INTRODUCTION
With the world’s economy growing at a rapid rate and global transportation on the rise; there is a need to understand the requirements and regulations for this mode of transport. The difference between the shipping agents and brokers is important as one can see their different rolls and how their relationships are important to the structure of ocean shipping in global logistics. Free Alongside Shipping (FAS) and its obligations to the seller and buyer is discussed as it is only applicable to sea or inland waterway transport requiring the seller to deliver goods to a named port alongside a vessel designated by the buyer.
DISCUSSION:
A. Structure of ocean shipping in global logistics
1- Liner service
Liner service has the following
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• Sale & Purchase brokers represent one party in a deal to buy or sell new or secondhand tonnage.
C. Free Alongside Ship (FAS)
Incoterms are one of most important features of international trade, but sadly, one of the most misunderstood: they feature regularly in the lives of a wide range of people involved in exporting or importing (sales, customer service, purchasing, accounts, freight and shipping personnel). Using Incoterms properly as part of a sales contract provides clarity for both parties, gives certainty over costs, and reduces the risk of disputes and disagreements with clients or suppliers.
One of the most frequently used incoterms are FAS (Free Alongside Ship). Free Alongside Ship ("Cost and Freight") means that the seller delivers the goods on board the vessel or procures the goods already so delivered. It is a trade term requiring the seller to deliver goods to a named port alongside a vessel designated by the buyer. "Alongside" means that the goods are within reach of a ship's lifting tackle.
When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a
The National Motor Freight Classification (NMFC), as determined by the Surface Transportation Board (STB), is the tariff system that has classification and description of commodities based on four main characteristics. These are density of the commodity, liability, handling and storability of the commodity. Carrier companies negotiate the rate and terms of transporting the commodities on the basis of these four characteristics. It is important to mention that product density is the dominant factor that determines use of carrier’s vehicle and cost per hundredweight. Higher product density results in lower cost per hundredweight but higher capability of hauling product weight. A lower density of commodity results in high cost per hundredweight and lower capability of weight haulage.
The organization is able to build a barrier to new entrants in parcel industry. It is very expensive to set up the services that are equal to the existing organizations. There is high fixed cost associated with establishing the required international transport network. This includes ground transportation vehicles, depots, plants and a retail
The shipping department is to encourage the overseas transportation trade. For example, the praying activities will held by the specialized shipping department and local officials to wish the safe of shipping.
soon have several ships in port, agrees to part with a pound of flesh if the
A general ship or a common carrier is a vessel that the owner or operator willing carries goods for more than one person. There are three different types of common carriers. First is a conference line which is an association of seagoing carriers who have joined together to offer common freight rates. Those that chose to ship all or a large share of their cargo through this process receives a discounted rate. Second is an independent line, which is when the vessel has their own rate schedules. Generally, independent lines have a lower rate than that of the conference discounted price. Finally the third aspect of common carrier is tramp vessels which are similar to independent lines by the fact that they have their own rate schedule, but they differ from both in that they don’t operate on established schedules.
Free trade can be defined as the free access to the market by individuals without any restriction or any trade barriers that can obstruct the trade process such as taxes, tariffs and import quotas. Free trade in its own way unites and brings people together. Most individuals love the concept of free trade because it gives them the ability to move freely and interact with the market. The whole idea of free trade is that it lowers the price of goods and services by promoting competition. Domestic producers will no longer be able to rely on government law and other forms of assistance, including quotas, which essentially force citizens to buy from them.
In international trade, almost all documentary credits are expressed to be subject to the UCP published by the International Chamber of Commence. The reason for that is the long periods during which the cargo is in transportation and the location of the seller and the buyer in different countries, problems arose when it comes to payment, since a simultaneous exchange of goods for money is not possible. One of the most prevalent payment tools found in international trade is the Letter of Credit (L/C), also known as Documentary Credit (DC). In Harbottle v National Westminster Bank Ltd case, Judge Kerr LJ described its importance as “the life blood of international commerce”. Furthermore, L/Cs are particularly significant in cross-border transactions, as it is served as a payment method in occasions where the seller and the overseas buyer have no or limited history of cooperation. Therefore, they do not trust each other, as they are not sure of what to expect. Although L/Cs are an essential vehicle for companies to enlarge and grow internationally, international traders often experience difficulties to achieve the high documentary compliance required by many banks. Although the UCP is of almost universal application, it does not have the force of law in the UK, and has to be incorporated into the contract, which forms the basis of the credit. In the present work, a considerable note will be based upon two main issues. Firstly, on how do the Uniform Customs and Practice for Documentary Credits (UCP) 600 deal with the significance in letters of credit issued for international sale contracts with a partial reference to the autonomy principle through Article 5 and secondly, the effects of the UCP600’s attitude which results with t...
A modern seaport performs a lot of functions, it is a place where not only goods are in transit but they are also sorted, manufactured and distributed. It is a multi-dimensional system; therefore it needs to be integrated within logistic chains to perform effectively (Hall, Pete...
CIF stands for Cost, Insurance and freight. In this type of contracts freight and insurance cost is included in the price. The initials, C.I.F indicate that the price is to include cost, insurance and freight . The seller of the goods is bound to perform six things. First, to make out an invoice of the goods sold. Secondly, to ship at the port of shipment goods of the contract description. Third, to procure a contract of affreightment under which the goods will be delivered at thedestination contemplated by the contract. Fourth, to arrange for an insurance upon the terms current in the trade which will be available for the benefit of the buyer. Fifthly, with all reasonable despatch to send forward and tender to the buyer three ‘shipping documents', namely, the invoice, bill of lading and policy of insurance, delivery of which to the buyer is symbolical of delivery of the goods purchased.
Promotion of seafarers rights coupled with international co-operation is likely to boost international trade and competition among ship owners. Commitment from governments and ship owners is critical in ensuring effective and successful implementation of the convention in order to achieve its goals. It was anticipated that as the MLC 2006 was being ratified by countries, the conventions which were in existence would be slowly phased out to pave way for the implementation of the new convention.
It states that the seller of the goods is treated as an unpaid seller when the following situations are satisfied;
According to OECD (2005), World Bank estimated average time required for custom clearance through sea cargo in Africa is 10.1 days and only 2.1 days in OECD which shows the difference between trade efficiency of Africa and trade efficiency of OECD. According to OECD (2005), custom clearance time can be reduced by increasing the cooperation among the international border agencies and custom authorities of trading countries.
One other peculiarity of a consecutive voyage charter is the time factor as it causes certain structural differences when it comes to costs and income. These contracts will contain bunker clauses or other clauses concerning cost
By Article I (e): "'Carriage of goods' covers the period from the time when the goods are loaded on to the time when they are discharged from the ship", and by Article II: "... Under every contract of carriage of goods by sea the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth".
According to iRami (2012) stated that the shipping plays an important role in world trade which is the backbone of the world economy. Recently, without these boats and vessels provide transportation services, many countries will be unable to participate in world trade and will not be as prosperous. From centuries past, the sea has always been important to all country at the world which as an important factor of economic development of every maritime country. The maritime sector contributes significantly to the economic development. Underling this is the fact that 95% of the country international trade is carried in whole or in part by maritime transport. An efficiency of the transport that will improve the liberalization of the economy, the