International Shipping and Logistics: Modes, Packaging, Insurance

Posted on Jan 6, 2025 in Transport and Vehicle Maintenance

International Ocean Transport

Types of merchant ships:

  • Wet-bulk (liquid) cargoes: Liquid cargo that is loaded directly into the hold.
  • Dry bulk cargoes: Although dry, the cargo exhibits the properties of a liquid, in that it takes the shape of the hold.
  • Other dry cargo: Shipped in bulk or unitized (shipped in units that are unloaded once at a time, such as boxes, crates, or containers).

Ships are categorized partly by cargo capacity, weight, and partly by dimensions.

International Air Transport

Growth is driven by globalization and expectations of businesses and consumers worldwide. Airfreight is well suited for commodities that have a high value-to-weight ratio, are quickly obsolete, are required on short notice, or are attractive when demand is unpredictable or seasonal. There is a risk of deterioration.

Types

  1. Airmail services
  2. Express airfreight services
  3. Scheduled air services (flights offered on a published schedule; they are reliable and low-cost airfreight delivery)
  4. Leased cargo aircraft services
  5. Airfreight forwarder service: They are the link between the shipper of airfreight and consignees at the destination. Freight forwarders can buy space, arrange surface transport, and contract with air carriers.

Aircraft

Passenger, combination, quick-change, airfreighters.

Land Transport

  1. Truck transport: Vital in many countries. Issues include national rules and regulations regarding weight, hours trucks operate, the size of the equipment used, and hours for drivers.

  2. Rail transportation: Dominated by three issues: ownership of the railroad (private or public), infrastructure (dictates goods shipped and speed), and the relationship between merchandise and passenger traffic.

  3. Intermodal transport: A shipment that uses more than one means of transportation to its destination. It is linked to containers since they can be transferred.

  4. Liability issues: Depend on the transportation mode in each country.

  5. Freight forwarders: Forwarders arrange all aspects of transportation and paperwork for a shipper, from following the exporting country’s requirements to clearing Customs in the importing country.

  6. Project cargo: A type of cargo that requires more planning because of its size, weight, or volume, and requires special permits.

  7. Pipelines: Can be used to transport liquid cargo, gases (natural gas), and coal.

  8. Barges: Carry cargo on rivers and canals. They can carry most bulk cargo.

Packaging

Packaging protects goods, allows handling of goods with no damage, and is a customer service strategy of the firm. Objectives of tertiary packaging are to protect goods from mechanical damage, water damage, theft, and pilferage.

Ocean Cargo

Small shipments can be:

  • Full Container Load (FCL): Entire capacity, use of mechanical equipment to move them as units. Using pallets protects goods while handling. FCL should use dunnage to prevent movement and desiccants to avoid humidity. Heavier items should be at the bottom.
  • Less than Container Load (LCL): Not the entire capacity and mixed with other goods, that’s why it should be better protected than FCL. LCL cargo should be boxed with strong corners, protected from humidity, and marked with instructions.

Break-bulk ocean cargo: Not in containers, too big or heavy. Placed into the hold of the ship.

Air Transport

There is less danger to cargo, but it still needs to be protected. Secondary packaging cannot fly because it does not offer enough protection and can be easily stolen.

Road Transport

Braced as in ocean transport.

Good Packaging

Tamper-proof seals, hide which goods are inside, keep information confidential. Hazardous cargo is mostly transported by sea. Refrigerated goods require care and specialized packaging services. Issues in primary packaging include size, design, legal requirements, and environmental concerns. Good packaging builds trust, and importers value well-packed shipments because there is no need for invoices.

International Insurance

Cargo movements (waves), water damage, cargo collapse and fall into the water, and fire are all risks. Parties on board pay for this loss.

  1. Open policy: An insurance contract that insures international shipments over a period.
  2. Special cargo policy: The importer or exporter can purchase it to cover a specific shipment.

Buying Insurance

First from an insurance agent, second from a freight forwarder. Insurers will deny damage claims if there is improper packaging.

Dispute Resolution

Arbitration (Chamber of Commerce) or mediation (third party).

Contract Termination

For just cause (unilateral decision to end a contract before the term of appointment expires because some terms were not met) or convenience (unilateral decision to end a contract before the term of appointment expires).