Top points to remember about shipping before reading ahead
01. Many activities grouped under the term
02. Key national economic activity, so ministry level administrations function in maritime countries
03. Infrastructure both on shore and offshore is massive and permanent, often shared with navies.
04. Interaction between operators belonging to several nationalities is unavoidable. Trust plays a key role.
05. Trained man-power at every level.
06. Safety and security are important issues facing challenges
07. Business occurs in cycles, each lasting sometimes a decade or more, directly influenced by world economy.
08. Communication is the backbone for the industry.
09. Carries 90% of global trade cargo.
10. High value cargoes include aviation fuel, industrial gases and containers carrying medical supplies
11. Low value cargoes include coal, ores and minerals.
12. Highly regulated industry, international, national and regional level laws and agreements very common.
13. Regulation is effected through extensive documentation activity, both manual and electronically transmitted.
14. Highly competitive, with syndicates often controlling freight rates with so called ‘conferences’
15. Insurance is a hugely important activity.
16. Due to existence throughout recorded history, the field is a subject of popular art and culture.
17. The way to understand is to continuously collect important educational material, read and discuss.
18. The way to acquire working knowledge is to actually work for a company that undertakes complex shipping and cargo handling activity.
Shipping Industry, the industry devoted to moving goods or passengers by water. Passenger operations have been a major component of shipping, but air travel has seriously limited this aspect of the industry. The enormous increase, however, in certain kinds of cargo, for example, petroleum, has more than made up for the loss of passenger traffic. Although raw materials such as mineral ores, coal, lumber, grain, and other foodstuffs supply a vast and still growing volume of cargo, the transportation of manufactured goods has increased rapidly since World War II.
HISTORY
Commercial shipping began perhaps with the activities of the Phoenician merchants who operated their own vessels, transporting goods in the Mediterranean. The practices they developed were adopted by the merchants of ancient Greece and Rome and were continued by the maritime powers through the Middle Ages to modern times. The Venetians, from 1300 to 1500, owned a huge merchant fleet that served the interests of the merchant traders and the city-state exclusively. From 1600 to 1650 the Dutch ranked first in shipping activity, operating a globe-circling tramp service for merchants of western Europe.
Advances in the 19th Century
Until the 19th century, ships were owned by the merchant or by the trading company; common-carrier service did not exist.
On January 5, 1818, the full-rigged American ship James Monroe, of the Black Ball Line, sailed from New York City for Liverpool, inaugurating common-carrier line service on a dependable schedule. A policy of sailing regularly and accepting cargo in less-than-shipload lots enabled the Black Ball Line to revolutionize shipping.
Two technological developments furthered progress toward present-day shipping practices: the use of steam propulsion and the use of iron in shipbuilding. In 1819 the American sailing ship Savannah crossed the Atlantic under steam propulsion for part of the voyage, pioneering the way for the British ship Sirius, which crossed the Atlantic entirely under steam in 1838. Iron was first used in the sailing vessel Ironsides, which was launched in Liverpool in 1838.
The opening of the Suez Canal in 1869 was of great economic importance to shipping. Coinciding with the perfection of the triple-expansion reciprocating engine, which was both dependable and economical in comparison with the machinery of the pioneer vessels, the completion of the canal made possible rapid service between western Europe and Asia. The first steam-propelled ship designed as an ocean-going tanker was the Glückauf, built in Britain in 1886. It had 3,020 deadweight tons (dwt; the weight of a ship's cargo, stores, fuel, passengers, and crew when the ship is fully loaded) and a speed of 11 knots.
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Among the technological advances at the turn of the century was the development by the British inventor Charles A. Parsons of the compound steam turbine, adapted to maritime use in 1897. In 1903 the Wandal, a steamer on the Volga River, was powered by the first diesel engine used for ship propulsion. The Danish vessel Selandia was commissioned as the first seagoing motor ship in 1912. After World War I significant progress was made especially in the perfection of the turboelectric drive. During World War II, welding in ship construction supplanted the use of rivets. The keel of the first nuclear-powered passenger-cargo ship, the Savannah, was laid in Camden, New Jersey, on May 22, 1958, and the ship was launched in 1960. In 1962 it was chartered to a private company for experimental commercial use, but it did not prove financially successful.
Nature of the Shipping Industry
Shipping is a private, highly competitive service
industry. The activity of the industry is divided into several categories,
namely, liner service, tramp shipping, industrial service, and tanker
operation, all of which operate on certain well-established routes.
Trade Routes
Most of the world's shipping travels a relatively small number of major ocean routes: the North Atlantic, between Europe and eastern North America; the Mediterranean-Asian route via the Suez Canal; the Panama Canal route connecting Europe and the eastern American coasts with the western American coasts and Asia; the South African route linking Europe and America with Africa; the South American route from Europe and North America to South America; the North Pacific route linking western America with Japan and China; and the South Pacific route from western America to Australia, New Zealand, Indonesia, and southern Asia. The old Cape of Good Hope route pioneered by Vasco da Gama and shortened by the Suez Canal has returned to use for giant oil tankers plying between the Persian Gulf and Europe and America. Many shorter routes, including coastal routes, are heavily traveled.
Coastal Shipping
Technically, coastal shipping is conducted within 32 km (within 20 mi) of the shoreline, but in practice ship lanes often extend beyond that distance, for reasons of economy and safety of operation. In the U.S., coastal shipping is conducted along the Pacific, Atlantic, and Gulf coasts. Under the restriction known as cabotage, the U.S. and many other nations permit only vessels registered under the national flag to engage in coastal trade. Among many small European countries cabotage does not apply, and short international voyages are common. A special feature of coastal shipping in the U.S. is the trade between the Pacific coast and the Atlantic and Gulf coasts. Vessels engaged in this trade traverse the open sea and utilize the Panama Canal; however, they are covered by cabotage laws. In coastal and short-distance shipping, special-purpose ships are often employed, such as car ferries and train ferries.
Inland Waterways
A major part of all the world's shipping moves on inland waterways—rivers, canals, and lakes. Usually such shipping employs smaller, lighter vessels, although in some cases oceangoing ships navigate inland waterways, for example, the St. Lawrence Seaway route to the Great Lakes of North America. Containerization, lighter-aboard-ship, and barge-aboard-ship operations have facilitated the shipping of cargoes between oceangoing vessels and those of the inland waterways.
Liner Service
Liner service consists of regularly
scheduled shipping operations on fixed routes. Cargoes are accepted under a
bill-of-lading contract issued by the ship operator to the shipper. Competition in liner service is regulated generally by
agreements, known as conferences, among the shipowners. These conferences
stabilize conditions of competition and set passenger fares or freight rates
for all members of the conferences. In the U.S., steamship conferences are
supervised by the Federal Maritime Commission in accordance with the Shipping
Act of 1916. Rate changes, modifications of agreements, and other joint
activities must be approved by the commission before they are effective.
Measures designed to eliminate or prevent competition are prohibited by law.
Tramp Shipping
Tramps, known also as general-service ships, maintain
neither regular routes nor regular service. Usually tramps carry shipload lots
of the same commodity for a single shipper. Such cargoes generally consist of
bulk raw or low-value material, such as grain, ore, or coal, for which
inexpensive transportation is required. About 30 percent of U.S. foreign commerce
is carried in tramps.
Tramps are classified on the basis of employment rather than of ship design. The typical tramp operates under a charter party, that is, a contract for the use of the vessel.
The center of the chartering business is the Baltic Exchange in London, where brokers representing shippers meet with shipowners or their representatives to arrange the agreements. Freight rates fluctuate according to supply and demand: When cargoes are fewer than ships, rates are low. Charter rates are also affected by various other circumstances, such as crop failures and political crises.
Charter parties are of three kinds, namely, the voyage charter, the time charter, and the bare-boat charter. The voyage charter, the most common of the three, provides transport for a single voyage, and designated cargo between two ports in consideration of an agreed fee. The charterer provides all loading and discharging berths and port agents to handle the ship, and the shipowner is responsible for providing the crew, operating the ship, and assuming all costs in connection with the voyage, unless an agreement is made to the contrary. The time charter provides for lease of the ship and crew for an agreed period of time. The time charter does not specify the cargo to be carried but places the ship at the disposal of the charterer, who must assume the cost of fuel and port fees. The bare-boat charter provides for the lease of the ship to a charterer who has the operating organization for complete management of the ship. The bare-boat charter transfers the ship, in all but legal title, to the charterer, who provides the crew and becomes responsible for all aspects of its operation.
The leading tramp-owning and tramp-operating nations of the world are Norway, Britain, the Netherlands, and Greece. The carrying capacity of a typical, modern, well-designed tramp ship is about 12,000 dwt, and its speed is about 15 knots. The recent trend is toward tramps of 30,000 dwt, without much increase in speed.
Industrial Carriers
Industrial carriers are vessels operated by large corporations to provide transportation essential to the processes of manufacture and distribution. These vessels are run to ports and on schedules determined by the specific needs of the owners. The ships may belong to the corporations or may be chartered. For example, the Bethlehem Steel Corp. maintains a fleet of Great Lakes ore carriers, a number of specialized ships that haul ore from South America to Baltimore, Maryland, and a fleet of dry-cargo ships that transports steel products from Baltimore to the Pacific coast. Many oil companies maintain large fleets of deep-sea tankers, towboats, and river barges to carry petroleum to and from refineries.
Tanker Operation
All tankers are private or contract carriers. In the 1970s some 34 percent of the world tanker fleet, which aggregates about 200 million dwt, was owned by oil companies; the remaining tonnage belonged to independent shipowners who chartered their vessels to the oil companies. So-called supertankers, which exceed 100,000 dwt, are employed to transport crude petroleum from the oil fields to refineries. The refined products, such as gasoline, kerosene, and lubricating oils, are distributed by smaller tankers, generally less than 30,000 dwt, and by barges.
General Ship Types
Merchant ships are classified as passenger carriers, cargo ships, and tankers. During the height of passenger travel by ship, the largest as well as the most glamorous ships afloat were the famed liners of the North Atlantic, which, beginning in the mid-19th century, sailed regular schedules between the Americas and Europe. Competing in speed as well as in size and appointments, such ships as the Mauretania, the Queen Mary, the Queen Elizabeth, the United States, and the France gradually reduced the time for the North Atlantic crossing to less than four days. Their size, from about 45,000 to 75,000 metric tons and up to 300 m (1,000 ft) in length, was gigantic by the standards of the first half of the 20th century, but they have been dwarfed by the oil tankers of the 1970s and '80s. Today's passenger liners operate principally in the cruise trade.
Cargo Ships
Cargo ships carry packaged goods, unitized cargo (cargo in which a number of items are consolidated into one large shipping unit for easier handling), and limited amounts of grain, ore, and liquids such as latex and edible oils. A few passengers are accepted on some cargo liners. Specialized ships are designed and built to carry certain types of cargo, for example, automobiles or grain.
Container Ships
In the late 1950s container ships set the pattern for
technological change in cargo handling and linked the trucking industry to
deep-Sea shipping. These highly specialized ships carry large truck bodies and
can discharge and load in one day, in contrast to the ten days required by
conventional ships of the same size. The rapid development of the container
ship began in 1956, when Sea-Land Service commenced operations between New York
City and Houston, Texas. Barge-aboard, or lighter-aboard, ships, also called
seabees (sea barges) or LASH (lighter-aboard ships), resulted from an
evolutionary development of the container ship. They are capable of carrying
about 38 barges, or up to 1,600 containers, or a combination of containers and
barges. Their design enables them to deliver cargo to developed or undeveloped
ports, without the need for berthing.Tankers
Tankers, designed specifically to carry liquid cargoes, usually petroleum, have grown to many-compartmented giants of a million metric tons and more. Despite their great size, their construction is simple, as is, for the most part, their operation. A major problem with the giant tankers is the severe environmental damage of oil spills, resulting from collision, storm damage, or leakage from other causes.
Specialized tankers transport liquefied natural gas (LNG), liquid chemicals, wine, molasses, and refrigerated products.
Treaties and Conventions
