International Ocean Transportation Becoming a Master Unlimited. Maneuvering a ULCC is a job that a few people can handle It is the responsibility of the Captain who have reached a precious tile “Master Unlimited. There are only 3000 of them world wide and there the only ones accredited to command the ship ULCC is as long as four foot ball fields, & that , at cruising speed & fully loaded, it stops in a mere six miles if its engine is stopped. With full reverse it stops in 2 miles Captains practice on simulators and training at Port Revel in France After few days of practice, they can squeeze 700’ behe-moth in 750’ space left between two other ships in port without the help of a tug.

The End of The Shipping Line Most ships after 20-25 years of sea get damaged so much, they can not be economically used In addition as size of ship increases, shipping lines have a surplus of capacity which can be sold Where do all these old ships end their lives? Many of them end up on beaches of Pakistan, Bangladesh or India where they are dismantled for a sale as scrap Half of these ships die in Alan in Gujarat 600 or so scrap businesses dismantle 400 ships every year These are dangerous & poorly paid jobs but provided employment to 200,000 workers Despite governmental protests about the impact of this business on health, image etc, it continues.

International Ocean Transportation Liner Ships – They make regular voyage on established routes. Two ports or more as scheduled Liner ship’s size depends on draft & ocean condition on the route, specific types of cargo Tramp Ships : they operate whenever market dictates They do not operate on regular schedule They usually carry one type of cargo Tramp vessel is like a taxi cab whereas a liner ship is like a public bus.

Size of Vessel : – Expressed in tons Dead Weight tonnage – (DWT) is the total capacity of the ship i,.e max weight of cargo ship can carry. Bunker – Fuel it needs Stores – Supplies it needs Registered tonnage – (GRT) total volume capacity of the ship measured in hundreds of cubic feet But this not the cargo carrying capacity This capacity is used to pay tax when registered or to ports when they visit or the channels they use Once volume occupied by crew,engine, etc, is removed, the net registered tonnage is obtained

Displacement : The displacement tonnage is the total weight of the ship when fully loaded, measured by the weight or the volume of water it displaces Light tonnage – is the weight of the ship measured the same way, when the vessel is empty. Both the tonnages are used for stability Plimsol Lines : Ships are fully loaded” at different drafts is the function of season in which they are operating, latitude & density of water. The deepest a ship can sink is called the “tropical line”, summer line, winter line, Winter-North – Atlantic Line . Fresh water line in which ship sinks/sits more as density is low. All of these lines are painted on the hull & form a diagram called Plimsol mark.

The Plimsoll Mark T F L R F S T W WNA LR – Lloyd’s Register TF – Tropical Fresh Water F – Fresh Water T – Tropical Seas S – Summer Seas W – Winter Seas WNA – Winter, North Atlantic Ocean

Size Categories : The ships which pass through panama are called Panamax ship. Such ships have 75000 tons dead weight. They barely fit locks of panama which are 1000’ long & 110 ft wide. Longest ship to cross panama canal is Marcona Prospector 973’ Long, 106 ‘wide, The widest is USS New Jersey which is 108’ wide. Post – Panama Ships Suez – Max Ships : DWT – 150,000 tons, 285 M long, 35 M wide & 23m draft. In 1996, Suez canal was widened & deepened

Capesize Ships –large dry bulk carriers of a capacity greater than 80,000 DWT Very large Crude Carrier – Oil tanker of upto 300,000 DWT, 350 m long, 55 m wide, 28 m draft Ultra Large Crude Carrier – Oil tanker of more than 300,000 DWT. One of the largest ULCC built, the “Sea Giant” is 555,000 DWT. 415m long, 63m wide; 35m draft. Such a ship can not go to port but discharges cargo in deep sea by lightering

The largest container ship is Regina Maersk – 302 m long, 43 m wide &12 m draft & DWT – 65,600 ton. Types of Vessels Containership – 60% of world trade is containerized. They rely on port cranes to unload cargo. Some container ships have their cranes. Roll on/roll off ships – 1. Ships were created to accommodate cargo that was self propelled, such as automobiles etc. They are essentially floating parking garages. RORO ships have a portion of their hull that opens up and acts as a ramp on which the vehicles are driven before being parked, on decks of the ship. Opening on the side of the ship or its stern (rear). 5. Specialized equipment not required. 6. They have adjustable decks. 7. No stevedoring labor required. It is cheap

Break Bulk Ships Least homogeneous category of ships They are multipurpose ships which carry all sizes of cargo Because of containerized ships, RORO ships, break bulk ships requirement is decreasing Cargo being of different , require different handling equipment Securing load on decks is expensive They stay in ports longer as discharge rate is low They have flexibility of handling any cargo They have crane on board therefore can handle cargo without difficulty Almost no new break bulk ship has been built during the last 15 years Combination ships are increasing

Combination Ships Can carry allsorts of cargo in a single voyage They have several holds which hold all types of cargo It has also tween deck or a deck below main deck Vehicles, break bulk cargo can be accommodated It can also carry containers It has cranes They operate in shipping lanes that have low volume of trade

Lash Ships Lighter aboard ships (LASH) is quite versatile It carries a standardized units of cargo Unit is large in size 385 metric tons Unit can also float, they are called (LASH) barges They are 18 m long, 9 m wide & 3 m deep Each barge is covered with a hatch cover & is watertight Capacity of ship is 80 Lash barges It allows very fast loading & unloading They can call on ports where lifting facilities are inadequate Loading & unloading at anchor possible Cargo barges can be delivered at any place

Crude Carrier Dedicated for petroleum products like crude Refined crude carrier called product carriers Large ships can call on some ports only They stay at anchor points Crude is discharged at anchorage point called lighterage Floating island is used for discharging crude. VLCC or ULCC are connected to floating island. by pipeline

Dry - Bulk Carriers Operate as oil tanker basis Chartered for whole voyage Agricultural products, ores, scrap etc They are generally small in size 10,000 DWT Refrigerated ships called “reefer ships” Some ships carry vegetable oils, etc Chemical tankers Gas Carriers They carry LNG, LPG Long term contracts called time charter parties They have sailing schedule

Flying Flag Choice of flag has many consequences beyond training of crew, taxes the ship owners have to pay. Cabot age rules require that American flags & crews be used in US water Ships having no US flag can not travel within American Ports. Most of the cruise ships fly flags of countries such as Bahamas, or Secondary registries, such as that of Norway Such ships pay substandard wages & 12-15 hours of work.

Passengers are oblivious about this problem When Hong kong rejoined the people’s Republic of China, in July 1997, a flag issue surfaced They ultimately decided not to fly any flag in each other’s ports During the conflict between Iran & Iraq in the Persian Gulf, Several Kuwaiti Ship were temporarily placed under the US Flag so they could gain protection from US Navy Finally all crude carriers were given US Flag when they were in Persian Gulf.

Flag According to international convention, each ship carries a flag of the country to which it belongs It is registered in that country They pay taxes to that country Composition of crew, training requirement, its nationality vacation time Flying US flag ads at least 30% more to operating cost US flag carrying ship costs $13,300 per day whereas the same ship flying developing country’s flag costs US $1400. Flag regulates qualification of crew, compensation etc

Conference A group of shipping companies (carriers) that operate vessels competing in the same trade lines, and that have legally agreed to not compete on price and charge the same amount for the same type of cargo and the same voyage. Tariff – The price that conference members have agreed to charge for a specific commodity going from one specific port to another. Conferences are organized on trade routes & will have same price on that route. All these rates are called tariffs & are published

Hague – Visby Rules An international liability convention for ocean going carriers that limits their liability to SDR 667 per package or SDR 2 per kg. Whichever is higher. This liability convention is the most commonly used in the world: however, the United States has not ratified this convention & therefore still abides by the Hague rules. Hamburg Rules An international liability convention for ocean going carriers that limits their liability to SDR 835 per package or SDR 2.5 per kg. Whichever is higher and eliminates most of the ‘defenses’ a carrier could use to discharge itself liability. The Hamburg rules have not been ratified by many countries, the United States has not ratified this convention and therefore still abides by the Hague Rules.

Non Vessels Operating Common Carriers – NVOCC make up another type of shipping Co : They do not own & operate ship NVOCC operate by purchasing space on ship on a given voyage & by selling this space to companies that need to ship cargo NVOCC acts as a freight consolidator

International Air Transportation Cherries & Carnations. In 1999, US $ 870 million worth of cut flowers entered USA. 70 % which came from Colombia, Trade was done through airfreight, Aero flora of Columbia Aeroflora sends 15 flights every week to USA filled with only one cargo 1,e.cut flowers-roses & carnations mostly. Week preceding valentine's day, business becomes crazy. In 1999, co: sent 18 Boeings 474s with flowers 48 hours preceding holiday Every year Federal Express dedicates two to three of its DC10s for that purpose. 747 Boeing holds 3.6 million roses From Late May until late June, Cherry season starts More than 1.1 million cartons (8.2kg each) of cherries leave USA for Japan 9000 MT of cherries travel by air freighters. US$ 1.95 per kg freight charge. It is the most profitable period of the year for the airline involved in that trade.

Air Transportation 34% world trade by value is moving by air High value low density cargo moving fast Air transportation is increasing as air transportation is becoming cheap. Reasons for increase in air cargo are Deregulation & liberalization of air cargo industry Global interdependence helped by world trade agreements International production & sales of goods & service New inventory management concepts like JIT New air eligible commodities Vast development of high value & limited time consumable commodities.

International Air Transportation It has grown during last two decades through the advent of “time defined” deliveries Federal Express create above concept in 1981. It is the largest airfreight company in the world Lufthansa is the second. Types of Aircrafts Passenger aircrafts carrying cargo Cargo aircrafts carry only cargo Planes used for cargo services that are regularly scheduled Planes of cargo services hired for a single trip

Passenger airplanes Aircraft carries some cargo in the belly Most of the airfreight is loose None of the packages in the aircraft are secured International belly cargo is extremely urgent Max size & weight of package/load that an aircraft can carry. Many items are not allowed in passenger planes Onboard carriers above use passenger aircrafts

Combis Combi airplanes are passenger airplanes that are designed so that freight is carried on the main deck Main deck is split in the middle of the aircraft Some portion for cargo & other for passengers They travel long distances Combis are advantageous as size limitation of passenger aircraft is absent Main deck has a greater weight capacity, larger door can accept pallets, containerized cargo Cargo can be secured in plane with slings Restrictions on what can be shipped with passengers aboard remains

Air freighters Most air freighters are liners traveling between two airports. They operate on regular basis One of which is hub, the location at which the cargo will be transferred to another flight They are equipped with ‘roller deck” for pushing palletized or container's cargo through an over sized door. These are old planes used & are noisy. They operate at night Memphis airport is largest cargo airport in the world. Freight is priced on weight & volume & will charge higher of the two On international shipments the volume weight conversion uses 60 m3 per Ton. Or 166 cubic inches per pound.

Charters Cargo airplanes serve chartered transportation Goods should be present for loading Goods to be shipped do not fit into airplanes regularly scheduled, in this case shipper charters a heavy lift cargo airplane Specialized cargo is handled by specialised aircrafts Antonov 124 carries 150 Tons Airbus beluga for large volume cargo 1400 m3 but max of 47 tons If the cargo service is not available for some location, then DC3 is used to take cargo to the destination

Space & Equipment Belly space – Normally used for luggage of passengers about 60% of cargo moves in luggage compartments Flex belly – Interior of passenger plane can be adjusted to include more/less space for cargo Freighter – Used for cargo Often passenger planes at the end of their life is converted into freighter Transport related stress on cargo are much less Less packaging is needed which saves cost Insurance premium on air cargo tends to be low Planes are designed for long flights

Freighter fleet doubles by 2013 1993 2013 Large 175 Medium 357 Small 476 Small 862 Large 777 Medium 575

IATA ( International Air Transport Association ) found that the average delivery time for air cargo was 6.5 days point to point This time has decreased to 6 days Wealthiest regions in the world use air tours portal for exotic food, medicines etc. Four major air cargo markets – North Atlantic transpacific, Europe – Far East & US domestic make three quarters of the total market Three forms of air cargo carriers: Integrated carries & FedEx & UPS. Scheduled Couriers offering cargo services. Chartered carriers are specialized all cargo couriers Cargo containers used for air cargo are very different from that used for other modes of transport Inter modal size containers (8X8X20) are used for cargo only on freighters

Four Distinct Markets for Air Cargo Mail – used in official postal service Express transportation – It is defined by FedEx is faster growing. Delivery is time definite Courier – It is an extension of air express. Delivery is either same day or next day flight. They can track the package Courier service is expensive because someone has to be at the airport 24 hours to get packages passed through customs Freight – Mostly larger packages are moved Moving large packages by express is expensive However difference between express & freight is diminishing Air cargo company has to satisfy expectations of both the parties Perishables is a golden market

Perishable Imports World wide (breakdown) Meat and animal products –0.241 Pharmaceuticals -0.017 Dairy products -0.139 Nuts -0.115 Fish & Sea food -0.114 Miscellaneous -0.062 Vegetables -0.055 Flowers & Plants -0.040 Fruits -0.033 Chocolates & Candy -0.030

Distribution of Costs Value added services -0.082 Local pickup -0.089 Transportation in refrigerated truck –0.144 Export service & customs -0.015 Air cargo -0.049 Import service & customs -0.091 Warehousing -0.090

Forces & constraints for Air Cargo Growth Industry Relocation Directional Imbalances Restrictions Quotas & Trade lower deck Combos & freighters Wide body New commodities Export Promotion Research market Airline New Trade Relationship Shipper education Airline market Surface Competition Currency Revolution Shipper utilization National development program Airport Curfews of points served Proliferation Oil price & Availability Deregulation Labour stoppages Air & surface Express market JIT concepts Reengineered Bilateral

Characteristics of Air Cargo Commodities Perishable Subject to quick obsolescence Required on short notice Valuable relative to weight Expensive to handle or store When demand is unpredictable, infrequent, in excess of local supply, seasonal When distribution problems include: Risk of pilferage, breakage, deterioration High insurance costs for long in transit periods Heavy or expensive packaging required for surface transportation Special handling or case needed Warehousing or stocks in excess of what would be needed if air freight were used

Aviation Economics Two major factors influence the growth of air cargo: economic conditions & rate level Yield Management – It is the way air carrier gets maximum amount from each unit (cargo) carried Volume of traffic – Higher volume lower rates Characteristics of the traffic – Cargo density size per piece, average weight of the shipment Volume of the service – Needs of customer Competition

Aviation Regulation International Air Transport Association (IATA) Used to regulate price but not now International Civil Aeronautic Organisation – Safety standards, technical standards First freedom, over flight – Right to fly in a country’s air space Second freedom service stops – Right to stop for servicing of the plane, refueling etc Third freedom, passenger deliver – Right to bring revenue passenger from foreign country This requires bilateral agreements

Fourth freedom, Repatriation – Right to bring revenue passengers from a foreign country to home country Fifth freedom on carriage – The right to bring revenue passengers from one foreign country to another Sixth freedom , Cabot age – The right to carry passengers within a country Seventh freedom, All arrangement apply but for cargo

PORT OF MUMBAI Mumbai port has long has been principal Gateway to India. It is situated almost midway ( Latitude 18o 54’N.Longitude 72049’E) on the west coast of India. It is a natural deep water Harbor of about 400sqKm. Approaches to harbour are well lighted, visible 29km. Channel has been deepened to 11 m with a mean high water neap tide of 33m. Channel is adequate to meet the requirements of large vessels, passenger ships & deep drafted takers. Navigation is allowed round the clock.

Three wet clocks:Indira, Prince’s & Victoria, total water area of 46 Three wet clocks:Indira, Prince’s & Victoria, total water area of 46.30 hectares & a qua yage of 7776 meters. Indira Dock has an Entrance Lock 228.6 m long & 30.5 m wide. 21 berths& 5 berths along harbour wall – 9.14m draft & 7.5 m Depth of berths can be increased by 1.2 m by impounding water by pumps. Two berths at ballard Pier – 224 m long, 9.75 m deep. For handling crude oil, petroleum products, there are four jetties at Jawahar Dweep. Tanker of 12.7 m draft & 1,23,000 tonnage can be handled. Two of the jetties can take tanker of 70,000 T. & 228.6 m long & third one can take 213.4m & 48,000 T. tanker. Chemical & POL products are handled at two jetties at Pir Pau Pin pass can accommodate tankers of 170.7 m long & new jetty can handle 197 m long & 10.5 m draft tanker. Open bunders can also handle sailing vessels traffic. Two dry docks 304 m long & other 160 m long. Transit sheds at most of the berths.

STORAGE & HANDLING There are liquid storage tanks for HSD, FO, Veg. oil, etc. Total covered storage area of 3,17,857, & open area 1,41,401 & slots 12,802. Sq m. Cargo handling equipments like wharf cranes over 6 tonnes, shore cranes/ gantries 35.5 ton. Mobile cranes 14 tonnes, 20 tonnes. Tractors 6000 lb per pull. Portainer 35.5 Tonn.

Reach Stackers 43 T & 45 T. Port Railway of its own 11 locomotives. Rail container depot which can handle two trains of 45 with double discharge facilities. Nicnet connectivity Internet ISO 9001 – 2000 certification.

State of the art Vessel Traffic Management Systems ( VTMS) for tracking & guidance of the ships. MIS GPS based marine survey system. Computerization of port operation & management. Flotilla of dredgers Hopper barges of 225 – 300 T capacity Tugs from 320 HP to 1500 BHP Pilot Launches & other Launches Fire Floats Survey Vessel

PORT CHARGES PORT DUES Foreign going vessels of 3000 T & upwards – 17 US cents per G.R.T. Foreign going vessels of 3000T & below 12 US cents Coasting Vessels 3000T & upwards Rs.1.6/ GRT Coasting Vessels 3000T & below Rs.1.10 GRT PIER DUES Rs.1.2 per GRT for 8hrs subject to minimum Rs.1200 Rs.25 for every boat / barge for 8 hrs. BERTH HIRE CHARGE Coasting vessel Rs.0.75 / GRT for 8 hrs. Foreign going US Cent 4.7 / GRT

Pilotage, Tug Assistance, Towage Vessels maneuvering with their engine Coasting (varies) Rs.3.85 / GRT / day Foreign going (varies) US cent 26.4 / GRT /day Charges for harbor tug for mooring vessel Rs.1.1/GRT/day & US Cent 12.1/GRT/day. Pilotage charge Mooring fees Attendance/ cancellation / Detention for harbor Tug.

Hire of launches & tank barges. Anchorage Fees Charges on cargo containers, containerised cargo & container equipment. Licence (Storage) Fees on containers for the period of storage of containers. Charges for port trust labour for stuffing or destuffing of cargo. Telephone charges. Craneage charges. Mobile crane & equipment. Port trust labour requisitioned & supplied but not fully or properly utilized.

Dry docks – docking & unloading. Occupation of dry docks. Wharfage. License fees for water conveyance. Charges for operation of the catamarans, hovercrafts, speed boats. Wharfage for POL. Free days – 3 days free of demurrage. Demurrage on import cargo – Rs.25/day/tonne for first 30 days. Exports – Non containerised cargo. Containerized cargo export / import.