CARRIAGE OF GOODS

BY LAND, SEA & AIR

MODULE - 6
CARRIAGE OF GOODS BY SEA
• Seaborne
trade accounts for about 90% of the global trade, and as per
UNCTAD, were carried in around 155.6 million containers (2019 estimate).
• Growth in international maritime trade stalled in 2019, reaching its lowest
rate since the global financial crisis of 2008–2009. Maritime trade volumes
expanded by only 0.5 per cent in 2019, down from 2.8 per cent in 2018 to
reach a total of 11.08 billion tons.
• Because of size or volume, there are several types of cargoes that cannot be or is
economically unviable to move by other modes of transport than the sea.
• Ocean freight is a less expensive method of shipping goods, but the drawback is
a longer transit time. Another benefit for ocean freight is while size and weight
may be an issue for air; it is not for ocean freight.
• Ocean freight is used quite extensively for the movement of bulk commodities
such as agri-products (wheat, maize, soya, etc.), coal, iron ore or for wet bulk
products such as crude oil and petroleum. Also, larger, odd-shaped items
including engines and propellers may move via this mode as well, depending on
how sensitive the delivery time is.
• Ocean freight is also a preferred mode of transport for the movement of high
volume and heavy cargo such as minerals, metals, ores, steel coils, etc. which
would be impossible to move by air freight.
• Additionally,businesses are placing more of an emphasis on the environmental
impact on shipping. An air freight service emits a higher amount of polluting
gases with less space capacity compared to sea freight services which are
considered a much greener transportation mode with a higher carrying capacity.
KEY BENEFITS OF OCEAN FREIGHT
INCLUDE
• Suitable for wide range of products with long lead times
• Large volumes
• Most environmental friendly among all modes of transport
• Economical
• Extensive coverage around the world
• Multiple carrier options for the shippers
 CARRIAGE OF GOODS BY AIR
• Tomeet the demand for growth, world air cargo traffic is forecasted to grow an
average 4.2 percent per year.
• Air freight is a critical mode of transport. It serves markets and supply chains that
demand speed. One of greatest examples goes back to 1997 when Apple began
innovating on the nitty-gritty details of supply-chain management. Almost
immediately upon Steve Jobs’ return. At the time, most computer manufacturers
transported products by sea, a far cheaper option than air freight.
• Steve Jobs took advantage of the benefit of air freight and used an innovative
strategy. He paid $50 million to buy up all the available holiday air freight space to
ensure that the company’s new, translucent blue iMacs would be widely available
during Christmas season giving them a massive competitive advantage over their
rivals.
• Other industries such as the automotive and retail industry also utilize air freight
to achieve ‘just-in-time’ (JIT) inventory replenishment. JIT option allows stores,
production lines to place order fulfillment based on demand as, and when
required. It provides greater flexibility and reduces inventory and storage costs.
• Also, perishable goods such as foods, flowers, and some pharmaceuticals also
take advantage of shorter transit time. Another positive for air freight is that
there’s less handling of cargo overall, so the likelihood of damage or theft is less
likely when utilizing air.
• But air freight also has its own disadvantages such as being one of the most
expensive due to the requirement of speed and the fuel that is used.
• It also has its size and weight limitations. Regulatory bodies limit what can and
cannot be transported by air, and as such, oddly shaped or very large items may
be more suitable for other modes of transport.
KEY BENEFITS OF AIR FREIGHT INCLUDE
• Quick transit
• Less handling of cargo
• Less documentation
• Reliable arrival and departures
• Enhanced level of security for your cargo
CARRIAGE OF GOODS BY RAIL
• Another mode of transport which is also considered a ‘green’ option is rail.
Trains burn less fuel per ton-mile than road vehicles and a train, which can
have as many than 100 wagons, only needs one driver.

• There are, however, some additional costs which are incurred in a rail journey:
at each end of the rail transit, a road delivery will be needed, and there will be
a lift cost to transfer the container between the train and the road vehicle.

• On average, longer journeys tend to be less expensive by rail, and shorter

journeys are less costly by road.
KEY BENEFITS OF RAIL FREIGHT
INCLUDE
• Reliable transit times and schedules
• Railroads are the most efficient form of land transportation. One train can
haul the equivalent of over 400 trucks

• Fast and cost-effective deliveries over long distances.

• Traditionally, rail has a strong safety record.
• Helps in alleviating road congestion, thus lowering emissions
CARRIAGE OF GOODS BY ROAD

• Road freight is one of the most common of all modes of transportation. It is

widely used in continents such as Europe, Africa, and North America.

• The single customs document process provides a seamless movement of

goods even across various states and countries.

• However, truck transport is limited somewhat as to what it can carry by the

size of the vehicles used and by size and weight restrictions. Another
limitation is that it is affected by weather, road conditions and traffic.
KEY BENEFITS OF ROAD INCLUDE
• Cost-effectiveness
• Quick and scheduled delivery
• Local, over border, long or short haul deliveries even in rural areas
• Flexible service
• Saving in Packing Cost compared to other modes
• Track and trace of cargo and truck
• Complete door-to-door service and it is one of the more economical means
of transport.
 MULTIMODAL
• Another option to keep in mind is multimodal solutions – the utilization of more than
one mode of transport.
• Multimodal is a combination of different modes of transportation such as rail, road, and
sea which allows the customer to cost-effectively manage shipments from start-to-end,
ensuring optimum care and efficiency every step of the way.
Key benefits of multimodal transport include:
• Cargo can be moved to any part of the world using multiple modes of transport
• Reduces the distance for the goods between the manufacturer and consumer
• Customers can deal with one entity to handle all modes of transport under one
document
• Efficient and cost-effective delivery options
TYPES OF CONTAINERS
1.  Dry storage container
• The most commonly used
shipping containers; they come
in various dimensions
standardized by ISO. They are
used for shipping of dry
materials and come in size of
20ft, 40 ft and 10ft.
2. Flat rack container
• With collapsible sides, these are
like simple storage shipping
containers where the sides can be
folded so as to make a flat rack
for shipping of wide variety of
goods.
• Flat rack containers are
especially suitable for heavy
loads and cargo that needs
loading from the top or sides,
such as pipes and machinery.
3. Open top container
• With a convertible top that can
be completely removed to
make an open top so that
materials of any height can be
shipped easily.
• Oversized cargo such as
machinery, timber, steel, scrap
metals etc. can be loaded easily
from the top in an open top
container.
4. Tunnel container
• Container storage units
provided with doors on both
ends of the container, they are
extremely helpful in quick
loading and unloading of
materials.
5. Open side storage container
• These storage units are
provided with doors that can
change into completely open
sides providing a much wider
room for loading of materials.
6. Double doors container
• They are kind of storage units
that are provided with double
doors, making a wider room for
loading and unloading of
materials. Construction
materials include steel, iron etc
in standardized sizes of 20ft
and 40ft.
7. Refrigerated ISO containers
• These are temperature
regulated shipping containers
that always have a carefully
controlled low temperature.
They are exclusively used for
shipment of perishable
substances like fruits and
vegetables over long distances.
8. Tanks
• Container storage units used
mostly for transportation of
liquid materials, they are used by
a huge proportion of entire
shipping industry. They are
mostly made of strong steel or
other anti corrosive materials
providing them with long life and
protection to the materials.
9. Half height containers
• Another kind of shipping
containers includes half height
containers. Made mostly of steel,
these containers are half the
height of full sized containers.
Used especially for good like
coal, stones etc which need easy
loading and unloading
10.  Car carriers
• Car carriers are container
storage units made especially
for shipment of cars over long
distances. They come with
collapsible sides that help a car
fit inside the containers without
the risk of being damaged or
moving from the spot.
11. Intermediate bulk shift
containers
• They are designed to handle
large amounts of materials and
made for purpose of shipping
materials to a destination where
they can be further packed and
sent off to final spot.
• engineered for the mass
handling, transport and storage of
liquids, semi-solids, pastes, or
solids.
12. Drums
• As the name suggests, circular
shipping containers, made from
a choice of materials like steel,
light weight metals, fiber, hard
plastic etc. they are most
suitable for bulk transport of
liquid materials. They are
smaller in size but due to their
shape, may need extra space.
13.  Special purpose containers
• Not the ordinary containers,
these are the container units,
custom made for specialized
purposes. Mostly, they are used
for high profile services like
shipment of weapons and arson.
As such, their construction and
material composition depends on
the special purpose they need to
cater to. But in most cases,
security remains the top priority.
TYPES OF VESSELS
Intermodal:
• involving two or more different modes of transport in conveying goods.
Deadweight Tonnage:
• is a measure of how much weight a ship can carry, not its weight, empty or in any degree
of load. DWT is the sum of the weights of cargo, fuel, fresh water, passengers, and crew.
Containerization:
•a shipping method in which a large amount of material (such as merchandise) is
packaged into large standardized containers.
Break-bulk:
• denoting a system of transporting cargo as separate pieces rather than in containers.
Stowage:
• pack or store (an object) carefully and neatly in a particular place.
 1. DRY CARGO SHIPS
• Dry cargo ships are used to carry solid dry goods that have a higher tolerance to
heat and cold, such as metal ores, coal, steel products, forest products, and grains.
These vessels are equipped with on-deck cranes and other mechanism for loading
and unloading of goods.
• As dry cargo shipment doesn’t require special types of precautions (as required
for carrying liquid and gases), bulk carriers and container ships don’t have
onboard temperature control equipment.
• Dry cargo vessel category mainly includes bulk carriers and container ships.
Bulk carriers are used for transportation of unpackaged bulk cargo, such as
metal ores, coal, cement, tin, steel, and grains in its cargo holds.
• Container ships are primarily used for the transportation of non-bulk cargo,
generally manufactured goods, in truck-size intermodal containers.
CONTAINER SHIP
(EMMA MAERSK)
BULK CARRIER
2. GENERAL CARGO VESSELS
• Ships that move packaged merchandise from one location to another.
• Vital to international trade, these transports are specifically designed for this
purpose due to the vast range of cargo materials to be moved.
• To move, load and unload cargo, on-ship cranes and other heavy equipment
are typically built-in and needed.
•A general cargo ship is extremely adaptable and can be used to transport
virtually every form of dry non-bulk cargo.
3. REEFER VESSELS (REFRIGERATED
CARGO SHIP)
•A vessel designed to carry goods requiring specific climatic conditions
during transport, such as meat, fruit and fish.

• A reefer ship has special insulated holds into which cold air is forced at the
temperature appropriate for the goods being carried.

• Cargo is stowed in holds which are then sealed and temperature controlled.
• Traditional reefer vessels have been largely replaced by the use of reefer
containers which may be carried on board a container vessel.
4. RO-RO VESSELS
• Ro-ro is an acronym for Roll-on/roll-off.
• Roll-on/roll-off ships are vessels that are used to carry wheeled cargo.
• The vehicles in the ship are loaded and unloaded by means of built-in ramps.
Normally these ramps are made towards the stern (backside) of the ship. In some
ships, they are also found on the bow side (front) as well as the sides. The vessel
can be of both military and civilian types.
• There are various types of ro-ro vessels, such as ferries, cruise, ferries, cargo
ships, etc.
• The ro-ro vessels that are exclusively used for transporting cars and trucks across
oceans are known as Pure Car Carriers (PCC) and Pure Truck & Car Carriers
(PCTC) respectively.
 5. LIQUID CARGO SHIPS (TANKERS)
• Tankers are ships carrying liquid cargoes in bulk; crude oil, oil products, chemicals,
liquefied gases, molten sulphur, even orange juice. The nature of their cargo requires special
forms of construction.
• Tankers can be divided into the following types: oil tankers, chemical tankers, gas
carriers and combination carriers.
• Crude oil tanker is an oil tanker engaged in the trade of crude oil. Product tanker is an oil
tanker engaged in the trade of oil other than crude oil.
• Chemical tankers are ships constructed to carry a cargo of noxious liquid substances in bulk.
• Gas carriers are intended to carry different liquefied gases used for energy purposes
(petroleum gases, natural gases), in the chemical industry (ethylene, vinyl chloride,
propylene, etc.) or used as a raw material for making agricultural fertiliser (ammonia).
• Parcelchemical tanker – A chemical tanker capable of carrying many kinds of
chemical cargoes including petroleum products. 
6. PASSENGER VESSELS

• Are defined as vessels used primarily for the transportation of persons;

commercial vessels transporting property in addition to transporting
passengers; and ferryboats carrying passengers and their vehicles.
• This can vary from small ferries carrying at least 10-20 people to large cruise
ships carrying passengers as well as vehicles.
7. LIVESTOCK CARRIERS
• Ships that are used for the purpose of transferring cattle across the seas are
known as livestock carriers or cattle ships. Without the help of such ships,
livestock transportation and livestock shipping would have been extremely
difficult or completely impossible.
• The animals that are used in such livestock carriers include sheep, goats,
cows and other forms of cattle. Such transfer of cargo with animals as the
main items of transportation is carried out as an import-export operation.
This is why all animal cargo-carrying operations are required to be approved
and licensed by the appropriate authorities.
• Twotypes of Livestock carriers are Open Livestock Carrier Vessels and
Mechanical Livestock Carrier Vessels.
• It has to be noted that such livestock carriers also needed to carry
huge and enormous amounts of food, water and any other material
that could be needed by the animals at any point of time.

• Also important is the number of crew present in such cattle ships.

Since the animals are more in number, the amount of crew also needs
to be more so as to effectively handle the livestock present in the
ships.
 CONTRACT OF AFFREIGHTMENT
• A contract for the carriage of goods by sea is called as a "contract of
affreightment".
• The word 'affreightment' literally means 'the hiring of a vessel or ship". It
may, thus, be defined as a contract between the consignor or shipper and the
shipping company whereby the former agrees to hire, at a price called
'freight', space in a ship for transportation of goods.
• A contract of affreightment may be embodied either in a Charter Party or a
Bill of Lading.
 CHARTER PARTY
• A charter party is a contract of affreightment entered into for hiring the
whole ship or a principal part thereof to carry goods from one port to
another.

•  Charter party is a Latin word ‘Charta Partitia’ meaning divided document.

• It also refers to the formal written document in which the contract of hiring
of the whole or part of the ship for the conveyance of goods is expressed.
The person hiring the ship or a part of it is called the 'charterer'.
 KINDS OF CHARTER PARTY
• 1. Voyage Charter: When the vessel is chartered for a particular voyage is
called the voyage charter.
• 2. Time Charter: When the vessel is hired for a specified period of time,
irrespective of the number of voyages performed.
• 3. Charter by demise: In the case of hiring the whole ship, the terms of the
charter party may sometimes amount to a lease or demise of the ship,
whereby the possession of the ship comes under the absolute control of the
charterer who becomes temporarily the owner of the ship and the captain
and the crew become his servants. This is called a 'charter by demise'.
• 4. Charter without demise: Generally, a charter party is without a
demise or lease of the ship where, like a simple contract of carriage,
the charterer only gets the right to have his goods conveyed by the
ship and the captain and the crew do not become his servants and the
possession and control of the ship remain with the ship-owner. In
such a case it is called a 'charter without demise'.
 CLAUSES OF CHARTER PARTY
1. Particular of the Parties: This clause covers the description and name of the
parties i.e. the charterer and the shipping company.
2. Particular of the ship: The name and the rating of the ship showing its
measurement, volume and its loading capacity. If the ship provided is of
different class, charterer can avoid the contract.
3. Lawful Merchandise: Goods loaded must be such as could be lawfully carried
and discharged at the port of destination.
4. Position of the Ship: The position of the ship as on the date of contract must be
clearly shown as it indicates to the charterer that when the ship will probably
arrive at the port of dispatch.
5. Port of Loading: It is the duty of the ship owner to bring the ship to the port of
loading and inform the charterer in time so that the arrangement for the loading
of the cargo could be made.
6. Obligations of the ship owner: It is the responsibility of the ship
owner to provide a ship which is sea worthy. If it is not stated in the
contract, it will be considered as an implied condition.

7. Obligation of the Charterer: Charterer should pay the agreed freight

either in advance or at the completion of mission depending upon the
terms of the contract. Moreover he is required to return the ship in
good condition and should load as much cargo as ship can safely
carry. There is an implied condition that charterer should not load
dangerous goods.
8. Lay days and demurrage: Lay days are the number of days allowed to the charterer for the
loading and unloading cargo. These days begin to run from the time when the charterer has
received notice of the arrival of the ship at the stated port. Theses days may be either "running
days" which are counted from midnight to midnight including holidays or "working days"
which are the days on which the work is normally done i.e. excluding holidays.
It is necessary that work of loading and unloading be completed with in the number of days
allowed and if days are not fixed, than within the reasonable period of time considering the
circumstances and the custom of the port.
Lay days reflects the maximum time allowed. If the ship is loaded in a shorter period of time,
charterer must allow the ship to depart.
If charterer requires extra time than allowed lay days, he will be required to pay extra amount
calculated on daily basis known as "demurrage". No demurrage is payable if the ship has been
detained through the fault of the owner.
9. Cargo of third parties: Generally charterer is allowed to load the cargo of the
third parties but for this purpose, separate bill of lading will be required.

10. Delivery of goods: It is the duty of the master of the ship to proceed at the
port of discharge, get the goods out of the ship hold and put them on the deck
of the ship. Thereafter, charterer will be responsible for taking delivery of the
goods.

11. Excepted Perils: By virtue of this clause, shipowner will not be liable for the
loss caused by some perils such as storm, flood, earthquake, fire etc. This
clause protects ship owner only if the perils could not have been avoided by
the exercise of reasonable care.
 MATE RECEIPT
• Mate's receipt is a receipt issued by the Commanding Officer of the ship when the
cargo is loaded on the ship.
• It is a prima facie evidence that goods are loaded in the vessel. Mate's receipt is
first handed over to the Port Trust Authorities.
• After making payment of all port dues, the exporter or his agent collects the mate's
receipt from the Port Trust Authorities. Mate's receipt is freely transferable.
• It must be handed over to the shipping company in order to get the bill of lading.
Bill of lading is prepared on the basis of the mate's receipt.
• Mate's receipt is not a document of title of goods. It is merely a receipt of goods.
• However, it is an important document as without it, the exporter will not be able to
obtain the title document of goods, i.e., the bill of lading.
TYPES OF MATE RECEIPTS
• (a) Clean Mate's Receipt: The Commanding Officer of the ship
issues a clean mates receipt, if he is satisfied that goods are packed
properly and there is no defect in the packing of the cargo or package.

• (b) Qualified Mate's Receipt: A qualified mate's receipt is issued

when the Commanding Officer of the ship is not satisfied with the
packing of the goods and the shipping company does not take any
responsibility of damage in transit.
CONTENTS OF MATE RECEIPT
• (a) Name and logo of the shipping • (h) Total number of containers and
line. packages.
• (b) Name and address of the shipper. • (I) Description of goods in terms of
• (c) Name and the number of vessel. quantity.

• (d) Name of the port of loading. • (i) Container status and seal number.
• (e) Name of the port of discharge and • (k) Gross weight in kg. and volume in
place of delivery. terms of cubic metres.

• (f) Marks and container number. • (I) Shipping bill number and date.
• (g) Packing and container description. • (m) Signature and initials of the Chief
Officer.
SIGNIFICANCE OF MATE’S RECEIPT
(a) It is an acknowledgement of goods received for export on board the
ship.
(b) It is a transferable document. It must be handed over to the
shipping company in order
to get the bill of lading.
(c) Bill of lading, which is the title of goods, is prepared on the basis of
the mate’s receipt.
(d) it enables the exporter to clear port trust dues to the Port Trust
Authorities.
 BILL OF LADING
• Bill of lading (BOL) is one of the most important documents in the shipping process. To ship any
goods, a bill of lading is required and acts as a receipt and a contract. A completed BOL legally shows
that the carrier has received the freight as described and is obligated to deliver that freight in good
condition to the consignee.
• A bill of lading must be stamped and signed by the ship owner or his agent i.e., the master or captain of
the ship. Under the Carriage of Goods by Sea Act, 1925, a bill of lading, apart from the main terms of
contract, must contain the following particulars:
a. The leading marks necessary for identification of the goods, provided such marks are stamped on
the cases or coverings in which such goods are contained in such a manner as should ordinarily
remain legible until the end of the voyage.
b. The number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in
writing by the shipper.
c. The apparent order and condition of the goods.
 CHARACTERISTICS OF BILL OF LADING
PROOF OF CONTRACT OF SHIPMENT
• The bill of lading is the ‘proof’ of a contract of shipment between the shipper and the
carrier. It is not a contract between the buyer and the seller. It is only the evidence of the
shipment’s contract to transport the cargo as decided by the buyer and the seller.
RECEIPT OF SHIPMENT
• The bill of lading also acts as a receipt for goods received by the carrier in good
condition from the shipper. The carrier issues the bill of lading in exchange for the
receipt of the goods to be shipped.
TITLE TO THE SHIPMENT
• The bill of lading gives the holder the ‘title’ to the shipment. The goods are transferred to
the holder, who can either claim them or transfer to someone further.
 TYPES OF BILL OF LADING
Clean Bill of Lading
• Where a bill of lading acknowledges receipt of goods in good order and condition,
it is called clean bill of lading.
Dirty or qualified/ bill of lading
• When a bill of lading contains a qualified statement for e.g. goods received in
damp condition it is called dirty or qualified bill of lading.
Through Bill of Lading
• Through Bills of Lading are complex than most BOLS. The document permits the
shipping carrier to pass the cargo through several modes of transportation or
through several distribution centers. This bill includes an Inland Bill of Lading and
an Ocean Bill of Lading depending on the destination. 
Claused Bill of Lading
• If the cargo is damaged or there are missing quantities, a Claused Bill of Lading is
issued.
Received for shipment
• This is not a proper bill of lading and operates only as receipt of goods received for
shipment. It is issued when the goods are received in anticipation of the arrival of the
ship. Generally this bill is converted into a clean bill of lading when the master of the
ship issued the receipt of delivery of the goods on the board of the ship.
Bearer Bill of Lading
• Under this case, bill of lading can be transferred freely by simple delivery and the
person holding that bill can obtain delivery of the goods.
Combined transport B/L
• This bill gives information about cargo being transported in large containers by sea
and land, i.e. through multi-model transport
Order Bill of Lading
• The cargo is only delivered to the bonafide holder of the bill of lading, and it
has to be verified by an agent who issues delivery order and the verified bill of
lading. The order bill of lading:
–    is the most modern type bill which is widely used all over the world
–    ensures the safety of delivery of cargo to a bonafide holder of B/L
–    Since the ship visits several foreign ports where the language, practice, procedures may
be different the master might be inconvenienced during the delivery of the cargo. People
might fraudulently collect the cargo.
–    To overcome this difficulty and avoid future cargo claims and litigations, the consignee
or the holder is required to surrender the bill of lading to the ship’s agent at the discharge
port who will verify the genuineness of the bill of lading. When satisfied the agent will
issue a delivery order and the verified bill of lading. Now any person can collect the cargo
from the ship by surrendering the bill of lading and the delivery note to the ship.