1. Shipping history at a glance
From time immemorial, people wanted to involve with trading activities at sea. As such when people had started to contemplate carriage of goods and merchandise from one country to another, from one region to another, and from one continent to another continent, then the idea of "Shipping" emerged in their mind. In the early days when Airways and Railways were not invented, the traders used rowing boats and then at later stage sailing boat to carry their merchandise from one country to another. With the continuous development of international trade and technology over the years, the mode of transportation of cargo by sea has developed notably i.e from sailing boat to modern motor ship. Now Merchant Shipping is considered to be the most reliable, cheap and safe mode of transportation in the international trade. It acts as the life blood of world economy, carrying 90% international trade with 102,194 commercial ships worldwide.
International Shipping business is broadly classified into two categories : -
a) Liner Shipping: Whenever Shipping Company operates their vessels in a particular route and cover some fixed ports of call with declared schedule at regular interval, then it is known as liner shipping service. For example - If ship 'A' is declared in the trade to load cargo ex-Chittagong port to cover fixed ports / route viz Chittagong->Colombo->Port Kelung->Singapore & back, and operate on regular interval, then it is liner shipping or liner service.
b) Chartering: It is a written contract between owner of ship and charterer(user of ship) as per mutually agreed terms and conditions enabling charterer to fulfill his business commitment. The said contract which accommodates terms & condition is known as "Charter party". Whenever a certain named ship is hired by charterer under conditions of charter party for a particular period of time,say one year, then the it is known as Time charter. Under this arrangement, payment is done by charterer on the basis of fixed rate to be negotiated per day. Whenever a named ship is offered to charterer to transport certain quantity of named goods from a named load port to a named discharge port under agreed conditions of charter party, then it is known as Voyage charter party. Here payment is done by charterer on per ton of cargo calculated on the basis of total quantity of cargo transported in the voyage.
Shipping business may be classified in terms of services rendered to the trade as under:
a) Bulk shipping: There is a long history of Bulk Shipping. We came to know from history that about 2000 years ago, Rome imported 30 million bushels of grain in a year from grainlands of northern Africa, Sicily, and Egypt. To transport this huge quantity of grain, a fleet of special ships was built. It was not until the mid-nineteenth century, bulk trade started with the advent of industrial revolution in Europe and technological development in shipping taking place.
The coal trade between Newcastle and London was done at that time with steam-driven colliers. Since nineteenth century, the volume of seaborne cargoes like coal, ores and grain has grown enormously & paved the path for bulk shipping to grow for exploring economies of scale.
Debate exists to define ‘bulk cargo’. Sometimes the term is used to refer to the commodities such as crude oil, iron ore and coal that are homogeneous and shipped in large volume. Some people are of opinion that cargoes such as refrigerated meat, chilled bananas, and motor cycles are also bulk cargo as they are transported in ship load. According to the United Nations Maritime Transport Study – “crude oil, iron ore, grain & similar cargoes which are usually homogeneous is character and are transported in large volume, can be termed as ‘bulk cargo’. In other words, any cargo that is transported by sea in large consignments to reduce the unit cost, can be grouped under bulk cargo. The basic principle of bulk shipping is ‘one ship, one cargo’.
Bulk cargoes may be divided into following categories :
i) Liquids: This includes crude oil, refined oil products, chemicals, vegetable oil, liquefied petroleum gas, etc.
ii) Homogenous bulk: This category includes iron ore, grain, coal, bauxite / alumina and phosphate.
iii) Minor bulk: This includes steel products, forest products, sugar, non-ferrous metal ores, and industrial products.
iv) Refrigerated / chilled cargo: This includes meat, dairy products, fruits, vegetables.
Container Shipping / Containerization:
Container shipping or Containerization has revolutionized the mode of maritime transportation of the world during last 50 years. The main reason is that the new mode of transport has been able to guarantee movement of goods from shipper’s door to consignee’s (ultimate receiver of goods) door at a cheaper rate, faster speed and more secured way which the age old conventional break-bulk system failed to do. The prime emphasis aims at extension of services combining rail-road-sea i.e. door to door instead of port to port services. Before the intermodal container transportation system was developed, goods were moved from land to sea using crates, barrels, sacks, pallets, and boxes. The loading and unloading of ships when they arrived at the dock was slow and labor intensive. The term used for this type of cargo is called break bulk, derived from the phrase “breaking bulk” which means the extraction of a portion of the cargo of a ship. Due to traditional system of unloading and loading, the ships turn around time at port was longer. This traditional break-bulk system continued in the trade even after the end of Second World War. The era of ‘containerization’ began 10 years after the 2nd world war. In the year 1955, Malcolm McLean, a trucking entrepreneur, became a ship owner through purchasing two Second World War tankers. The first tanker, the ‘Ideal X’ was converted into a cargo ship with reinforced deck. On April 26, 1956 Ideal X made the maiden voyage from Port Elizabeth, New Jersey to the Port of Houston and carried 58 metal container boxes as well as 15,000 tons of bulk petroleum. Subsequently in the year 1966, Malcolm McLean introduced first deep sea container service on North Atlantic trade by establishing a shipping company named ‘Sea-Land’.
After 1970 onwards, world transport industry witnessed unprecedented growth of containerization in the developed and developing countries during next few decades which created opportunities for massive investment in container ship building, setting up of new container terminal with all equipments for container handling at port, container fleet development and overall infrastructure development for intermodal transportation. At the primary stage, there was some difference of opinion regarding dimension of a standard 20 foot container which can be conveniently used by international trade. Ultimately International Standard Organization (ISO), has devised a standard set of external container dimension, offering a box 8 feet high, 8 feet wide with four optional lengths --- 10 foot, 20 foot, 30 foot, and 40 foot which can meet the basic requirement of trade & acceptable to all the countries. On the basis of ISO standard, a TEU (twenty-foot equivalent unit) now has the dimension of 8*8*20 which is being used & accepted in the international trade.
Feeder Service or trade: This is an important sector where shipping line renders services to the exporters and importers. Big container ships engaged in global trade cannot cover all the ports because it is not economical to call each and every port in the route. Moreover there may be draught problem for ports located in interior region of a country. To save money & time, leading shipping company deploys container ship of smaller size to transport all available container cargo from ports around and bring them to the nearest hub port where mother vessel is waiting to load. Therefore Feeder service aims at feeding the mother vessel waiting at hub port. A network of feeder service has been developed by local and foreign shipping companies to look after the trade requirements of South East Asian countries like other parts of the world. Container cargo from these regions / countries are transported to the hub ports viz Singapore, Colombo, Port Kelang and Port of Tanjung pelepas for connecting mother vessel which again carry these cargo to different destination of the world. In Bangladesh there are different foreign & local feeder operators who are rendering feeder services to the trade through fixed liner schedule.
Bio: I'm Humayun Kabir Chowdhury. Obtained my Graduate & Master's degree in Economics from Dhaka University . Joined Bangladesh Shipping Corporation, the national line of the country & served there for about 30 years. Also served in CMA CGM Shipping Line, one of the leading Container Shipping Company of the world, as Senior Manager and made significant contribution in the field of marketing.