KNOWLEDGE MODULE 1
Learner Guide
Freight Forwarding
Practice and Procedures
Theory
OCCUPATIONAL CERTIFICATE | CLEARING AND FORWARDING AGENT
SAQA ID 96368
KNOWLEDGE MODULE 1 | LEARNER GUIDE
LG-96368-333101000-KM-01
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Table of Contents
Introduction ...............................................................................................................................4
Purpose and Rationale of the Qualification............................................................................... 4
Structure of Qualification......................................................................................................... 6
Purpose of Knowledge Module [333101000-KM-01].................................................................. 7
Resources................................................................................................................................ 8
Using this Learner Guide ........................................................................................................ 10
Structure of this Module ........................................................................................................ 13
Chapter 1 | An Introduction to Freight Forwarding [KM-01-KT01] ..............................................14
Topic 1.1: Definitions of concepts, administrative approaches of freight forwarding and clearing
operations [KT0101].................................................................................................................... 16
Topic 1.2: Principles of system theory and its application to international trade [KT0102]............. 21
Topic 1.3: Structures of different modes (air, maritime, surface) [KT0103].................................... 28
Topic 1.4: Principles and approaches to choices of transport mode in international trade [KT0104]
.............................................................................................................................................. 29
Topic 1.5: Approaches to the handling of different types of cargo [KT0105].................................. 34
Topic 1.6: Basic concepts of cargo care [KT0106].......................................................................... 40
Topic 1.7: Interpretation of maps and major national and international geographic points [KT0107]
.............................................................................................................................................. 49
Topic 1.8: Management principles of loss and damage of goods [KT0108] .................................... 57
Topic 1.9: Fundamentals of international purchasing [KT0109]..................................................... 59
Topic 1.10: Fundamentals of international trade (import and export) transactions [KT0110]......... 66
Topic 1.11: Organisation, roles, and principles of international commercial terms [KT0111].......... 76
Topic 1.12: Types and uses of different international freight carriers (all modes) [KT0112]............ 80
Chapter 2 | The International Freight Forwarder and the Freight Business [KM-01-KT02] ........81
Topic 2.1: Business principles and practices for international freight forwarding [KT0201]............ 83
Topic 2.2: Calculation of customs duties for international trade (import and export) transactions
[KT0202]..................................................................................................................................... 91
Topic 2.3: Uses and applications of certificates of origin and other commercial documents [KT0203]
.............................................................................................................................................. 94
Topic 2.4: Legal principles for international freight business [KT0204].......................................... 95
Topic 2.5: Infrastructure and equipment in international freight forwarding [KT0205].................. 98
Topic 2.6: Approaches to multimodal surface freight import clearances [KT0206]........................117
Chapter 3 | Organisation of the Company [KM-01-KT03]...........................................................130
Topic 3.1: Different structures of an organisation within freight forwarding and clearing
environment [KT0301] ...............................................................................................................132
Topic 3.2: Types and functioning of sea freight carriers and agents [KT0302] ...............................142
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Topic 3.3: Principles of security and confidentiality in organisations [KT0303] .............................192
Chapter 4 | Basic Principles of Finance and Accounting [KM-01-KT04] .....................................210
Topic 4.1: Basic principles and concepts of financial accounting [KT0401]....................................211
Topic 4.2: Principles of costing and estimates ........................................................................220
(Intermodal surface, shipment, airfreight) [KT0402]....................................................................220
Topic 4.3: Interpretation of Financial Statements...................................................................253
(Balance Sheet and Income Statements) [KT0403] ......................................................................253
Topic 4.4: Techniques for the purpose of allocating costs in international trade transactions
involving a number of commodities [KT0404].............................................................................258
Topic 4.5: Uses and forms of invoicing [KT0405]..........................................................................262
Chapter 5 | Professional Organisations [KM-01-KT05]...............................................................269
Topic 5.1: History and functions of different national and international organisations (FIATA,
IATA, SAAFF, etc) [KT0501].........................................................................................................269
Topic 5.2: Uses of different documents and forms [KT0502]........................................................269
Chapter 6 | General Knowledge of Transport and Related Geography [KM-01-KT06] .............270
Topic 6.1: Basic concepts of geography [KT0601].........................................................................270
Topic 6.2: Geography of ocean transport and port facilities [KT0602] ..........................................270
Topic 6.3: Approaches to mapping a trade route (different transport modes) [KT0603]................287
Major shipping routes of the world .......................................................................................287
TRADE ROUTES .....................................................................................................................290
Chapter 7 | Special transport services [KM-01-KT07] .................................................................294
Topic 7.1: Forms and types of different and special transport services [KT0701] ..........................295
Topic 7.2: Types of documentation for special transport services [KT0702]..................................295
Topic 7.3: Types of barges used in inland waterways carriage [KT0703].......................................306
Topic 7.4: Air transportation for perishable cargo [KT0704].........................................................320
Topic 7.5: National and international carriage by inland waterways [KT0705]..............................323
Chapter 8 | Cooperation with other service providers [KM-01-KT08]........................................335
Topic 8.1: Stakeholders in freight forwarding and clearing environment [KT0801] .......................336
Topic 8.2: Structure of the Business and relations between stakeholders [KT0802]......................338
Chapter 9 | Information and communication technologies [KM-01-KT09]................................350
Topic 9.1: Introduction to use of Personal Computer [KT0901] ....................................................351
Topic 9.2: Programmes used in the international freight forwarding world or environment [KT0902]
.............................................................................................................................................354
Topic 9.3: Storage, management, and database of different forwarding environment [KT0903]...367
Topic 9.4: E-Commerce [KT0904] ................................................................................................370
Topic 9.5: Role of information technology in the freight forwarding including the modern-day
technology [KT0905]..................................................................................................................372
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Chapter 10 | Logistics and forwarding [KM-01-KT10].................................................................376
Topic 10.1: Concept of groupage and surface imports [KT1001]...................................................377
Topic 10.2: Approaches to multimodal surface clearance [KT1002]..............................................377
Topic 10.3: Movement of goods between locations [KT1003]......................................................377
Topic 10.4: Basic concepts of logistics [KT1004]...........................................................................382
Topic 10.5: Calculations and determination of international and national charges [KT1005].........384
Topic 10.6: Basic concepts and tools of project management [KT1006]........................................384
Chapter 11 | Transport equipment [KM-01-KT11] ......................................................................388
Topic 11.1: Types and uses of transport equipment in international transportation [KT1101].......388
Topic 11.2: Use of hand operated firefighting equipment [KT1102] .............................................390
Topic 11.3: Types and specification for most used containers [KT1103] .......................................399
Chapter 12 | Transport and accompanying documents [KM-01-KT12]......................................402
Topic 12.1: Forms and uses of waybills [KT1201].........................................................................402
Topic 12.2: Uses of bills of lading and manifests [KT1202]...........................................................405
Bibliography ..........................................................................................................................410
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Introduction
Dear Learner,
Welcome to this module entitled ‘Freight Forwarding Practice and Procedures Theory’. The
curriculum code for this module is 333101000-KM-01. In terms of the curriculum, this module
has been designated as a ‘Knowledge Module’ and is the first in a series of four (4) Knowledge
Modules related to the Clearing and Forwarding Agent qualification, as detailed below.
In order to successfully complete this module, you will be required to devote at least 200
‘notional’ hours of comprehensive reading and study of the learning resources provided to
you (including but not limited to this Learner Guide), as well as completion of the relevant
assessments. Notional hours will be explained later in this introduction.
This module is part of a qualification formally titled ‘Occupational Certificate: Clearing and
Forwarding Agent’ which has been set an NQF Level 5 and is registered with the South African
Qualifications Authority (SAQA)1 and is administered by the Quality Council for Trades and
Occupations (QCTO).2
Purpose and Rationale of the Qualification
Purpose:
The purpose of this qualification is to prepare a learner to operate as a Clearing and
Forwarding Agent.3
A Clearing and Forwarding Agent carries out customs clearing procedures and ensures that
insurance, export/import licences, and other formalities are in order, to facilitate the
movement of cargo internationally and locally, and ensures compliance with current
legislation.
A qualified learner will be able to:
1. Forward cargo within the local and international logistics environment.
2. Observe compliance with statutory requirements within the local and international
logistics environment.
3. Conduct warehousing operations within the local and international logistics
environment.
4. Assist with distribution of cargo within the local and international logistics
environment.
1 http://www.saqa.org.za/
2 https://www.qcto.org.za/
3 http://regqs.saqa.org.za/viewQualification.php?id=96368
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Rationale:
This qualification reflects the workplace-based needs of the international logistics and freight
forwarding industries relating to the clearing and forwarding operations that have been
expressed by all role-players to meet both current and future needs. It will contribute to the
upliftment of the industry and set a standard of professionalism in the industry.
This qualification serves to equip the qualifying learner with the fundamental skills,
knowledge, and attitudes necessary to support the provision of world-class services and
improve customer service in international logistics and supply chain management to promote
an efficient and comprehensive national and international cargo movement system.
The intention of this qualification is to ensure that South Africa remains compliant with
national and international standards for the movement of cargowithin and across its borders,
by promoting the development of functional knowledge and competencies required in the
Freight Forwarding and Customs Compliance environment; and providing opportunities for
career pathways and life-long learning for learners in the Freight Forwarding and Customs
Compliance environment.
The Forwarding and Clearing Industry (F & C) comprises economic activities and supply chains
that relate to all imports and exports of goods entering or leaving South Africa , as well as
those transiting this country. This is essential for the success of every industry in South Africa
and therefore contributes to the growth of the South African economy as a whole. This
industry is critical to the ongoing performance of South Africa as an international trading
nation, and its activities facilitate all forms of physical trade. Though there are many areas of
commerce and industry critical to the long-term performance of the economy, there are few
more so than this industry.
Logistics, a major component of the supply chain, contributes substantially to the costs of the
goods in South Africa, and is above the international norm. A large proportion of this
overspend could be attributed to inefficiencies and lack of competence. In order to compete
globally, South Africa needs to achieve just-in-time delivery as an essential requirement of its
cost efficiency. This requires the maintenance of world-class supply chains, competence, and
skills.
The F & C Industry serves as an input to nearly every industry in the national and international
economy and utilises all modes of transport involved in the carriage of goods, cargo, and
freight, be it by ocean, air, rail, or road. The industry is also a service provider of warehouses,
transit sheds and the associated management of shipment tracking, costing, and accounting
data.
The transport sector, including the Forwarding and Clearing Industry, comprises a substantial
proportion of South Africa's national carbon footprint, and is therefore the ideal environment
to maximise the impact of practical, new, green logistics approaches and technologies.
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Structure of Qualification
The Clearing and Forwarding Agent qualification is structured as outlined in the table below.
Furthermore, the module highlighted in blue bold text indicates where you are in the learning
process.
KNOWLEDGE MODULES
Module Code Module Title Credits
20
333101000-KM-01 Freight Forwarding Practice and Procedures Theory 12
5
333101000-KM-02 Compliance and Brokerage Theory 3
40
333101000-KM-03 Warehouse and Distribution Theory
Credits
333101000-KM-04 Environment, Energy Efficiency and Ethics 10
8
TOTAL (KM) MODULE CREDITS
8
PRACTICAL SKILLS MODULES
10
Module Code Module Title
10
333101000-PM-01 Plan and co-ordinate freight movement of cargo 5
333101000-PM-02 Plan and co-ordinate customs clearing, delivery and 3
54
pickup of cargo
Credits
333101000-PM-03 Prepare and process data/documentation associated 8
with international trade in compliance with applicable 8
2
and current legislation
8
333101000-PM-04 Audit commodities against customs and other statutory
26
requirements
120
333101000-PM-05 Apply rebate, drawback, and bond facilities
333101000-PM-06 Prepare documents for receipt, storage, and removal of
warehoused cargo
333101000-PM-07 Prepare receipts of cargo to be distributed
TOTAL (PM) MODULE CREDITS
WORK EXPERIENCE MODULES
Module Code Module Title
333101000-WM-01 Conduct cargo forwarding processes
333101000-WM-02 Process customs compliance procedures
333101000-WM-03 Communication and documentation for warehousing
processes and requirements
333101000-WM-04 Documentation for distribution processes and
procedures
TOTAL (WM) MODULE CREDITS
TOTAL (QUALIFICATION) MODULE CREDITS
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Purpose of Knowledge Module [333101000-KM-01]
The main focus of learning in this knowledge module is to build an understanding of the
theory required for freight forwarding practices and procedures. The knowledge acquired will
enable learners to demonstrate an understanding of: the basics of freight forwarding, the
international freight forwarder and the freight business, the organisation of a freight
forwarding company, the basic principles of finance and accounting, freight forwarding
professional organisations, general knowledge of transport and related geography, special
transport services, cooperation with other service providers, information and communication
technologies, logistics and forwarding, transport equipment, and transport and
accompanying documents.
SAQA Exit Level Outcome Associated with this Module.
The ‘Exit Level Outcome’ associated with this module as found in the relevant qualification
document for SAQA qualification ID 96368 is:
Exit Level Outcome 1: Forward cargo within the local and international logistics
environment.
Associated Assessment Criteria for Exit Level Outcome 1
The ‘Associated Assessment Criteria for Exit Level Outcome 1’ for this module, as found in the
relevant qualification document for SAQA qualification ID 96368 are:
• Freight movement of cargo within the international logistics environment is planned
and co-ordinated.
• Shipment files are correctly completed according to standard operating procedures,
Incoterms, and statutory regulations.
• The status and the data contained in the shipment are identified and analysed in order
to process the shipment for import or export purposes.
• Customs clearing, delivery and pickup of cargo are planned and co-ordinated.
• Cost responsibility and risk are administered in accordance with chosen International
Commercial Terms (Incoterms).
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Resources
In order to assist you in your learning experience, you will be provided with the following
resources:
NB – Some of these resources may be provided to you in hard copy or electronic format
through various types of media or devices depending on the preferred approach of your
employer(s) / supervisor(s) and/or Skills Development Provider (SDP).
Resource Description and Purpose
Learner Guide The Learner Guide serves as your main resource manual and
textbook. It is also alternatively referred to as a Knowledge Module.
It provides detailed content in terms of the theoretical knowledge
components of the curriculum which you are required to
demonstrate an understanding of.
You will receive one (1) Learner Guide per Knowledge Module.
NB: The qualification you are undertaking comprises four (4)
Knowledge Modules.
Learner Workbook The Learner Workbook serves as your Assessment Guide and
contains quizzes/questionnaires/tests and exercises which will form
part of the formative assessment process of your training.
These formative assessments will be based on the Internal
Assessment Criteria (IACs) as outlined in the curriculum document
which pertains to this qualification.
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Resource Description and Purpose
Your facilitator will advise and guide you regarding the due dates
and manner of submission of your assessments. Furthermore, your
answers/responses to these formative assessments will be
appropriately collated, graded and filed physically and/or
electronically.
These assessment records should and will be kept as part of your
Portfolio of Evidence (POE).
References Your Learner Guide will contain multiple footnotes and other
references in the bibliography which you are encouraged to refer to
in order to supplement your knowledge and mastery of the subject
matter being discussed in that particular topic.
Furthermore, your Facilitator may also provide you with additional
readings or information in the form of handouts in relation to any of
the various topics which you will be studying.
You are encouraged to file and keep a record of these handouts for
reference when needed.
Practical Skills Module(s) You will receive seven (7) Practical Skills Guides or Modules or one
Logbook(s) (1) integrated Practical Skills Module depending on the preferences
of your Facilitator and/or Assessor.
You will be required to utilise the logbooks to record evide nce of
your having completed the activities outlined therein. You will also
be required to submit this evidence for incorporation into your
Portfolio of Evidence (POE).
Both you and your Assessor will be required to sign-off the activities
in the logbook.
Work Experience Module(s) You will receive four (4) Work Experience Modules or one (1)
Logbook(s) integrated Work Experience Module depending on the preferences
of your Facilitator and/or Assessor.
You will be required to utilise the logbooks to record evidence of
your having completed the activities outlined therein. You will also
be required to submit this evidence for incorporation into your
Portfolio of Evidence (POE).
Both you and your Workplace Supervisor will be required to sign-off
the activities in the logbook.
Hyperlinks If you are accessing this document electronically, whenever you see
underlined blue text, please note that you may click on that
hyperlinked text to access more resources relevant to the topic at
hand.
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Using this Learner Guide
This learner guide as well as any additional reference material which may be provided by your
Skills Development Provider (SDP) and/or your facilitator, are the primary sources of learning
content for this module. This learner guide, therefore, contains a major part of the learning
content you should master. A sound mastery of this learning content will be key in enabling
you to successfully complete the activities and tasks required of you in the Practical Skills and
Work Experience Modules.
In this study guide you may find certain sections in the body on learning content which need
only to be read, whereas other sections must be studied thoroughly. Such references would
usually include action words or icons as explained below:
ACTION DESCRIPTION
Read Read to obtain broad and basic knowledge of the subject matter
under discussion. You must read attentively so that
Study theory/explanations are clearly understood. You may be
assessed on the theory by means of short questions in activities
and also in assignments.
Learn with a view to gaining the highest level of understanding
that is necessary to solve problems in assessments / exercises/
tasks / assignments and in both the practical and work
experiential settings.
This level of knowledge will also be necessary for further studies
and application in your career. Always bear in mind that you will
be required to apply the theory that you learn in the correct
format and to apply the correct steps / procedures, for a given
task.
Each chapter or learning unit begins with an outline of the topics to be covered and also of
the requisite learning outcomes.
The learning outcomes indicate what you are expected to understand, know, explain, discuss,
demonstrate, and apply etc., and will help you to structure your learning.
On the other hand, activities, examples, and exercises (formative assessments) will get you
involved in the content of the particular chapter or learning unit. These are designed to help
you find out if you have the necessary assumed knowledge, and if you understand the work
and can apply the new knowledge gained. Activities can be in the form of theory questions,
multiple choice questions, calculations, true or false questions, etc., whereas examples /
exercises may be in the form of detailed questions dealing with the learning content.
Activities, examples, and exercises, thus imply “doing”. They help you to study the content of
the module systematically. These may also be found in your Learner Workbook, whichshould
be used in close conjunction with this learner guide.
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The following icons may also be used in this and other learner guides and workbooks to
indicate or refer to the above-mentioned concepts you may encounter as you interact with
the content in this module:
ICON DESCRIPTION
Key topics
Learning outcomes
Key concepts
Read
Study
Solve
Calculate
Individual activity
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ICON SAQA 96368 Knowledge Module 1
DESCRIPTION
Group task/activity/project
Group discussion
Practical Skills task/activity/project
Work Experience task/activity/project
Assessment
Timeout
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Structure of this Module
This module is delivered at NQF Level 5.4 It comprises a total of 20 credits, hence the 200
notional hours of study required.
1 credit is equivalent to 10 notional hours of study.
The module is broken down into ‘Chapters’ and ‘Topics’ or Topic Elements. The chapters are
outlined below and have been set in accordance with the qualification curriculum:
Chapter Chapter Description Component % Coverage
1 An introduction to Freight Forwarding KM-01-KT01 5%
KM-01-KT02 15%
2 International freight forwarder and the
KM-01-KT03 5%
freight business KM-01-KT04 10%
KM-01-KT05 5%
3 Organisation of the company KM-01-KT06 15%
4 Basic Principles of finance and accounting KM-01-KT07 10%
KM-01-KT08 3%
5 Professional organisations KM-01-KT09 5%
6 General knowledge of transport and KM-01-KT10 14%
KM-01-KT11 10%
related geography KM-01-KT12 3%
7 Special transport services
8 Cooperation with other service providers
9 Information and communication
technologies
10 Logistics and forwarding
11 Transport equipment
12 Transport and accompanying documents
4 National Qualifications Framework: See SAQA website for definition of NQF.
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Chapter 1 | An Introduction to Freight Forwarding [KM-01-KT01]
The Topic Elements to be covered in the chapter referenced above include:
Topic Topic Element/Heading Knowledge Theory
1.1 Definitions of concepts, administrative approaches of KT0101
1.2 freight forwarding and clearing operations KT0102
Principles of system theory and its application to
1.3 KT0103
1.4 international trade KT0104
Structures of different modes (air, maritime, surface)
1.5 Principles and approaches to choices of transport mode KT0105
1.6 KT0106
1.7 in international trade KT0107
Approaches to the handling of different types of cargo
1.8 KT0108
1.9 Basic concepts of cargo care KT0109
1.10 Interpretation of maps and major national and KT0110
1.11 international geographic points KT0111
Management principles of loss and damage of goods
1.12 KT0112
Fundamentals of international purchasing
Fundamentals of international trade (import and
export) transaction
Organisation, roles, and principles of international
commercial terms
Types and uses of different international freight carriers
(all modes)
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By the end of this chapter, you should be able to demonstrate an understanding of the
following Internal Assessment Criteria (IAC) or Learning Outcomes relevant to this topic:
No. Learning Outcome IAC
IAC0101
1 Discuss various concepts of freight forwarding IAC0102
operations IAC0103
IAC0104
2 Explain the role of different role players involved in
freight forwarding operations IAC0105
3 Interpret maps and locate major geographical points on IAC0106
a map IAC0107
4 Describe approaches for purchasing internationally
sourced goods in terms of legislation and organisational
policy and procedures
5 Describe the respective roles of the international
regulatory and industry representative bodies in terms
of their impact on airfreight forwarding
6 Explain the cargo care requirements for specialised
cargo
7 Explain across all the modes the freight transport
operations and ancillary service providers involved in
the movement of freight
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Topic 1.1: Definitions of concepts, administrative approaches of freight
forwarding and clearing operations [KT0101]
In order to understand the concept of Freight Forwarding, the following public statement
issued by FIATA (International Federation of Freight Forwarders Associations) may be helpful.
Herewith below is an extract:
FIATA Public Statement 5
Freight Forwarders Evolve with Trade
Through Time – Freight Forwarders at the side of Traders
Freight forwarders existed for a long time and long before we discovered the modern use of
the word logistics. Without having the ambition to write history, perhaps we could try to put
this concept on the record with a minimal historical perspective. Some attribute a Greek
origin to the word: λόγος, meaning reason or speech; λογιστικός, meaning accountant or
responsible for calculating (sourced from Wikipedia). In this sense the origin of Logistics can
be traced all the way back to ancient Greek and Roman war times when military officers called
“λογιστικός” were assigned the duties of calculating and arranging for field supply and
resources.
The Oxford English Dictionary defines logistics as "the branch of military science relating to
procuring, maintaining and transporting material, personnel and facilities". However, the
New Oxford American Dictionary, leaving the military perspective aside, defines logistics as
"the detailed coordination of a complex operation involving many people, facilities, or
supplies" and the Oxford Dictionary on-line defines it as "the detailed organisation and
implementation of a complex operation". As such, logistics is commonly seen as a branch of
engineering that creates "people systems" rather than "machine systems." (Sourced from
Wikipedia). In this regard the idea that freight forwarders are “architects of transport”, as
FIATA wrote several years ago, functions well in this description.
In 2004 it became apparent that more clarity was required with regard to the services that
freight forwarders and logistics providers offered and FIATA provided a description of such
services that is still publicly available on FIATA’s website and seems to fulfil its task of
describing what FIATA members actually do:
5 https://fiata.com/fileadmin/user_upload/Changing_Logistics_-_Freight_Forwarders_Evolve_with_Trade.pdf
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SAQA 96368 Knowledge Module 1
Freight Forwarding and Logistic Services means services of any kind
relating to the carriage (performed by single mode or multimodal
transport means), consolidation, storage, handling, packing or distribution
of the Goods as well as ancillary and advisory services in connection
therewith, including but not limited to customs and fiscal matters,
declaring the Goods for official purposes, procuring insurance of the
Goods, and collecting or procuring payment or documents relating to the
Goods. Freight Forwarding Services also include logistical services with
modern information and communication technology in connection with the
carriage, handling or storage of the Goods, and de facto total supply chain
management. These services can be tailored to meet the flexible
application of the services provided.
There is evidence of transport and trade related documents dating back to the Egyptians and
the Roman Empire, but we need to come to more recent times to become acquainted with
the idea of a freight forwarder operating as an intermediary at the service of traders. There
was evidence of early freight movements by English and Flemish traders selling wool and
other commodities to each other.6
During that time, the owner of the freight had been the one in charge of moving it. However,
as trade grew in its complexity, a need arose for a coordinator of the many different services
that were necessary to move goods across borders: the freight forwarder was born. There are
examples of logistics services in Germany and in Italy even at relatively early dates. It is
however difficult to beat the record of Gebrueder Weiss in Austria, whose history goes back
to 1330.7
By the Second World War, the importance of logistics was well understood especially by the
United States. This ensured that supplies were readily provided to their troops in order to
gain a competitive edge and at the same time blocking key European trade lanes which were
utilised on the other side by European forwarders to move military goods.8
By the 1950s, as forwarders sought greater efficiencies from multiple carriers, the focus
turned to mechanisation (e.g., pallets and pallet-lifts) to streamline processes of material
handling. In the early 50’s the UN prepared and produced Recommendation Number 1,9
which became the standard reference for the vast majority of our trade documents. FIATA
officers were part of the team of professionals who cooperated in this endeavour. By the ’60’s
trade was exploding, at least on the two shores of the Atlantic, and the forwarder required
sufficient warehousing and storage facilities farther away from ports, where space was
getting too tight.
6 https://research.stlouisfed.org/wp/2015/2015-006.pdf
7 https://www.gw-world.com/en/company/about-us/history/the-beginnings/
8 Dr Haniefuddin S, Shaik Shamshuddin Dr Shaik Khadar Baba (2013) - Essentials of Logistics and Supply Chain
Management
9 http://tfig.unece.org/contents/unlk-recomm-1.htm
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This contributed to the "unit load" concept which eventually would produce freight container
services. By the 1960s, a clear trend had developed in shifting more time-dependent freight
transportation to truck rather than rail, as forwarders required more flexibility to reach end
consumers and could not be constraint by fixed rail lines and the existence of sidings. The
arrival of reliable steamships created a demand for trade between Europe and North America
giving birth to the international shipping industry.10 In April 1966 McLean’s Sea-Land11 started
container services from North America to Europe and that was the game changer that
triggered the evolution in transport and logistics many of us have witnessed before our eyes
in the last 50 years. Something was happening in the air as well and Jimmy Carter’s de-
regulation policies12 coupled with the powerful “Jumbo” made air freight affordable for a
number of trade articles that had not been flying beforehand.
In the ’90’s the tech community grewin awareness of the important role the freight forwarder
was playing in logistics, and attempted to develop standard software products, such as
Enterprise Resource Planning (ERP) and Transport Management Systems (TMS), gradually
substituting the main frame-dependant structure to catapult logistics into a networking
industry phenomenon. Networking had always happened, by post, telex, phone, and fax, but
the internet gradually changed logistics, as probably everything else, by making networking
faster, cheaper, and scalable. This raised the bar of service; the top freight forwarders
provided end-to-end shipment visibility with all carriers complying with streamlined
documentation. In many situations, technological development was seen as threatening the
foundations of an old industry and progress was not, and still is, easy all the time. We are still
debating the fortune of the eAWB,13 and this can hardly be seen as an achievement today.
However modern freight forwarding services allow for value added services that are
particularly beneficial for shippers and were impossible to even imagine just a few decades
ago.
Freight forwarders and logistics service providers in general have been grappling with
different modes, different standards, different habits, but managed to “keep cargo moving”
despite the raising bar of the challenges created by evolving trade patterns. Freight
forwarders are today a truly global industry whose importance in the world trade is second
to none and compares well with the importance of financial services.
In an industry that spans so globally, one would expect the hand of the regulator to be
intertwined throughout its history. However, this is in fact the opposite, as the industry has
always done well to regulate itself by understanding the need for harmonised rules and
streamlined processes to keep trade barriers low and facilitate the movement of goods. The
very creation of FIATA in 1926 embodied the representation of this requirement, as it clearly
appears in our historic documents. In this nearly a century old work in search of efficiency,
freight forwarders – through FIATA – have cooperated with a number of institutional and
private sector interlocutors.
10 http://www.containerhomeplans.org/2015/03/a-complete-history-of-the-shipping-container/
11 https://en.wikipedia.org/wiki/Malcom_McLean
12 https://en.wikipedia.org/wiki/Airline_Deregulation_Act
13 http://www.iata.org/whatwedo/cargo/e/eawb/Pages/index.aspx
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Our work with various UN entities and bodies,14 the WCO, the WTO and many others happens
on a daily basis, we have continuous collaboration with the International Chamber of
Commerce and similarly we work with peer organisations such as IATA, IRU, UIC etc. and many
others; in FIATA, the industry has always found a guiding hand, able to ensure its longevity.
For these reasons we firmly believe that our sector must remain agile andnimble, able to deal
with the ever-increasing level of challenges international trade
presents.
We are about to enter an entirely new revolution now, which is made possible by the ubiquity
of information services which did not exist just a few years ago. eCommerce is a relatively
new concept which is re-shaping trade, and consequently our industry. It brings big challenges
and huge opportunities. In front of these changes, it is vital that our sector is not hampered
by excessive bureaucracy. It is a question of development or stagnation, and it has complex
interconnection with concepts such as safety, security, integrity, and compliance. We strongly
believe that we must not put this powerful surge or new ideas into the narrow box of
antiquated stamps and forms. From walking through History to harnessing the Future – The
Tech Boom, The International Transport Forum (ITF) expects international trade to represent
50% of global GDP increasing 350% by 2050.15 A growing share of trade would take place
between emerging economies – one third of trade would then take place between non-OECD
economies by 2060, compared with only 15% today,16 and by 2030, the North Pacific corridor
would surpass the North Atlantic one as the main freight corridor of the world. Supposing
these predictions come true, this will all be made possible by improvements in infrastructure
and broadband connectivity. Mobile phones have made it easier to work on the go, which is
particularly valuable in an industry that operates at an international level and is often on the
move. The addition of cloud-based services has made documents readily available in a
business that requires accurate and prompt documentation at a forwarder’s finger tips. This
will certainly lead to the greater harmonisation of documents.
New technology has given rise to eCommerce platforms which are changing the landscape of
logistics. What once was only the business of trading goods between large and medium
traders who were wholesalers working with organised local distribution is now rapidly
changing into a business of trading goods between private consumers and micro-enterprises.
The WCA projects that by 2020, freight forwarding will be 20% e-commerce driven17 and some
believe this is a modest expectation. By allowing products to reach a broader range of
customers through eCommerce, sellers will require more sophisticated and integrated
logistics networks. Such networks are best harnessed through forwarders who have a strong
understanding of trade rules and logistics routes. Knowledge will make a difference, and this
is where FIATA can lead the entire industry.
14 http://www.unsceb.org/directory
15 International Transport Outlook | 2015
16 International Transport Outlook | 2015
17 http://www.wcaworld.com/cn/news.asp?id=1143
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In cauda fabulae (In the tail of the story)
Governments will need to play their role in the future of trade to avoid erecting trade barriers;
this is the only way to facilitate their citizens’ businesses’ access to markets, whilst ensuring
that citizens’ safety and security are not put at greater risk. The power of the regulator will
be best exercised in seeking greater harmonisation of standards and procedures. As history
has taught us, regulation had been relatively absent in our sector, resulting in a healthy
industry harmonising its own rules and improving its own trading environment. This trend
must continue with regulation being the silent finger pointing to unity in harmonisation only
where trade rules require a small push.
The goal of the freight forwarder and the principles that they operate on have practically not
changed since inception, still a business of moving goods from one point to another at the
service of trade. Interesting enough, when examined closely the freight forwarder is not
practically needed to move the goods. The forwarder creates its own demand by offering a
superior level of service; as trade continues to grow in importance and digital tools become
available, forwarders will continue to provide that added value to their customers. In fact,
customers becoming less individually interested in the rules of trade and more concerned
about receiving reliable and fast service at the tip of their fingers will create more demand of
knowledgeable, flexible services that traditionally freight forwarders have been able to
organise. How bright this future is will greatly depend on the level of collaboration that
forwarders will be able to create among one another amid this almost chaotic development
of trade paradigms.
FIATA, an association established in 1926, has been there with its members facilitating trade,
and these enterprises will continue to do so many years to come working with their more and
more numerous customers. Even accepting that we do not see ourselves as an advanced
industry, we actually are. Freight Forwarders today are much more advanced than others in
dealing with the chaotic development of eTrade, simply because freight forwarders have
been dealing with chaotic environments for time immemorial.
Some say that multitasking is not good for one’s health… well we survived it. Being a freight
forwarder in fact is not only trying to work as an architect of transport, as we said earlier, but
it becomes increasingly like trying to make sense of the chaotic development of modern
lifestyles.
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Topic 1.2: Principles of system theory and its application to international trade
[KT0102]
Read the following extract from a publication by the Organisation for Economic Cooperation
and Development (OECD). This article is very important as it details how the international
trade system works.
How trade works
Where do my things come from? How trade works today
When we think about international trade, we traditionally think about a person or company
producing all elements of a product in their home country and then exporting a final product
to a consumer in a different country.
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This type of trade, however, only represents about 30% of goods and services trade today;
the majority of trade (70%) is actually in intermediate parts, components, and services that
form segments of global value chains (GVCs). The process of producing goods is often spilt
across countries, with different elements carried out wherever the necessary skills and
materials are available at competitive cost and quality.
For example, a T-Shirt may be manufactured in Viet Nam using fabric imported from the
United States, and then exported to Canada to sell in local retail markets. At the other end of
the technology spectrum, producing a smart phone requires many complex components
sourced from all over the world, including for example, computer code from France, silicon
chips from Singapore, precious metals from Bolivia, and graphic design from the United
States. While the final product may be assembled in China and then shipped to consumers all
around the world, this example reveals that many products we think of today as being made
“somewhere” are in fact the result of efforts by firms and individuals in many countries.
Traditional trade statistics do not capture this reality, which is why the OECD launched an
initiative to measure trade in “value added” (TiVA) terms, deepening our understanding of
how trade actually works. Using TiVA, we can better identify how much value each country
and industry adds to a final product along the global supply chain. This approach provides a
much more accurate picture of trade balances between countries and the contribution of
trade to income and employment.
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Taking the example of the smart phone, traditional trade statistics would attribute 100% of a
final Apple iPhone assembled in China to Chinese exports, whereas a value-added approach
shows that China actually only retains around 4% of the total value of the iPhone – the rest
of the value is attributed to other countries that provide inputs all along the supply chain.
This new sharing of production across countries has enabled many more countries to
participate in global trade, with developing countries increasing their share of global exports
and imports. While the new environment for trade creates new opportunities, it also
increases the costs of trade barriers.
When goods and components cross borders many times in GVCs, even small tariffs can add
up, and the costs of inefficient border procedures are multiplied. Trade facilitation –the
transparent, predictable, and straightforward procedures that expedite the movement of
goods across borders – is becoming ever more important and is especially critical for trade in
perishable agricultural products or high-tech manufacturing components, both of which are
highly sensitive to delays. Trade facilitation is becoming even more important in the digital
era.
TiVA data also highlight how important services are to global trade. Services represent more
than 50% of total global exports, and over 30% of manufactured goods exports and around
25% of agri-food exports in value added terms. This means that efficient services sectors are
not just important in their own right – services contribute to as much as 80% of GDP in some
countries – but they are also essential to a country’s competitiveness in other sectors as well.
Even though services generate more than two-thirds of global GDP, employ the most workers
in major economies, create more new jobs than any other sector, and are critical to
competitiveness, obstacles to trade in services remain pervasive. Regulatory reforms and
liberalisation of trade and investment in services are needed to enhance competition and
increase the productivity and quality of services.
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Indeed, international trade canbe strongly impacted by non-tariff barriers that originate from
domestic regulations, or from limitations to foreign investment. The challenge is to meet
policy objectives in ways that maintain the gains from trade.
Digital technologies and related new business models are also now changing the way we
trade. Digitalisation reduces the cost of engaging in international trade, connects a greater
number of businesses and consumers globally, helps diffuse ideas and technologies, and
facilitates the co-ordination of GVCs.
But even though it has never been easier to engage in trade, the complexity of international
trade transactions has increased dramatically, posing new challenges for firms, individuals,
and governments. Emerging technologies like 3D printing are poised to further change how
we trade in the future.
In this fast-evolving environment, challenges involve ensuring that the opportunities and
benefits from trade can be realised and shared more inclusively. How countries trade with
each other matters.
Rules of the road: the international trading system
Today’s multilateral trading system can be traced to the aftermath of World War II when the
desire for peace led governments to establish mechanisms for deeper economic co-
operation. The General Agreement on Tariffs and Trade (GATT) was signed by 23 foundi ng
members in 1948.
Over the years, successive rounds of multilateral negotiations further reduced tariffs and new
members joined the GATT. The Uruguay Round of trade negotiations concluded in 1993,
establishing the World Trade Organisation (WTO) to replace the GATT as a governing
structure for global trade. The birth of the WTO in 1995 established new procedures for
settling disputes and marked the first time global rules were set for agriculture, trade in
services, and intellectual property.
WTO members launched the Doha Development Agenda (DDA) in 2001 with a goal of
advancing trade rules and market opening, notably in agriculture, non-agriculture market
access, and services. Following more than a decade of impasse, in 2013, WTO members
reached agreement on the Trade Facilitation Agreement (TFA).
Notwithstanding this slow progress, the multilateral trading system remains critical to global
prosperity. WTO rules helped to prevent a slide into a 1930s-style trade war that would have
greatly exacerbated the global economic crisis a decade ago. Changes in the global economy
and the slowdown in trade call for strengthening the WTO. There are a number of ongoing
efforts to strengthen and modernise the WTO, in particular with respect to its monitoring and
surveillance functions, its dispute settlement function, and negotiations to ensure that firms
in all countries are competing on a level playing field.
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Today, the WTO still sets the basic rules of the game for cross-border trade in over 160
countries, and is complemented by a growing number of bilateral and regional trade
agreements (RTAs) that tend to include deeper and wider commitments to integrate markets.
In fact, more than 290 RTAs notified to the WTO are in force today (figure), and more than 30
new agreements are under negotiation.
Although RTAs operate alongside global multilateral agreements under the WTO, many are
developing in ways that go beyond existing WTO multilateral rules and have created a
“spaghetti bowl” of preferential agreements. Areas covered by many new RTAs –
from investment, to the movement of capital and persons, to competition, to e-commerce –
are essential policy issues that must be addressed in today’s more interconnected markets.
To the extent that they go beyond commitments made in the WTO and remain open to
additional participation by countries committed to meeting their standards, RTAs can
complement the multilateral trading system.
Governments have put a lot of effort into establishing and maintaining a global trading
rulebook over the past 70 years; progressively opening markets and deepening economic
integration. Learn more about why open markets matter to better understand their
motivation. 18
From the above reading, it is clearly evident that international trade is a key driver of
economic growth for any economy.
18 https://www.oecd.org/trade/understanding-the-global-trading-system/how-trade-works/
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Freight Forwarders on their part, also play a crucial role in international trade or the global
supply chain, which in actual fact as you may have read, is more like a system or network of
various parties or stakeholders interacting together to facilitate the smooth flow of legitimate
trade.
In this international trade system, there are various elements interacting with each other at
any given time. An action by one party or more within the system is bound to have an impact
on another party or more within that system.
For further reading on the critical part which has to be played by Freight Forwarders in the
modern and ever evolving global trade system, please read the extract below from a FIATA
publication.
PROMOTING SUSTAINABLE DISTRIBUTION TO THE GLOBAL MARKET
THE GLOBAL ECONOMY
Consumer demand has created and continues to fuel prosperous economies that now sustain
in many ways, our daily lives. Products from all over the world are almost immediately
available at our doorstep and at affordable prices. This could not happen without efficient
and reliable transport. Reliable freight distribution is essential to enable continued growth of
the global economy. Curbing in any form the transportation needs may and could possibly
affect economic development and the prosperity it brings.
THE FREIGHT FORWARDER
Managing the Supply Chain
The role of the forwarder has constantly evolved to meet the demands of the marketplace.
Simply moving freight from A to B, is now only a small element of the services provided by
the forwarder.
Requirements for new skills and modern technology make it possible for forwarders to handle
and manage supply chains that stretch around the world. Effectively managed supply chains
need to be continuously evolving processes and enable cost savings and efficiencies.
Facilitating Trade
The world’s economies are at very different stages of development, and this may often create
artificial barriers that delay goods and increase costs for the customer. A freight forwarder
helps to remove these barriers by managing the documentary requirements and thereby
speeding the movement of goods, eliminating wasted time, hence driving trade.
Your Partner in Trade
There is rarely any trade without transport.
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The forwarders’ knowledge of transport, the versatility and diversity of the range of services
offered, make him an ideal partner to support international trading. The forwarders’ prime
responsibility is to safeguard the interests of his customer.
Delivering the Goods
The forwarder is rarely the carrier of the goods in the transport chain. Usually, he is the
organiser of multiple carriage, much like the travel agents arranging holidays. Transport
chains are normally complex, and more often than not involve a logistical plan, hence the
tendency for forwarders to present themselves as “logistics service suppliers”. The forwarder
has been called the “architect of transport” which today could be “managing logistics”.
FREIGHT FORWARDING
Creating Employment
Freight distribution generates millions of jobs worldwide and the continued development of
trade, the industry is continuing to create new jobs and employment opportunities. FIATA
also promotes and encourages the establishment of qualification standards in a wide variety
of skills and disciplines.
Leading in Technology
The cost of investing in the latest technology is in itself at times a barrier to trade for some
companies. The freight forwarder has already made and continues to make this investment
in developing and up grading systems, to deliver data to a variety of organisations including
banks, carriers, and customs authorities around the world.
Many forwarders’ systems include links to the international trader and their customers to
ensure a seamless error free information environment.
Promoting the Environment
Congestion, pollution, and safety - These are among the watchwords in today’s society.
Everyone is aware of them, and it is clear that concern for the environment is the
responsibility of everyone.
The transport industry arguably has a greater responsibility than many because its effects are
ever visible on everyone’s daily life. Forwarders invest heavily in environmentally friendly
transport modes and support policies for cleaner vehicle emissions.19
19 https://fiata.com/uploads/media/architect_of_transport_11.pdf
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Topic 1.3: Structures of different modes (air, maritime, surface) [KT0103]
Introduction to Transport Modes
Transportation modes are essential components of transport systems since they are the
means by which mobility is supported. Modes can be grouped into three broad categories
based on the medium they exploit: air, maritime/water, surface/land (road and rail).20
The physical movement of goods across borders, or transport of goods, can be undertaken
using one or more modes of transport.
The different modes (air, sea, road, rail, inland waterways) have varying processes and
information requirements. This partly stems from different infrastructures, different
capabilities for handling larger or smaller amounts of cargo, but also from different
international, national, and even local regimes for a specific mode.
Every mode of transport has specific characteristics in terms of conditions of transportation,
performance, and legal frameworks. When using long-haul transportation (ocean ships,
intercontinental air flights, long distance rail) the pre- and on-carriage is usually through
another mode of transport, often road. This intermodal and multimodal transport can lead to
complications and trade facilitation issues such as the use of waybills for other modes of
transport.
Transport by air and sea usually includes
transport by other modes of transport
for pre- and on-carriage (road, rail, inland
waterways). Multimodal transport
consists of the use of more than one
mode of transport, but also involves its
own equipment, particularly in rail-road
movements through specific equipment
that can be transferred from truck to
wagon.
As documentary requirements differ
from mode to mode, transport involving
more than one mode can lead to
additional changes in documentation.
Sometimes the use of transport documents for one mode is allowed (or excepted) in another
mode, for example the "flying trucks" that use airway bills.
International Transport Conventions settle the movement of goods through the different
modes of transport, or in multimodal and intermodal transport.
20 https://transportgeography.org/?page_id=100
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They define the legal framework in which transport operates and the liabilities between the
parties involved in freight transport. For every mode of transport there is at least one
International Transport Organisation for the parties in that mode:
• Maritime: IMO, ISC
• Air: IATA, ICAO
• Road: IRU
• Rail: UIC
• Inland Waterways: ERI in Europe
Modes of transport compete with each other, but there are also government preferences for
the use of certain modes, for example the use of short sea or rail over the use of congested
roads. However, there are rules of 'cabotage' that hinder free short sea or rail transport.21
Topic 1.4: Principles and approaches to choices of transport mode in
international trade [KT0104]
Each mode has its own requirements and features and is adapted to serve the specific
demands of freight and passenger traffic. This gives rise to marked differences in the ways
the modes are deployed and utilised in different parts of the world. More recently, there is a
trend towards integrating the modes through intermodality and linking the modes ever more
closely into production and distribution activities. At the same time, however, passenger and
freight activity are becoming increasingly separated across most modes.
21 http://tfig.unece.org/contents/transport-modes.htm
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It is therefore quite evident that international trade is dependent upon reliable modes of
transporting goods from e.g., an exporter to an importer across distance.
The mode of transportation is an important consideration when planning the shipment
process. Besides the costs, the urgency of the shipment, the value of the goods being shipped
as well as the size and weight of the goods need to be evaluated when determining the form
of transportation.
Ocean/Sea/Maritime
Seaborne trade accounts for about 90% of the global trade, and as per UNCTAD, 1687 million
tons (2015 estimate) were carried in around 177.6 million containers (2015 estimate)
covering 998 billion ton-miles (2016 estimate).
Because of size or volume, there are several types of cargo which are economically not viable
to move by other modes of transport other than by sea.
Ocean freight is a less expensive method of shipping goods, but the drawback is a longer
transit time. Another benefit for ocean freight is that whilst size and weight may be an issue
for air; it is not for ocean freight.
Ocean freight is used quite extensively for the movement of bulk commodities such as
agricultural products (wheat, maize, soya, etc.), coal, iron ore or for wet bulk products such
as crude oil and petroleum. Also, larger, odd-shaped items including engines and propellers
may move via this mode as well, depending on how sensitive the delivery time is.
Ocean freight is also a preferred mode of transport for the movement of high volume and
heavy cargo such as minerals, metals, ores, steel coils, etc. which would be impossibl e to
move by air freight.
Additionally, businesses are placing more of an emphasis on the environmental impact on
shipping. An air freight service emits a higher amount of polluting gases with less space
capacity compared to sea freight services which are considered a much greener
transportation mode with a higher carrying capacity.
Key benefits of ocean freight include:
• Suitable for wide range of products with long lead times,
• Large volumes – A single, ultra-large container ship can carry +20,000 twenty-foot
equivalent units (TEU)
• Most environmentally friendly among all modes of transport,
• Economical. Liner shipping is the most efficient mode of transport for goods,
• Extensive coverage around the world,
• Multiple carrier options for the shippers,
• Mode of transportation.
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Air
Over the next 15 years, as the world GDP grows, there will be a demand for higher value
goods. As per Boeing’s 2016 – 2017 world air cargo forecast, there will be a proportionate
growth in the value per ton of total traded goods around the world.
To meet the demand for growth, world air cargo traffic is forecasted to grow an average 4.2
percent per year.
Air freight is a critical mode of transport. It serves markets and supply chains that demand
speed. One of greatest examples goes back to 1997 when Apple began innovating on the
nitty-gritty details of supply-chain management. Almost immediately upon Steve Jobs’ return.
At the time, most computer manufacturers transported products by sea, a far cheaper option
than air freight.
Steve Jobs took advantage of the benefit of air freight and used an innovative strategy. He
paid $50 million to buy up all the available holiday air freight space to ensure that the
company’s new, translucent blue iMacs would be widely available during Christmas season
giving them a massive competitive advantage over their rivals. – “It was an ‘Oh s—’ moment,”
recalls former HP supply chain chief Mike Fawkes.”
Other industries such as the automotive and retail industry also utilise air freight to achieve
‘just-in-time’ (JIT) inventory replenishment. JIT option allows stores, production lines to place
order fulfilment based on demand as, and when required. It provides greater flexibility and
reduces inventory and storage costs.
Also, perishable goods such as foods, flowers, and some pharmaceuticals also take advantage
of shorter transit time. Another positive for air freight is that there is less handling of cargo
overall, so the likelihood of damage or theft is less likely when utilising air.
But air freight also has its own disadvantages such as being one of the most expensive due to
the requirement of speed and the fuel that is used.
It also has its size and weight limitations. Regulatory bodies limit what can and cannot be
transported by air, and as such, oddly shaped or very large items may be more suitable for
other modes of transport.
Key benefits of air freight include:
• Quick transit
• Less handling of cargo
• Less documentation
• Reliable arrival and departures
• Enhanced level of security for your cargo
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Rail
Another mode of transport which is also considered a ‘green’ option is rail. Trains burn less
fuel per ton-mile than road vehicles and a train, which can have as many than 100 wagons,
only needs one driver. There are, however, some additional costs which are incurred in a rail
journey: at each end of the rail transit, a road delivery will be needed, and there will be a lift
cost to transfer the container between the train and the road vehicle.
On average, longer journeys tend to be less expensive by rail, and shorter journeys are less
costly by road. Where the point of cost neutrality comes is governed by many factors which
are route and commodity specific, but in general, the point of cost neutrality can be expected
to lie in the range of 130 to 150 miles.
In 2015, the first freight train carrying ISO freight containers from China arrived in the Port of
Rotterdam in 18 days as against the normal 44 odd days by the sea.
This movement of containerised cargo by rail from China to logistics hubs in Europe such as
in the Netherlands, UK is seen as a significant step in the development of trade between the
two continents. It has encouraged multinationals such as Hewlett-Packard and Ricoh to use
the route from Europe to China for their cargoes.
The Manager of European Transport at Ricoh notes that if one can set up an effective
planning, rail is a relatively quick mode of transport taking only 20 days to China. In addition,
the move by rail also has some advantages such as all containers being transported to the
location in one go, while being environmentally friendly as a train releases far less CO2 than
a plane.
Key benefits of rail freight include:
• Reliable transit times and schedules
• Railroads are the most efficient form of land transportation. One train can haul the
equivalent of over 400 trucks.
• Fast and cost-effective deliveries over long distances. Typically, over 500 miles
• Traditionally, rail has a strong safety record.
• Helps in alleviating road congestion, thus lowering emissions.
Road
Road freight is one of the most common of all modes of transportation. It is widely used in
continents such as Europe, Africa, and North America. The single customs document process
provides a seamless movement of goods even across various states and countries.
Road freight provides several advantages over other modes of transportation such as:
• Cost-effectiveness
• Quick and scheduled delivery
• Local, over border, long or short haul deliveries even in rural areas
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• Flexible service
• Saving in Packing Cost compared to other modes.
• Track and trace of cargo and truck
• Complete door-to-door service and it is one of the more economical means of
transport.
However, truck transport is limited somewhat as to what it can carry by the size of the vehicles
used and by size and weight restrictions. Another limitation is that it is affected by weather,
road conditions and traffic.
Multimodal
Another option to keep in mind is multimodal solutions – the utilisation of more than one
mode of transport under a single contract of carriage.
Multimodal is a combination of different modes of transportation such as rail, road, and sea
which allows the customer to cost-effectively manage shipments from start-to-end, ensuring
optimum care and efficiency every step of the way.
One such example is the cross-region rail network combined with truck. Providers including
DHL, Geodis, UPS, and DB Schenker are offering such a solution along China’s Silk Road
network.
According to UPS, the service can offer savings of up to 65% versus air freight costs while
providing transit times up to 40% faster than standard ocean movements.
Sea-Air is another example of multimodal transport. The service is considered less expensive
than air and quicker than ocean service.
An alternate solution to pure air or ocean, Sea-Air provides the global transportation industry
time and cost savings along with eco-friendliness.
Sometimes using this mode of transport helps to avoid demurrage fees.
Key benefits of multimodal transport include:
• Cargo can be moved to any part of the world using multiple modes of transport.
• Reduces the distance for the goods between the manufacturer and consumer.
• Customers can deal with one entity to handle all modes of transport under one
document.
• Efficient and cost-effective delivery options
Conclusion – What mode of transportation should you use?
There are numerous options for transporting goods, and there may not be one solution for
your transportation needs.
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Each mode of transport has its advantages and disadvantages. Prioritising your needs,
understanding your shipment, and comparing costs is important when planning your
shipment and choosing the best mode of transport.
Topic 1.5: Approaches to the handling of different types of cargo [KT0105]
Most cargo professionals, have no doubt developed their own way of doing things. The
trouble is, no item is shipped by just one person or even one company. When everyone in the
transport chain – ground handlers, freight forwarders, and airlines – works from the same
guidelines, damage, delays, refusals, and fines are significantly reduced.22
General Principles of the Handling, Stowage, and Carriage of Cargoes23
The transport of cargoes dates back through the centuries to the Egyptians, the Phoenicians,
ancient Greeks, and early Chinese, long before the Europeans, ventured beyond the shores
of the Atlantic. Strong evidence exists that the Chinese Treasure Ships traded for spices, and
charted the Americas, Antarctica, Australia and the Pacific and Indian Oceans before
Columbus reportedly discovered America.24
The stones for the Pyramids of Egypt had to be brought up the River Nile or across the
Mediterranean and this would reflect the means of lifting heavy weights and transporting the
same was a known science even before the birth of Christ.
Marco Polo reported 200 000 vessels a year were plying the Yangtze River of China in 1271
and it must be assumed that commerce was very much alive with a variety of merchandise
being transported over water.
Products from the world's markets have grown considerably alongside technology.
Bigger and better ships feed the world populations and the methods of faster and safer
transport have evolved over the centuries.
22 https://www.iata.org/en/publications/store/iata-cargo-handling-manual/
23 https://www.globalspec.com/reference/22645/203279/chapter -1-general-principles-of-the-handling-
stowage-and-carriage-of-cargoes
24 Menzies, G. (2002) 1421 The Year China Discovered the World, Bantam Press.
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The various cargoes and merchandise may be broadly divided into the following six types:
1. Bulk solids,
2. Bulk liquids,
3. Containerised units,
4. Refrigerated/chilled,
5. General, which includes virtually everything not in (1), (2), (3) and (4) above,
6. Roll-on, Roll-off (Ro-Ro) cargoes.
Bulk cargoes can be loaded and discharged from a ship quickly and efficiently. Conversely, we
have yet to see 10000 tonnes of grain being loaded into a Jumbo Jet. Ships generally remain
the most efficient means of transport for all cargo parcels of any respectable weight or size.25
Various cargo handling techniques for seagoing general cargo ships
Planning and control of cargo handling
The techniques of cargo handling have, at least in ocean transport, developed considerably
over the last decades. This is particularly due to:
a. Technological advances in ship design and lifting equipment,
b. Rapid development and increase in the tonnages of bulk cargo,
c. The impact of unitisation, and
d. The new and modern techniques of refrigeration, particularly with container carriage.
It has mainly been the shippers, as a group, which have been influencing these developments.
The requirements for efficient transport have led the transport industry, port authorities,
shipowners etc., to develop new concepts for ship technology and cargo handling.
It is up to the individual shipper to utilise the available methods of transport and cargo
handling, in order to be competitive in the international markets. As a minimum,
requirements must be properly defined by shippers so that the most appropriate services
may be made available by the carrier.
The shipper will have a responsibility for the preparation of consignments for transportation.
The handling and storage of cargo may not be their immediate responsibility; however, it will
influence the total transport cost. Shippers will have to ascertain that the best available
methods are accessible and can be utilised.
While in transit, the goods or commodities being shipped are represented by documents. It
is in the shipper's interest to see to that the paperwork is also handled efficiently.
25 Cargo Work: For Maritime Operations, Seventh Edition by D. J. House
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Cargo preparations
Some sort of packaging will normally be a prerequisite for carrying commodities as general
cargo, especially in break bulk. Packaging has at least three functions:
a. To protect the goods.
b. To keep a consignment together.
c. To prevent the goods from damaging the environment.
Transport usually subjects the cargo to mechanical forces (shocks, vibrations, pressures)
and/or climatic forces (temperature, moisture). At least for a conventional shipment, the
packaging needs to be strong enough to withstand the rigours of stowage and multiple
handling.
Goods which are not packed properly may damage other goods in the same transport. In such
cases the shipper may be liable. Paper, plastic, and cartons are traditionally mostly used in
local transport, where the risk of damage is usually smaller. Plastic and especially jute are
used to produce bags. Bags are commonly used to pack traditional bulk commodities in small
quantities, like cement, sugar, or grain. Wood is still common in making cases or crates. Drums
and barrels are made of metal or plastics and are used for transport of liquids in small lots.
The shipper has to follow procedures laid down by public authorities as well as commercial
practice with regard to packaging, marking and declarations of contents.
The marking should embrace at least the following:
a. Destination: Address of the end receiver, transhipment, order-number.
b. Handling instructions: Especially with fragile commodities it is important to mark the
package with handling directions to avoid breakage and other damages. To avoid
language difficulties a set of internationally recognised signs are developed for cargo
marking.
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c. Dangerous goods: Some goods are classified as dangerous. In general, goods are
regarded as dangerous if they have chemical or physical properties which can damage
other goods, materials, or the environment. Examples are explosives, flammable
liquids or gases and poisons.
IMO, the International Maritime Organisation, has worked out rules for the handling of
dangerous goods at sea in conventions which have been ratified by most member countries.
These rules incorporated in the IMDG code contain regulations regarding packaging, marking,
and labelling, stowage requirements, etc. for various types of explosives, gases, and various
types of inflammable materials.
Cargo loading and discharging.
The rate at which cargo is loaded aboard or discharged from a ship has a significant bearing
upon the overall cost of transport. Excessive time in port deprives consignees of the use of
their goods, and ship operators of the use of their vessels. Therefore, the improvement of
cargohandling methods has been a constant aim of many of those concerned in the operation
of ships.
Every cargo handling or transfer system consists of a number of identifiable elements. Goods
are moved from one place to another, such as a quayside storage area and a ship's hold. Then
there is the commodity itself, which may take many forms, as already described.
Finally, there is the medium by which the cargo is transferred, which may be manual labour,
specially designed equipment, or some combination of the two. In an efficient system, these
four elements must be properly matched. This implies a certaincooperation between the port
authority, the shipowner, the shipper, and the possible stevedoring company engaging the
port labour.
The earliest efforts to increase cargohandling rates were concentrated mainly on the transfer
medium and led to the development of a wide range of mechanical equipment, such as
cranes, conveyors etc., which has substantially improved loading and discharging rates,
especially for bulk cargoes. General cargo handling has, however, not benefited to such a
great extent from such developments.
In liner shipping, the principal restriction to high handling rates has always been the large
variety of packaging(s) used for general cargo, so that significant improvements have only
become possible by reducing the number of different forms in which goods are presented for
shipment.
Thus, it is only with the adoption of unitisation that general cargo carriers have achieved high
transfer rates and been able to take advantage of handling techniques similar to those which
have been developed for homogeneous cargoes. It is customary to distinguish between
vertical and horizontal loading of ships as well as other means of transport. With vertical
loading, the cargo must pass over the rail of the ship and into holds through hatches in the
deck.
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Derricks, cranes, and conveyor belts are commonly used for the transfer of dry commodities.
Liquids and gases are moved through pipelines. This traditional method is very useful for the
handling of bulk cargoes.
Horizontal loading of cargois done through openings in the bow, side, or stern of a ship. These
ships are commonly referred to as roll-on/roll-off (Ro/Ro) ships as the cargo can be accepted
on wheeled vehicles. Flexibility and fast port turnarounds are the essential feature of Ro-Ro
operations, and cargo handling rates can be significantly increased.
Not all horizontal loading ships are strictly Ro-Ro ships. Pallet carriers may, for example, have
side doors only and the cargo is loaded or discharged by fork-lift trucks operating on the
quayside.
Air cargo handling operations
Cargo handling is performed at thousands of airports all over the world by hundreds of
companies, posing a high potential risk for deviations in the quality of handling. IATA actively
drives the development of ground handling operations standards, best-practice processes,
and procedures. They promote global consistency and harmonisation.26
The demand for air freight is limited by cost, typically priced 4–5 times that of road transport
and 12–16 times that of sea transport. Air freight rates generally range from $1.50–$4.50 per
kilogram, while the value of air cargo typically exceeds $4.00 per kilogram. Commodities
shipped by air thus have high values per unit or are very time-sensitive, such as documents,
pharmaceuticals, fashion garments, production samples, electronics consumer goods, and
perishable agricultural and seafood products. They also include some inputs to meet just-in-
time production and emergency shipments of spare parts.27
Since the advantage of air freight is much shorter transit times, carg o must move quickly
through an airport. The time for cargooperations depends on four factors: customs clearance
procedures, cargo inspection procedures, the efficiency of cargo handlers, and the layout of
storage facilities.
Customs clearing
For imports the customs procedures are critical. The clearance requires both the airway
master bill, sent at the time the flight departs, and the customs declaration, filed by the
brokers after the cargo had been shipped. In some countries the customs authority at the
airport uses the same procedures and systems as at other international gateways, and
inbound cargo can take up to a day to be cleared. In others the procedures are adapted to
the requirements of air cargo, with all transactions conducted electronically and cargocleared
within one or two hours on a 24/7 basis.
26 https://www.iata.org/en/programs/cargo/cargo-operations/#tab-1
27 https://www.worldbank.org/en/topic/transport/publication/air -freight-study
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Inspection equipment
For exports the documents are filed at the time cargoarrives at the airport, and the inspection
is done at the same time so that cargo can be loaded within a few hours of arrival. Before X-
ray scanners, a 24-hour cooling period was typically added to the transit time, but this has
been eliminated. Most of the scanners are for baggage and small packages, so the cargo must
be unloaded from the truck in loose form and scanned before being built into palettes. At
larger airports with significant cargo traffic, full palette scanners allow shippers to build their
palettes off-airport and to load them on the aircraft within a few hours.
Cargo handling
Cargo handlers at the airport should ensure efficient and secure handling of the cargo
allowing airlines to compete with each other. Where the cargo volumes are fairly small, an
exclusive contract is used, and the contractor must provide appropriate equipment for
unloading the different types of aircraft.
In many developing countries the national carrier enjoys a monopoly, which presents a
problem if the carrier is an inefficient state-owned enterprise. This situation also introduces
opportunities for discriminatory behaviour in handling competitor’s cargo. In some other
airports a private contractor maintains a monopoly, but performance is often regulated
through productivity incentives. Since the possibility for discriminatory behaviour remains,
competition must be introduced as soon as there is enough cargo, or carriers should be
allowed to handle their own cargo.
Warehousing
Many storage facilities at smaller and older airports are fairly basic. This has little impact on
cargo storage since most cargo does not stay at airports. Generally, exports are time-
sensitive, and the imports are high-value, fast-moving goods.
Modern warehouses have loading docks to speed truck turnarounds and minimise vertical
movements of cargo. Export facilities for exports have large areas for scanning, inspection,
building palettes, and gathering the cargo for specific flights. Separate facilities for imports
have offices and inspection areas to facilitate customs clearance procedures and to allow for
segregation of cargo into truckloads. For perishable cargo, these warehouses have
temperature-controlled rooms for maintaining the cold chain between the truck and the
aircraft. These warehouses also provide some bonded storage for high-value cargo.
Where there is enough traffic and space, airlines or larger forwarders will invest in such
facilities. Where there is a lack of space or each airline handles a small amount of freight, the
airport has to invest in a multiuser facility. In both cases, the airport must finance the
construction of the complementary taxiways and the aircraft parking area.
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Where these four elements, customs procedures, inspection equipment, cargo handling
services, and warehousing are integrated into an efficient operation, most cargo will pass
through the airport within a few hours. This minimises dwell time and substantially reduces
the space required to handle a specific volume.28
Cargo Facility of the Future
In the cargofacility of the future, humans and machines work in harmony to offer both higher
efficiency and superior customer service. Fully automated high-rack warehouses, automated,
and green vehicles navigating autonomously through the facility, employees equipped with
advanced tools, including artificial intelligence and augmented reality. The facility of the
future will be safe and secure, green, automated, connected, and smart. 29
Download the Cargo Facility of the Future white paper from IATA and watch the
accompanying video to gain more insight into this.
Topic 1.6: Basic concepts of cargo care [KT0106]
The basic concepts of cargocare essentially exist to ensure that the integrity of cargois always
maintained.
Read the following extract from the TT Club30:
Achieving Cargo Integrity is all about increasing awareness and improving standards.
TT Club statistics indicate that as much as 66% of incidents related to cargo damage in the
intermodal supply chain can be attributed in part to poor practice in the overall packing
process, including not just load distribution and cargo securing, but also the wor kflow from
classification and documentation through to declaration and effective data transfer.
28 https://www.worldbank.org/en/topic/transport/publication/air -freight-study
29 https://www.iata.org/en/programs/cargo/cargo-operations/#tab-1
30 https://www.ttclub.com/products-and-services/loss-prevention/cargo-integrity/
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These incidents are estimated to cost marine aviation & transport insurers in excess of
USD500 million each year, alongside the major casualties, such as ‘MSC Flaminia’ (July 2012)
or ‘Maersk Honam’ (March 2018). Overall economic losses are calculated to be many times
this; supply chain stakeholders are collectively bearing a significant, largely avoidable burden.
What is cargo integrity and what does it include?
Cargo integrity is the adoption of best practice in all aspects of cargo care, through the
intermodal supply chain.
• Selection of suitable unit for intended commodity and journey.
• Ensuring that the unit positioned for packing is sound and free from previous cargo
residues.
• Prevention of contamination by plants, plant products, insects, or other animals.
• Proper packing of cargo within a unit, including load distribution, and effective
blocking, bracing, and securing.
• Correct classification, packaging, marking/placarding, documentation, and
declaration of packed goods, particularly those that are regulated (dangerous, waste
etc.).
• Complete and transparent transmittal of all data regarding contents (including
compliant verified gross mass), enabling appropriate safe handling through the
intermodal supply chain; and
• Effective methods of stowing and securing of units for transport in land, sea, or air
modes.
Why is it important?
• Protection of the condition and value of cargo.
• Well-being of people handling the goods at warehouses and throughout the entire
anticipated intermodal journey.
• Prevention of unevenly loaded units or insecure cargo causing incidents, particularly
during road or rail transport.
• Reduction of the number of injuries caused when unpacking.
• Prevention of undeclared or mis-declared dangerous goods causing fires, at
warehouse facilities, at ports and terminals, and at sea.
Who needs to be aware of it?
There are many direct stakeholders in the intermodal supply chain, including:
• Operators of cargo transport units (CTUs).
• Shippers, Packers, Consignors.
• Freight forwarders and logistics operators.
• Carriers (by road, rail, inland waterway, and sea); and
• Anyone else involved in the movement of CTUs.
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• There are also numerous indirect stakeholders who influence the practices adopted
in intermodal transport, such as international traders, fiscal authorities, enforcement
agencies, emergency responders, and insurers.
What is the CTU code?
The 2014 Code of Practice for Packing of Cargo Transport Units (CTU Code)31 applies to
packing and transport operations throughout the entire surface intermodal chain. It provides
guidance not only to those responsible for packing and securing cargo, but also to those who
receive and unpack such units.
It was jointly developed by the International Maritime Organisation (IMO), the International
Labour Organisation (ILO) and the United Nations Economic Commission for Europe (UNECE).
The non-mandatory global Code of Practice also addresses issues such as training and the
packing of dangerous goods. The CTU Code is intended to assist the industry, employers’ and
workers’ organisations as well as Governments in ensuring the safe packing of cargo in CTU
of all kinds.
How do I follow best practice?
We believe there are two fundamental steps inherent in achieving compliance and assurance
throughout the supply chain:
1. Ensure that you understand what role(s) you have and related obligations, and that
you and your [own] employees/colleagues are competent to carry out all tasks in a
way that does not compromise safety, security, or the environment.
2. Seek assurance from all your customers, contractors, and suppliers that they also
understand their obligations and are committed to good practice.
(IMO) Maritime Transport: Safety – Cargo Securing and Packing32
The proper stowage and securing of cargo is of the utmost importance for the safety of life at
sea. Improper stowage and securing of cargohas resulted in numerous serious ship casualties
and caused injury and loss of life, not only at sea but also during loading and discharge.
Furthermore, many incidents in transport are attributed to poor practices in the packing of
cargo transport units, including inadequate securing of the cargo within the cargo transport
units, overloading and incorrect declaration of contents.
This is of major concern particularly because the victims may be the general public or
transport and supply chain workers, who generally have no control over the packing of such
units.
31 http://www.imo.org/en/OurWork/Safety/Cargoes/CargoSecuring/Documents/1497.pdf
32 http://www.imo.org/en/OurWork/Safety/Cargoes/CargoSecuring/Pages/default.aspx
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In order to deal with the problems and hazards arising from improper stowage and securing
of certain cargoes on ships and improper packing of cargo transport units, the IMO has
developed, in cooperation with other UN agencies where appropriate, the codes listed
hereunder:
• Code of Safe Practice for Cargo Stowage and Securing (CSS Code)
• Code of Safe Practice for Ships Carrying Timber Deck Cargoes,2011 (2011 TDC Code)
• IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU Code)
(IATA) Air Transport: Standards – Working for efficient & safe operations.
The IATA Cargo Handling Consultative Council (ICHC) brings together cargo handlers and
airlines involved in cargo operations. ICHC has a plan aligned to Cargo Committee's
(CC) priorities and works with the Ground Operations Group (GOG) and other sub-groups. Its
objective is to develop best-practice processes and procedures to address all aspects of cargo
acceptance and handling.
Cargo Handling Manual (ICHM)
The IATA CargoHandling Manual (ICHM) is based on the industry-endorsed Master Operating
Plan (MOP). It will be further enhanced to reflect operating procedures for airmail, best-
practices for irregularities and damages, and include freight forwarders’
requirements. ISAGO will now refer to this manual in their CGO parts.
Ground Operations Manual (IGOM)
The IATA Ground Operations Manual (IGOM) is a current source for the latest industry-
approved standards harmonising ground handling processes and procedures for frontline
personnel. It contains 21 topics related to cargo safety working instructions out of 85 core
cargo handling topics currently found in the airlines' cargo operations manuals.
ULD Regulations (ULDR)
The IATA ULD Regulations (ULDR) covers both technical and operational standards and
regulatory requirements as well as the carrier's requirements applicable to overall ULD
operations.
Airport Handling Manual (AHM)
The Airport Handling Manual (AHM) is a definitive source for the latest industry-approved
policies and standards covering all facets of safe and efficient airport operations. The manual
contains the new Cargo Recommended SLA (AHM 803).
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(IRU) Road Transport: Safety – International Guidelines on Safe Load Securing for Road
Transport
Rules on safe cargo securing today vary from one country to another, making it difficult for
road transport operators to know the minimum requirements for international journeys.
Moreover, loads that have not been properly secured can fall off, affect the balance of a
vehicle, and sometimes even tip it over and cause accidents with other vehicles.
The International Road Transport Union (IRU) has published guidelines is to enable every
stakeholder involved in international road transport operations anywhere in the world, to
correctly load and secure goods on vehicles. When transport stakeholders implement load
securing good practices from the outset, this will induce sustainable improvements in
international operations and road safety standards.33
For more detailed reading on these guidelines, you may download them on the following link:
https://www.iru.org/sites/default/files/2016-01/en-safe-load-securing-8th.pdf
Published on: 13/01/2014 - 08:52
Author: IRU
Type of document: Technical documents
Category: Goods transport, Services
Region: Global
Size: 76 pages
Also download the IRU ‘Safe Loading and Cargo Securing Checklist’ on the following link:
https://www.unece.org/fileadmin/DAM/trans/doc/2011/wp24/IRU-
SafeLoadingandCargoSecuringChecklist.PDF
These standards are quite comprehensive and should be read in conjunction with local
legislation such as may be published locally by e.g., the Department of Transport (DoT) in
South Africa.34
(UIC) Rail Transport: Safety – Loading Guidelines
Safety of loading in freight transportation is a shared concern by all actors in the rail logistics
supply chain: RUs, carriers, consigners/shippers.
The UIC Code of practice for the loading and securing of goods on railway wagons is a
reference for a safe loading; the Principles (volume 1)35 contain the rules to be observed and
the Goods (volume 2),36 loading guidelines for specific types of goods, developed in
compliance with the Principles based on experiences and carriage tests.37
Cargo Handling and Care in Context
33 https://www.iru.org/resources/iru-library/international-guidelines-safe-load-securing-road-transport
34 https://www.gov.za/about-sa/transport
35 https://uic.org/IMG/pdf/loading_rules-volume_1-01042020.pdf
36 https://uic.org/IMG/pdf/loading_rules-volume_2-01042020.pdf
37 https://uic.org/freight/wagon-issues/loading-rules#Loading-Guidelines
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Goods have to be shipped with care – whether to market in the local town, or halfway round
the globe. The demands of the client dominate timing of delivery, the quantities required and
the condition in which the goods have to be delivered. It follows, therefore, that issues of late
delivery, delivery of spoiled or damaged goods or delivery of insufficient quantities are
unacceptable - always. Herein it is that the producer/seller/shipper is at risk; notwithstanding
that the producer/seller/shipper may be many thousands of kilometres away, and dependent
upon a sophisticated freight handling and storage network that is in business to deliver to the
client. Service industries supply finance and insurance to take account of the risks involved –
and these can be expensive – but everything ultimately depends upon the multitude of
choices that prevail for handling and shipping.38
Despite the emphasis given to stowage and securing produce at time of loading and shipment,
an essential pre-requisite for ensuring this is the use of a sound and undamaged container.
Containers must be maintained to a minimum standard and checked continually to screen
out damaged containers for repair of disposal.
Container Inspections
A full container inspection for structural damage requires competence and experience.
However, for cleanliness and general acceptability common sense will usually suffice. It is
normal to carry out a brief internal and external inspection of any container presented for
loading before anything is loaded into it. In fact, it is obligatory for any shipper or supplier
under conditions of carriage (of all transporters, of whatever form) to check the condition of
the container before loading. This satisfies the customer as to cargo-worthy condition and
suitability for transit of the goods to be carried. Checklists are a useful way of doing way of
covering all sectors and components that have to be checked.
The following checklists, respectively, for an external and internal inspection of the container
recommended by P&O Nedlloyd (2003) helps to minimise damage to the cargo and ensures
safe delivery to its final destination. Check for:
External
• Holes: Holes or tears in the exterior panelling of the container.
• Doors: Broken or distorted door hinges, locks, or door seal gaskets. Check that the
• doors close and fit tightly.
• Tilts: Where containers are fitted with removable roof tilts or side curtains check that
these fit correctly and have no tears.
• Roof bows: Open top containers where all roof bows (i.e., supports) are in place.
• Labels: Labels on the outside of the container that relate to the previous cargo and
removed them.
38 http://www.fao.org/tempref/GI/Reserved/FTP_FaoRne/morelinks/Publications/English/Version -
3FreightMarinerExSteeleNov09.pdf
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Internal
• Clean: That there is nothing remaining from the previous cargo (i.e., sweepings, dust,
grease, or liquid).
• Dry: That the interior is dry and free of any sweat.
• Infestation: That there is no evidence of insects, pests or rodents which might
contaminate the cargo and lead to delay by port health authorities.
• Taint free: If the container will be carrying delicate goods susceptible to damage by
bad odours, check that it is sweet-smelling. This should be checked immediately the
doors are opened when any lingering smells will be at their strongest.
• Watertight: This is best checked by entering the container and closing both doors. If
any light can be seen, then water can gain entry. This applies equally to the container
floor where water can percolate through when the unit may stand in water.
Post-Loading
Once the product has been fully loaded, P&O Nedlloyd (2003) recommends that the following
checks be undertaken:
• Stowage: That the goods have been stowed and secured so as to withstand the normal
stresses and strains of the intended transit; and, in particular, that doorway cargo
cannot move.
• Security: When the doors are shut, all securing lugs should be properly engaged,
forcing the door seals into compression. The approved seal should be applied in the
appropriate position and a careful record made of its number.
• Contents: Any labels on the outside of the container advertising contents will attract
thieves and should be removed.
Condensation
Condensation occurs when moisture-laden air releases its water vapour on to the surrounding
surfaces in the form of water droplets (OUP, 1978). For condensation to occur the following
conditions need to be present:
• Temperature gradient (between air inside and outside the container).
• Source of water vapour (moisture).
• Pathway for it to move.
Condensation manifests itself as cargo or container sweat. Whatever the cause of
condensation, however, the consequences include damage or loss of goods transported.
Hygroscopic commodities are particularly vulnerable to damage from sweat. These are goods
which are permeable to water, and which retain moisture under some conditions.
Timber, coffee, cocoa, and most materials of organic origin are hygroscopic. Coffee, for
example, can have moisture content of up to 12 percent, making it essential to avoid
container or cargo sweat (P&O Nedlloyd, 2003). Steps can be taken to minimise condensation
and damage.
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Container Sweat
Container sweat occurs when the skin of the container is cooled to a temperature below that
of the dew point of the air enclosed within the container. This results in droplets of water
forming on the interior roof and side panels and then dripping down on to the cargo, thus
causing water damage. This may encourage mould to grow. Care needs to be considered
when handling products that heat spontaneously. The following extract was reported by P&O
Nedlloyd (2003), and illustrates an example of how container sweat can arise:
A cargo is loaded into a container in a country located in the tropical belt. The conditions
under which it is loaded are warm with high relative humidity. Its final destination is
temperate Europe during winter. During transit, the temperature outside the container
gradually drops to that prevailing in Europe. The steel container allows the chill from the
outside of the panel through to the inside. The situation inside the container is now one of
cool sided panels and warm moist air in the header space above the cargo and within the
stow. The temperature of the side panels is therefore below the dew point of the air inside
the container and condensation occurs. Condensation will continue until the dew point of the
interior air falls to that of the outside air. A simple solution for over-coming this is to ventilate
the container by passing air through it and replacing the warm moist air with air similar to
that outside the container.
Heat Radiation at Terminals and on-Board Ship
Wherever possible, cargoes sensitive to condensation should be protected from sources of
radiant heat and extreme cold. Cargo is vulnerable to exposure of this kind:
• When the container has a long road or rail transit.
• During the time that the container is in the stack at the terminal awaiting shipment.
Here shaded or sheltered stowage may be required.
• Once aboard ship, where below-deck or protected stowage may be required.
An example of this problem and its solution was reported by P & O Nedlloyd (2003) to help
their clients to provide better care of cargo.
A non-insulated container was left on the quayside terminal at Assab in Ethiopia with a
consignment of bagged coffee and subjected to radiant heat from the sun. The air inside the
container heated up and absorbed moisture from the coffee and thus established an
environment of elevated humidity. Cooling during the night caused the temperature of the
container skin to fall below the dew point of the internal humid environment and heavy
condensation resulted.
This example emphasises the need to avoid radiant heat. In this case, delayed packing of the
coffee before export would have avoided this situation. Equally, long periods of exposure to
the elements should be avoided and particularly during extremes of temperature - at the
height of summer and/or the depths of winter.
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When a consignment arrives at the destination port it is important to make prompt delivery
and more so with sensitive cargos arriving at terminals with near zero temperatures. If this
happens in case cargos can suffer so-called ‘cold shock’ during the first night at the terminal.
Ocean carriers often consider it prudent to open a container door slightly so as to ventilate
the container – if prior approval exists from the cargo owner (P&O Nedlloyd, 2003).
Ventilation
In cases of extreme ‘container sweat’ air should be ventilated evenly inside and outside the
steel container. Good ventilation helps to evacuate the warm moist air from the container
and replace it with ambient air from outside.
Ventilated containers have vent ducts along the side panels and at the top and bottom rails
that encourage ventilation by convection. Warm moist air is expelled from the upper ducts
and replaced with the colder ambient air from the lower ducts. As carriers incur high leasing
costs for this kind of equipment, the freight costs charged by carriers for use of material
handling equipment such as this are also correspondingly higher, which raises issues of cost.
A large number of general-purpose containers have four small vents at the top of the corner
castings, with each providing air paths. These are termed ‘porthole containers’, and provide
a small amount of ventilation, but it is important to leave sufficient free space around them
for effective movement of air.
The passive vents of this kind of container have to be taped off when it is used for hygroscopic
cargoes. The same applies for cargoes liable to spontaneous combustion. However, the
majority of dry cargoes can be successfully carried in these general-purpose containers (P&O
Nedlloyd, 2003).
‘Fantainers’ are used successfully throughout the world for carrying onions and potatoes. An
extraction fan draws ambient air through the cargo to maintain equilibrium with the
temperature outside the container (P&O Nedlloyd, 2003).
Other options include the use of desiccants and/or lining the container with ‘kraft paper’ or
fibreboard. This amounts to parcelling the cargo to avoid contact with the steel walls of the
container. Desiccant bags should be placed on top of the stow so as to absorb moisture in the
header space (P & O Nedlloyd, 2003).39
39 http://www.fao.org/tempref/GI/Reserved/FTP_FaoRne/morelinks/Publications/English/Version -
3FreightMarinerExSteeleNov09.pdf
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Topic 1.7: Interpretation of maps and major national and international
geographic points [KT0107]
Introduction to Maps
Maps are a two-dimensional (2-D) representation of a three-dimensional (3-D) world. They
are a ‘bird’s eye’ view – as if the viewer is ‘flying’ above the earth’s surface and looking down
on it.
They also show how objects are distributed and their relative size, and they are a useful way
of visualising all sorts of data and they are a key tool for various types of users.
The same map outline can be used to show different information, so it is important to identify
the map title, key, scale, and orientation.
What is a map?
According to the National Geo-spatial Information (NGI) website in South Africa,40 a map is a
graphical representation drawn to scale of natural and artificial features (objects) on the
Earth's surface. Some of these features such as roads, buildings, or rivers, you would be able
to see from a hilltop or aeroplane. A map is a portrayal of the real world. Other features such
as names of places, boundaries or heights are added to the map because of the importance
that they have for the map user. A map can tell us about things that are happening around
us, close by and far away. It gives us this information without having to necessarily be at that
place.
Position (location): A map gives the location or position of places or features. The positions
are usually given by the co-ordinates of the place, either as the cartesian co-ordinates (x, y)
in metres or as geographical co-ordinates (latitude and longitude) in degrees, minutes, and
seconds. The co-ordinates can be measured using the co-ordinate grid shown at set intervals
along the borders of the map. The map user can, for example, find out that the position of
Cape Town is 33°56' South latitude, 18°25' East longitude.
Spatial relationships: A map gives us the spatial relationship between features. For example:
What province is the neighbour of another province? Which side of the road is the river on?
Is there a dam on the farm? Where is the nearest railway station?
40 http://www.ngi.gov.za/index.php/what-we-do/maps-and-geospatial-information/38-maps-and-charts-
digital-raster-or-printed
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