Sea transport accounts the largest share of international trade and the practices associated with it has developed over several centuries. However this modes of transport is slow and fraught with delays and is ideal for high volume cargoes that are not highly sensitive or have long lead times for delivery.
Ninety per cent of the world’s international trade is transported by sea. The customs and practice associated with this form of transport have been refined over centuries of worldwide trade. Sending cargo by sea is ideal for high-volume cargoes that are not necessarily time sensitive or have long lead times for delivery. However, this mode of transport is slow and fraught with possibilities for delay. Due to the elongated supply lines and slowness of this form of transport, higher levels of in-transit inventory need to be accounted for.
The differnt types of sea transport available for shipment of goods are:
- Liner conferences: These are formal groups of shipping lines that operate on certain shipping routes. They work together and offer the same tariff and shipping conditions. As they operate on almost all regular shipping routes, it provides the exporters to quote reliable shipping and delivery dates. However as they work for the interest of their member shipping lines to avoid price competition, they are seen by many as anti-competitive.
- Non-conference lines: They own and operate their own fleet of ships on regular shipping routes and in competition with conference lines; consequently they are cheaper than the conference lines.
- Tramp lines: They do not have any fixed itinerary and mainly carry any cargo in bulk from one or more ports to different ports. The tramp ships usually carry only one commodity at a time and from one shipper. One key characteristic of tramp shipping is to seek cargoes all over the world and provide flexibility in sea transport to satisfy the needs of world trade. In the tramp market rates are per voyage basis and the terms and conditions are negotiated on a case-to-case basis.
- National or flag lines: In certain cases, using a national shipping line of the importing country, a lower rate of import duty and other benefits may be available to the exporter.
- Shipping agent: They provide a host of services to the shipping lines at the port. These services may include.
- provisioning with food and spare parts,
- arranging for necessary repairs for the ship,
- dealing with local port and customs authorities,
- Organizing berths, pilots, tugboats, crew change and refueling.
- Freight forwarders: Their role is to oversee and manage the movement of the freight from the point of origin to destination. They provide integrated door-to-door services for customers involving multi-modal transportation and taking care of all aspects of movement of cargoes.
- Shipping lines: They own and operate the various types of ships in their fleets. Their role is to provide the physical means by which cargo may be safely and efficiently transported by sea.
- Ships’ agents : They provide services to the shipping lines in the ports where the ships call. A ship’s agent will deal with many important and diverse matters on behalf of the shipping line. These services may include: provisioning with food and spare parts, arranging any necessary repairs for the ship, dealing with local port and customs authorities, organizing berths, pilots, tugboats (if required), crew change and refueling.