Unit 9

TRANSPORTATION OF CARGO

A.

TEXT

Cargo transportation is an important part of any contract where carriage of goods is involved. There are quite a few participants employed here. On the one side there are service providers such as shippers,¹ carriers of cargo by sea, rail, truck or air, customs, port and border authorities, stevedore companies that load and discharge cargo in ports. There are shipping agents² who book the shipping space in advance, deal with insurance and customs formalities. There are also forwarding agents³ who organize the collection, carriage and delivery of cargo. On the receiving end there are consignees.

For the last few decades intermodal containerised shipments⁴ have be­come popular. Cargo in containers is moved by ocean container carriers transhipped⁵ in ports on rail flatcars⁶ and then truck-delivered to the cus­tomer. Freight operators provide computer tracing and tracking⁷ of the cargo, giving the customer updates on status, location and arrival of containers.⁸ Haulage of goods⁹ is a complex, large scale logistic task which requires a well developed infrastructure: ports, wharves, harbours, piers, quays, jet­ties, merchant fleets, berths and berthing facilities, railroads and truck fleet. It also requires up-to-date cargo handling equipment, the use of floating, gantry, shore and mobile cranes, container straddle carriers¹⁰ at rail sta­tions, etc.

Transportation terms of delivery can be quoted f.o.b., c.i.f. or c.a.f.," free on rail or f.o.r.,¹² or door c.y.¹³ Depending on the terms of the contract either of the parties pays freight charges on services provided.

Regular freight services at sea are provided by shipping lines or tramp ships¹⁴ that are available to charterers, and freight shuttle block trains¹⁵ on rail.

A special clause defines which party pays demurrage costs.

B.

22Nd October 20...

Dear Sirs,

Re: Offer for delivery of equipment and materials

Thank you for your enquiry of September 20... in which you inform us that you are interested in the purchase of equipment and materials for a Desalination Plant in ... .

We have pleasure in enclosing a detailed quotation for the equipment and materials you require.

Our company enjoys a first class reputation and the equipment you men­tion in your enquiry has been very successfully installed in a number of tropi­cal countries.

Our offer is made subject to our standard terms and conditions of sale,¹⁶ enclosed herewith. Shipment can be completed within one year from the date of receiving your acceptance of our offer and confirmation of the order. The first consignment would be despatched¹⁷ six months from the same date.

Prices as quoted are f.o.b. ... port.¹⁸

Packing is made in seaworthy cases as used in the Supplier's country to withstand inland and sea transportation including transhipments.

Payments: Our usual terms are by a Letter of Credit against shipping documents.

We think we have covered every major point of your enquiry. Should you require further details, please do not hesitate to write to us again. It will be a pleasure to give you an immediate reply.

Yours faithfully,

С

Following the Offer, the company ... worked out a Draft Contract for the delivery of equipment and materials. The customer studied it carefully and found some terms and conditions unacceptable. So, Mr ... came to Moscow to discuss these matters with the representative of the supplier.

TERMS OF DELIVERY AND PAYMENT

Supplier: Let's start with the terms of delivery.

Customer: What do you propose?

5. I presume the delivery should be made free on site, since it's a turn-key contract. Do you agree?

C. Well, we have close contacts with some local transportation companies ifnd could easily arrange for transportation from the port to the con­struction site.

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S. Yes, if you prefer to arrange local transportation, we'll deliver the equip­ment c.i.f.... port and you'll take it to the construction site by your own

means. C. We'd prefer that. The change will involve revision of the contract price,

won't it? S. Certainly it will. The contract price will be reduced by the difference

involved. C. That would be fine. S. Let's consider the matter settled then. Is there any other business for

today? С Yes, there's another thing we'd like to request — we would ask you not

to charter vessels whose owners are on the black list. S. Oh, there's no need to worry about that. We don't do business witbj

these companies, I assure you. C. Fine. S. And the last point for today is the terms of payment. We would prefef

payment to be made by a letter of credit in US dollars against shipping

documents. C. No objections. What set of shipping documents do you require? S. Seven copies of the invoice, one original and two copies of the clean bill

of lading and the certificate of origin. С All right. I think we've taken up the main points for today. S. Yes, we may call it a day.

D.

UNLOADING THE EQUIPMENT. CUSTOMS CLEARANCE AND INSURANCE

S. The first point of today's discussion arises out of the previous meeting. I mean that we're afraid our vessels could be kept on demurrage in your port for a long time. Could you help us to avoid that?

С. In principle we can ensure berths for discharge if we receive your notifi­cations five days before your vessel's arrival¹⁹ at the port of destination.

S. That would be fine. And can your stevedores arrange for prompt un­loading?

С I think they can. Our stevedores are usually quick and efficient. But you'd better get in touch with the stevedoring companies about the ex­act rate of discharge.

3. We'll certainly do that, but we are not very familiar with practices in your ports. We'd like you to handle contracts with the stevedores.

jC. We'd be happy to cooperate where we can. Yes, we can handle that.

|S. Thank you. In any case the rates of despatch and demurrage should be stipulated in the contract.

(p. I quite agree with you.

S. Now there's the customs clearance. What's your usual practice in deal­ing with the customs?

C. First of all we expect you to airmail the usual set of documents: bill of lading, freight cargo manifest, shipping specifications and quality cer­tificates. All this should reach your agent 3-5 days before the vessel's arrival so that the agent could help us with obtaining the customs clear­ance²⁰ in due time.

S. I see. And what about the equipment brought in for temporary use?

C. We usually furnish the supplier with the customs exemption certificate in such cases.

S. That's fine. And the last thing today is insurance.

C. Yes, our request still holds — insurance on "all risks" terms.

S. Well, it can be granted. We suggest the following wording: "Insurance i of the equipment against all risks shall be covered by the supplier with j the Foreign insurance department of Russia "Ingosstrakh", Moscow, as per its current transport insurance rules."

C. That suits us all right.

S. Glad to hear that. I presume there's no other business for today.

C. Actually we've done all we planned to.

NOTES

1. shipper грузоотправитель

2. shipping agent судовой агент

3. forwarding agent экспедитор

4. intermodal containerised комбинированные, интермодаль-shipments ные контейнерные перевозки

5. transship, transshipment перегрузить, перегрузка, |Am) — to unload goods from one vehicle and load them on to another

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