Marketing Studies & Consultancy Division (MSCD)

Export Consultancy Unit (ECU)
______________________________________________________________

Export Study

(Part-A)
Ocean Transportation Study
(Up-Date)

Rabi-I, 1425H (April, 2004G)

Ocean Transportation Part (A)

Table of ContentsE

1
2

Introduction..........................................................................................................................1
The ports of KSA ............................................................................................................... 2
2.1
Jeddah Islamic Port................................................................................................... 3
2.2 King Abdul Aziz Port, Dammam ............................................................................... 3
2.3 Yanbu Commercial Port.............................................................................................. 3
2.4 Jubail Commercial Port.............................................................................................. 4
2.5 Jizan Port ..................................................................................................................... 4
2.6 Dhiba Sea Port ............................................................................................................ 4
2.7 King Abdullah Economic City .................................................................................... 5
3 Statistics of exports through Saudi Ports .................................................................. 5
4 Type of ships ....................................................................................................................... 7
4.1
Dry cargo ship ............................................................................................................. 7
4.1.1 General-cargo ships.................................................................................................... 7
4.1.2 Reefer ships................................................................................................................. 8
4.1.3 Container ships ............................................................................................................ 8
4.1.4 Barge-carrying ships (lighter ships)....................................................................... 9
4.1.5 Ro-Ro ships................................................................................................................... 9
4.1.6 Bulk-carriers (bulkers: .............................................................................................. 9
4.2 Liquid cargo ships ..................................................................................................... 10
5 Type of containers ........................................................................................................... 10
5.1
Standard dry cargo containers (dc) 20' & 40'.................................................. 10

5.2 HI-Cube dry cargo containers 40' x 8' x 9'6. ...................................................11

5.3 Open-top containers 20 & 40 ................................................................................11
5.4
Reefer (Refrigerated Containers 20' & 40'. .................................................... 12
5.5 Flat rack containers 20 & 40................................................................................ 13
5.6 Tank Containers: ....................................................................................................... 14
6 Types of the shipping Routes ........................................................................................ 14
7 The required Forwarding documents .......................................................................... 15
8 Charges of Saudi Ports collected from the consignee/shipper ............................ 15
8.1
Charges for port services for cargo exported: ................................................ 16
8.2 charges of bulk cargo .............................................................................................. 16
8.3 For Containers, flats & other types of trailers (including export charge)16
8.4 Additional service charges for container & trailers:....................................... 17
8.5 Storage charges: ...................................................................................................... 17
8.6 Additional services:.................................................................................................. 18
9 Insurance............................................................................................................................ 18
9.1
Insurance Companies working in KSA .................................................................. 18
9.2 Insurance Fees.......................................................................................................... 19
10 Freight rates .....................................................................................................................20
10.1 Cost Structure ..........................................................................................................20
10.2 Sample of Freight rates : ....................................................................................... 21
11 Major Global shipping companies: .................................................................................23
12 Conclusion ...........................................................................................................................23

Introduction

Export is one of the influenced factors that can increase the economic growth rate.
Clearly, exporting play a major role in the economic of the country. This is because:

Exports increase the hard currency reserves of the country.

It optimizes the unutilized production capacities in the country.
It activates services sector in the country such as transportation, banking or
professional consultations.
It develops local industry by motivating local producers to update their
production, management and marketing system.

Similarly, KSA is trying to diversify revenue resources by encouraging local

manufactures to enter overseas markets and increase Saudi Non-Oil exports.
Moreover, Saudi Non-Oil exports should establish a foothold in new markets for
specific reasons, which include the following:

To construct marketing facilities.

To contact directly with customers and start adaptation process.
To deliberate the nature of competition and determine the kind of competition
in which if it depends on price, access, or promotion efforts.

Exporting process has a number of critical parts that should be planned well to avoid
unpredictable events, however, the transportation aspect is the corner stone of
exporting process and can be considered by some potential exporters as one of the
complicated part on the exports procedures and cost. Clearly, the transportation cost
has a great impact on the profitability of the export transaction if the exporter
doesnt deliberate the impact of added cost, transportation fees, and the competitors
prices in such targeted market.
This report aims to give an up-date of our previous study in Ocean Transportation
which includes estimating of the ocean freight and illustrating of procedures that
have to be done by exporters when they want to transport their shipments by sea.
Additionally, this up-date study has also focused in other important elements which
include the following:

Insurance
Freight rates to important ports in the world.

It should be noted that although there is some information that does not change,
however, an effort have been paid to reflect the updated information in each topic in

the study .To accomplish the objectives of this report, we obtained information from
various sources, which include the following sources.

Direct contacts with Government organizations e.g. Ministry of transportation.

Direct interviews with selected transportation companies.
Searches of information over various Internet websites on Ocean
transportation.

The Ports of KSA

The Kingdom of Saudi Arabia is the worlds main oil exporting country. It has the
largest and most diversified economy in the Middle East with industrial exports that
are internationally oriented. The Kingdom, therefore, has to have efficient, fully
equipped ports that are capable of doing the job as it should be done. The Saudi ports
used to be managed by different bodies with
different rules, regulations and tariffs, for each
port.
In 1976, the Saudi Government decided to create
an independent Ports Authority, which was
directly linked to the Prime Minister. The aim
was to improve and develop all Saudi Ports and to
run them in the most advanced and effective
ways, in a unified manner. In its first six months;
The Ports Authority was able to eliminate the
problem of congestion. Later the Ports Authority proceeded to achieve its goal: to reorganize ports and to enhance their efficiency. Now the Saudi Ports have become
major contributors to Saudi economy and a link between the national and international
economy.
The capacity of the Saudi ports has increased from 31 berths to 183 mechanized and
organized berths. Also Operating costs were reduced from U.S. $40/ton to less than
U.S. $1.6/ton. Moreover 3.7 million containers are handled annually and 12,000 ships
visit Saudi ports annually (one ship every 30 minutes).
The Ports Authority supervises the management and operation of the eight main
seaports located on the Eastern and Western coasts of Saudi Arabia with a total of
183 Berths of which 137 in the six commercial ports and the other 46 are in the two
industrial ports. These berths constitute the biggest port network in the Middle East
.Moreover the KSA total trade activity (imports and exports) showed that about 95%

the trade activities pass through the Kingdoms sea ports. 70% of the cargos handled
are exports. Generally, there are 8 ports throughout Eastern and Western coasts.
Two of them are industrial ports which are specialized to serve the factories in the
both industrial cities Jubail and Yanbu. Other ports are commercial ports that are
illustrated in the map above. In 2005, the government declared that a new sea port
will be built within The King Abdullah Economic. In the following section a brief
summary would be given about each port especially commercial ports. It should be
noted that there is no new information in the regard of Saudi ports, however, an
effort have been paid to reflect the updated information from ports authority.

2.1 Jeddah Islamic Port

Jeddah Islamic Port has an excellent location in the middle
for the international shipping route between east and
west. The port lies on the Red Sea coast at latitude 28
21' north and longitude 39 10' east. It is the kingdoms
principal port serving the holy cities of Makkah and
Madinah. The port serves the commercial centers through
which 59% of the kingdoms imports by sea are being
handled. The importance of Jeddah Islamic Port increased
and reached its maximum limit when the Kingdom was developing into a modern and
civilized country.

2.2

King Abdul Aziz Port, Dammam

King Abdul Aziz Port, Dammam, is the principal port of

Saudi Arabia in the Gulf and is located approximately midway along the Eastern Coast at: Latitude 26 30 Longitude
50 12 King Abdul Aziz Port is the main gateway through
which cargoes from all over the world enter the Eastern
and Central Provinces of the Kingdom. It is strategically
placed to service the requirements of the oil industry, the continuous development of
Riyadh, the capital, and the major provincial cities in
the Eastern and Central Provinces.

2.3

Yanbu Commercial Port

In Yanbu there are two ports. The first one is

industrial port and other one is commercial port. Yanbu
Industrial Port specializes to serve factories in the

industrial city. Here the writer will concentrate on commercial port. Yanbu Commercial
Port is located on the East coast of Red Sea approximately 460 nautical miles South
of Suez Canal and 168 nautical miles North-West of Jeddah. It is a natural harbour
sheltered by the mainland to the North and East and by coral reefs to the South and
South-East. It is reached by a mile long channel.

2.4

Jubail Commercial Port

In Jubail there are two ports. The first one is

industrial port and other one is commercial port. Yanbu
Industrial Port specializes to serve factories in the
industrial city. Jubail Commercial Port lies on Arabian
Gulf in the Eastern Province of the Kingdom of Saudi
Arabia. It is 80kg north of Dammam. Moreover, Jubail
port is considered one of the biggest construction
projects in the Kingdom, it has the most modern cargo
handling, safety and fire fighting equipment. The port is
on an area 50 km2 in the East and West of the Port
there is a breakwater berth of ten kilometers. The economic importance of the Jubail
Commercial Port is a vital economic utility because of its effective role in export and
import policy in Eastern Region of Saudi Arabia. This is because that it is near to
production centres, which could lead to low cost of material, coming to K.S.A. and
material export to world markets. This Port has alleviated the burden of King
Abdulaziz Port in Dammam with regard import & export.

2.5 Jizan Port

Jizan Port is ideally situated on the southern Red Sea
coast and is very close to the main east/west sea-trade
routes to Europe, the Far East and Arabian Gulf. Jizan
Port is a modern, well-equipped, deep-water port with a
highly skilled work force.

2.6 Dhiba Sea Port

Port of Dhiba is strategically located at the north end of
the Red Sea coast of Saudi Arabia at Latitude 27 33' N,
Longitude 35 31' E. It is a natural harbour protected on all
three sides by hills. This port has vast hinterland on the
inland frontier up to the Northeast coast of Saudi Arabia
and extends up to the Mediterranean Sea on the maritime
4

front. It is nearest Saudis port to the Suez Canal and other Egyptian ports.

2.7 King Abdullah Economic City

As it is released, the King Abdullah Economic City will contain a huge sea ports. This
port is planned to be a hub port, which links between the
continents of Europe, Asia and Africa. The port will be
spread across 2.5 millions square meters and equipped by
sophisticated and advanced craning system, as well as
developed GIS and GPS data management network. The total
handled capacity of the port is estimated to be millions
TEUs annually.

Statistics of Exports Through Saudi Ports

The tables below show statistics of major Saudi ports during last four years. Table 1
illustrates statistics of exports on the basis of cargo type while Table 2 illustrates
commodities exported (loaded) details for years between 2002 to 2005. Finally, Table
3 shows number of containers for both import and export during the last four years.
Table 1 Shipments Statistics of exports (Tons) through Saudi Ports
2002
Ton
Bulk Cargo(liquid)* 50,115,643
Growth %
Bulk Cargo(solid)
8,846,525
Growth %
Ro-Ro& Vehicles
113,662
Growth %
Containers (in tons) 7,538,629
Growth %
General Cargo
1,009,066
Growth %
livestock
1,029
Growth %
Total
67,624,554
Growth Rate
0
*Bulk cargo excluding crude oil.
Cargo Type

%
74%
13%
0.20%
11%
1%
0.02%

100%

2003
Ton
53,939,805
8%
6,277,602
-29%
115,647
2%
9,966,029
32%
972,827
-4%
0
-100%
71,271,910
5%

%
76%
9%
0.0%
14%
1%
0.0%

100%

2004
2005
Ton
%
Ton
56,945,484
74%
58,009,331
6%
2%
5,122,980
7%
5,676,193
-18%
11%
114,606
0.0%
177,173
-1%
55%
13,577,157
18%
15,935,614
36%
17%
735,465
1%
842,424
-24%
15%
190
0.0%
0
190%
-100%
76,495,882
100%
80,640,735
7%
5%
Source: Ports Authority

%
72%
7%
0.0%
20%
1%
0.0%

100%

The table above categorize sea shipments based on type of cargo. The percentages of
growth in each type and in 4 years have been illustrated. It is worth to mention that,
in this up-date study, the statistics of bulk cargo (Liquid) is included, unlike the
pervious one.
As can be seen, there is a slight growth in the total exports for the years between
2002 and 2005. The average annual growth is roughly 4.6% p.a. In the same context
the bulk cargo (liquid) has the largest proportion of Saudi export by around 72% of
total exports. This is due to the fact that Saudi Arabia is one of the biggest
5

exporters of liquid petrochemicals such as Methanol and Polyethylene. In the case of

containerized shipments, there is a growth by around 28% annually and it represents
around 20% of the total sea export in 2005. Regarding Bulk Cargo (solid), the volume
of shipments increased slightly by around 17%in 2005.
Table 2 Statistics of Non-Oil exports through Saudi Ports on the basis of commodity (tons)
Commodity
Refined Products
Growth %
Liquefied Gas
Growth %
Petrochemicals
Growth %
Food & Foodstuffs
Growth %
Industrial Products
Growth %
Recycling Material
Growth %
Empty Containers
Growth %
Vehicles
Growth %
Other Cargo Loaded
Growth %
Total Cargo Loaded
Growth %
Source: Ports Authority

2002
Ton
%
37,586,660 55.42%
2,333,438
3.44%
18,999,607 28.02%
133,207
0.20%
5,367,496
7.91%
206,306
0.30%
896,643
1.32%
103,170
0.15%
2,189,617
3.23%
67,816,144
100%
-

2003
Ton
%
41,675,854 58.47%
11%
2,250,433
3.16%
-4%
18,682,081 26.21%
-2%
257,729
0.36%
93%
3,345,312
4.69%
-38%
291,252
0.41%
41%
974,186
1.37%
9%
110,473
0.16%
7%
3,684,590
5.17%
68%
71,271,910
100%
5%

2004
Ton
%
44,721,426 58.46%
7%
2,392,931
3.13%
6%
18,963,298 24.79%
2%
400,934
0.52%
56%
2,035,127
2.66%
-39%
267,975
0.35%
-8%
1,113,157
1.46%
14%
107,153 0.14%
-3%
6,493,881
8.49%
76%
76,495,882
100%
7%

2005
Ton
%
44,966,981 55.76%
1%
2,319,107
2.88%
-3%
21,312,465 26.43%
12%
403,223
0.50%
1%
1,752,836
2.17%
-14%
236,947
0.29%
-12%
1,263,062
1.57%
13%
163,206
0.20%
52%
8,222,908
10.20%
27%
80,640,735
100%
5%

Similarly, the statistics are categorized on the basis of commodity. The percentages
of growth in each commodity and in 4 years have been illustrated. By looking at the
structure of total export in 2005, it appears that refined products represent around
56% of total exports in 2005. Moreover, Petrochemicals represent around 27% of
total exports and it grew markedly in 2005. Likewise, other cargo has increased by
around 57% p.a. during 2002-2005. Regarding Food & foodstuff, although it
represents minor proportion among other commodities, it has witnessed sharp
increase during the last 3 years. In contrary, Industrial products has dropped
considerably in the last three years.
Table 3 Number of containers handled by Saudi Ports
Containers (TEU)*
2002
2003
2004
2005
Discharged (Imports) 975,253 1,227,258 1,595,065 1,880,337
%
49.87%
50.29%
50.07%
50.38%
Loaded (exports)
980,514 1,213,069 1,590,634 1,852,291
%
50.13%
49.71%
49.93%
49.62%
Total
1,955,767 2,440,327 3,185,699 3,732,628
* Twenty-foot equivalent unit. A unit of measurement equivalent to one
20-foot shipping container.
Source: Ports Authority

In the case of containers statistics, it has been noticed that imported containers
seem to be well utilized in the process of export activities since the imported
containers are almost matching with the exported one.

Type of Ships

This section intends to describe most types of ships by explaining their characteristic
features and through the use of illustrations. It dwells mainly on troop ships because
they constitute the world's merchant fleet and contribute largely to world trade and
transportation. Basically, troop ships can be categorized on the basis of the nature of
shipment itself. Hence, there are two types of ships. Firstly dry cargo ships and as
the name suggests, they carry dry shipments such as general-cargo, containers and
specialized ships (livestock ship and refrigerated ships (Reefer Ships). Secondly,
liquid cargo ships that specialize on carrying liquid shipments such as crude oil,
Petrochemical and Natural Gas. It is worth to notice that the writer does not find
major changes in this section to be reflected in this up-date. In the following brief
description for each type will be provided.

4.1 Dry Cargo Ship

As the name suggests, it caries dry shipment such as general-cargo, containers and
specialized ships. In the following is brief illustration of most uses of dry cargo ships.

4.1.1 General-Cargo Ships

Once the most popular type, nowadays generalGeneral-cargo ship
cargo ships are still built but in small quantities.
Their carrying capacity is 4,000-6,000 ton on
average and may reach 16,000 - 20,000 ton.
General cargo includes items which are packed
(boxes, barrels, bags, packages) or not packed
(pipes, bricks, machinery, rolls of wire). They
usually have spacious holds which occupy the
larger part of the hull. Refrigerator chambers to keep perishable foods, tanks for
carrying vegetable oils and air-conditioned systems for furs needing special care are
being provided on modern vessels.

4.1.2 Reefer Ships

They transport perishable foods such as fruit,
Reefer
vegetables, meat, fish and dairy, having a
carrying capacity of 8,000 - 12,000 ton. They
sail at a speed of 18-22 knots which is faster
than that of the common general-cargo ships
because these perishable goods require faster
delivery. Foodstuffs are kept in holds with good
heat and freezing insulation at a temperature
varying from -25 C to +13 C depending on the
type of cargo. Reefers are equipped to carry
not only frozen stuff but also goods which first have to be refrigerated to a specific
temperature for transportation.

4.1.3 Container Ships

Container ship

Carrying capacity - 8,000-15,000 ton on

average and 25,000-30,000 ton for big
containerships. These ships are classified as
unit-load ships because freight is carried in
Pier
huge boxes of standard size (units), usually
from 10 to 40 ton. Actually these are the
same we see on trains and trucks proving one
of the advantages of containerships and those
boxes: the delivery can be transported to the recipient using the link wagon - car ship with least damage of cargo. Containerships are said to have made a revolution in
the history of water transport. The higher speed (of 20-26 knots) and shorter port
stay are a few of their advantages over other types of
ships. The boxes, also called containers, may carry anything
- fruit and meat (in special refrigerator containers),
chemicals and acids, textile, instruments and metals, TV
sets, radios and computers. Containerships tend to have a
large hatch on the deck just above the hold in order to
avoid moving boxes horizontally along the deck to the hold
to save time and effort. Due to this peculiar ship design and method of units, loading
and unloading is done much faster. Usually, there is a pier that can load and discharge
containers from ship.

4.1.4 Barge-Carrying Ships (lighter ships)

Barge-carrying ships

This type of ships pertains to the category of

containerships but the principle is slightly
different. Cargo is carried in floating containers,
also referred to as barges or lighters, each with
a carrying capacity of 375 t - 1050 t. As these
barges cannot sail on their own, they need to be
tugged or towed to the ship. There, they can be
loaded aboard in different ways depending on the
type of lighter ship. From then on, another device carries the barge to its place. The
"integrator" lighter ship has its hull divided into sections so that the tug can move the
barge straight into its compartment. Unloading is done in the same way on the
following principle - lighters are unloaded from the ship, let in the water and tugged
to the pier. The advantage of this type of ships being that cargo can be carried in
separate barges to and from smaller ports through a series of rivers and canals that
is inaccessible for big ships.

4.1.5 Ro-Ro Ships

Ro-Ro ships

It is used for transporting motor vehicles and

other wheeled equipment. Ro-Ro is short for
roll-on roll-off ships and is thus called because
cargo is carried on wheeled containers or
trailers. Ro-Ro ships sail at an average speed of
22 knots. Roughly speaking, their shape is
"boxy". Ro-Ro ships usually have 2-6 decks and
look like huge parking lots with stern openings and lifting platforms to sort out
trailers. Needless to say, loading and unloading is quite speedy. A common
"representative" of Ro-Ro type is the car carrier (car-loading) which usually has cars
directly loaded on the ship without putting them in containers. Modern car carriers
are capable of carrying about 6,500 automobiles.

4.1.6 Bulk-Carriers (Bulkers)

It is designed to carry loose goods which constitute
about 70% of all the shipments carried by sea; speed 14 - 16 knots, carrying capacity - varies (there are ships
with 30,000 ton and others with 150,000t), Bulkers are
Bulk-carriers(bulkers)
9

usually one-decked, with an engine room in the stern and a deckhouse above it. The
holds are constructed with longitudinal and cross walls (called "bulkheads") and the
cargo is easily stowed according to them. Bulk-carriers do not have cargo-handling
gear aboard and have their goods loaded/unloaded by means of port devices. That's
why all the space before the deckhouse is vacant to make load operations easier.
There is an exception for some bulkers that work on a self-unloading principle. Bulk
cargo is a wide term. Heavy bulk-carriers usually transport ore, coal and coke, building
materials, such as cement and gravel. Light bulkers carry grain, salt and sugar.
Unfortunately, goods such as ores and grain cannot simply be dumped in the hold of
the ship without taking any precautions. Any careless maintenance of this cargo may
result in damage of the ship.

4.2 Liquid Cargo Ships

As the name suggests, it carries liquid shipment such as crude oil, petrochemical and
vegetable oil. They are several types of the liquid
cargo ships. Cargo ships transport chemicals such as
sulfuric acid, phosphoric acid and ammonia. Some
products require special conditions - for example,
asphalt and liquid sulfur need to be warmed so as not
to cool down during transportation. However, there
are other types of liquid cargo that can carry water,
vegetable oils, olive oils, etc.

Type of Containers

There are several types of containers and each type is required for significant
product. Principally, there are six types of containers and they will be presenting in
the following. Also it should be noted that no major changes need to be reflected in
this section.

5.1

Standard Dry Cargo Containers (dc) 20' & 40'

Standard Dry Cargo containers are designed for the carriage of general dry freight
cargo. Moreover, there are 40 and 20 foot container
.In the following there is detailed information about
the specifications of 40 and 20 foot containers. The
definitions of some terms used in the tables are as
follows:-

10

Tare weight:- The weight of container itself

Payload:- The net weight of shipment
CBM:- Cubic metre
CFT:- Cubic foot
Lbs:- Pounds (imperial measure)

L:- Length
W:- Wide
H:- High
20:- 20 foot container
40:- 40 foot container

Table 4
20' Dry Freight Containers
Interior Dimensions Door Opening Max. Gross Weight Tare Weight

Payload

Cubic Capacity

L: 5898mm

W: 2340mm

30480 KG

2300 KG

28180 KG

33.2 CBM

W: 2352mm

H: 2280mm

67200 LBS

5071 LBS

62129 LBS

1173 CFT

Payload

Cubic Capacity

Table 5
40 Dry Freight Containers
Interior Dimensions Door Opening Max. Gross Weight Tare Weight
L: 12031mm

W: 2340mm

30480 KG

3840 KG

26640 KG

67.7 CBM

W: 2352mm

H: 2280mm

67200 LBS

8465 LBS

58735 LBS

2390 CFT

5.2 HI-Cube Dry Cargo Containers 40' x 8' x 9'6.

With the additional one foot height of the Hi-Cube Containers, shipper and consignees
have 12.5 percent more space than in a standard 40' Container. In
addition, it is especially for light-weight, voluminous cargo. The table
below shows the specifications of this container.
Table 6
40' High-Cube Dry Containers
Interior Dimensions

Door Opening Max. Gross Weight Tare Weight

Payload

Cubic Capacity

L: 12031mm

W: 2340mm

30480 KG

3990 KG

26490 KG

76.4 CBM

W: 2352mm, H: 2698mm

H: 2585mm

67200 LBS

8795 LBS

58405 LBS

2698 CFT

5.3 Open-top Containers 20 & 40

Open-top containers are designed to offer unrestricted overhead and
door loading/discharge facilities. A strong tarpaulin cover, also referred
to as a tilt', ensures that cargo is adequately protected in transit and
that cargo, which is over-height, can be loaded and secured without
difficulty. All Open-top containers are provided with floor and sidewall lashing points.
In addition, it is especially for excessively high cargo. For loading from
above or from the door with door header swung out. The table below
shows the specifications of this container.

11

Table 7
20' Open Top Containers
Interior Dimensions

Door Opening Max. Gross Weight Tare Weight

Payload

Cubic Capacity

L: 5890mm

W: 2338mm

30480 KG

2410 KG

28070 KG

32.5 CBM

W: 2438mm, H: 2591mm

H: 2279mm

67200 LBS

5310 LBS

61890 LBS

1138 CFT

Payload

Cubic Capacity

Table 8
40' Open Top Containers
Interior Dimensions

5.4

Door Opening Max. Gross Weight Tare Weight

L: 12024mm

W: 2338mm

30480 KG

4000 KG

26480 KG

67 CBM

W: 2350mm, H: 2351mm

H: 2279mm

67200 LBS

8000 LBS

52960 LBS

2345 CFT

Reefer (Refrigerated Containers 20' & 40')

Reefer containers are used to ship perishable food or products that

needs for constant temperature. The Reefer container contains
temperatures control unit at the front of the container and it is
closely monitored throughout the shipment cycle by staff of ship.
At the consignees port, the containers are transferred to
specific place that is equipped by generator of electricity to
maintain the temperature of container that is suitable of the
contents of container. The tables below show the specifications
of this container.
Table 9
20' Reefer Containers
Interior Dimensions

Payload

Cubic Capacity

L: 5443mm

Door Opening Max. Gross Weight Tare Weight

W: 2294mm

30480 KG

2960 KG

27520 KG

28.2 CBM

W: 2298mm, H: 2282mm

H: 2266mm

67200 LBS

6530 LBS

60670 LBS

995 CFT

Payload

Cubic Capacity

Table 10
40' Reefer Containers
Interior Dimensions

Door Opening Max. Gross Weight Tare Weight

L: 11625mm

W: 2286mm

32500 KG

4850 KG

27650 KG

59.6 CBM

W: 2290mm, H: 2241mm

H: 2260mm

71653 LBS

10700 LBS

60957 LBS

2104 CFT

Payload

Cubic Capacity

Table 11
40' High-Cube Reefer Containers
Interior Dimensions

Door Opening Max. Gross Weight Tare Weight

L: 11577mm

W: 2294mm

32500 KG

4030 KG

28470 KG

67.0 CBM

W: 2286mm, H: 2532mm

H: 2550mm

71650 LBS

8888 LBS

62765 LBS

2365 CFT

12

5.5 Flat Rack Containers 20 & 40

The Flat rack unit has neither roof nor sidewalls. Strengthened
lashing points are located on both sides along the floor and accessory
side posts can be readily fitted as required. With the side posts
removed, large out-of-gauge pieces of cargo can be easily loaded and
secured.
Shipment possibilities include:

With the full height, solid end walls in the upright position,
it is an ISO flat rack.
With both end walls down, the unit is converted to a
platform flat.
With one end wall up and the other down, the unit can be used on road and
rail when forward bulkhead regulations apply.
Often the 40' Flat rack is used in place of the 40' Open top
unit due to the added flat rack advantage of much heavier
cargo payload.

In all modes, the Flat rack has full cargo carrying capacity over its
entire length, including the collapsed end walls. Slim profile end walls
ensure minimum loss of platform area when used as a flat rack. When in
the Platform mode, the end walls are fixed by failsafe catches to ensure maximum
safety in transit. For empty positioning, end walls are folded down and units
interlocked into 8'6" modules, allowing seven 20' units or four 40' units per module
Also, there is Flat container that is used specially for heavy cargo and excessively
wide cargo. The tables below show the specifications of this container.
Table 12

20' Flat Rack Platform Containers

Interior Dimensions

Max. Gross Weight

Tare Weight

Payload

L: 6038mm

30480 KG

2600 KG

27880 KG

W: 2208mm, H: 2233mm

67200 LBS

4730 LBS

61460 LBS

Table 13

40' Flat Rack Platform Containers

Interior Dimensions

Max. Gross Weight

Tare Weight

Payload

L: 12172mm

45000 KG

4900 KG

40100 KG

W: 2380mm, H: 1955mm

99210 LBS

10800 LBS

88410 LBS

13

5.6 Tank Containers:

There is also a container that specializes to store liquid
shipment such as petrochemical liquids. The size of this
container varies from company to other. The table below
shows the specifications of one type of this container.
Table 14
Size and type
Dimension and type code

20 x 8 x 86

20 x 8 x 86

22TD

22TD

External dimensions
Length (mm) l1
6.058
Width (mm) w1
2.438
Height (mm) h1
2.591
Internal capacity
Liters
20.000
Cubic meters
19.13
Maximum gross mass (kg)
24.000
Average tare (kg)
3.550
Maximum payload (kg)
20.450
max. operating pressure (bar)
1.75

26.000
36.000
3.550
32.450
-

Types of the Shipping Routes

In general, there are two types of shipping methods .The first one is by Conference
Lines and the other by tramp shipping.

Tramp Shipping: usually operated by smaller companies which have few small
ships. This kind of shipping is non-scheduled routes or lines and transport to
any ports overall the world according to their customers, moreover, their
freight rate is relatively cheaper than Conference Lines Shipping. The big
disadvantage of this kind of shipping is there is a big probability for piracy
problems, therefore, it is
not advisable alternative.

Conference Lines Shipping:

This kind of shipping is
frequently used by most of
exporters
overall
the
world. It is scheduled
route and time and has a
specific line that passes by
particular ports in a
specific date. However,

14

launching or closing shipping lines depends on the profitability that could be

gain by shipper. Hence, if a transporter believes that one of his shipping line
is no more profitable he would close it and vice versa. Each company has a
number of shipping lines and schedules its ship to pass with particular ports
in certain time. For example, the map shows the North America line of
National Shipping Company of Saudi Arabia (NSCSA) and ports those are
passed by ships.

The Required Forwarding Documents

Each shipment should raise the requirement documents for the destination country. In
general, these documents include the following:

Certificate of Origin - that proves the origin of goods.

Bill of Lading - a document supplied to the exporter by the shipping company
that is transporting the goods to their foreign destination, listing, item by item,
the goods being shipped. It serves three basic purpose:
o To acknowledge receipt by the carrier of the exporter's goods.
o To indicate the carrier's contractual obligation to transport the goods to
their destination in exchange for payment.
o To record transfer of title (or ownership) from the seller to the buyer
when payment for the goods takes place.
Commercial Invoice: it shows the value of shipments for custom estimation
purposes. Some companies as a good service issue this document instead of
exporter.
Authorization letter: authorize customs clearance office to deal with all custom
clearance procedures.
Backing list: it contains the number of the containers, the number of each
container, number of leaden seal and finally the contents of each container.
Insurance Policy: It is an insurance certificate for the shipment. It is, however,
an optional document. More details about such policy are in the insurance
section.

Charges of Saudi Ports Collected from the Consignee/Shipper

Saudi Ports Authority imposes charges for handling imports and exports. The handling
consists of discharging and loading from ships, then, inspections and storing of
shipments. After joining WTO, Ports authority stop giving Saudi exports any
exception in terms of ports charges. As known, one of the main principles of WTO is
to equal between export and imports in terms of treatments and charges. However,

15

there are few exemptions for Saudi exports such as storage period exemption for
exports and container charges. Regarding to containers charges, the Ports authority
collect all charges of handling and storage of container from importer and that allows
exporter to export its shipments in the same containers without charges. The
following table shows the charges of Saudi ports that collected from exporter. Also,
it is worth to mention that no recent changes have been made toward charges of ports
services

8.1 Charges of Port Services for Cargos Exported:

Table 15
Description
Rate (SR)*
General cargo**
35
Vehicles and equipment
35
Bagged cargo& foodstuff
20
Bagged cement
10
*
Per ton or part thereof.
** General cargo includes all types of cargo excluding vehicles, selfpowered equipment, livestock, bulk cargo and cargo loaded on
containers, flats or trailers.

Port services charges, as shown above, are collected for transporting cargo after
discharging from ship to transit storage areas, sorting, stacking and transportation to
the customs hall for inspection and then loading onto the consignees means of
transport and vice versa in the case of export whether all or part of the service is
provided.

8.2 Charges of Bulk Cargo

Table 16
Description

Rate (SR)*

Bulk cargo (including foodstuff, bulk cargo handled at the cement silos,
grains, oils or similar) excluding crude oil, gas and liquid petroleum products.

Exported bulk cement and clinker.

* Per ton or part thereof.

Source: Saudi Ports Tariff (Ports Authority)

8.3 For Containers, Flats & Other Types of Trailers (including Export Charge)
Table 17
Description
20 feet long or less
Over 20 feet up to 40 feet
Over 40 feet
* Per ton or part thereof.
Source: Saudi Ports Tariff (Ports Authority)

Rate (SR)*
270
415
415

16

Port service charges, as in table above, are collected for transporting containers,
flats and other types of trailers after discharging from the ship to the import
storage area, stacking and then loading onto the consignees means of transport for
delivery. The charges in the export situation are exempted.

8.4 Additional Service Charges for Container & Trailers:

Table 18
Description
Every additional movement.
Stripping of container/trailer contents.
Re-stuffing of cargo into container/trailer.
Refrigerated containers/ trailers for any period in excess of three days
after discharging day.
Transfer of overdue containers to the unclaimed cargo yard.
Failure by the consignee to attend the mutually agreed appointment for
customs inspection of containerized goods will result in the return of the
container to the import stack. the new appointment will require payment of:
Transfer of contents of a container/trailer to another container/trailer plus
stacking and restuffing (for other than customs purposes):

Un refrigerated:

Refrigerated:
Source: Saudi Ports Tariff (Ports Authority)

Rate (SR)
60
120
120

Unit
Per unit.
Per unit.
Per unit.

100

Per unit/day or part thereof.

200

Per unit.

120

Per each operation.

200
400

Per 20 feet or part thereof

In addition to the charges stated in the second and third row above, an amount of SR.
350 will be collected for each 20 feet container or less. Also, SR.750 for each
container longer than 20 feet would be collected if the contents of the container
were stowed in a way that cannot be handled by mechanical cargo handling equipment.

Charges of Refrigeration Services for Refrigerated & Frozen Cargo

Table 19
Description
For any period during the first three days.
With effect from the fourth day
* Per ton or part thereof.
Source: Saudi Ports Tariff (Ports Authority)

Rate (SR)*
20
20

It is worth to mention that, the above charges will be collected in addition to the
storage charges shown in table (20).

8.5 Storage Charges:

Table 20
Description
Storage charges

Rate (SR)
Unit
20
Per ton per day or parts thereof until the date of clearing the cargo outside the port.
Source: Saudi Ports Tariff (Ports Authority)

17

8.6

Additional Services:

Storage charges will be collected on export cargoes delivered to the port

after ten (10) days from the day after entering customs premises. The two
Eid holidays are to be excluded from that period.
In the case of exports of national industries, the period of exemption will be
thirteen (13) days.
Exported bulk cargo in silos such as cement, grains, oils, chemicals, etc. and
on the project berths at the industrial ports will be exempted from the
storage charges.

Any other additional services will be charged at the rate of actual cost plus 10
%, the customer requesting the service must provide the materials used. actual
cost will be computed as follows:
Charges for using additional equipment for lifting or other purpose.
Charges for labour are SR. 10 per hour or part thereof.
Charges for skilled labour or technician are SR. 20 per hour or part thereof.
Charges for engineer or supervisor are SR. 30 per hour or part thereof.

Insurance

9.1 Insurance Companies Working in KSA

Insurance services become common in business environment in general, and in
transportation activities in particular. According to SAMA, there are 25 insurance
companies currently in operation in KSA. One of them which is NCCI has SAMA
licence, whereas the rest of companies are in the process to get their licenses. The
name, location and contact number of insurance companies currently working in KSA
are listed below:
Company-Head Office
A- Central Region
National Company for Cooperative Insurance (NCCI)
Al Al-Ahlia Insurance
Assurance Saudi Fransi
Saudi Indian Insurance
Gulf Union Cooperative Insurance Company
Malath Insurance Company
Al Rajhi Company for Cooperative Insurance
Arabian Shield Insurance
SABB Takaful
The Mediterranean & Gulf Insurance & Reinsurance (MedGulf)
Sanad for Cooperative Insurance
Saudi Arabian Insurance Company (SAICO)

Telephone Number
800-124-9990
01-4726666
01-4042222
01-4603402
01-4661830
01-4548404
01-4730477
01-4645943
01-4050677
01-4779229
01-4727535
01-4775263

18

B- Western Region
Allied Cooperative Insurance Group
Al Alamiya Insurance
Tokio Marine & Nichido
BUPA Arabia
Al Ahli Takaful
AXA Cooperative Insurance
United Cooperative Assurance (UCA)
Arabian Malaysian Takaful Company
Arabia Insurance Cooperative Company
Saudi IAIC for Insurance
C- Eastern Region
Saudi United Cooperation Insurance (AMITY)
Trade Union Insurance Company
Al Sagr Company for Cooperative Insurance

02-6519995
02-6718851
02-6433334
02-6636936
02-6430555
02-2635566
02-6532881
02-6749166
02-6605945
02-6644035
03-8652200
03-8572222
03-8596124

9.2 Insurance Fees

Generally speaking, the insurance fees would be determined based on several
elements, 1) value of shipment, 2) type of packaging (containerized or noncontainerized), 3) nature of shipment and the destination country. Moreover, the
nature of goods play major role in determining the kind of insurance. For instance, no
insurance company would give comprehensive insurance if the goods are fragile or
perishable such as eggs or vegetable.
In the marine sector, there are three insurance services offered for sea
transportation, namely Cover A, Cover B and Cover C. All of them are illustrated as
follows:
Institute Cargo Clauses A: ICC A (Cover A):
In this service, the insurance covers all risks for a shipment from door to door. This
insurance covers all risks of loss or damage. The range of insurance fees are a
percentage of the total value of the shipment.
Type of insurance
ICC A All Risks

Minimum
0.16%

Maximum
0.20%

Institute Cargo Clauses B: ICC B (Cover B)

This insurance covers basic risk such as fire, explosion, sinking, earthquakes, volcanic
disturbance or lightening. The range of insurance fees are a percentages of the total
value of the shipment.
Type of insurance
ICC B Basic risks

Minimum
0.12%

Maximum
0.15%

19

Institute Cargo Clauses C: ICC C (Cover C)

This insurance is for limited risk. For example, if a client wants to make insurance
against specific risk such as sinking or fire. The range of insurance fees are a
percentages of the total value of the shipment.
Type of insurance
ICC C Limited insurance

Minimum
0.08%

Maximum
0.1%

Additional Risk:
Beside the fees of insurance, there are additional fees to cover the risk of war and
terror. The fees of such risk are unified in all insurance companies and change from
time to time.
Additional fees
War and Terror risk

Plus insurance fees

0.05%

It is worth to mention that, there are two types of insurance policies namely,
Certificate of Marine Insurance and Poly of Marine Insurance. The first one is for
regular clients who have an annual contract with an insurance company, while the other
one is for irregular clients who insure rarely.

10 Freight rates
10.1 Cost Structure
The cost of freight is consisting of a number of elements that determine the freight
rate. Hence, any change in these elements would be reflected on the freight rate.
The main elements are as follows:

Freight rate (20 foot): the cost of shipping from port to port. For example
the freight rate in the North America line is $400 TEU, twenty-foot equivalent
unit, which includes depreciation of ship, tax of transit, maintenance, container
maintenance, etc.
Terminal and Handling Charges (THC): Charge payable to a shipping line either
for receiving a full container load at the container terminal, storing it, and
delivering it to the ship at the load port or for receiving it from the ship at the
discharge port, storing it and delivering it to the consignee.
Bunker Adjust Factor (BAF), also known as fuel adjustment factor (FAF) or
surcharge. Extra charge applied by shipping lines, or set by liner conferences
on behalf of their members, to reflect fluctuations in the cost of bunkers. This

20

surcharge is expressed either as an amount per freight ton or as a percentage

of the freight.
War Risk surcharge (WR): this element is the main reason for fluctuation in
the freight rate. During period of instability in area where there is a risk of
war. For example 10 years ago the war risk in some countries was around
US$500/20 foot container. So, an exporter should consider the war risk fees
in each country and match it with his pricing strategy.
Bill of Lading fees: it is issuance fees of Bill of Lading and it is fixed amount
and cost $25.
Currency Adjustment Factor (CAF): surcharge applied to freight rates by
shipping lines or set by liner conferences on behalf of their members. It is to
ensure that the revenue of the shipping lines is unaffected by movements in the
currencies in which transactions are carried out by the lines in relation to the
tariff currency. It is normally expressed as a percentage of the freight and
may be negative as well as positive.
Ocean Freight: it consists of the total of all fees and surcharges plus the
container rate.

Finally, an exporter can apply the formula below to get the ocean freight of 20 foot
container.
Ocean Freight = freight rate + [freight rate x (CAF)] + THC + BAF +WR.

10.2 Sample of Freight Rates:

Having freight rates of all countries is difficult due to sharp fluctuation of freight
rate from time to time and as well as the huge number of destinations. Hence, all
transporters change their freight rate every month to reflect changes in the related
elements. However, some freight rates of shipments from KSA to selected countries
will be given in this report .Moreover, an exporter can obtain freight rates of various
destinations by visiting the website of major shipping company. For instance, Maersk
Sealand Co.s websites (www.maersksealand.com) offers to its customers freight rates
service that gives updated freight rates over the Internet (See section 11).
Generally speaking, it is recommended for an exporter to build a relationship with one
of the shipping agents in order to up-date him by latest frigate rates for his targeted
market. The following table illustrates ocean rates of shipments from KSA (Dammam
and Jeddah ports) to some destinations in the world continents, namely USA, Europe,
Africa, and South East, which are obtained from the National Shipping Company of

21

Saudi Arabia (NSCSA). It should be noted that theses rates are valid up to 1Q, 2006
and are subject to change up or down in the future.
Table 21 Ocean rate from KSA to USA
To USA

From / Jeddah & Dammam

Ports

USD$
20 Foot

40 Foot

New York

2400

3400

Baltimore

2400

3400

Savannah

2400

3400

New Orleans

2400

3400

Wilmington

2400

3400

Halifax

2400

3400

Table 22 Ocean rate from KSA to Europe

To Europe

From / Jeddah

From / Dammam

USD$

Ports
20 Foot

40 Foot

Hamburg

850

1100

Rotterdam

850

1100

Le Haver

850

1100

Southampton

850

1100

Hamburg

1050

1400

Rotterdam

1050

1400

Le Haver

1050

1400

Southampton

1050

1400

Table 23 Ocean rate from KSA to Africa

To Africa

From / Jeddah

USD$

Ports
20 Foot

40 Foot

Port Sudan

850

1400

Mogadiscio

1500

1900

Cotonou

3500

4500

Table 24 Ocean rate from KSA to India Semi continent

To ISC (India Semi continent)

From / Dammam

Ports

USD$
20 Foot

40 Foot

Mumbai

425

650

Karachi

425

650

Colombo

700

1050

22

Table 25 Ocean rate from KSA to China,

Malaysia, Indonesia and S. Korea .
To China& South Asia

From / Dammam

USD$

Ports

20 Foot

40 Foot

Shanghai

650

950

Hong Kong

650

950

Yantian

650

950

Chiwan

650

950

Xiamen

750

1100

Port Klang

600

950

Jakarta

550

900

Pusan

550

900

11 Major Global Shipping Companies:

The following are major Sea transportation companies in the main cities of KSA.
Commonly, each company has branches in such cities. Also, in attachment No. 8 a list
of names, addresses and telephone numbers of most shipping companies and agents
are provided.
NO.
1
2
3
4
5
6
7
8
9
10

Company
Maersk Sealand
P&o Containers
CMA-Algosibi
Mediterranean Shipping
Globe Marine
Ever Green
Cosco
APL/NOL
United Arab Shipping
NSCSA

Nationality
Danish
U.K
French
Switzerland
Multinational
Taiwan
Chinese
Singapore
Arabic
Saudi

Websites
www.maersksealand.com
www.ponl.com
www.cma-cgm.com
www.mscgva.ch
www.globemarine.com.sa
www.evergreen-marine.com.sg
www.cosco.com/en/index.jsp
www.apl.com
www.uasc.com.kw
www.nscsa.com

12 Conclusion
In conclusion, the transportation issue is one of the most critical parts in the
exporting process. ECUs objective in this report is to provide up-dated information
about ocean shipping market and analyze the market prices in order to help and guide
KSA potential exporters to understand the current procedures & cost structure of
various available transportation facilities exist in the Kingdom. Moreover, this primary
report will form a base to assess and measure the impact of transportation cost on
the prices of Saudi products in overseas markets. However, it should be noted that all
freight rates provided in this study are subject to change in the future. Hence, it is
strongly recommended for an exporter to build a relationship with one of the shipping
agents in order to up-date him with the latest freight rates for his targeted markets.

23

From observation of the transportation market, the potential exporters are advised
to:

Look for broker companies (forwarding company which has a contact with all
shipping companies) that are capable to look for lowest prices in the market for
exporters shipments and guarantee delivering of shipments.
Due to the fact that ocean freight rates fluctuate sharply, an exporter should
watch out the effect of transportation cost on his pricing strategy in each
targeted counties.
There are number of pricing strategies that could play with price elements in
order to avoid transportation effect in overseas markets. One of the common
strategies is allocating total fixed cost on products that selling in local market.
An exporter is strongly recommended to draw an appropriate shipment plan of
his yearly exports in order to enable forwarder (shipping agent) to make
bookings and export arrangements ahead of time. This could reduce the
shipping costs by approximately 7% - 15%.

24