Air Waybill

See 11.1.3.

Questions

1. Can the Air Waybill be transferred to another person?

2. Who is the exporter here?

3. How much is the handling charge on the bill?

4. How many copies would the shipper get?

5. Does the consignee have an account with the airline?

6. What is the gross charge for delivery?

7. What is the size of each parcel?

11.3

Shipping

11.3.1

Types of vessels

There are a variety of vessels available for exporters to use when shipping goods:

Passenger liners are ships that follow scheduled routes and concentrate on passenger services, but also carry cargo.

Passenger cargo vessels concentrate on cargoes, offer more facilities for loading and unloading, but carry few passengers.

Tramps travel anywhere in the world on unscheduled routes, picking up any cargo and delivering it.

Tankers are usually oil carriers, and are like bulk carriers which transport bulk consignments such as grain, wheat, and ores.

Container vessels offer facilities to move containers from one country to another, and have special lifting gear and storage space for the huge steel boxes they transport.

Roll-on roll-off ferries are vessels which allow cars and trucks to drive on at one port and off at another without having to load and unload their freight.

There are also barges, large flat-bottomed boats, which transport goods inland along canals and waterways, and lighters which may do the same work as a barge, or are used for taking goods from a port out to a ship, or vice versa.

Note that before the name of the ship, which is usually underlined in correspondence, the letters SS are used. These stand for Steam Ship and show it is a British Merchant vessel. MV, Motor Vessel, and MS, Motor Ship, are also used.

11.3.2

Shipping organizations

The exporter also has a choice as to whether he uses a company which is a member of the Shipping Conference group, or one that is listed on the Baltic Exchange.

The Shipping Conference is an international organization of ship owners who have agreed to fix prices for transporting goods or passengers. They meet periodically to set costs for hiring their vessels. The advantage for their customers is that the costs of shipment are steady, i.e. do not fluctuate over a short period, and universal, i.e. the same price is quoted by all members. They can also claim rebates (discounts) by shipping in bulk. A similar body to the Shipping Conference can be found in airlines- IATA, International Air Transport Association.

The Baltic Exchange has a number of functions, but its freight market offers facilities to exporters to charter (hire) ships and planes through brokers, who work on a commission and are specialists with a knowledge of the movement of ships and the most competitive rates available at any one time. See 11.6 Chartering ships for more details of this.

11.3.3

Shipping documentation

We have seen in Unit 9 Banking, that there are a number of documents used in overseas trade. Now we can look at the main documents used in shipping.

A freight account\s an invoice sent by the shipping company to the exporter stating their charges. Once the goods are received on the dock, a shipping note, with a receipt, is handed to the Superintendent of the docks, advising him that the goods are to be shipped. A dock receipt, (sometimes called a wharfinger's receipf) will be returned to the consignor confirming that the goods are stored and awaiting shipment. Once the goods are on board the ship, a mate's receipt may be sent, acknowledging that the goods have been loaded. The mate's receipt is often sent when the consignment is loaded directly, and serves as a document of title until the bill of lading is ready.

The bill of lading (b/l or blading) (see 11.4.3) is the most important document in shipping as it is a document of title, i.e. gives ownership of the goods to the person named on it. If the words 'to order' are written on it, it means that it is a negotiable document and can be traded. In this case it will be endorsed on the back (the exporter will sign it), and if the endorsement is blank, there will be no restrictions on ownership. In an l/c transaction the confirming bank will usually ask for the b/l to be made out to them when they pay the exporter, then transfer it to the customer.

A shipped bill of lading means that the goods have been loaded on to the ship. Sometimes the words 'shipped on board' are used to mean the same thing. In c.i.f. and c. & f. transactions the words 'freight prepaid' are used to signify that the costs of shipment have been paid. Bills are also marked 'clean' to indicate that the goods were taken on board in good condition, or 'dirty/claused' to indicate that on inspection there was found to be something wrong with the consignment, e.g. packing, or the goods were damaged. This statement protects the shipping company from claims that they were responsible for the damage or bad condition of the consignment.

Usually two copies of the b/l are sent to the buyer or his bank, by air and sea for security.

11.3.4

Shipping liabilities

The Hague Rules signed at the Brussels Convention in 1924 govern liability for loss or damage to cargo carried by sea under a bill of lading, and state that the carrier will not be responsible under the following conditions: Acts of war, riots, civil disturbances; Force majeure, i.e. exceptional dangers such as storms, abnormal disturbances, or unusual hazards; Negligence, i.e. when the goods have not been properly packed, or were in a bad condition when packed; Inherent vice, i.e. when goods are subject to deterioration because of their content or nature. For example, fish can go bad, wood can carry insects, metal can oxidize.

The Hamburg Rules of 1978 have extended the shipping companies' liability for damage or delay to 'goods in their charge' unless they can prove they took all measures to avoid problems.

To be safe, most companies insure their consignments under all risk cover, which protects them against most contingencies, but special 'war insurance' is necessary for particularly dangerous zones.

11.3.5

Forwarding agents

Forwarding agents are used by exporters to arrange both import and export shipments. In the case of the former, their services include collecting the consignment, arranging shipment, and if required, packing and handling all documentation, including making out the bill of lading, obtaining insurance, sending commercial invoices and paying the shipping company for their clients. They also inform the importer's forwarding agent that the shipment is on its way by sending an advice note, and he, in turn, will inform his client, send the goods on to him, or arrange for them to be stored until collected. Many forwarding agents in importing countries also act as clearing agents, ensuring that the goods are cleared through the customs and are sent to the importer.

Because forwarding agents handle many shipments they can collect consignments for the same destination and get competitive 'groupage rates' for sending a lot of consignments in one shipment. However, many exporters find it more convenient to deal direct with the forwarding agents in the importer's country, and some importers prefer to deal with their supplier's forwarding agent.

11.4