Chapter 4: Container transport

What is container?
• A freight container is a shipping equipment
with strength suitable to withstand shipment,
storage, and handling and used to transport
cargo.
 What is container?
• According to ISO 668:1995(E), a shipping container means
an article of transport equipment which is:
a) of a permanent character and accordingly strong enough
to be suitable for repeated use;
b) specially designed to facilitate the carriage of goods, by
one or more mode of transport, without intermediate
reloading;
c) fitted with devices permitting its ready handling,
particularly its transfer from one mode of transport to
another;
d) so designed as to be easy to fill and empty;
e) stackable; and,
f) having an internal volume of 1 cubic meter or more.
 Container standardization
• Series 1: 1a, 1b, 1c, 1d, 1e, 1f
• Width = height = 2435mm
• Length: 1a: 12190mm, 1b: 9125mm, 1c: 6055mm, 1d: 2990mm, 1e:
1965mm, 1f: 1460mm

• Series 2: 2a, 2b, 2c

• Height = 2100mm, Width = 2300mm
• Length: 2a: 2920mm, 2b: 2400mm, 2c: 1450mm
⇒ 1c: TEU (Twenty feet equivalent unit), gross weight: 30,4 MT, Capacity:
33,1m3
⇒ 1a: FEU (Forty feet equivalent unit), gross weight 30,4 MT, capacity
67,5m3
Closed container
Open top container
Open side container
High cube container
Flat rack container
Platform container
Half height container
Bulk freight container
Vented container
Thermal insulated container
Tank container
 Container transport operation
1. Methods
• FCL/FCL:
– FCL: shipper has enough cargo to fill up a container to
its full capacity.
– FCL/FCL: carrier receive a FCL shipment from a
shipper and deliver that FCL shipment to a consignee
=> 1 shipper- 1 consignee.
– Period of liability of carrier: from CY to CY
– CY (Container Yard): is the area within the terminal
where containers are stored, pending either arrival of
the vessel for loading, or pending arrival of the hauler
for invalid delivery.
 FCL/FCL
• Procedure:
– The shipper takes empty container and stuff it with his
all goods; container is sealed;
– The shipper transfers container to CY at loading port,
handing it to carrier for loading;
– The carrier loads container on board and transports to
discharging port with his own expense;
– At the discharging port, the carrier unloads container
from the vessel and moves to CY, with his own
expense;
– The carrier delivers the container to the consignee at CY of
discharging port.
 FCL/FCL
• Shipper’s responsibilities:
– Hire and transport empty containers to his warehouse
– Pack in containers
– Mark and number
– Carry out customs procedures and sealing containers
(according to export regulations)
– Move and hand containers to carrier at CY of loading
port
– Receive B/L (issued by carrier)
– Bearing the costs involved
 FCL/FCL
• Carrier’s responsibilities:
– Get the sealed container in CY
– Issuance of B / L
– Manage, care, send goods in container
– Take container from CY to vessel
– Unloading container onto CY at destination port
– Deliver container to recipient with valid B / L
– Bearing the costs involved
 FCL/FCL
• Consignee’s responsibilities:
– Arrange import documents and customs clearance
for the goods
– Submit valid B / L to receive the goods
– Transport containers to their warehouses, unload
goods out of the container under the supervision
of customs
– Return empty containers to the carrier or
container rental agent
– Bearing the costs involved
 LCL/LCL
• LCL good: A term used to describe the transportation
of small ocean freight shipments not requiring the full
capacity of a container
• LCL/LCL: is a shipping method in which carrier receive
goods from multiple shippers and deliver goods to
multiple consignees (Multiple shippers – multiple
consignees).
• CFS- Container Freight Station: is the warehouse where
LCL shipments are received by the ship operator, while
waiting to be either packed into containers for export
or unstuffed from containers for import.
• Period of liability: from CFS to CFS
 LCL/LCL
• Procedure:
– The carrier receives multiple shipments from multiple
shippers at CFS, issues B / L;
– The carrier packs multiple lot shipments into the same
container, container is sealed;
– Container is loaded on board and shipped to the
destination port;
– The carrier unloads container from the vessel, bringing
to CFS at destination port.
– At the CFS, the carrier unloads the multiple shipment
from the container, delivered to multiple consignee
with valid B/L
 LCL/LCL
• Shipper’s responsibilities:
– Carry goods from inland warehouse and deliver to
the carrier at CFS
– Customs clearance for goods
– Receipt of bill of lading
– LCL freight payment
 LCL/LCL
• Carrier's responsibilities:
– Receive multiple shipments at CFS and issue LCL B/L
for multiple shippers;
– Packs in container and seals container;
– Move container to the port, loading onto the ship for
transportation to the port of destination;
– Unload container from the vessel at the port of
destination and transport them to CFS;
– At the CFS, unload the goods from the containers,
handing them to multiple consignees and recovering
the B/L.
 LCL/LCL
• Consignee’s responsibilities:
– Arrange import licenses and customs clearance for
shipments;
– Submit a valid bill of lading for receipt;
– Pay the costs involved and transport the goods to
warehouse.
 LCL/LCL
• Combined methods:
– FCL/LCL
– LCL/FCL
• Notes:
– Container transport with traditional Incoterms (FOB, CIF, CFR)
• Unsuitable delivery points
• Difference in transport document requirements (Shipped on board vs.
Received for shipment B/L)
– Law of adjustment
– Responsibilities of carrier
– “Unknown clause”
– “Cargo on deck” clause
– Limits of liability of carrier
 Container freight
• Container freight is an amount that the owner must pay to the carrier for
the transportation of the container from one port to another.
• Freight unit: amount per unit of cargo
• Freight structure:
– Basic ocean freight: freight on the main transportation
– Feeder freight: Charge on the extra leg
– Additional fees: Payments outside the freight:
• Terminal handling charge (THC)
• LCL service charge
• Inland Haulage Charge
• Up, down, remove charge
• Container demurrage
• Bunker adjustment factor (BAF)
• The currency adjustment factor (CAF)
• Surcharge (B/L fee
 Types of freight
• Freight all kind (FAK): calculate the same for every kind
of cargo loaded in container if it occupied the same
weight or volume.
• Commodity box rate (CBR): different commodities are
subject to different rate:
– Freight unit: TEU
– Charges are based on average capacity of the container
– Apply only to certain consignments on certain routes
• LCL charges
• Charges applied to volume contract or time volume
contract
• Allowances, incentives
 Consolidation
• Consolidation is the collection of multiple
small shipments from multiple shippers to
stuff into full container load and deliver to
multiple consignees at the destination.
•
 Consolidation
• At the departure, the consolidator:
– picks up individual shipments at CFS and collect
House B/L;
– packs in full container load at the CFS;
– Deliver to carrier and receive Master B/L
• At the destination, the consolidator’s agent:
– receives containers with valid Master B/L;
– Unload the shipments from container and deliver
to consignee with valid House B/L
 Consolidation
• Benefits:
– For exporters:
• Freight reduction
• More convenient (only need to deal with consolidator)
– For carriers:
• Save on cost, time, paper work
• Make full use of capacity of transport vehicles
• Easier to collect freight
– For consolidator:
• Income (the difference between freight rate pay for carrier and
the one paid by exporters)
• More preferential freight rate offer by carriers/shipping
companies