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Global Transportation
GLOBAL TRANSPORTATION
PROVIDERS
Ocean Transportation
Types of carriers: liners, tramps, and private
vessels
LINERS
Liners are ships that ply fixed routes on
published schedules.
Liner services are either container or breakbulk types.
Liners cont
Freight must be moved to the liner
companys terminal at the port after the
shipper has arranged freight booking or
reservation
Freight is loaded by machine if bulk, or
crane if containerized.
Liners cont
Container movement is gaining over the
traditional break-bulk (general cargo)
method of ocean carriage.
When goods have to be heavily crated and
packaged for break-bulk movement, a
container often provides much of that
needed protection
Liners cont
Break-bulk ship might require many days to
unload and load its cargo by small crane and
manpower
An entire container ship can enter, unload, load,
and clear a port in less than 12 hours
Such speed has brought about labour savings to
both the shipper and the liner company, as well as
increased ship (and capital) utilization.
Because a ship is only earning revenue at sea, it is
easy to see why containers have become a
dominant form of packaged-goods shipping.
Liners cont
Container service, although saving port
and ship time, has brought about different
operating and management concerns for the
ship company
This service requires a large investment in
containers at sea, delivered inland, loaded
Although a ship might carry 1,000
containers, an investment of 1,500 to 2,500
containers is necessary to support that ship
Liners cont
With inland movement of containers,
control over this land movement becomes a
necessity.
The container itself is a large investment
and is attractive to thieves in areas of
warehouse or housing shortages.
Liners cont
roll-on/roll-off ship, referred to as a
RORO ship.
These ships carry trucks, trailers, and
construction equipment much like a
multilevel ferryboat.
Especially effective when ports dont have
cranes (container with wheels dont a crane)
TRAMPS
The tramp ship is one that is hired like a
taxi or leased auto.
That is, it is a bulk or tank ship that is hired
on a voyage or time basis.
Time charters are usually longer-term
charters in which the shipper will make or
arrange for more than a one-way move.
Such charters are made with or without
crews being provided by the shipowner.
PRIVATE VESSELS
Private ships are owned or leased on a longterm basis by the firm moving the goods.
Many oil ships fit this category, as do
automotive and lumber vessels.
SHIP REGISTRY
Although a ship might be U.S.-owned and ply a
route between the United States and the Persian
Gulf, it might be registered in and fly the flag of
Liberia or Panama. These nations represent what
are called flags of convenience.
That is, the owners derive certain benefits of taxes,
manning, and some relaxed safety requirements by
being registered in those countries, rather than in
the United States, Canada, or wherever.
The top flags of convenience nations include
Panama, Liberia, the Bahamas, Greece, and Malta.
Air Carriers
Air transportation offers the global
transportation user speed
Four types of air carriers are available for
international shippers: air parcel post,
express or expedited service, passenger, and
cargo.
EXPRESS OR EXPEDITED
SERVICE
Express or courier service is provided by air
carriers and is generally restricted to small
shipments weighing less than 32 kg.
Speed is the essential characteristic of this
service, with next-day or second-day
delivery a standard service level.
Examples of major carriers providing this
service include Federal Express, United
Parcel Service (UPS), and DHL.
PASSENGER CARRIERS
Regularly scheduled international passenger
flights haul freight in the belly of the
plane.
These carriers focus on the movement of
passengers, but the excess capacity in the
nonpassenger compartment permits the
transporting of cargo along with passengers.
ALLCARGO CARRIERS
All-cargo carriers specialize in the
movement of freight, not passengers.
The air planes are outfitted with larger
hatch openings, cargo compartments, and
floor- bearing ratings.
Many air cargo planes have mechanized
materials-handling devices on board to
permit the movement of heavier cargo
inside the plane.
INTERNATIONAL FREIGHT
FORWARDERS
These firms arrange movement for the
shipper. They do not necessarily act as
consolidators or earn their revenues in the
manner like domestic forwarders.
International freight forwarders act as
agents for shippers by applying familiarity
and expertise with ocean shipping to
facilitate through movement.
INTERNATIONAL FREIGHT
FORWARDERS cont
They represent the shipper in arranging
such activities as inland transportation,
packaging, documentation, booking, and
legal fees
They play an invaluable role for shippers
who are not familiar with the intricacies of
shipping or those who do not have the scale
or volume to warrant having in-house
expertise in this area.
NONVESSEL OPERATING
COMMON CARRIERS (NVOCC)
Nonvessel operating carriers assemble
and disperse less-than-container shipments
and move them as full-container shipments.
They serve much the same role as the
domestic freight forwarders.
A shipper moving a small item would
otherwise have to move it via break-bulk
ocean carrier or air freight.
SHIP BROKERS
These firms act as middlemen between the
tramp shipowner and a chartering shipper or
receiver.
The brokers extensive exposure, contacts,
and knowledge of the overall ship market
make them valuable parties in these
arrangements.
They are compensated on the basis of a
percentage of the chartering fees.
SHIP AGENTS
Ship agents act on behalf of a liner
company or tramp ship operator (either
owner or charter company) to represent
their interests in facilitating ship arrival,
clearance, loading, unloading, and fee
payment while at a specific port.
Liner firms will use agents when the
frequency of sailings are so sparse that it is
not economical for them to invest in their
own terminals or to have management
personnel on site.
LAND BRIDGES
The "landbridge" is a generic term meaning use
the land freight as a means of transport
connection.
The landbridge is a way of transporting cargo
from a port or an inland point of origin in the
shipper's country to an inland point or a port of
final destination in the consignee's country using a
combination of usually sea and land, or air and
land, or air, land and sea transports
Shipping Conferences
A steamship conference is a voluntary
organization of vessel-operating carriers
whose main function is to set acceptable
rates for steamships and shippers.
The goal of the conference is to maintain a
stable market and fair competition among
carriers.
Another important element of the steamship
conference is to administer operating rules
that guarantee the shipper a consistent level
of service from participating lines.
Global Air
AIR CARGO RATE
Air cargo rates are based on the value of
service or the cost of service
The less sensitive cargo is to rates, the
higher the rate will be.
On traffic lanes where demand is strong and
plane capacity is limited, the air rates will
be high, and vice versa for traffic lanes
where supply exceeds demand.
FUTURE OF GLOBAL
TRANSPORTATION
Global transportation will grow in
importance as more manufacturing and
merchandising firms become involved in
overseas sourcing and marketing.
The cloud on the global trade horizon is
nationalism. This ranges from tariff
protection to political constraints and home
flag carrier protection. ????
FUTURE OF GLOBAL
TRANSPORTATION cont
Such nationalism tends to appear whenever
a home industry is threatened by foreign
competition or forces.
The Jones Act in the United States, which
requires domestic movements only by U.S.
flag ships and domestic airlines, is one such
example, though not a significant one on
the world scene
END