Showing posts from March, 2014

Lay Time in Shipping

In a voyage charter the time spent by the vessel at the port is, of particular importance to the owner because the freight is fixed only with reference to the quality of cargo carried and any undue detention during which he continues to incur fixed overhead charges such as depreciation, insurance, interest on invested capital, wages etc. would reduce his calculated profit.

An important clause in the charter party is therefore the one stipulating the maximum time to be allowed for the cargo loading and discharging operations, that is Lay Time.

The provisions of the charter party usually state that lay time is to commence at a specific time after notice of readiness has been given.

The cancelling date is applicable to the loading port only and is the absolute last day under the terms of the charter party on which the charterer is obliged to make use of the vessel.

Lay Time may be expressed as the maximum number of days allowed for loading and discharge or as loading/discharge rate like…

Time Charter in Shipping

Time Charter in Shipping is usually restored to when the charterer desires to operate a vessel for a period of time without undertaking either the financial commitments of ownership or responsibilities of navigation and management of the vessel.

Point of difference between time charter and voyage charter is the basis of calculating hire or freight . In the case of voyage charter freight is paid on the cargo carried and is directly proportionate to the volume of the cargo. In the case of time charter, the volume of cargo has no relation to the charter hire which is fixed on the basis of carrying capacity of the vessel and is directly proportionate to the period of charter .

Followings are the clauses contained in the time charter party usually related to :-

-----  Description of the vessel name, flag, ownership, class, gross and net registered tonnage, cargo capacity, indicated horse power and speed, bunker consumption, etc.

-----  Rate of cahrter hire and mode of payment.

-----  Char…

Bare Boat Charter

Bare Boat Charter is also known as Demise Charter. This is a type of contract under which the owner provides the service of vessel to the Charterer for a period of time in return for charter hire. For all practical purpose, charterer acts as the owner of the vessel during the period of charter but without undertaking the financial commitments of ownership.

The Bare Boat Charter party commonly used is the standard "Barecon" charter party. The charter party usually contains clauses relating to;

1)  Description of vessel - such as size, speed, fuel consumption, loading capacity etc. on which the performance will be depend.

2)  Survey to be carried out on delivery and re-delivery.

3)  Inventories of stores to be taken on delivery and re-delivery.

4)  Charter period - usually a provision of included giving the charterer the option of extending the validity of the charter by a specified period.

5)  Rate of charter hire and mode of payment. This is usually computed on the deadweig…

Decision Areas In Warehousing

There are two important decisions in Warehousing. Which are as follows :-

A)  Warehousing Location : The following factors influence the location of a warehouse:-

------  Transport facilities available.

------  Transportation cost of serving the market area.

------  Transportation cost of supply to the warehouse.

-----  Product price, customers' expected level of service and the resulting inventory carrying costs.

-----  Exise duties and other taxes assesed in the area.

-----  Labour supply and costs.

-----  Land and construction cost.

-----  Availability of power, water and communication.

-----  Climatic conditions.

-----  Attitude of residents and government towards the establishment of the warehouse.

-----  Potential for future expansion.

-----  Location of warehouse of competitors.

B)  Own versus lease versus use Public Warehouse :-

A warehouse may be privatly used or publically used . If a company makes goods and these are stored exclusively in some warehouse, then such wareho…

Paperless Trading

Paperless trading is done by Electronic Data Interchange (EDI). EDI is a very important Part of Modern Trade and Logistics.  Evolution of data elements that can be transmitted electronically to interchange trading information such as invoice etc. have been part of this development.

Advantage of Paperless Trading :-

------  EDI saves on clerical costs by avoiding re-entering of data. It allows timely and error free transaction information be passed from one computer to another.

-----  By improving information management and data exchange between organizations, EDI promotes introduction of new business strategies such as just in time manufacturing based on zero stock principle.

-----  Providing error free information to the right place at the right time; thus quicker response to orders, shortening of delivery cycle.

-----  Reducing stocks levels and thus increasing availability of working capital.

-----  Quicker and safer processing of invoice brings speedy payments with improving cash…

Traffic Flows

-----   Having determined the trade volumes , the immediate exercise would be estimate the traffic flows likely to be materialized at the dry port . This volume obviously would be a percentage of the total trade volumes and would be influenced by many factors having a direct or indirect bearing on such traffic .

-----   To begin with such commodities as crude oil , petroleum, oil and lubricants, dry bulk cargoes like minerals and ores, coal, cement, fertilizers and heavy structural including steel etc.  have to be discounted to the appropriate extent .

-----   The general principal to be followed should be to concentrate on containerisable commodities, and general cargo able to containerization .

-----   This fact is supported by ever increasing conversion of breakbulk general goods traffic into containerized transport and this being the future scenario, provisions of container handling facilities should suffice at the dry ports.

-----   After having obtained the volumes of container…

Multimodal Transport and Documentary Credit

-----   Science transport is an integral part of global trade , the documents issued by the Carrier while taking charge of the goods in a crucial document. The other documents include commercial invoice, packing list, certificate of origin, certificate of inspection etc.

-----   The Transport Document will depend on the mode of transport like sea, air , land and the agency issuing the document . The most commonly used Transport Document is called Bill of Lading with an endorsement "shipped on Board" signifying that the goods have been physically placed on board on the ship. In the case of Air Transport , the document is called Airway Bill issued by airlines or their authorized agents.

-----   Multimodal Transport implies transport by  two or more then two modes under a single document issued by MTO . This document has involved in response to advances in transport technology through containerization and emergence of non-vessel owning operators. Such operators have evolved t…

Implied Warranties in Marine Adventure

In order to make the underwriter liable under a contract of marine insurance or cargo insurance , there are certain preliminary essential conditions which must be complied with though not expressed in clear ords . These terms are implied warranties basically these are two :-

A)  -----  Implied warranties of seaworthiness :-

                It implies that the ship , by which the particular kind of cargo is transported , is fit to carry the particular cargo . For instance , if is frozen meat , then the refrigerating machinery, holds etc. must be in proper order . Actually for a proper cargo all supporting  machinery and others have to be in a good condition and seaworthy , but there are is not implied warranty that the goods are seaworthy .

b)  -----  Marin adventure in all respect to be lawful activity :-

              It implies that an insurance of unenforceable if it is respect to a marine adventure which has declared illegal according to the law of land where the contract was eff…

What Constitutes Material Circumstance

The term "Circumstance" includes any communication made or information received by the assured . Every circumstance is deemed to be material which would influence the judgment of an insurer in determining the risk of fixing the premium . The assured is under obligation to tell every material fact and the change in circumstance , if any , to the insurer . Further if the assured is asked a question whether a material fact or not , by the underwriter , he must answered it truly otherwise it may vitiate the policy . However , the following circumstances need not be disclosed :-

a)  -----  Any circumstance which diminishes the risk .

b)  -----  Any circumstance as to which information has been waived of by the insurer while taking the risk.

c)  -----  Any circumstance which is known or presumed to be known to the insurer in ordinary course of the business ;
    Matters presumed to be known by underwriter are the matters falling in the category of trade usages such as routes being a…

Customs Convention on Container

This Convention is administered by the Customs Co-operation Councils .

Its purpose is to facilitate the use of containers in international traffic . The contracting parties grant free temporary admission to containers subjected to re-exportation when they are ;

-----   Imported loaded to be re-exported empty or loaded .

-----   Imported empty to be re-exported loaded .

Containers have to be approved in compliance with technical conditions concerning construction and closing systems, including ;

-----   External marking with owner's name and address , tare and identification;

-----   They have to be capable to simple the effective sealing;

-----   It must not be possible to introduce or remove any goods without breaking the seal or leaving trace of tampering .

-----   There must be no space in which goods might be hidden;

-----   They must be readily accessible for Customs inspection; a certificate of approval must be displayed on the outside .

-----   Prescribed structural require…

Advantages of TIR to Customs

The advantages for customs authorities of States Contracting Parties to the TIR Convention are considerable.

In particular the following may be mentioned .

-----   The physical inspection of the load and transit country frontiers , expensive in terms of labor and facilities , can be replaced by inspection confined merely to the external condition of the container or the means of transport and the sales  affixed by competent authorities in the country of departure ;

-----   It is no longer necessary to organize a national guaranteeing system since an International guaranteeing system of lawful amount per TIR carnet and per country is provided by the TIR system .

-----   It eliminates the need for an expensive national system of documentary control .

Commercial Advantages :-

The advantages to commerce and to transport interests are equally clear . Goods may travel across national frontiers with a minimum of interference by Customs . By reducing delay in transit , it enables significant econ…

Outline of TIR Convention

To ensure the goods may travel with the minimum of interface en-route and yet offer safeguards to Customs administrations in all transit , the TIR system contains four basic requirements :-

-----   That goods should travel in secure vehicle or containers .

-----   That duties and taxes at risk should throughout the journey be covered by an internationally valid guarantee .

-----   That goods should be accompanied by an internationally accepted carnet taken into use in the country of departure and serving as control document in the countries of dispatch , transit and destination .

-----   That Customs control measures taken in the country of departure should be accepted by the countries of transit and destination .

The TIR convention provides that goods shall be carried in containers or in vehicle whose load compartment is so constructed that there shall be no access to the interior when secured by Customs seal and   that the result of any tempering will be clearly visible . The Conve…

Regulation and Control of Multimodal Transport

-----   The UNCTAD shall not affect or be incompatible with the application of any international convention or national law relating to the regulation and control of transport operations .

-----   The UNCTAD  shall not affect the right of each state to regulate and control at the national law level multimodal transport operations and multimodal transport operators , including the right to take measure relating to consultations, especially before the introduction of new technologies and services between multimodal transport operators , shippers , shipper's organizations and appropriate national authorities on terms and conditions of service ; licensing of multimodal transport operators ; participation in transport and all other steps in the national economy and commercial interest .

-----   The multimodal transport operator shall comply with the applicable law of the country in which he operates and with tyhe provisions of this convention .

-----   This article is intended particu…

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