Liner Logistics

Unit I
Introduction
• Currently the ocean freight accounts for over 95% (in
terms of volume) and 60% (in terms of value) of world
trade.
• Oldest means of mass transportation of goods were
ship.

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Liner Trade

the passage of ships between

designated ports on a fixed
schedule and at published
rates
Liner Shipping: Advantages
• Capacity: Liner ships can carry a lot of goods. This is one of their key advantages
over air shipping. Also, the shape of what you need to transport doesn't matter.
You can pick the ship to match your cargo. Heavy machinery, cars, and plastic
bottles for recycling can all be carried on a liner ship.

• Cost: Shipping is simply the cheapest way to transport goods, which is why its a
method used by many companies. If time isn't important, a ship is the way to go.
Also, if you don't have an entire shipload, you can share space and cost on a cargo
ship with other businesses.

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Liner Shipping: Disadvantages
• Speed: It's not the fastest way to get cargo from one place to another. That's the
major downside of liner shipping. An air shipment may take one or two days,
while a liner shipment could take a month or more.

• Reliability: Ships are unreliable in terms of time of arrival. They run on a weekly
schedule and delays can be common. They are reliable in terms of maintaining
the quality of the goods they are shipping, but if customers are waiting on the
other end, it could hurt your business if you rely only on ships.

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Tramp Trade

A boat or ship engaged in the tramp

trade is one which does not have a
fixed schedule, itinerary nor published
ports of call, and trades on the spot
market as opposed to freight liners.
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Vessel

A vessel is a ship or large boat

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Ship

A ship is a large ocean-going vessel. A ship is a

sailing vessel that uses wind power or steam
power or other man-made energy sources,
rigged in such a manner that will allow it to sail
and be controlled. A ship is a floating vessel
that transports cargo in order to earn revenue.
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Types of Cargo Ships

General Cargo Vessels

• Carry packaged items like chemicals, food, furniture, machinery, motor vehicles, footwear, garments etc.

Tanker

• Carry petroleum commodities or other liquids cargo.

Dry-bulk Carriers

• Carry coal, grain, ore, and other similar products in loose form.

Multi-purpose Vessels

• Carry different classes of cargo e.g. liquid and general cargo at the same time.

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Container Vessels
• Container vessels invented by John McLean.
• It removes the individual hatches, holds and partitions
of the traditional general cargo vessels.
• Containerisation caused a revolution in the world of
shipping.

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Types of Container Ships

Categorization

Handling
Generation Size Service Range
Modes

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Development Generation
First Generation
• 1956 to 1970

Second Generation
• 1970-1980

Third Generation
• 1980-1988

Fourth Generation
• 1988-2000

Fifth Generation
• 2000-2005

Sixth Generation
• 2006 to till date

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Handling Modes

Lift-on/Load-off (LO-LO) Vessels

• Which can load and discharge the cargoes using the

ship’s own crane.

ROCON Container Ships (RO-RO Vessels)

• Containers may be loaded on deck or there is separate

hold specifically for loading containers.

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Ship Sizes
Panamax

• Introduced in 1980. These are of around 4000-5000 TEU’s and are narrow enough to pass through the Panama Canal.

Suezmax

• Bigger vessels which cannot pass through Panama Canal. Official capacity of 6400 TEUs.

Post-panamax

• Vessels introduce by keeping the Suez Canal in mind. Carrying capacity of around 12000 TEUs.

Post-suezmax

• Ultra large container vessels with a carrying capacity of 18000 TEU.

Post-malaccamax

• Huge in size. The maximum permissible draught of 21m. Due to their size port authorities will have to be ready to accept
them. Presently only ports of Singapore and Rotterdam are ready to accept them.

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Service Range

Feeder Ships

• Used for short routes, maximum voyage length is 500nm.

• Movement restricted to coastal areas only.
• Maximum capacity 1500TEU.

Mother Ship

• Much bigger than feeder vessels.

• Cargo discharged by mother ship is taken by the feeders to the smaller
ports.

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Containers Booking
• Generally booked by exporters but importers or their representative may do so as well.
• This may be done directly with the liner, who may have their own office at the location or operate
through an agent or through a freight forwarder.
• Rates of quotes course need to be negotiated and a quote is obtained for the following:
• Ocean freight
• Terminal Handling Charges (THC)
• BL Release Charges
• Inland Haulage Charges
• Seal Fixing Charges
• There may be a Bunker Adjustment Factor (BAF) also added.
• Generally, ocean freight and BAF are billed in dollars, and other charges are billed in the local
currency.
• Freight forwarder would add their own clearance charges.

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Containers Booking (Cont….)
• If the container has to be stuffed at exporter’s premises known as
Factory Stuffing, local transportation charges too will be added.
• Once it's been ascertained what type of container is needed and the
quotes are agreed upon, the container may be booked.
• At the time of booking the following information needs to be given:
• Number of packages
• Gross weight and dimensions of packages
• The port of discharge

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Stuffing in Containerized Cargo Handling
Operation for Export-Import
Container Freight Station (CFS)/Inland Container Depot (ICD)

• The cargo once ready and packed according to the international standards, will be transported to the
CFS/ICD by truck.
• The exporter or CHA will need to prepare necessary documents for getting the cargo ready for carriage.
• Once all the formalities are completed and permissions obtained, cargo stuffed into the container and will
have to be sealed by the customs.

Factory Stuffing

• Once, goods are ready and packed, the container is placed in the exporter’s premises.
• The container is stuffed under the supervision and documentation is completed electronically.
• Once the formalities are completed customs seal and the One Time Lock are placed by the custom
officials and shipping line representatives.
• The BL is issued by the shipping line and containers are then moved to the port of departure.

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Indian Ports
• India have a coastline of 7516.6 km.
• Total 204 ports are there, out of which 12 are major
ports.
• Ports are governed by port trust, which come under
the Ministry of Shipping.

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Major Ports Authority Act, 2020
• Major Ports Trusts Act came into force in the year
1963.
• This was enacted to set up port authorities for major
ports in India and enable the smooth functioning of
ports.
• In 2020 The Major Ports Authority Bill was introduced
and passed in both houses of parliament.

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Major Ports Authority Act, 2020: Salient
Features
• Application: The Bill will apply to the major ports of Chennai, Cochin,
Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao,
Paradip, V.O. Chidambaranar, and Vishakhapatnam.

• Major Port Authorities Board: Under the 1963 Act, all major ports are managed
by the respective Board of Port Trusts that have members appointed by the central
government. The Bill provides for the creation of a Board of Major Port Authority
for each major port. These Boards will replace the existing Port Trusts.

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Major Ports Authority Act, 2020: Salient
Features
• Composition of Board: The Board will comprise of a Chairperson and a deputy
Chairperson, both of whom will be appointed by the central government on the
recommendation of a selection committee. Further, it will include one member
each from (i) the respective state governments, (ii) the Railways Ministry, (iii) the
Defence Ministry, and (iv) the Customs Department. The Board will also include
two to four independent members, and two members representing the interests of
the employees of the Major Port Authority.

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Major Ports Authority Act, 2020: Salient
Features
• Powers of the Board: The Bill allows the Board to use its property, assets and
funds as deemed fit for the development of the major port. The Board can also
make rules on: (i) declaring availability of port assets for port related activities and
services, (ii) developing infrastructure facilities such as setting up new ports,
jetties, and (iii) providing exemption or remission from payment of any charges on
any goods or vessels.

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Major Ports Authority Act, 2020: Salient
Features
• Fixing of rates: Currently, the Tariff Authority for Major Ports, established under
the 1963 Act, fixes the scale of rates for assets and services available at
ports. Under the Bill, the Board or committees appointed by the Board will
determine these rates. They may determine rates for: (i) services that will be
performed at ports, (ii) the access to and usage of the port assets, and (iii) different
classes of goods and vessels, among others. Such fixing of rates will not be with
retrospective effect and must be consistent with the provisions of the Competition
Act, 2002, or any other laws in force, subject to certain conditions.

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Major Ports Authority Act, 2020: Salient
Features
• Financial powers of the Board: Under the 1963 Act, the Board has to seek prior sanction of the
central government to raise any loan. Under the Bill, to meet its capital and working expenditure
requirements, the Board may raise loans from any: (i) scheduled bank or financial institution within
India, or (ii) any financial institution outside India that is compliant with all the laws. However, for
loans above 50% of its capital reserves, the Board will require prior sanction of the central government.

• Corporate Social Responsibility: The Bill provides that the Board may use its funds for providing
social benefits. This includes development of infrastructure in areas such as education, health, housing,
and skill development. These benefits could be provided for the Board’s employees, customers,
business partners, local communities, environment and the society at large.

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Major Ports Authority Act, 2020: Salient
Features
• Public Private Partnership (PPP) projects: The Bill defines PPP projects as projects taken up through a
concession contract by the Board. For such projects, the Board may fix the tariff for the initial bidding
purposes. The appointed concessionaire will be free to fix the actual tariffs based on market conditions, and other
conditions as may be notified. The revenue share in such projects will be on the basis of the specific concession
agreement.

• Adjudicatory Board: The Bill provides for the constitution of an Adjudicatory Board by the central
government. This Board will replace the existing Tariff Authority for Major Ports constituted under the 1963 Act. It
will consist of a Presiding Officer and two members, as appointed by the central government. Functions of the
Adjudicatory Board will include: (i) certain functions being carried out by the Tariff Authority for Major Ports, (ii)
adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires, and (iii)
reviewing stressed PPP projects.

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Major Ports Authority Act, 2020: Salient
Features
• Penalties: Under the 1963 Act, there are various penalties for
contravening provisions of the Act. For example, (i) the penalty for
setting up any structures on the harbours without permission may
extend up to Rs 10,000, and (ii) the penalty for evading rates may
extend up to 10 times the rates. Under the Bill, any person
contravening any provision of the Bill or any rules or regulations will
be punished with a fine of up to one lakh rupees.
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Major Seaports in India

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Thank you