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CHAPTER 1

THE ORGANIZATION OF SHIPPING

MAJOR COMPONENTS OF THE SHIPPING INDUSTRY

The sole purpose of merchant shipping is the carriage of cargo, liquid, solid and passengers, from the place that it was mined, grown or manufactured, to the place that it is required. Normally the owner of the cargo does not own transport and therefore he needs to enlist the services of a company that would be willing to carry the cargo for him. The transport can be by road, rail or air. However, the vast bulk of cargo carried internationally is by sea, us by ship.

The management structure of a shipping company can be divided into 2 distinct areas: Cargo Management and Ship Management. The income is derived from selling the services to clients and the expenditure takes place providing the service. To function effectively each is dependent on the other. Excessive expenditure will result in a poor service.

The shipping industry is a service industry and consists of many categories of personnel and organizations employing them. These many groups and organizations work to provide assistance, guidance and control to the shipowner or ship manager and to facilitate the movement of cargo. The groups form an international industry that includes technical, personnel and commercial aspects. Each group works within its own area and often has little contact with another. The commercial aspects of ship operations cover the entire business side of ship acquisition and management.

GENERAL DESCRIPTION OF A SHIP

The main body of a ship is called a hull. The hull is divided into three main parts: the foremost part is called the bow; the rearmost part is called the stern; the part in between is called midships. The hull is the main part of the ship. This is the area between the main deck, the sides (port and starboard) and the bottom. It is made up of frames covered with plaiting. The part of the hull below water is the ship’s underwater body. The distance between the waterline and the main deck is the vessel’s freeboard. The hull is divided up into a number of watertight compartments by decks and bulkheads. Bulkheads are vertical steel walls going across the ship and along.

The hull contains the engine room, cargo spaces and number of tanks. In dry cargo ships the cargo space is divided into holds. Openings giving access to holds are called hatches. In liquid cargo vessels the cargo space is divided into tanks.

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At the fore end of the hull are the forepeak tanks, and at the after end are afterpeak tanks. They are used for fresh water and fuel. If a ship has double sides, the space between the sides contains wing tanks.

All permanent housing above the main deck is known as superstructure. Nowadays, cargo vessels are normally built with the after location of the engine room and bridge superstructure to gain more space for cargo. The forward raised part is the poop. On deck there are cargo handling facilities, such as cranes, winches, derricks etc. Ships having derricks also have cargo masts and cargo posts (or Samson posts) on deck.

Since a ship is supported by fluid pressure, she will incline in any direction in the process of loading according to the position of the weights placed on her. Therefore the ship’s position below water must be closely watched. The angle that a ship is making fore and aft with the water is known as trim. An extreme difference between the water levels at each end of the ship indicates bad loading. The levels are read by numbers painted on the ship’s stem and called draught marks. A list or inclination from one side to another, caused by faulty loading, is known as heel. In the course of loading load lines must be watched above all. The load lines are engraved and then painted on the both sides of ships. The divided circle on the left shows the depth to which the ship may be loaded in summer time. Below this line are, on the grid to the right, two lines. The one marked W means winter loading, the lower one marked WNA means the maximum depth to which the ship may be loaded if she is going across the North Atlantic in winter. The other marks above these are: T for tropical, F for fresh water. These lines are shown on the ship’s Load Line Certificate. In case of overloading a ship, so that these lines are under water, the penalties are severe.

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DIFFERENT KINDS OF SHIPS

There are over 70.000 merchant ships in the world. Some of these are general cargo ships. Others are specialized and are used for carrying one kind of cargo such as oil or bananas while others may be used for passengers or holiday cruisers. But because people travel mostly by air nowadays the old passenger liners have gone out of service. However it is still possible to travel by sea on a cargo boat (freighter) which has passenger accommodation.

Complete these sentences with words from the passage or diagram:

Ships which carry one kind of cargo are _____. Ships which carry oil are called _____.

Ships which carry passengers on holiday are called _____ _____. Ships which carry only travelers are called _____ _____.

Match the words on the left with the words on the right:

All ships are divided into 2 broad categories: men-of-war and merchant ships. The Navy’s ships include aircraft carriers (these large floating runways

launch warplanes for a variety of purposes; to protect one’s own ships; to attack the enemy; to fight enemy aircraft at sea of overland or to support land operations

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more generally), destroyers (traditionally a fast-moving warship of medium size, although the term is now used for modern war ships of a range of sizes and functions), frigates ( term used at different times for several different types of vessels; in the 18th and 19th centuries, a frigate was a medium-sized sailing ship, with square sails, in modern Britain, a frigate is a warship which is tasked with general duties and anti-submarine warfare), submarines (a submarine is a specialized vessel that can operate under-water, most major navies of the world employ submarines, they are also used for marine and freshwater science and for work at depths too great for human divers), mine warfare ships (mine sweepers - vessel designed to sweep or explode mines laid at sea), auxiliary ships and service craft.

Merchant ships fall into these broad categories: freighters (or cargo ships), dry bulk carriers, tankers, passengers ships, coastal and harbour craft. Pleasure craft and yachts are used for sport and rest.

Main types of fishing ships are seiners, trawlers, clippers and others.

Two new ship types are widely used: hydrofoil and hovercraft. The hydrofoil uses underwater foils to obtain lift. With the hull above the water, resistance is greatly reduced and speed increased. Some hydrofoils use water-jet propulsion instead of propellers. The hovercraft (or air cushion vehicles) ride over the waves, marsh or land on a cushion of air moved by air propellers.

Pair words with an opposite meaning:

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Read and translate the following text:

On one hand, all cargo ships are divided into two types: dry cargo ships and tankers. On the other hand, cargo ships may be divided into universal ships designed to carry principal different types of cargo and specialized ships designed to carry one type of cargo (e.g. bulk cargo, timber, refrigerated goods, oil etc.). Such specialized ships as bulkers (bulk-carriers), timber-carriers, reefer ships, tankers have long been known. In the past two decades three trends in specialized ship design have emerged. One is cargo-carriers with cargo handling equipment on board for special purposes or routes, such as, for example, heavy/bulky cargo ships with derricks or cranes capable of handling single lifts over 500 tons without requiring outside assistance. These ships are also called special-purpose ships. The second trend is Roll-on/Roll-off ships, in which bow and stern doors and adjustable steel ramps permit vehicles to drive on board and drive off again, requiring only minimum dock-side facilities. The third trend is the container ship. The use of containers for cargoes has encouraged the design of ships specifically to carry containers. In their extreme form, as in the LASH barge-carrying ships, the container is a 60-foot steel lighter, which can be quickly launched over the ship’s stern.

The RO/RO vessel (RO/RO or RORO) derived from the traditional car ferry, where motor vehicles are driven on and off by their drivers. RO/RO is popular within the European trade routes. Some modern RO/ROs are designed as a trailer/break-bulk/container carrier suitable for the deep-sea voyage (long haul), making loading and unloading of containers from the top, like a full container ship, possible using the crane. The type of cargo that can be carried on a RO/RO is flexible, including large objects.

The LASH and barge come in different configurations. Some LASHes can accommodate over 24 barges. Each barge may carry 600 to 1,000 metric tons of cargo, which is much bigger than the ocean freight container, and can float and be towed up and down a river or canal, thus the barge is often referred to as the floating container.

The LASH is useful in moving a relatively large volume of cargo in the shortsea trade and to and from sites on rivers and canals, that cannot be used by the larger ocean-going vessels. The LASH keeps the load in the same vessel for the entire trip, thus reduces cargo handling, transport costs and time.

The LASH is popular in Europe, taking advantage of the extensive inland waterway systems which are the cheapest means of inland transport.

There are specialized ships designed to carry different types of cargoes (e.g. OBO ships, PROBO ships, CONBULKERs etc.). These are called combined ships.

A comparatively new development is the multi-purpose ship combining characteristic features of both universal and specialized vessels.

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In dependence of the cargo handling method used dry cargo ships may also be divided into: LO-LO (lift-on/lift-off) vessels where handling of cargo is effected by derricks or cranes through cargo hatches; RO-RO (roll-on/roll-off) vessels where the cargo is rolled on board and rolled off through cargo ports or doors in the bow, stern or sides of the ship; FO-FO (float-on/float-off) vessels where dock lift cargo handling method is used, that is floating cargo units (e.g. barges) are floated into cargo spaces (usually large holds). But there are also hybrid vessels where combinations of the above mentioned methods are used, such as LO-LO/RO-RO (or RO/LO), RO-RO/FO-FO (or RO/FO-RO-Flow) vessels and others.

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CHARTERING OF SHIPS

Chartering is a highly specialized business, but as far as correspondence is concerned we do not need to go into great detail, and the following is an outline of this side of the shipping business.

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When the senders of goods have very large shipments to may, and especially when bulk cargoes are concerned, it may be of greater advantage to them to have a whole ship at their disposal. They do not have to buy the ship but can hire it, and this is called “chartering”. (The same word is also used for the hiring of a freight plane for the transport of merchandise.)

Some very large organizations have their own fleet of ships, especially when their raw material has to be shipped regularly from another part of the world; this is also the case when they specialize in one type of commodity, such as oil.

The chartering of ships is usually done through the intermediary of brokers, and in London there is a special centre called the Baltic Exchange where the brokers operate, in much the same way as stock and share brokers on a stock exchange.

Ship brokers have an expert knowledge of rises and falls in rates for chartered ships, and the trends of the market. This is a very competitive business and there are no conferences to fix rates as in the case of the line companies: indeed, tramp rates fluctuate very rapidly, according to supply and demand. The tramp market may be compared with the liner trade in much the same way as one can compare the cost of raw materials with a finished product; for example, the price of raw sugar remains constant until the raw price becomes so high or so low that the retail price of sugar has to be altered.

The contract between the shipowner and the charterer is the charter party, and it is, understandably, a long and rather complicated document. A charter party may be for the carriage of goods from one specified port to another, and is known as a voyage charter, or it may cover a period of time and is known as a time charter. In the case of a voyage charter there is, on the back of the charter party, a form of the bill of lading, to cover the shipment of the cargo. In some cases the chatterers may not need the complete space in the vessel and may agree to carry cargo also for other shippers.

It is obvious that certain cargoes, such as oil and coal, require special vessels for their transport. Grain in bulk is carried in ships that can be loaded an unloaded by special apparatus – pouring the grain into the holds of the ship and sucking it out for unloading, which avoids the lengthy process of loading and unloading sacks (though this is still done sometimes).

Much of the business of chartering is done regularly by cable. The following are examples of the type of letters that would be required.

From charterers to brokers

We are able to secure an order for 2.000 tons of coal and coke mixed, shipment Grisby/Abo early next month. Please advise us of the lowest rate for a suitable fixture.