Evaluating the Sea Transport
Advantages of shipping goods by sea freight
- Less Maintenance Cost: Maintenance cost in rail and road transport is quite high but maintenance cost of water transport is quite low.
- Cheap: The transport channel is quite cheap as compared rail and road Transport.
- Useful for Bulky Goods: Heavy and bulky goods can be transported easily at little cost through water transport.
- Helpful in Defense: Development of shipping is essential for the defense of the country also. It is also called second line of defense.
- Important for Foreign Trade: Water transport plays important role in foreign trade.
- You can ship large volumes at low costs – a freight forwarder can consolidate consignments to reduce costs
- Shipping containers can also be used for further transportation by road or rail.
Disadvantages of shipping goods by sea freight
- Slow Speed: shipping by sea can be slower than other transport modes and bad weather can add further delays
- Inflexible: it only moves to designated routes and timetables which are usually inflexible.
- Tracking: tracking your goods’ progress is difficult since you can hardly tell where the vessel is.
- Port Duties: it is associated with payment of heavy port dues in case of any delays.
- Further transportation overland will be needed to reach the final destination
- Basic freight rates are subject to fuel and currency surcharges
Learning Activities
You are an employ of freight forwarding company in South Sudan, and you are a sales person of a forwarding service. You happen to visit Chongquing International Construction services to sale your services and the procurement manager tells you they already have some excavator they expect from Japan, they have already got the commercial invoice and the terms are EXW assembling Plant Nagoya. The project for which they are expecting the excavator is to start in 3 months. The commercial value of the excavator is $500,000.
Required
- Explain to the customer the meaning of the terms on the commercial invoice
- Explain to the customer his liability according to the terms
- Explain the choice of the mode of transport you will use
- Explain the full range of documents required to move such cargo up to the port of discharge.
- Explain your roles and obligations to the customer
Assignment
- List and explain at least five (5) forms of sea transport?
- Discuss the different types of documentation used in sea transport
- What criteria can be used in selecting sea transport?
- What is the contracts of affreightment and its implication in sea transport?
- Explain the advantages of using seas transport over other modes.
- Explain the duties and responsibilities of the carrier under The Hague Visby rules
- Explain conditions under which the carrier may be exempted from Liability according The Hague Visby rules.