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MODULE
LOGISTICS AND INTERNATIONAL
FREIGHT FORWARDING
Lecturer: Assoc.Prof. Dr. Nguyen Thi Binh
Department of Logistics and Supply chain management
School of Economics and International Business
Tel: 036 977 03307
Email: ntbinh@ftu.edu.vn

CHAPTER 4
CONTAINER TRANSPORTATION

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1.Transporting by Container in general

1.1. Definition
Container is a shipping equipment which has rectangular
shape, made of wood or metal with standardized size,
many-time reusability and large capacity.

According to ISO 668:1995(E) standard, Freight container is a transport article

which
▪ Has fixed-shape, durable, and can reuse many times
▪ Has special form in order to easily transport by one or more means of
conveyance, so that carriers don’t have to pack and unpack goods at those ports
along the way.
▪ Has its own equipment to facilitate the arrangement and change from one
transporting tool to another.
▪ Has significant structure to conveniently stowage, dispatch, conserve and arrange
goods in container.
▪ Has internal tonnage no less than 1m3
➢ Container is not goods’ package

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1.2. The history of container transportation

Stage 1 – Before 1955

▪ This is the period of an experimental installation for transfer
of small and medium containers, almost serving railway
stations. The US is one of the nations which laid the
groundwork for the development of containerization.
Stage 2 – From 1956 to 1965 Container transport in England, 1928

▪ The beginning of the container's revolution (in the scientific-

technical revolution), demand for containers was doubled,
containers were used for ocean freight.

▪ In 1966, the first container ship transported 236 containers

from Port Elizabeth in the USA, to Rotterdam in the
Netherlands.
Loading Container at No.4 berth, Royal
Stage3 – From 1966 to 1980 Victoria Dock, 1964

▪ Width-development stage: standardized containers' size, developed container transport

systems (built routes, invested adequate facilities: ships, ports, specialized warehouses
and equipment...)

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Stage 5 – From 1980 up to now

▪ Depth-development stage: innovated techniques and transportation activities has
resulted in economic efficiency.

▪ The type and size of containers are standardized, and numerous ports are equipped with
specialized loading and un-loading facilities for containers.

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1.3. Classification

Container's classification

Based on material Based on deadweight Based on uses Based on structure

▪ Steel ▪ Small: deadweight ▪ General cargo ▪ Closed container

▪ Aluminum < 5MT, tonnage < Container ▪ High cube container
▪ Plywood 3m3 ▪ Tank Container ▪ Open top container
▪ Wood…. ▪ Medium: ▪ Bulk or Dried ▪ Open side container
deadweight 5- 10 Container ▪ Open top, open side container
MT, tonnage 3 - ▪ Perishable goods
10m3 ▪ Flat rack container
Container
▪ Big: deadweight > ▪ Platform/ flatbed container
▪ Special Container
10MT, tonnage > ▪ Half height container
10m3 ▪ Bulk container
▪ Vented/ ventilated container
▪ Thermal insulated/ refrigerated/
heated container
▪ Tank container

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1.3 Container dimensions

Length High Width Internal Total
(feet) (feet) (feet) capacity mass
(m3 ) (tons)
20 8 8 30.8 18

20 8’6’’ 8 33.1 21.7

Steel container
40 8’6’’ 8 67.5 26.7

40 9’6’’ 8 76.2 26.5

45 9’6’’ 8 85.5 26.5

The standard twenty-foot container, commonly known as a "Twenty Feet

Aluminium container
Equivalent Unit" (TEU), occupies a space that is 20 feet (6.1 m) long, 8 feet (2.44
m) wide, and 8 feet 6 inches (2.59 m) high. TEU is a standard unit of measurement
in container shipping

Bulk freight container General purpose container

Closed container
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2. Infrastructures
Shipping tools
By sea:
• Semi- container ship
• Full container ship
- RO-RO (Roll-on/Roll-off): horizontal loading & discharging method
- LO-LO (Lift on/ Lift off): vertical loading & discharging method
- LASH (Lighter Abroad Ship):
- Convertible container ship
By road: Specialized cars with trailers or tractor, ...
By rail: Specialized carriages with locking pins or wheeled trailers

Lo-Lo ship (Lift on-Lift off) Ro-Ro ship (Roll on-Roll off) Trailer
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Loading and unloading facilities

Equipment of Cargo Container Ship loading

& unloading
• Container gantry crane
• Mobile Crane

Equipment of loading & unloading at the

container yard
• Container stacking crane
• Forklift truck

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Port & Container Yard

• Wharf: A place where ships may dock to load and unload

containerized cargo
• Apron: A place of the installation of crane
• Container stacking yard: A place to prepare loading and
unloading of containers
• Container yard- CY: A place where containers are stored on the
terminal before they are loaded or unload from a ship.
• Container freight station- CFS: A place to pack and unpack goods
from containers.
• Container depot/ Inland container depot
(ICD)

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Wharf

Apron

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Container stacking yard A Container Yard (CY)

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3. THE BENEFITS OF CONTAINER FREIGHT TRANSPORTATION

▪ Standardizing cargo units in transportation

- Increasing the accessibility of containerized cargo to distribution
systems worldwide, while reducing the risk of capital investment in
various transport methods and terminal equipment.

▪ Flexible and diversified usage across various types of cargo

- From raw materials to industrial products and frozen goods.Creating
favorable condition for portage

▪ Efficiently manage the system through container identification

numbers
- Each container has a unique identification number and a size/type
code
▪ Leverage the economies of scale
- Compared to bulk cargo, container transportation significantly
reduces shipping costs

▪ Rapid transshipment speed

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Challenges of transporting goods by containers

Factors Description
Restrictions regarding Require large area for container loading and unloading activities
dimensions Difficulty in transferring into urban zone
Infrastructure costs The entire installation expenses of cranes, storage warehouse,
container yard is expensive.
Loading and Complicated, both on the ground and means of transportation
unloading Require specialized equipment
Tracking shipment Require specific management and supervision to each container
and detailed position of shipments recordings
Empty container Full import containers are coming in, but there is not enough
issues export cargo going out and therefore empty containers are piling
up. Its stakeholders have arranged for the empties to be
returned to various private/shared depots outside the port.
Smuggling Tools for the smuggling of guns, drugs and human trafficking

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FCL: full container load

LCL: less than container load

4. PROCESS OF TRANSPORTING CONTAINERIZED CARGO

FCL/ FCL- full container load

The carrier receives FCL from the shipper and then deliver this container to the
consignee at the destination port.
Process

Shipper Carrier Consignee

▪ The shipper is responsible for CY/ ▪The carrier issues the Bill ▪ The carrier
CY/
packing goods into containers port of Lading (B/L), loads the delivers the sealed
at the warehouse. The port
of container onto the ship, and container to the
containers are sealed and initiates the transportation of
depar consignee at the
remain sealed until delivery. ▪Upon reaching the arrival
ture Container Yard of
▪ destination port, the carrier,
▪ Subsequently, the containers at their expense, unloads the destination
are transported to the port of the container and port
shipment (Container Yard - transports it to the
CY) to be handed over to the Container Yard (CY)
carrier and await loading onto
ships.
FCL/FCL Shipping place
The loading and unloading expenses shall be borne by the good's owner
(the consignor or the consignee)
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❖ Responsibility of shipper
- Hiring and transporting empty containers to warehouse
- Packing goods into containers
- Creating shipping marks and labels
- Provide the customary clean shipping documents
- Transporting containers and delivering them to the carriers at CY then receiving B/L
- Pay relevant costs
❖ Responsibility of carrier
- Receiving sealed containers at CY
- Issuing B/L
- Loading them from CY into the ship
- Unloading containers from the ship to the CY at destination port.
- Delivering the goods to the holder of B/L
- Pay relevant costs
❖ Responsibility of consignee
- Preparing importing documents and customs procedures
- The consignee presents B/L in order to received goods
- Transporting containers from CY at destination port into warehouse, unloading goods
- Returning empty containers to the carriers
- Pay relevant costs

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LCL/LCL – Less than Container Load

Carrier /Consolidator receives LCL cargo from many suppliers and delivers them
to many consignees.

Process
Carrier/Consoli
Shipper dator Consignee
CFS ▪ At CFS, the container ▪ At CFS, the goods will
▪ Send the Goods to carrier. CFS
port will be sealed and be unpacked by the
▪ Receive House B/L from port
of taken to the wharf. carrier/consolidator ,
the consolidator of
depar ▪ The carrier load onto and delivered to
the container ship arrival consignees base on
ture
which brings to the House B/Ls.
port of destination
▪ At the port of
destination, the
container is taken off
the ship and
transported to CFS

CFS/CFS Shipping place

(The loading and unloading expenses shall be borne by the carrier)

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❖ Shippler’s responsibilities:
– Transport goods from warehouse to delivery to carrier at CFS
– Do the customs procedures
– Receive bill of lading and pay relevant cost

❖ Carrier's responsibilities:
– Receive LCL cargo at CFS and issue bill of lading for owners
– After gathering, goods must be packed into containers and sealed with lead
seals.
– Transport containers to the wharf loading onto ships to transport to the
destination port
– Unload goods from the ship at the destination port and transport to CFS
– Unload cargo from container at CFS, deliver to consignees and withdraw bill of
lading

❖ Consignee ‘s responsibilities:
– Arrange import permits and do customs procedures for shipments
– Present a valid bill of lading to receive goods at CFS
– Pay related costs and transport goods to warehouse.

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LCL/FCL - Less than Container Load, Full Container Load

▪ It is a common approach to consolidate small purchases from multiple

shippers into container shipments and send to a consignee.

Process
Carrier/
Shippers consignee
CFS consolidator
CY/
port
▪ Send the Goods to ▪ At CFS, the container port ▪ The consignee
of
carrier or consolidator will be sealed and of receives sealed
depar- taken to the wharf.
▪ Receive House B/L arrival container from the
ture ▪ The carrier load onto
from the consolidator, the container ship
carrier at the
noted “part of which brings to the port Container Yard of
container” of destination destination port
▪ At the port of
destination, the
container is taken off
the ship and
transported to CY

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FCL/LCL - Full Container Load, Less than Container Load

▪ The carrier receives full container load from one shipper and issues B/Ls
corresponding to the number of consignees.
▪ At the port of destination, the goods will be unpacked by the carrier, and
delivered to consignees base on B/Ls.

Within the 4 types of freight forwarding by container as above, is the

ship's rail actually be the allocation of responsibilities and risks division?

❖ Notes for transporting goods by containers

- Delivery by container with FOB, CIF, CFR:

- Place of delivery does not match

- Boundary of delivery no longer makes sense

➢ Should use the corresponding conditions FCA, CIP, CPT

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CONTAINER TRANSPORT DOCUMENTS

FCL/FCL Bill of lading

▪ Definition: FCL/FCL Bill of lading (Container Bill of Lading) is a document
which issued by the shipping company, the ship's owner, or the ship's
representative after containers are sealed.
▪ Characteristic: It's a kind of Received for shipment B/L

LCL/LCL Bill of Lading

▪ Case 1: If the carrier directly receives the shipment, they will issue LCL/LCL Bill
of Lading (similar to FCL/FCL Bill of lading ).
▪ Case 2: If the shipment is collected by the freight forwarder, there will be 2 types
of bill of lading issued
▪ House B/L: Issued by freight forwarder and then sending its customer.
▪ Master B/L: Issued by the shipping company to freight forwarder.
hang tau/hang hang khong

RESPONSIBILITIES OF THE CONTAINER CARRIERS BY SEA

The responsibility of the container carrier is followed by the applicable law of the
bill of lading. That is the national maritime law or international conventions on the
carriage of goods by sea
• Hauge Rule, 1924
• Hauge-Visby, 1968
• Hamburg Rules, 1978
• Vietnam: Vietnam Maritime Code, 2015

Review chapter 2

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NOTES WHEN SENDING GOODS BY CONTAINER

▪ Delivery of goods by containers with FOB, CIF, CFR terms → FCA, CIP, CPT
▪ It is necessary to specify FCL / FCL or LCL / LCL on the bill of lading
▪ Storage charges
▪ Unit price
▪ Legal system
▪ Carrier’s responsibilities
▪ The term "not knowing the situation of goods inside containers“
▪ Loading goods on deck
▪ Limitation of liability

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5. CONTAINER FREIGHT

▪ Freight is an amount that shippers must pay to carrier for the transportation of
containers from one port to another.

▪ The freight rates is the amount that the shipper must pay the carrier on a unit
of freight
▪ Freight structure

– Basic ocean freight: freight on the main transport route

– Feeder freight: freight on extra route
– Surcharges: Payables other than freight

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▪ Types of freight charges

(i) Rates are per container, but apply only to certain items
(ii) Freight all kind (FAK): Uniform calculation for all goods loaded in the container, based
on weight or volume.
(iii) Commodity box rate- CBR: Different items with different freight rates
▪ Unit of calculation is TEU
▪ Rates determined by the average capacity of the container
▪ Applicable to specific items on designated routes
(iv) Freight applies to contracts for carriage large quantities of cargo in a period of time
(Time Volume Contract - TVC)
(v) Charges are based on TEU on the certain shipping route. Prices vary based on the
container provider; for example, carrier-provided containers may incur higher charges.
(vi) Freight calculated on container dimensions: Distinct rates for 20' and 40' containers
on the same route.
(vii) FCL freight and LCL freight …

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Surcharges

The amount of money that the goods' owner has to pay to the carrier and relevant
agencies, in addition to the freight, includes

(i) Terminal Handling Charge: A surcharge for handling at a port per container
(ii) Delivery Order fee: When a consignment imported into Vietnam, the consignee must go
to the shipping line /forwarder to get the delivery order
(iii) LCL Service charge: Surcharges that LCL shipment owners have to pay for delivery,
packaging, sealing, storage, unloading of containers ...
(iv) Lifting, Placing, and Moving Container Fee
(v) Demurrage: The shipment's owner have to pay to shipping lines when he does not
receive, unload and return the container at the time specified in the notice of arrival.
(vi) Fuel surcharge: fees (other than sea freight) that is paid by the goods owners to offset
expenses incurred due to the fluctuation of fuel prices
(vii) Foreign Exchange Fluctuation Fee
(viii) Peak Season Surcharge
(ix) Container Sanitation Fee

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