Mixed Deck — All Ocean Sea Freight Topics Flashcards

A 20-foot standard dry container has an approximate maximum payload capacity of:

Answer: 28 metric tons

A standard 20-foot dry container (TEU) typically has a maximum payload capacity of approximately 28 metric tons.

What is a 'demurrage' charge in ocean freight?

Answer: A penalty for keeping a container beyond the free time at the port

Demurrage is a penalty fee charged when a shipper or consignee keeps a container at the port terminal beyond the allowed free time.

Under FCA Incoterms, where does risk transfer when used at a named port/terminal?

Answer: When goods are delivered to the carrier at the named place and loaded onto the carrier's transport

Under FCA, risk transfers when the seller delivers goods to the named carrier or another nominated party at the agreed place — if at a container terminal, transfer occurs upon handover to the terminal.

What is a 'constructive total loss' in marine cargo insurance?

Answer: The cost to recover or repair the cargo exceeds its insured value, making recovery uneconomical

A constructive total loss occurs when the cost of salvage, repair, or forwarding the cargo to its destination would exceed its insured value, so the insured can claim a total loss.

What is the role of a 'customs broker' in ocean freight imports?

Answer: To prepare and file import documentation and clear cargo through customs on behalf of the importer

A licensed customs broker is authorized to prepare and submit import entries, calculate duties, and facilitate the release of cargo from customs on behalf of the importer.

What type of container is used for transporting temperature-sensitive cargo like pharmaceuticals or fresh produce?

Answer: Reefer (Refrigerated) Container

A Reefer container has an integrated refrigeration unit that maintains a set temperature range (typically -25°C to +25°C), making it suitable for perishables, pharmaceuticals, and chemicals.

What is a 'Manifest' in ocean freight?

Answer: A master document listing all cargo aboard a vessel, submitted to customs

The Cargo Manifest is an official summary of all goods carried on a vessel, used by customs authorities at the port of arrival to verify incoming cargo and assess duties.

Which of the following is NOT typically covered under a standard marine cargo insurance policy?

Answer: Inherent vice — the natural tendency of cargo to deteriorate or damage itself

Inherent vice, meaning the natural propensity of cargo to deteriorate on its own (such as fruit rotting or rubber oxidizing), is a standard exclusion because it results from the cargo's own nature rather than an external peril.

A route for transporting import and export commodities between ports and inland locations

Answer: Inland Carrier

An 'Inland Carrier' refers to a transportation company or service that moves goods over land, connecting ports to interior destinations or vice versa. This is crucial for the domestic leg of international shipping, facilitating the movement of import and export commodities beyond the immediate port area to their final destinations.

What is 'subrogation' in the context of marine cargo insurance?

Answer: The insurer's right to pursue a third party responsible for a loss after paying the insured's claim

Subrogation transfers to the insurer the right to recover the amount paid in a claim from the party legally responsible for causing the loss.

What is 'GRI' (General Rate Increase) in ocean freight?

Answer: A periodic, across-the-board increase in base freight rates announced by carriers

A GRI is a carrier-announced increase in the base ocean freight rate, typically applied at a fixed date and expressed as a dollar amount per TEU or FEU.

What is the primary role of a Protection & Indemnity (P&I) Club in the shipping industry?

Answer: To provide mutual liability insurance to shipowners covering crew injuries, cargo damage claims, and third-party liabilities

P&I Clubs are mutual insurance associations that cover shipowners' liabilities, including crew illness and injury, damage to third-party cargo, collision liability, and pollution claims.

A shipper wants to ship temperature-sensitive pharmaceuticals by ocean. Which container type should they request?

Answer: Reefer (refrigerated) container

Reefer containers are refrigerated units capable of maintaining precise temperature ranges, making them essential for pharmaceuticals, perishables, and other temperature-sensitive cargo.

What are the standard external lengths of ISO shipping containers?

Answer: 20 feet and 40 feet

The two most common ISO standard container lengths are 20 feet (TEU) and 40 feet (FEU), with 45-foot containers also used in some trades.

What is 'abandonment' in the context of a marine insurance claim?

Answer: The insured surrenders all rights and interest in the cargo to the insurer in exchange for payment of a total loss claim

Abandonment allows the insured to hand over all remaining interest in the cargo to the insurer and receive a total loss settlement, which is most common in constructive total loss situations.

Which document certifies the country where goods were manufactured, often required by customs at destination?

Answer: Certificate of Origin

The Certificate of Origin (CO) certifies where goods were manufactured and is used to determine applicable duty rates and trade agreement eligibility.

What is BAF (Bunker Adjustment Factor) in ocean freight?

Answer: A fuel surcharge added to the base rate to account for fluctuations in vessel fuel (bunker) costs

BAF (also called Fuel Surcharge or EBS) is a variable surcharge carriers add to the base rate to recover the cost of fuel — it fluctuates based on global oil prices and route.

When comparing the NOS rate to the general cargo rate,

Answer: Higher

The NOS (Not Otherwise Specified) rate is typically higher than the general cargo rate. This is because NOS cargo refers to goods that do not fit into specific, pre-defined classification categories, making them potentially more challenging or costly to handle, store, or transport. The higher rate compensates for the increased uncertainty or specialized requirements associated with such unclassified cargo.

Which country forbids closed conferences?

Answer: USA

The USA has historically forbidden closed conferences in ocean shipping, viewing them as anti-competitive practices. Closed conferences are agreements among shipping lines that restrict membership and fix rates, which the U.S. believes can stifle competition and harm shippers. U.S. maritime law generally promotes open competition to ensure fair market practices.

Which document proves that a shipment has been cleared for export by customs?

Answer: Export declaration / Electronic Export Information (EEI)

An export declaration (filed as EEI via the Automated Export System in the US) is required by customs and confirms the shipment is authorized to leave the country.