Practice of International Trade – Obligations of the Seller

Chapter 4-4

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Transportation

•We will pay attention mainly on marine transportation.

•Features of marine transportation• The freight volume per ship is large• The freight of a sea transportation ship is

low• The sea transportation ships can meet

various requirements of the goods• The transporting techniques are easily to

be improved

•Kinds of marine transportation• Liner Transport

• Features of liner transport• Fixedness – line, ports, basic freight, schedule• Loading and unloading of the goods are borne

by shippers• The formalities of booking shipping space on

a liner is simple

• Freight of liner• Freight-charging standards• Basic freight and additional freights

• Shipping by charter• Features of shipping by charter

• The volume of goods is large, and the freight is relative low

• Shipping conditions should be determined by negotiation

• The rights, duties and obligations of charter and ship owner should be according to the charter party

• Charter freight is determined by ship owner and consigner

• Ship owner does not responsible for the loading and unloading of the shipped goods

• F.I.O.; F.I.; F.O.; Gross terms (Liner terms)

• Kinds of chartering• Voyage charter

• Freight rate may fluctuate when the demand and/or supply of chartering market changes.

• The rate of how many tons at which the ship is to load and demurrage and dispatch money should be stipulated in charter party.

• Time charter• Only sailing area is stipulated in time charter

contract instead of definite shipping route.• The ship owner is responsible for the

seaworthiness and ship’s class ship owner is responsible for the seaworthiness and ship’s class

• Demise charter (Bareboat charter)

•The relationship between the contracts of marine transportation and the sales contracts• Time of shipment

• Liner transport• Shipping by charter

• The port of shipment• When shipping by charter, pay attention to

the rate of flexibility.

• Bill of Lading (the document of marine transportation)• Natures and functions of B/L

• Receipt for the goods• Document of title (in most cases)• Evidence of the contract of carriage

• Kinds of B/L• On board B/L (Shipped B/L) and Received for

Shipment B/L• Clean B/L and Unclean B/L (Foul B/L)• Straight B/L (Non-negotiable B/L), Order B/L and

Blank B/L (Open B/L, or Bearer B/L)• A straight B/L is not a document of title

• Ante-Dated B/L, Advanced B/L and Stale B/L

• Direct B/L, Transshipment B/L and Through B/L

• Long form B/L and Short Form B/L• Documents of international railway

transport, Documents in road transport, Air Waybill, Parcel Post Receipt are not document of title; MTD can be used as a document of title.

•Clause of delivery (shipment)• Time of delivery (shipment)

• Methods of stipulating the time of delivery (shipment)

• Pay attention on the following:• The supply of the contracted goods• The shipping space• Time of delivery should be clear and definite• The length of the period of time of delivery• The L/C’s time of validity• The feature of the goods and market

• The port (place) of shipment and the port (place) of destination

• Way of stipulating the port (place) concerned• Attention to the stipulation of the port (place) of

shipment and destination• The stipulation should be clear and definite –

expressions such as European Main Ports should be avoided.

• Two or more ports (places) of shipment or destination can be stipulated in a contract as the circumstances may require.

• Conditions of the port of shipment and destination must be considered.

• Attention should paid to the ports (places) with the same name.

• Partial shipment and transshipment• Partial shipment

• A general stipulation• A clear and definite stipulation• Different explanations according to different laws

• Transshipment • Different explanations according to different laws

• Shipping advice• Demurrage and dispatch• Clause of O.C.P.

• Overland Common Points – encourage to use the land bridge transport in U.S.

• Other kinds of transportation besides marine transportation• Rail transport• Road transport• Air transport

• Make balance between high cost and high speed• Mail transport• Pipeline transport• International multimodal transportation

• A MTO is responsible for the whole journey• A single freight existed• Only one document of transport (MTD) concerned

• Attention to international multimodal transportation• It’s different from “through transport”• MTO may be NVOCC (non-vessel operating common

carrier)• Containers are usually used

• CY; CFS; FCL; LCL• FCL/FCL; FCL/LCL; LCL/FCL; LCL/LCL

• Land bridge transport• The U.S. land bridge• The Canadian land bridge• The Siberia land bridge (The first Europe-Asia land

bridge)• The China-Holland land bridge (The second Europe-

Asia land bridge)

Insurance

•Risks• Marine risks (Perils of the Sea) Marine risks do not include all the risks in

the course of marine transport.• Natural Calamity• Fortuitous Accidents

• Extraneous risks• General extraneous risks• Special extraneous risks

•Marine Losses• Total Loss

• Actual total loss• The goods are lost thoroughly• The loss of the goods cannot be retrieved• The commercial value is lost completely• The carrying vessel has been missing for a

reasonable period of time

• Constructive total loss• When the goods are damaged, the expenses

for repair will exceed the goods’ value after being repaired

• Notice of Abandonment

• Partial Loss• General Average (G.A.)

• General Average contribution

• Particular Average (P.A.)

•Expenses• Sue and Labor Expenses• Salvage Charges

• Traditional insurance coverage in marine transport insurance• Basic insurance coverage

• Kinds of basic insurance coverage• Free from Particular Average (F.P.A.)• With Particular Average (W.P.A.)• All Risks

• Exclusions in Clause of Insurance• Loss or damage caused by the intentional act or fault of the

insured, or falling under the liability of the consignor• Loss or damage arising from the inferior quality or shortage

of the insured goods prior to the attachment of this insurance

• Loss or damage arising from normal loss, inherent vice or nature of the insured goods, loss of market and/or delay in transit

• Loss or damage caused by war, strike etc.

• Additional insurance coverage - cannot be purchased independantly.• General additional insurance coverage

• Theft, Pilferage and Non-delivery; Fresh Water & Rain Damage; Risk of Shortage; Risk of Intermixture & Contamination; Risk of Leakage; Risk of Clash & Breakage; Risk of Odor; Damage Caused by Heating & Sweating; Hook Damage; Loss or Damage Caused by Breakage of Packing; Risks of Rust

• Special additional insurance coverage• War Risk; Strike Risk; Failure to Deliver Risk;

Import Duty Risk; On Deck Risk; Rejection Risk etc.

•Institute Cargo Clause (I.C.C.) of London Insurance Institute I.C.C was first set in 1912, and the newest

revision was in 1982.• Institute Cargo Clause (A)• Institute Cargo Clause (B)• Institute Cargo Clause (C)• Institute War Clauses – Cargo• Institute Strikes Clauses – Cargo• Malicious Damage Clauses

•Attention to set Insurance Clause in Sales Contract• Choose the Insurance Clause which is the

accordance of insurance• Set total amount insured

• Franchise• Set insurance covers• Document of insurance

• Insurance Policy• Insurance Certificate