Ocean Sea Freight Ocean and Sea Freight Basic 5 — Questions and Answers
Question 1: What is 'general average' in maritime shipping?
- The average freight rate across all carriers on a trade lane
- A principle where all parties in a voyage proportionally share losses resulting from a voluntary sacrifice made to save the ship (Correct answer)
- The standard weight limit applied to all containers
- A carrier's average on-time performance metric
Correct answer: A principle where all parties in a voyage proportionally share losses resulting from a voluntary sacrifice made to save the ship
General average is a maritime law principle requiring all cargo owners on a voyage to share the cost of losses incurred when cargo is sacrificed to save the ship and remaining cargo.
Question 2: What is 'cabotage' in ocean shipping?
- A surcharge applied to refrigerated containers
- The transportation of goods between two ports within the same country, often restricted to domestic carriers (Correct answer)
- A type of bulk cargo loading method
- A route between Europe and South America
Correct answer: The transportation of goods between two ports within the same country, often restricted to domestic carriers
Cabotage refers to the trade of goods between domestic ports; in the US, the Jones Act requires this to be performed by US-flagged, US-crewed vessels.
Question 3: What information is typically found on a commercial invoice for an ocean shipment?
- Vessel name, voyage number, and carrier contact details only
- Description of goods, quantity, unit price, total value, buyer and seller details, and terms of sale (Correct answer)
- Container seal numbers and port authority stamps only
- Insurance policy number and premium amount
Correct answer: Description of goods, quantity, unit price, total value, buyer and seller details, and terms of sale
A commercial invoice is the primary trade document detailing goods description, value, parties involved, and trade terms, used by customs to assess duties.
Question 4: What does 'port congestion surcharge' (PCS) mean for shippers?
- A discount given when a port is underutilized
- An additional fee charged by carriers when a port is heavily congested, causing vessel delays (Correct answer)
- A government tax on imports during peak season
- A fee for storing cargo beyond the warehouse limit
Correct answer: An additional fee charged by carriers when a port is heavily congested, causing vessel delays
A port congestion surcharge is an additional fee carriers add to their rates when severe port congestion causes delays and extra costs for the vessel.
Question 5: What is the role of a 'customs broker' in ocean freight imports?
- To negotiate freight rates with ocean carriers
- To prepare and file import documentation and clear cargo through customs on behalf of the importer (Correct answer)
- To inspect containers for damage before loading
- To issue bills of lading for the carrier
Correct 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.
Question 6: What is a 'Verified Gross Mass' (VGM) requirement?
- The minimum cargo weight needed to qualify for FCL rates
- The mandatory confirmed weight of a packed container that shippers must provide to the carrier before loading (Correct answer)
- The maximum gross weight a container terminal crane can lift
- A certification that cargo is non-hazardous
Correct answer: The mandatory confirmed weight of a packed container that shippers must provide to the carrier before loading
Under SOLAS regulations, shippers must provide the verified gross mass of packed containers to the carrier and terminal before the container can be loaded onto a vessel.
Question 7: Which ocean alliance or carrier type typically offers the most frequent sailing schedules on major trade lanes?
- Tramp carriers operating on spot voyages
- Global liner carriers operating fixed weekly services as part of alliances (Correct answer)
- National government-owned shipping lines
- Regional short-sea carriers
Correct answer: Global liner carriers operating fixed weekly services as part of alliances
Major liner carriers such as those in the three main alliances (2M, Ocean Alliance, THE Alliance) operate fixed weekly or near-weekly scheduled services on high-volume trade lanes.
Ocean Sea Freight Ocean and Sea Freight Basic 5
What is 'general average' in maritime shipping?