Shipping Industry

Implicit time/explicit space

Shipping containers were a relatively simple idea that revolutionized the transportation industry. Malcolm McLean was the man behind it. In the mid-1950's he thought of taking the body from a tractor-trailer and place it fully loaded on a ship, railroad car and even an airplane. (http://www.shipping-container-housing.com/shipping-containers.html)

This transportation method using shipping containers has many advantages:
• reduces the costs and time of unloading the cargo from a truck or a railroad car, loading it into the hull of a ship and reversing the process at the ship's destination.
• the fully loaded standard shipping containers can carry up to 20 tons.
• protects the shipments from damage in handling and from thefts.
• A standard shipment from Hong Kong to New York, took 50 days in the 1970's, today it takes only 17 days. The transportation of non-bulk commodities is now dominated by the movement of containers between a wide variety of origins and destinations in world markets.
• Transport containers are basically of two types, 20 ft long closed metal boxes and 40ft long closed metal boxes, which together account for around 99% of the total containers in existence.
These containers have become the standard format for moving goods internationally where a sea leg is involved and are increasingly used solely for road and rail legs.
• In 1999, over 200 million container moves took place across the world maritime ports (container throughput it measured in 20-foot equivalent units [TEUs], representing a box 20 feet long, 8 feet wide, and 8.5 feet high).
How spaces are chartered.
Consolidators first reserve or charter space on ships plying a certain route on a certain set of dates. This space can be by sq ft or cubic feet in the case of containers.(The methods used for dry bulk eg iron ore can be very different.) Space or volume is quoted in TEUs (Twenty Equivalent units) as represented by 20 ft or 40 ft containers, described below. Space is thus very clearly defined, in this case by the company. Time is not as specific, but is dependent on the route served, cargo being carried, nautical distance between points, weather conditions, etc. Time features implicitly in the costing methods.

Container dimensions (most common)
40' Dry Freight Container
Ratings
Maximum Gross Weight: 67,200 lbs.
Tare Weight: 7,782 lbs.
Payload: 59,417 lbs.
Capacity: 2,376 cu. ft.
20' Dry Freight Container
Ratings
Maximum Gross Weight: 67,200 lbs.
Tare Weight: 4,850 lbs.
Payload: 62,350 lbs.
Capacity: 1,164 cu. ft.
45' High Cube Dry Container
Ratings
Maximum Gross Weight: 71,656 lbs.
Tare Weight: 10,449 lbs.
Payload: 61,200 lbs.
Capacity: 3,037 cu. ft.

40' High Cube Dry Container
Ratings
Maximum Gross Weight: 67,200 lbs.
Tare Weight: 8,223 lbs.
Payload: 58,976 lbs.

How companies differentiate themselves.
The first way stems from how companies define their services ie FOB (Free on Board) which means different things in different places. Ref www.rickmers-linie.com
Some shipping companies the offer additional services such as stevedoring, warehousing, customs clearance, surface transportation etc thus enhancing value just like extra services in hotel rooms.
Here is an example from a firm called Soundtanker. http://www.soundtanker.com/contact.php
How Are Rates Calculated?


The amount you pay for your charter can be calculated using internationally recognized freight scales as well as a number of variables including:
• worldwide demand for tankers
• availability of a particular type of vessel in your market
• the type of charter (voyage/time/contract of afreightment/etc.)
• prevailing worldwide energy prices and political conditions
The rate of each fixture is calculated on a case by case. Ultimately, a good quality broker will have the negotiating skills to get you the best possible price on the best possible vessel. Soundtanker has the experience and network contacts you need.
ANOTHER METHOD

The shipping firm gives the client an option to book an entire ship, or container or part of a container as below.( http://www.searates.com/login/)
1. LCL - Your cargo will be loaded into container in totality with other cargoes (commodities)
Gross weight: *

Cubic capacity: *

2 . FCL - Container will be used for your cargo shipment only
Gross weight: * mt (Weight of cargo incl all packing for one container)
Containers: * Quantity:


3. Shipload - Cargo for shipload lot only



Examples of Shipping Companies
1. China Shipping Container Lines (CSCL)( http://222.66.158.218/english/lxwm.asp), (SEHK: 2866, SSE: 601866) a division of China Shipping Group (China Shipping), is a containerized marine shipping company, based in Shanghai China.
Differentiation: CSCL, established in 1997, provides storage, transshipment, customs clearance, and other related declaration services. The company has grown rapidly, it is now the eighth largest container shipping company. With a modern fleet that comprises 123 vessels, and a total operating capacity of 290,460 twenty-foot equivalent units (TEU). The company calls on ports all over the world, and more than 30 ports from South China to North China in its domestic coastal business. It also has container yards and trucks, and international cargo agencies.
2. Orient Overseas Container Line (OOCL)( http://www.oocl.com) is a Hong Kong-based container shipping and logistics service company. It is a wholly-owned subsidiary of Orient Overseas (International) Limited (OOIL) (HKEX: 316).
Today, OOCL is one of the world's largest shipping and logistics companies, with more 280 offices in 58 countries around the world. OOCL provides 78 services covering international trading markets with a fleet of more than 270 ships, including Grand Alliance member line vessels, feeder and OOCL-owned and operated vessels.OOCL has vessels of different classes with capacity varying from 2,500 twenty-foot equivalent units (TEU) to 8,063 TEU, plus ice-class vessels for extreme weather conditions.
The Grand Alliance was formed in 1998. Its members are Hapag-Lloyd (Germany), MISC Berhad (Malaysia), NYK (Japan) and OOCL (Hong Kong).
3. MOL (Mitsui O.S.K. Lines, Ltd.)( http://www.mol.co.jp/menu-e.html) (株式会社商船三井 Kabushiki-gaisha Shōsen Mitsui?) (TYO: 9104) is a Japanese transport company whose main area of operations is international shipping. Its alligator logo can be seen on containers in ports around the world.
Founded as a key part of the Mitsui zaibatsu (family-owned conglomerate) during the early industrialization of Japan, the company is now independent of the zaibatsu, but remains part of the Mitsui keiretsu (group of aligned companies).
Many heads of this company have wielded considerable power in Japan and abroad. One of the latest is Masaharu Ikuta, who has been appointed to head the newly privatized Japan Post.


4. American President Lines Ltd(http://www.apl.com/) (now simply referred to as APL) is the world's seventh-largest container transportation and shipping company[1], providing services to more than 140 countries[2] through a network combining intermodal freight transport operations with IT and e-commerce. It is a wholly owned subsidiary of Neptune Orient Lines (NOL), based in Singapore, a global transportation and logistics company engaged in shipping and related businesses. [3]. APL has offices in almost 100 countries worldwide[4]


APL container ship APL Turquoise in Bremerhaven, Germany
APL and its predecessors once were engaged in passenger service serving the Asia-Pacific route, among with others. However, these ceased in 1973. Liners included the SS President Cleveland and the SS President Wilson.[5]
[6]
In 1938 the U.S. Government took over the management of the Dollar Steamship Co. which was in financial difficulties and transferred their assets to the newly formed American President Line. [5]
The company operated trans-Pacific and round-the-world services, but the war in Europe disrupted services and after the entry of the United States into the war, all the company's ships were taken over for war duties under the War Shipping Administration. [5] [7]


End note: Just like us, the shipping industry has its own blog. Visit them at:-
(http://www.shipping-container-housing.com/shipping-container-housing-blog.html)