An overview of the merchant marine industry

Mercantile Laws
The law that relates to a shipment by sea is called Maritime Law; and the law that relates to the commercial transaction is called Mercantile Law.

Every ocean-going ship (tanker, tramp, liner, bulk, container, etc.) is required to be covered by a marine insurance policy because ocean disaster is an ever-present hazard. Cargo onboard a ship is listed on the ship's manifest and may be accepted onboard the ship as FOB, C&F, or CIF. Several documents are attached to a shipment of cargo. They are:-

*Export license or the shipper's export declaration for U.S. export shipments valued in excess of $1,000.

*Commercial Invoice accompanied by a Certificate of Origin, Packing List, Consular Invoice and Insurance Policy if the cargo is shipped CIF

*Ocean Bill of Landing, Inspection Certificates, Dock/Warehouse Receipt, Draft, Letter of Credit, Letter of Indemnity, and Bill of Exchange.

Income

* Freight Onboard

* Interline Agreement

* Others

Expenses
* Fuel
* Captain and Crew
* Insurance & Bond
* Agents
* Longshoremen
* Freight Forwarders
* Ports of (call, loading, & refuge)
* Rental Equipment
* Dry Dock
* Storage
* Tug, Tow, & Pilot
* Waste Disposal
* Cleaning & Maintenance
* Legal & Accounting
* Secretarial
* Kitchen Equipment
* Furniture & Fixtures
* Others

Coronavirus Lockdown-(COVID-19)

During the first half of 2020, thousands of empty containers were left stranded in Europe and the USA as shipping lines cancelled hundreds of trips because Coronavirus Lockdown had caused a sudden slowdown in Global Trade.

When European and US demand for Asian-made goods rebounded in the second half of 2021, competition among Shippers for available containers sent freight rates soaring skyhigh.

The cost of Shipping goods from China to Europe had more than quadrupled in 8 weeks. The high prices were due to a shortage of empty containers that occurred during the Pandemic.

In November 2021, the cost of shipping a 40-foot container from Asia to Northern Europe had increases from $2,000 to $9,000 according to Shippers, Importers, the BBC and Euro. news network. Congestion at Ports had also contributed to higher prices. Shipping Lines were charging extra fees to compensate for Port Cost because they had to wait in Ports for a longer period of time to load and offload/unload cargo.

Trade and Economic Trends

The world's biggest ocean shippers, Greek shipper, Dry Ships, Inc., Copenhagen-based Moller Maersk, Geneva-based Mediterranean Shipping Co., and Marseille-based CMA-CGM have paid $50 million for each new container ship and $100 million for each new dry-bulk ship by placing their order several years ahead of time. The escalation in shipping prices has taken some companies by surprise. The average price for renting a ship to carry raw materials from Brazil to China has nearly tripled from $65,000 a day in 2007 to $180,000 a day in 2008, according to the Baltic Exchange Dry Index, a widely used indicator of worldwide ocean freight rates for bulk commodities. The cost of shipping raw materials has also reached an all-time high. The main reason cited for the escalation in commodity shipping rates is the shortage of bulk ships.

The shortage stems from the increasing volume of global trade as economic growth explodes in China, India, and other developing countries. However, when ships are available, inadequate port facilities may cause delay and increase the cost of shipments. In some ports, ships are waiting their turn offshore for up to two weeks to load or unload, according to the Global Ports Congestion Index, which tracks wait times worldwide. The price for renting oil tankers and container ships that transport finished goods, such as electronic equipment, is low because those ships are not in short supply.

Freight Forwarders
Freight forwarders are an integral part of the exporting business. Virtually all shippers depend on them for varying degrees of service. They are regulated and certified by the FMC, which regularly audits them to ensure they follow the rules for licensing and bonding.

Logistics
Some ships operate as tramps during off-peak season when cargo is in a slump. They do not have prescheduled ports of call. They operate on a tight profit margin and will enter any port to deliver and pick up cargo under inducement.

Container ships sailing from northern or southern China can take 12-16 days to reach the ports of Los Angeles and Long Beach, which handle 66% of the West Coast containers. A shipment from Asia via the Maru Shipping Line (trans-Pacific) to a consignee in the Caribbean might be transshipped to the Atlantic Container Lines or the Saguenay Lines for delivery to the island of destination, legally referred to as the country of consignment, where the shipment is landed, cleared at the port/customs, and transported to the consignee's warehouse for inventory management and distribution to retailers.

Trade imbalance
Because of the trade imbalance between the U.S.A. and China, ships delivering cargo to the U.S.A. will sometimes return to China empty. One U.S. firm saw that as a great opportunity to ship products by sea to its stores in China. About 60% of container ships traveling from Europe to Asia/China are empty, reflecting Europe's trade deficit/imbalance with China, which was over $200 billion in 2007.

Lawsuits
Ocean-going ships also have their share of problems. They are sued for oil spills and illegal waste disposal. The maximum fine for dumping untreated ballast water in regions around the Great Lakes is $25,000.

Pirates
In 2008, pirates seized two ships, including a Saudi Arabian oil tanker, off the coast of Somalia as insurers declared the Gulf of Aden a "war-risk" zone. The Indian Navy warship, INS Tabar, made headlines around the world after it foiled a piracy attempt and sank a pirate ship while escorting the Indian commercial vessel, MV Jag Arnav, off the coast of Somalia as governments and shippers sparred over who should bear responsibility for keeping pirates at bay. China dispatched warships to join an international effort to battle piracy off the coast of Somalia after a Chinese cargo ship fought off an attempted hijacking in the Gulf of Aden.

The Merchant Marine Industry Coursework
(Travel Institute, Manhattan, New York)
* Intra-state & inter-state commerce
* International trades, Sales tax & VAT
* Trade Unions, Maritime, & Mercantile Laws
* Employment taxes & International Taxation
* Seamen benefits, expenses, reimbursements, & deductions
* Property & Casualty (General Average/Maritime) Insurance
* Choice of ships, cargo, routes, ports, agencies, & storage
* Ship registration, emigration, sailors nationality, & tax home
* Manufacturing, Cost Accounting, & Transfer pricing
* Consignment, freight forwarders, landing, & warehousing
* Customs declaration, clearance, commission agents, & distribution
* Banks & Foreign Exchange rules

Continuing Education courses:
*Main Maritime Academy, Castine, ME.

*The Maritime Institute, San Diego, CA.

Maritime Economics, The nature of the shipping industry, Facility & Capital Planning, Decision-Making Models, Terminal Operations, Liquid & Dry Cargo Operations, Warehousing & Distribution, Seamanship 1&2, Meteorology & Weather Routing, Tug & Barge Operations, Tanker Operations, Tramp Operations, Vessel Operations, Yacht Management, Commercial Merchant Ships, Maritime Law, Logistics & global supply chain management, Admiralty and International Law, Industrial relations, Financial Management, Maritime Leadership & Management, International Business, Insurance & General Average, and Marketing.