LINER SHIPPING AND TRAMP SHIPPING SERVICES BALITIC EXCHANGE

GROUP No. 9 Megha Thakur Bhargav Ajinkya Parth Chauhan

What is liner shipping?

Liner shipping is different from conventional shipping because it uses containers of various sizes 20 foot (6.09 m), 40 foot (12.18 m) , 45 foot (13.7 m), 48 foot (14.6 m), and 53 foot (16.15 m) to load, transport, and unload goods. Liner shipping is a highly efficient method of transporting goods. The container has made it possible for large ships to be designed to transport huge quantities of material, increasing global trade dramatically. Container ports are specially designed to load and unload the containers quickly and efficiently. This makes the import and export of goods affordable for manufacturers and traders. Before the invention of container shipping, goods were unpacked and loaded onto the ships at the port, taking up much more time, manpower and money.

A standard container can hold 24,914 tin cans

Facts about containers

Container capacity is measured in twenty-foot equivalent units (TEU). This is the size of the standard 20-foot long (6.09 m) container.

Another standard size is the forty-foot (12.18 m) container (i.e. two TEUs). A forty-foot equivalent unit (FEU) can be loaded with about 20 tons of cargo.

Different containers for different cargoes

In addition to standard containers, there are also specialized types of equipment: Open tops are used for easy load of cargo such as logs, machinery and odd sized goods.

Flat racks can be used for boats, vehicles, machinery or industrial equipment.
Open sides may be used for vegetables such as onions and potatoes. Tank containers transport many types of liquids such as chemicals, wine and vegetable oil.

How can container ships keep food fresh?

Have you ever wondered how you can eat lamb from New Zealand or sea food from Norway? Special reefer containers exist that can control temperatures, allowing everything from meat, fruit and vegetables, to dairy products, chemicals and pharmaceuticals to travel across the world. Reefers can keep goods frozen at temperatures as low as -60C. However, they can also preserve goods at warmer temperatures if that is necessary.

How do the boxes fit on the ship?

The containers are stacked on the ship with up to 8 containers stacked on top of each other on deck. Below the deck a ship can stack up to 11 containers on top of each other. To make sure that the containers stay in place during the voyage, twist locks are used to connect the containers. A twist lock is a device used for connecting two containers at the corner posts through an interlocking mechanism.

What are the advantages of Liner shipping?

1 it works on regular scheduled services. 2. Offers cargo space irrespective of volume.
3.

Cost of Inventory is less

4. Low emission and environment friendly

Liner shipping offers: Passenger Shipping Luxury Travel Break Bulk Containers Containers.

Why dont we just transport goods by airplane isnt that faster?

Container shipping is the most efficient way to transport large volumes of goods across the world. While airplanes are faster, container ships can carry more goods in one trip. It would take hundreds of airplanes to carry all the goods that can fit on just one large container ship.

Transporting goods by container ship is also better for the environment.

It is estimated that on average a container ship emits around 40 times less CO2 than a large freight aircraft and three times less than a heavy truck.

Transporting goods in large volumes makes it cheaper - we call this economies of scale.

Container shipping is also estimated to be two and a half times more energy efficient than rail and 7 times more so than road.

Few people know very much about container shipping, but the scale of the industry is huge and involves the whole world. The ships themselves are also massive in size.

Big, impressive facts that you might not know

The worlds biggest container ships are about 1,300 feet long - thats nearly 400 meters or the distance around an Olympic running track. Many container ships can comfortably carry more than 8,000 containers. Container ships have the capacity to carry several warehouses-worth of goods.

How Does Liner Shipping Works?

Lets take an example:

http://www.worldshipping.org/about-the-industry/how-liner-shipping-works/the-step-by-step-process

Tramp Shipping

What is Tramp Shipping

The tramp, or general trader as she is often called, does not operate on a fixed sailing schedule, but merely trades in all parts of the world in search of cargo. Tramp Shipping is the shipping these tramps in a Carter market

Why tramp ships

Seasonal goods Bulk carriage On order Irregular transports Main Tramp Trades are: coal & coke, Iron ore, Grain , Bauxite and Alumina & Phosphate rock

Characteristics of Tramp Ship

Unspecialized type of vessel Two to six holds, each with large unobstructed hatches Vary in Size

Characteristics of Tramp Shipping

Unorganized Bulk cargo carriers Vessel follows the cargo Freight decided according to Supply Demand Ballast Voyages are to be avoided Supply and Demand meet at Charter market

Exporter Approches agent

Exporter approches agent

Types of Charter-Voyage
Specific vessel, specific cargo, specific port and specific route. Rights, duties and responsibilities of ship owners and charterers are determined by the charter party. The charterer should be responsible for the arrangement of the cargo, payment of freight calculated according to the quantity of the cargo loaded or carried and other expenses concerned. The ship owner possesses and controls the vessel and takes charge of the operation of the vessel and the manning and management of crew. The shipowner should bear the operational expenses of the vessel.

Time Charter
The time chartering means that the shipowner provides a designated manned ship to the charterer, and the charterer employs the ship for a specific period against payment of hire. The ship owner should be responsible for the manning of crew and bears the wages and provisions thereof. The master shall be under the orders and directions of the charterer as regards employment and agency. If the charterer shall have reasonable cause to be dissatisfied with the conduct of the master or officers, the shipowner shall on receiving the complaint make a change in the

Bareboat Chartering
The bareboat chartering ordinarily means that the vessel is put at the disposal of the charterer for a long period employment without any crew. A time charter is distinguished from a bareboat charter by the employment of the master and crew. With a time charter the master and crew remain the employees of the shipowner, although they will be subject to the directions of the time charterer.

Types of vessels
1 Dry Bulk Carrier Capesize, Panamax, Handymax, Handysize 2 General Cargo Ship 3 Tanker (VLCC, ULCC) 4 Container Ship (TEU) 5 Other Ships

Difference between liner Shipping and Tramp Shipping

Liner Shipping Fixed Schedules Fixed Freights Operational cost is higher Reliable service Highly Sophisticated Tramp Shipping
Unfixed time Schedules Changing Freights according to the demand & supply Comparatively low operational cost Efficient utilization of floor space and the voyage Comparatively less Sophisticated

Baltic Exchange
International, self-regulated market for matching ships and cargoes, buying or selling ships, trading and settlement of physical and derivative contracts Located in London It traces its name to the Virginia and Baltick Coffee House, London, established in 1744 Baltic provides daily freight market prices and maritime shipping cost indices which are used to settle freight futures (Forward Freight agreements or FFAs)

Baltic Exchange
International, self-regulated market for matching ships and cargoes, buying or selling ships, trading and settlement of physical and derivative contracts Located in London It traces its name to the Virginia and Baltick Coffee House, London, established in 1744 Baltic provides daily freight market prices and maritime shipping cost indices which are used to settle freight futures (Forward Freight agreements or FFAs)

Baltic Exchange Dry Index (BDI)

BDI tracks worldwide international shipping prices of various dry bulk cargoes BDI provides an assessment of the price of moving the major raw materials by sea. Considers more than 20 shipping routes measured on a time charter and voyage basis BDI derived from : The Baltic Exchange Handysize Index (BHSI) the Baltic Exchange Supramax Index (BSI) the Baltic Exchange Panamax Index (BPI) the Baltic Exchange Capesize Index (BCI).

Daily Chart For Cape/Panamax/Supramax 4 Time Charter Average Values(Avg of 4 major routes)

PERIOD RATES (Figures in USD per day)

 Everyday a group of International brokers decides current freight costs on various routes These rate assessments are then weighted together to create the overall BDI and the size specific indices BDI contains route assessments both on the basis of: USD paid per ton carried - fuel, port and other voyage dependent costs are included "USD paid per day - after voyage dependent costs are deducted(Time charter equivalent earnings) Fuel (Bunkers) is the largest voyage dependent cost and moves with the crude oil price

BDI doesnt consists of any speculative content as: Trading is limited to members parties securing contracts are those who have actual cargo to move and those who have the ships

Importance of Baltic Exchange

the index measures the demand for shipping capacity versus the supply of dry bulk carriers Also, index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers seen as an efficient economic indicator of future economic growth and production

Forward Freight Agreements

provides a means of hedging exposure to freight market risk through the trading of specified time charter and voyage rates for forward positions The main terms of an agreement will cover:
(a) The agreed route. (b) The day, month and year of settlement. (c) Contract quantity. (d) The contract rate at which differences will be settled.

Bibliography
Shipping Freight Forwarding and Global trade Operations by Mr. RAJIV SATHE http://www.worldshipping.org/about-the-industry/how-liner-shipping-works

www.crowley.com/.../Shipping.../Liner-Container-Shipp... shippinginsouthafrica.wordpress.com/.../difference-between-a-liner-s...