Chapter V: Containers

I. Transporting by Container in general

1. The nature of carrying goods by Container
 T = t1 + t2 + t3
To clarify:
- T: total operating time of the ship
- t1: loading time
- t2: real traveling time on the sea
- t3: unloading time
=>t1+ t3 (standing time of the ship) usually makes up a remarkable proportion in total
time
=> To reduce T: +) reduce t2
+) reduce t1 + t3 => mechanizing the load and unload step
=> “unitization” process

 “Unitization” must guarantee:

– Goods’ unit is created by combining several small packages together which
have shape, size and weight be kept intact over the course of conserving,
loading, unloading and transferring.
– Having capability to facilitate mechanizing entire process of loading and
unloading, using reasonably warehouse and means of conveyance.
– Satisfying the requirements of production and circulation of goods.
 Types of goods’ unit:
– Using common packaging to package goods
– Pallet
– Container
=> The nature of “Containerisation” is loading, unloading and maintaining goods
over the transit by using a significant transport article with standardized size,
many-time reusability and large capacity.
 2. Container
2.1. Definition
 General definition: Container is a mean of packaging
goods which has rectangular shape, made of wood or
metal with standardized size, many-time reusability and
large capacity.
 ISO’s definition: 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
 Container is a transport article which separates with
transport tool
2.2. Container standardization
 Contents of standardization:
– Size
– Deadweight
– Door
– Corner structure
– Lock
 Standardization in size:
– Series 1: 1a, 1b, 1c, 1d, 1e, 1f
• Height = width = 2435mm
• Length: 1a: 12190mm, 1b: 9125mm, 1c: 6055mm, 1d:
2990mm, 1e: 1965mm, 1f: 1460mm
– Series 2: 2a, 2b, 2c:
• Height = 2100mm, width= 2300mm
• Length: 2a: 2920mm, 2b: 2400mm, 2c: 1450mm
1c: TEU (Twenty feet equivalent unit), deadweight 30,4
ton, tonnage 33,1m3
1a: FEU (Forty feet equivalent unit), deadweight 30,4
ton, tonnage 67,5m3
2.3. Classification
 Based on deadweight:
– Small: deadweight < 5MT, tonnage < 3m3
– Medium: deadweight 5- 10 MT, tonnage 3 -
10m3
– Big: deadweight > 10MT, tonnage > 10m3
 Based on size
 Based on material:
– Steel
– Aluminum
– Plywood
– Wood….
 Based on structure:
– Closed container
– High cube container
– Open top container
– Open side container
– Open top, open side container
– Flat rack container
– Platform/ flatbed container
– Half height container
– Bulk container
– Vented/ ventilated container
– Thermal insulated/ refrigerated/ heated
container
– Tank container
Closed container
Open top container
Open side container
High cube container
Flat rack container
Platform container
Half height container
Bulk freight container
Vented container
Thermal insulated container
Tank container
 Based on uses:
– General cargo Container
– Tank Container
– Bulk or Dried Container
– Perishable goods Container
– Special Container
4. The economic importance of containers
4.1. For the society
- Increasing social labor productivity
- Decreasing social production cost
- Creating opportunities to access new technology
- Creating new jobs, solving social working issue
4.2. For carriers
- Decreasing loading and unloading time
- Decreasing transport cost
- Decreasing complaints of goods owners
- Creating favorable condition for portage
4.3. For goods owners
- Decreasing transporting cost and time
- Decreasing goods packaging cost
- Decreasing goods loss and damage in transit
- Economizing insurance fee
II. Infrastructures
1. Container Ships
 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
II. Infrastructures
2. Loading and unloading facilities
2.1. Equipment of Cargo Container Ship loading &
unloading
• Container gantry crane
• Mobile Crane
2.2. Equipment of transporting goods from wharf to
a storage warehouse
Strader
Trailer
2.3. Equipment of loading & unloading at the
container yard
• Container stacking crane
• Forklift truck
3. 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 offloaded from a ship.
 Container freight station- CFS: A place to pack
and unpack goods from containers.
 Container depot/ Inland container depot- ICD
III. Process of transporting containerized cargo
1. Container Shipments
1.1 FCL/ FCL-full container load
• FCL is that a shipper has enough cargo to fill up a
container to its full capacity.
• The carrier receives FCL from the shipper and
then deliver this container to the consignee at
the destination port.
• If exchanging at CY (container yard), the bill of
lading (B/L) contains term CY/CY => the
responsibility of the carrier: from CY at the load
port to CY at the discharge port.
FCL/FCL Shipping Process
 FCL/FCL Shipping Process
The shipper packs goods into the containers at warehouse.
Containers are sealed until delivery.

The containers will be taken to the port of shipment (at CY) to

deliver to carrier and wait for loading onto ships

The carrier issues B/L, takes into the ship and puts on the
way

At the destination port, the carrier at his cost unloads

container and transport to the CY

The carrier delivers sealed container to consignee at the

Container Yard of destination port
III. Process of transporting containerized cargo
• 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
III. Process of transporting containerized cargo

1.2. LCL/ LCL- Less than container load

• LCL cargo is the small cargo, not requiring the full
capacity of an ocean container
• Ship operator receives LCL cargo from many
suppliers and delivers them to many consignees.
• Exchange cargo at CFS (container freight
station), B/L contains term: CFS/CFS => the
responsibility of carrier from the CFS at loading port
to CFS at destination port.
 2. LCL/LCL Shipping process
The carrier receives goods from many shippers and sends to
many customers at CFS, then issuing B/Ls

At CFS, the container will be sealed and taken to the wharf

The carrier load onto the container ship which

brings to the port of destination

At the port of destination, the container is taken off the

ship and transported to CFS

At CFS, the goods will be unpacked by the carrier, and

delivered to consignees base on B/Ls.
III. Process of transporting containerized cargo
● Consignors 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
● Consignees 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.
III. Process of transporting containerized cargo
1.3. Combined container shipments
● Full container load, less than container load
(FCL/LCL)
●Less than container load, full container load
(LCL/FCL)
1.4. 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
- Legal system
- Carrier’s responsibilities
- The term "not knowing the situation of goods inside
containers“
- Loading goods on deck
- Limitation of liability
2. 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
● Fee structure
– Basic ocean freight: freight on the main transport route
– Feeder freight: freight on extra route
– Surcharges:
• Terminal Handling Charge-THC
• LCL service charge
• Inland Haulage Charge
• Up and down, removed charge
• Demurrage
• bunker adjustment factor- BAF
• Currency adjustment factor- CAF
• B/L fee
● Types of freight charges
– Freight all kind- FAK: The same calculation applies to
all goods that are loaded inside the container for the
same weight or volume
– Commodity box rate- CBR: Different items with different
freight rates:
– LCL charge
– Freight applies to contracts for carriage large quantities
of cargo in a period of time (Time Volume Contract-
TVC)
– Allowance, incentive
3. Consolidation
3.1. Definition
● Consolidation is the collection of different packages
from different exporters, thus providing LCL service.
● Process
– Consolidator receive individual shipments at CFS
and issue House bill of lading (House B/L)
– Consolidator gather goods and pack into
containers at CFS
– Consolidator send full container load to the carrier
and receive master bill of lading (Master B/L)
– The agent of the consolidator at the destination
presents the MBL with the carrier, receives the
containers and takes them back to CFS
– Unloading and delivering to different consignees
on the basis of presenting the HBL
3. Consolidation
3.2. Advantages
● For the exporters:
– Reduce transportation costs
– More convenient when working just with a consolidator
 For carriers:
– Saving paperwork, freight, time.
– Take full advantage from ship’s capacity
– Not afraid of losing revenue
● For consolidators:
– Benefit from the amount of discrepancy fee
– Preferential price
3.3. Consolidator's responsibility
� Be a carrier if on B/L, write "as carrier"
� Be agent of the carrier if on B/L write "as agent"
3. Consolidation
3.4. Consolidators’ standards
• Having fully equipped facilities for the transport
of goods by containers
• Having foreign agents to receive and distribute
goods
• Staffs are knowledgeable about laws and
professional operations of cargo transport by
containers
• Having wide relationship with the transporter
• Having financial ability
• Participation in liability insurance at transport
associations
4. Container transport documents
● FCL/FCL B/L
● LCL/LCL Bill of Lading
● House Bill of Lading (HBL)
● Master Bill of Lading (MBL)