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Chapter VIII.-TRANSPORTATION

Transportation makes export and import trade possible; all the other steps in trade are dependent on moving the product from manufacturer to consumer. In this discussion it is intended to present briefly the steps involved in export trade, and give suggestions and sources of aid so that the occasional exporter will be able to obtain movement of products comparable with that attainable by organizations maintaining special export facilities.

Any organization doing extensive domestic or export trade will find it advantageous to employ a traffic manager. If the volume of business. does not warrant a full-time traffic manager, part of the work may be assigned to some member of the organization familiar with such functions, with the technical traffic problems delegated to an outside traffic bureau or public traffic bureaus. The Bureau of Foreign and Domestic Commerce, in its study Industrial Traffic Management, endorsed and encouraged the employment of traffic managers and counselors in industrial organizations.

ROUTING TO SEABOARD

The choice of inland routes to port is the first transportation problem of the inland manufacturer in export trade. He must consider the port he will use, on the basis of steamship service available then select an inland carrier to the port. He must choose the form of inland carrier, rail or motor or inland waterways, then select the route, which may involve a joint movement. When using rail carriers the routing of freight is an important function of both shipper and carrier, because freight rates depend on the route over which freight is forwarded. There are export rates by which goods destined for export move by rail under lower rates to ports than the same product in domestic markets. In the direct routing of freight to a port served by two or more railroads, the shipper should know the railroad desired by his agent or consignee, so that the extra expense of trucking or switching at seaboard will be avoided, as the forwarder's place of business may be nearer one railroad than another.

Time is an important factor to be considered by the shipper in choosing a route, and the fast movement of freight is often more essential than a small saving in freight rates. The best route for car. load freight may not be the best for less-than-carload freight, and conversely. The time in transit for carload freight depends on distance and congestion; the expeditious movement of less-than-carload freight depends largely on the number of times it must be transferred en route. Since goods moving over competing lines to the same port, on export rates, have little difference in rates, the rail and port facilities, the time involved, and the location of the tracks in relation to loading and unloading will determine the choice of inland routes.

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Many motor freight lines offer regular service to seaports, but distance somewhat limits their export operations. Thus far no general schedules of export rates, similar to those of the rail carriers, have been compiled by motor carriers, as they rely on their fast service and pick-up and delivery service to obtain traffic; their mobility enables them to carry the shipment directly to the forwarder or docks without extra switching or trucking costs. In choosing the means of transportation to the seaport the shipper will consider the distance to port, the rates, the time involved, the services offered, and the volume of the shipment, as, generally speaking, only export shipments of less than carload volume move by motor carriers.

SELECTION OF PORTS

The availability of inland transportation to port, storage and transfer facilities, availability and frequency of steamship service, the particular fitness of a port for certain commodities, the freight forwarding service, and banking facilities are all factors entering into the selection of a port. Inasmuch as all important ports are prepared to handle export and import trade, shipping facilities and rates to ports usually have some bearing. Some ports are outstanding from the point of view of steamship services, while others have differential rail rates in their favor—both of which factors are to be considered.

PACKING FOR EXPORT A very essential point in export and import trade is satisfactory packing of the shipment. Important factors to be remembered are: adequate protection of the shipment from loss and damage, minimum cost of packing, the effect of packing on transportation and insurance costs, the customs duties of countries of destination, and meeting the customers' requirements.

Some of the outstanding points to be considered in export packing are:

Condense the shipment, as freight charges are frequently paid on a measurement basis.

Eliminate advertising matter from cases, as this assists pilferers. Mark all cases with stencils in letters at least 2 inches high.

Where duties are paid on gross weights, only one commodity should be placed in the container unless it is possible to separate the items on the customs declaration.

Merchandise for export is subject to all the handling of a domestic shipment before it reaches port; it may then be loaded on a lighter and hauled out into the stream to the ship. Frequently seas are heavy, and the package may be subject to rough handling and water spray. On board ship the merchandise may be subject to the hazards of damage from moisture, heat, chafing and crushing, frost, burning, being stored near malodorous goods, or loss from pilferage. There are other hazards on arrival at destination, as the handling process must be repeated. At many of the world's ports vessels are unable to dock, and the lightering of goods is necessary, frequently in heavy seas. As services to the interior at many ports is somewhat undeveloped, the shipment may rest on dock exposed to weather for several days before being shipped to interior points; in some in

stances it may be transported by mule pack, with further exposure to the elements.

The Transportation Division of the Bureau of Foreign and Domestic Commerce has, for years, stressed the importance of adequate packing, and it furnishes information on practices in packing for export.

EXPORT FREIGHT RATES

As the name implies, the export freight rate is a rate offered by the railroads on shipments moving for export and is lower than the domestic rate on the same commodity moving over the same route. On transcontinental shipments through Pacific ports destined to oriental points, materially lower rail rates are given goods exported than on domestic shipments. Rates from interior points on export trade are offered to eastern ports, Gulf and South Atlantic ports. This is done to encourage shipments through some particular point or over some particular line. Other concessions, such as free time allowed on export goods as compared with domestic goods, are sometimes made. Export rates are filed by the rail carriers, and information should be available in the traffic department or can be furnished by the carriers.

UNIFORM THROUGH EXPORT BILL OF LADING

On the delivery of the goods to the railroad, three documents are made out—the shipping order, the memorandum, and the bill of lading. They differ in name only; the entries are identical, including the date, name of shipper, destination, route, car number, consignee, number of packages, correct. description of articles, and the weight. The bill of lading, a receipt for the goods given to the shipper by the carrier, is also a contract of affreightment and document of title. It is signed by the shipper and by the agent of the carrier. The carrier is bound only to deliver what he received; he is not bound by the description of the contents. It is important for the shipper to copy on the bill of lading special shipping marks, and the order number of the exporter, as this gives the exporter a record to identify any particular order.

In the ordinary routine of export traffic, the shipment will originate on a domestic bill of lading, marked for export, or a uniform through export bill of lading. If not available at the point of origin, the uniform through export bills of lading will be issued by the commercial agent of the railroad, at the nearest point of shipment, in exchange for the railroad domestic bill of lading. The uniform through export bill of lading is not, as a rule, available for goods which steamships carry on measurement rates, or optional weight, as the basis for ocean charges on such goods must be determined upon the loading of cargo into the ship and the ascertaining of storage factors. Uniform through export bills of lading are issued via all principal ports. There is no uniform through export bill of lading for motor carriers at the present time, although one will probably be authorized upon necessity.

The Interstate Commerce Commission, under section 25 of the Transportation Act of 1920, was authorized to make rules and regulations and prescribe the form of uniform through export bills of lading for use on ships registered under the American fag. It has issued orders enumerating approximately 2,500 railway stations where uniform through export bills of lading can be secured. This list is shown in Foreign Order No. 5, by the Commission, which can be obtained from the Commission. In 1923 the bill was modified by the Commission, on behalf of shipments of cotton, to conform with the Liverpool Cotton Bills of Lading Conference and the American Bankers' Association.

Section 25 of the Interstate Commerce Act was amended by the Carriage of Goods by Sea Act, approved April 16, 1936, as follows: “Provided, however, that insofar as any bill of lading authorized hereunder relates to the Carriage of Goods by Sea Act, such bill of lading shall be subject to the provisions of the Carriage of Goods by Sea Act.” On July 6, 1936, the Interstate Commerce Commission issued an order permitting, until further notice, the endorsement on the uniform through export bill of lading of a statement to the effect that, so far as such bills relate to the Carriage of Goods by Sea Act, they shall have effect subject to the provisions of that act.

Information concerning the uniform through export bill of lading is set forth by the Transportation Division of the Bureau of Foreign and Domestic Commerce, in its publication Uniform Through Export Bill of Lading, Trade Information Bulletin No. 593 (supply exhausted, but available at public libraries).

FREE TIME ON THROUGH EXPORT BILLS OF LADING

The terminal regulations at many ports are more liberal with shipments covered by uniform through export bills of lading than with shipments sent to the port “for export” on ocean bills of lading. Some railroads agree to hold at their terminals without charge, for a longer period of time, all carload shipments moving by uniform through export bills of lading. On shipments by way of the Pacific ports, uniform through export bills of lading are necessary to secure export rates; the through bill of lading must be taken out within 20 days of date of shipment.

ADVANTAGES AND DISADVANTAGES CLAIMED FOR UNIFORM THROUGH EXPORT

BILL OF LADING

Several advantages are claimed for users of the uniform through export bill of lading, among which are: The inland exporter can ship directly to foreign customers on "c. i. f. foreign port” quotations, as they know in advance the exact cost of such shipments. The shipper is able to obtain payment for merchandise upon presentation of his bill of lading in a bank in his own town instead of being forced to wait until the shipment arrives at seaboard and the documents are issued. The exporter may save money by using the bill, as it provides for the publishing of rates and tariffs for transfer, lighterage, or other charges that would accrue against the shipment at seaboard. Shipments moving on a through bill of lading are exempt from embargoes; also storage and demurrage charges are borne in equitable manner; the agency responsible for delay pays storage and damage charges. At some ports additional free storage time is allowed shipments moving on uniform through export bills of lading. While the uniform through bill of lading was prescribed for use on ships registered under American flags there is no restriction to its use on vessels flying foreign flags, and a number of foreign lines have entered into agreements accepting the bill.

On the other hand, it is claimed that there are several objections to the use of the uniform through export bill of lading; these are: Shipments on this bill may not move so readily through the seaboard. Transfer arrangements at the port can often be arranged at a lower cost by the shipper's agent. The necessity of taking out a bill with the originating carrier causes delay; and the liability clause in the bill limits protection given the shipper. The ocean carrier, more particularly a vessel of foreign registration, is not bound by contract to accept shipments forwarded via uniform through export bill of lading for a particular vessel. In some countries the uniform through

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This contract is made subject to conditions of Act of Congress governing Phills of Lading approved Feb. 13. 1993. and to terms of Bulls of Lading in ise by Steainer's Agents

Should Steamer not pass Sandy flook before 6 P. M. of expect
ed sailing day (as reported by Maritime Exchange) or should
steamer arrive known to be so disabled as to prevent her sailing
within ten days after her expected saling date, shippers have
option of cancelling this contract on giving Agents notice to that
effect by noon of the first business lay following cxpected sailing
day or announcement of disability

Steamer reserves right of taking grain in excess of her zetre
gister tonnage.
BROKERAGE AT 1X%

Figure 7.-Freight contract.

bill of lading is not used, and will not be accepted. Part III is not generally used, as the shipment is usually consigned on a through export bill of lading to a foreign seaport and from there moved on a local bill of lading to the interior.

SEABOARD HANDLING

To arrange most advantageous through costs, the shipper must ascertain the inland rate, the port charge, and the ocean freight and insurance rates via available routes. When the ocean freight and insurance rates are agreed on, and the space for shipment tentatively reserved, the agent through whom the booking is made files a confirmation with the steamship agency, and, on arrival of the goods at seaboard, he applies for a delivery permit, under the engagement confirmed to the steamship agents. For carload shipment, the booking of space should be made with a steamship company before the shipment is made from the interior, because when exports are moving freely it is often impossible to get steamer space after arrival of the cargo at seaboard. (See fig. 7.)

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