. Mainly they will take care of the Bunkering
activities and inward/outward clearance of ships in port. They need to prepare the documents that
are needed for the clearance of ship. Customs and port authorities require many documents for
allowing the ships into the port.
The master of every vessel, on arriving within signal distance of any signal- station established
within the limits of any part of a river or channel leading to a port shall, on the requisition of the
pilot in charge of the vessel, signify the name of the vessel by hoisting the number by which she is
known, or by adopting such other means to this end as may be practicable and usual, and shall keep
the signal flying until it is answered from the signal- station.
If the ships agent got information about the ships arrival to the port, they have to immediately
retrieve the documents that are necessary for the clearance of that particular ship. And they also
have to get some documents and signature from the master of the ship. Once every document is
prepared and got signed from the ship master, they (ship agent) will submit those documents
separately to the custom agent and port authority for the process of clearance. Once every
document is verified and satisfied by the customs and the port authority, they will issue the
clearance for the vessel. The port authorities will board the vessel at the pilot station upon arrival.
When reporting at the custom house, inward light dues are paid and general declaration on arrival
(or inward entry) is completed by the agent.
42
And they also have to pay certain amount to the Port Authority for Port clearance and for the
allotment of birth to the ship. The ship agent need not to pay those dues from their own, they can
claim that from the owner or charterer of the vessels. The owner will handle his separate bank
account for handling these kinds of expenses. Once the documents were cleared in customs as well
as port and dues are paid out, the ship agent can take care of the discharge of goods. The Ship’s
Agent will be always present in the inward and outward clearance and will require all the
permissions that the ship may require, in advance.
Below are the operations where vessel in port needs a previous authorization:-
Washing of ship’s side
Painting and Maintenance
Lowering Lifeboats
Use of ship’s whistle or horn
Bunkering Operations
Welding Operations.
43
DOCUMENTS REQUIRED FOR INWARD CLEARANCE:
CUSTOMS BOARDING DOCUMENTS:
1. Deck Cargo
2. Arrival Report
3. Authorization Letter
4. Nil List
5. General Declaration
6. Stores List
7. Crew List
8. Crew’s Effect List
PORT DOCUMENTS:
1. Deputy Conservator letter
2. FA and CAO
3. Deputy conservator letter
4. Arrival Report
5. Captain’s under taking
6. Marine Form 1
7. Marine Form 2
8. Marine Form 3
9. Crew list
44
DETAILS ABOUT THE DOCUMENTS:
CUSTOMS BOARDING DOCUMENTS:
The documentation department in ACT have format of each and every Custom Boarding
Documents. Once they get intimation about the ships arrival to a port, immediately they will
enter the details about the ship and cargo into those documents. And a representative from that
agency will bring those documents to the Customs Authority for clearance purpose. Details about
each documents is explained below,
1. DECK CARGO :
Deck Cargo declaration is provided along with the “APPLICATION FOR ENTRY
INWARD” by the Ship Agents to the Customs Boarding Officer. Hereafter, the Deck Cargo
Declaration shall give details of the number of container, sizes, inner volumetric capacity of
the containers and computed Tonnage for the purpose of assessment of light-dues. The same
applied to the Ships leaving the port. The Ships shall also provide cubic capacity as well as
Tonnage of the General Cargo or any other cargo carried as Deck Cargo under the ‘Deck
Cargo Declaration’. The Master of the Ship shall also provide information of any additional
spaces other than NRT that is utilized for carrying cargo.
2. ARRIVAL REPORT :
This is a Pre-arrival document which is submitted to customs. This document will contain the
full details about the arriving ship such as vessel name, registered tonnage, nationality of
ship, name of the port at which the vessel touched during the voyage, description about the
cargo that it is carrying, number of deck passengers, light dues, name of the ship’s agent,
goods that are imported at arriving port, and goods that are to be exported from the arriving
port, details about the vessel’s stay in the port and also the endorsement on last port
clearance.
45
3. AUTHORIZATION LETTER :
This authorization letter will be submitted to the commissioner of customs. This letter
ensures that the concern ship agent is appointed by the owner of the vessel for handling
overall activities of the vessel in the port. This letter is a witness for the agency that they are
officially appointed by the owner of thee vessel.
4. NIL LIST :
This list makes sure that there is no Hazardous or dangerous goods on board and there is no
passenger on board. If there are any Hazardous goods on the vessel, then customs will not
clear the vessel’s entry.
5. GENERAL DECLARATION :
General Declaration form contains the details about the ship and about the cargo that it is
carrying. Some of the details in the form are, Name-type-call sign of ship, port of
arrival/departure, Date and time of arrival/departure, port arrived from, certificate of registry,
gross tonnage, net tonnage, brief description of the cargo etc.
6. STORES LIST :
This form contains the full details about the stores that the cargos are occupied. Few contents
in this FORM IV are Name of shipping line agent, port from arriving, date of arriving,
Nationality of the ship, no. of persons on board, period of stay, place of storage and the
quantity.
7. CREW LIST :
This list comprises the full details about the full crew who are all onboard. The details about
every member onboard such as Name, age and nationality will be present in the crew list.
46
8. CREW EFFECT LIST :
This list contains the details about the whole crew and the list of goods or things which they
are carrying with them. The list of goods includes all the belongingness of the crew
members. This list also contains the details such as name of the agent, IMO number, period
of stay etc.
PORT DOCUMENTS:
1. DEPUTY CONSERVATOR LETTER :
This letter will be prepared by the vessel agent and for the purpose of submitting it to the
Deputy Commissioner of customs. This is prepared for the intension to get permission for
clearance. This letter contains details such as Name of the ship, nationality of the ship, name
of the master, nationality of master, Gross registered tonnage, Net registered tonnage, no. of
crew, arriving from, arrived for, sailed with, sailing to, etc.
2. FA AND CAO LETTER :
This letter will be prepared by the vessel agent, to the FA (Financial Advisor) and CAO
(Chief Accounts Officer). This is prepared for the debit purpose. This document will mention
about the charges that need to be credited to the agents account. The ship owner will transfer
amount to the agents account for the purpose of paying dues which need to be paid to the port
for the vessel clearance. The agents need not to pay the dues by their own.
3. DEPUTY CONSERVATOR LETTER :
This letter ensures that the ship agent has complied with all the regulations of the port and
paid all the dues that are required to pay for the clearance of the ship. This letter will be duly
signed by the agent of the ship and the master of the ship. This letter was to be written to the
deputy conservator.
47
4. ARRIVAL REPORT :
Name of the vessel, name of the master, name of the agent, name of the line, nationality of
the ship, gross registered tonnage, net registered tonnage, length overall, original port of
departure, type of carrier ,time of arrival etc will be present in the arrival report. Agent has to
attach 2 copy of arrival report to the port authority. This document is necessary for the port to
allot the berth for ship at the right time and place.
5. CAPTAIN’S UNDERTAKING :
The agents have to mention in the document, if there is any change in the master in the
previous port due to unavoidable circumstances. If there is any change in master of the ship,
then the agent has to mention the name of the new master, details about him and the reason
for the undertaken.
6. MARINE FORM 1 :
This form will contain all the details about the ship such as Name, nationality, port of
registry, agent name, Charterer(if any), Length Overall, Beam, Gross registered tonnage, net
registered tonnage, passenger capacity and the ship type, berth required, etc. It is a general
declaration form.
7. MARINE FORM 2 :
It is a cargo declaration form which contains the full details about the cargo that are on the
vessel. It contains the details such as type of cargo in transit, cargo to be discharged, cargo to
be loaded, tons to be discharged and loaded etc.
8. MARINE FORM 3 :
Marine form 3 is a ship stores declaration form. This form contains complete detail about
stores in the vessel. It will have the details such as the space available and space allocated in
the stores.
48
9. CREW LIST :
This list comprises the full details about the full crew who are all onboard. The details about
every member onboard such as Name, age and nationality will be present in the crew list.
4.2 CONDITIONS FOR ACCEPTANCE OF VESSEL INTO PORT:
The Vessel shall be accepted for berthing subject to fulfillment of the following
conditions amongst others:
a) All the documents/certificates mentioned above should be valid and shall remain
valid during the stay of the Vessel within Port Limits. In the event any information is
incomplete or missing, the berthing of the particular Vessel will not be planned.
b) Vessel possesses valid Port Clearance Certificate from the last port of call.
c) Vessel is not loaded above the Vessel’s certified load lines.
d) Vessel is not carrying any hazardous cargo.
e) All Vessel Related Charges such as Port Dues, Pilotage and Towage and Berth
Hire has been paid as per Port Tariff by the vessel Agent.
f) Indian Light House Dues as per rates notified by Government of India has been
paid to the Government Authorities.
49
4.3. DEPARTURE OF VESSEL FROM PORT:
The ship cannot leave the port until it get Port clearance certificate from the port authority. For
getting the port clearance certificate, the agent have to submit certain documents similar to
inward clearance and also have to outward due to the port. There is not much procedure for
outward clearance when compared to inward. If the port is satisfied with the documents
submitted by the agent, then they will issue the Port Clearance certificate.
The agent must go to the Custom House and first pay the outward light dues unless these dues
have already been fully paid for the current financial year. If the ship is a foreign going ship and
has deck cargo, the agent must complete a form to declare the space occupied by the deck cargo.
The form must be shown to the Custom Officer. If the ship is foreign going ship, then they have
to pay ILH Dues to the custom for the tonnage it is carrying.
DOCUMENTS REQUIRED FOR OUTWARD CLEARANCE:
PORT DOCUMENTS:
1. Deck cargo cover letter
2. Departure Report
3. Captain’s Undertaking
4. Marine form 2
5. F.A and C.A.O Letter
6. Crew list
7. NIL list
50
CUSTOMS DOCUMENTS:
1. Entry Outward Declaration
2. Capt appointment Form
3. NIL list
4. Crew List
5. Declaration of Pollution.
DETAILS ABOUT THE DOCUMENTS:
PORT DOCUMENTS:
1. DECK CARGO :
Deck Cargo declaration is provided along with the “APPLICATION FOR ENTRY
OUTWARD” by the Ship Agents to the Customs Boarding Officer. Hereafter, the Deck
Cargo Declaration shall give details of the number of container, sizes, inner volumetric
capacity of the containers and computed Tonnage for the purpose of assessment of light-
dues. The Ships shall also provide cubic capacity as well as Tonnage of the General Cargo or
any other cargo carried as Deck Cargo under the ‘Deck Cargo Declaration’. The Master of
the Ship shall also provide information of any additional spaces other than NRT that is
utilized for carrying cargo.
2. DEPARTURE REPORT :
This letter is a mandatory one for the clearance of the vessel. This letter will have the
contents like Name of the vessel, name of the master, name of the agent, name of the line,
nationality, gross registered tonnage, net registered tonnage, length overall, next port of call,
type of carrier, DWT, no. of crew on departure, etc. They have to submit 2 copy of departure
report to the port.
51
3. CAPTAIN’S UNDERTAKING :
The agents have to mention in the document, if there is any change in the master in the ship
from the port due to unavoidable circumstances. If there is any change in master of the ship,
then the agent has to mention the name of the new master, details about him and the reason
for the undertaken.
4. MARINE FORM 2 :
It is a cargo declaration form which contains the full details about the cargo that are on the
vessel during the time of sailing out. It contains the details such as type of cargo in transit,
cargo that are loaded, tons that are loaded etc.
5. FA AND CAO LETTER :
This letter will be prepared by the vessel agent, to the FA (Financial Advisor) and CAO
(Chief Accounts Officer). This is prepared for the debit purpose. This document will mention
about the charges that need to be credited to the agents account. The ship owner will transfer
amount to the agents account for the purpose of paying dues which need to be paid to the port
for the vessel clearance. The agents need not to pay the dues by their own.
6. CREW LIST :
This list comprises the full details about the full crew who are all onboard. The details about
every member onboard such as Name, age and nationality will be present in the crew list.
7. NIL LIST :
This list makes sure that there is no Hazardous or dangerous goods on board and there is no
passenger on board. If there is any Hazardous goods on the vessel, then customs will not
clear the vessel.
52
CUSTOMS DOCUMENTS:
1. ENTRY OUTWARD DECLARATION :
The entry outwards declaration form should contain: name of ship, name of master, port of
registry, net tonnage, number of crew, where the ship is lying, the name of any previous loading
port, destination, whether with or without passengers, particulars of any inward cargo,
particulars of previous voyage, and the name and address of the agent. Either master of agent
can sign it.
2. CAPTAIN’S APPOINTMENT FORM :
The agents have to mention in the document that who is present master of the vessel and the
details about the master. If there is any change in master of the ship, then the agent has to
mention the name of the new master, details about him and the reason for the undertaken.
3. NIL LIST :
This list makes sure that there is no Hazardous or dangerous goods on board and there is no
passenger on board. If there is any Hazardous goods on the vessel, then customs will not
clear the vessel.
4. CREW LIST :
This list comprises the full details about the full crew who are all onboard. The details about
every member onboard such as Name, age and nationality will be present in the crew list.
5. DECLARATION OF POLLUTION :
This will ensure that the ship agent will pay the charges, if the ship cause any oil pollution or
polluting the sea by throwing garbage’s within the port limit. This will be submitted to deputy
commissioner of customs.
53
4.3. CHALLENGES FACED IN INWARD & OUTWARD CLEARANCE:
Long Waiting in Customs to get the documents cleared
Not using E-Commerce for the clearance.
Delay in getting documents that need to be cleared.
Unawareness of proceedings by the staffs.
Poor Connectivity with the Vessel.
Time Congestion in the port.
Heavy work load.
Errors in Documentation.
54
5. RECOMMENDATIONS
The agency is facing many issues/Challenges in the documentation alone. Therefore the main
solution for overcome these challenges is to apply the EDI system. Electronic data
interchange (EDI) is the structured transmission of data between organizations by electronic
means, which is used to transfer electronic documents or business data from one computer
system to another computer system, i.e. from one trading partner to another trading partner
without human intervention It is more than mere e-mail; for instance, organizations might
replace bills of lading and even cheque with appropriate EDI messages. It also refers specifically
to a family of standards. EDI helps to reduce time in preparing documentation, waiting time in
the queue for clearance, reduce work load and such us.
Another major problem faced by the ship agency is heavy work load. The whole inward and
outward clearance of ships is handled by a single person therefore it adds more load to that
person. Here they can appoint few more persons to that process and can divide their work, by
that they can reduce their work load.
They can also give training to the members to reduce the errors in documentation, delay in
preparing it such as. Training will help the staffs to know more about the field which will reduce
errors and also helps to improve the communication skills and many more. Thus the ship agency
can improve a lot in many aspects.
55
6. CONCLUSION
Shipping agents have some significant role in the logistic chain hence they have to provide
higher services with higher quality services, reliability and above all the focus should be on
customer requirement. The major roles of the Ship agents are explained in the above headings.
Hence this project helps to know that how the agents are appointed, what are the qualifications to
act as a Agents, what are the liabilities of the Agents and also some of the challenges faced by
the Agents.
There were only few researches has been done on the Inward and outward clearance of the ships
into port. Therefore this research may help the people to gain knowledge about the particular
field and also can take effective measures for the challenges by implementing the suggestions
given.
56
7. REFERENCE
Alvatzidis, P. Painful Progress. The Ship’s Agents & Brokers, 25, 53. (1999,Autumn).
Alan branch, Elements of shipping, (2007)
Aleem ,Charter Parties, Unit 12. (2001)
Barker. D.. The cycle of challenges continues in liner and port agency, BIMCO Review
1998. London: Stroudgate PLC.
Beardshaw, J. Economics: A student guide. London: Pitman (1988).
Bonfield, P. Knowledge management strategy: Managing Information.25, 26-30. (1999, July-
August).
C.R Kothari, Research Methodology Techniques, (2004)
Donner, P. Bolero. Unpublished lecture handout, World Maritime University, Malmö,
Sweden. (2000).
E- Commerce – Revolution or hype? Maritime Asia, 9- 18 (2000, May).
Francou, B. Freight Forwarders. Unpublished lecture handout, World Maritime University,
Malmö, Sweden.69 (2000).
Issa Baluch “The Changing Role of Freight Forwarder” (2002)
John.k.mochi Problems and prospects of the state shipping agency in Tanzania.
(2000)
Krishna Prasad “CHANGING ROLE OF SHIP BROKERS” (2002)
Moussa, D. The future of Niger Shipping Council in the new maritime
framework. Unpublished master’s thesis, World Maritime. (1999).
Ralph Amissah “United nations (UNCTAD) Minimum standards for shipping Agents”
(1988)
Sharda, http//:www.marineinsight.com (2011)
57
top related