Global Institute Of Studies

REPORT ASSIGNMENT

Course Name : Diploma in Maritime Management

Subject Code : Dmm 2503
Subject Name : Ship Chartering Practices
Prepared For : Miss Nur Soraya Binti Mohd Zamri
Prepared By : Zul Haris Ramli( 2002AD6092 )
Submission Date : 13 March 2022

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 Table of Contents

NO Content Page
1  Company Profile 3-4
 Company Organization Structure
2  Liner Service 4-7
 TYPE OF CARGO
 Cargo Handling
 Material Handling
 Picking Systems
3  CHARTERING PROCESS 8 - 12
 INLAND TRANSPORTATION
4  ADVANTAGES AND DISADVANTAGES LINER 13 - 14
 SUGGESTION TO IMPROVE SHIP CHARTERING
IN FUTURE
5  Conclusion 15
 Reference

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 Introduction Of The Company

1.0 Company Profile

China Ocean Shipping Company, or COSCO in short, was founded in 1961 as a

Chinese government agency. In the same year a subsidiary is formed in Guangzhou,
Guangdong Province. The Guangzhou subsidiary purchased a British vessel and renamed it
as Guanghua (Chinese: 光华). Guanghua made its maiden voyage to Jakarta for the People's
Republic of China in April 1961.
After US resumed the relation with China in the 1970s, China Ocean Shipping
Company signed an agreement with American company Lykes Brothers Steamship
Company in 1979. The agreement opens the commercial sea routes between the United States
and the People's Republic of China. In the same year, COSCO became the Chinese side
representative to collaborate with International Telephone and Telegraph on repairing the
communication facilities in the coastal cities of China.
In 1981, COSCO won a contract from the Pakistani Government owned National
Tanker Company of Pakistan, for crude oil transport.The company became a holding
company and renamed as China Ocean Shipping (Group) Company in 1993.Two other
government owned companies, China Marine Bunker Supply Company (Chimbusco in short)
and China Road Transport Company, which engaged in oil tanker and road transport
businesses respectively, became the subsidiaries of the group in 1988 and 1992 respectively.
China Road Transport Company was renamed into COSCO Logistics in 2001 (now part of
COSCO Shipping Logistics). As of 2003, COSCO Logistics engaged in shipping agency,
freight forwarding, third party logistics and supporting services. While Chimbusco became a
joint venture with PetroChina since 2003.
COSCO has a Hong Kong division which the division acquired a HK-listed
company Shun Shing Holdings[b] in February 1997. Hong Kong was a British colony until
June 30, 1997, and became a special administrative region of China with a separate
jurisdiction system since July 1. Another subsidiary of COSCO HK at that time, COSCO
Pacific, was a HK-listed company since 1994. COSCO Pacific has a joint venture
with Hongkong International Terminals Limited, which operates a terminal in Kwai Tsing
Container Terminals, Hong Kong since 1991. COSCO Pacific acquired 49% stake of COSCO
Logistics from the parent company in 2003. COSCO retained the remaining 51%. COSCO
Pacific also owned 20% stake of Hong Kong-based Chong Hing Bank from 1997 to 2007. In
2007 the stake was sold to the parent company, COSCO HK.
In 1995, another subsidiary, COSCO Corporation (Singapore) Limited,[d] became a
listed company in Singapore Exchange. The company was a component of Straits Times
Index until 2010.COSCO also acquired a Shanghai-listed company in 1997 as a vehicle
of backdoor listing. It became COSCO Development, which engaged in real estate. The direct
parent company of COSCO Development was sold in 2005, thus COSCO Development was
no longer part of the COSCO Group. Also in 2005, COSCO Group acquired a company from
COSCO Development. That company was the operator of Boao Forum for Asia.
In 2002, another subsidiary, COSCO Shipping Co., Ltd.,[f] became a listed company in
Shanghai.In 2004, COSCO formed a joint venture with fellow Central
Government owned Ansteel Group (Angang Group).In 2005, the flagship subsidiary of
COSCO, China COSCO Holdings, became a listed company.The A share of China COSCO
Holdings was listed in Shanghai since 2007

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1.2 Company Organization Structure

2.0 Liner Service

Liner services are most commonly associated with container cargo. However, such
services also include Roll-on Roll-off (RoRo) services for automobiles, carriage of bulk
cargo, break-bulk cargo, oil-tankers, LNG tankers, transport of passengers, etc. The sailing of
these vessels follows a fixed shipping timetable. Also known as a sailing schedule, it provides
details on the sailings of ships between ports. For example, it could be a weekly, fortnightly,
or monthly timetable subject to regular updates. Sailing schedules are normally published by
the shipping companies that operate liner services. However, it is also available on various
specialized and trusted websites. A shipping schedule can be checked by vessel, by port of
call, or by routing. It allows shippers or business people to analyze the best routes and transit
times to plan their shipments accordingly.
Liners are obliged to follow the dates and routes shown on the shipping schedule
unless they cannot do so due to natural calamities, epidemics, war, strikes. These unforeseen
and uncontrollable circumstances are known as Force Major. However, it is not unusual to see
sailing schedules omitting certain regular, scheduled ports. Other than force major, the
reasons for such blank sailings could be due to lack of cargo to load and unload from such
ports, extraordinary delays at any of the previous ports, unexpected maintenance stops for the
vessel.

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TYPE OF CARGO CARRIED :

1. Shipping of Food Stuff

Foodstuff includes various categories such as fresh, packaged, frozen, partially processed, and
other varieties. Foods present one of the most challenging goods to transport, due to their
short life and high probability of spoilage.

2. Transportation of Livestock and Animals

Livestock and animals are another commonly transported cargo between several countries.
This may be for the purpose of breeding, for meat, or for animal bi-products.Transporting
them presents challenges by way of ensuring that the animals survive the long journey. To
allow for this, there must be mechanisms by which they are provided with nutrition as would
normally be consumed. In addition, there must be provisions to regularly clean the living
holds and the livestock. Lastly, proper ventilation is a must.

3. Shipping Cars and Other Vehicles

Shipping vehicles is a very common business adopted in and around the Middle East, Europe,
some parts of Asia (China, Japan, Taiwan, Indonesia, Malaysia, Singapore etc.) and the
Americas. It generally functions as a ferry service where cars are moved around the coastlines
of a nation or neighbouring countries.

4. Transportation of Machinery, Equipment, and Factory Parts

Shipping machinery and parts is a very lucrative industry, especially when parts are moved in
large numbers. This is because these goods do not have specific shipping requirements, can
withstand most forms of sea motion on their own, and do not have the problems generally
faced by other types of cargo (spoilage, volatility etc.).

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Cargo Handling

Cargo handling refers to the overall activities in warehouses and logistics centers, such as
loading and unloading cargo, transporting cargo, warehousing, picking, and sorting. The main
work in cargo handling is separated into six tasks: assortment, stacking/taking inventory,
transportation, storage (allocation), sorting, and picking. These tasks greatly effect
productivity and quality in logistics. Cargo handling is a very important part of logistics, and
losses in cargo handling directly increase logistics costs. Cargo handling involves many
different tasks, so next we will explain in detail the most common.

Material Handling

Material handling is a general term for the machines that make cargo handling work (e.g.,
assortment, loading and unloading, transportation, and sorting) more efficiently. More simply,
it refers to the machines in general that make it easy to move cargo around or automate
handling. This includes simple machines such as carts, pallets, forklifts, and conveyors, as
well as industrial robots and automated warehouses that reduce labor requirements and
loading times. Material handling also includes automated picking machines, product
management machines using RFID tags, and machines that perform automated conveyance
and sorting as examples of machines that have been increasing in recent years.

Picking

Picking is work to gather products to ship while checking the item numbers and quantities of
those products written on a shipping instruction form (picking list). There are two picking
methods: the single picking method in which products are collected individually for each
shipping destination and the total picking method in which products collected in advance are
sorted by shipping destination.

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Picking Systems :

1. List Picking

The most basic picking method in which a person looks at the shipping instruction form
(picking list), checks the product names and quantities, and searches for the products. This
method is easy to implement, but it depends on the accuracy and speed of the worker, and the
chance of worker-caused mistakes also increases. To prevent mistakes, checks are required,
such as inspecting products with barcodes, before the products are shipped.

2. Digital Picking System (DPS)

In this picking method, digital displays are attached to racks that store cargo and products,
and the products are collected according to the instructions on the displays. A advantage of
this system is that workers can perform the work easily without any experience because they
simply pick the products while looking at the indicators and worker-caused mistakes are kept
to a minimum. This system is also desirable because it can be easily adopted and displays can
be attached to any storage location.

3. Barcodes

In this method, picking is performed by turning shipping instruction information into

barcodes and reading the barcodes of products. If the wrong product is selected, the barcode
scanner or handheld computer emits an error sound or vibrates to prevent the wrong product
from being picked.

4. RFID Tags

Attach RFID (radio frequency identifier) tags, with which information can be exchanged over
the wireless network, to product racks to prevent the wrong product from being picked. The
advantage is that nothing needs to be read like a barcode, which makes this effective for
implementing speedy work.

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CHARTERING PROCESS

Charterer Ship Broker Ship Owner

1. Finding a vessel to ship cargo

The charterer will contact to the Ship Broker to book the vessel. The Ship Broker will give
the suitable vessel to the charterer that they want. Ship Broker must give the several
characteristic that needed such as the capacity of the vessel, speed,the cost of the vessel (oil
consumption, crew of the ship and other several important things), the limit of the vessel to
sail of any cannal, lock or to enter any port.

2. Building optimal routes

They must find a route that suits the ship and is safe. They need to find the closest route to
save the cost and time of sailing the ship. In this way they can save on the cost of sailing the
ship. They need to find a non -hazardous route to ensure that every item on board is in a safe
and undamaged condition. Among the dangers they have to avoid are pirate attacks, the
weather and the depth of the sea must be in accordance with the ship.

3. Estimating and comparing voyage profitability

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Every voyage of ours must desire profit. Every voyage we want to carry out we need to
calculate all the costs that have been used and calculate the distance of the route that the ship
wants to use to deliver the goods to its destination. We need to choose the most profitable
cruise. In addition we need to estimate the voyage from several Ship Owners to facilitate our
work. We can also compare fare calculations and
selection of the most effective cargo

4. Tracking ships

The charterer is able to track the position of the ship and all ship activities. With this
Tracking, Charterers can calm their minds by knowing all the movements of the ship. If the
ship is damaged the Charterer can easily find out about the incident and find a solution as
soon as possible so that the ship does not experience delays in arriving at the port of
destination.

5. Creating reports, monitoring performance, and analyzing the market situation.

This process is done after the completion of the delivery of goods to the destination /
completion of the voyage. Ship Broker, Ship Owner, Charterer need to collect and analyze
data and information related to the voyage that has been done to make reference in the future.
Having this information can repair any shortcomings from past voyages. With this system can
also determine the losses incurred during the voyage that has been done before.

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INLAND TRANSPORTATION

Inland transport covers all transport activities by land, i.e. all modes except air and maritime
transport. Thus, it includes transportation by road, rail, inland waterways (both passengers
and goods) and pipelines (goods only). Land transport is a major partner for sea transport.

1. Sender (Manufacturer / Charterer)

A factory that produces goods for delivery to consumers who are in other countries. they will
pack the goods into the cointainer to be shipped overseas carefully to avoid damaged goods
during shipment.

2. Road Transport
Containers that are ready to be sent to the dry port will be delivered using a trailer truck that
has been provided. Each trip of the truck has been determined according to the time that has
been set to reach the dry port according to the schedule that has been set. They should not be
late because in the dry port there are many containers that need to be arranged according to
the type of goods carried.

3. Port Shipment

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Here all containers will be inspected by Customs to avoid carrying inappropriate goods such
as prohibited goods (drugs, firearms, human beings etc.). They will also check the documents
of each container to facilitate the movement of the container so as not to board the wrong
ship.

4. Sea Transport
Containers will be carried by a scheduled ship according to a set time. Containers will be
loaded into the ship using a crane at the port. Every movement of the container will be
recorded and entered into the system for the use of the sender and receiver. They will find it
easier to know where their containers are.

5. Port of Call
When the ship reaches its destination, the Container will be unloaded to the port using a
crane. Ships need to arrive on time to avoid traffic congestion while in port. When the
container is unloaded from the ship the container will be inspected again by the Customs of
the country to avoid carrying prohibited goods.

6. Dry Port
The container will be moved to the dry port for storage while waiting for the trailer truck to
pick up the container. The container will be stored there until the truck picks up the container.

7. Road Transport
When the trailer truck reaches the port they will pick up the container and will take it directly
to the receiver. Every movement of the truck will be recorded for the shipper to know where
the truck is located. Each truck trip was scheduled by the dispatcher to reach the destination.

8. Receiver
Receiver will get shipments shipped from other countries and stored in their place. The
container will be opened and all items in the container will be removed and inspected
according to the order that has been made.

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Advantages of Inland Transportation :

1. Door-to-door services
You can book your cargo from warehouse to warehouse and ensure flexible and transparent
end-to-end logistics.

2. Cost-efficient and environmentally-friendly services

Sustainability is important – both for us and our customers. We are focused on
sustainability and we are developing solutions to limit our impact on the environment.

3. Time-saving end-to-end process

You can simply add Inland Transportation to your ocean freight booking as well as Customs
Services. Covering truck, rail and barge, our inland services are designed to get your goods to
their final destination with fewer handovers and a simple end-to-end approach.

4. Single point of contact

You don’t need to get in touch with multiple suppliers. We do the work for you as we have an
extensive and flexible vendor network.

5. Simplified billing process

When booking Inland Transportation with Twill, you won’t get separate bills, but everything
will be included in your bill of lading, i.e. one invoice for ocean freight and drayage services.
This means improved ease of use for you.

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ADVANTAGES AND DISADVANTAGES LINER

Advantages :

1. 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.

2. 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.

Disadvantages :

1. 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.

2. 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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SUGGESTION TO IMPROVE SHIP CHARTERING IN FUTURE

Improve charter party assessments with real-time data

We believe that real -time, accurate data with full transparency on ship performance is
essential. We have developed new tools to assist in real -time monitoring of charter vessels.
Through our Digital Twin, owners and renters can enjoy up to 480 data points per day, (one
every 3 minutes) without having to install hardware on board. This data can be used to
provide real -time feedback and help operators improve navigational efficiency by reducing
bunker usage.

It can also be of enormous value in supporting performance claims. Having data of what
actually happens during the voyage, with detailed data on position, speed, draft, usage,
weather and sea area has proven invaluable for showing poor performance.

It’s time for a new approach in monitoring chartered ships. Just contact us to discuss how we
can together improve your charter party evaluation.

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CONCLUSION

From a commercial point of view, it is Master and ship staff’s moral responsibility to ensure
that shipowner profits from owning and running the ships. But there are no hard and fast
written rules that hold good in all situations. This is particularly the case when a ship is
chartered in different ways. It is important that we understand our responsibilities under each
charter party. And it is important that we understand where the loyalties of each party that we
are interacting with lies.

References

According to Gerard de Villiers The inland intermodal terminal concept has been
developed to integrate various individual components in adding logistics value at
a facility that acts as an intermediary in the supply chain. ( Villiers, 2015)

According to Heather Skyler, Liner shipping is the transport of goods by huge ocean ships
that traverse regular routes on fixed schedules. ( Skyler, 2018)

According to Ajay Menon , The global shipping industry transports goods all over the
world, connecting commerce and businesses across continents. In today’s fast-
paced world, the speed and capacity of ships have increased. (Menon , 2010)

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