EXPOLANKA FREIGHT LIMITED LINES: Subsidiary of Orient Overseas International Limited
1.1Introduction:
As forwarding sector have emerged as the most important player of our economy and they also offer a passionate environment for career development. A develop forwarding sector plays a vital role for marketing stability of a country. It is now providing their forwarding service with lot of sector. The report has been based on the freight forwarding and overall system of Bangladesh.
2.1 Introduction:
EXPOLANKA FREIGHT LIMITED LINES is a subsidiary of Orient Overseas International Limited, a Hong Kong based public company, and is a worldwide leader in integrated international container transportation and logistics services serving Asia, Europe, North America, and Australasia. It has a highly regarded reputation in the industry as providing customer-focused solutions and by being a pioneer in providing Internet-based services for clients.
2.2 History:
EXPOLANKA FREIGHT LIMITED LINES was founded in the 1940s by CY Tung, with the intent of becoming the premiere Chinese international merchant fleet. Their first ship landed in 1947 on the U.S. Atlantic Coast and in Europe; the company went under the name Orient Overseas Line. In a restructuring move to expand operations, the company went under the name Orient Overseas International Ltd. (OOIL) in 1968.
The following year, as containerized transport began, the subsidiary Orient Overseas Container Line (EXPOLANKA FREIGHT LIMITED LINES) was created which assumed the primary business of containerized ocean cargo transport. In respect to ship capacity, their vessels back then could carry around 300 TEU (trade term for space meaning “Twenty foot equivalent”), or fifteen 20ft. containers. Their largest ship today (and at the moment the world’s largest), the EXPOLANKA FREIGHT LIMITED LINES Shenzhen, has a capacity of 8,063 TEU.
EXPOLANKA FREIGHT LIMITED LINES today has 160 offices in 50 countries with a global staff of 4,000.
2.3 History of Freight Forwarding
Previously, it was relatively straight forward to define the role of the freight forwarding community. Traditionally, it involved bringing together all the elements of international transport and distribution and arranging the most suitable space (depending on speed, cost, reliability and security) for the clients’ cargo. The forwarder was also responsible for processing all paperwork, such as customs and letters of credit.
This role has changed significantly. One of the principal catalysts for change was the entry of the global express delivery and courier companies (also known as integrated carriers) into the freight forwarding market in the 1980’s. The fundamental difference between a traditional freight forwarding company and an Integrator (DHL, Fedex, UPS etc) is that a forwarder provides pickup and delivery services but relies on independent carriers to transport the cargo. The integrated carrier also perform pickup and delivery services but use their own vehicles and planes to transport the cargo (forwarders continue to shop around with multiple airlines to ensure they obtain the most competitive rates for customers).
The integrators offered a range of additional services, such as pick-up and delivery, as well as being relatively cheap and reliable. The effect on the freight market was to greatly increase customers’ expectations, as a single company was now able to deal with all aspects of the collection and delivery of consignments. The “traditional” freight forwarders have therefore had to adapt and develop specialist and high value added services (a trend not exclusive to this industry).
Today freight forwarders activities include the following functions:
· To act on the customers’ behalf to procure the most suitable transport and shipping services.
· To undertake the arrangement of the routing and choice of mode for the customer, together with any ancillary service such as customs clearance or packing. This level of involvement introduces a higher level of expertise, which the shipper may not always be able to provide.
· Offering stand-alone ancillary services such as warehousing, customs clearance, packing and port agency
2.4 Span of International Operations:
The company’s world and Asian Pacific headquarters are in Honk Kong; The N. American headquarters are based in San Ramon, California, and the European headquarters are in London. Under these offices lie the individual countries with their respective headquarters and branch offices. In some nations, the company has an associate company through which they provide their services.
2.5 Relation to Containerized Liner Industry at Large:
EXPOLANKA FREIGHT LIMITED LINES is largely concentrated in Asia where it began and developed into the region’s market leader among mass-containerized liner carrier transport. In the larger competitive ocean transport markets servicing Europe and North America though, EXPOLANKA FREIGHT LIMITED LINES acts more so as a large player among a distinct group of partners. EXPOLANKA FREIGHT LIMITED LINES is able to maintain its market competitiveness through memberships in Conferences (next section).
This business situation in the containerized liner industry seems to be the norm nowadays, with each major player best serving their respective markets but collaborating at the benefit of both expanding operations combined with better and wider service coverage. EXPOLANKA FREIGHT LIMITED LINES has no operations in Central or South America. Could one say that this branch of the ocean transport industry has matured in size though? With respect to the number of carriers: yes. With expanded service coverage coupled with increased trade volume: no.
The general logistics service industry over the last ten years has been one of the world’s fastest developing service markets considering the scope of modal operations: air, truck, and sea. However, in the last three years large number of logistics service providers left the market while others merged and consolidated. The merger of ocean carriers Maersk and Sealand, as well as P&O and Nedlloyd are prime examples of this movement in ocean freight. There is however, still much growth in this market as trade volume increases over time; variable on the geographical region being looked at.
North America and Western Europe have very large export production volumes that, although important, have only marginally increased over the last 3 years in light of the global economic recession. There is however much optimism in Central and Eastern European trade growth, complemented by the forthcoming admission of 10 new member states in the EU.
The countries most watched (in order of importance) are Poland, the Baltic Nations, the Czech and Slovak Republics, and Hungary. Germany will play a key role as the intermodal transport gateway to these nations. As such, logistics service providers willing to invest and serve their neighboring countries will have high growth prospects.
The new interest in these nations has influenced the expected increase of Trans-Atlantic trade. According to a May 2003 article by World Trade Magazine, overall Trans-Atlantic vessel tonnage is expected to grow by 4.9 percent. Of this figure, air-freight will see marginal growth while ocean freight is also forecasted at around 4.9% and is “expected to exceed air freight expansion for the first time in 13 years.”
In Asia, annual production growth is larger with an average of 3%. The leading countries are China with 7% and South Korea with 5%. Japan is the only exception in Asia with its trade growth being stagnant. (Source: Logistics Pilot August 2002). Although there is wide service coverage already by major carriers, volume and trade will still significantly rise among major ports like Singapore and Hong Kong with further port investment and growth among large regional ports including Shanghai and Shenzhen, and other smaller ports.
EXPOLANKA FREIGHT LIMITED LINES is the leading carrier here, already serving direct routes from Europe to cities that used to only be covered by transshipment in Hong Kong. One of EXPOLANKA FREIGHT LIMITED LINES’s main competitors in the Asia region is China Ocean Shipping Company (COSCO).
Combined with the growth in Asian-European trade and Trans-Atlantic trade, ports like Antwerp, Rotterdam and Hamburg will continue to grow and expand. Hamburg expects in the near-future to see an increase in container traffic of 16% with a large portion stemming from China and the Baltic Sea region.
A specific issue (discussed on p.13) related to the larger proportion of exports/imports from Asia to Europe trade, is the increased costs associated with moving unloaded containers within the European continent. This is causing a supply chain headache for all container companies in countries where export demand is not as high as that of import.
2.6 Conference Lines:
A shipping conference is a voluntary association of ocean carriers operating on a particular trade route between two or more countries. These associations were originally formed in the nineteenth century as a means to provide transport services for trade between England and its colonies.
A shipping conference establishes uniform freight rates, and terms & conditions that are adhered to by the member carriers. Although the sheer nature of this organizational structure can be compared to that of a cartel, it is seen as very beneficial in the growth of international trade through the establishment of stable and predictable rate levels. This in turn, reduces the threat of predatory price competition.
Although a conference serves as the association at large, member carriers are divided into alliances which provide the basis for a liner service. The carriers share or lease out an agreed portion of their ships to other members, thus providing more frequent services for each. At the benefit of countries and customers, liner services provide sailings on a regular schedule to and from specific ports along a trade route.
This schedule is regularly updated for each ship’s ETA and ETD. The intervals, upon which the sailing schedules are set, are determined by the amount of cargo transported on that route. For large routes from Asia-Europe, this is a weekly service. For smaller inter-regional traffic, these may be on a two week basis.
In order to keep conferences from unfairly discriminating against independent carriers through particular membership requirements, the U.S. and Germany require that all conferences that serve their ports must be open. This means they must be willing to accept new carriers under fair and reasonable terms and conditions.
The formation of modern alliances began in 1994 with the formation of the Global Alliance between American President Lines, Mitsui OSK Line, EXPOLANKA FREIGHT LIMITED LINES, and Nedlloyd Lines. The Grand Alliance came next with the members: NYK, Hapag-Lloyd, Neptune Orient Line, and P&O). The following shows the major alliances today:
New World Alliance Independent Carriers Alliance
· APL · CMA/CGM
· Hyundai · CSAV/Chilean Line
· MOL · Hanjin Shipping
· Montemar Maritime
· Zim Israel Navigation Co.
New Grand Alliance · CKYH Alliance
· Hapag-Lloyd · COSCO ”·
· NYK Line .· ”K” Line
· EXPOLANKA FREIGHT LIMITED LINES · Hanjin Shipping
· MISC· · Yang Ming Line
· P & O Nedlloyd
Hanjin/Senator/UASG
2.7 Values:
Service Excelle
Opennes
Trust
Integrity
Responsible corporate citizen
2.8 Objectives of EFLL(Environmental Foundation Logistics Limited):
Promote, protect and develop a sound freight forwarding and logistics industry, as the association may deem appropriate, in close cooperation and consultation with any government or non-governmental authority or the private sector.
Promote and enhance Sri Lanka as a regional and international logistics hub with a reputation for reliability, integrity and high standards by introducing best in class freight forwarding and logistics practice and management.
Represent, protect and promote the interests of Members and, enhance solidarity and mutual assistance between its members.
Organize trade events and promote members’ participation in commercial events organized by the association and by third parties.
Facilitate capacity building by promoting training and development of members and of their employees and of people interested in making freight forwarding and logistics a career.
Foster good relations with associations whose objectives are, directly or indirectly, similar to those set out above.
Improve the overall professional image of the freight forwarding and logistic industry.
Exchange information between industry stakeholders in order to improve the entire freight forwarding and logistic process.
Develop best practice industry standards in meeting the needs of consumers.
Carry out the general functions of a trade organization and to provide information for its members through electronic means, publications and of meetings and conferences.
Represent, promote and protect the interests of the industry by participating as advisors or experts in meetings of international bodies dealing with transportation.
2.9 Service of EFLL:
International freight forwarding
Air & Ocean services
Import & Export
Custom clearance Ocean / Air combination services
Project forwarding
Freight consulting
Air & Sea freight charters
NVOCC operations
Break bulk handling
Exhibition forwarding
Storage and warehouse
Distribution
2.10 Department Activities and Responsibilities:
The Scandinavian-Baltic territory is served by either EXPOLANKA FREIGHT LIMITED LINES’s own SBX service or by Public Feeders. Containers originating from Germany or elsewhere to a city in this region will have their shipping arrangements made by Transshipment. The only exception is the city of Gothenburg, Sweden which is served by the Iberia Scan Express Service (ISX).
On the SBX route, there are three ships: the Neva, Nevskiy, and Narva which can carry up to 600 TEU. The Neva and Nevskiy operate on the SBX1 route while the Narva is on the SBX2 route. The port rotation for both services is as follows:
SBX1: Grangemouth \ Antwerp \ Rotterdam \ Hamburg \ Gdansk \ St Petersburg \ Hamburg \ Grangemouth
SBX2: Hamburg \ St Petersburg \ Hamina \ Hamburg
The amount of TEU that Transshipment Bremen is allowed to book on the SBX service is allocated on a weekly schedule from England. If the department needs to book more space, they would have to call the Trade department in England and receive approval.
The SBX booking/notification process begins with the retrieval from InfoNet of a Container Announcement List (CAL). This details the containers to be loaded/discharged from/to the port or to another ship. The tasks vary depending where the container is coming from. Containers from previously called SBX cities (east or west) may need to be unloaded if final destination is Germany, or another country by which mothership or public feeder further transports the cargo. Motherships arriving in Hamburg may have containers needing further shipment via SBX. Containers from Germany may be bound for eastern or western SBX cities.
As one can see, the origins of the container vary but the process of finding out where they need to go is essentially the same. Two versions of the CAL are made: one for loading and the other for discharging at the terminal. Each CAL is further divided up among the varying container sizes, whether they normal or reefer containers, if they contain Dangerous Goods (IMO), or if they are flat-rack/project containers. These two CALs are then reviewed for discrepancies and when ready, are sent to the Stevedore along with the arrival and departure dates.
A Stevedore is a company that operates one or more port terminals. For IMO containers, a DG-Declaration and Packing Certificate have to be forwarded to the terminal (if not already available, booking office is contacted), while for reefer containers a cooling order must be sent so that the specified container will be connected and be set at the proper temperature while in the port. After all is done, Transshipment will receive a load/discharge report from the Stevedore which is then reviewed to find containers that weren’t loaded and follow up on their shipment status.
Jochen handles outgoing containers coming from eastern SBX cities that need to transfer in Hamburg to outgoing motherships, while Hermann handles container loading from incoming motherships in Hamburg to eastern SBX cities.
Although we was not involved with booking/notification of SBX ships, we observed that timing, planning and coordination were the main aspects of Jochen and Hermann’s tasks. Other aspects of their work included contacting the ships, receiving updates on arrival/departure times and weather conditions, and relaying this information to all interested parties. Veterinary products also have to be declared and have their documentation forwarded on time. Another task is the review of terminal load/discharge reports for accuracy and be forwarded to accounting.
3.1 What is Freight Forwarding?
Freight forwarding is a service used by companies that deal in international or multi-national import and export. While his freight forwarder doesn’t actually move the freight itself, it acts as an intermediary between the client and various transportation services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden.
Freight forwarding services guarantee that products will get to the proper destination by an agreed upon date, and in good condition.
The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners.
Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability.
A freight forwarding service generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder’s bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination.
3.2 EXPOLANKA FREIGHT LIMITED LINES Conference:
EXPOLANKA FREIGHT LIMITED LINES is a member of three conferences. These are the Trans-Atlantic Conference Agreement (TACA), the Far East Freight Conference (FEFC), and the Canadian Secretariat (CANSEC).
3.2.1 TACA – Trans Atlantic Conference Agreement:
This conference serves ports between Europe and the U.S. East, Gulf, and West Coast. EXPOLANKA FREIGHT LIMITED LINES is a member of the New Grand Alliance along with the following other members: Hapag-Lloyd, NYK Line, P&O Nedlloyd, and MISC. EXPOLANKA FREIGHT LIMITED LINES serves these routes along with the New Grand Alliance members (excluding MISC) and including TMM, Americana, and Lykes (for the GMX and GAX routes). With each carrier, EXPOLANKA FREIGHT LIMITED LINES has Slot Charter Agreements in which it rents and leases vessel space.
3.2.2 FEFC – Far East Freight Conference:
This conference serves between Europe – Asia and Asia – N. America. EXPOLANKA FREIGHT LIMITED LINES serves this route through the New Grand Alliance. Since the creation of this alliance in January 1998, member carriers’ combined ports of destination have vastly expanded and service routes have become very frequent and reliable.
3.2.3 CANSEC – The Canadian Secretariat:
This conference serves between Europe and Canada. Under this conference, EXPOLANKA FREIGHT LIMITED LINES is a member of the Saint Lawrence Coordinated Service (SLCS) along with the other members Hapag-Lloyd, Canadian Maritime, and Container Atlantic Shipping Transportation (CAST).
3.2.3 Other Alliances:
The Asia Australia Alliance (AAA) is an alliance between Pacific International Lines (PIL), Malaysia International Shipping Corporation (MISC), Mitsui OSK Lines (MOL), and EXPOLANKA FREIGHT LIMITED LINES . Together they serve ports between Southeast Asia and Australia.
3.3 Services Offered and Assets:
3.3.1Trade Routes:
The following routes cover transport for Europe-Asia and Europe-North America. EXPOLANKA FREIGHT LIMITED LINES covers other important routes over the Pacific Ocean and offers a significant number of routes for intra- Asia; those however will not be discussed here. Another route not mentioned here but in Section II, is the Scandinavian-Baltic Express. The main gateway European ports for EXPOLANKA FREIGHT LIMITED LINES are: Southampton, Le Havre, Hamburg, Bremerhaven, Rotterdam, and Antwerp. The acronym for Trans-Atlantic Trade is TAT, whereas Asia-Europe Trade is AET.
Europe – Canada: There is the Gateway Express consisting of three services lines each running once a week between 5 European cities and Montreal. The service acronym to Canada is TAG, while the individual routes are GEX 1-3. GEX2 is the only line that connects to Germany, through Hamburg.
Europe – USA/Mexico: There are five service lines running each once a week connecting 7 European cities to 13 N. American cities. The lines connecting in Hamburg include the Atlantic Express (ATXS) and the S. Atlantic Express (SGXS). Lines connecting in Bremerhaven include the Gulf Mexico Exp. (GMX), the Pacific Atlantic Exp. (PAX), and the Gulf Atlantic Exp. (GAX). All routes except PAX (which falls under TAP), are grouped under the acronym TAN.
Europe – Asia: In conjunction with the New Grand Alliance, EXPOLANKA FREIGHT LIMITED LINES offers six service loops connecting 10 European cities to China, Japan, Singapore, Korea, Indonesia, Sri Lanka, and the Middle East. Each loop covers a particular group of cities, but the two main Asian cities covered are Singapore and Hong Kong. Hamburg covers loops A through E with the exception of B, covered by Bremerhaven. Loop F covers Mediterranean – Asia trade. Loops A through E fall
under the service acronym AEC (“C” for Continent) while Loop F falls under AEM.
3.3.2 Containers:
EXPOLANKA FREIGHT LIMITED LINES has around 350,000 containers worldwide. These vary according to size and purpose. The first and most popular sort is the general twenty and forty foot length container. The exact dimensions are 20/40’ x 8’ x 8’6”. High Cube (HQ) containers are also available which offer one foot greater height, 9’6”. These containers are made of steel or aluminum (which is lighter and can bear a higher max gross weight).
Reefer containers are refrigerated containers for temperature sensitive goods like food, chemicals, pharmaceuticals, and particular medical equipment. Cooled air is delivered through the floor to allow thorough distribution. These containers are made of steel with a stainless steel lining and are available in 20ft, 40ft and 40ft high cube sizes.
Open top containers allow bulk cargo like machinery to be loaded from overhead. They come with a PVC tarp cover and attachable bows with cable sealing devices, in addition to removable container doors for easier cargo stuffing. They are made of steel available in 20 and 40ft sizes. Flatracks are standard 20-40ft containers designed for heavy cargo loaded from the sides or top, for example lumber and pipes. These are available as collapsible or non-collapsible with or without walls, and are made of steel.
To suit the shipment needs of clothing manufacturers and distributors, EXPOLANKA FREIGHT LIMITED LINES also offers Garmentainers. These special containers come in 20 and 40ft sizes, have either a string or bar system (or both) for hanging clothes, and offer the client greater load internal capacity and lower handling costs.
3.3.3 Vessels:
EXPOLANKA FREIGHT LIMITED LINES ’s ship fleet is modern and relatively young in comparison to other large carriers. All of their ships are registered under Hong Kong and come in different classes with respect to capacity and purpose. The S-class with 10 ships carry within an average of 5,500 TEU.
The E-class with 2 ships carry 2,450 TEU. The F-class with 6 ships carry an average of 3,200 TEU. The ICEclass has 3 special ships with strong reinforced hulls for very cold weather and ice conditions; two carry up to 3,100 TEU while the last one up to 4,400 TEU. The last ship, and currently the world’s largest, is the EXPOLANKA FREIGHT LIMITED LINES Shenzhen with a capacity for up to 8,063 TEU. While it has a fixed number of ships, EXPOLANKA FREIGHT LIMITED LINES ’s membership in the Grand Alliance extends their offering of container shipment services to over 100 ships.
The need for larger ports:
Although ocean ships will only get bigger and have higher-capacities over the next 20 years, an important issue for certain ports is the ability to accommodate these massive vessels. In Hamburg for example, certain large ships have to wait until high-tide until they can enter the harbor because the water-depth is not that deep (average of 14 meters in high-tide). Even so, ships from Cuxhaven have a particular window-period of time of 2 hours within which to sail into Hamburg. While the solution for some harbors is to build further out into the sea, this option is quite costly and may not even be available depending on the relative geographic location of the port to the ocean.
In northern Germany, there is a massive study into the prospect of a new mega port in Wilhelm shaven. The project would be a costly investment and undertaking, but the prospect of building a spacious harbor with the capacity to accommodate these massive vessels of the future is considered well worth it. An additional benefit of this harbor would be its ability to strongly compete against Rotterdam, already the 3rd largest port in the world. Wilhelm shaven originally approached Bremen and Hamburg into the idea of joint investment.
At the moment only Bremen (namely BLG – Bremer Lagerhaus Gesellschaft) has actively taken interest in the prospect. Although the long-term investment potential is quite large, a greater issue at hand is the massive infrastructure needed to support the port including larger highways, bonded warehouses, and companies willing to establish offices there. The largest and most important investment needed would be the building of a two-track electric railway to connect Wilhelm shaven to either Bremen or Osnabrück; this would need to be funded by the German Parliament.
3.3.4 Terminals:
A terminal is an area of the harbor where a ship docks and from which its cargo is unloaded. It also may include a container yard and bonded warehouses. Terminals may be state or privately owned and operated, and may be located in- or outside of the Free Trade Zone of a harbor (if available). The commission in charge of the terminal draws up the applicable load/unloading, storage, and other applicable fees it charges the carriers.
EXPOLANKA FREIGHT LIMITED LINES also owns and operates port terminals in
Asia and North-America. These include:
Taiwan: Kaosiung Terminal
Los Angeles: Long Beach Container Terminal
New Jersey: Global Terminal
New York: Howland Hook
Vancouver: Deltaport and Vantern
3.3.5 Bill of Lading:
This official legal document issued by the carrier to the shipper is a contract of carriage that represents the ownership of cargo, a negotiable document to accept cargo, and the terms and conditions under this contract that identify the responsibilities and liabilities of each party. Issued B/Ls come usually in a set of three originals which are signed by the master of the ship or another authorized person on behalf of the shipping company. On presentation of any of the three originals (along with appropriate payment), the master or authorized person has to turn over the goods to the consignee or delegated party.
Types of B/Ls
1) Straight – Here the consignment is made directly to the overseas customer or
other entrusted agent to further handle the goods.
2) Order – This B/L is negotiable, meaning that it can be bought, traded, or sold. There is no designated consignee, but rather an agent which is to be notified upon arrival of the goods. The agent is responsible for properly identifying to the carrier the right to pay for and pick up the goods. If the agent or overseas customer is unable to pay, the carrier (after notifying the shipper and a certain amount of time has expired) has the option to sell the B/L (and thus the goods) to an interested party. The transfer of title is completed when the carrier endorses the B/L to the respective agent or buyer.
3) Through – This B/L is issued by the freight forwarder or carrier, and covers
the contract of carriage for all primary and intermodal carriers used in the shipment from point of origin to destination.
Terms and Conditions
The terms and conditions on the back of a B/L highlight the responsibilities of the carrier and their liabilities. This section is very important. As carriers would probably like to draw up their own limitations of the contract, all affected parties in B/Ls are subject not only to national laws, but international laws drawn under conventions signed by various nations. Under the EXPOLANKA FREIGHT LIMITED LINES standard Bill of Lading, the following sections are outlined:
Sections
1-2: Definitions attributed to terms used, such as CARRIER, MERCHANT, GOODS,PORT OF RECEIPT, HAGUE-RULES, and STATE.
3: Declaration of Carrier’s tariff to be further outlined. Copies of applicable tariffs can be obtained from EXPOLANKA FREIGHT LIMITED LINES. In areas of inconsistency between the B/L and applicable tariffs, the B/L shall preside except in the U.S. where the tariff provisions preside.
4: Carrier’s Responsibility and Clause Paramount. This section details EXPOLANKA FREIGHT LIMITED LINES ’sliabilities and the parties responsible under specific scenarios. Where limitations of liability are unclear, they are further delegated to international/national laws where applicable.
5-6: These sections outline the Merchant’s warrants for the authority to ship the goods that are suitable for containerized transport, the various merchant responsibilities, and the liabilities the merchant cannot hold EXPOLANKA FREIGHT LIMITED LINES accountable for.
7: The Merchant is delegated the responsibility for complying with all applicable regulations and paying all necessary dues that arise under previously agreed terms and any fines/penalties that may arise. Further, the carrier considers the cargo officially handed over to the consignee should the carrier be obliged to hand over goods to customs or the port authority.
8: Here, the merchant is responsible for any damage to goods (under listed conditions) that arise from containers that have been packed by the shipper.
9: In handling dangerous goods, the shipper is responsible for properly notifying the carrier of the goods’ nature. If the goods become dangerous during the course of voyage, they may be disposed of without financial liability of the carrier so long as the merchant had made proper notification to the carrier prior to loading. The Merchant further warrants that the goods are lawful and legal to transport/export. Finally, the merchant cannot hold the carrier liable for any loss or damage to the goods as long as proper notification of the goods contents had been given to the carrier.
10: With respect to deck cargo and livestock, the carrier is absolved from liability arising from unseaworthiness, negligence, or any other cause. In cases of transport to and from the United States however, the Merchant is responsible for knowing inherent risks of such carriage and other conditions will fall under the U.S. Carriage of Goods by Sea Act (COGSA).
11: This section outlines the rights of the carrier to store particular goods on or below deck, without notification to the merchant. Particular international conventions apply.
12: The final section relates to the description of the goods and the carrier’s limitations of liability thereof.
3.3.6 Relation of EXPOLANKA FREIGHT LIMITED LINES to that of a Freight Forwarder:
EXPOLANKA FREIGHT LIMITED LINES has service contracts with various large clients including freight forwarders (who represent their end customer) and large corporations. Most of world trade is handled though freight forwarders who then contract with carriers. A natural question that arises is what is the range of flexibility that the company can use to bypass the middleman freight forwarder and better directly (and more profitably) serve medium sized companies. The answer is through negotiation with freight forwarders (who look out for their best interests) and through service contracts with inter modal carriers. When choosing an inter modal partner, EXPOLANKA FREIGHT LIMITED LINES examines a number of important characteristics:
What kind of Quality Management System does this company have?
This includes things like how well the company communicates with its partner over their mutual operations, and the quality of its punctuality and responsiveness.
2. How is the company organized managerially and geographically?
3. Of high importance, how well are their rates and related costs?
4. Is this company’s inter-business IT services sophisticated enough to handle the requirements of EXPOLANKA FREIGHT LIMITED LINES ?
At the moment, EXPOLANKA FREIGHT LIMITED LINES Deutschland has the following spread for inland intermodal container transport: 40% Truck, 30% Rail, and 30% Barge (source: Richter). The Rhein serves as a major waterway in effectively transporting goods in the West. Rail use is very convenient but is not widely used in the East, where rail networks are not as advanced and developed. I had expected truck usage to be higher here in Germany (and Europe in general) considering the small geographic size of the continent. However when considering the higher price of petrol and diesel fuel in Europe, I could understand part of the reason why.
3.4 EXPOLANKA FREIGHT LIMITED LINES Dhaka Branch:
This branch originally was a shipping agent for EXPOLANKA FREIGHT LIMITED LINES , but in April 1993 it was established as the German headquarters for the company. The office is in the World Trade Center and oversees all business activities for EXPOLANKA FREIGHT LIMITED LINES in Germany and Austria. They also collaborate with other offices in Denmark, Scandinavia, Switzerland, and of course the European headquarters in London. Some of the main departments of the Bremen branch and their activities are as follows:
3.4.1 Marine Operations:
This department has a variety of functions which are individually explained below in order of occurrence: Weekly Sailing Schedules and Vessel Shut-Off times: on the second day of each week, a Marine Clerk (MC) must extract from IRIS2-Schedule System (ITS) the applicable dates of arrival and departure of ships in German ports for the following week. Further necessary details are either obtained either from the Ship’s Operating Agent or (in the case of EXPOLANKA FREIGHT LIMITED LINES operated vessels) from the Territorial Marine Operations. The MC must then contact involved partners for late Amendments that were not updated to ITS and inform them of Vessel Shut-Off times for each sailing. The process of updating this schedule and passing it along to different partners and departments is an ongoing process until actual vessel departure.
Husbandry: this involves supplying ships in Bremerhaven and Hamburg with necessary mail, spare parts, and the process of notification of special lists (reefer, dangerous goods, and awkward cargo) between affected parties. What follows is a lengthy procedure of receiving info and notifying other parties. Copies of special lists are received through courier or email from agents of the last port of call in Asia or North America, which are then forwarded to the terminal operator at latest five days before arrival. Staff must send copies of DG manifest from EXPOLANKA FREIGHT LIMITED LINES and partner lines by fax to EUEXPOLANKA FREIGHT LIMITED LINES DG. Before arrival, staff must also prepare, sign, and send the European DG Reporting Form to the Zentralmeldestelle (Central Reporting Station) in Cuxhaven. Arrival Report must be made and forwarded to Territorial Marine Ops. After departure, a Departure Report must be made and distributed by fax to recipients within two hours after departure, and update ITS. An additional “Meldeschein” has to be filled out and mailed to the port authorities by the latest the next business day. For Hamburg, some of these functions including the arrival and departure reports are handled by a sub-contractor, DELTA Klarierungs-GmbH.
Container Announcement List (CAL) Preparation: After the booking deadline, a MC goes into the ODS Report System to find the CAL, then exports this into Excel and prints it out. Next, the MC compares the CAL to the final booking lists received from the booking offices and looks for (followed by settling) discrepancies including: Missing or non-corresponding container numbers, cancellations and additional bookings, unspecific cargo dimensions, and details on temperature sensitive cargo.
After this is complete, the MC must print a Load Confirmation (LC), verbally confirm with the Terminal Operator on the figures and send them the LC. Finally, the MC must review the DG manifest and ensure that all DG documents are available and are reported to the Port Authorities.
Container Booking Forecast and Planning: this involves the communication between EXPOLANKA FREIGHT LIMITED LINES Bremen, London, and other Ship Operating Agents. A forecast must be made 1 week prior to arrival and forwarded to all parties. This is needed for the applicable Ship Operating Agent to correctly plan the stowage of containers upon initial loading. The details include the number and size of full, reefer, and empty containers.
Port and Terminal Charges: here a MC gathers the figures for loading, discharging, and other port usage charges in Hamburg and Bremerhaven. Then the MC enters this data into IRIS-2, generates a job number, and forwards this info to the Terminal Operator by email. Later when the office receives invoices from the terminal, these must be compared to the applied terminal tariff and, when correct, be forwarded to Accounts Payable.
Some additional duties include the distribution of High-Security seals (for US bound containers) to depots in Germany, and the compliance with ensuring proper Q-Seal fitting on containers containing meat of cloven hoofed animals destined to USA or Japan.
3.4.2 Transshipment:
This department handles the further shipment of containers arriving in Germany destined for Scandinavia and the surrounding region. This is done by booking on EXPOLANKA FREIGHT LIMITED LINES’s three ships on the Scandinavian-Baltic Express Line (SBX1 and SBX2) which cover the northern cities of St. Petersburg, Gdansk (Poland), and Hamina (Finland). Containers bound for other cities will be booked by the transshipment staff to partner feeder (small vessel) companies. Further details are found in Section II: Transshipment.
3.4.3 Import – Customer Service / Documentation:
This department manages the import of containers and the relationship to the receiving client here. This is done through three individual groups. Three to four days before a ship’s arrival, Documentation will send a “Notice of Arrival” to the receiving client, informing them of all pertinent details regarding their shipment. Customer Service then speaks with the client in regards to how the client would like their container delivered, and answers any questions the client may have. The client can choose either Merchant Haulage, or Carrier Haulage.
With Merchant Haulage, Customer Service needs only to release the container to the client who will make their own arrangements for transport from the port to their location of choice. With Carrier Haulage, EXPOLANKA FREIGHT LIMITED LINES handles port customs and Customer Service contacts the Transport department to arrange for delivery of the container to the client. Documentation (in either scenario) then handles the issuance of invoices to the client for the applicable services rendered.
The last function, Cost Control, examines any excessive storage costs associated with the container and bills the client appropriately. Demurrage is the condition when containers are sitting too long in the port, whereas Detention is when the client is still in possession of the container over the allowable window period of transport.
3.4.4 Export – Customer Service / Documentation:
This department manages the booking of containers for export, necessary documents needed, notification/negotiation over containers to Marine Operations, the issuance of Bills of Lading, and working to keep the client informed on shipment issues.
Customer Service takes booking calls from clients and enters them into the system. They determine from the client whether the container will be carrier or merchant freighted to port, then contact Transport for arrangements or releasing the container for pickup by the client. In the case of dangerous goods or awkward/flatrack containers, C.S. needs to obtain/arrange the necessary goods documents from the client otherwise the shipment cannot be loaded. Although C.S. manages contact with the customer, C.S. contacts Marine Operations for the official booking onto a ship. When all pertinent container data is available, C.S. sends this to Marine Ops who then examines allocation status for the ship and makes the arrangements for booking, advising C.S. on arising circumstances.
After this is done, C.S. advises the client of all applicable rates, contracts, tariffs, and finally the shipment schedule. This schedule consists of the ETS (sailing), ETA (arrival), Booking- Deadline (to book additional freight), and Gate-In Deadline (arrival of container to port). This information can be given early to the client on an appraisal basis, but not confirmed basis until the container is officially booked by Marine Ops. Finally, C.S. sends out a Load Confirmation to the client.
Documentation handles then handles two tasks. One is the issuance of Bills of Lading and Invoices for services rendered to the clients. Secondly, they compile and correct the Manifest (official ship list) for all containers loaded.
3.4.5 Transport:
This department handles the transport and booking of import/export containers for clients to/from ports using truck, rail, or barge from inland intermodal partners. They additionally work with the management of Container depots in Germany, of which there are 17. None are shared depots with other container companies.
3.4.6 Sales:
This department responds to rate enquiries and establishes sales contracts, which are approved from the Territorial Trade Department in England. The procedure is as follows:
When a Sales Clerk receives a rate enquiry, they must note all details including container size, type, description of cargo, origin and destination, and any applicable DG, reefer, or awkward size info. If available, any competitive rates mentioned by the client are also noted. All this is documented on a standard Quotation Sheet form or in the reply section of the customer’s email/fax.
The Territorial Trade Departments establish the rates given based on Conference and Alliance membership. Sales Clerks, when looking up quotations, go onto EXPOLANKA FREIGHT LIMITED LINES Info Net and look up rates according to the service route in question. For any rates that aren’t covered in Info Net, the Territorial Trade Department must be contacted for further advice.
When a preliminary rate offer is found, it must be notified to the client by the following day. Prior to booking, the Sales Clerk must either make a CSO input into IRIS-2 which in turn sends a rate request to the Conference & Pricing Department in the Territorial Trade office, or call them personally to get rate approval. The Sales Clerk should periodically check during the day if the rate has been approved. Once it is, the clerk can begin booking for the client. If however, the rate is not approved, the sales clerk must contact the client and offer other possible alternatives, and the rate approval process starts again.
For sales contracts that involve a specific amount of tonnage over a time period, the rate establishment procedure is the same as outlined above, although presumably more care is taken to negotiate and accommodate the needs of the customer. In these contracts, EXPOLANKA FREIGHT LIMITED LINES cannot apply a penalty to the client for shipping under the agreed tonnage/time interval unless the applied trade route is TAN.
On a personal note, we found the need to confirm all rate contracts with England sort of degrading on the ability of EXPOLANKA FREIGHT LIMITED LINES Germany to make wise and profitable sales contracts on its own. However, when considering the thin margins on containerized transport today and the nature of conference/alliance participation, we can understand the need for centralized rate decision making. But I imagine the sub-status effect is the same on all country offices outside England, China, and to a lesser degree in N. America.
3.4.7 Traffic:
This department can be described as the circulatory system of EXPOLANKA FREIGHT LIMITED LINES Germany. It acts as the conductor for the volume of shipments that England allocates Germany, that it then divides and allocates among the individual booking offices.
This department is further described in Section III: Traffic.
3.4.8 Flow Control:
This department manages the planning, coordination, and a balanced supply of empty containers among the various container depots in Germany. To achieve this, they work closely with the Transport department.
This business function, I have learned, has become a big headache to carriers in general. The problem is the issue of having containers available and close to the client in addition to the desire that containers when shipped somewhere, are delivered back to the harbor full. The transport cost for an empty container eats at the revenue just made.
Upon considering the situation, I wondered where a solution could be. At the moment it is not possible to correctly book specific containers for re-use by another client in the next week whose proximity to the container discharge point would be feasible and cost-effective. Could an IT solution solve this? Possibly, If we say that we make a 7 day window for clients to unload their container, whereby we then deliver that to the closest customer that needs it, it could be possible. Cancellations would free that container up again. If the client takes longer than 7 days to unload, the IT system could find another container or notify a human agent to handle the situation further.
With EXPOLANKA FREIGHT LIMITED LINES at the moment, we have a lot of clients that use containers to export from Nord Rhein Westphalen, Hessen, Baden-Württemberg, and Bayern. There aren’t however enough containers coming into the country that are shipped to that region. A large proportion of imported containers stop at Hamburg and Bremerhaven because the overseas client is unfamiliar with the German geography and figures since the country is small anyway, the client can take charge of the shipment from the port. The container then might be unloaded by the client/forwarder and that cargo is re-consolidated to go south. The container stays in Hamburg.
As one can see, it’s a difficult situation that cannot be easily handled by IT. I found this subject quite interesting as it is an industry-wide equipment supply problem.
3.4.9 Claims:
This department works with claims on damages to containers and to cargo. Personnel must fill out a claims form and after the process of investigation, determine who is responsible and liable for damages and for repair costs. The following questions are raised to aid the inquiry.
1) What, when, where, and under whose custody did the damages occur?
2) What are the financial costs and which insurance coverage is available?
Additionally, all relevant documentation and data reports are examined to further assess liability.
3.4.10 Maintenance & Repair:
This department takes care of the proper condition and repair of containers. If a container is damaged, depending on the condition of it, it may be repaired or be sold. Average container lifetime is between 6-8 years.
Damaged containers receive a repair estimate and the department assesses whether it is cost effective to continue with repair or not. If so, attention must also be given to ensure payment for repair will be received and accounted for from the liable party.
3.4.11 Information Technology:
The heart of all transactions and inter-communication between regional headquarters, country offices, and among various departments are ran though the company’s extensive IT system. The system is based in Hong Kong and serves operations the world over. It is divided into three sections based on function.
EXPOLANKA FREIGHT LIMITED LINES –Internet
This is for general information for potential clients wishing to learn more on EXPOLANKA FREIGHT LIMITED LINES and its products and services, as well as clients looking for sailing schedules, news, and shipment tracking among other things.
EXPOLANKA FREIGHT LIMITED LINES –Internet
This is the company intranet for employees, where they can learn about news, departments, notifications on events, procedure and software manuals, and access EDI and reporting systems among many other functions.
IRIS-2
This is the backbone for all transactions entered, and stands for Integrated Regional Information System. Through using this system, verbal and written communication between departments regarding daily transactions and work is kept to a minimum while being highly effective. The size and extent of functionality of IRIS-2 is quite amazing. Departments though only need a certain amount of functions that is applicable to their work. Thus the interface is customizable to where only desired functions are displayed. See Attachment M for a view of the IRIS-2 main menu.
4.1.1 Department Activities and Responsibilities:
The Scandinavian-Baltic territory is served by either EXPOLANKA FREIGHT LIMITED LINES’s own SBX service or by Public Feeders. Containers originating from Germany or elsewhere to a city in this region will have their shipping arrangements made by Transshipment. The only exception is the city of Gothenburg, Sweden which is served by the Iberia Scan Express Service (ISX).
On the SBX route, there are three ships: the Neva, Nevskiy, and Narva which can carry up to 600 TEU. The Neva and Nevskiy operate on the SBX1 route while the Narva is on the SBX2 route. The port rotation for both services is as follows:
SBX1: Grangemouth \ Antwerp \ Rotterdam \ Hamburg \ Gdansk \ St Petersburg \ Hamburg \ Grangemouth
SBX2: Hamburg \ St Petersburg \ Hamina \ Hamburg
The amount of TEU that Transshipment Bremen is allowed to book on the SBX service is allocated on a weekly schedule from England. If the department needs to book more space, they would have to call the Trade department in England and receive approval.
The SBX booking/notification process begins with the retrieval from InfoNet of a Container Announcement List (CAL). This details the containers to be loaded/discharged from/to the port or to another ship. The tasks vary depending where the container is coming from. Containers from previously called SBX cities (east or west) may need to be unloaded if final destination is Germany, or another country by which mothership or public feeder further transports the cargo. Motherships arriving in Hamburg may have containers needing further shipment via SBX. Containers from Germany may be bound for eastern or western SBX cities.
As one can see, the origins of the container vary but the process of finding out where they need to go is essentially the same. Two versions of the CAL are made: one for loading and the other for discharging at the terminal. Each CAL is further divided up among the varying container sizes, whether they normal or reefer containers, if they contain Dangerous Goods (IMO), or if they are flat-rack/project containers. These two CALs are then reviewed for discrepancies and when ready, are sent to the Stevedore along with the arrival and departure dates. A Stevedore is a company that operates one or more port terminals. For IMO containers, a DG-Declaration and Packing Certificate have to be forwarded to the terminal (if not already available, booking office is contacted), while for reefer containers a cooling order must be sent so that the specified container will be connected and be set at the proper temperature while in the port.
After all is done, Transshipment will receive a load/discharge report from the Stevedore which is then reviewed to find containers that weren’t loaded and follow up on their shipment status. Jochen handles outgoing containers coming from eastern SBX cities that need to transfer in Hamburg to outgoing motherships, while Hermann handles container loading from incoming motherships in Hamburg to eastern SBX cities.
Although we was not involved with booking/notification of SBX ships, we observed that timing, planning and coordination were the main aspects of Jochen and Hermann’s tasks. Other aspects of their work included contacting the ships, receiving updates on arrival/departure times and weather conditions, and relaying this information to all interested parties. Veterinary products also have to be declared and have their documentation forwarded on time. Another task is the review of terminal load/discharge reports for accuracy and be forwarded to accounting.
4.1.2 Issues/Problems:
Listed are some of the types of issues/problems I noticed my department faced in the normal course of operations:
• Schedule/allocation changes from England
• Heavy ice when traversing the Finnish/Russian bay, thus causing delays in corresponding arrivals and bookings.
• Missing IMO papers.
• Missing ATB numbers.
• Incorrect container weight on CAL; needed to be revised by lookup in IRIS-2.
• Overbooked public feeders; resulted in negotiations with the receiving shipping company (at FND) to resolve which containers can be delayed/re-booked and which cannot, then further advising the feeder company on our decision.
• Other late notifications that resulted in quick correspondence. (Other than the incorrect container weight on CALs, these issues were routine and normal).
4.2 Traffic:
In the last week of March, we moved over to the Traffic department in order to gain a new perspective on operations in Bremen. Here we was introduced to my two immediate colleagues Martina Falk and Joerg Goldstein, and a top manager Herr Ralph Abel. Martina briefed us on the nature of what we would be doing here in Traffic and what my immediate tasks would be. Upon starting, our goals were somewhat undefined due to our insufficient knowledge on Traffic operations.
4.2.1 Department Activities and Responsibilities:
The work nature was examining booking allocations from England for every ship and further allocating this space among the German booking offices, making r