LINER TRADE CHARACTERISTICS


Liner conference

A group of two or more vessel operating carrier which provide international liner service for the carriage of cargo on a particular route or routes within specified geographical limits and which has an agreement whatever its nature within the framework of which they operate under uniform on common freight rate and any other agreed condition with respect to provisions of liner service.

Types of liner conferences

1. Open conferences –

  • an open conference particularly has to accept any shipping lines that applies for membership.
  • All conferences operate to and from US are open conference.

2. Closed conference

  • A closed conference admits new member at the discretion of existing members. Most of European based shipping conference are closed conference.

What are the common factors of liner conferences?

Following are the factors of liner conferences

  1. Uniform rate
  2. Control of supply of shipping space through regulation of trade. participation of each member such as sailing , tonnages and port restrictions.
  3. Loyality arrangement with shipper such as contractual discount service contracts.

Advantages of liner conference

  1. Provide stability of freight rates, service and schedule for shippers.
  2. No discrimination between shippers served by conference.
  3. This service creates confidence for both shipowner and shipper that the business is secure.
  4. The elimination of competition between members lead to service competition like upgradation of equipments of cargo handling

Disadvantages of liner conference

  1. The monopolistic character of conference is one of the main disadvantages.
  2. The very limited competition among the member.
  3. Effect of loyalty agreements.
  4. Elimination of outsiders.
  5. The major disadvantage of shipper view is level of freight rate.

How freight rate are fixed.

The following factors are taken into account for the formation of freight rate.

  1. The weight and the measurement of commodities being shipped.
  2. The value of the commodity.
  3. The distance of transfer of cargo.
  4. The efficiency of the port of origin and port of destination.
  5. Maintenance cost of the container
  6. Port charges including tag higher pilotage and port dues.etc
  7. Cargo handling expenses
  8. Various taxes.
  9. Cargo broker commission
  10. Nature of cargo
  11. Fuel and bunker cost and fuel efficiency of Ship.
  12. Canal dues
  13. Cargo availability at Port for call.
  14. Equipment repositioning cost
  15. Vessel frequency and speed of the vessel and transit time.
  16. Some value added services
  17. Other ports located in the same origin.

Nonconference liner

A nonconference line is a shipping line which operate on the route served by the liner conference but which is not a member of that conference.

Competition

  • nowadays liner trade companies do not necessarily have to be member of conference which until about two decades ago conference lines clearly dominated liner trade with a share of 90%.
  • non-conference shipowner individually or in cooperation with others increasingly managed to supply competition service of an equal quality, thereby eroding the share of traffic held by the conference line.
  • Due to a growing use of containers for the transport of general cargo and the introduction of large container vessel the show of this so-called outsider in liner trade today account for up to 50% depending on the route.
  • The number of liner conference is declining day by day.

MATe’S RECEIPT

This is a receipt signed by mate of a ship for cargo that is loaded on board. It should be Given to the mate before loading starts. It has all details about the cargo being shipped.

It is necessary that mates receipt shows the condition of cargo accurately so that if any claim against the ship arising at the discharge port it can be used .

Mate signs the receipt when the cargo covered by it is loaded. It is given to shipper as a receipt when the cargo is loaded in exchange with bill of lading.

BILL OF LADING

Bill of lading is given in exchange of mates receipt. It performs following functions-

  • It is a receipt  for the cargo signed by the master of agent on behalf of the ship owner.
  • It is a document of title to the cargo. It is a negotiable document and the person having this document is the owner of the cargo
  • It can be sold just by signing and transferring the BILL OF LADING in the name of the new buyer.
  • It is evidence of a contract between shipowner and shipper.
  • The information in the bill of lading includes – 
  • name and address of shipper.
  • destination port.
  • loading port.
  • description of cargo (weight, volume)
  • name of the vessel .
  • date of loading.
  • Back side of the document has terms and conditions of carriage.
  • The bill of lading contains an accurate description of the condition of cargo.
  • Bill of lading contains terms like – ”said to contain” ,  ”said to weight ”.
  • Shippers try to get a bill without any clauses, this is a fraudulent practice as shippers letter has no legal standing  and the shipowner will not be able to escape his liability for cargo claims. 

WHAT IS CONTAINERISATION

Containerization is a method in which a large amount of material is packed into a large standardized container.

It is a system of intermodal freight transport using international container having a standardized dimension.

By containerization, containers can be loaded , unloaded, stocked and transported effectively over long distances and transferred from one mode of transport to another.

in this system, the handling is completely mechanized all the handling stand with the help of grains for a special forklift lift truck.

due to coming of containerization now all containers are numbered and can be tracked using computerized system.

Containerization is major part of globalization because it reduces the cost of transport and even ease of transport.

Advantages of container service

  1. Faster handling of cargo reducing exposure to loss or damage
  2. Lower inventories required
  3. Now the ship and terminal can be more effectively used as time taken for loading and discharging is getting less
  4. Shortening of total cargo held in transit
  5. Lowest labour cost because it requires automated handling technique.
  6. Lower cost of packing, documentation, insurance and forwarding.
  7. It enables door to door movement of cargo instead of Port to Port movement.

CONSOLIDATED SHIPPING

Consolidated shipping is a method of shipping where consolidator combines individual lower than the container load shipments from various slippers into one full container shipment.

Use of consolidated shipping gives a shipper affordable rate.

when the full container shipment reaches its destination the shipment are then consolidated into the small lots of different slippers and then shipment is done.

Benefit of consolidated shipping.

Cost saving – Most of the time shipper will only use half or 2/3 of the container but have to pay for the full space with the coming of consolidated service he will not need to pay for entire space.

Reduced chance of damage – consolidator use a model that significantly reduce the handling of the product as cargo moves from shipper to consolidated centre to receiver with fewer touchpoints there is less opportunity of product to get damaged.

Speed to market – a consolidated strategy can help get your goods delivered where it need to be on your schedule

Challenges of consolidated shipping

  1. Finding a career – not all career sir willing to carry consolidated shipments because of the added complexity.
  2. Organising and planning- consolidated shipment require more organisation and planning then full shipmentent as a shipper you need to be aware of pricing method, dimensions ,timing and other specifications in order to make your shipment get where it need to go.
  3. Time- consolidated shipment can take more time because first full container is unloaded at the port and then each segment is divided before transport.

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