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INTRODUCTION TO SHIPPING

May 2017

© Krishnan Subramaniam
Practitioners – Shipping

SHIP
S&P BROKER FINANCE

SHIP BUILDING
YARD
SHIP AGENT

PORT SURVEYOR
INSURANCE
H&M
CREW

CLASSIFICATION PSC
SHIP OWNER

LEGAL
SHIP
CHANDLERS
INSURANCE
FLAG STATE P&I

TECHNICAL
MANAGEMENT
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Registries and Classification

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Vessel Registration
•  Every vessel has a name & Registry
•  Name and Registry painted on the stern
•  Name of the ship painted on the bow
•  Registry issues the “Registration Certificate”
•  Formalised through Convention of the Law of the
Sea (UNCLOS)

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Ship Registry
•  The laws of the country of registry are applicable
on the Ship
•  These laws incorporate various international
conventions.
•  Some traditional registries had stringent laws on
–  Ownership
–  Taxation
–  Manning
•  Flags of convenience

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Flag of Convenience

FOC’s or ‘open registries’ gave freedom to


•  Own and operate companies by non-nationals
under its flag
•  Owners can reside and operate from elsewhere
•  Have banking and accounting operations
elsewhere and keep all profits in a different
country
•  Employ crew of any nationality with any wage
scale.
•  Reduced taxation

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Flags of Convenience

•  Liberia
•  Panama
•  Malta
•  St Vincent and Grenadines
•  Cyprus
•  Bermuda
•  Vanuatu
•  Cambodia
•  Marshall Islands
etc.

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Marshall Islands
•  The Republic of the Marshall Islands is situated nearly midway between
Hawaii and the Philippines, and is the easternmost island group in
Micronesia. The capital city is Majuro.
•  Together, the Marshall Islands is comprised of approximately 1,225 islands
and islets, which spread across an ocean area of 1.9 million square
kilometers.
•  The Marshall Islands registry is administered through International
Registries, Inc. (IRI), the world’s oldest non-governmental flag State
administrator, which now has over 60 years experience.
•  Active member of the International Maritime
Organization (IMO) - ratified and implemented all
key international conventions and instruments.
•  Those operating under the Marshall Islands flag
achieve the highest ratings in the port State control
(PSC) international rankings.
•  Marshall Islands Registry is the only major open
registry to be included on the White Lists of both the
Paris and Tokyo MoUs and to hold Qualship 21
status with the US Coast Guard for four consecutive
years.
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Off-shore Flag

•  Set up by some of the traditional ship owning countries


such as Germany, Norway and Denmark to prevent
exodus of ship owners to FOCs.
•  Allows flying the flag of the country but do not impose
same restrictions on the nationality of the owning
company or on ship’s personnel.
•  Some countries set up Ship registries in former
colonies
–  Netherlands Antilles
–  Bermuda
–  Gibraltar (UK)

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Port State Control

•  PSC inspectors ensures compliance with


international standards
•  Universally applied by states which are not
part of any formal groupings such as Paris
Convention, Tokyo Memorandum, etc.
•  Operates by surveyors visiting vessel on
random basis for inspection.
•  Vessels with serious deficiencies are
detained until deficiency is rectified.

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International Conventions

•  Convention on Loadlines – 1966


•  Safety Of Life at Sea (SOLAS) – 1974/78
•  Prevention of Pollution From Ships – MARPOL - 1973/78
•  Standards of Training, Certification and Watch-keeping for
Seafarers – STCW 1978
•  Regulations for Preventing Collisions at Sea – COLREGS –
1972
•  Merchant Shipping (Minimum Standards) Convention 1976
•  Global Maritime Distress and Safety System – GMDSS -1999
•  International Safety Management Code – ISM - 2002

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Ship Classification
•  Class societies started in the 18th century
•  Autonomous bodies that endorses the quality of the ship
– for the Ship-owner and the Cargo interest
•  Relevance
o  Ship design and Ship building Yards
o  Ship registry
o  Port State Control
o  Insurance underwriters
o  Charterers
•  Principal Class Societies (members of IACS)
o  ABS, BV, CCS, DNV-GL, IRS, KR, LR, NK, PRS, RINA, RS
•  IACS – International Association of Classification
Societies http://www.iacs.org.uk/

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American Bureau of Shipping (ABS)
.
•  The surveyors, engineers, researchers and regulatory specialists
who form the ABS team work in more than 200 offices in 70
countries around the world providing
o  traditional classification services
o  on-the-ground technical services in asset performance
o  energy efficiency
o  environmental performance
o  life cycle management
•  Proven legacy of providing best-in-class service for more than 150
years.
•  Recognition by more than 100 governments to provide statutory
services.
•  Continuous advanced research in the areas of strength, stability,
machinery, safety equipment, pollution, energy efficiency and
performance.
•  200 offices in 70 countries around the world - a global reach, with a
local touch
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How Does Classification Work?
•  Implementing the published Rules, the classification process
consists of:
•  A technical review of the design plans for a new vessel to verify
compliance with the Rules
•  Attendance by an ABS or other classification society surveyor:
o  At the construction / repair shipyard
o  At the relevant production facilities that provide key
components
o  At sea trials
o  Incident investigation
•  When these inspections are completed satisfactorily in compliance
with the Rules, we issue a certificate of classification.
•  Once in service, the owner must submit the vessel to periodical
onboard class surveys to verify that the ship continues to meet the
relevant Rule requirements.

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Class Surveys

•  The Class Society prescribes a program of


surveys for the ship, based on type, age, etc.
•  Everything on board the vessel which is material
to its safety is surveyed in rotation.
•  Dry dock programs are also incorporated in this
cycle.
•  Repairs to the ship are also carried under the
supervision of Class Societies.
•  Special inspections required if ship has an
incident.

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Ship’s Certificates

•  Load Line Certificate •  Ship Safety Certificate


•  Safety Construction •  Cargo Gear Certificate
Certificate
•  De-ratting certificate
•  Safety Equipment
Certificate •  Safe Manning
•  Safety Radio Certificate Certificate
•  International Oil Pollution •  Grain Stability booklet
Prevention Certificate •  Cargo Securing Manual
•  Safety Management •  Hazardous Cargo
Certificate & Document of Certificate
Compliance

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The Ship
Port Side & Starboard Side
Denotes Left and Right side of a ship as perceived by a
person on board facing the bow

AFT or
Stern Midship
Port Side

Starboard
Side
Bow or the
‘Fore’

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The Ship

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Loadline

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Load Line
•  Load line marks have the following meanings:
–  TF: Tropical Fresh Water
–  F: Fresh Water
–  T: Tropical Seawater
–  S: Summer Temperate Seawater
–  W: Winter Temperate Seawater
–  WNA: Winter North Atlantic
•  Density
–  Fresh water 1000 kg/m³
–  Sea water 1025 kg/m³
•  Fresh water marks make allowance for the fact that the
ship will float deeper in fresh water than salt water.
•  A ship loaded to her Fresh Water mark in fresh water will
float at her Summer Mark when in sea water.
•  Similarly if loaded to her Tropical Fresh water mark she
will float at her Tropical Mark in sea water.

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The Ship

•  LOA ( Length Over All)


–  Length of the vessel measured from extremes
Fore and Aft
•  BEAM:
–  Breadth of the ship measured at the widest
part of the hull
•  DRAFT (Dft)
–  The depth of water a ship is occupying

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The Ship

•  DISPLACEMENT
–  Total weight of the ship
•  LIGHT DISPLACEMENT
–  Displacement less weight of stores, cargo, bunkers etc.
Denotes actual weight of metal in the demolition market
•  AIR DRAFT
–  Height of the ship from the water line to the highest point of
any permanent projection like the tip of the mast

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The Ship

•  DWAT: Dead Weight All Told:


–  Total weight of everything : Stores, Bunkers,
Cargo, Lubes etc. required to bring the ship down
from her light draft to maximum permissible draft
•  DWCC: Dead Weight Cargo Capacity
–  Maximum amount of actual cargo the ship can
load (assuming full bunkers, fresh water and
stores)
•  TPC : Tonnes Per Centimeter Immersion
–  Weight of cargo required to be loaded for the ship
to go down by one centimeter

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The Ship
Terms Related to Capacity

•  GT: Gross Tonnage


–  Not a measurement of weight but of volume - volume of
the vessel’s enclosed spaces in cubic feet divided by 100
–  Used for port dues calculation, official statistics, tonnage
dues, etc.
•  NT : Net Tonnage
–  GT less space occupied by crew, ballast and FW tanks,
propelling & machinery space etc.
–  Spaces which do not represent earning capacity of the
vessel are deducted

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The Ship

•  Safe Working Load (SWL) - Maximum


permissible load on a crane or derrick

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MARITIME GEOGRAPHY

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Major Sea Routes

1.  The North Atlantic Routes


2.  The Cape route
3.  The South Atlantic route
4.  The Panama route
5.  The North Pacific route
6.  The Mediterranean-Red Sea route

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Major Shipping Routes & Ports

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Geography – Continents

- Asia
(45 Million Sq Km)
- Africa
(30 Million Sq Km)
- North America
(24 Million Sq Km)
North Europe
- South America
America Asia
(18 Million Sq Km)
- Europe Africa
(10 Million q Km)
- Australia/Oceania South
(8 Million Sq Km) America Australia

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Geography – Oceans

- Pacific Arctic
(156 Million Sq Km)
- Atlantic
(77 Million Sq Km)
- Indian
(69 Million Sq Km) Atlantic Pacific
- Antarctic
(20 Million Sq Km)
- Arctic Indian
Pacific
(14 Million Sq Km)

Antarctic
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Geography – Seas

1. Sea of Okhotsk
2. Sea of Japan
(East Sea)
3. East China
4. South China
5. Andaman 12
13 1
6.  Arabian Sea
7. Red Sea 8 9 2
11 3
8. Mediterranean 10 7
9. Black Sea
6 5 4
10. Caribbean
11. Gulf of Mexico
12. Hudson Bay
13. Bering

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Geography – Canals

Natural or man-made. Major canals


1.  Suez Canal
163 Km
Opened 1869
20000 vessels/year
2. Panama Canal
82 Km
Opened 1914
13000 vessels/year

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Panama Canal

http://www.youtube.com/watch?v=hADHVkE_zdI

+20 cm.
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Panama Canal - Parameters
Panamax New Panamax
Length 294.13 m (965 ft) 366 m (1,200 ft)
Width 32.31 m(106 ft) 49 m (160.7 ft)
Draught 12.04 m (41.2 ft) 15.2 m (49.9 ft)
TEU 5,000 13,000
DWT ~ 75,000 ~ 195,000

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Suez Canal

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Time zone

•  Region on Earth that has a uniform standard time


•  Nautical standard times, nautical standard time
zones and the nautical date line were recommended
by the Anglo-French Conference on Time-keeping at
Sea in 1917.
•  Applies to all ships, both military and civilian
•  Time changes are required for changes of longitude
in one-hour steps. One-hour step corresponds to a
time zone width of 15° longitude
•  Time on a ship's clocks and in a ship's log had to be
stated along with a "zone description“.

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International Date Line

•  Imaginary line on the surface of


the Earth, running between the
north and south poles and
demarcating one calendar day
from the next.
•  The International Date line is on
the opposite side of the earth to
the Prime Meridian

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TYPES OF SHIPS

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Types of Ships

DRY SHIPS WET BULK OTHERS

Bulk Carrier Crude Oil tankers Tugs


Container Ships Product tankers Barges
Multipurpose Ships Chemical tankers Passenger Ships
RORO Ships Gas carriers Specialised ships

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Employment of the Ship

Liner Tramp
•  Specific routing •  No specific routing
•  Ships go wherever cargo
•  Fixed schedule is available
•  Published tariff •  No tariff – Market
•  Usually needs large determined rating
marketing setup •  Vessels traded in the
charter market
•  Relatively small
•  Marketed through broking
quantities per parcel
channels.

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Contract of Carriage (Ocean)

•  Physical movement of goods from origin to


destination is by means of contract of carriage.
•  Seller and Buyer should ensure that the terms of
the contract of carriage do not contravene with the
terms of contract of sale. Also the parties should
be able to perform the terms agreed.
•  In ocean carriage, normally the contracts of
carriage are (i) Liner booking Note (ii) Charter
Party.

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Contract of Carriage

•  Contract of Carriage is different from


contract of Sale
•  Contracting parties to a contract of sale are
the “Carrier’ And the ‘ Merchant’
•  When mode of transport is by Sea, the
contract of carriage may be Charter Party
or Liner booking Note
•  Contract of Carriage helps in the execution
of Contract of Sale

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Operational Terms

•  CHOPT / OO
–  Charterers option or Owners option.
•  MOLCO/MOLOO
–  More or Less Charterers Option or more or
less Owners Option. Used to denote tolerance
on cargo quantity
•  ROB
–  Remaining on board: Cargo, Bunkers, FW, etc

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Operational Terms
NOR

NOR - Notice of
Readiness:
Notice given by the
Vessel /Owners to the
Charterers showing
the time the vessel
arrived and in all
respects ready to load/
discharge

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Operational Terms

•  WWWW
–  Whether in Port or not (WIPON)
–  Whether in Berth or not (WIBON)
–  Whether Custom Cleared or not (WCCON)
–  Whether in Free Pratique or not (WIFPON)
•  BBB:
–  Before Breaking Bulk
–  Used to express commencement of cargo
operations

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Operational Terms

•  WWD:
–  Weather working day
•  ETA:
–  Estimated time of Arrival
•  ETD/ETS:
–  Estimated time of Departure
–  Estimated time of Sailing

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Operational Terms
SOF

Statement of Facts:
•  Statement containing
all significant events
while the vessel is in
port.
•  Used to determine
time taken for load/
discharge

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Operational Terms
•  LAYDAY
•  LAYCAN
–  The period during which the owner agrees to place the
vessel at the charterers disposal. Usually in terms of Local
Time
•  SHINC
–  Sundays , Holidays Included
•  FIO
–  Free in and Out. Merchant undertakes to load and
discharge the cargo at his time and cost
•  FLT
–  Full Liner Terms: The Carrier agrees to load/discharge
cargo at their time and cost

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Operational Terms

•  TIP
–  Taking Inward pilot: Point and time at which the Pilot
boarded the vessel inbound to port
•  APS:
–  Arrival Pilot Station : Location where a time chartered
vessel is delivered upon arrival
•  DOP
–  Drop off Pilot: Point at which the time charterer hands
over a time chartered vessel to the owner after
sailing from the final port. Also DLOSP (Dropping off
Last outward Sea Pilot)

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