15 Aug Freight Transport: Maritime
Welcome to the second post in a five-part series on different modes of freight transport. This post looks at maritime freight.
The Maritime Freight Industry
According to the International Maritime Organization, more than >90% of the world’s trade is carried by sea. It is particularly effective for moving large volumes of goods that are not time-sensitive, as it slow and prone to delays. But maritime transport is popular because it is the most cost-effective method of transporting freight. It is also a vital method of transportation for Western economies that rely on importing goods from China, the Indian subcontinent and South-East Asia.
A shipping line is a company that operates a fleet of ships that carries the sea freight. They are often formalised into groups called liner conferences. A group of shipping lines within a liner conference all operate certain routes in the same area. They co-operate to protect each others interests by controlling tariffs and maintaining price stability within their area.
While the conferences see price co-operation as a means of protecting their interests, it is seen as anti-competitive price-fixing by a number of bodies, including the EU, which regulated against them in 2008.
Ships’ agents are companies that provide services to shipping lines in the ports. Services include dealing with customs and port authorities, refuelling and provisioning with food and drink, arranging a change of crew, and managing repairs or delivery of spare parts.
Freight forwarders deal with getting cargo from its origin to its destination, but don’t actually move the goods themselves. They instead manage the logistics, documentation and port handling.
Common ship types and their cargos
Here’s a summary of common ships and the type of cargo that they handle:
- Cellular container vessels carry standard shipping containers, with loads being calculated by weight or by number of containers. The largest container ships can carry more than 19,000 containers.
- Break-bulk freighters carry loose cargo. They are often known as LOLO vessels, short for lift-on lift-off, and have their own cranes for moving goods from dockside onto the ship.
- RORO, or roll-on roll-off ships are designed to carry self-loading wheeled vehicles, like lorries. They are similar to car ferries, but are much larger and can convey thousands of vehicles.
- LNG tankers carry liquefied natural gas in long spherical tanks.
- Oil tankers are ships that transport large volumes of crude oil.
- Specialised heavy lifting vessels carry bulky or heavy loads that cannot be accommodated on standard ships. The hull is often covered by one large open deck that will carry the freight.
- Dry bulk carriers convey dry goods like grain, coal or stone.
- There is a range of ships that can carry commodities like oil or mineral ores in bulk. From smallest to largest, they are known as: handysize, handymax, Aframax, VLCC (very large crude carrier) and ULCC (ultra large crude carrier). There are also ships designed specially for passing through the Panama and Suez canals, known as Suezmax and Panamax. Capesize vessels are too large for the canals and so travel via the Cape of Good Hope or Cape Horn.
- Tug boats don’t carry cargo, but help larger vessels manoeuvre in ports.
Ports and Cargo handling
Around the world, ports vary in the types of cargo they can handle and in the vessels they can accept. Some ports are dedicated to just one type of cargo, like crude oil terminals, for example.
Ports often offer limited free periods for storing goods before or after loading, after which a demurrage or detention charge will be applied. Or, where goods can be offloaded straight to direct delivery vehicles, they may offer discounted rates as this can speed up turnaround times.
Cargo surveyors are independent third parties that can document the loading, stowage or unloading of goods. They can be helpful in case of insurance claims where the involved parties are not available or present to document matters themselves. Alternatively, a cargo superintendent can be appointed by the shipping line itself.
The Benefits of Maritime Transport
Maritime freight is extremely cost-effective. Prices are competitive because maritime transportation of cargo is relatively slow. And over long distances, the relative costs of sea freight are very economical.
Unlike any other method of transportation, very large volumes of goods can be shipped. Sea freighters can carry thousands of containers, allowing costs to be shared by hundreds or thousands of distributors.
Ocean-going vessels can easily accommodate bulky, oversized or very heavy goods, making sea freight the most versatile method of freight transport.
Of course, sea freight is not as fast air transport. But for international cargo, it is so cost-effective that it suits goods where delivery times are not critical.
Notwithstanding the risk of piracy, sea freight is a secure method of stowing and handling goods internationally. Ships can securely handle and store a range of dangerous goods that cannot be transported by air. Cargo loss at sea is declining as maritime safety improves and shipping technology evolves.
Finally, maritime freight is one of the more eco-friendly methods of transportation. With relatively low carbon footprints – certainly compared with air freight – it is a carbon efficient shipment method.
You can read all the blog posts in this freight transport series: