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Parties involved in sea transportation of goods -buyer, seller,carrier,freight forwarder,shipper, consignee, agent & banks

Forming links in the transport chain

The transport of goods by sea from seller to buyer usually involves several parties whose roles may be unclear to those on board ship. The following notes are intended to outline the basic functions of the most prominent players forming links in the transport chain.

The seller and the buyer are the parties contracting with each other for the delivery of the goods. The seller may be the producer or manufacturer of the goods, or may be a party acting as the producer/manufacturer’s agent. Both parties agree on the trade terms which will influence the type and terms of shipping documents (e.g. bill of lading or sea waybill).

As far as the shipowner is concerned, the shipper is the party who contracts for the carriage of the goods by sea and delivers the goods into his care, whether this party is the seller or an agent of the seller. The seller, however, may be employing the services of a freight forwarder to perform the various functions involved in exporting the goods, and it may be the freight forwarder who contracts for carriage of the goods with the shipowner, making the freight forwarder the legal shipper. Another possibility is that a certain amount of cargo space on board the ship has been contracted to a non-vessel owning carrier (NVOC) , and the seller or his agent has contracted with the NVOC to transport the goods; in that case, the NVOC will be the legal shipper in the contract with the shipowner. Whoever the shipper is in law, however, the document evidencing receipt of the goods by the carrier (e.g. a bill of lading or sea waybill) will be issued by the carrier to that party, and that party will be giving employment to the ship. In some countries, including the USA, the shipper may be called the consignor.

A freight forwarder is a transport intermediary, operating in the liner trades, who arranges the export of another party’s goods (by land, sea or air) and “forwards” the goods into the care of the sea carrier. Freight forwarders can advise on routeing, can arrange carriage with a carrier (booking space, paying freight, etc.), can prepare or assist in preparting customs documents, can make customs entry (clearance) of goods, can arrange packaging and warehousing of goods before shipment, can arrange goods transit insurance, and can in many cases arrange “groupage” or “consolidation”, meaning the more cost-effective shipment in one transport unit of several small parcels sent by different shippers, where they are all destined for the same delivery port or place)

A carrier is a party who contracts with a shipper for the transport of goods by sea. In the liner trades, where nonvessel owning carriers offer shipping services , the carrier with whom the seller or the seller’s agent makes his carriage contract is not necessarily the carrier actually performing the sea carriage. Furthermore, where a ship is chartered and is being operated commercially by the charterer (such as a time charterer), the identity of the legal carrier may depend on the information stated on the bill of lading or sea waybill .

The consignee is the party to whom the goods are consigned or sent by the shipper. The consignee may be the buyer of the goods, or a party acting as import agent for the buyer.

The receiver is the party who takes receipt of the goods from the sea carrier at the port or place of delivery. Some consignees will take direct delivery of goods from carriers, but many consignees in the liner trades employ an agent such as a freight forwarder to act as a “clearing agent” in the customs and other formalities of importing the goods, and for transportation of goods to their ultimate destination. When loss or damage to goods is discovered on discharge, it is often the receiver who notifies the carrier.

The notify party (a term found in most bills of lading and sea waybills) is the party who must be informed by the carrier of the ship’s arrival, so that collection of the goods can be arranged. The notify party may be the consignee or a receiver.

Banks will form links in the transport document chain when payment for the goods is being made by means of a Letter of Credit. For notes on the documentary credit system. For notes on the bill of lading in the documentary credit system.

Depending on the trade terms, either the seller or the buyer will usually take out goods transit insurance with a cargo insurer.

Charterers agent: Since time charterers require their cargo operations in each port to be overseen by reliable port agents, particularly in specialised trades, the charterers will normally reserve the right to nominate agents, although these “charterers’ agents” will usually be appointed and have their fees paid by the owners. (The owners will therefore be the principal in the legal relationship.)

As well as expediting cargo operations, charterer’s agents should attend to the ship’s (i.e. owner’s) business, e.g. crew reliefs and repatriation, subs, etc., and a Disbursements Clause may provide that they will be paid for this work by a commission on the actual cost of the disbursements.

As in a voyage charter on free in and out terms , a protecting agent may be appointed by the owners where there is any conflict of interest between owner’s and charterer’s requirements.

Since the master is normally under the charterer’s orders regarding employment and agency , charterer’s agents have the right to sign bills of lading on behalf of the master, although the master will usually be required to sign a form or letter authorising them to do this.

Read more :Money transfer procedure in sea transport:Money transfer system commonly used in overseas trade to enable sellers to obtain early payment, i.e. soon after shipment of the goods.

Summarized below seagoing cargo ship various employment guide:
  1. Charty party forms

  2. defines the obligations, rights and liabilities of the shipowner and charterer. Recognised standard form (e.g. GENCON, BALTIME, NYPE)
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    Nature of a time charter
    The charterers agree to hire from the shipowner a named vessel, of specified technical characteristics, for an agreed period of time, for the charterer’s purposes subject to agreed restrictions.
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  3. Voyage charter advantages

  4. contract for the carriage by a named vessel of a specified quantity of cargo between named ports or places.
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  5. Terms of Bareboat charter and lease arrangement

  6. The vessel owners put the vessel (without any crew) at the complete disposal of the charterers and pay the capital costs, but (usually) no other costs.
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  7. Seaworthiness of vessel

  8. A vessel must be fit to encounter the “ordinary perils of the sea” (e.g. bad weather) and other incidental risks to which she will be exposed on the voyage..
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  9. International trade terms (INCOTERMS) in sea transportation

  10. INCOTERMS is a set of rules, published by the International Chamber of Commerce, for the uniform interpretation of the most commonly used trade terms used in international trade contracts.
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  11. Money transfer procedure in sea transport

  12. Money transfer system commonly used in overseas trade to enable sellers to obtain early payment, i.e. soon after shipment of the goods.
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  13. Contract between cargo seller and buyer

  14. The contract of sale between the seller and the buyer of the goods is separate from the contract of carriage which one party or the other, or a third party (such as a freight forwarder), will make with the carrier .
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  15. Parties involved in sea transportation of goods

  16. Forming links in the transport chain- Sea carrier, Freight forwarder, shipper, consignee,agent & banks
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  17. Carriage of goods by sea act 1992 (COGSA 92)

  18. Section 3 of COGSA 92 lays down guidelines establishing when liabilities under a bill of lading, sea waybill or ship’s delivery order will be transferred to a party who is not an original party to the contract of carriage (i.e. an endorsee or transferee). The party who takes or demands delivery of the goods to which a bill of lading, sea waybill or ship’s delivery order relate becomes subject to the same liabilities as the original shipper..
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  19. Laytime interpretation rules

  20. Rules, which were issued jointly by BIMCO, CMI, FONASBA and INTERCARGO, replace the Charter party Laytime Definitions 1980.
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  21. CIF ( Cost, Insurance and Freight ) used in international trade terms (INCOTERMS)

  22. “CIF” means Cost, Insurance and Freight (paid to a named place), e.g. CIF London.- is a contract based on the discharge port
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  23. FOB ( free on board ) used in international trade terms (INCOTERMS)

  24. “FOB” means Free On Board (named port of shipment), e.g. “FOB Newcastle NSW”. It is one of the most commonly used term (INCOTERMS) in sales contracts involving sea transportation of goods.
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  25. Ships employment baltic exchange

  26. Baltic Exchange members undertake to abide by a strict code of business practice, enshrined in the famous Baltic motto “Our Word Our Bond”.
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  27. Ships charter market place

  28. Most ships employed in the charter markets are dry bulk carriers, tankers, combination carriers (e.g. OBOs), or reefer vessels, although there is also a charter market for container ships and for vessels of various special purpose types
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  29. Common Chartering abbreviations

  30. Many terms commonly used by shipbrokers and others involved in ship chartering, mainly to save time and effort in communications. Shipmasters may come across many of the acronyms and abbreviations in documents relating to charters, e.g. in telexed voyage orders and market reports..
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  31. Tanker freight worldscale

  32. "Worldscale" is the code name for the “New Worldwide Tanker Nominal Freight Scale”, published by the Worldscale Association (London) Limited and the Worldscale Association (NYC) Inc
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