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What is a LINER OUT CHARGE in shipping..??

Liner out charge, liner in charge, free in, free out……………… so many jargons in shipping and so little explanation..!!

As the author of this blog, I owe a lot to some of the readers who ask questions that may sound basic, but are important and thought provoking questions that not only help others to understand various aspects of shipping, but also helps me keeps my wits sharp..

Below is one such question asked by a reader of this blog..

What exactly is the LINER OUT CHARGE.. Shipping Lines are quoting this for cargo to West Africa..??

As described briefly in my previous post (https://www.shippingandfreightresource.com/2009/01/09/answers-to-test-your-shipping-knowledge-week-012009/), in general,

“LINER OUT means the cost of discharging the cargo at the destination port is included in the freight rate”

So although this “Liner Out Charge (LOC)” appears to be a new charge, on the West African trade lane, under the auspices of Asia-West Africa Trade Agreement (AWATA), the cost of discharging the cargo at the destination port has merely been separated from the Basic Freight and shown as an additional charge..

what is liner out charge

AWATA members include China Shipping Container Lines (CSCL), CMA CGM, Delmas, Gold Star Line, Maersk/Safmarne, Mediterranean Shipping Company (MSC), MOL, and Pacific International Lines (PIL)..

This was apparently done so to create a more transparent freight structure..

Depending on the shipping line however, the total freight cost to the client should not be affected as the cost is only split and shown separately..

Other variations are as below :

FIO, FILO, LIFO, FLT

(These terms are more often used in bulk/break bulk shipments, and not much for containerized shipments)

FIO : Free In/Out which when used from a liners perspective means that the client (shipper or consignee) are responsible for the loading (In) and discharging (Out) costs at the Port of Load and Port of Discharge respectively.. The lines responsibility and costs commences/ceases when the cargo passes the ships rail..

FILO : Free In/Liner Out which when used from a liners perspective means that the shipper is responsible for the loading (In) costs at the Port of Load and the Liner (carrier) is responsible for the discharging (Out) costs at the Port of Discharge..

LIFO : Liner In/Free Out which when used from a liners perspective means that the liner is responsible for the loading (In) costs at the Port of Load and the consignee is responsible for the discharging (Out) costs at the Port of Discharge..

FLT : Full Liner Terms which when used from a liners perspective means that the liner is responsible for the loading (In) and discharging (Out) costs at the Port of Load and Port of Discharge and basically the liners responsibility and costs commence/ceases at the shoreside where the cargo is made available..)

Also suggest to read my other articles about Freight Charges..

 

Can cargo be released without collection of destination charges..??

Question from a reader from Turkey.. Please feel free to comment..

Ask your question here..: Dear Hariesh

Hope doing well. I need your opinion to clarify a big doubt. Some cnee´s at Turkey received imports goods and original BL full set, with some pending charges payable at Turkey.

Shipping line release the cargo without charges collection because they insist that they can´t hold goods no matter that collect charges were pending to pay.

It is true ?? I mean shipping agent is obligated to check if cargo can be released with no pending charges no matter that shipper claims goods delivery with the Original BL ?? far as I know, if shipper sent some charges collect, cnee is forced to paid to request formal release of his cargo.

Waiting for your good clarification.
Brgds

Answer

Daniel, if this has been done, then it would be TOTALLY due to the IGNORANCE of the person and company that released the cargo to the consignee without collecting the relevant charges.. Especially as you mention that the shipper has sent some charges as collect from consignee.. Either the shipping line (or agent) at load port failed to manifest this clearly or the shipping line (or agent) at destination didn’t take note of the charges in the cargo manifest and released without collecting it.. 

Since you mentioned that the shipping line insisted that they cannot hold release of the cargo in lieu of collection of charges, it could also suggest that the destination agent might have been too lazy to check with the load port if any charges were pending (in case the load port failed to manifest it)..

The charges for any shipment from Point A to Point B must be paid either at Point A (Prepaid) or Point B (Collect or in some cases at Point C (Collect Elsewhere) which could be anywhere in the world where the shipping line has accounting facilities) with the manifest and bill of lading showing the info of where the freight and other charges are being paid, clearly..

Overall, in this case, the destination port agent/shipping line failed to follow the guidelines for releasing import cargo some of which i have clearly outlined as below :

  • https://www.shippingandfreightresource.com/2011/08/17/who-pays-what-charges-for-a-shipment/
  • https://www.shippingandfreightresource.com/2009/02/08/documents-required-by-shipping-lines-for-release-of-cargo/
  • https://www.shippingandfreightresource.com/2008/11/17/duly-discharged-bills-of-lading-the-great-debate/
  • https://www.shippingandfreightresource.com/2008/10/19/article-4-import-process/
  • https://www.shippingandfreightresource.com/2008/10/13/article-2-the-documents/

In conclusion, THE SHORT ANSWER TO ANSWER YOUR QUESTION = NO..

Vessel sailing date vs Shipped on board Date – opinion sought

Dear readers, I had a question from one of the readers of this blog regarding the issue of Sailing Date vs Shipped on Board Date, as below.. Would invite comments from all of you regarding same..

Please can I have your opinion on the below matter

For container shipments – Most Lines will date the bill of lading / shipped on board date as the sailing date – even if the containers are laden on board prior to that.

Case in question – the containers all 115 of them were loaded on board the vessel on the 8, 9 and 10th Feb.. the vessel sailed only the 11th Feb due to the port being wind bound

As the LC on hand has a LSD of the 10th Feb the b/l dated 11th would deem as a discrepancy – the Line in this case although the containers were on board will not date the bill of lading

“laden on Board the 10th” as their systems do not allow it ..

I have this issue often – the delay is due to lines schedules not being very accurate and consistently move out due to a host of reasons as there are in African Ports.

I am trying to prove to the line in terms of whatever law there might be that they are obligated to give me a shipped on board notation as the sailing date might even be a week later

I would appreciate any info you might be able to provide to substantiate this

Please also read

 

What name should your cargo be known by in a hazardous shipment..??

Proper Shipping Name, Technical Name, Chemical Name, Trade Name are some of the names your cargo is classified into when shipping hazardous cargo..

A lot of improper declarations and incorrect names are known to have been used when filling out a hazardous request/declaration..

What name should your cargo be known by in a hazardous shipment..??

Let me try to clarify these names to you..

Proper Shipping Name : The IMDG code 3.1.2.1 describes it as

3.1.2.1

The Proper Shipping Name is that portion of the entry most accurately describing the goods in the Dangerous Goods List, which is shown in upper-case characters (plus any numbers, Greek letters, ‘sec’, ‘tert’, and the letters m, n, o, p, which form an integral part of the name). An alternative Proper Shipping Name may be shown in brackets following the main Proper Shipping Name (such as ETHANOL (ETHYL ALCOHOL)).  

Technical Name : The IMDG Code describes it as :

3.1.2.8.1.1

The technical name shall be a recognized chemical or biological name, or other name currently used in scientific and technical handbooks, journals and texts. Trade names shall not be used for this purpose. 

Examples illustrating the selection of the Proper Shipping Name supplemented with the technical name of goods for such N.O.S. entries are: 

  • UN 3394 ORGANOMETALLIC SUBSTANCE, LIQUID, PYROPHORIC, WATER-REACTIVE (trimethylgallium)
  • UN 2902 PESTICIDE, LIQUID, TOXIC, N.O.S. (drazoxolon).

Chemical Name : is the actual chemical composition that the cargo has.. If there are several ingredients, the most active ingredients name may be chosen..

Trade Name : is the name by which the cargo is known in the local retail market..

Let me illustrate this with an example of Baygon 70% WP Insecticide
rena-breakup3

  • Proper Shipping Name : CARBAMATE PESTICIDE, SOLID, TOXIC
  • Technical Name : Carbamate Insecticide
  • Chemical Name : 2-(1-Methylethoxyl) phenol methylcarbamate
  • Trade Name : Baygon 70% WP Insecticide

The Proper Shipping Name is the name that has to be declared in the Hazardous packing declaration alongwith the UN Number and IMO Class..

Some people also get confused with these names and try to use any of the above names looking for HS Code when filing customs documentation..

The Harmonized Commodity Description and Coding System (HS) of tariff nomenclature is an internationally standardized system of names and numbers for classifying traded products developed and maintained by the World Customs Organization (WCO)..

The correct commodity information must be input when looking for the HS codes and that code must be used when filing the documentation with customs..

Some of the sites where you can check the HS codes are

For above cargo example, you must search the HS Code : Insecticide which will return the value – 3808.50.01.. 

More details on Hazardous cargo shipments and HS codes can be found here :

 

I want to issue my House Bill of Lading

Question from one of the readers : We are an NVOCC and we currently primarily use the steamship line’s BL showing The shipper’s name with us as agent . If we start using HBLs, what is our liability.?

Laden on Board

Question from Karen Meza – Email: kgordillo@me.com

Ask your question here..: First and foremost thank you for your website ! I have been in the FF industry for 17 years and I find all your post extremely useful and a great tool to help me better explain things to new team mates just starting out.

I have a questions relating to Bill of Ladings. When issuing originals I have been taught to use the term ” LADEN ON BOARD” I know this is an older term and after reading your post today I started to wonder if using this is correct.

I tried searching the site for a post relating to this term and I could not find anything.

Thank you
Karen Meza-Gordillo
Miami, FL

 

Top 10 Things to Keep In Mind When Shipping Overseas

This is a guest post by Celina Jones – who as the owner of a shipping consulting business,  has quite a lot of experience in helping organizations send shipment overseas to several different countries. She sees the emergence of websites like Verschiffung USA as a new trend, with shipping facilities going out of their way to make sure that their target markets abroad are well informed of the current rules and regulations. 

When shipping products internationally, many things need to be considered; procedures are far more complex than for local shipments. There are a lot of additional custom regulations that should be followed and a huge amount of paperwork that needs to be sorted out. Moreover, you also need to consider the shipment costs and time it will take for the shipment to reach different destinations.

thinkAs it wished to develop its presence on the German market, the Port of Montreal created a website in German, Verschiffung USA, where prospects could find all the necessary information. It was designed to help prospective clients make sure they had everything sorted out if they decide to ship a product to the US through Canada. The ten main things to remember when sending an overseas shipment are as follows:

1.           Custom Regulations

The very first thing to consider when you are sending online shipments is the custom regulation. All products that are shipped internationally, regardless of the medium of shipment, will be required to clear customs. You will also be required to fill out the appropriate paperwork, usually two custom forms; one for the country where you reside and one for the country where the product is being shipped.

2.           Custom Fees

When products are being shipped internationally, a fee is charged by the custom department. Depending on the value of the product and the country where it is being shipped to, this fee varies widely. You will have to pay more fees if your product is of high value. Therefore, it is necessary to check the custom fee rates of different countries before shipping your product.

3.           Shipping Tariff

This includes the shipment fee that will be charged by the shipping company and any other additional freight taxes that are applicable on certain products. For this rate, you will have to check out several shipment companies and their tariff rates. Companies that provide shipment to particular countries such as Verschiffung USA are likely to have different prices as compared to companies that provide worldwide shipment.

4.           Time of Transit

When shipping products internationally, it very important to determine the date you want them to be delivered and plan your shipment carefully. In international shipment, there are far more chances of your shipment getting delayed. For some countries, the option of overnight delivery may not be available at all. Also, depending on what you are sending, the custom clearance can take a long time as well, so prepare accordingly.

5.           Packaging

Depending on the country where your shipment is being sent, you will be required to handle the packaging accordingly. The goods should be carefully packed and labelled accurately. If you are unclear about what you have to do, you should consider hiring a shipment company that handles packaging as well.

6.           Medium of Transportation

Another thing that needs to be considered is the medium of shipment that you want to use which mainly includes sea or air freight. Three things should be considered here; time, cost and product. Air freight is the fastest method but an expensive one. Sea freight on the other hand is quite affordable but take a lot more time. Also, sea shipment is often not considered appropriate for delicate items which cannot endure trips enclosed in cargo containers.

7.           Restricted Items

A lot of items are restricted in some countries so you should consider this before you send your shipment. You need to check the restricted items list of both the countries; where you live and where the shipment is headed. If the item you are sending is on the list of any one of the countries, the custom personnel will likely restrict it for an indefinite period.

8.           Shipment Rules of Perishables

If you are sending goods that are perishable, there are some definite rules in that case which you will be required to follow. The type and quantity of product allowed to be shipped varies depending on the country of shipment and your own country.

9.           Shipment of Animals and Plants

If you are shipping animals and/or plants, there are several addition shipment forms that need to be filled out beforehand. Also, the shipping company you select will have to be more reliable and experienced in handling shipment of living creatures, taking good care of them throughout the journey.

10.     Insurance

The risk of damages is quite high in international shipments. Therefore, it is far safer to get your shipment insured for damages and accidents, especially if they are highly valuable. Even if you think it is unnecessary, it is a financial safety net that can save you from a lot of potential problems.

Keeping these points in mind, you can make sure that the process of international shipping goes flawlessly for you. If you are aware of the essentials and get them out of your way in the right manner, international shipping can get relatively easier. The first time you send a shipment abroad would be the hardest to sort out; after that you will know exactly what to do, and a good shipping company like Verschiffung USA can make it much easier!

What happens when containers are abandoned by Consignee

This was a question asked by Roberto – Email: inzainfo@bigpond.com..

Ask your question here..: What happens when the containers are abandoned by Cnee ? Is the Shipper liable for all detention charges incurred at Port ? is the jurisdiction at Loading Port or Discharge Port

Any comments..??

Difference in HBL and MBL dates

Question asked by sutjiadi gunawan – stdgnw

Ask your question here..: if we have MBL with dated 23 Jan 2013, HBL 24 Jan 2013 and we have COO/Form AK-Korea w/ 24 Jan 2013 and the Manifest BC 1.1 at Bea Cukai 23 Jan 2013…………is it the problem for customs clearance?

How to clean cement from cargo hold – question from Thein Than

Name: thein than
Email: theinthan.660@gmail.com
Ask your question here..: How to clean cargo residues of cement in cargo hold’s,frame,bulkhead bilge clinkerwell or pls, how to prepare cargo holds for loading cement,cement clinker , i want to be wash downed easily after discharging that cargo.

Chartering terms query

Name: Ranjit Ajgaonkar

Email: ranjit.ajgaonkar@gmail.com

Ask your question here..:

GOOD DAY ! We all know about common load/disrate terms such as 8000 mt pd shex eiu or uu etc..

But what does it exactly means when the C/P states per day load/disrate CD (Customory Despatch) or COP (Custom of Port) ??

Having agreed to such vague terms can Charterers/Cargo Interests take the Ship Owner for a ride ?? Or the Ship Owners / Master still remain well sheilded ??

Plsd to hear in detail. Ranjit

What does UN Number mean in haz cargo..??

Name: Ashwini
Email: ashwinimodel@gmail.com
Ask your question here..: every haz cargo has the UN NO NO.. WAT DOES IT MEAN? WAT VALUE DOES IT TAKE PLACE FOR THE HAZ APPROVAL FROM CARRIER?

Errors on a Bill of Entry – South African customs context

Name: Rachael
Email: Rachael.rachaelf@gmail.com
Ask your question here..: Hi
Where errors have to be corrected on a bill of entry that has already been processed by customs, a VOC must be completed by the importer or his / her agent. Please help me with the procedure in detail in terms of a practical example.

Thanks.

Question regarding registering ships with IMO

Name: Abhishek

Email: abhi.shipping

Ask your question here..: Its necessary to registered ship owner with IMO and its related Associations ? If yes,what’s the reason……

What is ISPS code and why ISPS is charged – Part 2

In Part 1 of this 2 Part series, we dealt with the topic of what ISPS means and the various parts of the ISPS Code and security levels..

Here, we will discuss why ISPS is charged and who gets charged for it..

For the safety and protection of all concerned, the ISPS code must be implemented in its fullest form..

This means the employment of qualified and trained personnel capable of implementing the security measures set by the port and the ship..

The security arrangements have to be done both from the Ships side and from the Ports side..


Security arrangements by the Ship

  • ISPS CodeCompany Security Officer ( CSO ) – is a person appointed to assess ship security and to implement the SSP (Ship Security Plan) as per the ISPS code.. The CSO monitors the situation, deal with it and modify the SSP as required..
  • Ship Security Officer ( SSO ) – is a person from the ship that is in charge of security on board the vessel.. The SSO nominates duties to the other crew to be carried out on board the ship..
  • Ship Security Plan ( SSP ) – is the plan that outlines the duty of the various crew members supervised by the SSO, that have to be followed during the various security levels..

Apart from the above personnel, there are also various security systems and equipment on board the ship, including metal detectors, remote alarms that notify a shore based authority about any security issues..

Security arrangements by the Port Facility

  • Each port appoints a Port Facility Security Officer ( PFSO ) with the primary responsibility of implementing the Port Facility Security Plan (PFSP) and also to assess the security at the port facility and fix the security levels for the port and the berth..
  • Port Facility Security Plan ( PFSP ) – is the plan of action that has to be followed by the port at the various security levels as per the guidelines set by the port and the ISPS code..
  • Similar to the ship side, the port facility also needs to have security systems and equipment like metal detectors, hand held scanners etc to detect any obvious threats inside the port..

As you can see from above, there is a lot of manpower, planning, equipments etc that goes into the implementation of the ISPS code and ensuring the safety and security of the ships crew, port staff and also of the cargo..

why is ISPS chargedIn order to cover these costs, the shipping lines/ship operators implement the ISPS Charges..

Therefore you might find that the lines charge what they call Carrier Security Fee which as the name implies is to cover the carriers cost towards the maintenance of the ISPS code and also Terminal Security Charge which as the name implies is to cover the cost of following the requirements of the ISPS code at the relevant port terminal..

The ISPS charges generally forms part of the freight quote and is required to be paid along with the freight..

The quantum of the ISPS charges are set by the line depending on the port of call as some of these costs are variable..

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