What does 'CLEAN BILL OF LADING' mean ?

The carrier will issue a Clean Bill of Lading after thoroughly inspecting the packages for any damage, missing quantities or deviation in the quality.In a clean bill of lading, the carrier is declaring that the goods have been received in an appropriate condition, without any defects. Often, a clean bill of lading is issued to fulfill the requirements of letters of credit. Many purchasers rely on letters of credit to pay for imports and banks may refuse to supply the funds if a 'claused bill of lading' is presented. A 'claused , dirty ,unclean or foul ' bill of lading is issued when the received product is damaged or does not meet specifications.

In the present scenario, carriers will not (should not) issue Clean B/L as the carriers do not have any control on cargo stuffing. The stuffing happens in the customers premises or in a CFS and the responsibility of the liner starts only when the containers gated inside the port yard. The cargo and the quality / condition of it is purely the shippers' responsibility. In the B/L it would be shown as "Shippers' stow and count".

ICDs & CFS - What are the functions ?

Definition

 

A common user facility with public authority status and offering services for handling and temporary storage of import/export laden and empty containers carried under customs control . Clear goods for home use, warehousing, re-export, temporary storage for transit .

 

Why ICD / CFS ?

 Generally ports are located in the proximity of densely populated areas and are already mainly space pressed and plagued by congestion . ICD s & CFS are the most viable alternatives to reduce the impact of congestion on ports. Also helps to relieve local communities from the negative externalities generated by increasing  cargo flows to/from sea ports.

 

The extended gate concept .

 

      To resolve the complexities associated with terminal gate management and to reduce congestion in the proximity of the port, the extended gate concept has been proposed.The extended gateway would allow truck operators to move containers to a hinterland location, ideally making use of  road ,barge or rail connection. In this way the terminal would reduce congestion at its gates as well as reducing pressure on its yard capacity.

Distinction between an ICD/CFS

 

ICD is a consolidation node for containers, where as CFS aggregates individual consignments into containers (stuffing) .

 

Both are transit facilities, which offer services for containerization of break bulk cargo and vice-versa. 

 

An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports

 

Where as the CFS, is an off dock facility located near the  port which helps in decongesting the port by shifting cargo and Customs related activities outside the port area. Also, CFS function might be added to the ICD

   

 

FUNCTIONs OF ICDs/CFSs

The primary functions of ICD/CFS may be summed up as under:

 

•Receipt and dispatch/delivery of cargo.

•Stuffing and stripping (de-stuffing) of containers.

•Transit operations by rail/road to and from serving ports.

•Customs clearance.

•Consolidation and desegregation of LCL cargo.

•Temporary storage of cargo and containers.

•Reworking of containers.

•Maintenance and repair of container units.

  

The operations of the ICDs/CFSs revolve around the following centers of activity

i) Rail Siding (in case of a rail based terminal)

• The place where container trains are received, dispatched and handled in a terminal. Similarly, the containers are loaded on and unloaded from rail wagons at the siding through overhead cranes and / or other lifting equipments.

ii) Container Yard

•Container yard occupies the largest area in the ICD.CFS. It is stacking area were the export containers are aggregated prior to dispatch to port, import containers are stored till Customs clearance and where empties await onward movement. Likewise, some stacking areas are earmarked for keeping special containers such as refrigerated, hazardous, overweight/over-length, etc.

 

Warehouse

•A covered space/shed where export cargo is received and import cargo stored/delivered; containers are stuffed/stripped or reworked; LCL exports are consolidated and import LCLs are unpacked; and cargo is physically examined by Customs. Export and import consignments are generally handled either at separate areas in a warehouse or in different nominated warehouses/sheds.

iv) Gate Complex

•The gate complex regulates the entry and exist of road vehicles carrying cargo and containers through the terminal. It is place where documentation, security and container inspection procedures are undertaken.

 

BENEFITS OF ICDs/CFSs

- Concentration points for long distance cargoes and its unitisation.

- Service as a transit facility.

- Customs clearance facility available near the centres of production and consumption

-Reduced level of demurrage and pilferage

-No Customs required at gateway ports.

-Issuance of through bill of lading by shipping lines, hereby resuming full liability of shipments.

-Reduced overall level of empty container movement.

-Competitive transport cost.

-Reduced inventory cost.

-Increased trade flows.

 

Factors Influence Development of ICDs

¢To be developed where there is a market potential.

¢Requires public support

¢Requires support of local entrepreneur or public official to ensure momentum in the development 

¢The attitude and overall strategy of the local and national administration is also crucial

¢The efficiency of the rail/road transport services is critical 

¢Need to have a clear ownership structure and transparent organisation

 

Main Features of ICD

 

¢Is an intermodal terminal which is situated inland.

¢Has rail / road connection to the gateway port with scheduled and Reliable to/from service

¢Offer all services available at sea ports such as storage / maintenance of containers, customs clearance, forwarding facility , road/rail haulage

 

Benefits of ICD / CFS

¢One – stop – shop concept

¢Provide seamless seaport inland intermodal access

¢Reduce port congestion and thus save cost

¢Helps to penetrate interior market to widen the service access of port

¢Add competitive advantage to the port

¢Offers service to the EXIM trade at par with the seaport facilities

¢Helps to reduce total cost in the supply chain.

What is the difference between a Liner & Tramp services ?

Who is a Liner ?

A shipping company who transports goods in containers by sea , with a fixed route and schedule (timetable) , and with a high level og cargo safety is called a Liner. This is similar to an air line or bus line(service), on a route with fixed stoppings as per predetermined timetable. These services will continue to run irrespective of whether the airoplane/bus is full or empty as they have to strictly keep their timings and route. Similarly cargo liners too have to stick to the fixed schedule and route irrespective of whether the vessel is full or not.

What is Tramp service ?

The dry bulk and liquid cargoes are generally refered as 'Tramp Trades' and the vessels used to transport these cargoes are called 'Tramp Ships' . Tramp services will not have a fixed route . The ships goes from one port to other depending up on the cargo availability. Tramp services could be compared to a taxi service which is hired to go from one place to another for a single travel. After completing that trip, next employment must be seeked.

What is chartering ?

Chartering is a term used in shipping for hiring a ship. Depending on the type of ship and the type of charter, normally a standard contract form called a charter party is used to record the exact rate, duration and terms agreed between the shipowner and the charterer. There are various types of chartering , they are

1. A voyage charter is the hiring of a vessel and crew for a voyage between a load port and

a discharge port.

2. A time charter is the hiring of a vessel for a specific period of time;
3. A bareboat charter is an arrangement for the hiring of a vessel whereby no administration

or technical maintenance is included as part of the agreement.

4. A demise charter shifts the control and possession of the vessel; the charterer takes full

control of the vessel along with the legal and financial responsibility for it.

P & I Clubs

What is P&I Insurance?

P&I stands for Protection and Indemnity. P&I is insurance in respect of third party liabilities and expenses arising from owning ships or operating ships as principals.

What is a Mutual or Club?

An insurance mutual, a Club, provides collective self insurance to its Members. The membership is comprised of a common interest group who wish to pool their risks together in order to obtain "at cost" insurance cover.The UK P&I Club, as a "not for profit" mutual, is therefore owned by its insureds. As it has no shares to issue, it does not need to make a profit or pay dividends.

The UK P&I Club

The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited - generally known as the UK P&I Club - is one of the oldest P&I Clubs. It is also the largest mutual marine protection and indemnity organisation in the world. The UK P&I Club insures nearly one fifth of the world’s total ships .

As a mutual association, the UK P&I Club has no outside shareholders and no financial links with other organisations. It exists solely for the benefit of its Members. As a mutual insurance association, the UK P&I Club is able to offer superior service, attention and coverage to its assureds.

The UK P&I Club is directed by the members themselves. Overall control of the Club lies with the Directors, who are elected by the Clubs' Members from amongst themselves. The Directors normally meet four times a year to formulate policy on calls, the scope of cover, finance and current industry issues affecting the P&I world. They resolve specific claims which may not fall clearly within the cover.

In almost all ports of the world, on-the-spot help and local expertise is always available to Members, and to the masters of their ships, from the Club's correspondents.

The Advantages of Mutuals over Fixed Premium Insurers

The P&I Clubs provide at cost insurance without profit. Fixed premium insurers aim to make a profit for their shareholders.

P&I Clubs have existed continuously for more than 140 years. Fixed premium insurers have no convincing track record of commitment to P&I insurance.

P&I Clubs provide the most comprehensive cover available including the right of the board to cover "omnibus" claims.

Importance of Marine Container Logistics strategies

Since the beginning of containerization , the shipping industry has shown enviable developments in increased productivity, vessel capacity, speed ,safety , reduction in service time and cost. Despite these achieved efficiencies, marine container logistics has been suffering from severe trade imbalances between the major trading regions..

Projections indicate that the container fleet size as well as the vessel size will continue to increase as the order book of all major carriers are quite big , though the present economy slow down will delay the release of new builds further. This is a clear indication that the volume of empty container need to be handled in future will increase considerably.

The problem of trade imbalances and repositioning of empty container will continue to be a serious transportation logistics issue. As per the available stats regarding strong trade imbalance between Trans pacific , Trans Atlantic and Asia Europe trades , the exports from Asia , the world’s factory, to America and Europe are 15 % and 9% respectively. Whereas the imports from the respective regions to Asia is 5% and 3.5% only.

India’s container handling capacity for international and domestic traffic is expected to reach 21 million in 2014, up from 9.1 million in 2008 according to Frost & Sullivan analyst’s report “ Strategic Assessment of Containerization Trends in India”. Our container trade registered an impressive double digit growth of 23% during the year 2007-08. With Indian trade growing 11-12% per annum, the insufficient port and other related infrastructures, will result in increased port congestions at major ports and will adversely affect container shipping industry.

Similar to the international container shipping industry, Indian ports too face serious trade imbalances and equipment storage, repositioning issues. The problem of import , export imbalance is very high in southern ports of Cochin , Mangalore and Tuticorin due to seasonal cashew imports from Africa. The east coast ports, Chennai and Kolkata too have similar issues.

To minimize the port / depot congestion and the equipment dwell time , carriers are forced to make logistic vessel calls to evacuate the excess equipments. Due to insufficient port / depot infrastructure and poor logistics management strategies of the carriers, the whole process of evacuation used to be cumbersome , time consuming and expensive. This situation demands for an empty container management strategy which rationalizes the repositioning, storage and maintenance of empty containers in major importing regions.

India’s productivity growth is very strong and this is surely an indication of the robust growth of container shipping industry as well. In the present economic scenario, India is emerging into the spot light due to the stable economy and steady growth rate. Also the upcoming Vallarpadam International Transhipment Terminal and the proposed Vizhinjam terminal is expected to position India as a transshipment hub .To maintain the present momentum and ensure the future growth, the container shipping industry must take measures to strengthen the overall logistics chain.

Switch Bill of Lading

Switch B/L is the new set of b/ls issued upon customer’s request in exchange of the first set of original bill. This is also called ” the traders’ second set”. Switch b/ls are intended to keep the identity of the supplier from the sub purchaser and thus to prevent future direct dealing between the supplier and the sub purchaser. Shipper, Consignee and Notify are the information that are most commonly requested to be changed by the traders. Due care and consideration must be exercised when issuing such bills of lading because of inherent exposure to fraud/conversion of factual data . Furthermore, the agent at POD must confirm that amendment may be performed without fines. If amendment is done too late, cargo declaration may already have been done or even cargo may already been discharged, leading to fines / costs for amendments. These fines/costs are to be borne by the party requesting the amendment.

HIGH SEA SALE.

High Sea sales (HSS) is a sale carried out by the actual consignee (ie, the consignee shown in the Bill of Lading) to another buyer while the goods are yet on high seas or after their dispatch from the port of loading (POL) and before their arrival at the port of discharge (POD). HSS contract/agreement should be signed after dispatch of goods from origin & prior to their arrival at destination. The agreement should be on stamp paper. The word ‘Sea’ appearing in HSS should not be taken by it’s literal meaning. As long as the sale is formalized after dispatch from port of origin and before arrival at the first port of discharge at destination, such sale is considered as HSS.

On concluding the HSS agreement, the B/L should be endorsed in favour of the new buyer. If the seller does not mind disclosing original import values to HSS buyer, in such case it is better from custom clearance point of view for the seller to endorse the B/L, invoice , packing list in favour of the HSS buyer. The endorsement should read "Transferred on High Sea Sales basis to M/S -------- for a sales consideration of Rupees --------". Such endorsement should be stamped and signed by the HSS seller.

Sometime HSS buyers buy goods after their arrival. Such sale are not HSS. The stamp paper on which the HSS agreement is executed must not bear the stamp paper purchase date as being post cargo arrival date. Such a case can easily be detected by customs as being a post arrival sale.

The IGM should be filed by the carrier in the name of the HSS buyer. If not Import General Manifest (IGM) should get amended for which Customs will impose a penalty.

Same goods can be sold more than once on high seas. In such cases, HSS agreement should give indication of previous title transfers. The last HSS buyer should also obtain copies of previous HSS agreement as such documents may be called upon by the customs. HSS is considered as a sale carried out outside the territorial jurisdiction of India. Accordingly, no sales tax is levied in respect of HSS. The title of goods transfers to HSS buyer prior to entry of goods in territorial jurisdiction of India.