Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What are the implications to ship owners for not declaring the real weight of cargo in containers? (10m) (scenario) Today we live in a global

What are the implications to ship owners for not declaring the real weight of cargo in containers? (10m) (scenario) Today we live in a global environment in which shipping, and international trades are inextricably linked as never before. With the easing of the Covid-19 pandemic and vaccination becoming broad-based, the growth rate of international trade is likely to experience a high-speed expansion throughout the whole year. Since the situation is very much fluid, many shipping companies have leveraged their profit margins at the same time improving their supply chain efficiency. To ensure that the export sector moves in the right direction, the logistics industry players must pay close attention to the development of the global trade and economic situation. For instance, international logistics capacity is tight and freight rates are high, against a background of rising commodity material and labor costs. The shipper is driving the shipping industry and the response is focused continuously on ship productivity with strong interface with eco-environmental-friendly type of ships. It is envisaged that the next generation ships will have a 20m draught. The Suez Canal has indeed only 24m deep which is roughly as deep as the Straits of Malacca and Singapore, so passing through these areas posing high risks. Thus, the shipping liners must find alternative routes and to adopt the appropriate optimization strategy of carrying capacity. Correspondingly, demand will surge for container and tanker shipping as well as offshore fleet and services, but it tends to be very competitive. For this reason, some of vessels are operating with under capacity load either carrying Full Container load (FCL) or Less than Container Load (LCL) of cargoes. This is causing freight levels to slide and forcing many major shipping companies to restructure and reduce operating costs. Inversely, it affects the smooth flow of the supply chains and inevitably jeopardizing the businesses of cargo owners. Another prevailing issue is that some cargo owners are not properly declaring the real weight of cargo in containers. The World Shipping Council and International Chamber of Shipping warned about this problem, and they estimated, according to the data obtained from container shipping companies that this deviation was up to 10% of the total transported. Interestingly, some shipping liners are resorting into Non-Vessel Operating Common Carrier (NVOCC). The role of the NVOCC has gradually expanded over the years it has assumed the role of a total logistic provider. This has made such a big impact on the shipping business that even shipping lines are now established their own in-house NVOCC services, to try and compete in the market. Hence, by adopting this concept the shipping companies could obtain several benefits regarding cargo shipments without physically owned any vessels

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Implications for Ship Owners 1 Financial Penalties Not declaring the real weight of cargo in containers can result in financial penalties as ship owne... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management A Strategic Emphasis

Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins

6th Edition

78025532, 978-0077523732, 77523733, 978-0078025532

More Books

Students also viewed these General Management questions

Question

36. Find a c-inverse of the matrix A in Prob. 6.

Answered: 1 week ago