ChapterFiveCargoTransportationSEIBOFGDUFS2LearningobjectivesAfterlearningthischapteryouwillbeabletounderstandtheimportanceofoceantransportationandhowlinerfreightisobtainedknowothermodesoftransportationintermsoftheirfeatures,suitabilityandfreightcalculationbeawareoftheimportanceofoceanbillofladinganditsdifferenttypesdescribearangeofothertransportationdocumentsstipulatedeliveryclauseinasalescontractSEIBOFGDUFS35.1OceanTransportationLinertransportationChartertransportationSEIBOFGDUFS45.1.1LinertransportationLiner:definitionavesselwithregularsailingsandarrivalssailingonafixed(regular)sailingroutecallingatfixed(regular)baseportsadoptingacomparativelyfixedtimetablechargesatcomparativelyfixedfreightratesfreightinclusiveofloading&unloadingcostLiner:typesconferencelinersnon-conferenceliners

SEIBOFGDUFS55.1.1LinertransportationLinerFreight=basicfreightrate

+surchargesandadditionalCalculationformulaoflinerfreightTotalFreight =TotalQuantity

×BasicFreightRate

×

(1+

Surcharge/AdditionalRates)BasicFreightRate:quotedbythecarrierSEIBOFGDUFS65.1.1LinertransportationSEIBOFGDUFS75.1.1LinertransportationSurchargesBunkerSurcharge(bunkeradjustmentfactor/BAF)CurrencySurcharge(currencyadjustmentfactor/CAF)PortCongestionSurchargeTransshipmentSurchargePortSurcharge…SEIBOFGDUFS85.1.1LinertransportationAdditionalHeavyliftadditionale.g.forcargoover5MTperunitLengthycargoadditionale.g.forcargoover9mperunitBulkycargoadditionale.g.forcargoover6cbmperunit…SEIBOFGDUFS95.1.1LinertransportationFreightcalculation:IllustrationSuppose:CompanyAexports1000casesofCommodityYtoLondon.Thevolumepercaseis40cmx30cmx20cm,andthegrossweightis30kgpercase.ForCommodityY,thefreightratebasisisW/M,andtheFreightTariff(China—London)isUSD230,witha10%portsurcharge.Howmuchisthetotalfreight?

SEIBOFGDUFS105.1.1LinertransportationSolution:W:30kg=0.03M/TM:0.4x0.3x0.2=0.024m3W>M,“W”isthefreightbasisforthecalculationoffreightTotalFreight =TotalQuantity

×BasicFreightRate×

(1+

Surcharge/AdditionalRates)

=1000cases

×0.03M/T×USD230×(1+10%)

=USD7590Answer:ThetotalfreightcostisUSD7590.SEIBOFGDUFS115.1.2ChartertransportationCharacteristicsNofixedroutesNofixedtimetablesFreightchargedonthevolumeofcargoSuitableforcargoofacompleteshipload(e.g.bulkcargo)Typesvoyagecharter:hiredbasedonaparticularvoyagetimecharter:thehireofashipforaperiodoftimebareboatcharter:thehireofthevesselitselfSEIBOFGDUFS125.1.2ChartertransportationCharterpartythecontractbetweentheship-owner(carrier)andthecharterer(shipper)Contentsthecontractpartiestheshipconditions:e.g.theship’sname,age,nationality,tonnagevoyage:e.g.portsofshipment&destinationcharterfreightdivisionofloading&unloadingcostlaydays,demurrage&dispatchfreightpaymentterms..SEIBOFGDUFS135.1.2ChartertransportationSpecifyingloading&unloadingcostFourmethods:I.&O.orLinerTerms/GrossTerms:InandOutF.I.:FreeInF.O.:FreeOutF.I.O.:FreeInandOutOrF.I.O.S.T.:FreeInandOut,StowedandTrimmedSEIBOFGDUFS145.1.2ChartertransportationLaytime

alsocalledlayday,istheperiodoftimeallowedtothechartererfortheloadingorunloadingofgoods

withoutadditionalchargeMethodsofstipulation

DaysorrunningdaysorconsecutivedaysWeatherworkingdaysof24hoursAweatherworkingdayof24consecutivehours..SEIBOFGDUFS155.1.2ChartertransportationDemurrage

theamountofmoneypaidasapenaltyatanagreedratebythecharterertocompensatetheship-ownerforhislossesincasethechartererfailstohaveloadingandunloadingcompletedwithinthelaytimeDispatch

theamountofmoneypaidasabonusbytheship-ownertothechartereriftheygetloadingandunloadingdoneaheadofschedule.normallydispatchmoney=?thedemurrageSEIBOFGDUFS165.2OthermodesoftransportationAirTransportationRailTransportation&RoadTransportationInternationalMultimodalTransportationContainerTransportation

SEIBOFGDUFS175.2.1AirTransportationTypes

ofairtransportationscheduledairlines charteredcarriers consolidatedconsignment airexpress

SEIBOFGDUFS185.2.1AirTransportationAirtransportationfreightrategeneralcargoratesminimumchargesclassratesspecialcommodityrates… SEIBOFGDUFS195.2.1AirTransportationGeneralcargoratesW:byweight(usu.1kgastheunit)M:bymeasurement(usu.6000cm3=1kg)W/M:byweightorbymeasurement,subjecttothehigher theheavier,thecheaper(unitfreight)e.g.45kgdrawsalineminimumfreight…SEIBOFGDUFS205.2.1AirTransportationAirfreight:illustrationCompanyAwantstosendoneconsignmenttoSydney,Australia.Thegoodsarepackedin50cartons,eachweighing15kgs,withmeasurementas50x40x30cm.TheairfreightrateisquotedatUSD2.00/KG(W/M).Howmuchwouldthetotalairfreightcost?SEIBOFGDUFS215.2.1AirTransportationSolutionW:15kgM:(50x40x30)/6000=10kgW>M,soWwillbeadoptedforthecalculationofairfreightTotalairfreight=TotalQuantity

×BasicFreightRate=50cartons×15kg

×USD2.00=USD1500Answer:thetotalairfreightcostisUSD1500.SEIBOFGDUFS225.2.2RailTransportation&RoadTransportation

Railtransportation

fromadispatchingstationtoadestinationstationlargecapacityrelativelyhighspeedpunctualandeconomicallesspronetobadweather,butconfinedtorailroads,thereforelessflexible

SEIBOFGDUFS235.2.2RailTransportation&RoadTransportation

Roadtransportation

fromaninlandpointtotheseaport,airportandrailwaystationhighflexibilityanddistributiveabilityfacilitatingdoor-to-doorserviceidealforcargoesinsmallquantities,butlimitedincapacityvulnerabletohighriskofpilferageanddamageintransitrelativelyhigheroperationcostSEIBOFGDUFS245.2.3InternationalMultimodalTransportation

onlyonemulti-modaltransportationoperatoronlyonecarriagecontractonefreightrateforthewholejourneyhighoperatingefficiencylowoperatingcostshorttimeperiodforcargomovementmoreandmorepopularinshippingpracticeSEIBOFGDUFS255.2.4ContainerTransportation

Definitionamethodofdistributingmerchandiseinaunitizedformadoptinganinter-modalsystemprovidingapossiblecombinationofsea,roadandothermodesoftransportationFeaturesvarietyinservice involvingoneoperator lowriskofdamageandpilferage substantialcostsavings

SEIBOFGDUFS265.2.4ContainerTransportation

Typesofcontainersdrycargocontainerrefrigerated/reefercontainertankercontainercarcontainerSizesofcontainersISO/TC104（13sizesof13series）Standardsizes(mostpopular)FEU8’x8’x40’TEU8’x8’x20’

SEIBOFGDUFS275.2.4ContainerTransportation

TypesofserviceAccordingtoplaceofshipmentanddestinationCYtoCY(ContainerYardtoContainerYard)CFStoCFS(ContainerFreightStationtoContainerFreightStation)DRtoDR(DoortoDoor)DRtoCFS(DoortoContainerFreightStation)CFStoDR(ContainerFreightStationtodoor)SEIBOFGDUFS285.2.4ContainerTransportation

AccordingtothecapacityneededFCLforgoodsoffullcontainerloadfreightbasedoncontainercapacityLCLforcargoinsmallquantity(lessthanacontainerload)Carriers’consolidatinggoodsofdifferentshipperstobedeliveredtothesamedestinationSEIBOFGDUFS295.2.4ContainerTransportation

ContainerfreightFCL:determinedmainlybythecapacityofthecontainertheplaceofshipmentDestination…LCL:similartothoseoftheoceanlinerserviceW,MorW/Mthedistanceofvoyage…surchargesandadditionalifapplicableSEIBOFGDUFS305.3TransportationdocumentsBilloflading(B/L)Definitionadocumentissuedbyanoceancarriertoashipperwithwhomthecarrierhasenteredintoacontractforthecarriageofgoods.

FunctionareceiptofcargoanevidenceofcontractofcarriageadocumenttitletothegoodsSEIBOFGDUFS315.3TransportationdocumentsContents

onthefaceInformationconcerningcontractedparties,fullparticularsofthecargo,termsofcarriagecontract…onthebackthegeneraltermsandconditionsSEIBOFGDUFS32TypesofBillofLadingaccordingtowhetherthegoodshavebeenloadedonboardthecarryingvesselshippedB/LIssuedaftergoodsshippedonboardthevesselIndicatingdateofshipmentandnameofthevessel

receivedforShipmentB/LGoodsbeingreceivedbutnotyetloadedDifficulttoanticipatedateofarrival,sonotfavorablebybuyerWaysofbecomingShippedB/LExchangeforaShippedB/LaftergoodsareshippedonboardWordingsuchas“GoodsshippedonboardS/SRedStaronMay10,2011”addedandsignedbythecarrierortheagentonthereceivedB/LSEIBOFGDUFS33TypesofBillofLadingaccordingtotheconditionoftheexteriorpackingofthereceivedcargocleanB/LProofthatgoodshavebeen“shippedinapparentgoodorderandcondition”or“cleanonboard”orthelikeFavoredbybuyersandbanksforfinancialsettlementuncleanB/LMarkedas“unclean”,“foul”etc.e.g..2casesmissing,3cartonswet,1casebroken,casesinadequatelypackedUsuallyunacceptabletobuyersandbanksSEIBOFGDUFS34TypesofBillofLadingaccordingtotheaddressoftheconsigneestraightB/LMadeouttoadesignatedconsigneeOnlythenamedconsigneeisentitledtothecargoNottransferableopenB/LNonameofadefiniteconsigneeTheconsigneeboxleftblankoropen,orbearingthewording“Tobearer”CanbetransferredwithoutendorsementHighrisk→unfavorableininternationaltradeSEIBOFGDUFS35TypesofBillofLadingOrderB/LMadeouttotheorderofanamedpersonNodefiniteconsignee,“Toorder”“Toorderoftheshipper”or“Toorderoftheconsignee”insteadNegotiableandtransferable，butneedendorsementSpecialendorsement:signatureoftheendorserandnameoftheendorseeBlankendorsement:signatureoftheendorserbutnonameoftheendorseeWidelyusedininternationaltradeSEIBOFGDUFS36TypesofBillofLadingaccordingtowhethertransshipmentisinvolvedintransitdirectB/Lportofshipment→portofdestinationPreferredbythebuyertransshipmentB/L

portofshipment→intermediateport→portofdestinationInvolvingadditionalcharges,longertimeandhigherrisksintransit,thereforeunfavorabletothebuyerAcceptableonlywhenthereisnodirectserviceSEIBOFGDUFS37TypesofBillofLadingaccordingtotheperplexityorsimplicityofthecontentlongformB/LdetailedshippingcontractclauseprintedonboththefaceandthebackShortformB/L

simplifiedandabbreviatednodetailedshippingcontractclauseesp.onthebacknotsuitableforevidenceofcontractofcarriageSEIBOFGDUFS38TypesofBillofLadingaccordingtothepaymentconditionoffreightfreightprepaidB/LIssuedonlyafterfreighthavingbeenpaidNormallysuitableforSalesContractsontradeterms(e.g.CFR/CIF)wherethesellerisobligedtoarrangecontractofcarriageandpaythefreight.freighttobecollectedB/L

Wordingsuchas“Freightpayableatdestination”or“Freighttocollectatdestination”isindicatedNormallysuitableforSalesContracts(e.g.FOB)wherecontractofcarriageisarrangedbytheselleronbehalfofthebuyerSEIBOFGDUFS39TypesofBillofLadingaccordingtothevalidityoriginalB/LValidonlyafterbeingsingedbytheshippingcompanyoritsagentShowing“Original”andthenumberofthesignedoriginalsNormallymadeoutinasetofthreeoriginalsAnevidenceshowingtheownershipofgoodsPresentedfortakingthedeliveryofthegoodsatdestination,oneisused,theothersbecomesvoidautomaticallyCopyB/LBearing“Copy”“Duplicate”or“Non-negotiable”NormallyonlyusedforreferenceorforrecordsmadeoutinseveraltobeafullsetoftogetherwiththeoriginalsSEIBOFGDUFS40TypesofBillofLadingStaleB/LpresentedlaterthanthelatestpresentationdatespecifiedintheL/Corpresentedlaterthanthegoods’arrivalatthedestinationUCP600:theB/Lshallbepresentedwithin21daysafterissuance,unlessotherwisestipulatedinthecreditnecessarytoaddaclausethata“StaleB/Lisacceptable”inthecontractforshortvoyagesSEIBOFGDUFS41TypesofBillofLadingAnti-datedB/Ltheshipmentdateshownonthebillbeingearlierthantheactualoneissuedattherequestoftheshippertomeetthetimeofshipmentstipulatedinthecreditfortheavoidanceofanon-paymentconstituteafraud

SEIBOFGDUFS42TypesofBillofLadingAdvancedB/LissuedbeforeactualloadingofthegoodsiscompletedorevenbeforethecommencementoftheactualloadingoperationissuedwhenthetimeofshipmentstipulatedintheL/Cisalmostduebuttheactualloadingofthegoodsisnotyetcompletedorthegoodsarenotreadyforshipment.issuedattherequestofthesellerfortheavoidanceofanon-paymentconstituteafraud

SEIBOFGDUFS43TypesofBillofLadingOndeckB/Lindicatingthatthegoodsarestowedandshippedondeckcarrierbeingresponsibleforthedamage&lossesusu.unacceptabletobuyerandbankunlessthecreditstipulatesotherwisespecialarrangementforinsuranceisneededifapplicableSEIBOFGDUFS445.3TransportationdocumentsOthertypesoftransportationdocuments

SeaWaybillAirWaybillConsignmentNote(RailWaybill)RoadConsignmentNoteMultimodalTransportationDocument(MTD)

SEIBOFGDUFS455.4Shipmentclauseinthesalescontracttimeofshipmentvs.timeofdeliveryforshipmentcontractstimeofshipment=timeofdeliveryforallarrivalcontractstimeofshipment≠timeofdeliverySEIBOFGDUFS465.4ShipmentclauseincontractStipulatingmethodsspecifyingafixedperiodoftimeoradeadlineShipmentistobemadeduringJanuary/February/March2011Shipmentnotlaterthan31stJuly,2011settingatimeperioduponreceiptofpaymentShipmentistobemadewithin30daysafterreceiptoftheL/C.TherelevantL/Cmustreachthesellernotlaterthan30thJune,2011.SEIBOFGDUFS475.4ShipmentclauseincontractIssuesconcerningtimeofshipmentSufficiencyintermsofavailabilityofgoodsavailabilityofshippingspacePaymentNormallyL/Cshouldarriveatleast15daysbeforethetimeofshipmenttoallowtimeforexaminingandmodifyingL/CFlexibility:avoid“shipmentonMay15th”Clarityavoidwordinglike“Immediateshipment”,“Promptshipment”,“Shipmentassoonaspossible”etc.SEIBOFGDUFS485.4ShipmentclauseincontractIssuesconcerningportofshipmentanddestination:closetotheoriginofthegoodsconsideringportfacilities,regulations,specifictransportationconditions,chargesandpossiblesanctions..definiteandspecificbeingawareofdifferentportsinthesamenameSEIBOFGDUFS495.4ShipmentclauseincontractPartialShipmentthecommoditiesunderacontractaretobeshippedinmorethanonelotReasonsforpartialshipmentthelackofmeansofconveyanceshippingspaceunavailablethelimitationofloadingorunloadingfacilitiesattheport