A convergence zone is an area where shipping lanes converge and then spread out. Because these are relatively narrow areas on a sea route through which many ships pass, the zones become important as shown below: Lots of ships passing an area means The area becomes economically important The area becomes strategically important The area…
The Concept of ‘dumping’ cheap Goods onto World Markets Some companies (or even countries) may wish to get rid of products that were meant to go to a particular country but were rejected because of quality or for other reasons. To sell the rejected product, a company (or country) may sell it elsewhere at a…
This section assumes that you have a knowledge of Ship Chartering as covered in the Grade 11 modules. In most voyage charter parties, loading and discharge times are stipulated (e.g. 72 hours or 38 hours, etc.). This time period is called laytime. If the cargowork takes more time than the time stipulated, demurrage is paid…
On her voyage from Brisbane (Australia) to Mombasa (Kenya), the bulker Sea Master (value $36 million) hits a drifting container that makes a small hole below the waterline in number one hold that becomes flooded. She diverts to Darwin (Australia) where repairs are carried out. The value of the cargo is $100 per ton.…
To replace a ship or to repair damage to a ship can cost a lot of money, even millions of dollars. Similarly, to replace damaged or lost cargo (which in some cases can be of higher value than the ship) can also be very expensive, while the consequences of a serious accident (e.g. an oil…
A South African mining company wants to export 900 000 tons of coal to China via Richards Bay. In negotiations with the Chinese importer, the mining company agrees to instruct the shipbroker to arrange that the coal is shipped FOB. Who is the shipper – the mining company or the Chinese importer? Who is the consignee…
What are Incoterms? Incoterms were drawn up by the International Chamber of Commerce. They are internationally recognised for all foreign cargo shipments. An incoterm refers to the following Costs: It identifies who is responsible for the expenses (shipping costs, insurance, customs duties, storage, etc) involved in a shipment from a given point in the shipment’s…
To standardise international shipping procedures, various systems have been introduced on a global scale. In the shipping context, the term intermodal freight transport applies to the movement of containers via a number of types of transportation (train, ship, and/or truck), without any handling of the freight itself when changing from one type of transport to another. The container is…
These are non-governmental organisations that draw up and maintain the standards for the construction and continued seaworthiness of vessels, including offshore structures such as oil rigs and platforms. Some of the main classification societies are as follows (The abbreviation that appears as part of a ship’s loadline and the country in which the classification society…
All ships have to be registered in a country of the owner’s choice. Many owners choose to register their ships in their own country (e.g. a German shipowner will register his ship in Germany or a Japanese shipowner will register his ship in Japan.) However, for several reasons, a shipowner may register his ship in…
