Cargo Interests
When the term “cargo interests” is used, it refers to the owners of the cargo. The owners of the cargo are the ultimate customers of the service providers involved in the transit, whether they are an ocean carrier, logistics company or marine terminal. It is the transaction created by the sale of a good from the buyer to the seller that gives rise to all the services required to move the goods from origin to destination.
As the customer, the buyer or seller, depending on who assumes the role of the shipper, has decision making responsibility as to which carrier, forwarder or other service providers are selected and which port the goods are routed through. As a result, customers are very demanding. They demand quality service at a competitive price. Although they are the customer, the buyer and seller have obligations they must fulfill. See the graphic below to understand the roles of the buyer, the seller and the shipper. As we know, the shipper may be either the buyer or seller, depending on which party takes responsibility for transportation under the terms of sale.
Role of Cargo Interests:
For good seller-buyer relationships, it is essential that goods reach their destination in their original condition, fit for use.
Third Party Service Providers
Third party service providers support the breakbulk shipping process. Third party refers to a service provider in addition to the primary shipper and carrier (the first party and second party) that fulfills various aspects of the logistics process. Often in logistics, third parties undertake multiple roles on behalf of customers.
For example, according to the Council of Supply Chain Management Professionals, a third party provider is:
“A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated, or “bundled” together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers, and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.”
Third party providers in breakbulk include packers, freight forwarders, and truckers. Each of these providers has a responsibility to provide professional services for the process of moving goods safely from the seller to the buyer.
PackersThe packer of goods, especially for goods to be transported overseas on ships, has to ensure that the goods are safe from the rigors of rough handling and the exposure to wind and weather, during the ship’s movement in a seaway. The packer may be an independent company or packing services may be provided by the forwarder or the terminal operator.
Prior to the cargo being loaded on the ship, it must be packed appropriately to withstand the rigors of ocean transportation. Waves often crash on deck in heavy seas, and cargo that is not properly protected can be damaged or destroyed. Electronic and mechanical parts must be made watertight, vulnerable parts protected, and the complete unit protected by an outside layer to facilitate proper loading, securing, carriage and discharge.
Packing is a skillful art because cargo must be packed in such a way that the resulting combination of packing and cargo does not occupy too much of a ship’s limited cargo capacity. If it does, this will increase the freight charges. If the overall dimensions of a packed unit are retained within the main dimensions of the cargo unit, then additional ocean freight charges will not be incurred. Freight charges as we have learned, are determined by extreme measurements on a cubic basis and a shipper does not want to pay for shipping the enclosed empty space within the packing.
A packer’s role is to ensure that:
- The cargo is appropriately packed to sustain the ocean passage
- The packing is adequate and not excessive to the size and weight of the unit
- The packing ensures that vulnerable parts of the unit are adequately packed
- The centre of gravity, lifting and securing points are marked on the packing
- The packing list of the contents of the package is provided
Freight Forwarder
A primary responsibility of a licensed freight forwarder is to prepare export documents. Freight forwarders, sometimes referred to as travel agents for cargo, obtain space on a ship that serves the loading and discharge ports desired by the shipper. Freight forwarders may also perform other pre-arranged services, including storage, land transportation, insurance services, and packing. The documents typically prepared by the freight forwarder include the Bill of Lading, export declaration, certificate of origin, the master cargo manifest, and the government export authorization.
The import equivalent of the freight forwarder is the customs broker, who is responsible for documenting the import of cargo and the assessment and payment of duty to the customs authorities.
A shipper may occasionally act as his own freight forwarder and customs broker provided that he retains ownership in the merchandise. A seller may also do the same. Similarly, a cargo consignee can act as his own customs broker once he acquires ownership. However, many feel it is a good practice to utilize the services of a forwarders and brokers who provide these professional services.
Inland transportation is contracted out to a trucker or a railroad contractor, depending upon the inland distance, costs, the facilities, and the port terminal.
Trucking
Trucking is usually considered a cost-effective transportation mode up to a distance of roughly 800 kilometers (497 miles). The point is that trucking is expensive and beyond a certain distance it makes economical sense to use more efficient modes of transportation such as rail or barge, if available. Selection of an experienced trucker is very important as there are many complexities involved in hauling heavy and oversized freight by road.
Choosing a trucker requires a thorough examination of the experience, service patterns, client lists, financial status, claims handling, age and maintenance of equipment, skills of drivers, and the overall reputation of the company. Specialized equipment, such as low loaders, ramp loaders, or extra axles may be required if the load to be transported is large in dimension or weight. Specialized trucking companies typically are available near seaports to serve breakbulk shippers.
RailInland transportation may also be provided by a railroad. Rail service is not available everywhere and may also require the services of a trucker to move the cargo to and from the railhead. A railroad company has stringent rules pertaining to the securing of cargo units to a rail car. Rail is not always a viable option to move breakbulk cargo over land. Limitations of rail carriage include restricted lifting capability, limited track clearance, or restricted availability of suitable rail cars.
However, with sufficient planning and coordination, good service may be obtained from a committed railroad, especially for a large project requiring several specialized rail cars or wagons. Manufacturers occasionally have a rail spur leading into their plant and their own lifting equipment to load the cars. In ports, there are often shipside tracks that allow the rail car to deliver the cargo directly under the ship’s cargo lifting gear or into the terminal.
Terminal Operators, Stevedore, and Surveyor
Terminal OperatorsThe terminal operator runs the terminal within the seaport at which breakbulk cargo is transferred between the shore and the vessel. Specialized marine terminals exist to handle every conceivable type of ocean cargo. The world’s largest terminals are exclusively for the use of handling containers, but large facilities also exist in many ports for handling breakbulk.
Terminals are often private businesses operating under a lease from the port authority, which typically owns the land. In a declining number of cases, the terminal is operated directly by the port authority. A growing number of breakbulk terminals are run by operators of multipurpose ships. The terminal operator may also act as the stevedore, providing ship loading and discharging operations, and directly employing the longshoremen who work the vessel. Because container cargo has historically grown at a fast rate, many ports have sought to expand their container facilities while giving less consideration to the needs of breakbulk shippers and carriers.
StevedoresA stevedore is the employer of longshoremen who physically load and unload the vessel and secure the cargo aboard. With breakbulk cargo, these are specialized skills requiring experienced workers. Stevedores have the skills to handle and secure a variety of cargoes. They prepare the equipment and gear to handle cargo in port. Generally, stevedoring companies associated with a terminal specialize in a specific type of cargo handled at the terminal.
SurveyorsSurveyors are required by insurance interests to inspect, record, and report damages that may occur during the handling of the cargo. A primary reason is that if cargo is damaged the responsibility must be accurately identified. Surveyors possess an overall knowledge of the different characteristics of cargo and their behavior when exposed to different conditions during transit. Typically, cargo surveys are conducted at the transition between each stage of the transit in order to ascertain the cargo condition.
The following media explains about the Interaction Between Surveyors: