Unit 2
Fundamentals of Cargo
3.0 Cargo and Terminals
3.1 Cargo any goods or merchandise shipped in
domestic or international trade, excluding provisions
and stores aboard the carrying vessel or conveyance
BULK CARGO consists of cargo parcels big
enough to fill a whole ship requiring no packaging
(dry or liquid bulk)
Four main categories:
1. Liquid Bulk: tanker transport; crude oil, oil
products, LNG & LPG, liquid chemicals.
2. “Five Major Bulks”: iron ore, grain, coal,
phosphates, and bauxite; use a dry bulk carrier.
3. Minor Bulks: steel products, cements,
gypsum, non-ferrous metal ores, sugar, salt,
sulphur, forest products, wood chips and
chemicals.
4. Specialty Bulk Cargoes: any bulk cargoes
with specific handling or storage requirements such
as refrigerated cargo and special cargoes
GENERAL CARGO consists of many small
consignments too small to fill a ship, that have to
be packed with other cargo for transport.
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PS 111. Professional Studies
Unit 2: Cargo
Seven main categories:
1. Loose cargo - individual items, boxes, etc.
2. Containerized cargo - standard boxes filled
with cargo; now the principle forms of general
cargo transport.
3. Palletized cargo - cargo packed onto pallets for
easy stacking and fast handling.
4. Pre-slung cargo - small items such as planks of
wood lashed together into standard sized
packages.
5. Liquid cargo - stored in deep tanks, liquid
containers or drums.
6. Refrigerated cargo - perishable goods that
must be shipped chilled or frozen in insulated holds
or refrigerated containers.
7. Heavy and awkward cargo - large and difficult
to stow.
 While the classic “Stick Ships” of the first
¾ of the 20th century are gone…
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Notes:
PS 111. Professional Studies
Unit 2: Cargo
Notes:
Modern General Cargo ships, small and self-self
unloading – practical for shallow harbors,
underdeveloped, or “up-river” port

Containerization
o Cargo shipped in standard-sized
metal containers that resemble the
trailer portion of a highway tractor
trailer
o Containers are designed for
intermodal transportation between
various modes of transportation
(marine, rail, and truck)
o Worlds largest form of cargo
movement
o Containers size standardized
globally
3.2 FREIGHT RATES …
 … are the prices charged for the services of
ocean carriers. Determined by ship
operators to reflect:
 The cost of providing the carriage
including
 Vessel operation
 Cargo handling, port fees & tariffs
 Exchange rates among international
currencies
 The value of this service to the shipper
 The ability of the merchandise to support
the expense of being shipped
 Economic conditions in general
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PS 111. Professional Studies
Unit 2: Cargo
Notes:
 … subservient to
 The Law of “Supply & Demand” including
 Competition among carriers on the same
route
 Competition among ports
 Charge carriage by weight ($/100 lbs) or
volume ($/cu.ft.)? … It depends …
 If 1 LT (2240 lbs) of cargo occupies less
than 40 cu.ft., charge by weight.
(Deadweight cargo)
 If 1 LT (2240 lbs) of cargo occupies more
than 40 cu.ft., charge by volume. (Cubic
cargo)
 The weight (in LT) of 40 cu.ft. is the
stowage factor
 Carriers charge “by weight or measure”
whichever generates the most revenue
But what about the type of cargo? (Nails vs.
oranges vs. computer parts?)
 Class Rates – assigned to groups of
unrelated cargos that are found to require
approximately the same revenue for their
transport
 Class D (dangerous cargo) is the highest
rate followed by Class 1 through 8, with
Class 8 the cheapest
 There are deadweight cargo and cubic
cargo rates in each class
 Fuel surcharge computed to reflect fuel
price fluctuations without redefining class
rate scales
Commodity Rates – negotiated compromise
falling between class rates
 Applicable to specifically described
cargoes (e.g., Paper: wrapping, not
corrugated, other than cellulose film)
 Commodity rates take precedent when
both class & commodity rates are offered
 Through Rates – are charged for shipments
originating with one ocean carrier but
transferred to connecting carriers at
intermediate ports
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PS 111. Professional Studies
Unit 2: Cargo
 Usually the originating carrier issues the
Bill of Lading, collects all charges, and
divides the revenue with the other
carrier(s) as per the through rate
agreement
 Sometimes the Through Rate is lower
than the combination of rates of each of
the participating carriers
Similar to a flight from Chicago to NY via Atlanta
being cheaper than the sum of the legs or, possibly,
a direct flight.
 However, sometimes through rates are
the sum of the connecting carriers’
charges plus a transfer fee
Visit: http://www.enricomusso.it/tramps_market.ppt
http://allserv.rug.ac.be/~ddsloo/portmarknew/
http://www.worldbank.org/transport/publicat/tdps3.htm
http://www.trans-inst.org/seawords.htm#c
http://www.loglink.net/Seapage.htm
http://bruninginternational.com/freight_forwardin
g.htm
http://www.export911.com/e911/ship/rat
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Notes: