CARRIER, CONTAINERIZATION AND CHARTER PARTY

A carrier is a firm or organisation that specialises in transporting other people’s goods. Carriers can be classified into three, namely, private carrier, common carrier and contract carrier.

1) Common Carrier: A common carrier is a person or firm who undertakes to transport goods from one place to another for anyone willing to pay a reasonable charge. They are open to the generality of the people. A common carrier is obliged by law to carry the goods safely and is liable for damage or loss to the goods. It can also be defined as a term used for a transport undertaking which compel them to carry any goods given to them at a reasonable charge to any destination. Examples of common carriers are motor vehicles that operate on the highways.

Functions of a Common Carrier

• The goods must be delivered to their destination.
• The carrier will be liable for loss or damage to the goods.
• The carrier is obliged by law to carry the goods safely and securely.

2) Contract Carrier: Contract carrier is a public carrier which undertakes to transport goods from one place to another under contract, e.g. tanker fleets that transport oil to the oil depot.

3) Private Carrier: Private carrier helps to move his or its own goods from one place to another. For instance, a company car can be used to carry their products about.

 

CONTAINERIZATION

Containerization is a method of freight handling in which general cargo is packed into large rectangular containers and carried in this form from a factory or inland depot by lorry to a port. In other words, it is the use of sealed large metal boxes for transporting goods.

Containers are large rectangular crates which are used to pack cargoes from a factory or inland depot by lorry to a port. The containers are loaded onto the ship or plane by a machine called crane.

Uses of Containers

1. To Reduce Pilferage: Pilferage of goods can be reduced since the containers are sealed.
2. Quickens Loading: It increases the speed of loading of goods into a ship.
3. Easy Movement: It can be easily moved to their destination without being unpacked.
4. Protection: The goods can be protected by the use of containers against fire, bad weather etc.
5. Cost Reduction: The use of containers reduce cost of loading and offloading of goods because they are packed in containers.

 

CHARTER PARTY

Charter party is a contract whereby a ship or aircraft is temporarily leased by the owner to another person or firm purposely to transport cargoes from one place to another. The charterer must pay charges called charter party freight. It may be for a definite journey or definite period. The name of the ship, its destination and freight must be specified.

Types of Charter

• Time Charter: Time charter is the hiring of a ship for an agreed period rather than hiring for a particular voyage. The ship is chartered for a specific period, e.g. five months.
• Voyage Charter: Voyage charter is a contract whereby the owner of a ship hires it out for a specified voyage rather than for a fixed period.

DOCUMENTS INVOLVED IN TRANSPORTATION

1. Consignment Note: Consignment note is a document made out by the sender of goods handed to the carrier, and countersigned by the consignee on delivery as proof that delivery has been made.
2. Bill of Lading: A bill of lading is a document that gives the holder the right to acquire possession of goods that have been shipped. This is a contract between the exporter and the shipping company, stating the terms under which the goods are to be exported. It shows the name of the vessel, the port of destination and the rate of freight.
3. Certificate of Insurance: Certificate of insurance is a document which shows that the goods have been insured against risks or loss by the exporter.
4. Air Way Bill: Air way bill is a document made out by the consignor of goods to be transported by air. It shows the names of consignor and consignee, the airports of loading and the value of the goods.
5. Manifest: Manifest is a document which shows the full list of the cargo carried by a ship or aircraft. This document is to be completed by the captain of the ship and lodged with the custom authorities, showing the particulars of the ship, its cargo and destination.
6. Shipping Note: Shipping note is a document containing instructions for transporting the goods. It is sent to the shipping agent by the exporter.
7. Delivery Note: Delivery note is a document which normally accompanies the delivery of goods. It shows the goods delivered and checks to be made.

 

TERMINOLOGIES USED IN THE TRANSPORTATION INDUSTRY

1. Freight: Freight is the term used for the cost of shipping a particular cargo for a specific voyage.
2. Dead Freight: Dead freight is the freight paid on unoccupied space in the ship. If there is empty space left in the ship, the person that charter must pay for the space not used.
3. Charterer: A charterer is the person or firm that hires or charters a ship for a specific purpose.
4. Consignment: Consignment are goods that are conveyed from one place to another; a shipment or delivery of goods.
5. Consignee: Consignee is the person or organisation to which goods are transported to through a carrier.
6. Consignor: Consignor is the owner who sends goods to the consignee.
7. Demmurage: Demmurage is an extra charge or penalty which the chaterer pays for exceeding the period originally agreed upon. It is used in connection with charter party. Demmurage is normally calculated as a certain charge for each day a performance is delayed. It is the charge paid for failing to off-load a ship within a stipulated time.
8. Demise Charter: Demise charter is a form of charter party where the charterer of a ship makes all the arrangements for working it, so in effect for a period it is owned by him, i.e ., the period of charter.