SHORT CODESSHIPPING TERMS

Aquashell Shipping Pte Ltd

77 High Street,

#03-01 High Street Plaza

Singapore 179433

SHORT CODES OF SHIPPING & OTHER TERMS

Detailed below is our non-exhaustive list of some of the most frequently used abbreviations and their definitions that you maycome across from time to time. A wonderful Glossary of Nautical Terms (circa. 1814) can also be found here. We hope thatyou will find this information both helpful and informative. Please E-mail us if you have any additional charter termabbreviations or comments or for a quotation on your next project.

FIOS (FREE IN, OUT, STOWED) It is most important to remember that the "Free" reference is viewed from theShip Owners point of view - not the Shipper’s. Some Shippers get caught outwhen they read the word "Free" as they incorrectly believe that it refers to them.

Freight rates quoted on a FIOS basis specifically exclude all aspects relating tocargo handling operations. The ship is only responsible for expenses arising as aresult of the ship calling into the port, i.e. tugs, pilots and light dues etc. Anothervery important consideration when booking cargo on FIOS terms is that the shipdoes not bear any responsibility for the speed of loading or discharging.

Usually the rate agreed includes a fixed "free" period of time forloading/discharging operations, after which time a daily demurrage is incurred.Obviously this is of paramount importance where port congestion orstevedoring performance is uncertain. There are many overseas ports which fallinto this category and particularly where vessel demurrage rates can varysignificantly, depending on the size and type of ship nominated to undertake theparticular project.

LINER TERMS - GENERALSTATEMENT

Liner Terms is a very ambiguous statement and can be interpreted in a varietyof ways in different ports of the world and by different Ship Owners/Agents.Personally we would prefer to clearly define the extent of responsibility whenquoting on this basis.

LINER TERMS HOOK / HOOK Given that this is a notional point in chartering terms, this is best described asthe Shipper/Receiver arranging for delivery/receivable of cargo to/from directlyunder ships hook and the ship paying for the labor to stow the cargo in thevessels cargo holds, as well as on-board lashing & securing and provision ofdunnage materials, and to discharge again over the ship’s side. Shore basedstevedoring aspects remain the responsibility of the shipper/receiver, however,there are some Owners that may incorporate these costs into their LTHH rate.Once again, ask Owners to clearly define this aspect. Wharfagecharges/dues/taxes can be a contentious issue but are usually considered to befor the Shippers/Receivers account and there may also be many other statutorylevies on cargo or freight that may apply. Many Shippers/Receivers areunaware of these additional costs and do not include them into their costing andconsequently may be left with an unexpected considerable expense at thecompletion of a project.

FULL LINER TERMS This is somewhat a vaguer term given different port practices. However, itgenerally implies that the freight amount provided includes both shore basedand on-board stevedoring, lashing/unlashing, dunnage materials,securing/unsecuring and all costs of presenting to/receiving the cargo from theship’s side; with the shippers/receivers just bearing the cost of dischargingfrom/reloading to the transport, along with the usual port charges/levies/taxesetc.Frequently the terms are varied at different ends of the voyage i.e. FILO (FreeIn/Liner Out), LIFO (Liner In Free Out) or FIFO (Free In/Free Out) etc. To beabsolutely sure of all liabilities, it is always advisable to request that termsclearly and concisely indicate what is/isn’t included in your particular contract -in layman’s terms.I hope you will find this information both helpful and informative. If yourequire clarification on any aspect, or have any further questions, please don’t

hesitate to contact us at any time.

ABBREVIATION MEANING

AA Always AfloatAAAA Always Accessible Always AfloatAAOSA Always Afloat or Safe Aground. Condition for a vessel whilst in portAARA Amsterdam-Antwerp-Rotterdam AreaABAFT Toward the rear (stern) of the ship. BehindABOARD On or within the shipABOVE DECK On the deck (not over it - see ALOFT)ABT AboutADCOM Address CommissionADDENDUM Additional chartering terms at the end of a charter partyAFSPS Arrival First Sea Pilot Station (Norway)AFFREIGHTMENT The hiring of a ship in whole or partAFT At or towards the stern or rear of a shipAGROUND Touching or fast to the bottomAGW All Going WellAHL Australian Hold LaddersAIDS TO NAVIGATION Artificial objects to supplement natural landmarks indicating safe and unsafe

watersALOFT Above the deck of the shipAMIDSHIPS In or toward the centre of the shipANCHORAGE A place suitable for anchorage in relation to the wind, seas and bottomANTHAM Antwerp-Hamburg RangeAPS Arrival Pilot StationARAG Amsterdam-Rotterdam--Antwerp-Gent RangeARBITRATION Method of settling disputes which is usually binding on parties. A clause

usually in a charter partyA/S AlongsideASBA American Shipbrokers AssociationASPW Any Safe Port in the WorldASTERN In the back of the ship, opposite of aheadATDNSHINC Any Time Day/Night Sundays and Holidays IncludedATHWARTSHIPS At right angles to the centreline of the shipATUTC Actual Times Used to CountBACKLETTER Where a seller/shipper issues a 'letter of indemnity' in favour of the carrier in

exchange for a clean bill of ladingBAF Bunker Adjustment Factor. A Fuel Surcharge expressed as a percentage added

or subtracted from the freight amount, reflecting the movement in the marketplace price for bunkers

BALE CAP Cubic capacity of a vessels holds to carry packaged dry cargo such asbales/pallets

BALLAST Heavy weight, often sea water, necessary for the stability and safety of a shipwhich is not carrying cargo

BALLAST BONUS Compensation for relatively long ballast voyageBAREBOAT CHTR Bareboat Charter - Owners lease a specific ship and control its technical

management and commercial operations only. Charterers take over allresponsibility for the operation of the vessel and expenses for the duration

BBB Before Breaking Bulk. Refers to freight payments that must be received beforedischarge of a vessel commences

BDI Both Dates InclusiveBEAM The maximum breadth or the greatest width of a shipBELOW Beneath the deckBENDS Both Ends (Load & Discharge Ports)

BI Both InclusiveBIMCO The Baltic and International Maritime CouncilBL1 Bale

BL2 (Bill of Lading) A document signed by the carrier which acts as a Contract ofAffreightment, a receipt and evidence of title to the cargo

BM BeamBN Booking NoteBOB Bunker on BoardBOFFER Best OfferBOW The forward part of a shipBROB Bunkers Remaining on BoardBROKERAGE Percentage of freight payable to broker (by owners in c/p's) or applicable to sale

or PurchaseBSS BasisBSS 1/1 Basis 1 Port to 1 PortBT Berth TermsBULKHEAD A vertical partition separating compartmentsBUNDLING This is the assembly of pieces of cargo, secured into one manageable unit. This

is relevant to items such as Structural Steel, Handrails, Stairways etc. Whilstthis is a very flexible description, a rule of thumb is to present cargo at a sizeeasily handled by a large (20 tonne) fork lift

BUNKERS Name given for vessels Fuel and Diesel Oil supplies (Originates from coalbunkers)

BUOY An anchored float used for marking a position on the water or a hazard or ashoal and for mooring

BWAD Brackish Water Arrival DraftCAF Currency Adjustment FactorCBM Cubic MetresCBFT (or CFT) Cubic FeetCFR (or C&F) Cost and FreightCHART A map used by navigatorsCHOPT Charterers OptionCHTRS CharterersCIF Cost, Insurance & Freight. Seller pays all these costs to a nominated port or

place of discharge.CKD Completely knocked downCOA Contract of Affreightment - Owners agree to accept a cost per revenue tonne for

cargo carried on a specific number of voyagesCIP Carriage and Insurance paid toCOACP Contract of Affreightment Charter PartyCOB Closing of BusinessCOBLDN Closing of Business LondonCOD Cash On DeliveryCOGSA Carriage of Goods by Sea ActCONGESTION Port/berth delaysCONS ConsumptionC/SNEE CONSIGNEE. Name of agent, company or person receiving consignmentCOP Custom Of PortCP (or C/P) Charter PartyCPD Charterers Pay DuesCPT Carriage Paid ToCQD Customary Quick DespatchCR Current Rate

CROB Cargo Remaining on BoardCRN CraneCRT Cargo Retention Clauses, introduced by charterers based on shortage of

delivered cargo because of increased oil pricesCST CentistokeCTR Container FittedDA Disbursement AccountDAF Deliver At FrontierDAPS Days all Purposes (Total days for loading & discharging)DAMFORDET Damages for Detention. Penalty if cargo is not ready when ship arrives for

working (1st day of Laycan). This is not detention which is charged for shipstime on delay. If the cargo is ready there is no DAMFORDET.

DDU Delivered Duty unpaidDDP Delivered Duty PaidDECK A permanent covering over a compartment, hull or any part thereofDEM Demurrage (Quay Rent). Money paid by the shipper for the occupying port

space beyond a specified "Free Time" period.DEQ Delivered Ex QuayDES Delivered Ex ShipDESP Despatch. Time saved, reward for quick turnaround- in dry cargo onlyDET Detention (See DAMFORDET)DEV Deviation. Vessel departure from specified voyage courseDFRT Deadfreight. Space booked by shipper or charterer on a vessel but not usedDHDATSBE Despatch Half Demurrage on All Time Saved Both EndsDHDWTSBE Despatch Half Demurrage on Working Time Saved Both EndsDISCH DischargeDK DeckDLOSP Dropping Last Outwards Sea Pilot (Norway)DO Diesel OilDOLSP Dropping Off Last Sea Pilot (Norway)DOP Dropping Outward PilotDOT Department of TransportDNRCAOSLONL Discountless and Non-Returnable Cargo and/or Ship Lost or Not LostDRAUGHT (or DRAFT) Depth to which a ship is immersed in water. The depth varies according to the

design of the ship and will be greater or lesser depending not only on theweight of the ship and everything on board, but also on the density of the waterin which the ship is lying

DRK DerrickDUNNAGE Materials of various types, often timber or matting, placed among the cargo for

separation, and hence protection from damage, for ventilation and, in the case ofcertain cargoes, to provide space in which the tynes of a fork lift truck may beinserted.

DWAT (or DWT) Deadweight. Weight of cargo, stores and water, i.e. the difference betweenlightship and loaded displacement.

EBB A receeding currentEC East CoastEIU Even If UsedELVENT Electric VentilationETA Estimated Time of ArrivalETC Estimated Time of CompletionETD Estimated Time of DepartureETS Estimated Time of SailingEXW Ex WorksFAC Fast as can

FAS Free Alongside Ship. Seller delivers goods to appropriate dock or terminal atport of embarkation and buyer covers costs and risks of loading

FCA Free to Carrier. A modern equivalent of FAS used in intermodal transport wheregoods are transferred at a nominated forwarders premises, depot or terminal butnot actually on board vessel.

FD (FDIS) Free DischargeFDD Freight Demurrage DeadfreightFDESP Free DespatchFDEDANRSAOCLONL Freight Deemed Earned, Discountless And Non-Returnable (Refundable) Ship

And Or Cargo Lost Or Not LostFENDER A cushion, placed between ships, or between a ship and a pier, to prevent

damageFEU Standard 40’ ContainerFHEX Fridays/Holidays ExcludedFHINC Fridays/Holidays IncludedFILO Free In/Liner Out. Seafreight with which the shipper pays load costs and the

carrier pays for discharge costs.FIO Free In/Out. Freight booked FIO includes the seafreight, but no

loading/discharging costs, i.e. the charterer pays for cost of loading/dischargingcargo

FIOS Free In/Out Stowed. As per FIO, but excludes stowage costsFIOST Free In/Out and Trimmed. Charterer pays for cost of loading/discharging cargo,

including stowage and trimmingFIOT Free In/Out and Trimmed. As per FIOS but includes trimming, e.g. the levelling

of bulk Cargoes.FIOS includes seafreight, but excludes loading/discharging and stowage costs.FIT Free In TrimmedFIW Free In WagonFIXING Chartering a VesselFIXTURE Conclusion of shipbrokers negotiations to charter a ship - an agreementFLATPACKING Cargo to be presented stacked and secured as an integral unit.FLT Full Liner TermsFMC Federal Maritime CommissionFME Force Majeure ExceptedFMS FathomsFO1 For OrdersFO2 (IFO) Fuel Oil/Intermediate FOFO3 Free OutFOB Free on Board. Seller sees the goods "over the ship’s rail" on to the ship which

is arranged and paid for by the buyerFOFFER Firm OfferFOG For Our GuidanceFOQ Free On QuayFOR Free On RailFORCE MAJEURE Clause limiting responsibilities of the charterers, shippers and receivers of

cargo.FORE-AND-AFT In a line parallel to the keelFORWARD Toward the bow of the shipFOT Free On TruckFOW1 First Open WaterFOW2 Free On WharfFP Free Pratique. Clearance by the Health AuthoritiesFR First Refusal. First attempt at best offer that can be matchedFREEBOARD The minimum vertical distance from the surface of the water to the gunwale

FRT Freight. Money payable on delivery of cargo in a mercantile conditionFREE DESPATCH If loading/discharging achieved sooner than agreed, there will be no freight

money returnedFREE EXINS Free of any Extra Insurance (Owners)FREE OUT Free of discharge costs to owners. Includes seafreight onlyFRUSTRATION Charterers when cancelling agreement sometimes quote 'doctrine of frustration'

i.e. vessel is lost, extensive delaysFWAD Fresh Water Arrival DraftFWDD Fresh Water Departure DraftFYG For Your GuidanceFYI For Your InformationGA General AverageGEAR A general term for ropes, blocks, tackle and other equipmentGLS (GLESS) GearlessGNCN Gencon (GENERAL CONDITIONS)GN (or GR) Grain (Capacity)GO Gas OilGP Grain Capacity. Cubic capacity in 'grain'GR Geographical Rotation. Ports in order of callingGRD GearedGRT Gross Registered TonnageGSB Good, Safe BerthGSP Good, Safe PortGTEE GuaranteeGUNWALE The upper edge of a ship's sides2H Second HalfHA HatchHAGUE RULES Code of minimum conditions for the carriage of cargo under a Bill of LadingHATCH An opening in a ship's deck fitted with a watertight coverHBF Harmless Bulk FertilizerHDLTSBENDS Half Despatch Lay Time Saved Both EndsHDWTS Half Despatch Working (or Weather) Time SavedHHDW Handy Heavy d.w. (Scrap)HIRE T/C RemunerationHMS Heavy Metal ScrapsHO HoldHOLD A compartment below deck in a large vessel, used solely for carrying cargoHULL The main body of a shipHW High WaterICW Intercoastal Waterway : bays, rivers, and canals along the coasts (such as the

Atlantic and Gulf of Mexico coasts), connected so that vessels may travelwithout going into the sea

IMDG International Maritime Dangerous Goods CodeIMO International Maritime OrganisationIN &/OR OVER Goods carried below and/or on deckIND IndicationINTERMODAL Carriage of a commodity by different modes of transport, i.e. sea, road, rail and

air within a single journeyINCOTERMS (Refer to comments in covering statement on front page A-F)ITF International Transport Workers Federation (Trade Unions). Complies on

crewingITINERARY Route.ScheduleIU If UsedIUHTAUTC If Used, Half Time Actually To Count

IWL Institute Warranty LimitsKEEL The centreline of a ship running fore and aft; the backbone of a vesselKNOT A measurement of speed equal to one nautical mile (6,076 feet) per hourLANE METER A method of measuring the space capacity of Ro/Ro ships whereby each unit of

space (Linear Meter) is represented by an area of deck 1.0 meter in length x 2.0meters in width.

LASH To hold goods in position by use of Ropes, Wires, Chains or Straps etcLAT Latitude. The distance north or south of the equator measured and expressed in

DegreesLAYCAN Laycan (Layday Cancelling Date)LAYTIME Time at Charterers disposal for purpose of loading/dischargingL/C Letter of CreditLCR Lowest Current RateLEE The side sheltered from the windLEEWARD The direction away from the wind. Opposite of windwardLEEWAY The sideways movement of the ship caused by either wind or currentLF Load Factor. Percentage of cargo or passengers carries e.g. 4,000 tons carried

on a vessel of 10,000 capacity has a load factor of 40%LIEN Retention of property until outstanding debt is paidLNG Liquefied Natural GasLOA Length Overall of the vesselLOAD LINE SEE PLIMSOLL LINELOF Lloyds Open FormLOG A record of courses or operation. Also, a device to measure speedLOI Letter of IndemnityLONGITUDE The distance in degrees east or west of the meridian at Greenwich, EnglandLOW Last Open WaterLS (or LUMPS) Lumpsum Freight. Money paid to Shipper for a charter of a ship (or portion) up

to stated limit irrespective of quantity of cargoLSD Lashed Secured DunnagedLT1 Liner TermsLT2 Long Ton = 1,016.05 kilogram (2,240 lbs)LTHH Liner Terms Hook/HookLW Low WaterLYCN Laycan (Layday Cancelling Date)MANIFEST Inventory of cargo on boardMB Merchant BrokerMDO (DO) Marine Diesel OilMIDSHIP Approximately in the location equally distant from the bow and sternMIN/MAX Minimum/Maximum (cargo quantity)MOA Memorandum of AgreementMOLCHOPT More or Less Charterers OptionMOLOO More or Less Owners OptionMOORING An arrangement for securing a ship to a mooring buoy or pierMT Mertic Tonne (i.e. 1,000 kilos)M/V Motor Vessel / Merchant VesselNAABSA Not Always Afloat But Safely AgroundNM Nautical Mile. One minute of latitude; approximately 6,076 feet - about 1/8

longer than the statute mile of 5,280 feetNAVIGATION The art and science of conducting a ship safely from one point to anotherNCB National Cargo BureauNESTING Implies that cargo is presented stacked in the contour of similarly shaped cargo,

it may be likened to a stack of plates. This is particularly relevant in thepresentation of tankage strakes for transport

NON-REVERSIBLE (Detention). If loading completed sooner than expected, then saved days willnot be added to discharge time allowed.

NOR Notice of ReadinessNRT Net Restricted TonnageNYPE New York Produce ExchangeOO Owners OptionOBO Ore/Bulk/Oil VesselOSH Open Shelter DeckOVERBOARD Over the side or out of the shipOWS OwnersP&I Protection and Indemnity InsurancePASTUS Past UsPC Period of CharterPCGO Part CargoPCT PercentPDPR Per Day Pro RataPERDIEM By the DayPER SE By ItselfPHPD Per Hatch Per DayLOAD LINE An internationally recognised line painted on the side of merchant ships.

When a ship is loaded, the water level is not supposed to go above the line.Water can reach different parts of the line as its temperature and saltiness varieswith the season and location. From where Plimsoll Shipping derived its name

PORT The left side of a ship looking forward. A harbourPRATIQUE Licence or permission to use a portPREAMBLE Introduction to a charter partyPROFORMA Estimated AccountPUS Plus UsPWWD Per Weather Working DayRCVR ReceiverRECAP Recapitulation of the terms and conditions agreedREVERSIBLE (Detention). If loading completed sooner than expected at load port, then days

saved can be added to discharge operationsROB Remaining On BoardRT Revenue Tonne (i.e. 1.0 metric tonne or 1.0 cubic meter, whichever greater).

The overall RT is calculated on a line by line basis of the Packing List using thelargest amount. The overall freight liability is calculated on the total RTamount, multiplied by the freight rate

SATPM Saturday P.M.SB Safe BerthSD (or SID) Single DeckerSEAFREIGHT Costs charged for transporting goods over the sea. This does not cover haulage

or loading/discharging costs but the sea transport onlySEAWORTHINESS Statement of condition of the vessel (valid certificates, fully equipped and

manned etc.)SELFD Self DischargingSEMI-TRAILERS Are usually 12.0 meter flat bed road trailersSF Stowage Factor. Cubic space (measurement tonne) occupied by one tonne

(2,240 lbs/1,000 kgs) of cargoSHINC Sundays/Holidays IncludedSHEX Sundays/Holidays ExcludedSKIDS Are bearers (timber or steel) positioned under the cargo to enable forklift

handling at port, and for ease of rigging and lashing on board ship.SN Satellite Navigation - A form of position finding using radio transmissions from

satellites With sophisticated on-board automatic equipmentSOC Shipper Owned ContainerSOF Statement of FactsSP Safe PortSPIDERING Is the strengthening of circular tanks for transport, this prevents the tanks from

becoming warped. The tanks are strengthened with steel or wood crossbeamsgiving a "spider" appearance

SRBL Signing and Releasing Bill of LadingSSHEX Saturdays, Sundays, Holidays ExcludedSSHINC (or SATSHINC) Saturdays, Sundays, Holidays IncludedSTABILITY It is paramount that a vessel is stable in all aspects at all times. When cargo is

loaded/discharged, the stability is monitored by a computer, which takes intoaccount the weight and position of cargo within the vessel.

STARBOARD Right side of a ship when facing the front or forward end.STEM Subject to Enough Merchandise (Availability of cargo). Also, the forward most

part of the bow.STERN The aformost or after part of a shipSUB Subject (to). Depending upon as a conditionSUPERCARGO Person employed by a ship owner, shipping company, charterer of a ship or

shipper of goods to supervise cargo handling operations. Often called a portcaptain.

SWAD Salt Water Arrival DraftSWDD Salt Water Departure DraftTHWARTSHIPS At right angles to the centreline of the shipTIDE The periodic rise and fall of water level in the oceansTIME BAR Time after which legal claims will not be enteredTBN To Be Named / To Be NominatedTC Time Charter - Owners agree to hire a particular ship for a set length of time

and provide technical management, crewing etc.TCP Time Charter PartyTEU Standard 20' ContainerTOPSIDES The sides of a ship between the waterline and the deck; sometimes referring to

onto or above the deckTRIM Fore and aft balance of a shipTTL TotalTW Tween DeckerUSC Unless Sooner CommencedUU Unless UsedUUIWCTAUTC Unless Used In Which Case Time Actually Used To CountVPD Vessel Pays DuesWATERLINE A line painted on a hull which shows the point to which a ship sinks when it is

properly TrimmedWAY Movement of a ship through water such as headway, sternway or leewayWCCON Whether Customs Cleared Or NotWIBON Whether In Berth Or NotWIFPON Whether In Free Pratique Or NotWINDWARD Toward the direction from which the wind is comingWIPON Whether In Port Or NotWLTOHC Water Line-To-Hatch CoamingWOG Without GuaranteeWP Weather Permitting. That time during which weather prevents working shall not

count as LaytimeWPD Weather Permitting DayWWD Weather Working Day

WRIC Wire Rods In CollisWWR When, Where ReadyWWWW Wibon, Wccon, Wifpon, WiponYAR York Antwerp RulesYAW To swing or steer off course, as when running with a quartering seaZ UTC = GMT

1. Performing Vessel, Loading / Discharging Port(s)The vessel named in Box 4 of the C/P, being suitable for mechanical loading and discharging including grab loading anddischarging, and in every respcet fitted for the voyage, shall with all possible dispatch, sail and proceed to the loading port(s)indicated in Box 6 of the C/P and there load, always safe and afloat, in the customary manner, from the Charterers in suchdock as may be ordered by them, a full and complete cargo in bulk as described in Box 5 of the C/P, being so loaded, thevessel shall therewith proceed with all possible dispatch to the discharging port(s) inserted in Box 7 of the C/P as ordered onthe signed Bills of Lading.

The vessel must comply with all applicable commonwealth, state and local laws and regulations including Coast GuardRegulations, navigation regulations and customs, ITF and WWF regulations, and port and harbor regulations at the loadingand discharging ports, and must attain the highest Lloyds classification or the equivalent. If the vessel suffers any problemsdue to the vessel's equipment, including the hold ladder, it shall be the Owners' responsibility and the time and expensesrequired to settle such problems shall be borne by the Owners.

2. Loading/ Discharging(a) No cargo shall be loaded in the deeptanks, nor in tween decks, nor in any compartment not accessible for discharging by

means of the mechanical equipments, and all cargo shall be loaded in the holds only that mechanical loading and dischargingequipments can be accessible. Should any cargo be loaded by the vessel in above excepted places, any time lost and anyadditional expenses incurred in loading, trimming ordischarging such cargo to be for the Owners' account.

(b) The Vessel's tank tops and the shaft tunnel (if any) to be adequately protected by the Owners by ceiling and sheathing toprevent damage by loading / discharging equipments.

(c) If the shore regulations permit, the Master shall open hatches prior to tendering and shall cover the hatch of each hold assoon as the loading or discharging into same has finished, and also all hatches when the loading or discharging has finishedfor the day, if the weather be wet or threatening. He shall also, during rain or snow, cover up all hatches by which loading ordischarging is not actually going on.

(d) The Pilot, Master, Officers, and crew of the vessel, and any tow boat, person or facility assisting the vessel, shall not beagents or employees of the Charterers, and the Charterers shall not be liable for and the Owners shall indemnify and defendthe Charterers from any loss, damage or claim resulting from, or arising out of, negligence or error of any of them while thevessel is proceeding to, or lying at, any place of loading or discharging.

(e) Drafts at the loading and discharging ports shall always be at the Owners' risk.

3. Loading & Discharging Terms(a) Loading termsA Notice of Readiness may be tendered after the arrival of the vessel, which must be in free pratique, at the loading port at

any time irrespective of official office hours, Saturdays, Sundays and Holidays included, whether in berth or not, whether inport or not, whether customs have cleared or not, and the vessel is in every respect ready to receive the cargo. If a quarantineinspection is not available on the vessel's arrival, then a Notice of Readiness may be tendered on the vessel's arrival at or offthe port without free pratique. However, if the vessel is found not ready in every respect, then the time shall not be counteduntil she is ready.

Laytime at the first or sole loading port shall commence turn time hours stated in Box 10 of the C/P after a Notice ofReadiness is tendered. If loading has commenced before laytime has begun, one-half the time actually used until theexpiration of the turntime shall be counted as laytime. Laytime from the second loading port, if any, shall be counted fromarrival, provided that a Notice of Readiness is tendered.

(b) Discharging termsA Notice of Readiness may be tendered at any time or on any day, Sundays and Holidays included, immediately upon the

vessel's arrival, whether in berth or not, whether in port or not, whether customs have cleared or not, which must be in freepratique, provided that the vessel is in every respect ready for discharging. If the vessel in berth, however, is found not readyin every respect for discharging, then the time shall not be counted until she is ready for discharging. If the vessel is unableto commence discharging due to port authorities' denial of free pratique, then such time shall not be counted as laytime. If a

quarantine inspection is not available on the vessel's arrival, then a Notice of Readiness may be tendered after the vessel isinspected.

Laytime shall begin at the first or sole discharging port turn time hours stated in Box 10 of the C/P after a Notice of Readinessis tendered. If discharging has commenced before laytime has begun, one-half the time actually used until the expiration of theturntime shall be counted as laytime. Laytime from the second discharging port, if any, shall be counted from arrival, providedthat a Notice of Readiness is tendered.

4. Laytime and Cancelling DateThe laydays for loading shall not commence before opening the layday of the respective voyage indicated in Box 8 of the

C/P. The Charterers shall have the option of cancelling this charter if the vessel is not ready to load on or before thecancelling date indicated in Box 8 of the C/P or any wilful misrepresentation is made respecting the size, position, state ofthe vessel, such option to be declared on or before notice of readiness being given.

5. ETA NoticeThe Owners and the Master shall notify the Charterers (cable address : POSCO K.23278 / 27345 / 22632), their nominees,

the Shippers and the shippers' agents at the loading port at least twenty (20) days prior to the vessel's estimated time ofarrival (ETA) at the loading port, and every two (2) days thereafter in addition to a twenty-four (24) hour prior notice of ETAat the loading port.

Upon setting sail from the loading port(s), the Owners and the Master shall notify the Charterers, their nominees and theCharterers' agent at the discharging port of the vessel's name, the tonnage by hold, and by brand loaded on the Bills ofLading, the sailing date and the estimated time of arrival at the discharging port. Furthermore, the Owners and the Mastershall notify the Charterers, their nominees and the Charterers' agent at the discharging port of the vessel's ETA every two (2)days after setting sail from the loading port and twenty-four (24) hours prior to the vessel's estimated time of arrival at thedischarging port.

The Charterers may ask the vessel's position, if necessary, at any time during the voyage, in which case the Owners mustadvise of the vessel's latest position at that time.

6. Laytime Calculation(a) Laytime shall cease to be counted upon the completion of loading and discharging. The vessel shall sail from the

loading port and the discharging port as soon as the loading and discharging are complete, barring unforeseen circumstances.

(b) Shifting expenses at the loading berth(s) shall be borne by the Owners and the time shall be counted as laytime. At thedischarging berth(s), the first shifting expenses shall be borne by the Owners and the time shall be counted as laytime, butafter that, the charges from the second shifting shall be borne by the party that requested such shifting and the time shall becounted only when requested by the Charterers. If the port authorities request the shifting, the expenses therefor shall beborne by the Owners and the time shall be counted.

(c) Shifting time from anchorage to the loading and discharging berth(s), shall not be counted as laytime, even if the vesselis already on demurrage.

(d) The time needed by the vessel for draft checkings shall not be counted as laytime.

(e) The time used for the initial and final surveys shall not be counted as laytime.

(f) Any stoppage of loading and discharging at the vessel's request shall not be counted aslaytime.

(g) Time justly required to complete the loading and discharging, and to repair any damages, for which the Charterers orConsignees are liable, shall be included in the unexpired laytime, if any.

(h) Lighterage, if any, at both ends shall be at the Charterers' risk and at their expense, and time shall be counted as laytime.

(i) Any time lost in the extra trimming, while Charterers wait for instructions from the Master, shall not be counted aslaytime.

(j) In case normal loading has to be interrupted due to insufficient ballast pump capacity in relation to loading capacity, anysuch time lost shall not be counted as laytime.

(k) In case the loading of the vessel is remarkably slowed or suspended due to the vessel's responsibility, the Owners mustshift the vessel to waiting anchorage and reberth at the port when reloading is available. The cost of shifting in and out of theberth shall be at the Owners' expense and such time shall not be counted as laytime.

(l) Normal working hours at the loading and discharging ports shall be understood as weather working day of twenty-four(24) consecutive hours including Saturdays, Sundays and Holidays.

(m) The opening and closing of hatches at the commencement and completion of the loading and discharging at each port,and the removal of any other remaining equipment on board obstructing a smooth work flow shall be at the Owners' expense,provided that the port authorities allow for such, and the time used therefor shall not be counted as laytime.

(n) Time lost due to line troubles and mechanical breakdowns of the transhipper, loader and unloader at the loading anddischarging ports shall not be counted as laytime.

(o) Turn time at the discharging port shall be applicable even if demurrage has already begun to accrue.

(p) In case the charterers accept the vessel which miss the laycan , laytime shall commence from acceptance of the notice ofreadiness by the Shipper.

7. Force Majeure

The demurrage shall be paid to the Owners at the rate stated in Box 11 of the C/P per day or pro rata for any part of a dayexcept any time lost by force majeure, war (whether declared or undeclared) or hostilities,, nsurrection, civil commotion,political disturbance, riots, epidemics, strikes or lockouts, fire, floods, frosts, storms, stoppage or delay on railway, canal,quay, wharf, jetty, rope or cable way, loading or discharging plants and equipment, lack of trucks, stoppage of pitmen,trimmers or other hands connected with the working or delivery of the cargo for which the vessel is stemmed, breakdown ofthe machinery at the mines or governmental restrictions or control on imports, exports or foreign exchange, whether partialor general, or the time when by any cause of nature beyond the control of the Charterers or the Owners, supplying, loading,discharging or conveyance of the cargo from the mines to the vessel is prevented or delayed, such time shall not count or beconsidered as part of the laytime for loading or discharging. Should a strike or any other cause prevent the loading of a vesselat the time the vessel is ready to sail from the last discharging port, and provided that such strike or other cause is not likelyto be settled prior to the vessel's arrival at the loading port, the Charterers and the Owners shall mutually and in good faithagree on new laydays or terminating for the particular voyage. However, if no agreement is reached, the Charter Party termsshall prevail.

8. Bills of Lading(a) The Master shall sign the Bills of Lading as soon as the cargo is on board, as presented, without prejudice to this

charter.

(b) The Bills of Lading shall be prepared in accordance with the Dock or Railway weight or draft survey and shall beendorsed by the Master, Agent or Owners. The freight and all conditions are as per this General Provisions.

(c) In case the original Bills of Lading are not available upon the vessel's arrival at the discharging, the Owners shall beallowed to release the cargo on board without producing the original Bills of Lading against the Charterers' L.O.I, thewording of which shall be as per the Owners' P & I Club without bank signature.

9. FreightThe freight stated in Box 9 of the C/P is in full of portcharges, consulages, light, agency fees on the vessel, all additional

premiums charged on the cargo due to the vessel's age, class, flag or ownership, and all other dues / fees customarily paid or

payable by the vessels, and to be deemed earned as the cargo shipped on board, discountless and non returnable, whether thevessel and/or the cargo lost or not lost.

The freight is always basis on F.I.O.S.T. Ninety per cent(90%) of the freight on the Bills of Lading shall be prepaid in cashin U.S.Dollars to the Owners within twelve(12) banking days from the date when the Charterers have received the Owners'invoices and copies of the Bills of Lading after the loading had been completed and the Bills of Lading was signed andreleased. The balance shall be paid within fourteen(14) banking days from the date when the Charterers have received theOwners' invoices after the discharging was completed. All banking charges outside South Korea for the remittance of freightand demurrage, if any, shall be at the Owners' expense.

10. Demurrage & Despatch MoneyDemurrage and despatch money rates at the loading and discharging ports shall be as per Box 11 of the C/P. Demurrage or

despatch at the loading and discharging ports shall be settled between the Charterers including the Cargo Seller and theOwners within thirty (30) days from the date when the invoices and supporting vouchers have been received after thedischarging was complete.

11. Loading / Discharging CostsThe cargo shall be delivered free on board by the Charterers at their expense. The extra trimming other than spout or

bulldozer charges if required by the vessel shall be for the Owners' account. The cargo shall be discharged and to be takenfrom the vessel at the Receivers' risk and expense. The vessel always supplies winches and necessary men and power towork same, but shorewinchmen, if required, shall be for the Receivers' account. The expense of ship's clerk or runners at theloading or discharging port(s) shall be for the Receivers' account. The expense of ship's clerk or runners at the loading ordischarging port(s) shall be for the Owners' account.

12. Dumping CostIf the dumping cost is incurred at the loading port(s), the actual dumping cost shall be paid by the Owners in advance and

same amount shall be reimbursed by the Charterers to the Owners after receiving relevant.

13. Additional PremiumsAll additional insurance premiums, if any, charged on the cargo due to the vessel's age, class, flag or ownership shall be at

the Owners' expense. If the Owners do not pay additional insurance premium directly, the Charterers shall have the right todeduct additional insurance premiums from the freight balance against relevant supporting vouchers.

14. Taxes / DuesThe taxes / dues levied on the vessel or the freight at both ends, if any, shall be for the Owners' account, the taxes/dues on

the cargo at both ends, if any, shall be for the Charterers' account.

15. OvertimeThe overtime shall be at the expense of the party that requested such overtime; however, if requested by the port

authorities, such overtime shall be at the Charterers' expense. The Officers' and crews' overtime shall be at the Owners'expense.

16. PenaltyShould the Owners fail to arrange for the vessel at the loading port within the laydays, the Charterers shall have the right to

cancel the voyage or to continue the delayed shipment by imposing a penalty for the days delayed that shall be deductedfrom the freight on the voyage at the rate of demurrage per day, or pro rata, but not to exceed 30% of the total freight. In casethe vessel's delay is caused by bad weather during the approach voayge, for which the Owners can prove with objectivewritten evidence, no penalty shall be imposed; however, delays owing to causes other than inclement weather shall not beexempted from penalty even though such reasons may be beyond the Owners' control.

17. Non-PerformanceThe penalty for non-performance of this agreement, provcd damages, shall not exceed the estimated amount of the freight

18. Stevedore DamageThe Charterers shall not be responsible for any stevedore damage under this Charter Party. Such damage, if any, shall be

settled between the Owners and the Stevedores directly; however, should the Owners fail to receive prompt settlement of

stevedore claims from the Stevedores, the Owners can request the Charterers' assistance in the settlement of all stevedoreclaims that may exist between the Owners and the Stevedores.

19. AgencyThe Charterers have the right to disignate agent at both ends.

20. Owners' & Vessels' Responsibilities & Liabilities(a) The vessel shall provide all the necessary light for working on board at night.(b) The vessel shall sail from the loading port as soon as the loading is complete, weather and tides permitting.(c) The vessel shall be left in seaworthy trim for proceeding between the berths and ports to the Master's and the port

authorities' satisfaction.(d) The Owners shall provide the Charterers with the general arrangement plan and capacity plan of the performing vessel

at any time if required by the Charterers.(e) The Owners shall be members of the P & I Club, otherwise it shall be deemed that the Owners have failed to meet the

obligations under the Charter Party.(f) The Owners must guarantee that the vessel is not precluded from due and normal performance under this Charter by

virtue of any previous trading.(g) In case the vessel loses its turn, a turn which is consistent with the prevailing practices of all ports and railway

authorities, for any reason attributable to the Owners or to the vessel, including the Owners' misrepresentation--excepting,however, reasons deemed Acts of God and perils of the sea--the time lost thereby and the relevant proved damages thereof, ifany, shall be at the Owners' expense.

21. LienThe Master shall have a lien on the cargo for freight, dead-freight and demurrage, and it is agreed that all liability of the

Charterers shall cease as soon as the cargo is shipped and the freight, dead freight and demurrage in loading and indischarging (if any) are paid.

22. SubletThe Owners can not sublet the contract withou t the Chaterers' consent.

23. NegligenceClauseThe Act of God and perils of the seas excepted. Also fire, barratry of the Master and crew, pirates, collisions,

strandings and accidents of the navigation, or latent defects in or accidents to, the hull and/or the machinery and/or theboilers always excepted, even when occasioned by the negligence, default or error in judgement of the Pilot, Master,mariners or other persons employed by the Shipowners or for whose acts he is responsible, not resulting, however, in anycase from want of the due diligence by the Owners of the ship, or by the ship's husband or the manager. The Chaterers shallnot be answerable for any negligence, default, or error in judgement of the trimmers or the stevedores employed in loading ordischarging the cargo.

24. Both to Blame Collision ClauseIf the liability for any collision in which the vessel is involved while performing the charter party falls to be determined in

accordance with the laws of the United State of America, the following clause shall apply ; If the ship comes into collisionwith another ship as a result of negligence of the other ship and any act, neglect or default of the Master, Mariner, Pilot orservants of the carrier in the navigation or in the management of the Ship, the Owners of the goods carried hereunder willindemnify the carrier against all loss or liability to the other or non-carrying ship or her Owners in so far as such loss orliability represents loss of or damage to or any claim whatsoever of the Owners of said goods, paid or payable by the other ornon-carrying ship or her Owners to the Owners of said goods and set off, recouped or recovered by the other or non-carryingor her Owners as part of their claim against the carrying ship or carrier. The foregoing provisions shall also apply where theOwners, Operators or those in charge of any ship(s) or objects other than, or in addition to, the collision ships or objects areat fault in respect to a collision or contact.

25. New Jason ClauseIn the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any

cause whatsoever, whether due to negligence or not, for which, or for the consequnce of which, the carrier is not responsible,by statute, contract or otherwise, the goods, shippers, consignees or the Owners of the goods shall contribute with the carrierin general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or

incurred and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated bythe carrier, the salvage shall be paid for as fully as if the said salving ship(s) belonged to strangers.

26. General AverageGeneral average shall be adjusted, stated and settled, according to York-Antwerp Rules 1974, at such port or place in the

United States as may be selected by the carrier, and as to matters not provided for by these Rules, according to the laws andusages at the port of New York. In such adjustment disbursements in foreign currencies shall be exchanged into UnitedStates money at the rate prevailing on the dates made and allowance for damage to cargo claimed in foreign currency shallbe converted at the rate prevailing on the last day of discharge at the port or place of final discharge of such damaged cargofrom the ship. Average agreement or bond and such additional security, as may be required by the Carrier, must be furnishedbefore delivery of the goods. Such deposit as the Carrier or his agents may deem sufficient as additional security for thecontribution of the goods and for any salvage and special charges thereon, shall, if required, be made by the goods, shippers,consignees or Owners of the goods to the Carrier before dilivery.

Such deposit shall, at the option of the Carrier, be payable in United States money and be remitted to the adjuster.When soremitted the deposit shall be held in a special account at the place of adjustment in the name of the adjuster pending settlementof the General Average and refunds or credit balances, if any, shall be paid in United states money.

27. War Risk Clauses(a) No Bills of Lading to be signed for any blockaded port and if the port of discharging be declared blockaded after Bills

of Lading have been signed, or if the port to which the ship has been ordered to discharge either on signing Bills of Lading orthereafter be one to which the ship is or shall be prohibited from going by the Government of the Nation under whose flagthe ship sails or by any other Government, the Owner shall discharge the cargo at any other port covered by this CharterParty as ordered by the Charterers (provided such other port is not a blockaded or prohibited port as above mentioned) andshall be entitled to the freight as if the ship had discharged at the port(s) of discharging to which she was originally ordered.(b) The ship shall have liberty to comply with any orders or directions, as to departure, arrival, routes, ports of call,stoppages, destinations, delivery or otherwise howsoever given by the Government of the Nation under whose flag the vesselsails or any deparment thereof, or any person acting or purporting to act with the authority of such Government or of anydepartment thereof, or by any committee or person having, under the terms of the War Risks Insurance on the ship, the rightto give such orders or directions and if by reason of and in compliance with any such orders or directions anything is done oris not done, the same shall not be deemed a deviation, and delivery in accordance with such orders or directions shall be afulfilment of the contract voyage and the freight shall be payable accordingly.

28. Altered DestinationIn case of any hands war risk, striking work, quarantine or epidemic in the original port of the destination, the Charterers

during the voyage of this charter are entitled, but not obliged, to alter by wire the original port of the destination to otherports.

29. DeviationThe vessel shall have the liberty to call at any ports on route, to sail with or without pilots, to tow and to be towed, to assist

the vessels in distress, and to deviate for the purpose of saving life or property or bunkering. The Owners shall notify theCharterers as soon as deviation is made for any purpose.

30. Protection and Indemnity BunkeringThe vessel in addition to all other liberties shall have the liberty as part of the contract voyage and at any stage thereof to

proceed to any port(s) whatsoever whether such ports are on or off the direct and/or customary route(s) to the ports ofloading or discharging named in this Charter and there take oil bunkers in any quantity in the discretion of the Owners evento the full capacity of the fuel tanks, deeptanks and any other compartment, in which oil can be carried, whether such amountis or is not required for the chartered voyage

31. ArbitrationAny dispute, controversies, or differences which may arise between the parties, out of or relation to or in connection with

this contract or for the breach thereof, shall be finally settled by arbitration in Seoul. Korea in accordance with theCommercial Arbitration Rules of the Korean Commercial Arbitration Board and under the law of Korea. The award reneredby the arbitrator(s) shall be final and binding upon both parties concerned.

ABI-Automated Broker Interface - A system available to brokers with the computer capabilities and customs certification totransmit and exchange customs entries and other information, facilitating the prompt release of imported cargo.

Acceptance1.A time draft (or bill of exchange) which the drawee has accepted and is unconditionally obligated to pay at maturity.2.Drawee's act in receiving a draft and thus entering into the obligation to pay its value at maturity.3.Broadly speaking, any agreement to purchase goods under specified terms.

Ad Hoc Charter - A one-off charter operated at the whim of an airline or charterer.

Ad Valorem - Latin for "according to the value."1.An ad valorem duty is an import duty based on the value of an article as defined in the customs law of a particular country,

rather than on weight or volume. A percentage of that value is charged, for example, 5% ad valorem.2.A freight rate set at a certain percentage of the value of an article is known as an ad valorem rate.

Admiralty Court - A court having jurisdiction over maritime questions pertaining to ocean transport, including contracts,charters, collisions, and cargo damages.

Advance Against Documents - A loan made on the security of the documents covering a shipment.

Advising Bank - A bank operating in the exporter's country that handles letters of credit for a foreign bank by notifying theexporter that the credit has been opened in his favor.

Advisory Capacity - A term indicating that a shipper's agent or representative is not empowered to make definitive decisionsor adjustments without approval of the party represented.

Affiliate - A company that controls, or is controlled by another company, or is one of two or more commonly controlledcompanies.

Affreightment, Contract of - An agreement by a steamship line to provide cargo space on a vessel at a specified time and fora specified price to accommodate an exporter or importer who then becomes liable for payment even though he is later unableto make the shipment.

Agency Agreement - An agreement whereby the steamship line appoints the steamship agent and defines the specific dutiesand areas of responsibility of that agent.

Air Cargo Agent - A type of freight forwarder who specializes in air cargo and acts for airlines that pay him a fee (usually5%). He is registered with the International Air Transport Association (IATA). (See also Air Freight Forwarder and Forwarder,Freight Forwarder, Foreign Freight Forwarder)

Air Freight Forwarder - A type of freight forwarder who specializes in air cargo. He usually consolidates the air shipments ofvarious exporters, charging them for actual weight and deriving his profit by paying the airline the lower consolidated rate. Heissues his own air waybills to the exporter and has the status of an indirect air carrier. (See also Air Cargo Agent andForwarder, Freight Forwarder, and Foreign Freight Forwarder)

Air Waybill - A non-negotiable contract for carriage of air transportation between an air carrier and a shipper, or an air carrierand an air freight forwarder. In the latter case the forwarder, as an indirect air carrier, issues his own house air waybill to theshipper.

AITA - The French and German acronym for the International Air Transport Association (IATA).

All-Risk Insurance - The broadest form of coverage available, providing protection against all risk of physical loss or damagefrom any external cause. Does not cover loss or damage due to delay, inherent vice, per-shipment conditions, inadequatepackaging, or loss of market. Loss must be fortuitous to be covered.

Alongside - The side of the ship. Goods to be delivered alongside are to be placed on the dock or lighter within reach of theship's tackle from which they can be loaded aboard the ship.

Anti-Trust Exemption - The immunity from prosecution under the Sherman Act, granted to steamship companies in 1916, inrecognition of the special services and value American Flag merchant vessels provide in the defense of the country in time ofwar.

Arbitration Clause - A standard clause to be included in the contracts of exporters and importers, as suggested by theAmerican Arbitration Association. It states that any controversy or claim will be settled by arbitration in accordance with therules of the American Arbitration Association.

ASEAN - Association of Southeast Asian Nations.

AT (American Terms) - A marine insurance term used to differentiate between the conditions of American policies and thoseof other nations, principally England.

Automated Broker Interface - (See ABI)

Automated Commercial System (ACS) - The electronic system of the U.S. Customs Service, encompassing a variety ofindustry sectors, that permits on-line access to information in selected areas.

Automated Manifest System (AMS) - The electronic system allowing a manifest inventory to be transmitted to the U.S.Customs Service data center by carrier, port authority, or service center computers.

BAA - British Airports Authority.

BACA - Baltic Air Charter Association.

BAF (Bunker Adjustment Factor) - An adjustment in shipping charges to offset price fluctuations in the cost of bunker fuel.Also known as a Bunker Surcharge (B/S).

Barter - The direct exchange of goods and/or services without the use of money as a medium of exchange and without thirdparty involvement.

B/B (Breakbulk) - (See Breakbulk Cargo)

Belly Cargo - Freight accommodation below the main deck.

BENELUX - An economic union among Belgium, the Netherlands, and Luxembourg.

Bermuda Agreement - An agreement concluded in 1946 between the U.K. and the U.S.A. designed to regulate futureinternational air traffic. Most governments accept its principles and follow it by limiting traffic rights on international routes toone or two carriers.

Berth - The place beside a pier, quay, or wharf where a vessel can be loaded or discharged.

Berth Liner Service - A regularly scheduled steamship line with regularly published schedules (ports of call) from and todefined trade areas.

Berth or Liner Terms - An expression covering assessment of ocean freight rates generally implying that loading anddischarging expenses will be for the ship owner's account, and usually applying from the end of the ship's tackle in the port ofloading to the end of the ship's tackle in the port of discharge.

Bilateral Rights - Agreements on traffic rights concluded between two governments.

Bill of Lading - A document issued by a common carrier to a shipper that serves as:1.A receipt for the goods delivered to the carrier for shipment.2.A definition of the contract of carriage of the goods from the port of shipment to the port of destination listed in the bill of

lading.3.Evidence of title to the relative goods.When in order form, a bill of lading is negotiable. (See specific types of Bill of

Ladings below)

Bill of Lading, Claused - A bill of lading which has exemptions to the receipt of merchandise in "apparent good order" noted.

Bill of Lading, Clean1.A bill of lading which bears no superimposed clause or notation which expressly declares a defective condition of the

goods and/or the packaging (Article 18, Uniform Customs and Practice for Documentary Credits). A bill of lading that containsa clause declaring defective goods is called a Foul Bill of Lading.

2.A bill of lading that is silent as to the place of storage, indicating that the goods have been stowed under deck. (See Bill ofLading, Unclean)

Bill of Lading, Forwarder's - A bill of lading issued by a forwarder to a shipper as a receipt for merchandise that theforwarder will consolidate with cargo obtained from other exporters and ship to his agent at the port of destination. In mostcases, the Forwarder's Bill of Lading has legal standing for banking purposes. Also called House Bill of Lading.

Bill of Lading, Foul - A receipt for goods issued by a carrier bearing a notation that the outward containers or the goods havebeen damaged.

Bill of Lading, Inland - A bill of lading used in transporting goods overland to the exporter's international carrier.

Bill of Lading, Ocean - A document defining the terms and conditions of carriage for transport of cargo by sea freight.

Bill of Lading, On Board - A bill of lading acknowledging that the relative goods have been received on board for shipmenton a specified vessel.

Bill of Lading, Order - A negotiable bill of lading. There are two types:1.A bill drawn to the order of a foreign consignee, enabling him to endorse the bill to a third party.2.A bill drawn to the order of the shipper and endorsed by him either "in blank" or to a named consignee. The purpose of the

latter bill is to protect the shipper against the buyer's obtaining the merchandise before he has paid or accepted the relativedraft. (See also Endorsement in Blank)

Bill of Lading, Received for Shipment - A bill of lading acknowledging the receipt of goods by a carrier for shipment on aspecified vessel. This type of bill of lading is not acceptable under a letter of credit unless it is specially authorized. English lawdoes not regard these bills as a valid tender under CIF contracts because the CIF seller is obligated to ship the goods, and aReceived for Shipment Bill of Lading is not considered proof of shipment.

Bill of Lading, Straight - A non-negotiable bill of lading whereby the consignee named in the bill is the owner of the relativegoods.

Bill of Lading, Through - A bill of lading that covers transportation by more than one carrier from the point of issue to thefinal destination (e.g., a bill from New York, via Curaçao, to Pampatar, Venezuela).

Bill of Lading, Through Railway Export - A bill of lading showing the place of receipt by the carrier at an inland point, withtransport to the port of exit accomplished using rail/intermodal connections.

Bill of Lading, Unclean - A bill containing reservations as to the good order and condition of the goods or the packaging orboth. Examples: "bags torn," "drums leaking," "one case damaged," and "rolls chafed."

Bill of Sight - A written description of goods given by an importer to a customs officer in the event shipping documents havenot arrived in time and the importer wishes to avoid delayed entry charges. When an importer enters goods on a bill of sight, he

usually must make a cash deposit covering the estimated amount of duty. When the shipping documents are received and acorrect entry is made, the exact amount of duty is levied.

B/L (Bill of Lading) - (See Bill of Lading)

Bloodstock - Pedigreed livestock. Often race horses or cattle for breeding.

Bonded Warehouse - A warehouse authorized by customs authorities for storage of goods on which payment of duties isdeferred until the goods are removed.

Booking - Arrangements with steamship companies for the acceptance and carriage of freight.Breakbulk Cargo - Cargo which is shipped as a unit (e.g., palletized cargo, boxed cargo, large machinery, trucks, and pre-slung cargo).

Breakbulk Vessel - A vessel designed to handle palletized, pre-slung, boxed, and unitized cargo. Holds can be at the open bayor between deck type. Between deck means the hold can be converted from multi levels to open bay. This type of vessel isusually self-sustaining.

Breakpoint - The weight at which freight charges change, e.g., 100 kilos.

Broker - A person or firm that establishes a connection between a buyer and a seller. Brokers operate in many fields:insurance, steamship transport, securities, drafts, and other phases of foreign trade. Not only do brokers bring buyers andsellers together, but they help to negotiate and close contracts and agreements between them.

Brussels Nomenclature-Kennedy Round - A standardized system, established in 1950, for classifying commodities forcustoms purposes. The ECU common external tariff and the tariffs of other major trading nations, except the U.S.A., are basedon this nomenclature. The U.S. tariff schedule (TSUS) contains about 5,000 items compared to 2,800 in the BrusselsNomenclature.

B/s - Bags; bales.

B/S (Bunker Surcharge) - (See BAF)

b.t. - Berth terms.

Bulk Cargo - Loose cargo that is loaded directly into a ship's hold.

Bulk Carrier - There are two types of bulk carriers, the dry-bulk carrier and the liquid-bulk carrier, better known as a tanker.Bulk cargo is a shipment such as oil, grain, or one which is not packaged, bundled, bottled, or otherwise packed and is loadedwithout counting or marking.

Bulk Solids - Dry cargo shipped in containers, loose and in bulk, without counting or marking.

Bureau of Standards - A bureau of the U.S Department of Commerce that maintains research and testing laboratories,working standards, weights, measurements, and norms by which business and government are guided. The Bureau of Standardsfurnishes development and consulting services to the government and helps business to establish quality standards in allindustries other than food and drugs.

CAA (Civil Aviation Authority) - The government body responsible for regulating U.K. airlines.

Cabotage - Where cargo is carried on what is essentially a domestic flight and therefore not subject to international agreementsthat fix set rates. Cabotage rates are negotiable between shipper and airline and apply on flights within a country and to itsoverseas territories.

CAD (Cash Against Documents) - A method of payment for goods in which documents transferring title are given to thebuyer upon payment of cash to an intermediary acting for the seller.

CAF (Currency Adjustment Factor) - A surcharge on freight charges by a carrier to offset foreign currency fluctuations.

Cargo - Merchandise/commodities carried by means of transportation.

Cargo Insurance - Insurance to protect the financial interest of the cargo owner during transportation in the event of a loss.

Cargo Receipt - Receipt of cargo for shipment by a consolidator (used in ocean freight).

CARICOM - Caribbean Common Market.

Carnet - A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countrieswithout paying duties or posting bonds.

Carrier - Any person who, through a contract of carriage, undertakes to perform or procure the performance of carriage byrail, road, sea, air, inland waterway, or by a combination of modes. (See also Common Carrier)

Carrier Container/Shipper Container - A container over which the carrier or the shipper has control either by ownership orby the acquisition thereof under lease or rental from container companies or container suppliers or from similar sources.Carriers are prohibited from purchasing, leasing, or renting a shipper-owned container.

Cartel - An association of several independent national or international business organizations that regulates competition bycontrolling the prices, the production, or the marketing of a product or industry.

CCEF - Customs Centralized Examination Facility.

CE (Communauté Européene) Mark - A "passport" that allows manufacturers to trade industrial products freely within theinternal EU market. The CE Mark is not a quality mark, but indicates conformity to the legal requirements of the EUDirectives. It is mandatory for a wide range of products sold in the EU.

Certificate of Analysis - A certificate issued by a recognized organization or government authority confirming the quality andcomposition of goods. This is often required in importing countries for animal and plant products for consumption as well aspharmaceuticals.

Certificate of Inspection - A certificate usually required for industrial equipment and meat products. There are companies inevery port city that specialize in issuing certificates of inspection for machinery. The Meat Inspection Division of the U.S.Department of Agriculture issues certificates of inspection for meat products that are recognized throughout the world.

Certificate of Manufacture - A document used under a letter of credit containing an affidavit that goods have beenmanufactured and are being held for the account and risk of the buyer. In war times when transportation facilities are disrupted,it is common for letters of credit to be paid against presentation of a certificate of manufacture. This is rare in ordinary times,except in the case of specially manufactured goods.

Certificate of Origin - A document containing an affidavit to prove the origin of imported goods. It is used for customs orforeign exchange purposes or both. Certificates of origin are commonly certified by an official organization in the country oforigin such as a consular office or a chamber of commerce.

C&F (Cost and Freight) - An INCOTERM.

CFS (Container Freight Station) - The term CFS at loading port means the location designated by carriers for the receivingof cargo to be packed into containers by the carrier. At discharge ports, the term CFS means the bonded location designated bycarriers in the port area for unpacking and delivery of cargo.

CFS/CFS (Pier to Pier) - The term CFS/CFS means cargo delivered by breakbulk to carrier's container freight station (CFS)to be packed by carrier into containers and to be unpacked by carrier from the container at carrier's destination port CFS.

CFS Charge (Container Freight Charge) - The charge assessed for services performed at the loading or discharging port inthe packing or unpacking of cargo into/from containers at CFS.

CFS/CY (Pier to House) - The term CFS/CY means cargo delivered breakbulk to carrier's CFS to be packed by carrier intocontainers and accepted by consignee at carrier's CY and unpacked by the consignee off carrier's premises, all at consignee'srisk and expense.

CFS Receiving Services - The service performed at the loading port in receiving and packing cargo into containers from CFSto CY or shipside. "CFS Receiving Services" referred herein are restricted to the following:

1.Moving empty containers from CY to CFS.2.Drayage of loaded containers from CFS to CY and/or ship's tackle.3.Tallying.4.Issuing dock receipt/shipping order.5.Physical movement of cargo into, out of, and within CFS.6.Stuffing, sealing, and marking containers.7.Storage.8.Ordinary sorting and stacking.9.Preparing carrier's internal container load plan.

Chargeable Kilo - Rate for air freight goods where volume exceeds six cubic meters to the tonne.

Charter - Originally meant a flight where a shipper contracted hire of an aircraft from an airline, but has usually come to meanany non-scheduled commercial service.

Charter Agreement/Charter Party - A lease or agreement to hire an airplane, vessel, or other means of conveyance totransport goods to one or more designated locations. Among other specifications, the contract usually stipulates the exactobligations of the vessel owner (loading the goods, carrying the goods to a certain point, returning to the charterer with othergoods, etc.), or it provides for an outright leasing of the vessel to the charterer, who then is responsible for his own loadingand delivery. In either case, the charter party sets forth the exact conditions and requirements agreed upon by both sides.

Charter Party Bill of Lading - A bill of lading issued under a charter party. It is not acceptable by banks under letters ofcredit unless so authorized in the credit.

Chassis - A wheel assemble including bogies constructed to accept mounting of containers.

C&I - The cost of goods and insurance. (See INCOTERMS on pages 20-21)

CIA (Cash in Advance) - A method of payment for goods whereby the buyer pays the seller prior to shipping the goods.

CIF - An INCOTERM.

CITES - Committee on International Trade of Endangered Species.

Class Rates - A class of goods or commodities is a large grouping of various items under one general heading, and all items inthe group make up a class. The freight rates that apply to all items in the class are called class rates.

Classification - A customs term for the placement of an item under the correct number in the customs tariff for duty purposes.At times this procedure becomes highly complicated; it is not uncommon for importers to resort to litigation over the correctduty to be assessed by customs on a given item.

Clean Draft - A draft to which no documents have been attached.

cm - Centimeters.

CNS (Cargo Network Services) - An agency to which IATA forwarders pay their freight bills.

Collective Paper - All documents (commercial invoices, bills of lading, etc.) submitted to a buyer for the purpose of receivingpayment for a shipment.

Combi - An aircraft with pallet or container capacity on its main deck as well as in its belly holds.

Combination Vessels - A type of ship that accommodates both container and breakbulk cargo. It can be either self-sustainingor non-self sustaining. Also known as a Container/Breakbulk Vessel.

Commercial Invoice - An itemized list of goods shipped that is usually included among an exporter's collection papers.

Commodity Specialist - An official authorized by the U.S. Treasury to determine the proper tariff and value of importedgoods.

Common Carrier - A publicly or privately owned firm or corporation that transports the goods of others over land, sea, orthrough the air, for a stated freight rate. By government regulation, a common carrier is required to carry all goods offered ifaccommodations are available and the established rate is paid.

Common External Tariff (CET or CXT) - A uniform tariff adopted by a customs union or common market on imports fromcountries outside the union. It is often a required part of the entry process.

Conference - A group of vessel operators joined together for the purpose of establishing freight rates.

Confirmed Letter of Credit - (See Letter of Credit, Confirmed)

Confiscation - The taking and holding of private property by a government or an agency acting for a government.Compensation may or may not be given to the owner of the property.

Consignee - The individual or company to whom a seller or shipper sends merchandise and who, upon presentation ofnecessary documents, is recognized as the merchandise owner for the purpose of declaring and paying customs duties.

Consignee Mark - A symbol placed on packages for identification purposes generally consisting of a triangle, square, circle,diamond, or cross, with letters or numbers as well as the port of discharge.

Consignment - The physical transfer of goods from a seller (consignor) with whom the title remains until the goods are sold,to another legal entity (consignee) who acts as a selling agent. Only if there is a subsequent sale does the seller receive anypayment.

Consignor - A term used to describe any person who consigns goods to himself or to another party in a bill of lading orequivalent document. A consignor might be the owner of the goods, or a freight forwarder who consigns goods on behalf of hisprincipal.

Consolidated Shipment - An arrangement whereby various shippers pool their boxed goods on the same shipment, sharing thetotal weight charge for the shipment.

Consolidator - An agent who brings together a number of shipments for one destination to qualify for preferential rates.

Consortium - The name for an agreement under which several nations or nationals (usually corporations) of more than onenation join together for a common purpose (e.g., a shipping consortium).

Consul - A government official residing in a foreign country charged with representing the interests of his or her country andits nationals.

Consular Documents - Special forms signed by the consul of a country to which cargo is destined.

Consular Invoice - A document required by some countries describing a shipment of goods and showing information such asthe consignor, consignee, and value of the shipment. Certified by a consular official, a consular invoice is used by the country'scustoms officials to verify the value, quantity, and nature of the shipment.

Container - A single, rigid, sealed, reusable metal "box" in which merchandise is shipped by vessel, truck, or rail. Containertypes include standard, high cube, hardtop, open top, flat, platform, ventilated, insulated, refrigerated, or bulk. Containers(except for flat-rack vehicle rack and portable liquid tank types) have a closure or permanently hinged door that allows readyaccess to cargo. All containers have constructions, fittings, and fastenings able to withstand, without permanent distortion, allstresses that may be applied in normal service use of continuous transportation. Containers must bear the manufacturer'sspecifications. (See also Container Dimensions)

Container (Air Cargo) - Air cargo containers are designed in various sizes and irregular shapes to conform to the insidedimensions of a specific aircraft.

Container (Ocean) - Designed to be moved inland on its own chassis, an ocean container can be loaded at the shipper's plantfor shipment overseas. The average outside dimensions are generally 20, 35, and 40 feet in length, 8 feet wide, and 8 feet high.

Container Ship - An ocean-going ship designed to carry containers both internally and on deck. Some are self sustaining.

Containerization - A concept for the ultimate unitizing of cargo used by both steamship lines and air cargo lines. Containersallow a greater amount of cargo protection from weather, damage, and theft.

Continuous Bond - An annual customs bond insuring compliance with all regulations and requirements.

Contract Rate - This can refer to "service contract" rates which are low, favorable rates fixed over an extended period of timein exchange for which the carrier receives a volume commitment from the shipper.

Countertrade - A reciprocal trading arrangement in which the seller is required to accept goods or other instruments or tradein partial or whole payment for its products. Common transactions include: barter, buyback, counterpurchase, offsetrequirements, swap, switch; or triangular trade, evidence, or clearing accounts.

Countervailing Duties - Special duties imposed on imports to offset the benefits of subsidies to producers or exporters of theexporting country.

Customs Broker - An individual or service company that transacts customhouse formalities on behalf of an importer. In theU.S.A., a customs broker must be licensed by the Treasury Department and pass a government examination covering a broadrange of knowledge, including all phases of import regulations, rates of duties, and customs law. Licensing and requirementsvary from country to country, so check with your local United Shipping Partner for details.

Customs Court - The court to which importers must appeal or protest decisions made by customs officers.

Customs Tariff - A schedule of charges assessed by a federal government on imported goods.

Customs Union - An agreement between two or more countries in which they arrange to abolish tariffs and other importrestrictions on each other's goods and establish a common tariff for the imports of all other countries.

CWO (Cash With Order) - A method of payment for goods where cash is paid at the time of order and the transactionbecomes binding on both buyer and seller.

Dangerous Goods - Articles or substances capable of posing a significant risk to health, safety, or property, and that ordinarilyrequire special attention when being transported.

DAT - Dangerous Articles Tariff.

Date Draft - A draft that matures in a specified number of days after issuance without regard to date of acceptance.

DCA (Department of Civil Aviation) - Denotes the government department of any foreign country that is responsible foraviation regulation and granting traffic rights.

DDC - Destination Delivery Charge.

DDP (Delivered Duty Paid) - Also known as "free domicile."

DDU (Delivered Duty Unpaid) - This reflects the emergence of "door-to-door" intermodal or courier contracts or carriagewhere only the destination customs duty and taxes (if any) are paid by consignee.

Dead Leg - A sector flown without payload.

Dead Freight - Freight charges paid by the charterer of a vessel for the contracted space which is left partially unoccupied.

Deck Cargo - Cargo carried on deck rather than stowed under deck. On-deck carriage is required for certain commodities, suchas explosives.

Deferred Rebate - The return of a portion of the freight charges by a carrier or a conference shipper in exchange for theshipper giving all or most of his shipments to the carrier or conference over a specified period of time (usually six months).Payment of the rate is deferred for a further similar period, during which the shipper must continue to give all or most of hisshipments to the rebating carrier or conference. The shipper thus earns a further rebate which will not, however, be paidwithout an additional period of exclusive or almost exclusive patronage with the carrier of conference. In this way, the shipperbecomes tied to the rebating carrier or conference. Although the deferred rebate system is illegal in U.S. foreign commerce, itgenerally is accepted in the ocean trade between other countries.

Demurrage - A penalty for exceeding free time allowed for loading or unloading at a pier or freight terminal. Also a charge forundue detention of transportation equipment or carriers in port while loading or unloading.

Density - Density means pounds per cubic foot. The cubage of loose articles or pieces, or packaged articles of a rectangular,elliptical, or square shape on one plane, shall be determined by multiplying the greatest straight line dimensions of length,width, and depth in inches, including all projections, and dividing the total by 1728 (to obtain cubic feet). The density is theweight of the article divided by the cubic feet thus obtained.

DEQ - Delivered Ex Quay (duty paid).

DF- Dead Freight.

DGR - Dangerous Goods Requirement.

Dim Weight (Dimensionalized Weight) - An international airfreight formula determined by calculating length x width xheight and dividing by 166. It is charged when the actual weight is less than the dimensionalized weight.

DO - Delivery Order.

Dock Receipt - When cargo is delivered to a steamship company at the pier, the receiving clerk issues a dock receipt.

DOT - U.S. Department of Transportation.

Draft - An unconditional order in writing from one person (the Drawer) to another (the Drawee), directing the drawee to pay aspecified amount to a named drawer on a fixed date. Also known as a Bill of Exchange.

Drawback - A remission of duty or charges paid, in whole or in part, when imported goods are re-exported or used in themanufacture of exported goods.

Drawee - The individual or firm on whom a draft is drawn and who owes the stated amount to the drawer.

Dry Lease - The rental of a "clean" aircraft without crew, ground staff, or supporting equipment.

DST (Double Stack Train) - The transport by rail between two points of a trainload of containers with two containers perchassis, one on top of the other.

d.w. (deadweight) - The maximum carrying capacity of a ship expressed in tons of cargo, stores, provisions, and bunker fuel.

d.w.c. (deadweight cargo) - Cargo of such weight and volume that a long ton (2,240 lbs) is stowed in an area of less than 70cubic feet.

EAON - Except As Otherwise Noted.

EDI or EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) - From the UnitedNations-backed electronic data interchange standards body, this is used to create electronic versions of common businessdocuments that will work on a global scale.

Empty Leg - Results from an aircraft primarily chartered outbound having cargo capacity inbound or vice versa. A cheap formof airfreight.

Endorsement in Blank1.Commonly used on a bank check, an endorsement in blank is an endorsement to the bearer. It contains only the name of the

endorser and specifies no particular payee.2.Also, a common means of endorsing bills of lading dawn to the order of the shipper. The bills are endorsed "For..." (See

Bill of Lading, Order)

Ex. BL - Exchange Bill of Lading.

Export Broker - The individual who brings together buyer and seller for a fee, eventually withdrawing from any transaction.

Export Declaration - A form completed by the exporter or its authorized agent and filed in triplicate by a carrier with the U.S.Collector of Customs at the point of exit. It serves a twofold purpose:

1.Primarily, it is used by the U.S. Bureau of Census for the compilation of export statistics on U.S. foreign trade. (For thisreason, an export declaration is required for practically all shipments from the U.S.A. to foreign countries and the U.S.possessions, except for mail shipments of small value or for those of a non-commercial character.)

2.The declaration also serves as an export control document because it must be presented, together with the export license, tothe U.S. Customs at the port of export. If the goods may be exported under general export license, this fact must be stated onthe export declaration.

Export License - A document secured from a government authorizing an exporter to export a specific quantity of a particularcommodity to a certain country. An export license is often required if a government has placed embargoes or other restrictionsupon exports. (See General Export License.)

Export Trading Company - A corporation or other business unit organized and operated primarily for the purpose ofexporting goods and services, or of providing export-related services to other companies.

Express - Premium-rated service for urgent deliveries.

EXW (Ex-Works) - An INCOTERM.

FAA (Federal Aviation Administration) - The U.S. federal agency responsible for promulgating operational standards andprocedures for U.S. aviation.

FAK (Freight All Kinds) - A carrier's tariff description for products pooled and all shipped at one rate. FAK cargo is usuallyshipped in a container filled with different merchandise or commodities.

FAS (Free Alongside) - An INCOTERM.

Fathom - A nautical measurement with the following conversion equivalents: 6 feet; 1.83 meters.

FCL - Full Container Load, Full Car Load.

F.c.s. - Free of capture and seizure.

f.c.s.r.c.c. - Free of capture, seizure, riots, and civil commotions.

F&D - Freight and Demurrage.

Federal Maritime Commission (FMC) - The U.S. Federal agency responsible for overseeing rates and practices of oceancarriers that handle cargo at U.S. ports.

Feeder Vessel - A vessel that connects with a line vessel to service a port not directly served by that line vessel.

FEU - Forty foot equivalent.

FIATA - International Federation of Freight Forwarders Associations.

F.i.b. - Free in bunkers; free into barge.

Flag Carrier - An airline or vessel of one national registry whose government gives it partial or total monopoly overinternational routes. Flat Bed Chassis – A semi-trailer with a level bed and no sides or tops. The floor is a standard height fromthe ground.

Flat Rack - A container without sides or frame members at the front and back. It can be loaded from the sides and top.

FMC - (See Federal Maritime Commission)

FOB (Free on Board) - An INCOTERM.

F.o.d. - Free of damage.

Force Majeure - The title of a standard clause found in marine contracts exempting the parties for nonfulfillment of theirobligations by reasons of occurrences beyond their control, such as earthquakes, floods, or war.

Foreign Trade Zone (FTZ) - A port designated by the government for duty-free entry of any non-prohibited goods.Merchandise may be stored, displayed, and used for manufacturing within the zone and re-exported without duties being paid.Duties are imposed only when the original goods or items manufactured from those goods pass from the zone into an area ofthe country subject to customs authority. Also called a Free Trade Zone.

Foreign Trade Zone Entry - A form declaring goods which are brought duty free into a Foreign Trade Zone for furtherprocessing or storage and subsequent exportation from the zone into the commerce of another country.

Forwarder, Freight Forwarder, Foreign Freight Forwarder - An independent business that dispatches shipments forexporters for a fee. The firm may ship by land, air, or sea, or it may specialize. Usually it handles all the services connectedwith an export shipment, including preparation of documents, booking cargo space, warehousing, pier delivery, and exportclearance. The firm may also handle banking and insurance services on behalf of a client. The U.S. forwarder is licensed by theFederal Maritime Commission for ocean shipments.

FPA - (See Free of Particular Average)

FPAAC - (See Free of Particular Average, American Conditions)

Free In (FI) - Means the cost of loading a vessel is borne by the charterer.

Free In and Out (FIO) - Means the cost of loading and unloading a vessel is borne by the charterer.

Free of Capture and Seizure (FC&S) - An insurance clause providing that loss is not insured if due to capture, seizure,confiscation, and like actions, whether legal or not, or from such acts as piracy, civil war, rebellion, and civil strife.

Free of Particular Average (FPA) - A marine insurance clause relating to the recoverability of partial and total losses fromperils of the sea. The American and English coverages vary as follows:1.American Conditions (FPAAC). The underwriter does not assume responsibility for partial losses unless caused by sinking,

stranding, burning, or colliding with another vessel.2.English Conditions (FPAEC). The underwriter assumes responsibility for partial losses if the vessel is sunk, stranded,

burned, on fire, or in collision, even though such an event did not actually cause the damage suffered by the goods.

Free Out (FO) - The cost of unloading a vessel is borne by the charterer.

Free Port - A port which is a Foreign Trade Zone open to all traders on equal terms, or more specifically a port wheremerchandise may he stored duty-free pending reexport or sale within that country.

Free Trade Zone - (See Foreign Trade Zone)

Gang - A group of stevedores, usually four to five members, with a supervisor assigned to a hold or portion of the vessel beingloaded or unloaded.

Gateway - A port of entry into a country or region.

GATT (General Agreement on Tariffs and Trade) - A multilateral treaty intended to help reduce trade barriers and promotetariff concessions.

GCR (General Cargo Rate) - The basic tariff category which was originally introduced to cover most air cargo. It now coversonly a minority, the remainder being under SCR or class rates.

General Export License - Any of various export licenses covering export commodities for which validated export licenses arenot required.

General Order Warehouse - A government contract warehouse for the storage of cargoes left unclaimed for a designatednumber of days after availability. Unclaimed cargoes may later be auctioned publicly.

Gross Weight - The full weight of a shipment, including containers and packaging materials.

GR Wt./GW - Gross Weight.

Harmonized Code - An internationally accepted and uniform description system for classifying goods for customs, statistical,and other purposes.

Harmonized System (HS) - A key provision of the international trade bill, effective January 1, 1989, that establishedinternational uniformity for classifying goods moving in international trade under a single commodity code.

Hatch - The cover of, or opening in, the deck of a vessel through which cargo is loaded.

Hazardous Materials - (See Hazmat Definitions)

Heavy Lifts - Freight too heavy to be handled by regular ship's tackle.

Heavy Lift Vessel - A vessel specifically designed to be self-sustaining with heavy lift cranes to handle unusually heavy oroutsized cargoes.

Hi (or High) Cube - Any container exceeding 102 inches in height.

House Air Waybill - An air waybill issued by a freight consolidator. (See also Air Waybill)

Hub - A central location to which traffic from many cities is directed and from which traffic is fed to other areas.

Hundredweight (cwt.) - Short ton hundredweight = 100 pounds. Long ton hundredweight = 112 pounds.

Husbanding - A term used by steamship lines, agents, or port captains who are appointed to handle all matters in assisting themaster of the vessel while in port to obtain such services as bunkering, fresh water, food and supplies, payroll for the crew,doctors appointments, and ship repair.

IATA - International Air Transport Association.

ICAO (International Civil Aviation Organization) - A specialized agency of the United Nations headquartered in Montreal.It promotes general development of civil aviation such as aircraft design and operation, safety procedures, and contractualagreements.

ICC (International Chamber of Commerce) - A non-governmental organization serving as a policy advocate on worldbusiness.

ICTF (Intermodal Container Transfer Facility) - An on-dock facility for moving containers from ship to rail or truck.

IFF - Institute of Freight Forwarders.

Igloo - A container designed to occupy the full main deck width of carrying aircraft.

Import License - A certificate issued by countries exercising import controls that permits importation of the articles stated inthe license. The issuance of such a permit frequently is collected with the release of foreign exchange needed to pay for theshipment for which the import license has been requested.

In-Bond - A customs program for inland ports that provides for cargo arriving at a seaport to be shipped under a customs bondto a more conveniently located inland port where the entry documents have been filed. Customs clears the shipment there andthe cargo is trucked to its destination, which normally is close to the inland port.

INCOTERMS - A set of international rules for the uniform interpretation of common contract clauses in international trade.See Incoterms.

Independent Action - A move whereby a member of a shipping conference elects to depart from the specific freight rates,terms, or conditions set forth by the conference. No prior approval of the conference is needed.

Inducement - When steamship lines publish in their schedules the name of a port and the words "by inducement" inparentheses, this means the vessel will call at the port if there is a sufficient amount of profitable cargo available and booked.

Inland Carrier - A transportation line which hauls export or import traffic between ports and inland points.

Inspection Certificate - A document certifying that merchandise (such as perishable goods) was in good conditionimmediately prior to shipment.

Integrated Carrier - A forwarder that uses its own aircraft, whether owned or leased, rather than scheduled airlines.

Intellectual Property - Ownership of the legal rights to possess, use, or dispose of products created by human ingenuity,including patents, trademarks and copyrights.

Interline - A mutual agreement between airlines to link their route network.

Intermodal - This refers to the capacity to go from ship to train to truck or the like. The adjective generally refers tocontainerized shipping or the capacity to handle the same.

i.p.a. - Including particular average.

ISO 9000 - A series of voluntary international quality standards.

Jetsam - Goods from a ship's cargo or parts of its equipment that have been thrown overboard to lighten the load in time ofdanger or to set a stranded ship adrift.

Joint Venture - A term of business partnership involving joint management and the sharing of risks and profits betweenenterprises sometimes based in different countries.

Jones Act - An act of the U.S. Congress prohibiting foreign flag carriers from participating in the U.S. intercoastal trade bywater. It currently is applicable in such trade lanes as the U.S. continental states to and from Hawaii and Alaska.

Just in Time (JIT) - The principle of production and inventory control in which goods arrive when needed for production oruse.

J&WO - Jettison and Washing Overboard.

Kanban - The Japanese word referring to the manufacturing control system in which suppliers deliver needed parts just in timeto the assembly line for use.

KD Flat - An article taken apart, folded, or telescoped to reduce its bulk at least 66-2/3% below its assembled size.

KDCL - Knocked Down in Carload Lots.

KDLCL - Knocked Down in Less than Carload Lots.

Knocked Down (KD) - An article taken apart, folded, or telescoped in such a manner as to reduce its bulk at least 33-l/3%below its assembled bulk.

Knot, Nautical - The unit of speed equivalent to one nautical mile: 6,080.20 feet per hour or 1.85 kilometers per hour.

Lagan - Cargo or equipment to which an identifying marker or buoy is fastened and thrown overboard in time of danger tolighten a ship's load. Under maritime law, if the goods are later found they must be returned to the owner whose marker isattached. The owner must make a salvage payment.

LASH - Lighter Aboard Ship. (See Lighter)

Lash Vessels - Barges specifically designed to load on a vessel internally and for quick vessel turnaround. The concept is toquickly float the barges to the vessel (using tugs or ships wenches), load the barges through the rear of the vessel, then sail.Upon arrival at the foreign port, the reverse happens. Barges are quickly floated away from the vessel and another set ofwaiting barges quickly are loaded. Usually crane-equipped, these barges handle mostly breakbulk cargo.

Lay Days - The dates between which a chartered vessel is to be available in a port for loading of cargo.

L/C - (See Letter of Credit)

LCL - Less than Container Load; Less than Car load.

L&D - Loss and Damage.

Legal Weight - The weight of the goods plus any immediate wrappings that are sold along with the goods, e.g., the weight of atin can as well as its contents. (See also Gross Weight)

Less than Truckload (LTL) - Rates applicable when the quantity of freight is less than the volume or truckload minimumweight.

Letter of Credit (L/C) - A document issued by a bank per instructions by a buyer of goods authorizing the seller to draw aspecified sum of money under specified terms. Issued as revocable or irrevocable.

Letter of Credit, Confirmed - A letter of credit containing a guarantee on the part of both the issuing and advising banks ofpayment to the seller, provided the seller's documentation is in order and the terms of the letter of credit are met.

Lighter - An open or covered barge equipped with a crane and towed by a tugboat. Used mostly in harbors and inlandwaterways.

Lighterage - The cost of loading or unloading a vessel by means of barges alongside.

Linehaul - The management of freight between cities, usually more than 1000 miles.

Liner - The word "liner" is derived from the term "line traffic," which denotes operation along definite routes on the basis ofdefinite, fixed schedules. A liner thus is a vessel that engages in this kind of transportation, which usually involves the haulageof general cargo as distinct from bulk cargo.

Liquidation - The finalization of a customs entry.

Livestock - Common farm animals.

Lkg. & Bkg. - Leakage and Breakage.

Load Factor - Capacity sold as against capacity available and expressed as a percentage.

Logistics Management - The efficient and cost-effective management of the physical movement of goods from supply pointsto final sale and the associated transfer and holding of such goods at various intermediate storage points.

Lo/Lo (Lift-On/Lift-Off) - Denotes the method by which cargo is loaded onto and discharged from an ocean vessel, which inthis case is by the use of a crane.

I.t. or l.tn. - Long ton (2240 Ibs).

Ltge. - Lighterage.

LTL - (See Less than Truckload)

Manifest - A list of the goods being transported by a carrier.

Maquiladora - A foreign plant operating under an in-bond program whereby components may be shipped into Mexico duty-free for assembly and subsequent reexport. Maquiladora plants are also known as Twin Plants.

Maritime Administration (MARAD) - A U.S. government agency, while not actively involved in vessel operation, thatadministers laws for maintenance of merchant marine for the purposes of defense and commerce.

Mark - (See Consignee Mark, Markings, Port Marks)

Markings - The physical markings on a product indicating the country of origin where the article was produced.

Mate's Receipt - Receipt of cargo by the vessel, signed by the mate (similar to a dock receipt).

Measurement Ton - The measurement ton (also known as the cargo ton or freight ton) is a space measurement, usually 40cubic feet or one cubic meter. Cargo is assessed a certain rate for every 40 cubic feet or one cubic meter it occupies.

MERCOSUR - A trade alliance between Argentina, Brazil, Paraguay and Uruguay, with Chile and Bolivia as associatemembers.

Min. B/L - Minimum Bill of Lading.

MM - Mercantile Marine.

M/R - Mate's Receipt.

M/T - Metric Ton (2204 Ibs).

mt. - Empty.

M/V or MV - Motor Vessel.

MW - Minimum Weight Factor.

NAFTA (North American Free Trade Agreement) - A free trade agreement comprising the U.S.A., Canada, and Mexico.

National Carrier - A flag carrier owned or controlled by the state.

n.e.m. - Not elsewhere mentioned.

n.e.s. - Not elsewhere specified.

Nested - When three or more different sizes of an article are placed within each other so that each article will not project abovethe next lower article by more than 33-1/3% of its height.

Nested Solid - When three or more different sizes of an article are placed within each other so that each article will not projectabove the next lower article by more than 1/4 inch.

Net Terms - Free of charters' commission.

Net Weight (Actual Net Weight) - The weight of the goods alone without any immediate wrappings; e.g., the weight of thecontents of a tin can without the weight of the can.

NMFC - National Motor Freight Classification.

No Objection Certificate - A document provided by scheduled or national airlines of many countries declaring no objection toa proposed charter flight operated by another airline. It is often demanded by government authorities before they grantpermission for a charter flight to take place.

No Objection Fee - A sum of money normally paid by a charter airline to a scheduled airline in order that it waives its right ofobjection to its government, thus allowing a charter to take place. The amount is usually a fixed percentage of the gross cost ofa charter. Tantamount to a bribe, this is common practice in the Middle East and Africa.

NOE - Not Otherwise Enumerated.

NOHP - Not Otherwise Herein Provided.

NOI - Not Otherwise Indicated.

NOIBN - Not Otherwise Indicated By Number; Not Otherwise Indicated By Name.

Non-Scheduled Flight - (See Scheduled Flight)

Non-Vessel Operating Common Carrier (NVOCC) - An FMC-Iicensed cargo consolidator of small shipments in oceantrade, generally soliciting business and arranging for or performing containerization functions at the port.

NOS - Not Otherwise Specified.

NT - Net Tons.

NVOCC - (See Non-Vessel-Operating Common Carrier)

OD - Outside Diameter.

ODS (Operating Differential Subsidy) - A payment to an American-flag carrier by the U.S. federal government to offset thedifference in operating costs between U.S. and foreign vessels.

Off-Line - An airline that sells in a market to which it does not operate. An off-line carrier will use another operator to linkwith its network.

O/N - Order Notify; Own Name.

O/o - Order of.

Open Account - A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment such as anote, mortgage, or other formal written evidence of indebtedness.

Open Policy - A cargo insurance policy that is an open contract; e.g., it provides protection for all of an exporter's shipmentsafloat or in transit within a specified geographical trade area for an unlimited period of time, until the policy is cancelled by theinsured or by the insurance company. It is "open" because the goods that are shipped are also detailed at that time. This usuallyis shown in a document called a marine insurance certificate.

O/R - Owner's Risk.

O&R - Ocean and Rail.

O.r.b. - Owner's risk of breakage.

O.R. Det. - Owner's Risk of Deterioration.

ORF - Owner' Risk of Fire or Freezing.

ORL - Owner's Risk of Leakage.

ORW - Owner's Risk of Becoming Wet.

OS&D - Over, Short and Damaged.

PA - (See Particular Average)

PAIRED (Port of Arrival Immediate Release and Enforcement Determination) – A U.S. Customs program that allowsentry documentation for an import shipment to be filed at one location, usually an inland city, while the merchandise is clearedby customs at the port of entry, normally a seaport. May be ineffective with certain types of high-risk cargoes, such as quota-regulated textiles or shipments from drug production regions. Cities where there is a natural flow of cargo are actually "paired"in the program; e.g., Atlanta, an inland city, is linked with Savannah, a seaport.

Pallet - A load-carrying platform to which loose cargo is secured before placing aboard the aircraft.

Paperless Release - Under ABI, certain commodities from low-risk countries not designated for examination may be releasedthrough an ABI-certified broker without the actual submission of documentation.

Part Charter - Where part of an airline's scheduled flight is sold as if it were a charter in its own right. Often incorrectly usedas a synonym for split charter.

Part Load Charter - Where a part of an aircraft's load is discharged at one destination and a part of it at another. This isdistinct from a split charter where a number of consignments are carried to the same destination. Inbound, part loads are treatedas single entity charters under the regulations in most countries.

Particular Average (PA) - Partial loss or damage to goods.

Perils of the Sea - Fortuitous accidents or casualties peculiar to transportation on navigable water, such as sinking, collision ofvessel, striking a submerged object, or encountering heavy weather or other unusual forces of nature.

Perishables - Any cargo that loses considerable value if it is delayed in transportation. This usually refers to fresh fruit andvegetables.

Phytosanitary Inspection Certificate - A certificate issued by the U.S. Department of Agriculture indicating that a shipmenthas been inspected and is free of harmful pests and plant diseases.

Pilferage - As used in marine insurance policies, the term denotes petty thievery-the taking of small parts of a shipment-asopposed to the theft of a whole shipment or large unit. Many ordinary marine insurance policies do not cover against pilferage,and when this coverage is desired it must be added to the policy.

Pivot Weights - That weight of a ULD above which a higher tariff applies. In effect, it is an incentive to maximize cargodensity.

Place - A particular street address or other designation of a factory, store, warehouse, place of business, private residence,construction camp, or the like at a point.

Place of Rest - This term, as used in the Containerized Cargo Rules, means the location of the floor, dock, platform, ordoorway at the CFS to which cargo is first delivered by the shipper or agent thereof.

Point - A particular city, town, village, or other community or area which is treated as a unit for the application of rates.

Port Authority - A government body (city, county, or state) which in international shipping maintains various airports and/orocean cargo pier facilities, transit sheds, loading equipment, or warehouses for air cargo. It has the power to levy dockage andwharfage charges, landing fees, and other costs.

Port Marks - An identifying set of letters, numbers, or geometric symbols followed by the name of the port of destination thatare placed on export shipments. Foreign government requirements may be exceedingly strict in the matter of port marks.

Port of Discharge - A port where a vessel is off-loaded and cargo discharged.

Port of Entry - A port at which foreign goods are admitted into the receiving country.

Port of Loading - A port where cargo is loaded aboard the vessel, lashed, and stowed.

Power of Attorney - A document that authorizes a customs broker to sign all customs documents on behalf of an importer orexporter.

Prepaid Freight - Generally speaking, freight charges both in ocean and air transport may be either prepaid in the currency ofthe country of export or they may be billed collect for payment by the consignee in his local currency. On shipments to some

countries, however, freight charges must be prepaid because of foreign exchange regulations of the country of import or rulesof steamship companies or airlines.

Pre-Slung Cargo - Cargo shipped already in a cargo sling or net, such as coffee in bags or coconut shells. It is usuallyprepared and loaded at the pier, ready for the vessel's arrival and subsequent loading.

Prima Facie - A Latin term frequently encountered in foreign trade that means "on first appearance." When a steamshipcompany issues a clean bill of lading, it acknowledges that the goods were received "in apparent good order and condition" andthis is said by the courts to constitute prima facie evidence of the conditions of the containers; that is, if nothing to the contraryappears, it must be inferred that the cargo was in good condition when received by the carrier.

Proforma - When used with the title of a document, the term refers to an informal document presented in advance of thearrival or preparation of the required document, in order to satisfy a customs requirement.

Pro Number - A number assigned by the carrier to a single shipment, used in all cases where the shipment must be referred to.

Proof of Delivery (POD) - The delivery receipt copy of a freight bill indicating the name of the person who signed for apackage with the date and time of delivery.

Protest - U.S. Customs Form 19 allows for a refund of an overpayment of duty if filed within 90 days of liquidation.

PW - Packed Weight.

R&C - Rail and Canal.

R/C - Reconsigned.

r.&c.c. - Riots and civil commotions.

r.c.c.&s. - Riots, civil commotions, and strikes.

Rebate - A deduction taken from a set payment or charge. Because a rebate is given after payment of the full amount has beenmade, it differs from a discount which is deducted in advance of the payment. In foreign trade, a full or partial rebate may begiven on import duties paid on goods which are later reexported.

Reciprocity - A practice by which governments extend similar concessions to one another.

Reefer - A refrigerated trailer or railcar for hauling perishables.

REFG - Refrigerating; Refrigeration.

Regs. - Registered Tonnage.

Retaliation - An action taken by a country to restrain imports from another country that has increased a tariff or imposed othermeasures that adversely affect the first country's exports.

Ro/Ro (Roll-on/Roll-Off) Vessel - A ship designed to accommodate cargo that is rolled on and rolled off. Some Ro/Ro vesselscan accommodate containers and/or breakbulk cargo. A Ro/Ro Vessel can be self-sustaining.

Route - An established air passage, from the point of departure to the terminating station.

Royalty - A charge on charter flights levied by some governments before traffic rights are granted. Sometimes called a "noobjection fee." It is usually a fixed proportion of a total charter value.

Salvage - The rescue of goods from loss at sea or by fire. Also, goods so saved, or payment made or due for their rescue.

Schedule B - Refers to ''Schedule B, Statistical Classification of Domestic and Foreign Commodities exported from theU.S.A." This is being replaced under the Harmonized System.

Scheduled Flight - Any service that operates under a set timetable.

SCR (Specified Commodity Rate) - A rate applied to narrowly specified commodities and usually granted on relatively largeshipments. Theoretically, it is of limited time duration.

Sector - The distance between two ground points within a route.

SED - (See Shipper's Export Declaration)

Self-Sustaining - A vessel that has its own cranes and equipment mounted on board for loading and unloading. Used in portswhere shore cranes and equipment are lacking.

Service - The defined, regular pattern of calls made by a carrier in the pick-up and discharge of cargo.

Service Contract - A contract between a shipper and an ocean carrier of conference, in which the shipper makes acommitment to provide a minimum quantity of cargo over a fixed time period.

Set-Up - Articles in their assembled condition.

S&FA - Shipping and Forwarding Agent.

Ship's Manifest - An instrument in writing containing a list of the shipments constituting the ship's cargo.

Ship's Tackle - All rigging, etc., utilized on a ship to load or discharge cargo.

Shipment - Freight tendered to a carrier by one consignor at one place at one time for delivery to one consignee at one placeon one bill of lading.

Shipper - Term used to describe an exporter (usually a manufacturing company).

Shipper's Export Declaration (SED) - A form required by the U.S. Treasury Department and completed by a shippershowing the value, weight, consignee, and destination of export shipments as well as the Schedule B identification number.

Shipping Act - Created in 1916 and revised in 1984, the Shipping Act is a comprehensive legislative act defining the U.S.ocean freight industry. This legislation defines the rules and regulations governing the business practices of steamshipcompanies, non vessel operating carriers, and freight forwarders.

Short-Shipped - Cargo manifested but not loaded.

Sight Draft - A draft payable upon presentation to the drawee. (Compare with Date Draft and Time Draft.)

Single Entry Charter - A non-scheduled flight carrying the cargo of one shipper.

SIP (Solicitud de Inspección Pre-Embarque) - A pre-inspection order.

SIT - Stopped in Transit.

Site - A particular platform or location for loading or unloading at a place.

SL&C - Shipper's Load and Count.

SL&T - Shipper's Load and Tally.

S/N - Shipping Note.

SOL - Ship Owner's Liability.

Split Charter - Where a number of consignments from different shippers are carried on the same non-scheduled aircraft.Under U.K. regulations a non-scheduled flight chartered by a single forwarder or agent on behalf of a number of shippers isstill classified as a split charter. Under U.S. regulations, a forwarder-chartered flight is classified as a single entity although itcan consolidate.

SR - Shipping Receipt.

SR&CC - Strikes, riots, and civil commotions.

SS - Steamship; Steam-powered Ship (steam-driven turbines).

Standard International Trade Classification (SITC) - A standard numerical code system developed by the United Nations toclassify commodities used in international trade.

Steamship Agent - A duly appointed and authorized representative in a specified territory acting on behalf of a steamship lineor lines and attending to all matters relating to the vessels owned by his principals.

Steamship Line - A company usually having the following departments: vessel operations, container operations, tariffdepartment, booking, outbound rates, inward rates, and sales. The company can maintain its own in-country offices to handleregional sales, operations, or other matters, or appoint steamship agents to represent them doing the same. Some lines haveliner offices in several regions and appointed agents in others.

S. tn. - Short ton.

Stowage - The lacing of cargo in a vessel in such a manner as to provide the utmost safety and efficiency for the ship and thegoods it carries.

Strikes, Riots, and Civil Commotions - An insurance clause referring to loss or damage directly caused by strikers, locked-out workmen, persons' participation in labor disturbances, and riots of various kinds. The ordinary marine insurance policydoes not cover this risk. Coverage against it can be added only by endorsement.

Subsidy - An economic benefit granted by a government to producers of goods or services, often to strengthen theircompetitive position. Sue & Labor Cause – A provision in marine insurance obligating the assured to do things necessary aftera loss to prevent further loss and to act in the best interests of the insurer.

Surety Bond - A bond insuring against loss or damage or for the completion of obligations.

Surety Company - An insurance company.

SW - Shipper's Weights.

Tally Sheet - A list of incoming and outgoing cargo checked by the tally clerk on the dock.

Tare Weight - The weight of packing and containers without the goods to be shipped.

Tariff - A general term for any listing of rates or charges. The tariffs most frequently encountered in foreign trade are: tariffs ofinternational transportation companies operating on sea, land, and in the air; tariffs of international cable, radio, and telephone

companies; and the customs tariffs of the various countries that list goods that are duty free and those subject to import duty,giving the rate of duty in each case. There are various classes of customs duties.

TBL - (See Bill of Lading, Through)

Temperature Controlled Cargo - Any cargo requiring carriage under controlled temperature.

TEU - A twenty-foot equivalent unit (6.1m). A standard unit for counting containers of various lengths and for describingcontainer ship or terminal capacity. A standard 40' container equals 2 TEUs.

THC (Terminal Handling Charge) - A charge made for certain handling services performed at terminals.

Third Freedom Right - Where cargo is carried by an airline from the country in which it is based to a foreign country.

TIB (Temporary Importation Under Bond) - A U.S. Customs' temporary admission into the U.S.A. under a conditionalbond for articles not imported for sale or for sale on approval.

Time Draft - A draft that matures in a certain number of days, either from acceptance or the date of the draft.

Title, Passing - The passing of title to exported goods is determined in large measure by the selling terms and must be clearlyspecified and understood by both parties. (See INCOTERMS)

TL - Truckload.

Ton - Freight rates for liner cargo generally are quoted on the basis of a certain rate per ton, depending on the nature of thecommodity. This ton, however, may be a weight ton or a measurement ton.

Ton-Deadweight - The carrying capacity of the ship in terms of the weight in tons of the cargo, fuel, provisions, andpassengers which a vessel can carry.

Ton-Displacement - The weight of the volume of water which the fully loaded ship displaces.

Ton-Kilometer - A measure of airline freight capacity.

Tracking - A carrier's system of recording movement intervals of shipments from origin to destination.

Trade - A term used to define a geographic area or specific route served by carriers.

Tramp - A vessel that does not operate along a definite route on a fixed schedule, but calls at any port where cargo isavailable.

Transport Index - The number expressing the maximum radiation level in a package or ULD.

Transshipment - The transfer of a shipment from one carrier to another in international trade, most frequently from one shipto another. Because the unloading and reloading of delicate merchandise is likely to cause damage, transshipments are avoidedwhenever possible.

Truckload - Truckload rates apply where the tariff shows a truckload minimum weight. Charges will be at the truckloadminimum weight unless weight is higher.

Trust Receipt - The release of merchandise by a bank to a buyer for manufacturing or sales purposes in which the bank retainstitle to the merchandise.

Twin Plant - See Maquiladora.

UKACC - United Kingdom Air Cargo Club.

ULD (Unit Load Device) - A pallet or container for freight.

Unclean Bill of Lading - (See Bill of Lading, Unclean)

Uniform Commercial Code - The Uniform Commercial Code, or Uniform Customs and Practice for Documentary CreditsICC Publication No. 500, was first established and published in 1933 by the International Chamber of Commerce. Revisionswere made in 1951, 1962, 1974, 1983, and 1993. The code defines documentation standards to be followed by internationalbanks when negotiating letters of credit. The code is binding, and seeks to define a worldwide standard applicable to allinvolved in international trade, exchanging goods and money using the international letter of credit.

Unitization - The packing of single or multiple consignments into ULDs or pallets.

Universal Postal Union - The organization which negotiates international mail charges.

Valuation Charges - Transportation charges assessed shippers who declare a value of goods higher than the value of carriers'limits of liability.

Ves. - Vessel.

Visa - An invoice properly validated by the Minister of Trade in regard to quota entries.

Volume Weight - Used when calculating air freight when the size of the carton is greater than the average weight. It iscalculated by multiplying the length times the width times the height and dividing by 166.

WA - (See With Average)

War Risk - The possible aggressive actions against a ship and its cargo by a belligerent government. This risk can be insuredby a marine policy with a risk clause.

War Risk Insurance - Insurance issued by marine underwriters against war-like operations specifically described in thepolicy. In former times, war risk insurance was taken out only in times of war, but currently many exporters cover most of theirshipments with war risk insurance as a protection against losses from derelict torpedoes and floating mines placed duringformer wars, and also as a safeguard against unforeseen warlike developments. In the U.S.A., war risk insurance is written in aseparate policy from the ordinary marine insurance; it is desirable to take out both policies with the same underwriter in orderto avoid the ill effects of a possible dispute between underwriters as to the cause (marine peril or war peril) of a given loss.

Warehouse Receipt - A receipt of commodities deposited in a warehouse identifying the commodities deposited. It is non-negotiable if permitting delivery only to a specified person or firm, but it is negotiable if made out to the order of a person orfirm or to a bearer. Endorsement (without endorsement if made out to bearer) and delivery of a negotiable warehouse receiptserves to transfer the property covered by the receipt. Warehouse receipts are common documents in international banking.

Warehouse-to-Warehouse - A clause in marine insurance policy whereby the underwriter agrees to cover the goods while intransit between the initial point of shipment and the point of destination with certain limitations, and also subject to the law ofinsurable interest. The warehouse-to-warehouse clause was once extremely important, but marine extension clauses now oftenoverride its provisions.

Warranties1.Expressed Warranty: An agreement written in a marine underwriter's insurance policy which must be strictly and literally

complied with. A violation voids the insurance, e.g., trading warranties.2.Implied Warranty: Fundamental conditions implied in a contract of marine insurance are seaworthiness of the vessel and

the legality of the venture.

WeightGross - The weight of the goods including packing, wrappers, or containers, both internal and external. The total weight asshipped.

Net - The weight of the goods themselves without the inclusion of any wrapper.Tare - The weight of the packaging or container.Weight/Measurement Ton - In many cases, a rate is shown per weight/measurement ton, carrier's option. This means that

the rate will be assessed on either a weight ton or measurement ton basis, whichever will yield the carrier the greater revenue.For example, the rate may be quoted on the basis of 2,240 pounds, 40 cubic feet, one metric ton, or one cubic meter. WeightTon - There are three types of weight ton: the short ton, weighing 2,000 pounds; the long ton, weighing 2,240 pounds; and themetric ton weighing 2,204.68 pounds. The last is frequently quoted for cargo being exported from Europe.

Weight, Legal - Net weight of goods plus the inside packing.

Weight Load Factor - Payload achieved as against available, expressed as a percentage. Cargo is frequently limited byvolume rather than weight; load factors of 100 percent are rarely achieved.Wet Lease - An arrangement for renting an aircraft under which the owner provides crews, ground support equipment, fueland so on (of dry lease).w.g. - Weight guaranteed.Wharfage - A charge assessed by a pier or dock owner against the cargo or a steamship company for use of the pier or dock.W&I - Weighing and Inspection.

With Average (WA) - A marine insurance term meaning that shipment is protected for partial damage whenever the damageexceeds a stated percentage.

With Particular Average (WPA) - An insurance term meaning that partial loss or damage of goods is insured. The damagegenerally must be caused by sea water, and many terms specify a minimum percentage of damage before payment. It may beextended to cover loss by theft, pilferage, delivery, leakage, and breakage.

W/M - Weight and/or Measurement.

Without Reserve - A term indicating shipper's agent or representative is empowered to make definitive decisions andadjustments abroad without approval of the group or individual represented. (See Advisory Capacity)

W/R - Warehouse Receipt.WR - War Risk.X HEAVY - Extra Heavy.X STRONG - Extra Strong.XX HEAVY - Double Extra Heavy.XX STRONG - Double Extra Strong.

Y/A (York-Antwerp Rules) - A code of rules adopted by an international convention in 1890, amended in 1924 and again in1950, for the purpose of establishing a uniform basis for adjusting general average. Certain nationalities decline to observesome of the rules adopted. U.S. shipping interests generally abide by general rule "F" and numbered rules 1 to 15 and 17 to 22,inclusive, and specifically set this forth in a bill of lading clause.

Yield - Revenue, not necessarily profitable, per unit of traffic.

INCOTERMS

INCOTERMS are a series of acronyms describing international trade terms. They were created to be a universal language forglobal business, facilitating trade and minimizing misunderstandings over commercial terminology. First established in 1936by the International Chamber of Commerce, INCOTERMS have been amended and modernized several times. The most recentupdate was in 1990.

INCOTERMS fall into four categories. Each category bears the first letter of the INCOTERMS in it.

1.E-TERMS - Departure Terms

Ex-Works - The seller fulfills his obligation to deliver when he has made the goods available at the seller's premises. This termrepresents the minimum obligation for the seller and the maximum for the buyer. Documents required:the seller need only supply the documents specified in the contract.

F-TERMS - Shipment Terms, Main Carriage Unpaid

FCA (Free Carrier) - The seller fulfills his obligation to deliver when he has handed over the goods, cleared for export, intothe charge of the carrier designated by the buyer at the named place or port. This supplants "FOB Named Point" for intermodaltransport. Documents required: transaction, receipt by carrier, and required export regulatory documents.

FAS (Free Alongside Ship) - The seller fulfills his obligation to deliver when the goods have been placed alongside the vesselon the quay or in lighters at the named port of shipment. The buyer bears all costs and risk of loss of or damage to the goodsfrom that moment on. The buyer must also clear the goods for export. The term "FAS" is only for sea or inland waterwaytransport. Documents required: transaction, required export regulatory documents, and a Clean Dock or Mate's Receipt.

FOB (Free on Board) - The seller fulfills his obligation to deliver when the goods have passed over the ship's rail at thenamed point of shipment. The buyer must bear all costs and risks of loss of or damage to the goods from that moment on.Buyer must also clear the goods for export. Although frequently used for surface transportation, the term "FOB" is for sea orinland waterway transport only (see note on following page). When "ship's rail" does not apply, such as for Ro/Ro or containertraffic, the term "FCA" is more appropriate. Documents required: transaction, receipt by carrier, and required export regulatorydocuments.

2.C-TERMS - Shipment Terms, Main Carriage Paid

CFR (Cost and Freight) - The seller must pay the costs and freight necessary to bring the goods to the named port ofdestination. However, the risk of loss of or damage to the goods-as well as any additional costs due to events occurring afterthe goods have been delivered on board the ship-is transferred from the seller to the buyer when the goods pass the ship's rail inthe port of shipment. The seller must clear the goods for export. "CFR" is for sea or inland waterway transport only. ForRo/Ros or container traffic, the term "CPT" is more appropriate. Documents required: transaction, required export regulatorydocuments, and a clean bill of lading.

CIF (Cost, Insurance and Freight) - The seller has the same obligations as under "CFR," but must also procure and pay formarine insurance against the buyer's risk of loss of or damage to the goods during carriage. The seller must clear the goods forexport. "CIF" is for sea or inland waterway transport only. The term "CIP" is more appropriate for Ro/Ro or container traffic.Documents required: transaction, required export and import regulatory documents, insurance documents, and a bill of lading.

CPT (Carriage Paid To) - Seller pays freight for the carriage of goods to the named destination. The risk of loss of or damageto goods passes from seller to buyer when the goods have been delivered into the carrier's custody. The seller must clear thegoods for export. If subsequent carriers are used to the named destination, the risk passes when the goods have been deliveredto the first carrier. Documents required: transaction, usual transport, and required export and import regulatory documents.

CIP (Carriage and Insurance Paid To) - Seller has the same obligations as under "CPT," but the seller must also procure andpay for cargo insurance against the buyer's risk of loss or damage to goods during carriage. The seller must clear goods forexport. The code "CIP" becomes a full description. Documents required: transaction, insurance, usual transport, and requiredexport and import regulatory documents.

3.D-TERMS (Arrival Terms)

DAF (Delivered at Frontier) - The seller fulfills his obligation when the goods have been made available and cleared forexport at the named point and place at the frontier, but before the customs border of the adjoined country. (Note that is is veryimportant to precisely define the point and place of delivery.) DAF is used primarily for surface, inland transit. Documentsrequired: transaction, usual transport and/or warehouse, and required export regulatory documents.

DES (Delivered Ex Ship) - The seller fulfills his obligation when the goods have been made available to the buyer on boardthe ship and uncleared for import at the port of destination. The seller bears all costs and risks in bringing the goods to thedesignated port. "DES" is for sea and inland waterway transit only. Documents required: transaction, required export regulatorydocuments, and a bill of lading.

SELLER (Delivered Ex Quay) - The seller fulfills his obligation to the buyer on the quay (wharf) at the named port, clearedfor importation. The seller bears all risks and costs such as duties and taxes. If the parties wish to exclude some of the costspayable from the seller's obligations, they should be clearly noted, i.e., "Delivered Ex- Quay, VAT Unpaid." Documentsrequired: transaction, delivery order, and required export regulatory documents.

DDU (Delivered Duty Unpaid) - The seller fulfills his obligation when the goods have been made available at the namedplace in the country of importation. Seller bears the costs and risks involved in bringing the goods to this point. This termreflects the "door-to-door" intermodal or courier contracts of carriage where only the destination customs duty and taxes (ifany) are paid by consignee.

DDP (Delivered Duty Paid) - The seller fulfills his obligation when the goods have been made available at the named place inthe country of importation. The seller bears the risks and costs-including duties, taxes, and other charges-of delivering thegoods to this point, cleared for importation. Costs and risks after entry are negotiable. Also known as "Free Domicile."ocuments required: transaction, usual transport and/or warehouse, and required export and import regulatory documents.

For more information on INCOTERMS, see the International Chamber of Commerce (ICC) Publication 460, INCOTERMS1990. The ICC web site is http://www.iccwbo.org/.

HAZARDOUS MATERIAL

A Hazardous Material is a substance or material which has been determined by the U.S. Secretary of Transportation to becapable of posing an unreasonable risk to health, safety, and property when transported in commerce and which has been sodesignated.

Title 49, U.S. Code of Federal Regulations (CFR) Transportation, Parts 100-199, govern hazardous materials transport.

EXPLOSIVESAny chemical compound, mixture, or device the primary or common purpose of which is to function by explosion, e.g., withsubstantially instananeous release of gas or heat, unless such compound, mixture, or device is otherwise specifcally classifiedin Parts 170-189 of Title 49, U.S. Code of Federal Regulations (CFR) Transportation.

CLASS A EXPLOSIVESDetonating or otherwise of maximum hazard.

CLASS B EXPLOSIVESIn general, these function by rapid combustion rather than detonation and include some explosive devices such as specialfireworks, flash powders, etc. A flammable hazard.

CLASS C EXPLOSIVESCertain types of manufactured articles containing Class A or Class B explosives, or both, as components but in restrictedquantities, and certain types of fireworks. Minimum hazard.

COMBUSTIBLE LIQUIDAny liquid having a flash point at or above 100° F and below 200° F under the conditions specified in Title 49, CFR.

CORROSIVE MATERIALAny liquid or solid that causes destruction of human skin tissue or a liquid that has a severe corrosion rate on steel.

FLAMMABLE LIQUIDAny liquid having a flash point below 100° F under the condition specified in Title 49

PYROPHORIC LIQUIDAny liquid which may ignite spontaneously when exposed to air the temperature of which is 55° C (130° F) or below.

COMPRESSED GASAny material or mixture having in the container a pressure exceeding 40 psia at 70° F or 104 psia at 130° F.

FLAMMABLE GASAny compressed gas meeting the requirements for lower flammability limit, flammability limit range, flame projection, orflame propagation criteria.

NONFLAMMABLE GASAny compressed gas other than a flammable compressed gas.

FLAMMABLE SOLIDAny solid material, other than explosive which is liable to cause fires through friction, absorption of moisture, spontaneouschemical changes, retained heat from manufacturing or processing, or which can be ignited readily and when ignited burns sovigorously and persistently as to create a serious transportation hazard.

ORGANIC PEROXIDEAn organic compound containing the bivalent -0-0- structure and which may be considered a derivative of hydrogen peroxidewhere one or more of the hydrogen atoms have been replaced by organic radicals must be classed as an organic peroxide.

OXIDIZERA substance such as chlorate, permanganate, inorganic peroxide, nitro carbo nitrate, or a nitrate, that yields oxygen readily tostimulate the combustion of organic matter.

POISON AExtremely dangerous poisonous gases or liquids of such nature that a very small amount, mixed with air, is dangerous to life.

POISON BLess dangerous poisons. Substances, liquids or solids (including pastes and semi-sairolid) other than Class A or irritatingmaterials which are known to be so toxic to man as to afford a hazard to health during transportation, or which, in the absenceof adequate data on human toxicity, are presumed to be toxic to man based on results with test animals.

IRRITATING MATERIALSLiquid or solid substances, which, upon contact with fire or when exposed to air, give off dangerous or intensely irritatingfumes, but not including any poisonous material, Class A.

ETIOLOGIC AGENTAn etiologic agent means a viable micro-organism, or its toxin, which causes or may cause human disease (Sec. 173.386 Referto the Department of Health, Education and Welfare Regulations, Title 42, CFR).

RADIOACTIVE MATERIALAny material or combination or materials, that spontaneously emits ionizing radiation and has a specific activity greater than0.002 microcuries per gram.

ORM-A, B or C (Other Regulated Materials)

Any material that does not meet the definition of a hazardous material, other than combustible liquid in packagings having acapacity of 110 gallons or less, and is specified in Sec. 172.101 as an ORM material or that possesses one or more of thecharacteristics described in ORM-A through D below (Sec. 173.500) NTOE: an ORM with a flash point of 100 F to 200 F,when transported with more than 110 gallons in one container shall be classed as a combustible liquid.

ORM-AA material which has an anesthetic, irritating, noxious, toxic or other similar property and which can cause extreme annoyanceor discomfort to passengers and crew in the event of leakage during transportation.

ORM-BA material (including a solid when wet with water) capable of causing significant damage to a transport vehicle or vessel fromleakage during transportation. Materials meeting one or both of the following criteria are ORM-B materials:1.A liquid substance that has corrosion rate exceeding 0.250 inch per year (IPY) on aluminum (nonclad 7075-T6) at a testtemperature of 130° F. An acceptable test is described in NACE Standard TM-01-69.2.Specifically designated by name in Sec. 172.101 of the subchapter.

ORM-CA material which has other inherent characteristics not described as an ORM-A or ORM-B but which makes it unsuitable forshipment, unless properly identified and prepared for transportation. Each ORM-C material is specifically named in Sec.172.101 of the subchapter.

ORM-DA material such as a consumer commodity which, through otherwise subject to the regulations of the subchapter, presents alimited hazard during transportation due to its form, quantity and packaging. They must be materials for which exceptions areprovided in Sec. 72.101 of the subchapter. A shipping description applicable to each ORM-D material or category of ORM-Dmaterials is found in Sec. 172.101 of the subchapter.

When transported internationally by air, hazardous materials may be classified as Dangerous Goods, according to theInternational Civil Aviation Organization (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Airand the International Air Transport Association (IATA) Dangerous Goods Regulation.

York - Antwerp Rules 1994

RULE OF INTERPRETATION - RULE PARAMOUNT- RULE A - RULE B - RULE C - RULE D - RULE E - RULE F -RULE G - RULE I. JETTISON of CARGO - RULE II. LOSS or DAMAGE by SACRIFICES for the COMMON SAFETY -RULE III. EXTINUISHING FIRE on SHIPBOARD - RULE IV. CUTTING AWAY WRECK - RULE V . VOLUNTARYSTRANDING - RULE VI. SALVAGE REMUNERATION - RULE VII. DAMAGE to MACHINERY and BOILERS - RULEVIII. EXPENSES LIGHTENING a SHIP when ASHORE, and CONSEQUENT DAMAGE - RULE IX . CARGO, SHIP'SMATERIALS and STORES used for FUEL - RULE X . EXPENSES at PORT of REFUGE, etc. - RULE XI . WAGES andMAINTENANCE of CREW and other expenses bearing up for and in a port of refuge etc. - RULE XII DAMAGE to CARGOin DISCHARGING, etc - RULE XIII DEDUCTIONS from COST of REPAIRS - RULE XIV TEMPPORARY REPAIRS -RULE XV LOSS of FREIGHT - RULE XVI AMOUNT to be MADE GOOD for CARGO LOST or DAMAGED bySACRIFICE - RULE XVII CONTRIBUTORY VALUES - RULE XVIII DAMAGE to SHIP - RULE XIX UNDECLARED orWRONGFULLY DECLARED CARGO - RULE XX PROVISION of FUNDS - RULE XXI INTEREST on LOSSES madegood in GENERAL AVERAGE - RULE XXII TREATMENT of CASH DEPOSITS

RULE of INTERPRETATIONIn the adjustment of general average the following Rules shall apply to the exclusion of any Law and Practice inconsistenttherewith.

Except as provided by the Rule Paramount and the numbered Rules, general average shall be adjusted according to the letteredRules

RULE PARAMOUNTIn no case shall there be any allowance for sacrifice or expenditure unless reasonably made or incurred.

RULE AThere is a general average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonablymade or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritimeadventure.

General average sacrifices and expenditures shall be borne by the different contributing interests on the basis hereinafterprovided

RULE BThere is a common maritime adventure when one or more vessels are towing or pushing another vessel or vessels, providedthat they are all involved in commercial activities and not in a salvage operation.

When measures are taken to preserve the vessels and their cargoes, if any, from a common peril, these Rules shall apply.

A vessel is not in common peril with another vessel or vessels if by simply disconnecting from the other vessel or vessels she isin safety; but if the disconnection is itself a general average act the common maritime adventure continues.

RULE COnly such losses, damages or expenses which are the direct consequence of the general average act shall be allowed as generalaverage.

In no case shall there be any allowance in general average for losses, damages or expenses incurred in respect of damage to theenvironment or in consequence of the escape or release of pollutant substances from the property involved in the commonmaritime adventure.

Demurrage, loss of market, and any loss or damage sustained or expense incurred by reason of delay, whether on the voyageor subsequently, and any indirect loss whatsoever, shall not be admitted as general average.

RULE DRights to contribution in general average shall not be affected, though the event which gave rise to the sacrifice or expendituremay have been due to the fault of one of the parties to the adventure, but this shall not prejudice any remedies or defenceswhich may be open against or to that party in respect of such fault.

RULE EThe onus of proof is upon the party claiming in general average to show that the loss or expense claimed is properly allowableas general average.

All parties claiming in general average shall give notice in writing to the average adjuster of the loss or expense in respect ofwhich they claim contribution within 12 months of the date of the termination of the common maritime adventure.

Failing such notification, or if within 12 months of a request for the same any of the parties shall fail to supply evidence insupport of a notified claim, or particulars of value in respect of a contributory interest, the average adjuster shall be at liberty toestimate the extent of the allowance or the contributory value on the basis of the information available to him, which estimatemay be challenged only on the ground that is manifestly incorrect.

RULE FAny additional expense incurred in place of another expense which would have been allowable as general average shall bedeemed to the general average and so allowed without regard to the saving, if any, to other interests, but only up to the amountof the general average expense avoided.

RULE GGeneral average shall be adjusted as regards both loss and contribution upon the basis of values at the time and place when andwhere the adventure ends.

This rule shall not affect the determination of the place at which the average statement is to be made up.

When a ship is at any port or place in circumstances which would give rise to an allowance in general average under theprovisions of rules X and XI, and the cargo or part thereof is forwarded to destination by other means, rights and liabilities ingeneral average shall, subject to cargo interests being notified if practicable, remain as nearly as possible the same as theywould have been in the absence of such forwarding, as if the adventure had continued in the original ship for so long asjustifiable under the contract of affreightment and the applicable law. The proportion attaching to cargo of the allowances madein general average by reason of applying the third paragraph of this Rule shall not exceed the cost which would have beenborne by the owners of cargo if the cargo had been forwarded at their expense.

RULE I. JETTISON of CARGONo jettison of cargo shall be made good as general average, unless such cargo is carried in accordance with the recognisedcustom of the trade.

RULE II. LOSS or DAMAGE by SACRIFICES for the COMMON SAFETYLoss of or damage to the property involved in the common maritime adventure by or in consequence of a sacrifice made for thecommon safety, and by water which goes down a ship's hatches opened or other opening made for the purpose of making ajettison for the common safety, shall be made good as general average.

RULE III. EXTINUISHING FIRE on SHIPBOARDDamage done to a ship and cargo, or either of them, by water or otherwise, including damage by beaching or scuttling aburning ship, in extinguishing a fire on board the ship, shall be made good as general average; except that no compensationshall be made for damage by smoke however caused or by heat of the fire.

RULE IV. CUTTING AWAY WRECKLoss or damage sustained by cutting away wreck or parts of the ship which have been previously carried away or areeffectively lost by accident shall not be made good as general average.

RULE V. VOLUNTARY STRANDINGWhen a ship is intentionally run on shore for the common safety, whether or not she might have been driven on shore, theconsequent loss or damage to the property involved in the common maritime adventure shall be allowed in general average.

RULE VI. SALVAGE REMUNERATION1.Expenditure incurred by the parties to the adventure in the nature of salvage, whether under contract or otherwise, shall beallowed in general average provided that the salvage operations were carried out for the purpose of preserving from peril theproperty involved in the common maritime adventure.

Expenditure allowed in general average shall include any salvage remuneration in which the skill and efforts of the salvors inpreventing or minimising damage to the environment such as is reffered to in Art.13 paragraph 1(b) of the InternationalConvention on Salvage, 1989 have been taken into account.1.Special compensation payable to a salvor by the shipowner under Art.14 of the said Convention to the extent specified inparagraph 4 of that Article or under any other provision similar in substance shall not be allowed in general average.

RULE VII. DAMAGE to MACHINERY and BOILERSDamage caused to any machinery and boilers of a ship which is ashore and in a position of peril, in endeavoring to refloat,shall be allowed in general average when shown to have arisen from an actual intention to float the ship for the common safetyat the risk of such damage; but where a ship is afloat no loss or damage caused by working the propelling machinery andboilers shall be made good as general average.

RULE VIII. EXPENSES LIGHTENING a SHIP when ASHORE, and CONSEQUENT DAMAGEWhen a ship is ashore and cargo and ship's fuel and stores or any of them are discharged as a general average act, the extra costof lightening, lighter hire and reshipping (if incurred), and any loss or damage to the property involved in the commonmaritime adventure in consequence thereof, shall be admitted as general average.

RULE IX. CARGO, SHIP'S MATERIALS and STORES used for FUELCargo, ship's materials and stores, or any of them, necessarily used for fuel for the common safety at a time of peril shall beadmitted as general average, but when such an allowance is made for the cost of ship's materials and stores the general averageshall be credited with the estimated cost of the fuel which would otherwise have been consumed in prosecuting the intendedvoyage.

RULE X. EXPENSES at PORT of REFUGE, etc.1.When a ship shall have entered a port or place of refuge or shall have returned to her port or place of loading in consequenceof accident, sacrifice or other extraordinary circumstances which render that necessary for the common safety, the expenses ofentering such port or place shall be admitted as general average; and when she shall have sailed thence with her original cargo,or part of it, the corresponding expenses of leaving such port or place consequent upon such entry or return shall likewise beadmitted as general average. When a ship is at any port or place of refuge and is necessarily removed to another port or placebecause repairs cannot be carried out in the first port or place, the provisions of this Rule shall be applied to the second port orplace as if it were a port or place of refuge and the cost of such removal including temporary repairs and towage shall beadmitted as general average. The provisions of Rule XI shall be applied to the prolongation of the voyage occasioned by suchremoval.

2.The cost of handling on board or discharging cargo, fuel or stores whether at port or place of loading, call or refuge, shall beadmitted as general average, when the handling or discharge was necessary for the common safety or to enable damage to theship caused by sacrifice or accident to be repaired, if the repairs where necessary for the safe prosecution of the voyage, exceptin the cases where the damage to the ship is discovered at a port or place of loading or call without any accident or otherextraordinary circumstances connected with such damage having taken place during the voyage. The cost of handling on boardor discharging cargo, fuel or stores shall not be admissible as general average when incurred solely for the purpose ofrestowage due to shifting during the voyage, unless such restowage is necessary for the common safety.

3.Whenever the cost of handling or discharging cargo, fuel or stores is admissible as general average, the costs of stowage,including insurance if reasonably incurred, reloading and stowing of such cargo, fuel or stores shall likewise be admitted asgeneral average. The provisions of Rule XI shall be applied to the extra period of detention occasioned by such reloading orrestowing. But when the ship is condemned or does not proceed on her original voyage, storage expenses shall be admitted as

general average only up to the date of completion of discharge of cargo if the ship's condemnation or abandonment takes placebefore that date.

RULE XI. WAGES and MAINTENANCE of CREW and other expenses bearing up for and in a port of refuge etc.

1.Wages and maintenance of master, officers and crew reasonably incurred and fuel and stores consumed during theprolongation of the voyage occasioned by a ship entering a port or place of refuge or returning to her port or place of loadingshall be admitted as general average when the expenses of entering such a port or place are allowable in accordance with RuleX(a).

2.When a ship shall have entered or been detained in any port or place in consequence of accident, sacrifice or otherextraordinary circumstances which render that necessary for the common safety, or to enable damage to the ship caused bysacrifice or accident to be repaired, if the repairs were necessary for the safe prosecution of the voyage, the wages andmaintenance of the master, officers and crew reasonably incurred during the extra period of detention in such port or place untilthe ship shall or should have been made ready to proceed upon her voyage, shall be admitted in general average. Fuel andstores consumed during the extra period of detention shall be admitted as general average, except such fuel and stores as areconsumed in effecting repairs not allowable in general average. Port charges incurred during the extra period of detention shalllikewise be admitted as general average except such charges as are incurred solely by reason of repairs not allowable in generalaverage.

Provided that when the damage to the ship is discovered at a port or place of loading or call without any accident or otherextraordinary circumstance connected with such damage having taken place during the voyage, then the wages andmaintenance of master, officers and crew and fuel and stores consumed and port charges incurred during the extra detention forrepairs to damages so discovered shall not be admissible as general average, even if the repairs are necessary for the safeprosecution of the voyage. When the ship is condemned or does not proceed on her original voyage, the wages andmaintenance of the master, officers and crew and fuel and stores consumed and port charges shall be admitted as generalaverage only up to the ship's condemnation or of the abandonment of the voyage or up to the date of completion of dischargeof cargo if the condemnation or abandonment takes place before that date.

3.For the purpose of this and the other Rules wages shall include all payments made to or for the benefit of the master, officersand crew, whether such payments be imposed by law upon the shipowners or be made under the terms of articles ofemployment.

4.The cost of measures undertaken to prevent or minimise damage to the environment shall be allowed in general averagewhen incurred in any or all of the following circumstances:

5.as part of an operation performed for the common safety which, had it been undertaken by a party outside the commonmaritime adventure, would have entitled such party to a salvage reward;

6.as a condition of entry into or departure from any port or place in the circumstances prescribed in Rule X(a);

7.as a condition of remaining at any port or place in the circumstances prescribed in Rule X(b), provided that when there is anactual escape or release of pollutant substances the cost of any additional measures required on that account to prevent ormnimise pollution or environmental damage shall not be allowed as general average;

8.necessarily in connection with the discharging, storing or reloading of cargo whenever the cost of those operations isadmissible as general average.

RULE XII DAMAGE to CARGO in DISCHARGING, etc.Damage to or loss of cargo, fuel or stores sustained in consequence of their handling, discharging, storing, reloading andstowing shall be made good as general average, when and only when the cost of those measures respectively is admitted asgeneral average.

RULE XIII DEDUCTIONS from COST of REPAIRSRepairs to be allowed in general average shall not be subject to deductions in respect of "new for old" where old material orparts are replaced by new unless the ship is over fifteen years old in which case there shall be a deduction of one third. The

deductions shall be regulated by the age of the ship from the 31st December of the year of completion of construction to thedate of the general average act, except for insulation, life and similar boats communications and navigational apparatus andequipment, machinery and boilers for which the deductions shall be regulated by the age of a particular parts to which theyapply.

The deductions shall be made only from the cost of the new material or parts when finished and ready to be installed in theship.

No deduction shall be made in respect of provisions, stores, anchors and chain-cables.

Drydock and slipway dues and costs of shifting the ship shall be allowed in full.

The costs of cleaning, painting or coating of bottom shall not be allowed in general average unless the bottom has been paintedor coated within the twelve months preceding the date of the general average act in which case one half of such costs shall beallowed.

RULE XIV TEMPPORARY REPAIRSWhere temporary repairs are effected to a ship at a port of loading, call or refuge, for the common safety, or of damage causedby general average sacrifice, the cost of such repairs shall be admitted as general average.

Where temporary repairs of accidental damage are effected in order to enable the adventure to be completed, the cost of suchrepairs shall be admitted as general average without regard to the saving, if any, to other interests, but only up to the saving inexpense which would have been incurred and alowed in general average if such repairs had not been effected there.

No deductions "new for old" shall be made from the cost of temporary repairs allowable as general average.

RULE XV LOSS of FREIGHTLoss of freight arising from damage to or loss of cargo shall be made good as general average, either when caused by a generalaverage act, or when the damage to or los of cargo is so made good.

Deduction shall be made from the amount of gross freight lost, of the charges which the owner thereof would have incurred toearn such freight, but has, in consequence of the sacrifice, not incurred.

RULE XVI AMOUNT to be MADE GOOD for CARGO LOST or DAMAGED by SACRIFICEThe amount to be made good as general average for damage to or loss of cargo sacrificed shall be the loss which has beensustained thereby based on the value at the time of discharge, ascertained from the commercial invoice rendered to the receiveror if there is no such invoice from the shipped value.The value at the time of discharge shall include the cost of insurance and freight except insofar as such freight is at the risk ofinterests other than the cargo.

When cargo so damaged is sold and the amount of the damage has not been otherwise agreed, the loss to be made good ingeneral average shall be the difference between the net proceeds of sale and the net sound value as computed in the firstparagraph of this Rule.

RULE XVII CONTRIBUTORY VALUESThe contribution to a general average shall be made upon the actual net values of the property at the termination of theadventure except that the value of cargo shall be the value at the time of discharge, ascertained from the commercial invoicerendered to the receiver or if there is no such invoice from the shipped value. The value of the cargo shall include the cost ofinsurance and freight unless and insofar as such freight is at the risk of interests other than the cargo, deducting therefrom anyloss or damage suffer by the cargo prior to or at the time of discharge. The value of the ship shall be assessed without takinginto account the beneficial or detrimental effect of any demise or time charterparty to which the ship may be committed.

To these values shall be added the amount made good as general average for property sacrificed, if not already included,deduction being made from the freight and passage money at risk of such charges and crew's wages as would not have beenincurred in earning the freight had the ship and cargo being totally lost at the date of the general average act and have not beenallowed as general average; deduction being also made from the value of the property of all extra charges incurred in respect

thereof subsequently to the general average act, except such charges as are allowed in general average or fall upon the ship byvirtue of an award for special compensation under Art.14 of the International Convention on Salvage, 1989 or under any otherprovision similar in substance.

In the circumstances envisaged in the third paragraph of Rule G, the cargo and other property shall contribute on the basis ofits value upon delivery at original destination unless sold or otherwise disposed of short of that destination, and the ship shallcontribute upon its actual net value at the time of completion of discharge of cargo.

Where cargo is sold short of destination, however, it shall contribute upon the actual net proceeds of sale, with the addition ofany amount made good as general average.

Mails, passengers' luggage, personal effects and accompanied private motor vehicles shall not contribute in general average.

RULE XVIII DAMAGE to SHIPThe amount to be allowed as general average for damage or loss to the ship, her machinery and/or gear caused by a generalaverage act shall be as follows:1.When repaired or replaced , the actual reasonable cost of repairing or replacing such damage or loss, subject to deductions inaccordance with Rule XIII;2.When not repaired or replaced , the reasonable depreciation arising from such damage or loss, but not exceeding theestimated cost of repairs. But where the ship is an actual total loss or when the cost of repairs of the damage would exceed thevalue of the ship when repaired, the amount to be allowed as general average shall be the difference between the estimatedsound value of the ship after deducing therefrom the estimated cost of repairing damage which is not general average and thevalue of the ship in her damaged state which may be measured by the net proceeds of sale, if any.

RULE XIX UNDECLARED or WRONGFULLY DECLARED CARGODamage or loss caused to goods loaded without the knowledge of the shipowner or his agent or to goods wilfully misdescribedat time of shipment shall not be allowed as general average, but such goods shall remain liable to contribute, if saved.

Damage or loss caused to goods which have been wrongfully declared on shipment at a value which is lower than their realvalue shall be contributed for at the declared value, but such goods shall contribute upon their actual value.

RULE XX PROVISION of FUNDSA commission of 2 per cent. on general average disbursements, other than the wages and maintenance of master, officers andcrew and fuel and stores not replaced during the voyage, shall be allowed in general average.

The capital loss sustained by the owners of goods sold for the purpose of raising funds to defray general average disbursementsshall be allowed in general average.

The cost of insuring general average disbursements shall also be admitted in general average.

RULE XXI INTEREST on LOSSES made good in GENERAL AVERAGEInterest shall be allowed on expenditure, sacrifices and allowances in general average at the rate of 7 per cent per annum, untilthree months after the date of issue of the general average adjustment, due allowance being made for any payment on accountby the contributory interests or from the general average deposit fund.

RULE XXII TREATMENT of CASH DEPOSITSWhere cash deposits have been collected in respect of cargo's liability for general average, salvage or special charges suchdeposits shall be paid without any delay into a special account in the joint names of a representative nominated on behalf of theshipowner and a representative nominated on behalf of the depositors in a bank to be approved by both. The sum so depositedtogether with the accrued interest, if any, shall be held as security for payment to the parties entitled thereto of the generalaverage, salvage or special charges payable by cargo in respect of which the deposits have been collected. Payments on accountor refunds of deposits may be made if certified to in writing by the average adjuster. Such deposits and payments or refundsshall be without prejudice to the ultimate liability of the parties.

The Hamburg Rules

United Nations Convention on the Carriage of Goods by Sea (Hamburg, 30 March 1978)PART I - GENERAL PROVISIONS Article 1 Definitions - Article 2 Scope of application -Article 3 Interpretation of the Convention - PART II - LIABILITY OF THE CARRIER Article 4Period of responsibility - Article 5 Basis of liability - Article 6 Limits of liability - Article 7Application to non-contractual claims - Article 8 Loss of right to limit responsibility -Article 9 Deck cargo - Article 10 Liability of the carrier and actual carrier - Article 11Through carriage - PART III - LIABILITY OF THE SHIPPER Article 12 General rule - Article13 Special rules on dangerous goods - PART IV - TRANSPORT DOCUMENTS Article 14 Issueof bill of lading - Article 15 Contents of bill of lading - Article 16 Bills of lading:reservations and evidentiary effect - Article 17 Guarantees by the shipper - Article 18 -Documents other than bills of lading - PART V - CLAIMS AND ACTIONS Article 19 Notice ofloss, damage or delay - Article 20 Limitation of actions - Article 21 Jurisdiction - Article22 Arbitration - PART VI - SUPPLEMENTARY PROVISIONS Article 23 Contractualstipulations - Article 24 General average - Article 25 Other conventions - Article 26 - Unitof account - PART VII - FINAL CLAUSES Article 27 Depositary - Article 28 Signature,ratification, acceptance, approval, accession - Article 29 Reservations -Article 30 Entryinto force - Article 31 Denunciation of other conventions - Article 32 Revision andamendment - Article 33 Revision of the limitation amounts and unit of account ormonetary unit - Article 34 DenunciationChronological Table of Ratifications and Accessions

UNITED NATIONS CONVENTION ON THE CARRIAGE OF GOODS BY SEA (THE HAMBURG RULES) -Hamburg, 30 March 1978The States Parties to this Convention, Having recognized the desirability of determining by agreement certain rules relating tothe carriage of goods by sea, have decided to conclude a Convention for this purpose and have thereto agreed as follows:

PART I - GENERAL PROVISIONSArticle 1 - DefinitionsIn this Convention:1. "Carrier" means any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a

shipper.2. "Actual carrier" means any person to whom the performance of the carriage of the goods, or of part of the carriage, has

been entrusted by the carrier, and includes any other person to whom such performance has been entrusted.

3. "Shipper" means any person by whom or in whose name or on whose behalf a contract of carriage of goods by sea hasbeen concluded with a carrier, or any person by whom or in whose name or on whose behalf the goods are actuallydelivered to the carrier in relation to the contract of carriage by sea.

4. "Consignee" means the person entitled to take delivery of the goods.5. "Goods" includes live animals; where the goods are consolidated in a container, pallet or similar article of transport or

where they are packed, "goods" includes such article of transport or packaging if supplied by the shipper.6. "Contract of carriage by sea" means any contract whereby the carrier undertakes against payment of freight to carry goods

by sea from one port to another; however, a contract which involves carriage by sea and alsocarriage by some other meansis deemed to be a contract of carriage by sea for the purposes of this Convention only in so far as it relates to the carriageby sea.

7. "Bill of lading" means a document which evidences a contract of carriage by sea and the taking over or loading of thegoods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document. Aprovision in the document that the goods are to be delivered to the order of a named person, or to order, or to bearer,constitutes such an undertaking.

8. "Writing" includes, inter alia, telegram and telex.

Article 2 - Scope of application

1 . The provisions of this Convention are applicable to all contracts of carriage by sea between two different States, if:(a) The port of loading as provided for in the contract of carriage by sea is located in a Contracting State, or(b) The port of discharge as provided for in the contract of carriage by sea is located in a Contracting State, or(c) One of the optional ports of discharge provided for in the contract of carriage by sea is theactual port of discharge and

such port is located in a Contracting State, or(d) The bill of lading or other document evidencing the contract of carriage by sea is issued in a Contracting State, or(e) The bill of lading or other document evidencing the contract of carriage by sea provides that the provisions of this

Convention or the legislation of any State giving effect to them are to govern the contract.

2. The provisions of this Convention are applicable without regard to the nationality of the ship, the carrier, the actual carrier,the shipper, the consignee or any other interested person.

3. The provisions of this Convention are not applicable to charter-parties. However, where a bill of lading is issued pursuant toa charter-party, the provisions of the Convention apply to such a bill of lading if it governs the relation between the carrierand the holder of the bill of lading, not being the charterer.

4. If a contract provides for future carriage of goods in a series of shipments during an agreed period, the provisions of thisConvention apply to each shipment. However, where a shipment is made under a charter-party, the provisions of paragraph 3of this article apply.

Article 3 - Interpretation of the ConventionIn the interpretation and application of the provisions of this Convention regard shall be had to its international character and tothe need to promote uniformity.

PART II - LIABILITY OF THE CARRIERArticle 4 - Period of responsibility1 . The responsibility of the carrier for the goods under this Convention covers the period during which the carrier is in charge

of the goods at the port of loading, during the carriage and at the port of discharge.2 . For the purpose of paragraph 1 of this article, the carrier is deemed to be in charge of the goods

(a) From the time he has taken over the goods from:(i) The shipper, or a person acting on his behalf; or(ii) An authority or other third party to whom, pursuant to law or regulations applicable at the port of loading, the goods

must be handed over for shipment;(b) Until the time he has delivered the goods:

(i) By handing over the goods to the consignee; or(ii) In cases where the consignee does not receive the goods from the carrier, by placing them at the disposal of the

consignee in accordance with the contract or with the law or with the usage of the particular trade, applicable at theport of discharge, or

(iii) By handing over the goods to an authority or other third party to whom, pursuant to law or regulations applicable atthe port of discharge, the goods must be handed over.

3 . In paragraphs 1 and 2 of this article, reference to the carrier or to the consignee means, in addition to the carrier or theconsignee, the servants or agents, respectively of the carrier or the consignee.

Article 5 - Basis of liability1 . The carrier is liable for loss resulting from loss of or damage to the goods, as well as from delay in delivery, if the

occurrence which caused the loss, damage or delay took place while the goods were in his charge as defined in article 4,unless the carrier proves that he, his servants or agents took all measures that could reasonably be required to avoid theoccurrence and its consequences.

2 . Delay in delivery occurs when the goods have not been delivered at the port of discharge provided for in the contract ofcarriage by sea within the time expressly agreed upon or, in the absence of such agreement, within the time which it wouldbe reasonable to require of a diligent carrier, having regard to the circumstances of the case.

3 . The person entitled to make a claim for the loss of goods may treat the goods as lost if they have not been delivered asrequired by article 4 within 60 consecutive days following the expiry of the time for delivery according to paragraph 2 ofthis article.

4 . (a) The carrier is liable(i) For loss or damage to the goods or delay in delivery caused by fire, if the claimant proves that the fire arose from

fault or neglect on the part of the carrier, his servants or agents;

(ii) For such loss, damage or delay in delivery which is proved by the claimant to have resulted from the fault or neglectof the carrier, his servants or agents, in taking all measures that could reasonably be required to put out the fire andavoid or mitigate its consequences.

(b) In case of fire on board the ship affecting the goods, if the claimant or the carrier so desires, a survey in accordance withshipment practices must be held into the cause and circumstances of the fire, and a copy of the surveyor's report shall be madeavailable on demand to the carrier and the claimant.5 . With respect to live animals, the carrier is not liable for loss, damage or delay in delivery resulting from any special risks

inherent in that kind of carriage. If the carrier proves that he has complied with any special instructions given to him by theshipper respecting the animals and that, in the circumstances of the case, the loss, damage or delay in delivery could beattributed to such risks, it is presumed that the loss, damage or delay in delivery was so caused, unless there is proof that allor a part of the loss, damage or delay in delivery resulted from fault or neglect on the part of the carrier, his servants oragents.

6 . The carrier is not liable, except in general average, where loss, damage or delay in delivery resulted from measures to savelife or from reasonable measures to save property at sea.

7 . Where fault or neglect on the part of the carrier, his servants or agents combines with another cause to produce loss, damageor delay in delivery the carrier is liable only to the extent that the loss, damage or delay in delivery is attributable to suchfault or neglect, provided that the carrier proves the amount of the loss, damage or delay in delivery not attributable thereto.

Article 6 - Limits of liability

1 . (a) The liability of the carrier for loss resulting from loss of or damage to goods according to the provisions of article 5 islimited to an amount equivalent to 835 units of account per package or other shipping unit or 2.5 units of account perkilogram of gross weight of the goods lost or damaged, whichever is the higher.

(b) The liability of the carrier for delay in delivery according to the provisions of article 5 is limited to an amountequivalent to two and a half times the freight payable for the goods delayed, but no exceeding the total freight payableunder the contract of carriage of goods by sea.

(c) In no case shall the aggregate liability of the carrier, under both subparagraphs (a) and (b) of this paragraph, exceed thelimitation which would be established under subparagraph (a) of this paragraph for total loss of the goods with respectto which such liability was incurred.

2 . For the purpose of calculating which amount is the higher in accordance with paragraph 1 (a) of this article, the followingrules apply:(a) Where a container, pallet or similar article of transport is used to consolidate goods, the package or other shipping units

enumerated in the bill of lading, if issued, or otherwise in any other document evidencing the contract of carriage bysea, as packed in such article of transport are deemed packages or shipping units. Except as aforesaid the goods in sucharticle of transport are deemed one shipping unit.

(b) In cases where the article of transport itself has been lost or damaged, that article of transport, if not owned or otherwisesupplied by the carrier, is considered one separate shipping unit.

3 . Unit of account means the unit of account mentioned in article 26.4 . By agreement between the carrier and the shipper, limits of liability exceeding those provided for in paragraph 1 may be

fixed.

Article 7 - Application to non-contractual claims1 . The defenses and limits of liability provided for in this Convention apply in any action against the carrier in respect of loss

or damage to the goods covered by the contract of carriage by sea, as well as of delay in delivery whether the action isfounded in contract, in tort or otherwise.

2 . If such action is brought against a servant or agent of the carrier, such servant or agent, if he proves that he acted within thescope of his employment, is entitled to avail himself of the defenses and limits of liability which the carrier is entitled toinvoke under this Convention.

3 . Except as provided in article 8, the aggregate of the amounts recoverable from the carrier and from any persons referred toin paragraph 2 of this article shall not exceed the limits of liability provided for in this Convention.

Article 8 - Loss of right to limit responsibility1 . The carrier is not entitled to the benefit of the limitation of liability provided for in article 6 if it is proved that the loss,

damage or delay in delivery resulted from an act or omission of the carrier done with the intent to cause such loss, damageor delay, or recklessly and with knowledge that such loss, damage or delay would probably result.

2 . Notwithstanding the provisions of paragraph 2 of article 7, a servant or agent of the carrier is not entitled to the benefit ofthe limitation of liability provided for in article 6 if it is proved that the loss, damage or delay in delivery resulted from anact or omission of such servant or agent, done with the intent to cause such loss, damage or delay, or recklessly and withknowledge that such loss, damage or delay would probably result.

Article 9 - Deck cargo1 . The carrier is entitled to carry the goods on deck only if such carriage is in accordance with an agreement with the shipper

or with the usage of the particular trade or is required by statutory rules or regulations.2 . If the carrier and the shipper have agreed that the goods shall or may be carried on deck, the carrier must insert in the bill of

lading or other document evidencing the contract of carriage by sea a statement to that effect. In the absence of suchstatement the carrier has the burden of proving that an agreement for carriage on deck has been entered into; however, thecarrier is not entitled to invoke such an agreement against a third party, including a consignee, who has acquired the bill oflading in good faith.

3 . Where the goods have been carried on deck contrary to the provisions of paragraph 1 of this article or where the carrier maynot under paragraph 2 of this article invoke an agreement for carriage on deck, the carrier, notwithstanding the provisions ofparagraph 1 of article 5, is liable for loss of or damage to the goods, as well as for delay in delivery, resulting solely fromthe carriage on deck, and the extent of his liability is to be determined in accordance with the provisions of article 6 orarticle 8 of this Convention, as the case may be.

4 . Carriage of goods on deck contrary to express agreement for carriage under deck is deemed to be an act or omission of thecarrier within the meaning of article 8.

Article 10 - Liability of the carrier and actual carrier1 . Where the performance of the carriage or part thereof has been entrusted to an actual carrier, whether or not in pursuance of

a liberty under the contract of carriage by sea to do so, the carrier nevertheless remains responsible for the entire carriageaccording to the provisions of this Convention. The carrier is responsible, in relation to the carriage performed by the actualcarrier, for the acts and omissions of the actual carrier and of his servants and agents acting within the scope of theiremployment.

2 . All the provisions of this Convention governing the responsibility of the carrier also apply to the responsibility of the actualcarrier for the carriage performed by him. The provisions of paragraphs 2 and 3 of article 7 and of paragraph 2 of article 8apply if an action is brought against a servant or agent of the actual carrier.

3 . Any special agreement under which the carrier assumes obligations not imposed by this Convention or waives rightsconferred by this Convention affects the actual carrier only if agreed to by him expressly and in writing. Whether or not theactual carrier has so agreed, the carrier nevertheless remains bound by the obligations or waivers resulting from such specialagreement.

4 . Where and to the extent that both the carrier and the actual carrier are liable, their liability is joint and several.5 . The aggregate of the amounts recoverable from the carrier, the actual carrier and their servants and agents shall not exceed

the limits of liability provided for in this Convention.6 . Nothing in this article shall prejudice any right of recourse as between the carrier and the actual carrier.

Article 11- Through carriage1 . Notwithstanding the provisions of paragraph 1 of article 10, where a contract of carriage by sea provides explicitly that a

specified part of the carriage covered by the said contract is to be performed by a named person other than the carrier, thecontract may also provide that the carrier is not liable for loss, damage or delay in delivery caused by an occurrence whichtakes place while the goods are in the charge of the actual carrier during such part of the carriage. Nevertheless, anystipulation limiting or excluding such liability is without effect if no judicial proceedings can be instituted against the actualcarrier in a court competent under paragraph 1 or 2 of article 21. The burden of proving that any loss, damage or delay indelivery has been caused by such an occurrence rests upon the carrier.

2 . The actual carrier is responsible in accordance with the provisions of paragraph 2 of article 10 for loss, damage or delay indelivery caused by an occurrence which takes place while the goods are in his charge.

PART III - LIABILITY OF THE SHIPPERArticle 12 - General ruleThe shipper is not liable for loss sustained by the carrier or the actual carrier, or for damage sustained by the ship, unless suchloss or damage was caused by the fault or neglect of the shipper, his servants or agents. Nor is any servant or agent of theshipper liable for such loss or damage unless the loss or damage was caused by fault or neglect on his part.

Article 13 - Special rules on dangerous goods1 . The shipper must mark or label in a suitable manner dangerous goods as dangerous.2 . Where the shipper hands over dangerous goods to the carrier or an actual carrier, as the case may be, the shipper must

inform him of the dangerous character of the goods and, if necessary, of the precautions to be taken. If the shipper fails todo so and such carrier or actual carrier does not otherwise have knowledge of their dangerous character:(a) The shipper is liable to the carrier and any actual carrier for the loss resulting from the shipment of such goods, and(b) The goods may at any time be unloaded, destroyed or rendered innocuous, as the circumstances may require, without

payment of compensation.

3 . The provisions of paragraph 2 of this article may not be invoked by any person if during the carriage he has taken the goodsin his charge with knowledge of their dangerous character.4 . If, in cases where the provisions of paragraph 2, subparagraph (b), of this article do not apply or may not be invoked,

dangerous goods become an actual danger to life or property, they may be unloaded, destroyed or rendered innocuous, asthe circumstances may require, without payment of compensation except where there is an obligation to contribute ingeneral average or where the carrier is liable in accordance with the provisions of article 5.

PART IV - TRANSPORT DOCUMENTSArticle 14 - Issue of bill of lading1 . When the carrier or the actual carrier takes the goods in his charge, the carrier must, on demand of the shipper, issue to the

shipper a bill of lading.2 . The bill of lading may be signed by a person having authority from the carrier. A bill of lading signed by the master of the

ship carrying the goods is deemed to have been signed on behalf of the carrier.3 . The signature on the bill of lading may be in handwriting, printed in facsimile, perforated, stamped, in symbols, or made by

any other mechanical or electronic means, if no inconsistent with the law of the country where the bill of lading is issued.

Article 15 - Contents of bill of lading1 . The bill of lading must include, inter alia, the following particulars:

(a) The general nature of the goods, the leading marks necessary for identification of the goods, an express statement, ifapplicable, as to the dangerous character of the goods, the number of packages or pieces, and the weight of the goods ortheir quantity otherwise expressed, all such particulars as furnished by the shipper;

(b) the apparent condition of the goods;(c) the name and principal place of business of the carrier;(d) the name of the shipper;(e) the consignee if named by the shipper;(f) the port of loading under the contract of carriage by sea and the date on which the goods were taken over by the carrier at

the port of loading;(g) the port of discharge under the contract of carriage by sea;(h) the number of originals of the bill of lading, if more than one;(i) the place of issuance of the bill of lading;(j) the signature of the carrier or a person acting on his behalf;(k) the freight to the extent payable by the consignee or other indication that freight is payable by him;(l) the statement referred to in paragraph 3 of article 23;

(m) the statement, if applicable, that the goods shall or may be carried on deck;(n) the date or the period of delivery of the goods at the port of discharge if expressly agreed upon between the parties; and(o) any increased limit or limits of liability where agreed in accordance with paragraph 4 of article 6.

2 . After the goods have been loaded on board, if the shipper so demands, the carrier must issue to the shipper a "shipped" billof lading which, in addition to the particulars required under paragraph 1 of this article, must state that the goods are onboard a named ship or ships, and the date or dates of loading. If the carrier has previously issued to the shipper a bill oflading or other document of title with respect to any of such goods, on request of the carrier, the shipper must surrendersuch document in exchange for a "shipped" bill of lading. The carrier may amend any previously issued document in order

to meet the shipper's demand for a "shipped" bill of lading if, as amended, such document includes all the informationrequired to be contained in a "shipped" bill of lading.

3 . The absence in the bill of lading of one or more particulars referred to in this article does not affect the legal character of thedocument as a bill of lading provided that it nevertheless meets the requirements set out in paragraph 7 of article 1.

Article 16 - Bills of lading: reservations and evidentiary effect1 . If the bill of lading contains particulars concerning the general nature, leading marks, number of packages or pieces, weight

or quantity of the goods which the carrier or other person issuing the bill of lading on his behalf knows or has reasonablegrounds to suspect do not accurately represent the goods actually taken over or, where a "shipped" bill of lading is issued,loaded, or if he had no reasonable means of checking such particulars, the carrier or such other person must insert in the billof lading a reservation specifying these inaccuracies, grounds of suspicion or the absence of reasonable means of checking.

2 . If the carrier or other person issuing the bill of lading on his behalf fails to note on the bill of lading the apparent conditionof the goods, he is deemed to have noted on the bill of lading that the goods were in apparent good condition.

3 . Except for particulars in respect of which and to the extent to which a reservation permitted under paragraph 1 of this articlehas been entered:(a) The bill of lading is prima facie evidence of the taking over or, where a "shipped" bill of lading is issued, loading, by the

carrier of the goods as described in the bill of lading; and

(b) Proof to the contrary by the carrier is not admissible if the bill of lading has been transferred to a third party, including aconsignee, who in good faith has acted in reliance on the description of the goods therein.

4 . A bill of lading which does not, as provided in paragraph 1, subparagraph (h) of article 15, set forth thefreight or otherwiseindicate that freight is payable by the consignee or does not set forth demurrage incurred at the port of loading payable bythe consignee, is prima facie evidence that no freight or such demurrage is payable by him. However, proof to the contraryby the carrier is not admissible when the bill of lading has been transferred to a third party, including a consignee, who ingood faith has acted in reliance on the absence in the bill of lading of any such indication.

Article 17 - Guarantees by the shipper1 . The shipper is deemed to have guaranteed to the carrier the accuracy of particulars relating to the general nature of the

goods, their marks, number, weight and quantity as furnished by him for insertion in the bill of lading. The shipper mustindemnify the carrier against the loss resulting from inaccuracies in such particulars. The shipper remains liable even if thebill of lading has been transferred by him. The right of the carrier to such indemnity in no way limits his liability under thecontract of carriage by sea to any person other than the shipper.

2 . Any letter of guarantee or agreement by which the shipper undertakes to indemnify the carrier against loss resulting fromthe issuance of the bill of lading by the carrier, or by a person acting on his behalf, without entering a reservation relating toparticulars furnished by the shipper for insertion in the bill of lading, or to the apparent condition of the goods, is void andof no effect as against any third party, including a consignee, to whom the bill of lading has been transferred.

3 . Such letter of guarantee or agreement is valid as against the shipper unless the carrier or the person acting on his behalf, byomitting the reservation referred to in paragraph 2 of this article, intends to defraud a third party, including a consignee,who acts in reliance on the description of the goods in the bill of lading. In the latter case, if the reservation omitted relatesto particulars furnished by the shipper for insertion in the bill of lading, the carrier has no right of indemnity from theshipper pursuant to paragraph 1 of this article.

4 . In the case of intended fraud referred to in paragraph 3 of this article the carrier is liable, without the benefit of the limitationof liability provided for in this Convention, for the loss incurred by a third party, including a consignee, because he hasacted in reliance on the description of the goods in the bill of lading.

Article 18 - Documents other than bills of ladingWhere a carrier issues a document other than a bill of lading to evidence the receipt of the goods to be carried, such a documentis prima facie evidence of the conclusion of the contract of carriage by sea and the taking over by the carrier of the goods astherein described.

PART V - CLAIMS AND ACTIONSArticle 19 - Notice of loss, damage or delay1 . Unless notice of loss or damage, specifying the general nature of such loss or damage, is given in writing by the consignee

to the carrier not later than the working day after the day when the goods were handed over to the consignee, such handingover is prima facie evidence of the delivery by the carrier of the goods as described in the document of transport or, if nosuch document has been issued, in good condition.

2 . Where the loss or damage is not apparent, the provisions of paragraph 1 of this article apply correspondingly if notice inwriting is not given within 15 consecutive days after the day when the goods were handed over to the consignee.

3 . If the state of the goods at the time they were handed over to the consignee has been the subject of a joint survey orinspection by the parties, notice in writing need not be given of loss or damage ascertained during such survey orinspection.

4 . In the case of any actual or apprehended loss or damage the carrier and the consignee must give all reasonable facilities toeach other for inspecting and tallying the goods.

5 . No compensation shall be payable for loss resulting from delay in delivery unless a notice has been given in writing to thecarrier within 60 consecutive days after the day when the goods were handed over to the consignee.

6 . If the goods have been delivered by an actual carrier, any notice given under this article to him shall have the same effect asif it had been given to the carrier, and any notice given to the carrier shall have effect as if given to such actual carrier.

7 . Unless notice of loss or damage, specifying the general nature of the loss or damage, is given in writing by the carrier oractual carrier to the shipper not later than 90 consecutive days after the occurrence of such loss or damage or after thedelivery of the goods in accordance with paragraph 2 of article 4, whichever is later, the failure to give such notice is primafacie evidence that the carrier or the actual carrier has sustained no loss or damage due to the fault or neglect of the shipper,his servants or agents.

8 . For the purpose of this article, notice given to a person acting on the carrier's or the actual carriers' behalf, including themaster or the officer in charge of the ship, or to a person acting on the shipper's behalf is deemed to have been given to thecarrier, to the actual carrier or to the shipper, respectively.

Article 20 - Limitation of actions1 . Any action relating to carriage of goods under this Convention is time-barred if judicial or arbitral proceedings have not

been instituted within a period of two years.2 . The limitation period commences on the day on which the carrier has delivered the goods or part thereof or, in cases where

no goods have been delivered, on the last day on which the goods should have been delivered.3 . The day on which the limitation period commences is not included in the period.4 . The person against whom a claim is made may at any time during the running of the limitation period extend that period by

a declaration in writing to the claimant. This period may be further extended by another declaration or declarations.5 . An action for indemnity by a person held liable may be instituted even after the expiration of the limitation period provided

for in the preceding paragraphs if instituted within the time allowed by the law of the State where proceedings are instituted.However, the time allowed shall not be less than 90 days commencing from the day when the person instituting such actionfor indemnity has settled the claim or has been served with process in the action against himself.

Article 21 - Jurisdiction1 . In judicial proceedings relating to carriage of goods under this Convention the plaintiff, at his option, may institute an action

in a court which, according to the law of the State where the court is situated, is competent and within the jurisdiction ofwhich is situated one of the following places:(a) The principal place of business or, in the absence thereof, the habitual residence of the defendant; or(b) The place where the contract was made provided that the defendant has there a place of business, branch or agency

through which the contract was made; or(c) The port of loading or the port of discharge; or(d) Any additional place designated for that purpose in the contract of carriage by sea.

2 . (a) Notwithstanding the preceding provisions of this article, an action may be instituted in the courts of any port or place ina Contracting State at which the carrying vessel or any other vessel of the same ownership may have been arrested inaccordance with applicable rules of the law of that State and of international law. However, in such a case, at the petitionof the defendant, the claimant must remove the action, at his choice, to one of the jurisdictions referred to in paragraph 1of this article for the determination of the claim, but before such removal the defendant must furnish security sufficientto ensure payment of any judgement that may subsequently be awarded to the claimant in the action.

(b) All questions relating to the sufficiency or otherwise of the security shall be determined by the court of the port or placeof the arrest.

3 . No judicial proceedings relating to carriage of goods under this Convention may be instituted in a place not specified inparagraph 1 or 2 of this article. The provisions of this paragraph do not constitute an obstacle to the jurisdiction of theContracting States for provisional or protective measures.

4 . (a) Where an action has been instituted in a court competent under paragraph i or 2 of this article or where judgement hasbeen delivered by such a court, no new action may be started between the same parties on the same grounds unless the

judgement of the court before which the first action instituted is not enforceable in the country in which the newproceedings are instituted.

(b) For the purpose of this article the institution of measures with a view to obtaining enforcement of a judgement is not tobe considered as the starting of a new action;

(c) For the purpose of this article, the removal of an action to a different court within the same country, or to a court inanother country, in accordance with paragraph 2 (a) of this article, is not to be considered as the starting of a newaction.

5 . Notwithstanding the provisions of the preceding paragraphs, an agreement made by the parties, after a claim under thecontract of carriage by sea has arisen, which designates the place where the claimant may institute an action, is effective.

Article 22 - Arbitration1 . Subject to the provisions of this article, parties may provide by agreement evidenced in writing that any dispute that may

arise relating to carriage of goods under this Convention shall be referred to arbitration.2 . Where a charter-party contains a provision that disputes arising thereunder shall be referred to arbitration and a bill of lading

issued pursuant to the charterparty does not contain a special annotation providing that such provision shall be binding uponthe holder of the bill of lading, the carrier may not invoke such provision as against a holder having acquired the bill oflading in good faith.

3 . The arbitration proceedings shall, at the option of the claimant, be instituted at one of the following places:(a) A place in a State within whose territory is situated:

(i) The principal place of business of the defendant or, in the absence thereof, the habitual residence of the defendant; or(ii) The place where the contract was made, provided that the defendant has there a place of business, branch or agency

through which the contract was made; or(iii) The port of loading or the port of discharge; or

(b) Any place designated for that purpose in the arbitration clause or agreement.4. The arbitrator or arbitration tribunal shall apply the rules of this Convention.5. The provisions of paragraph 3 and 4 of this article are deemed to be part of every arbitration clause or agreement, and any

term of such clause or agreement which is inconsistent therewith is null and void.6. Nothing in this article affects the validity of an agreement relating to arbitration made by the parties after the claim under the

contract of carriage by sea has arisen.

PART VI - SUPPLEMENTARY PROVISIONSArticle 23 - Contractual stipulations1. Any stipulation in a contract of carriage by sea, in a bill of lading, or in any other document evidencing the contract of

carriage by sea is null and void to the extent that it derogates, directly or indirectly, from the provisions of this Convention.The nullity of such a stipulation does not affect the validity of the other provisions of the contract or document of which itforms a part. A clause assigning benefit of insurance of the goods in favour of the carrier, or any similar clause, is null andvoid.

2. Notwithstanding the provisions of paragraph 1 of this article, a carrier may increase his responsibilities andobligationsunder this Convention.

3. Where a bill of lading or any other document evidencing the contract of carriage by sea is issued, it must contain astatement that the carriage is subject to the provisions of this Convention which nullify any stipulation derogatingtherefrom to the detriment of the shipper or the consignee.

4. Where the claimant in respect of the goods has incurred loss as a result of a stipulation which is null and void by virtue ofthe present article, or as a result of the omission of the statement referred to in paragraph 3 of this article, the carrier mustpay compensation to the extent required in order to give the claimant compensation in accordance with the provisions ofthis Convention for any loss of or damage to the goods as well as for delay in delivery. The carrier must, in addition paycompensation for costs incurred by the claimant for the purpose of exercising his right, provided that costs incurred in theaction where the foregoing provision is invoked are to be determined in accordance with the law of the State whereproceedings are instituted.

Article 24 - General average1 . Nothing in this Convention shall prevent the application of provisions in the contract of carriage by sea or national law

regarding the adjustment of general average.

2 . With the exception of article 20, the provisions of this Convention relating to the liability of the carrier for loss of ordamage to the goods also determine whether the consignee may refuse contribution in general average and the liability ofthe carrier to indemnify the consignee in respect of any such contribution made or any salvage paid.

Article 25 - Other conventions1 . This Convention does not modify the rights or duties of the carrier, the actual carrier and their servants and agents, provided

for in international conventions or national law relating to the limitation of liability of owners of seagoing ships.2 . The provisions of articles 21 and 22 of this Convention do not prevent the application of the mandatory provisions of any

other multilateral convention already in force at the date of this Convention relating to matters dealt with in the said articles,provided that the dispute arises exclusively between parties having their principal place of business in States members ofsuch other convention. However, this paragraph does not affect the application of paragraph 4 of article 22 of thisConvention.

3 . No liability shall arise under the provisions of this Convention for damage caused by a nuclear incident if the operator of anuclear installation is liable for such damage:(a) Under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of Nuclear Energy as amended

by the Additional Protocol of 28 January 1964 or the Vienna Convention of 21 May 1963 on Civil Liability for NuclearDamage, or

(b) By virtue of national law governing the liability for such damage, provided that such law is in all respects as favourableto persons who may suffer damage as either the Paris or Vienna Conventions.

4 . No liability that arise under the provisions of this Convention for any loss of or damage to or delay in delivery of luggagefor which the carrier is responsible under any international convention or national law relating to the carriage of passengersand their luggage by sea.

5 . Nothing contained in this Convention prevents a Contracting State from applying any other international convention whichis already in force at the date of this Convention and which applies mandatorily to contracts of carriage of goods primarilyby a mode of transport other than transport by sea. This provision also applies to any subsequent revision or amendment ofsuch international convention.

Article 26 - Unit of accountl. The unit of account referred to in article 6 of this Convention is the Special Drawing Right as defined by the InternationalMonetary Fund. The amounts mentioned in article 6 are to be converted into the national currency of a State according to thevalue of such currency at the date of judgement or the date agreed upon by the parties. The value of a national currency, interms of the Special Drawing Right, of a Contracting State which is a member of the International Monetary Fund is to becalculated in accordance with the method of valuation applied by the International Monetary Fund in effect at the date inquestion for its operations and transactions. The value of a national currency in terms of the Special Drawing Right of aContracting State which is not a member of the International Monetary Fund is to be calculated in a manner determined by thatState.2 . Nevertheless, those States which are not members of the International Monetary Fund and whose law does not permit theapplication of the provisions of paragraph i of this article may, at the time of signature, or at the time of ratification,acceptance, approval or accession or at any time thereafter, declare that the limits of liability provided for in this Convention tobe applied in their territories shall be fixed as: 12,500 monetary units per package or other shipping unit or 37.5 monetary unitsper kilogram of gross weight of the goods.3 . The monetary unit referred to in paragraph 2 of this article corresponds to sixty-five and a half milligrams of gold ofmillesimal fineness nine hundred. The conversion of the amounts referred to in paragraph 2 into the national currency is to bemade according to the law of the State concerned.4 . The calculation mentioned in the last sentence of paragraph I and the conversion mentioned in paragraph 3 of this article isto be made in such a manner as to express in the national currency of the Contracting State as far as possible the same realvalue for the amounts in article 6 as is expressed there in units of account. Contracting States must communicate to thedepositary the manner of calculation pursuant to paragraph 1 of this article, or the result of the conversion mentioned inparagraph 3 of this article, as the case may be, at the time of signature or when depositing their instruments of ratification,acceptance, approval or accession, or when availing themselves of the option provided for in paragraph 2 of this article andwhenever there is a change in the manner of such calculation or in the result of such conversion.

PART VII - FINAL CLAUSESArticle 27 - DepositaryThe secretary-general of the United Nations is hereby designated as the depositary of this Convention.

Article 28 - Signature, ratification, acceptance, approval, accession1 . This Convention is open for signature by all States until 30 April 1979 at the Headquarters of the United Nations, New

York.2 . This Convention is subject to ratification, acceptance or approval by the signatory States.3 . After 30 April 1979, this Convention will be open for accession by all States which are not signatory States.4 . Instruments of ratification, acceptance, approval and accession are to be deposited with the secretary-general of the United

Nations.

Article 29 - ReservationsNo reservations may be made to this Convention.

Article 30 - Entry into force1 . This Convention enters into force on the first day of the month following the expiration of one year from the date of deposit

of the 20th instrument of ratification, acceptance, approval or accession.2 . For each State which becomes a Contracting State to this Convention after the date of the deposit of the 20th instrument of

ratification, acceptance, approval or accession, this Convention enters into force on the first day of the month following theexpiration of one year after the deposit of the appropriate instrument on behalf of that State.

3 . Each Contracting State shall apply the provisions of this Convention to contracts of carriage by sea concluded on or afterthe date of the entry into force of this Convention in respect of that State.

Article 31 - Denunciation of other conventions1 . Upon becoming a Contracting State to this Convention, any State party to the International Convention for the Unification

of Certain Rules relating to Bills of Lading signed at Brussels on 25 August 1924 (1924 Convention) must notify theGovernment of Belgium as the depositary of the 1924 Convention of its denunciation of the said Convention with adeclaration that the denunciation is to take effect as from the date when this Convention enters into force in respect of thatState.

2 . Upon the entry into force of this Convention under paragraph 1 of article 30, the depositary of this Convention must notifythe Government of Belgium as the depositary of the 1924 Convention of the date of such entry into force, and of the namesof the Contracting States in respect of which the Convention has entered into force.

3 . The provisions of paragraphs 1 and 2 of this article apply correspondingly in respect of States parties to the Protocol signedon 23 February 1968 to amend the International Convention for the Unification of Certain Rules relating to Bills of Ladingsigned at Brussels on 25 August 1924.4 . Notwithstanding article 2 of this Convention, for the purposes of paragraph 1 of this article, a Contracting State may, if it

deems it desirable, defer the denunciation of the 1924 Convention and of the 1924 Convention as modified by the 1968Protocol for a maximum period of five years from the entry into force of this Convention. It will then notify theGovernment of Belgium of its intention. During this transitory period, it must apply to the Contracting States thisConvention to the exclusion of any other one.

Article 32 - Revision and amendment1 . At the request of not less than one-third of the Contracting States to this Convention, the depositary shall convene a

conference of the Contracting States for revising or amending it.2 . Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to

this Convention, is deemed to apply to the Convention as amended.

Article 33 - Revision of the limitation amounts and unit of account or monetary unit1 . Notwithstanding the provisions of article 32, a conference only for the purpose of altering the amount specified in article 6

and paragraph 2 of article 26, or of substituting either or both of the units defined in paragraphs 1 and 3 of article 26 byother units is to be convened by the depositary in accordance with paragraph 2 of this article. An alteration of the amountsshall be made only because of a significant change in their real value.

2 . A revision conference is to be convened by the depositary when not less than one-fourth of the Contracting States sorequest.

3 . Any decision by the conference must be taken by a two-thirds majority of the participating States. The amendment iscommunicated by the depositary to all the Contracting States for acceptance and to all the States signatories of theConvention for information.

4 . Any amendment adopted enters into force on the first day of the month following one year after its acceptance by two-thirdsof the Contracting States. Acceptance is to be effected by the deposit of a formal instrument to that effect, with thedepositary.

5 . After entry into force of an amendment a Contracting State which has accepted the amendment is entitled to apply theConvention as amended in its relations with Contracting States which have not within six months after the adoption of theamendment notified the depositary that they are not bound by the amendment.

6 . Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment tothis Convention, is deemed to apply to the Convention as amended.

Article 34 - Denunciation1 . A Contracting State may denounce this Convention at any time by means of a notification in writing addressed to the

depositary.2 . The denunciation takes effect on the first day of the month following the expiration of one year after the notification is

received by the depositary. Where a longer period is specified in the notification, the denunciation takes effect upon theexpiration of such longer period after the notification is received by the depositary.

Done at Hamburg, this thirty-first day of March one thousand nine hundred and seventy-eight, in a single original, of which theArabic, Chinese, English, French, Russian and Spanish texts are equally authentic. In witness whereof the undersignedplenipotentiaries, being duly authorized by their respective Governments, have signed the present Convention. Commonunderstanding adopted by the United Nations Conference on the Carriage of Goods by Sea (A/CONF.89/13, annex 11) It is thecommon understanding that the liability of the carrier under this Convention is based on the principle of presumed fault orneglect. This means that, as a rule, the burden of proof rests on the carrier but, with respect to certain cases, the provisions ofthe Convention modify this rule. Resolution adopted by the United Nations Conference on the Carriage of Goods by Sea(A/CON.89/13, annex III) The United Nations Conference on the Carriage of Goods by Sea, Noting with appreciation the kindinvitation of the Federal Republic of Germany to hold the Conference in Hamburg, Being aware that the facilities placed at thedisposal of the Conference and the generous hospitality bestowed on the participants by the Government of the FederalRepublic of Germany and by the Free and Hanseatic City of Hamburg, have in no small measure contributed to the success ofthe Conference.

Expresses its gratitude to the Government and people of the Federal Republic of Germany, and having adopted the Conventionon the Carriage of Goods by Sea on the basis of a draft Convention prepared by the United Nations Commission onInternational Trade Law at the request of the United Nations Conference on Trade and Development, expresses its gratitude tothe United Nations Commission on International Trade Law and to the United Nations Conference on Trade and Developmentfor their outstanding contribution to the simplification and harmonization of the law of the carriage of goods by sea, anddecides to designate the Convention adopted by the Conference as the: "UNITED NATIONS CONVENTION ON THECARRIAGE OF GOODS BY SEA, 1978", and recommends that the rules embodied therein be known as the "HAMBURGRULES".

United Nations Convention on the Carriage of Goods by Sea, 1978 (Hamburg) United Nations Convention on the Carriage ofGoods by Sea, 1978 (Hamburg) Chronological Table of Ratifications and Accessions

Ratification AccessionEgypt, 23 April 1979

Uganda, 6 July 1979Chile, 4 July 1982

United Rep. of Tanzania, 24 July 1979Hungary, 5 July 1984

United Rep. of Tanzania, 24 July 1979Senegal, 17 March 1986

Tunisia, 15 September 1980Barbados, 2 February 1981

Morocco, 12 June 1981Sierra Leone, 7 October 1988

Romania, 7 January 1982Austria, 29 July 1993

Lebanon, 4 April 1983Czech Republic, 23 June 1995

Botswana, 16 February 1988Gambia, 7 February 1996

Georgia, 21 March 1996Nigeria, 7 November 1988

Kenya, 31 July 1989Burkina Faso, 14 August 1989

Lesotho, 26 October 1989Guinea, 23 January 1991

Malawi, 18 March 1991Zambia, 7 October 1991

Cameroon, 21 October 1993

THE HAGUE-VISBY RULES: THE HAGUE RULES AS AMENDED BY THE BRUSSELSPROTOCOL 1968

Article IIn these Rules the following words are employed, with the meanings set out below:(a) 'Carrier' includes the owner or the charterer who enters into a contract of carriage with a shipper.(b) 'Contract of carriage' applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so

far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document asaforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document oftitle regulates the relations between a carrier and a holder of the same.

(c) 'Goods' includes goods, wares, merchandise, and articles of every kind whatsoever except live animals and cargo which bythe contract of carriage is stated as being carried on deck and is so carried.

(d) 'Ship' means any vessel used for the carriage of goods by sea.(e) 'Carriage of goods' covers the period from the time when the goods are loaded on to the time they are discharged from the

ship.

Article IISubject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in relation to the loading,handling, stowage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilitiesand entitled to the rights and immunities hereinafter set forth.

Article III1. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to:

(a) Make the ship seaworthy;(b) Properly man, equip and supply the ship;(c) Make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe

for their reception, carriage and preservation.2. Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, anddischarge the goods carried.3. After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on demand of the shipper,

issue to the shipper a bill of lading showing among other things:(a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before

the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods ifuncovered, or on thecases or coverings in which such goods are contained, in such a manner as should ordinarily remainlegible until the end of the voyage.

(b) Either the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by theshipper.

(c) The apparent order and condition of the goods.

Provided that no carrier, master or agent of the carrier shall be bound to state or show in the bill of lading any marks, number,quantity or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, orwhich he has had no reasonable means of checking.

4. Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described inaccordance with paragraph 3 (a), (b) and (c). However, proof to the contrary shall not be admissible when the bill of ladinghas been transferred to a third party acting in good faith.

5. The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number,quantity and weight, as furnished by him, and the shipper shall indemnify the carrier against all loss, damages and expensesarising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit hisresponsibility and liability under the contract of carriage to any person other than the shipper.

6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agentat the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to deliverythereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall beprima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.

The notice in writing need not be given if the state of the goods has, at the time of their receipt, been the subject of joint surveyor inspection.

Subject to paragraph 6bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of thegoods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period,may however, be extended if the parties so agree after the cause of action has arisen.

In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to eachother for inspecting and tallying the goods.

An action for indemnity against a third person may be brought even after the expiration of the year provided for in thepreceding paragraph if brought within the time allowed by the law of the Court seized of the case. However, the timeallowed shall be not less than three months, commencing from the day when the person bringing such action for indemnityhas settled the claim or has been served with process in the action against himself.

7. After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier, to the shipper shall, ifthe shipper so demands be a 'shipped' bill of lading, provided that if the shipper shall have previously taken up anydocument of title to such goods, he shall surrender the same as against the issue of the 'shipped' bill of lading, but at theoption of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with thename or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when sonoted, if it shows the particulars mentioned in paragraph 3 of Article III, shall for the purpose of this article be deemed toconstitute a 'shipped' bill of lading.

8. Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damageto, or in connection with, goods arising from negligence, fault, or failure in the duties and obligations provided in this articleor lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect. A benefit ofinsurance in favour of the carrier or similar clause shall be deemed to be a clause relieving the carrier from liability.

Article IV1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by

want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned,equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in whichgoods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1of Article III. Whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of duediligence shall be on the carrier or other person claiming exemption under this article.

2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management

of the ship.(b) Fire, unless caused by the actual fault or privity of the carrier.(c) Perils, dangers and accidents of the sea or other navigable waters.(d) Act of God.(e) Act of war.(f) Act of public enemies.(g).Arrest or restraint of princes, rulers or people, or seizure under legal process.(h) Quarantine restrictions.(i) Act or omission of the shipper or owner of the goods, his agent or representative.(j) Strikes or lockouts or stoppage or restraint of labour from whatever cause, whether partial or general.(k) Riots and civil commotions.(l) Saving or attempting to save life or property at sea.(m) Wastage in bulk of weight or any other loss or damage arising from inherent defect, quality or vice of the goods.(n) Insufficiency of packing.(o) Insufficiency or inadequacy of marks.(p) Latent defects not discoverable by due diligence.(q) Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents

orservants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to showthat neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carriercontributed to the loss or damage.

3. The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from anycause without the act, fault or neglect of the shipper, his agents or his servants.

4. Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be aninfringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damageresulting therefrom.

5 (a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill oflading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with thegoods in an amount exceeding the equivalent of 666.67 units of account per package or unit or units of account per kilo ofgross weight of the goods lost or damaged, whichever is the higher.

5 (b) The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at whichthe goods are discharged from the ship in accordance with the contract or should have been so discharged. The value ofthe goods shall be fixed according to the commodity exchange price, or, if there be no such price, according to the currentmarket price, or, if there be no commodity exchange price or current market price, by reference to the normal value ofgoods of the same kind and quality.

5 (c) Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or unitsenumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages or units forthe purpose of this paragraph as far as these packages or units are concerned. Except as aforesaid such article of transportshall be considered the package or unit.

5 (d) The unit of account mentioned in this Article is the special drawing right as defined by the International Monetary Fund.The amounts mentioned in h_visby/art/art04_5asub-paragraph (a) of this paragraph shall be converted into nationalcurrency on the basis of the value of that currency on a date to be determined by the law of the Court seized of the case.

5 (e) Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph ifit is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklesslyand with knowledge that damage would probably result.

5 (f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in the bill of lading, shall be prima facieevidence, but shall not be binding or conclusive on the carrier.

5 (g) By agreement between the carrier, master or agent of the carrier and the shipper other maximum amounts thanthosementioned in sub-paragraph (a) of this paragraph may be fixed, provided that no maximum amount so fixed shall beless than the appropriate maximum mentioned in that sub-paragraph.

5 (h) Neither the carrier nor the ship shall be responsible in any event for loss or damage to, or in connection with, goods if thenature or value thereof has been knowingly mis-stated by the shipper in the bill of lading.

6. Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrierhas not consented with knowledge of their nature and character, may at any time before discharge be landed at any place, ordestroyed or rendered innocuous by the carrier without compensation and the shipper of such goods shall be liable for alldamages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped withsuch knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, ordestroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any.

Article IV bis1. The defences and limits of liability provided for in these Rules shall apply in any action against the carrier in respect of loss

or damage to goods covered by a contract of carriage whether the action be founded in contract or in tort.2. If such an action is brought against a servant or agent of the carrier (such servant or agent not being an independent

contractor), such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier isentitled to invoke under these Rules.

3. The aggregate of the amounts recoverable from the carrier, and such servants and agents, shall in no case exceed the limitprovided for in these Rules.

4. Nevertheless, a servant or agent of the carrier shall not be entitled to avail himself of the provisions of this article, if it isproved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage orrecklessly and with knowledge that damage would probably result.

Article VA carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of hisresponsibilities and obligations under these Rules, provided such surrender or increase shall be embodied in the bill of lading

issued to the shipper. The provisions of these Rules shall not be applicable to charter parties, but if bills of lading are issued inthe case of a ship under a charter party they shall comply with the terms of these Rules. Nothing in these Rules shall be held toprevent the insertion in a bill of lading of any lawful provision regarding general average.

Article VINotwithstanding the provisions of the preceding articles, a carrier, master or agent of the carrier and a shipper shall in regard toany particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier forsuch goods, and as to the rights and immunities of the carrier in respect of such goods, or his obligation as to seaworthiness, sofar as this stipulation is not contrary to public policy, or the care or diligence of his servants or agents in regard to the loading,handling, stowage, carriage, custody, care and discharge of the goods carried by sea, provided that in this case no bill of ladinghas been or shall be issued and that the terms agreed shall be embodied in a receipt which shall be a non-negotiable documentand shall be marked as such.

An agreement so entered into shall have full legal effect.

Provided that this article shall not apply to ordinary commercial shipments made in the ordinary course of trade, but only toother shipments where the character or condition of the property to be carried or the circumstances, terms and conditions underwhich the carriage is to be performed are such as reasonably to justify a special agreement.

Article VIINothing herein contained shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition,reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to, or inconnection with, the custody and care and handling of goods prior to the loading on, and subsequent to the discharge from, theship on which the goods are carried by sea.

Article VIIIThe provisions of these Rules shall not affect the rights and obligations of the carrier under any statute for the time being inforce relating to the limitation of the liability of owners of sea-going vessels.

Article IXThese Rules shall not affect the provisions of any international Convention or national law governing liability for nucleardamage.

Article XThe provisions of these Rules shall apply to every bill of lading relating to the carriage of goods between ports in two differentStates if(a) the bill of lading is issued in a contracting State, or(b) the carriage is from a port in a contracting State, or(c) the contract contained in or evidenced by the bill of lading provides that these Rules or legislation of any State giving effect

to them are to govern the contract; whatever may be the nationality of the ship, the carrier, the shipper, the consignee, orany other interested person.

(The last two paragraphs of this Article are not reproduced. They require contracting States to apply the Rules to bills of ladingmentioned in the Article and authorise them to apply the Rules to other bills of lading).

(Article 11 to 16 of the International Convention for the unification of certain rules of law relating to bills of lading signed atBrussels on August 25, 1974 are not reproduced. They deal with the coming into force of the Convention, procedure forratification, accession and denunciation and the right to call for a fresh conference to consider amendments to the Rulescontained in the Convention).

Application of Hague Rules as amended.1. In this Act, 'the Rules' means the International Convention for the unification of certain rule of law relating to bills of lading

signed at Brussels on 25th August 1924, as amended by the Protocol signed at Brussels on 23rd February 1968.2. The provisions of the Rules, as set out in the Schedule to this Act, shall have the force of law.

3. Without prejudice to subsection (2) above, the said provisions shall have effect (and have the force of law) in relation to andin connection with the carriage of goods by sea in ships where the port of shipment is a port in the United Kingdom, whetheror not the carriage is between ports in two different States within the meaning of Article X of the Rules.

4. Subject to subsection (6) below, nothing in this section shall be taken as applying anything in the Rules to any contract forthe carriage of goods by sea, unless the contract expressly or by implication provides for the issue of a bill of lading or anysimilar document of title.

5. The Secretary of State may from time to time by order made by statutory instrument specify the respective amounts whichfor the purposes of paragraph 5 of Article IV of the Rules and of Article IV bis of the Rules are to be taken as equivalent tothe sums expressed in francs which are mentioned in sub-paragraph (a) of that paragraph.

6. Without prejudice to Article X (c) of the Rules, the Rules shall have the force of law in relation to:(a) any bill of lading if the contract contained in or evidenced by it expressly provides that the Rules shall govern the

contract, and(b) any receipt which is a non-negotiable document marked as such if the contract contained in or evidenced by it is a

contract for the carriage of goods by sea which expressly provides that the Rules are to govern the contract as if thereceipt were a bill of lading, but subject, where paragraph (b) applies, to any necessary modifications and in particularwith the omission in Article III of the Rules of the second sentence of paragraph 4 and of paragraph 7.

7. If and so far as the contract contained in or evidenced by a bill of lading or receipt within paragraph (a) or (b) of subsection(6) above applies to deck cargo and live animals, the Rules as given the force of law by that subsection shall have effect as ifArticle I (c) did not exclude deck cargo and live animals.

In this subsection 'deck cargo' means cargo which by the contract of carriage is stated as being carried on deck and is socarried.

Contracting States, etc(1) If Her Majesty by Order in Council certifies to the following effect, that is to say, that for the purposes of the Rules:

(a) a State specified in the Order is a contracting State, or is a contracting State in respect of any place or territory sospecified; or

(b) any place or territory specified in the Order forms part of a State so specified (whether a contracting State or not), theOrder shall, except so far as it has been superseded by a subsequent Order, be conclusive evidence of the matters socertified.

(2) An Order in Council under this section may be varied or revoked by a subsequent Order in Council.

Absolute warranty of seaworthiness not to be implied in contracts to which Rules apply

There shall not be implied in any contract for the carriage of goods by sea to which the Rules apply by virtue of this Act anyabsolute undertaking by the carrier of the goods to provide a seaworthy ship.

Application of Act to British possessions, etc(1) Her Majesty may by Order in Council direct that this Act shall extend, subject to such exceptions, adaptations and

modifications as may be specified in the Order, to all or any of the following territories, that is:(a) any colony (not being a colony for whose external relations a country other than the United Kingdom is responsible);(b) any country outside Her Majesty's dominions in which Her Majesty has jurisdiction in right of Her Majesty's

Government of the United Kingdom.(2) An Order in Counsel under this section may contain such transitional and other consequential and incidental provisions as

appear to Her Majesty to be expedient, including provisions amending or repealing any legislation about the carriage ofgoods by sea forming part of the law of any of the territories mentioned in paragraphs (a) and (b) above.

(3) An Order in Council under this section may be varied or revoked by a subsequent Order in Council.

Extension of application of Rules to carriage from ports in British possessions, etc(1) Her Majesty may by Order in Council provide that section 1(3) of this Act shall have effect as if the reference therein to the

United Kingdom included a reference to all or any of the following territories, that is:(a) the Isle of Man;(b) any of the Channel Islands specified in the Order;(c) any colony specified in the Order (not being a colony for whose external relations a country other than the United

Kingdom is responsible);(d) any associated state (as defined by section 1(3) of the West Indies Act 1967) specified in the Order;

(e) any country specified in the Order, being a country outside Her Majesty's dominions in which Her Majesty hasjurisdiction in right of Her Majesty's Government of the United Kingdom.

(2) An Order in Council under this section may be varied or revoked by a subsequent Order in Council.

Supplemental(1) This Act may be cited as the Carriage of Goods by Sea Act 1971.(2) It is hereby declared that this Act extends to Northern Ireland.(3) The following enactments shall be repealed, that is: a) The Carriage of Goods by Sea Act 1924; b) section 12 (4) (a) of the

Nuclear Installations Act 1965, and without prejudice to section 38 (1) of the Interpretation Act 1889, the reference to thesaid Act of 1924 in section I (l) (i) (ii) of the Hovercraft Act 1968 shall include a reference to this Act.

(4) It is hereby declared that for the purposes of Article VIII of the Rules section 502 of the Merchant Shipping Act 1894(which, as amended by the Merchant Shipping (Liability of Shipowner and Others) Act 1958, entirely exempts shipownerand others in certain circumstances from liability for loss of, or damage to, goods) is a provision relating to limitation ofliability.

(5) This Act shall come into force on such day as her Majesty may by Order in Council appoint* and, for the purposes of thetransition from the law in force immediately before the day appointed under this subsection to the provisions of this Act,the Order appointing the day may provide that those provisions shall have effect subject to such transitional provisions asmay be contained in the Order.

The Act came into operation on 23 June 1977 (SI 1977 No 981).

MARPOL 73/78

The International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relatingthereto

Background

Oil pollution of the sea - especially in ports and harbours - was first recognised as a problem before the First World War and,during the 1920s and 1930s, various countries introduced measures to control discharges of oil within their territorial watersand provide deterrents in the form of fines for illegal discharges.

International measures were considered, but no agreement had been reached before the outbreak of the Second World War.

By the early 1950s, so much oil was being transported by sea that there was growing concern about the danger of marinepollution. In 1954, the United Kingdom organised a conference on the subject which resulted in the adoption of theInternational Convention for the Prevention of Pollution of the Sea by Oil. Following entry into force of the IMO Conventionin 1958, the depository and Secretariat functions in relation to the Convention were transferred from the United KingdomGovernment to IMO.

The 1954 Oil Pollution Convention Although pollution resulting from tanker accidents was beginning to cause some concern,this Convention was primarily aimed at pollution resulting from routine tanker operations and from the discharge of oily wastesfrom machinery spaces, which were regarded as the major causes of oil pollution from ships.

When a tanker discharged its cargo it had to fill some of its cargo tanks with ballast water in order to provide the necessary sea-keeping stability and to ensure that the propeller and rudder were properly immersed for the voyage back to the loading port.As a certain amount of cargo oil was left clinging to the tank walls and bottom, this ballast water became contaminated withoil, and its discharge into the sea caused pollution.

Mixtures of oil and water were also generated by washing the cargo tank walls and bottom with high pressure water jets. Priorto 1954 the normal practice was to pump these mixtures of oil and water and oily residues directly into the sea.

The 1954 OILPOL Convention attempted to tackle the problem of pollution of the seas by oil in two main ways:1. it established “prohibited zones” extending at least 50 miles from the nearest land in which the discharge of oil or of

mixtures containing more than 100 parts of oil per million was forbidden; and

2. it also required Contracting Parties to take all appropriate steps to promote the provision of facilities for the reception of oilywater and residues.

In 1962, IMO adopted amendments to the Convention which extended its application to ships of a lower tonnage and alsoextended the “prohibited zones”.

Further amendments were adopted in 1969, as a result of which the operational discharge of oil was restricted in the followingways:

For oil tankers

Operational discharges of oil from tankers are allowed only when all of the following conditions are met:

1. the total quantity of oil which a tanker may discharge in any ballast voyage whilst under way must not exceed 1/15,000 ofthe total cargo carrying capacity of the vessel;2. the rate at which oil may be discharged must not exceed 60 litres per mile travelled by the ship; and3. no discharge of any oil whatsoever must be made from the cargo spaces of a tanker within 50 miles of the nearest land.

A new form of oil record book is required, in which is recorded the movement of cargo oil and its residues from loading todischarging on a tank-to-tank basis.

For machinery spaces of all shipsThe discharge from machinery space bilges is allowed only when all of the following conditions are met:1. the rate at which oil may be discharged whilst the ship is under way must not exceed 60 litres per mile being travelled by the

ship;2. the oil content of any bilge water discharged must be below 100 parts per million; and

3. discharge must be made as far as practicable from land.

In 1971, further amendments were adopted which afforded additional protection to the Great Barrier Reef of Australia and alsolimited the size of tanks on oil tankers, thereby minimising the amount of oil which could escape in the event of a collision orstranding.

The 1973 MARPOL Convention The enormous growth in the maritime transport of oil and the size of tankers, the increasingamount of chemicals being carried at sea and a growing concern for the world’s environment as a whole made many countriesfeel that the 1954 OILPOL Convention was no longer adequate, despite the various amendments which had been adopted.

In 1969, the IMO Assembly - inspired partly by the Torrey Canyon disaster of two years before - decided to convene aninternational conference to adopt a completely new convention. The conference met in London in 1973.

The Convention which was adopted is the most ambitious international treaty covering maritime pollution ever adopted. Itdeals not only with oil, but with all forms of marine pollution except the disposal of land-generated waste into the sea bydumping (which was covered by another convention adopted the previous year).

Most of the technical measures are included in five annexes to the Convention which deal respectively with the following:Annex I - Oil

Annex II - Noxious liquid : substances carried in bulk (e.g. chemicals)

Annex III - Harmful substances carried in packages (e.g. tanks and containers)

Annex IV - Sewage

Annex V - Garbage

The Articles

These deal with such matters as application, entry into force, amendments, etc. Parties are obliged to ban violations of theConvention and to take action against violators, ensuring that penalties “shall be adequate in severity to discourage violations”.

Parties are required to co-operate in the detection of violations. Ships may be inspected by other Parties to see if any dischargeshave taken place in violation of the Convention.

Incidents involving harmful substances must be reported without delay, in accordance with Protocol I to the Annex: theProtocol covers such matters as the duty to report, methods of reporting, when to make reports and contents of the report.

Any disputes between Parties shall be settled (if this cannot be done by negotiation) in accordance with arbitration procedurescontained in Protocol II to the articles.

The Annexes to the Convention can be amended in a number of ways, the most important of which is the procedure known as“tacit acceptance”. After an amendment has been adopted (at a meeting “expanded” to include all Contracting Parties, some ofwhom may not be members of IMO), the amendments automatically enter into force on a date fixed by the conference (theminimum period is 16 months) unless it is rejected (within 10 months) by one-third of Contracting Parties, or by ContractingParties whose combined fleets of merchant shipping represent at least 50 per cent of world gross tonnage.

This procedure has been incorporated in all of IMO’s technical conventions adopted since the early 1970s. It is a greatimprovement on the previous system, under which amendments to IMO instruments entered into force only after beingpositively accepted by two-thirds of Contracting Parties (sometimes with a tonnage qualification as well). In practice, thisprocedure was so slow that amendments to instruments such as OILPOL, sometimes never did receive sufficient acceptances tobring them into force.

The other advantage of tacit acceptance is that it enables the conference to fix the exact date of entry into force of theamendment, a fact that is of considerable benefit to administrations and industry.

The articles also deal with entry into force.

Although the Convention was to enter into force 12 months after being ratified by 15 States, the combined merchant fleets ofwhich constitute not less than 50 per cent of world gross tonnage of merchant ships, Annexes III, IV and V are optional. Thismeans that countries can make a declaration to the effect that they do not accept one or more of these Annexes.

The technical regulations of the Convention are contained in the Annexes. These are summarised below.

Annex I (oil pollution)

The oil discharge criteria contained in the 1969 amendments to the 1954 OILPOL Convention (see above) are maintained, butthe total amount of oil which can be discharged into the sea is halved for new tankers to 1/30,000 of the cargo. For dischargesfrom machinery spaces of all vessels, the ship must be under way, more than 12 miles from land, and the oil content must beless than 100 ppm (regulation 9).

The definition of oil is broadened to mean petroleum in any form, including crude oil, fuel oil, sludge, oil refuse and refinedproducts (other than petrochemicals) (regulation 1).

The discharge of oil is completely forbidden in certain “special areas” where the threat to the marine environment is especia llygreat. These include the Mediterranean Sea, the Black Sea, the Baltic Sea, the Red Sea and the “Gulf Area” (regulation 10).

Parties to the Convention must ensure that adequate facilities are provided for the reception of residues and oily mixtures at oilloading terminals, repair ports, etc. (regulations 10 and 12).

An International Oil Pollution Prevention Certificate must be issued to tankers of 150 gross tons and above and other ships of400 gross tons and above, after survey (regulation 5). Its duration shall not exceed five years (regulation 8).

Oil tankers must be so constructed and equipped as to be able to operate the load on top system and to retain oily residues onboard until they can be discharged into shore reception facilities. This includes slop tanks, oil/water interface detectors, oildischarge monitoring and control systems, and suitable pumping and piping arrangements (regulation 15).

All ships of 400 gross tons and above must be equipped with oily-water separating equipment, or a filtering system fordischarges from machinery space bilges, together with on-board tanks for retention of oily residues from separators andpurifiers. Vessels in excess of 10,000 gross tons must be equipped with oil discharge monitoring and control systems(regulations 16 and 17).

The limitations on tank size adopted in the 1971 amendments to the 1954 Oil Pollution Convention have been retained. Thesizes vary according to factors such as the arrangement of tanks, the fitting of double bottoms, the installation of clean ballasttanks and so on, but on normal tankers centre tanks are limited to 30,000 cubic metres and wing tanks to 15,000 cubic metres(regulation 24).

New oil tankers of 70,000 dead-weight tons and above must be provided with segregated ballast tanks (SBTs) of sufficientcapacity to enable them to operate safely on ballast voyages without recourse to the use of cargo tanks for ballast purposes(except in very severe weather). The fact that SBTs are not used for carrying oil means that no oil-water mixtures are produced- and, consequently, no pollution (regulations 13 and 14).

New subdivision and stability requirements have been introduced to ensure that tankers can survive assumed side or bottomdamage to a degree which is specified on the basis of the ship’s length (regulation 25).

Tankers and other ships must carry and maintain an Oil Record Book in which all operations involving oil are to be recorded.The book can be inspected by the authorities of any State which is a Party to the Convention (regulation 20).

Annex II (liquid noxious substances) This Annex contains detailed requirements for discharge criteria and measures for thecontrol of pollution by liquid noxious substances carried in bulk.

The substances are divided into four categories which are graded A to D, according to the hazard they present to marineresources, human health or amenities. Some 250 substances have been evaluated and included in a list which is appended to theConvention.

As with Annex I there are requirements for the discharge of residues only into reception facilities, unless various conditions arecomplied with. In any case no discharge of residues containing noxious substances is permitted within 12 miles of the nearestland in water of less than 25 metres in depth. Even stricter restrictions apply in the Baltic Sea and the Black Sea. Parties to theConvention are obliged to issue detailed requirements for the design, construction and operation of chemical tankers whichcontain at least all the provisions of the Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals inBulk.

Operations involving substances to which Annex II applies must be recorded in a Cargo Record Book, which can be inspectedby the authorities of any Party to the Convention.

Annex III (harmful substances in packaged forms)

Entry into force: 1 July 1992

This Annex applies to all ships carrying harmful substances in packaged forms, or in freight containers, portable tanks or roadand rail tank wagons. The Annex requires the issuing of detailed standards on packaging, marking, labelling, documentation,stowage, quantity limitations, exceptions and notifications, for preventing or minimising pollution by harmful substances. Tohelp implement this requirement, the International Maritime Dangerous Goods Code was amended to cover pollution aspects.The amendment became effective on 1 January 1991.

Annex IV (sewage)

Status: The Annex will enter into force after being accepted by 15 states where merchant fleets represent 50% of worldtonnage. By October 1993 it had been accepted by 51 countries with 39.2% of world tonnage.

Ships are not permitted to discharge sewage within four miles of the nearest land, unless they have in operation an approvedtreatment plant. Between 4 and 12 miles from land, sewage must be comminuted and disinfected before discharge.

Annex V (garbage)

Entry into force: 31 December 1988

As far as garbage is concerned, specific minimum distances have been set for the disposal of the principal types of garbage.Perhaps the most important feature of this Annex is the complete prohibition placed on the disposal of plastics into the sea.

Progress towards ratification

Although it was hoped that the MARPOL Convention would enter into force quickly, in practice, progress was very slow. Thiswas due largely to a number of technical difficulties, in particular those associated with Annexes I and II.

In 1976 and 1977, a series of accidents involving oil tankers led to increased concern about safety and pollution. IMO wasasked to call a conference to consider further measures - including changes to MARPOL and the International Convention forthe Safety of Life at Sea, 1974 (SOLAS).

The 1978 MARPOL Protocol When the International Conference on Tanker Safety and Pollution Prevention (TSPP) was heldearly in 1978, neither Convention was then in force and consequently could not be amended. The new measures were,therefore, contained in two Protocols. The Conference decided that the SOLAS Protocol should be a separate instrument, andshould enter into force after the parent Convention.

In the case of MARPOL, however, the Conference adopted a different approach. At that time, the principal problemspreventing early ratification of the MARPOL Convention were those associated with Annex II. The changes envisaged by theConference involved mainly Annex I and it was, therefore, decided to adopt the agreed changes and, at the same time, allowContracting States to defer implementation of Annex II for three years after the date of entry into force of the Protocol (i.e.until 2 October 1986). By then, it was expected that the technical problems would have been solved.

This procedure, in effect, meant that the Protocol had absorbed the parent Convention. States which ratify the Protocol mustalso give effect to the provisions of the 1973 Convention: there is no need for a separate instrument of ratification for the latter.The 1973 MARPOL Convention and the 1978 MARPOL Protocol should, therefore, be read as one instrument, which isusually referred to as MARPOL 73/78.

The Protocol makes a number of changes to Annex I of the parent Convention. Segregated ballast tanks are required on all newtankers (see page 12) of 20,000 dead-weight and above (in the parent Convention SBTs were only required on new tankers of70,000 dead-weight and above).

Protocol also requires that SBTs be protectively located, that is, they must be positioned in such a way that they will helpprotect the cargo tanks in the event of a collision or grounding.

Another important innovation concerned crude oil washing (COW), which had recently been developed by the oil industry andoffered major benefits. Under COW, tanks are washed not with water, but with crude oil - the cargo itself. The solvent actionof the crude oil makes the cleaning process far more effective than when water is used and, at the same time, the mixture of oiland water which led to so much operational pollution in the past is virtually ended. (There is usually a final water rinse but theamount of water involved is very low.) At the same time, the owner is able to discharge far more of this cargo than before,since less of it is left clinging to the tank walls and bottoms. COW is accepted as an alternative to SBTs on existing tankers andis an additional requirement on new tankers.

For existing crude oil tankers, a third alternative was permissible for a period of 2 to 4 years after entry into force of othersystems MARPOL 73/78(i.e. until 2 October 1987 at the latest). This was called dedicated clean ballast tanks (CBT) and was asystem whereby certain tanks were dedicated solely to the carriage of ballast water. This was cheaper than a full SBT system,since it utilised existing pumping and piping, but after the period of grace had expired become mandatory.

The requirements of MARPOL 73/78, as they affect COW, SBT and CBT, are given in the table.

Drainage and discharge arrangements have also been altered in the Protocol, which introduces regulations for improvedstripping systems.

Some oil tankers operate solely in specific trades, between ports which are provided with adequate reception facilities. Someothers do not use water as ballast. The TSPP Conference recognised that such ships should not be subject to all MARPOLrequirements and they are consequently exempted from the SBT, COW and CBT requirements.

Survey and certification

It is generally recognised that the effectiveness of international conventions depends upon the degree to which they are obeyedand this, in turn, depends largely upon the extent to which they are enforced. The 1978 Protocol to MARPOL, therefore,introduced stricter regulations for the survey and certification of ships.

MARPOL 73/78 now requires:

an initial survey before the ship is put into service or before an International Oil Pollution Prevention Certificate is ssued;periodical surveys at intervals not exceeding five years; a minimum of one intermediate survey during the period of validity ofthe IOPP Certificate; and unscheduled inspection or mandatory annual surveys must be carried out (in practice mostgovernments have indicated a preference for mandatory annual surveys and IMO has, consequently, recommended that thisalternative be used by all Member States).

In addition, the action to be taken when ships are found to be defective or substandard has been more clearly defined.

The 1984 amendments

Adoption: September

Entry into force: 7 January 1986

The first set of amendments to MARPOL 73/78 was adopted on 7 September 1984. The amendments entered into force, underthe tacit acceptance procedure, on 7 January 1986.

The amendments are concerned with Annex I and are designed not only to improve existing provisions, but also to provide apractical solution to some of the problems involved in implementing the Annex.

The main points of the amendments are given below.

Regulation 10: The amendments introduce requirements for special equipment and procedures to prevent oily water beingdischarged into the sea in special areas - seas such as the Mediterranean, which have special environmental problems. Wastescannot be discharged if the oil content exceeds 15 parts per million.

Regulation 13: The carriage of ballast water in cargo tanks is permitted in certain circumstances.

Regulation 14: The carriage of oil in the forepeak tank is banned.

Regulation 15: The capacity of slop tanks can be reduced from 3 per cent to 2 per cent of cargo carrying capacity on shipsequipped with SBT, CBT or COW. Requirements for slop tanks and certain other oil discharge and monitoring equipment arewaived for ships operating on short voyages, or within 50 miles of land, provided other conditions are met.

Regulation 16: Requirements for oily discharge monitoring and control equipment, and oily-water separating equipment, arewaived for ships operating exclusively within special areas, or within 12 miles of land on “restricted” voyages, provided strictconditions are met.

Regulation 18: A basic principle of Annex I is that all discharges into the sea must take place above the waterline, but theamendments permit underwater discharge to take place from segregated ballast tanks, dedicated ballast tanks and some othertanks, providing that oil and water has separated sufficiently. The advantage of discharging below the waterline for SBTs isthat pumps and extra piping are not required, while for tanks using gravity (the normal practice) procedures are greatlysimplified.

Regulation 20: A number of changes have been made to the Oil Record Book which each ship (including non-tankers) isrequired to carry.

Regulation 21: The discharge of oil wastes from drilling rigs and other platforms is banned when the oil content reaches 100ppm.

Regulation 25: This regulation is intended to ensure that tankers can survive assumed damage. The requirements varyaccording to the ship’s length. The requirements have been considerably strengthened.

The 1985 amendments

Adoption: December

Entry into force: 6 April 1987

Having, by the 1984 amendments, updated Annex I of the Convention, IMO turned its attention to Annex II. Like Annex I thishad originally been adopted at the 1973 Conference, but unlike Annex I had never been updated.

The Annex was due to become effective on 2 October 1986 (3 years after Annex I), but it was clear that Annex II was not onlyoutdated in many respects but also presented considerable difficulties as far as implementation was concerned. IMO,consequently, prepared a number of important changes to the Annex which were formally adopted at an “expanded” meeting ofIMO’s Marine Environment Protection Committee in December 1985. They entered into force on 6 April 1987.

Among the major changes were the following:

Survey and certification requirements were brought into line with Annex I (regulations 10-12) Restrictions on the carriage ofcategory B and C substances were introduced (regulation 5A) A scheme for the mandatory pre-washing of cargo tanks wasintroduced (regulation 8) The Bulk Chemical Code and the International Bulk Chemical Code were made mandatory(regulation 13) A new regulation dealing with oil-like noxious liquid substances was included (regulation 14) The list ofnoxious and other substances appended to the Annex was revised The form of the Cargo Record Book was revised (regulation9)

These amendments were designed to encourage shipowners to improve cargo tank stripping efficiencies, and they contain anumber of specific requirements to ensure that both new and existing chemical tankers reduce the amount of residues to bedisposed of.

As a result of adopting these requirements it has been possible to adopt simplified procedures for the discharge of residues;furthermore, the amendments were expected to reduce the quantities of B and C substances that are discharged into the sea.

The Committee agreed that the proposed amendments to Annex II, by bringing about a significant reduction in the generationof wastes resulting from shipboard operations, would not only result in a remarkable reduction of marine pollution by noxiousliquid substances from ships, but would also reduce drastically the environmental problems ashore involved with the treatmentand ultimate disposal of wastes received from ships. In addition, the amendments provided for improved possibilities forexecuting effective port State control, thus ensuring full compliance with the provisions of the Annex.

At the same meeting, the MEPC decided that the implementation date of the existing Annex should also be deferred until 6April 1987. If this had not been done, the Annex would have entered into force in October 1986 only to be changed in crucialaspects, including the Certificate and Cargo Record Book, barely six months later. This would have imposed a considerableburden on Administrations and the shipping community.

Another important feature of the 1985 amendments to MARPOL was to make the International Bulk Chemical Codemandatory. This Code also became mandatory (as far as safety aspects are concerned) on 1 July 1986, when amendments to theInternational Convention for the Safety of Life at Sea, 1974 (SOLAS) enter into force.

The MEPC expanded the Code to cover pollution aspects as well, and the MARPOL amendments have made the Codemandatory from 6 April 1987. The effective inclusion of the IBC Code in MARPOL 73/78 is particularly important becausethe Code is concerned with carriage requirements, i.e. cargo containment, materials of construction, piping arrangements andso on.

Annex II itself deals with the discharge of cargoes.

Another amendment to Protocol I of the Convention (provisions concerning Reports on Incidents Involving HarmfulSubstances) make it a requirement to report incidents involving discharge into the sea of harmful substances in packaged form.

The 1987 amendmentAdoption: DecemberEntry into force: 1 April 1989

The purpose of the amendment, which affects regulation 10 of Annex I, makes the Gulf of Aden a “special area”, thus giving itgreater protection against discharges of oil.

1989 (March) amendments

Adoption: March

Entry into force: 13 October 1990One group of amendments affect the International Code for the Construction and Equipment of Ships Carrying DangerousChemicals in Bulk (IBC Code). This is mandatory under both MARPOL 73/78 and SOLAS and applies to ships built on orafter 1 July 1986.

A second group concerns the Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk(BCH). In both cases, the amendments include revised list of chemicals. The BCH Code is mandatory under MARPOL 73/78but is voluntary under SOLAS 1974.

The third group of amendments affect Annex II of MARPOL. The list of chemicals in appendices II and III are replaced bynew ones.

1989 (October) amendments

Adoption: October

Entry into force: 18 February 1991

The amendments make the North Sea a “special area” under Annex V of the convention. This greatly increases the protect ionof the sea against the dumping of garbage from ships.

The 1990 amendments

Adoption: March

Entry into force: six months after the entry into force of the 1988 SOLAS and Load Line

Protocols

One of IMO’s major achievements in recent years has been the development of a new harmonised system of surveys andcertification. The new system will align the survey and certification requirements of MARPOL 73/78 with those in theInternational Convention on Load Lines, 1966 and the International Convention on the Safety of Life at Sea, 1974 (SOLAS).

At present these requirements are not harmonised, with the result that the ship could have to go for a mandatory survey under aconvention a few months after being surveyed in connection with another. By making the intervals between surveys the same,as far as possible, many mandatory surveys can be carried out at the same time.

Not only will this be beneficial for the shipowner, who will save time and money, but it will also aid Government authoritieswho are responsible for carrying out the surveys.

Although tacit acceptance can be used to amend MARPOL this is not possible as far as SOLAS and the Load LinesConventions are concerned. In both cases the changes have been introduced by means of protocols which will enter into force12 months after being accepted by 15 States whose combined merchant fleets constitute at least 50% of world gross tonnage.

The MARPOL amendments are expected to enter into force under tacit acceptance six months after the protocols.

Other amendments will introduce the harmonised system into the IBC and BCH Codes. They will enter into force on the samedate as the MARPOL amendments.

The 1990 (Annexes I and V) amendments

Adoption: NovemberEntry into force: 17 March 1992

The amendments make the Antarctic a Special Area under Annexes I and V.

The 1991 amendmentsAdoption: July

Entry into force: 4 April 1993

The amendments affect Annexes I and V. The amendments to Annex I add a new chapter IV to the Annex entitled Preventionof Pollution arising from an Oil Pollution Incident. It requires oil tankers of 150 gross tons and above and ships other thantankers of 400 gt and above to carry a shipboard oil pollution emergency plan approved by the Administration of the countrywhose flag the ship flies. For ships built before 4 April 1993 this requirement may be applied 24 months later.

The plan must be in accordance with guidelines developed by IMO. These were approved in March 1992 and are now availableas an IMO publication. The plan must detail the procedure to be followed in reporting an oil pollution incident, as is requiredby article 8 and Protocol I of the MARPOL Convention. This procedure has itself been described in a resolution adopted byIMO in 1989 (A.648(16)).

The plan must list authorities to be connected in the event of an oil pollution incident, a description of the action which must betaken and the procedures and point of contact on the ship for co-ordinating shipboard actions with national and localauthorities.

The amendments involve changes to the International Oil Pollution Prevention (IOPP) Certificate and the Oil Record Bookwhich are both required by MARPOL 73/78.

The amendments were adopted in response to a resolution adopted in 1990 by the International Conference on Oil PollutionPreparedness and Response which required all ships to carry an oil pollution emergency plan.

The amendments to Annex V of MARPOL designate the Wider Caribbean area as a Special Area. This gives the WiderCaribbean greater protection against the disposal into the sea of garbage from ships. A number of other seas have been giventhis status, most of which have particular problems because of heavy maritime traffic or low water exchange caused by theland-locked nature of the sea concerned.

The Wider Caribbean includes the Caribbean itself, the Gulf of Mexico and a number of other seas and bays extending as farsouth as French Guiana.

The 1992 amendmentsAdoption: MarchEntry into force: 6 July 1993

These amendments are generally regarded as the most important changes to be made to the Convention since the adoption ofthe 1978 Protocol.

In the past MARPOL, the 1978 Protocol and the many amendments which have been adopted over the years have beenconcerned mainly with minimising operational pollution and they have concentrated mainly on new ships.

Although some of the 1992 amendments are concerned with minimising operational pollution, two new regulations in Annex Iare designed to drastically reduce pollution resulting from accidents - and they apply to existing as well as new tankers.

Regulation 13F deals with new tankers of 600 dwt and above. These are tankers for which the building contract is placed after6 July 1993; the keels of which are laid on or after 6 January 1994; or which are delivered on or after 6 July 1996.

Tankers of 5,000 dwt and above must be fitted with double bottoms and wing tanks extending the full depth of the ship’s side.The regulation allows mid-deck height tankers with double-sided hulls, such as those developed by the Japanese and Europeanshipbuilders, as an alternative to double hull construction.

Other methods of design and construction may also be accepted provided that they ensure the same level of protection againstpollution in the event of a collision or stranding. These design methods must be approved by the MEPC based on guidelineswhich are to be developed by IMO.

Oil tankers of 600 dwt and above but less than 5,000 dwt, must be fitted with double bottom tanks and the capacity of eachcargo tank is limited to 700 cubic metres, unless they are fitted with double hulls.

Regulation 13G is concerned with existing crude carriers of 20,000 dwt and above and existing product carriers of 30,000 dwtand above.

It makes provision for an enhanced programme of inspections to be implemented, particularly for tankers which are more thanfive years old.

With the exception of ships already fitted with double hulls, existing tankers must comply with the requirements of 13F notlater than 30 years after their date of delivery. In addition, pre-MARPOL tankers, not later than 25 years after their date ofdelivery, must provide side or bottom protection to cover at least 30% of the cargo tank area.

Regulation 13G also allows for future acceptance of other structural or operational arrangements - such as hydrostatic balance– as alternatives to the protective measures spelled out in the Regulation.

The MARPOL 73/78 Convention has been ratified by 70 countries whose fleets comprise about 90% of the world merchantmarine. In practice, virtually every tanker operating today complies with MARPOL 73/78 and the adoption of the amendmentswill have a major impact upon the tanker market.

It is anticipated that many older tankers which cannot be brought up to the new standard economically will be scrapped, andthe MEPC recognised this by adopting a resolution on the development of ship scrapping capacity to ensure the smoothimplementation of the amendments.

The resolution recommends Member Governments to take initiatives in co-operation with the shipbuilding and shippingindustries, to develop scrapping facilities at a world-wide level, to promote research and development programmes and toprovide technical assistance to developing countries in developing ship scrapping facilities.

The adoption of the amendments was first proposed in 1990 and originally involved only double hulls. At that time several ofIMO’s Member States said that other designs should be accepted as equivalents and that measures for existing ships shouldalso be contemplated. In 1991 a major study into the comparative performances of the double-hull and mid-height deck tankerdesigns was carried out by IMO, with funding from the oil and tanker industry.

It concluded in January 1992 that the two designs could be considered as equivalent, although each gives better or worseoutflow performance under certain conditions.

The other amendments adopted in March 1992 are concerned with operational oil pollution. The amount of oil which can bedischarged into the sea as a result of routine operations has been drastically reduced.

The amendments are concerned with discharges of oily wastes resulting from tank cleaning operations and with dischargesfrom machinery space bilges on non-tankers of 400 grt and above. The latter are forbidden to discharge such wastes if the oilcontent exceeds 100 parts per million. The amendments reduce this to 15 ppm (an amount which is virtually undetectable). Thenew standard will apply to all ships built after 6 July 1993 but there will be a five-year period of grace for existing ships (until6 July 1998).

As far as tankers are concerned the existing regulations permit tankers to discharge oily wastes (outside special areas) at a rateof 60 litres per nautical mile. The amendments reduce this to 30 litres. There is no period of grace for existing tankers becausethere is no difficulty involved in altering the monitoring equipment.

The 1994 amendments

Adoption: November

Entry into force: 3 March 1996 (under tacit acceptance)

The amendments affect four of the Convention’s five technical annexes and were all designed to improve the way it isimplemented. They will make it possible for ships to be inspected when in the ports of other Parties to the Convention toensure that crews are able to carry out essential shipboard procedures relating to marine pollution prevention. These arecontained in resolution A.742 (18), which was adopted by the IMO Assembly in November 1993.

The Annexes affected are Annex I, which deals with oil pollution: Annex II, which is concerned with pollution by noxiousliquid substances (such as chemicals); Annex III, containing regulations for the prevention of pollution by harmful substancesin packaged form; and Annex V, which deals with garbage.

The amendments are similar to those made to the International Convention for the Safety of Life at Sea (SOLAS), 1974 in May1995. A number of IMO Conventions contain provisions for port State control inspections but previously these have beenlimited primarily to certification and the physical condition of the ship and its equipment.

Extending port State control to operational requirements is seen as an important way of improving the efficiency with whichinternational safety and anti-pollution treaties are implemented.

The impact of MARPOL 73/78

It has been estimated that in 1981 some 1,470,000 tons of oil entered the world’s oceans as a result of shipping operations.Most of it came from routine operations, such as discharges of machinery wastes and tank washings from oil tankers (the latteralone contributed 700,000 tons). Accidental pollution contributed less than 30% of the total. By 1989, it was estimated that oilpollution from ships had been reduced to 568,800 tons. Tanker operations contributed only 158,000 tons of this. The study,which was carried out by the National Research Council Marine Board of the United States credited MARPOL 73/78 withmaking “a substantial positive impact in decreasing the amount of oil that enters the sea”.

Although the 1978 Protocol did not enter into force until 1983, many of its requirements were already being implemented. The“load on top” system, for example, had been mandatory since 1978 and was installed on a voluntary basis on many tankersbecause it reduced the amount of oil wasted during routine operations (and thereby increased profits). The “new ship” and“new tanker” definitions included in the original 1973 Convention and the 1978 Protocol also meant that all tankers built afterthose dates already complied with MARPOL 73/78 requirements.

Nevertheless, the impact of MARPOL 73/78 could be even greater in the years to come. One reason is economic. Successiveincreases in the price of oil in the 1970s brought the boom in the oil trade to an abrupt halt. Demand for tankers fell and theresult was a surplus of tonnage that has lasted ever since. This is particularly true of the large tankers which form the bulk ofthe world tanker tonnage. The great majority of them were built in the early to mid-1970s – before the MARPOL 1973 and the1978 Protocol were in force.

Many of these ships are now 15 to 20 years old and it is generally believed that many of them will be scrapped during the nextfew years, because it will be uneconomic to bring them up to the standards required by the 1992 amendments. They will thenbe replaced by new ships which will comply fully with all MARPOL 73/78 requirements.

This will almost certainly be beneficial to the marine environment. New ships tend to be safer than older ones simply becausethey are not so prone to break down. The new ships will also be built to higher standards in preventing both operational andaccidental pollution: many VLCCs operating today are not fitted with segregated ballast tanks or crude oil washing - theirreplacements will be.

It is also hoped that during the next few years international shipping conventions - including MARPOL 73/78 - will be muchmore effectively implemented than in the past. Other measures developed by IMO are intended to achieve this, for example, byemphasising the responsibilities of management and also monitoring the record of individual Governments in putting theconvention into effect. The more effective implementation of port State control measures is also being encouraged.

The provision of adequate reception facilities for wastes is crucial to the successful implementation of MARPOL 73/78. Theyare required by four of the five annexes (Annex III is the exception) and the intention is that ships will be able to retain theirwastes on board until they reach port.

Although facilities are mandatory, in practice they are often inadequate and in some cases still non-existent. In some countriesfacilities have been provided, but the charge for using them is so excessive that many ships avoid them.

Many countries which have large oil exports have so far failed to ratify MARPOL 73/78.

One reason is that they would be obliged to provide reception facilities for oily wastes. The costs of doing so could be verygreat, since most

Definitions

The application of MARPOL 73/78 varies according to the age and type of the ship concerned. The 1973 convention, forexample, refers to “new ships” while the 1978 Protocol refers to “new tankers” - as do the 1992 amendments. The table abovelists the different definitions._______________________________________

tank cleaning operations take place during the ballast stage of the tanker’s voyage: the reception facilities required at an oilloading port, therefore, are much greater than those needed elsewhere.

All of this makes life very difficult for the owners and crew of the ship concerned. MARPOL greatly limits the discharge ofwastes into the sea and in some areas bans it completely: but if the ports fail to provide the reception facilities the captain of theship has to dispose of the wastes in some other way. The temptation is to do this illegally - and hope that no one finds out.

Despite these problems, however, the next few years should see a continued decline in the amount of wastes entering the sea asa result of shipping operations. Certainly MARPOL 73/78 provides an excellent legal basis for bringing this about. The newgeneration of tankers that willenter service between now and the end of the century should be better protected against accidentsand operational pollution than those in use today.

But no matter how good the ships are, much will still be dependent on the way they are managed and on the competence ofthose who sail on them. The responsibilities for this rest with Governments, shipowners and operators and the crewsthemselves.