Carriage of goods by sea.docx

7/30/2019 Carriage of goods by sea.docx

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The Carriage of Goods by Sea Act ("COGSA")[1]is aUnited Statesstatutegoverning

the rights and responsibilities betweenshippersofcargoandship-ownersregarding

ocean shipments to and from the United States. It is the U.S. enactment of the

International Convention Regarding Bills of Lading, commonly known as the "Hague

Rules". It was found inTitle 46Appendix of theUnited States Code, starting at Section1301, but has been moved to a note in 46United States Code30701.[2]

TheUnited States Congress, concerned that the Hague Rules did not offer shippers

enough protection against damage to cargo by shipowners, amended the Hague Rules

in a number of minor, but important, ways. It increased the amount that shipowners

would have to pay cargo owners for damage in transit fromGBP100 per package

toUSD500 per package or, for goods not shipped in packages, per customary freight

unit. This "package limitation" has become one of the most contentious and litigious

areas in the field of cargo damage, particularly as it relates to the transportation of goods

by oceanshipping containers.
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Cargo (orfreight) isgoodsorproducetransported, generally forcommercialgain,

byshiporaircraft, although the term is now extended to intermodaltrain,vanortruck. In

modern times,containersare used in most long-haul cargotransport.

Transportation types[edit]

Marine [edit]

Container ship at thePort of Helsinkiin Finland

Seaportterminals handle a wide range ofmaritimecargo.

Automobilesare handled at many ports and are usually carried on specializedroll-

on/roll-offships.

Break bulk cargois typically material stacked onpalletsand lifted into and out of the

hold of a vessel bycraneson thedockor aboard the ship itself. The volume of break

bulk cargo has declined dramatically worldwide ascontainerizationhas grown. One

way to secure break bulk and freight inintermodal containersis by usingDunnage

Bags.

Bulk cargo, such assalt,oil,tallow, andscrap metal, is usually defined as

commodities that are neither on pallets nor in containers. Bulk cargoes are not

handled as individual pieces, the way heavy-lift and project cargoes

are.Alumina,grain,gypsum, logs, and wood chips, for instance, are bulk cargoes.

Neo-bulk cargocomprises individual units that are counted as they are loaded and

unloaded, in contrast to bulk cargo that is not counted, but that are not

containerized.[1]

Containers are the largest and fastest growing cargo category at most ports

worldwide. Containerized cargo includes everything fromauto

parts,machineryandmanufacturing componentstoshoesandtoysto

frozenmeatandseafood.

Project cargo and theheavy liftcargo include items like manufacturing equipment,

air conditioners, factory components,generators,wind turbines, military equipment,

and almost any other oversized or overweight cargo which is too big or too heavy tofit into a container.

Air[edit]

CargoluxBoeing 747-400F with the nose loading door open

Main article:Air Cargo

Air cargo, commonly known as air freight, is collected by firms from shippers and

delivered to customers. Aircraft were first used for carryingmail as cargoin 1911.

Eventually manufacturers started designing aircraft for other types of freight as well.

There are many commercial aircraft suitable for carrying cargo such as theBoeing

747and the biggerAn-124, which was purposely built for easy conversion into acargo

aircraft. Such large aircraft employ quick-loading containers known asunit load

devices(ULDs), much like containerized cargo ships. The ULDs are located in the front

section of the aircraft.

Most nations own and utilize large numbers of military cargo aircraft such as theC-17

Globemaster IIIfor logistical needs.

Train [edit]

Main article:Freight train
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A picture of aP&O Nedlloydinter-modalfreightwell caratBanburystation in the year 2001

Trains are capable of transporting large numbers of containers that come from shipping

ports. Trains are also used for the transportation of steel, wood and coal. They are used

because they can carry a large amount and generally have a direct route to the

destination. Under the right circumstances, freight transport by rail is more economic and

energy efficient than by road, especially when carried in bulk or over long distances.

The main disadvantage of rail freight is its lack of flexibility. For this reason, rail has lost

much of the freight business to road transport. Rail freight is often subject

totransshipmentcosts, since it must be transferred from one mode of transportation to

another. Practices such as containerization aim at minimizing these costs.

Many governments are currently trying to encourage shippers to use trains more often

because of the environmental benefits.[2]

Road [edit]

Main article:Truck

Many firms, likeParcelforce,FedExandR+L Carrierstransport all types of cargo by

road. Delivering everything from letters tohousestocargo containers, these firms offer

fast, sometimes same-day,delivery.

A good example of road cargo is food, assupermarketsrequire deliveries every day to

keep their shelves stocked with goods. Retailers of all kinds rely upondelivery trucks, be

they full sizesemi trucksor smallerdelivery vans.

Shipment categories [edit]

Freight is usually organized into various shipment categories before it is transported. An

item's category is determined by:

the type of item being carried. For example, a kettle could fit into the category

'household goods'.

how large the shipment is, in terms of both item size and quantity.

how long the item for delivery will be in transit.

Shipments are typically categorized as household goods, express, parcel, and freight

shipments:

Household goods (HHG) include furniture, art and similar items.

Very small business or personal items like envelopes are considered overnight

express orexpress letter shipments. These shipments are rarely over a few

kilograms or pounds and almost always travel in the carriers ownpackaging.

Express shipments almost always travel some distance by air. An envelope may go

coast to coast in the United States overnight or it may take several days, depending

on the service options and prices chosen by the shipper.

Larger items like small boxes are consideredparcels orground shipments. These

shipments are rarely over 50 kg (110 lb), with no single piece of the shipment

weighing more than about 70 kg (154 lb). Parcel shipments are always boxed,

sometimes in the shippers packaging and sometimes in carrier-provided packaging.

Service levels are again variable but most ground shipments will move about 800 to

1,100 kilometres (497 to 684 mi) per day. Depending on the origin of the package, it

can travel from coast to coast in the United States in about four days. Parcel

shipments rarely travel by air and typically move via road and rail. Parcels representthe majority of business-to-consumer (B2C) shipments.

Beyond HHG, express, and parcel shipments, movements are termed freight

shipments.

Less-than-truckload freight [edit]

Main article:Less than truckload shipping

Less than truckload (LTL) cargo is the first category of freight shipment, which

represents the majority of freight shipments and the majority of business-to-business

(B2B) shipments. LTL shipments are also often referred to as motor freightand the

carriers involved are referred to as motor carriers.

LTL shipments range from 50 to 7,000 kg (110 to 15,000 lb), being less than 2.5 to 8.5 m

(8 ft 2.4 in to 27 ft 10.6 in) the majority of times. The average single piece of LTL freight
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4/5

is 600 kg (1,323 lb) and the size of a standard pallet. Long freight and/or large freight are

subject to extreme length and cubic capacity surcharges.

Trailers used in LTL can range from 28 to 53 ft (8.53 to 16.15 m). The standard for city

deliveries is usually 48 ft (14.63 m). In tight and residential environments the 28 ft

(8.53 m) trailer is used the most.

The shipments are usually palletized, stretch [shrink]-wrapped and packaged for a

mixed-freight environment. Unlike express or parcel, LTL shippers must provide their

own packaging, as carriers do not provide any packaging supplies or assistance.

However, circumstances may require crating or other substantial packaging.

Air freight [edit]

Air freight shipments are very similar to LTL shipments in terms of size and packaging

requirements. However, air freight or air cargo shipments typically need to move at muchfaster speeds than 800 km or 497 mi per day. Air shipments may be booked directly with

the carriers, through brokers or with online marketplace services. While shipments move

faster than standard LTL, air shipments dont always actually move by air.

Truckload freight [edit]

In the United States, shipments larger than about 7,000 kg (15,432 lb) are typically

classified as truckload (TL) freight. This is because it is more efficient and economical

for a large shipment to have exclusive use of one larger trailer rather than share space

on a smaller LTL trailer.

By theFederal Bridge Gross Weight Formulahe total weight of a loaded truck (tractor

and trailer, 5-axle rig) cannot exceed 36,000 kg (79,366 lb) in the United States. In

ordinary circumstances, long-haul equipment will weigh about 15,000 kg (33,069 lb),

leaving about 20,000 kg (44,092 lb) of freight capacity. Similarly a load is limited to the

space available in the trailer, normally 48 ft (14.63 m) or 53 ft (16.15 m) long, 2.6 m

(102.4 in) wide, 2.7 m (8 ft 10.3 in) high and 13 ft 6 in or 4.11 m high over all.

While express, parcel and LTL shipments are always intermingled with other shipments

on a single piece of equipment and are typically reloaded across multiple pieces of

equipment during their transport, TL shipments usually travel as the only shipment on a

trailer. In fact, TL shipments usually deliver on exactly the same trailer as they are

picked up on.

Shipping costs [edit]

Often, an LTL shipper may realize savings by utilizing a freight broker, online

marketplace or other intermediary, instead of contracting directly with a trucking

company. Brokers can shop the marketplace and obtain lower rates than most smaller

shippers can obtain directly. In the LTL marketplace, intermediaries typically receive

50% to 80% discounts from published rates, where a small shipper may only be offered

a 5% to 30% discount by the carrier. Intermediaries are licensed by the DOT and have

requirements to provide proof of insurance.

Truckload (TL) carriers usually charge a rate per kilometre or mile. The rate varies

depending on the distance, geographic location of the delivery, items being shipped,

equipment type required, and service times required. TL shipments usually receive a

variety of surcharges very similar to those described for LTL shipments above. In the TL

market, there are thousands more small carriers than in the LTL market. Therefore, the

use of transportation intermediaries or brokers is extremely common.

Another cost-saving method is facilitating pickups or deliveries at the carriers terminals.

By doing this, shippers avoid any accessorial fees that might normally be charged for

liftgate, residential pickup/delivery, inside pickup/delivery, or notifications/appointments.

Carriers or intermediaries can provide shippers with the address and phone number for

the closest shipping terminal to the origin and/or destination.

Shipping experts optimize their service and costs by sampling rates from several

carriers, brokers and online marketplaces. When obtaining rates from different providers,

shippers may find quite a wide range in the pricing offered. If a shipper in the United

States uses a broker,freight forwarderor other transportation intermediary, it is common

for the shipper to receive a copy of the carrier's Federal Operating Authority.[3]Freight

brokers and intermediaries are also required by Federal Law to be licensed by

theFederal Highway Administration. Experienced shippers avoid unlicensed brokers and

forwarders because if brokers are working outside the law by not having a Federal

Operating License, the shipper has no protection in the event of a problem. Also,

shippers normally ask for a copy of the broker's insurance certificate and any specific

insurance that applies to the shipment.

Security concerns [edit]

Governments are very concerned with the shipment of cargo, as it may bring security

risks to a country. Therefore, many governments have enacted rules and regulations,

administered by acustomsagency, to the handling of cargo to minimize risks
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5/5

ofterrorismand other crime. Of particular concern is cargo entering through a country's

borders.

The United States has been one of the leaders in securing cargo. They see cargo as a

concern tonational security. After the terrorist attacks ofSeptember 11th, the security of

this magnitude of cargo has become highlighted on the over 6 million cargo containers

enter theUnited Statesports each year.[4]The latest US Government response to this

threat is theCSI: Container Security Initiative. CSI is a program intended to help

increase security for containerized cargo shipped to theUnited Statesfrom around the

world.[5]Europe is also focusing on this issue, with a number of EU-funded projects

underway.[6]
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Documents

Carriage of goods by sea.docx