VARIOUS TERMS AND ABBREVIATIONS WIDELY USED IN SHIPPING BUSINESS (Exp & Imp) AND MARITIME SECTOR.
Beny Jackson Maliota
ANT II A 2ND BADGE 2007
As navigational and safety communications from ship to shore and vice versa, from ship to ship, and on board ship must be precise, simple and unambiguous so as to avoid confusion and error, there is a need to standardize the language used. This is of particular importance in the light of the increasing number of internationally trading vessels with crews speaking many different languages, since problems of communication may cause misunderstandings leading to dangers to the vessel, the people on board and the environment.
The provisions of regulation V/14.4 of the International Convention for the Safety of Life at Sea, 1974, requiring that on all ships to which chapter I thereof applies, English shall be used on the bridge as the working language for bridge-to-bridge and bridge-to-shore safety communications as well as for communications on board between the pilot and bridge watchkeeping personnel unless those directly involved in the communications speak a common language other than English,
That the standardization of language and terminology used in such communications would assist the safe operation of ships and contribute to greater safety of navigation,
The wide use of the English language for international navigational communications and the need to assist maritime training institutions to meet the objectives of safe operations of ships and enhanced navigational safety through, inter alia, the standardization of language and terminology used.
Notices To Mariners
United Kingdom Hydrographic Office (UKHO) Publication Contain information, which enable the mariner to keep his charts and books published by UKHO up-to-date for the latest report received. The notices are published in weekly editions.
Line Of Position or Position Line is a line on the earth’s surface which represents the locus of an observer who moves such that some item of observed information remains of constant value
North European and Mediterranean Routing Instruction.
A publication book contains important routing instruction for North European and Mediterranean passage.
Rhumbline or Loxodrome is a line crossing all Meridians at the same angle, i.e a path of constant bearing. On a Mercator projection map, a loxodrome is a straight line, beyond the right edge of the map it continues on the left with the same slope.
MERCATOR MAP PROJECTION.
A conformal cylindrical map projection in which the surface of a sphere or spheroid, such as the earth, is developed on a cylinder tangent along the equator. Meridians appear as equally spaced vertical lines and parallels as horizontal lines drawn farther apart as the latitude increases, such that the correct relationship between latitude and longitude scales at any point is maintained. The expansion at any point is equal to the secant of the latitude of that point, with a small correction for the ellipticity of the earth.
A circle drawn on the surface of a sphere, whose plane passes through the centre of the sphere
A method of solving the various problems involving course, distance, difference of latitude, difference of longitude, and departure by considering them in the relation in which they are plotted on a Mercator chart. It is similar to plane sailing, but uses meridional difference and difference of longitude in place of
difference of latitude and departure, respectively.
A north-south reference line, particularly a great circle through the geographical poles of the earth.
The process of planning, recording, and controlling the movement of a craft or vehicle from one place to another.
Navigation involving frequent or continuous determination of position relative to observed geographical points, to a high order of accuracy; directing the movements of a vessel near a coast by means of terrestrial reference points.
Navigation by celestial bodies. Comprising principally celestial coordinates, time, and the apparent motions of celestial bodies.
Admiralty List of Radio Signals
British admiralty publications (8 volumes, some of them in double or triple books) informing the navigators about all the radio stations and various kind of broacasted informations such as time signals, weather & navigational warnings, positioning systems, VTS procedures and many other. They are regularly updated through the weekly published Notice to Mariners,
The path followed by the pivoting point of a ship in making a turn 360 degrees or more. For the ordinary ship, the bow will be inside and the stern outside this circle.
The distance the ship moves sidewise from the original course away from the direction of the turn after the rudder is first put over
The distance gained when the ship has turned through 90 degrees in the direction of the original course.
The distance gained at right angles to the original course when the ship has turned through 90 degrees.
The distance gained to the right or left of the original course when a turn of 1800 (Degrees) has been completed.
The angle at any point of the turning circle between the tangent to the turning circle at that point and the keel line of the vessel.
The distance perpendicular to the original course between tangents drawn at the points where 180 and 360 degrees of the turn have been completed.
A Charter Party is a contract signed between a ship owner and a charter who hires the vessel for a period of time (Time Charter) or for a particular voyage (Voyage Charter)
Bill of Lading
Bill of Lading is a document which shows that the cargo has been received on the ship by the Master or the Agent on behalf of the Ship Owner. It is also accepted as a Negotioable Document in case the Cargo is to be sold or transferred to the new buyer. This is a Contract between the Shipper and the Ship Owner, with the Terms and Conditions stated therein.
1. According to shipping method:
- shipped/on board B/L
- received B/L
2. According to consignee:
- straight B/L
- to the order of
- to bearer
3. According to trade interest:
- negotiable B/L
- non-negotiable B/L
4. According to Cargo condition:
- clean B/L
- claused/foul B/L
5. According to port of destination:
- direct B/L
- through B/L
- optional B/L
- groupage B/L
- house B/L
The bill of lading as evidence of the contract
The bill of lading as a receipt
The bill of lading as a document of title
The bill of lading as a negotiable document
Non-Vessel Operating Common Carrier
Non-vessel operating common carriers (NVOCC) are one type of sea freight forwarders. Instead of using their own ships, they operate as transportation or logistics intermediaries. That is, they book space on ships and sell it in smaller quantities, consolidating freight for transport in containers. One of the largest NVOCC is Kühne + Nagel (is a German-founded transportation and logistics company based in Schindellegi, Switzerland. It is the world's largest non-vessel operating common carrier, and as such, has strong buying leverage with the major shipping lines of the world.. An example of another large NVOCC is DHL. IAL is the largest NVOCC across the Middle East, Indian Sub continent, South East Asia and the Far East Smaller shippers, with less-than-containerload (LCL) shipments, can take advantage of the lower costs associated with being a big shipper. Non-vessel operating common carriers (NVOCCs) book space on steamships in large quantities at lower rates and sell space to shippers in smaller amounts. NVOCCs consolidate small shipments into containerloads that move under one bill of lading. More favorable rates are passed on to the shipper.
Notices Of Readiness
A written notice of ship’s readiness when ship have reached and be lying in a customary waiting area within the port and in all respect ready to load or discharge her cargo.
Laydays and Cancellation
Range of dates within the hire contract must start. For example LayCan 10-15/9, that is mean Layday on the 10th of September and Cancellation Date on the 15th of September, vessel should arrive at first date, however her arrival exceed than second date will regard as Cancellation Date and charterer will terminate charter agreement.
Time allowed to load/discharge the ship. The method of calculation of the days is fixed by the charter party.
Weather Working Days Sundays Holidays Excepted Unless Used.These days are not counted.
a shipping term denoting the number of days of favourable weather allowing for the unloading of cargo
The amount paid to the Ship-owner by a Charterer for any delays in loading or discharging of Cargo within stipulated time as mentioned in the Charter Party.
A bonus paid by the Ship-owner to the Charterer, if the loading or discharging of cargo is completed much earlier than the stipulated time as mentioned in the Charter Party.
of freight rate, the freight is inclusive of carriage and cost of cargo handling at the loading and discharging ports
“Arrived” in a Voyage Charter
Vessel must have reached and be lying in a customary waiting area within the port where discharge and loading operations are normally practice and be in a position to tender Notice of Readiness.
Free In Out Stowed and Trimmed
Certain commodities require both stowing and trimming – e.g.: scrap metal in bulk. This term ensures that none of the loading, discharging stowing or trimming expenses will be for the account of the carrier. For similar terms for some goods, traders must be even more explicit. For example, with motorcars, equivalent terms would be used so as to read 'free in, out, lashed, secured and unlashed'.
Free In Liner Out
Trade term. The seller of the goods pays their shipment and provide all the documentation at the loading of freight rate, the freight is inclusive of carriage and cost of cargo discharging, i.e. unlike liner terms, it does not include the cost of loading; FILO for short; also known as free in liner terms discharge or FILTD for short Freight rate that includes carriage and the cost of discharging (offloading) as per the custom of the port. FILO rate excludes the cost of loading and (where required) the cost of stowage and lashing.
Liner In Free Out
of freight rate, the freight is inclusive of carriage and cost of cargo loading, i.e. unlike liner terms, it does not include the cost of discharging; LIFO for short Tackle to Tackle
A loss arising out of an action or any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure. The sacrifices and expenses shall be borne by the different contributing interest on the basis of their value.
A loss suffered by a single individual, the sacrifices and expenses shall be borne by the party concerned (e.g. cargo damage by the cargo owner, damage of the ship by the ship’s owner)
Clause in a voyage charter party, which stipulates the circumstances under which a master can jettison goods from a ship. A Marine Insurance term referring to the throwing of cargo overboard to lighten the ship in order to save it from sinking. Jettison is one of the many perils covered under Institute Cargo Clauses A, B and C.
More Or Less Owner Option
Chartering term: range of weights of the goods to be shipped. Often expressed in percentage. MOLOO 50000 10% = 45000 to 55000 tons.
which means that the owners have option to ask for any percentage of cargo as stated in fixture (indicates a ship has been fixed for employment) note
More Or Less Captain Option
which means that the Captain has option to ask for any percentage of cargo as stated in fixture (indicates a ship has been fixed for employment) note
When do laydays commence to count?
Laydays commence when a vessel is to present herself at the first (or sole) loading port. This spread should be entered in a contract, as well as conditions under which the contract can be cancelled in the event that the vessel is unable to meet those dates.
Whether In Berth Or Not
States that Notice of Readiness (NOR) can be tendered whether the vessel is in berth or not
Whether In Custom Clearance Or Not
Meaning that the NOR can be tendered even if the ship is not yet clear custom matters.
Whether In Free Pratique Or Not
Meaning that the NOR can be tendered even if the ship is not yet gain Free Pratique.
Designated Person Ashore
For the ISM Code, any member of the Owner's staff who is aware of the problem of the vessels, and who has a direct access to the top management.
Always Safely Afloat
always safely afloat clause is inserted in the charterparty for the purpose of preventing a vessel from being ordered to berth where it cannot load/discharge without touching the ground or discharging part of its cargo prior to berthing.
Not Always Safely Afloat But Safely Aground
this term may be negotiated when a ship calls at a port where it is impossible for the vessel to remain always afloat, e.g. due to low tide in a port where the seabed consists of soft mud.
Most owners (especially of deep-sea vessels) will stipulate that their ships proceed only to ports where there is sufficient water to remain always afloat, so as to avoid the risk of hull damage. There are areas and ports, however, where water depth is restricted but, the bottom being soft mud, it is customary for ships to safely lie on the bottom at certain states of the tide. – e.g.: River Plate. In such a case, owners will probably agree to proceed NAABSA.
Taking Inward Pilot
Signifies a location on arrival at which (but only upon taking aboard the pilot a ship delivers on to her time charter. Of advantage to a time charterer when compared with APS (which see) as, in the event of a suspension of the pilotage service, or of late boarding by a pilot, the risk and expense of delay is that of the shipowner.
Dropping Outward Pilot
Signifies a point of delivery onto or redelivery off time charter, following a vessel's sailing from a port.
Time often used as the end of a Voyage charter when the vessel leaves the last discharge port.
Under Keel Clearance
Vertical distance between seabed and ship’s keel
lockout is a work stoppage in which an employer prevents employees from working. This is differentiated from a strike, in which employees refuse to work.
A lockout may happen for several reasons. When only part of a trade union votes to strike, the purpose of a lockout is to put pressure on a union by reducing the number of members who are able to work. For example, if a group of the workers strike so that the work of the rest of the workers becomes impossible or less productive, the employer may declare a lockout until the workers end the strike.
Actual Total Loss
Where the subject-matter (Ship) insured is destroyed, or so damaged as to cease to be a thing of a kind insured, or where the assured is irretrievably deprived thereof.
Constructive Total Loss
After an incident such as collision, grounding, fire, if it is too expensive to repair or return the ship to her original condition or repairing cost is higher than ship’s value after repaired, the insurance consider it is lost. The vessel is abandoned or sold as scrap.
All Risks cover by Hull & Machinery Insurance, which comprise and categorize as Marine Perils
Total Loss Only
Risks cover by Hull & Machinery Insurance for Total Loss Only
P & I
An organization settled by a group of Owners to insure, among other, liabilities not covered by the Hull and Machinery insurances.
P&I stands for Protection and Indemnity. P&I is insurance in respect of third party liabilities and expenses arising from owning ships or operating ships as principals. The risks typically covered by P&I Clubs are described in more detail under Insurance Cover. It is not hull insurance, war risk insurance, loss of profit/freight insurance, detention insurance, strike insurance or uninsured legal expenses (Defence) cover.
L/C (Letter of Credit)
Letter of Credit is a financial Instrument issued by an importer's bank (opening bank, on behalf of the importer). The opening bank substitutes its own credit for that of the importer, and undertakes a commitment to designated beneficiary (the exporter) to pay a stated amount within a stated time frame, provided that the exporter complies with all the terms and conditions of the Letter of Credit.
Documents in order to negotiate funds in a L/C
One set of Clean Shipped Order Bill of Lading
Certificate of Origin
Certificate of Weight-Packing List
Survey of Insurance
Three condition of the “Due Diligence Clause” in the Hague Rules and 5 immunities from Hague Rules
Due Diligence Clause According to Hague Rules Article III (i) as follows:
The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to:
Make the ship seaworthy
Properly man, equip and supply the ship
Make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation.
17 Immunities from Hague Rules :
(1) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.
(2) Fire, unless caused by the actual fault or privity of the carrier.
(3) Perils, dangers and accidents of the sea or other navigable waters.
(4) Act of God.
(5) Act of war.
(6) Act of public enemies.
(7) Arrest or restraint of princes, rulers or people, or seizure under legal process.
(8) Quarantine restrictions.
(9) Act or omission of the shipper or owner of the goods, his agent or representative.
(10) Strikes or lockouts or stoppage or restraint of labour from whatever cause, whether partial or general.
(11) Riots and civil commotions.
(12) Saving or attempting to save life or property at sea.
(13) Wastage in bulk of weight or any other loss or damage arising from inherent defect, quality or vice of the goods.
(14) Insufficiency of packing.
(15) Insufficiency or inadequacy of marks.
(16) Latent defects not discoverable by due diligence.
(17) Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.
Cesser and Lien Clause
clause in a voyage charter party which stipulates that the charterer's liability ceases once the cargo has been shipped and the owners have a lien on the cargo for freight, dead freight, demurrage and general average contributions
clause in a voyage charter party which stipulates that the charterer's liability ceases once the cargo has been shipped
In addition to the right of lien conferred on the Owners according to the provisions of the charter-party lien clause, the Owners also to have a lien over bunkers on board, as well as over any sums due to Time Charterers under any sub-charterparties (in addition to freights and sub- freights), for any amounts due under this charter-party. Further, in the event of the Owners' exercise of their liberty to withdraw the vessel in accordance with the provisions of the charter-party withdrawal clause, the ownership of any bunkers remaining on board shall thereupon vest in Owners, who shall allow to Time Charterers by way of credit against any sums due to Owners the value of such bunkers calculated in accordance with the provisions of the charter-party bunkers clause applicable on redelivery.
Standard Indonesian Hull Form
Running Down Close
The RDC, or “running down” clause, provides coverage for legal liability of either the shipper or the common carrier for claims arising out of collisions. (Collision loss to the vessel itself is part of the hull coverage.) The RDC clause covers negligence of the carrier or shipper that results in damage to the property of others
The clause in an ocean marine hull policy which covers damage done to another ship by collision, and other property damage caused by collision.
LOF and its settlement
The concept of Lloyd’s Open Form Salvage Agreement is “No Cure-No Pay”. In case of salvage, Insurer recommends to use LOF contract base on “No Cure-No Pay”. No bargaining for this contract since it’s settlement will be held in London through Arbitrator.
Example right of subrogation
In case of Constructive Total Loss, where the insurer pays for a total loss, wreck becomes insurer’s property
MARINE INSURANCE ACT 1909 - SECT 85
Right of subrogation
Where the insurer pays for a total loss, either of the whole, or in the case of goods of any apportionable part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for. He is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss.
Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain. However, he is there upon subrogated to all rights and remedies of the assured in and in respect of the subject matter insured as from the time of the casualty causing the loss, as far as the assured has been indemnified, according to this Act, by such payment for the loss.
Notice of Abandonment
Subject to the provisions of this section, where the assured elects to abandon the subject-matter insured to the insurer, he must give notice of abandonment . If he fails to do so the loss can only be treated as a partial loss.
In case of CTL insurant should give Notice of Abandonment to Insurer, once accepted this notice regarded irrevocable. Insurant liability to change owner of interest (Wreck) to insurer.
Port State Control
IMO/SOLAS regulation that allows the states to inspect the vessel calling their port, and detain them if safety deficiencies are observed. A person duly authorized by the competent authority of a party to a relevant convention to carry out port state control inspection.
International Conventions related to PSC
IMO (International Maritime Organisation)
ILO (International Labour Organisation)
STCW 95 (Standard training certification and watchkeeping for seafarer)
ILL (International Load Line)
SOLAS 74 (Safety Of Life at Sea)
Sub Rules ISPS, ISM-CODE
MARPOL (Marine Pollution)
BILL OF HEALTH
Letter of declaration issued by Port Health Center and endorsed by Port Health Officer, which certified that ship was free from any contagious disease and her crew in good health condition.
What are the steps to be taken by the Master if his ship is involved in a collision and its seaworthiness is affected?
Under the LOF agreements, The Master of a ship in distress has a reasonably wide power when faced with a case of urgency and necessity to bind owners of the vessel and the owners of cargo by his action in negotiating and fixing a salvage agreement to save ship, property, cargo, and person on-board.
Free Capture, Seizure, Riot, Civil Commotion
Risk Covered by P & I Club
Loss of life and personal injury
Damage to fixed and movable objects
One-fourth of damage done to other ship in collision
Cargo claims providing they were not caused by improper stowage
What is the basis of Marine Insurance?
Basis of Marine Insurance for covering all risk categorized as Marine Perils.
What is the purpose of Certificate of Origin and Consular Invoice
Certificate of Origin
The document certifies that goods were manufactured in a country as stipulated in document. It is signed by the shipper and may also be a certified by a local Chamber of Commerce, notarized, and even visaed by a resident foreign consul. A Certificate of Origin may be required by a foreign government for control purposes, or by the foreign importer to ensure that he receives U.S. goods.
Prepared from the information on the commercial invoice by the buyer's consulate or embassy in the shipper's country, these documents are usually stamped with an official seal. They may be specific forms required by the destination country's government or simply copies of the Commercial Invoice. Consular Invoices are required for control of certain commodities and to ensure valuation control.
A commercial invoice is the basic statement of the seller to the buyer for payment of the goods shipped. It must conform to any Letter of Credit requirements, foreign government requirements, and U.S. export control requirements regarding destination statements. It is used as one of the primary documents in the collection process, and is the main document used by foreign Customs for control, valuation of the goods, pricing, terms of sale, payment and delivery, credit numbers, import license numbers, shipper and consignee names, and shipping marks and numbers. Commercial invoices are usually signed by the exporter.
Certain countries require special invoices containing specific information for the Customs clearance and valuation of imported shipments. These documents contain most of the elements of the Commercial Invoice, and are usually in the language of the importing country. The Canadian Customs Invoice is the most popular of this type.
Document issued by the Customs broker to the ocean carrier as authority to release the cargo to the inland carrier.
Pro forma Invoice
The Pro Forma is used primarily to document to the buyer, in advance, the cost and terms of sale of a proposed export. It is used by the foreign buyer as a quotation from the exporter and also to assist in applying for a Letter of Credit from his bank. The Pro Forma Invoice serves as the basis for the subsequent Commercial Invoice
The Transmittal Letter, commonly prepared with a Bank Draft, is the document used to send shipping documents to a remitting bank for processing either a collection or payment/negotiation under a Letter of Credit. It contains the shipper's precise and complete instructions on how the documents are to be handled and the payments remitted.
Shipment of merchandise to the point of destination in another country on more than one vessel or vehicle. The liability may pass from one carrier to the next, or it may be covered by "through bills of lading" issued by the first carriers.
What is Bunker Clause?
Clause under the term of a Time Charter Party that the charterers are supplying and paying for the bunkers for the duration of the charter period (appropriate financial adjustments are made for bunkers on board at delivery and conversely ROB at re-delivery)
What is the difference between NYPE and BALTIME?
Time charter party used BALTIME form, In “Off Hire Clause”, In the event of the ship breakdown, charterer was unable to declare ship Off-Hire, however 24 hours incessantly allowed. Beyond such period then charterer declare ship “Off-Hire”.
Time charter party used NYPE form, In “Off Hire Clause”, In the event of the loss of time due to damage or any reason whatsoever of preventing the full working of the vessel will lead ship put Off-Hire immediately.
Why do Exporters/Shippers always insist on having a Clean B/L?
Because one condition in order to negotiate funds in a L/C by produces CLEAN B/L, bank might be able to refuse re-fund if B/L found with remarks.
What is the risk for a Shipping Com receiving a Letter of Indemnity?
Letter of Indemnity offering a guarantee to shipping company that any possibility risks subsist in gaining Clean B/L will be shipper’s accountability. In case of claim produce for any brake down, shortage, and discrepancy in shipment, Carrier should compensate for such loss and seek party who issued LOI for any claim incurred there from.
Why is it preferable to use LOF in case of Salvage?
The concept of Lloyd’s Open Form Salvage Agreement is “No Cure-No Pay”. In case of salvage, Insurer recommends to use LOF contract base on “No Cure-No Pay”. No bargaining for this contract since it’s settlement will be held in London through Arbitrator. Read More......