Recommendations to improve the process of bulk carrier operation of VINASHIP joint stock company

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME:DANG DINH DUNG DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS T

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME:DANG DINH DUNG

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVETHE PROCESS OF BULK

CARRIER OPERATION OF VINASHIP JOINT STOCK

COMPANY

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME:DANG DINH DUNG

CLASS: GMA02

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVETHE PROCESS OF BULK

CARRIER OPERATIONOF VINASHIP JOINT STOCK

COMPANY

Supervisor: LecturerVuong Thu Giang

Division: Global Study and Maritime Affairs

Faculty: Economics

PREFACE

This dissertation has been accomplished upon three month working experience in OperationDepartment of VINASHIP Joint Stock Company This writinghereby will demonstrate the full process of bulk carrier operation of the company Besides, I will analyze the process and also evaluate its efficiency in performance comparing to the standard process which is stated in Chapter 1 hereby recommend possible solutions for improvement

I hope that this dissertation can help readers in gaining somewhat general knowledge but also features about bulk carrier operation

I declare that this report is my own unaided work It has not been submitted before

If violated, I am solely responsible for and bear the punishments of the Institution and University

Student Name and Signature

ĐặngĐìnhDũng

ACKNOWLEGEMENT

Firstly, I would like to express my sincere gratitude to my advisor Prof Vuong Thu Giang for the continuous support of my study and related research, for her patience, motivation, and immense knowledge Her guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for the accomplishment of this dissertation

Besides I would like to thank sincerely Vice General Director, Shipping Manager and colleagues in Operation Department at VINASHIP Joint Stock Company for being very supportive and cooperative to myself during my internship I am grateful that they have provided me the best opportunity to learn and experience in a professional working environment

TABLE OF CONTENTS

Preface i

Table of Contents ii

List of Symbols, Abbreviations iii

List of Tables and Graphs iv

List of Figures v

INTRODUCTION 1

CHAPTER 1: Literature Review 3

1.1Definitions of bulk carrier and ship operator 3

1.2Method of bulk carrier operation 3

1.3 Ship’s particulars 3

1.4 Documents and Certificates required to be carried on board ships 7

1.5 Concerned parties 9

1.6 The international convention and national regulations related to the responsibilities of the parties 10

1.7 Contract to be used 10

1.8 The process of bulk carrier’s operation (voyage charter) 12

CHAPTER 2: The practical process of bulk carrier operation at VINASHIP Joint Stock Company 16

2.1 Overview of VINASHIP Joint Stock Company 16

2.1.1 History 16

2.1.2 Organization 17

2.1.3 Personnel and Infrastructure 18

2.1.4 Business Sphere and Department ofOperation 19

2.2The bulk carrier operation at VINASHIP 20

2.2.1 Chartering

2.2.2 Pre-voyage

2.2.3 Vessel Departure to Port of Loading

2.2.4At Port of Loading

2.2.5 Departure and Sailing to Port of Discharge

2.2.6At Port of Discharge

2.2.7 Post-voyage

CHAPTER 3: Recommendation to improvethe process of bulk carrieroperation of VINASHIP Joint Stock Company 28

3.1 Advantages and Disadvantages of the bulk carrier operation of VINASHIP JSC 28 3.2Business Result and Analysis 29

3.2.1 Strengths

3.2.2 Weaknesses

3.2.3 Opportunities

3.2.4 Threats

3.3 Recommendations 32

CONCLUSION Reference / Bibliography 36

Appendices 37

LIST OF ABBREVIATIONS

OBO Oil-Bulk-Ore Carrier

SOLAS Convention for Safety of Life at Sea

LOA Length Overall

LBP Length Between Perpendicular

LWL Length on Load Waterline

DWT Deadweight Tonnage

GRT/RT Gross Register Tonnage/Gross Tonnage

NRT/NT Net Register Tonnage/Net Tonnage

STCW Standard of Training, Certification and Watchkeeping

MARPOL International Convention for the Prevention of Pollution from Ships AFS International Convention on the Control of Harmful Anti-fouling

systems on ship CLC International Convention on Civil Liability for Oil Pollution Damage MSC Maritime Safety Committee

ROROC Report on Receipt of Cargo

B/L Bill of Lading

MLC Maritime Labor Convention

C/P Charter Party

BIMCO Baltic and International Maritime Council

NYPE93 New York Produce Exchange Form

GENTIME General Time Charter Party

VOLCOA Standard Volume Contract of Affreightment for the Transportation of

Dry Bulk Cargoes ETA Estimated Time of Arrival

NOA Notice of Arrival

NOR Notice of Readiness

LOI Letter of Indemnity

COR Cargo Outturn Report

SOF Statement of Facts

TPP Trans-Pacific Partnership

LIST OF TABLES/FIGURES

TABLE 1: VINASHIP Fleet 16

FIGURE 1: Ship dimensions 3

FIGURE 2: Loadline and Plimsoll Mark 4

FIGURE 3: Company struture 15

INTRODUCTION

Shipping is one of the most important industries having close ties with the development of foreign trade The country which has a developed shipping industry can perceive many advantages in foreign affair as well as increase the national revenue Moreover, it also promotes the interchange of diverse cultures between regions worldwide Vietnam is a coastal country with a long coastline of 3200 km and has many favorable geographical locations for the development of maritime transportation The national shipping industry, therefore, requires a continuous innovation and improvement in terms of scale, organization, quantity and quality, productivity, professionalism… in order to keep pace with the growing demand Considered as a typical model, the VINASHIP Joint Stock Company (VINASHIP)

is the leading corporation amongst many that operate within the industry

Amongst different departments in a shipping company, Department of Sales and Operationcan be considered as the most essential body of the company that it contributively assists the board of director in making decision towards their business As the shipping industry is requiring from participants to comply with more new legal, commercial, technical and operating standards, research on professional competence and working practice of the departmentthus is highly necessary especially for myself as a student of Vietnam Maritime Universitywhereby I had a deeper understanding of their business and been aware

of strengths and weaknesses Current strengths must be made the most while existent shortcomings must be minimized and remedied as soon as possible.Hopefully all the recommendations proposed for improvementof productivity and efficiency shall be taken into considerationby the company managers

This dissertation includes three main chapters as what I mentioned in the content above In the first chapter which is the Literature Review, I will introduce the basic knowledge of shipping, technically by giving out sufficiently broad concepts, terms and some particulars This chapter is supposed to clarify the technicalities used in the operation and provides various basic stagesin bulk carrier’s operation On the other hand, the next chapter focuses on what I actually obtained through research, work and observation during my apprenticeship at Department of Operation of VINASHIP, containing the background of the

company, its business spheres and professions of the department where I involved in.The profession will be described in detail as I have the permission from VINASHIP to use some of their documents as samples through outthis dissertation

In the final chapter of the dissertation, the financial result of the company will be provided hereby I will draw my infrences along with SWOT analysis For further development of the company, I would be very fortunate to recommend the company with some recommendations listed afterward so that the company shall be able to maintain its good working practice or even to improve the overall productivity

CHAPTER 1: LITERATURE REVIEW

1.1 Definition of Bulk Carrier and Ship Operator

There are several definitions of bulk carriers According to the International Convention for the Safety of Life at Sea (SOLAS) chapter IX, bulk carrier means a ship which is constructed generally with single deck, topside tanks and hopper side tanks in cargo spaces, and it intended primarily to carry dry cargo in bulk, and includes such types as ore carriers and combination carriers Some bulk carriers can

also function as tankers and this combination carrier is called an Ore Bulk Oil

(OBO) carrier(IMO, 1974) Another definition likewise has been developed by

Klaas van Dokkumthat defines a bulk carrier, bulk freighter, or bulker as a

merchant vessel uniquely designed to transport loose cargo in bulk which usually are coal, ore, agricultural product, fertilizer, cement and light minerals.(Dokkum, 2008) The dissertation will be based upon the second definition

As stated in the ISS shipping glossary, ship operator is either the shipowner or

the (legal) person responsible for the actual management of the vessel and her crew

In this dissertation, ship operator refers to whom responsible for the operation of bulk carrier(ISS Shipping Glosarry)

1.2 Method of bulk carrier’s operation

The most popular method of bulk carrier’s operation in the world is tramp shipping in which tramp ships operate wherever and whenever the market dictates Accordingly, they do not have a fixed itinerary but travel wherever the company that has contracted (chartered) the vessel wants the cargo delivered The tramp freight rates therefore vary greatly depending on negotiation

Another method of operation is liner shipping which is normally offered by a shipowner or group of shipowners on fixed trade routes with regular ports of call on

a fix schedule and at a fixed, stable freight rate Hence, liner service is suitable for transporting cargoes which tend to be small parcels of high value rather than the generally bulk, low value and large parcels

1.3 Ship’s particulars

1.3.1 Principal Dimensions

The principal dimensions of ship to be used during the operation of ship to check the safety in navigation, anchorage, loading/unloading or berthing at port Some of them are particularly used to calculate the quantity (amount) of cargoes to

be receipt based on draft or other measurements at port

Width/Beam: the greatest mould breadth, measured from side to side at the

outside of the frames, but inside the shell platting

Depth: the vertical distance between the base line and the upper deck

Length Overall (LOA): the horizontal distance over the extremities It is the

most commonly used way of expressing the size of a vessel, and is also used for caculating the cost of a marina berth

Length Between Perpendiculars (LBP): distance between the fore and aft

perpendicular (Forward perpendicular is the line that crosses the intersection of the water line and the front of the stem; Aft perpendicular is the line that usually align

with the center line of rudder stock)

Length on Load Waterline (LWL): horizontal distance between the points

where bow and stern are going through the water plane, at summer mark, less the shell platting

Draft/Draught: the vertical distance between the waterline and the bottom

of the hull (keel) as measured at the aft perpendicular, with the thickness of the hull included

(Dokkum, 2008)

FIGURE 1: SHIP DIMENSIONS

(Source: Shipboard Measurements, www.globalsecurity.org)

1.3.2Load-line’s Marks and Free Board

Freeboard: the distance between the waterline and the top of the deck at the

side (deck line) Summer Freeboard means the distance from the top of the Summer

Load Line or the PlimsollMark and the upper edge of the deck line The minimum freeboard is due to: the location on earth (latitude) and the time of the year (summer, winter)

International Load Line: the line where the hull meets the water plane when a

shipis lying in the water For different situations, there is:

- Light water line: the water line of a ship carrying only her regular inventory

- Deep water line: the water line of maximum load draught in seawater

- Construction (Scantling) water line: the water line used as the limit to which the

various structural components are designed

Load-line’s Mark: a set of horizontal lines indicating the minimum

freeboard/the maximal draft of the ship in which a ship loaded as per specific water types and temperatures

FIGURE 2: THE PLIMSOLL MARK

(Source: “Cargo Ship Marks ‘not Visible’ article, www.seabreezes.co.im)

Explanation of abbreviations used on the mark:

TF, F, T, S, W, WNA: denotes the waterlines when vessel carries other goods than wood

LT, LS, LW, LWNA, LTF, LF: denotes the waterlines when vessel carries a deck cargo of timber

Plimsoll Mark/Freeboard Mark: a symbol indicating the maximal

immersion of the ship in the water, leaving a minimum freeboard for safety (The horizontal line which is drawn with its upper edge going through the centre of the circle indicates the minimum freeboard in salt water in summer conditions)(Dokkum, 2008)

1.3.3 Volumes and Weights terms

Deadweight tonnage/Deadweight(abbreviated to DWT or D.W.T) is the

weight (in ton) in which ship can load till the maximum allowable immersion (to summer load line)

Gross Register Tonnage(abbreviated to GRT or GT) is a number that

describe the ship’s volume below the main deck and the enclosed space above the main deck

Net Register Tonnage (abbreviated to NRT or NT) is a number that describe the

volume of cargo space, derived from GRT/GT by excluding the volume of space occupied by crew, navigation equipment, propulsion equipment, workshops, ballast

Cargo capacity is the total weight of cargo (in ton) a ship is designed to carry, at a

certain time and can be adjustable due to the capacity (in ton) of fuel, spares, provisions and drinking water carried onboard

Bale capacity is the volume of cargo (in cubic feet or metre) that ship can carry in

bale (steel coils, bagged rice )

Grain capacity is the volume of cargo (in cubic feet or metre) that ship can carry

in terms of grain (rice, maize, clinker )(Dokkum, 2008)

Amongst those, GRT and NRT are two main factors which determine the port’s dues and fees in ship’s operation activity

1.3.4 Characteristics of vessel speed and engine consumption

Ballast speedis the speed in which ship sails without carrying cargo in hold

Laden speed is the speed in which ship sails in full loaded condition

Fuel oil consumptionis calculated per day by ton (or per hour by ton) and

demonstrate the consumption of main engine

Diesel consumptionis calculated per day by ton (or per hour by ton) and

demonstrates the consumption of the generator

1.3.5 Cargo gears

Bulk carriers are usually discharged by grabs Cargo onboard is usually moved with the aid of some type of cargo-handling gear which is present on the ship (self loader/unloader) These gears normally are crane, derrick, winches, sling, gin, fall, runner and rope

1.4 Documents and Certificates required to be carried on board ships

1.4.1 Operation Documents of vessel

The vessels are required to keep valid documents ensuring the ship seaworthiness and certificates complied with international maritime regulation (Tonnage Convention, Loadline Convention, SOLAS, STCW, MARPOL, AFS, Bunker Convention, CLC, MSC)

1.4.2 Voyage Document

At port of loading: For the carriage of good by sea, required documents must

be keep on board including Bill of Lading, Cargo manifest, Mate’s Receipt, Stowage Plan, Tally report, Draft Survey and Crew list

At port of discharge: After the completion of discharging process, Tally report and Report on Receipt of Cargo (ROROC) must be released Consignee must submit Original Bill of lading or other equivalent documents (Letter of Indemnity/Bank Guarantee/Letter of Guarantee) to receive cargo from ship

The notion of each document which was stated above will be explained in the process wherever one occurs Amongst those, Bill of lading, usually abbreviated

to B/L, is the primary document used in carriage of good by sea A B/L possesses three main characteristics which are:

- A receipt of goods, issued by the carrier

- A “document of title” to the goods, the proof of ownership

- Evidence of the terms and conditions of the contract of carriage(J Bes, Norman J Lopez, 1992)

This paper mentions types of B/L which are original B/L and backdated B/L

From the personal point of view, original B/L can be defined as the standard

of maritime transportation that when the cargo is fully laden on board, it is issued to the shipper Without the presentation of original B/L at port of discharge, the consignee is not able to claim for cargo delivery This document is crucial that it partly involves in the transaction of shipment along and defines when and to who the cargo onboard can be released

Backdated B/L or antedated B/L as defined in Bes’ Chartering and Shipping terms is a B/L issued by the captain or vessel’s agent when the seller of shipper can not comply with the condition agreed in the contract of sale whereby the cargo must

be shipped and “on-board, shipped B/L” obtained by a certain date

1.5 Concerned Parties

There are four main chartering participators: Shipowner, Sea Carrier, Charterer and Cargo owner

Shipowner: Under the Maritime Labor Convention (MLC) 2006, the

definition of shipowner has been stated as “the owner of the ship or another organization or person, such as the manager, agent or bareboat charterer, who has assumed the responsibility for the operation of the ship from the owner and who, on assuming such responsibility, has agreed to take over the duties and responsibilities imposed on shipowners in accordance with this convention, regardless of whether any other organization or persons fulfill certain of duties or responsibilities on behalf of the shipowner”

Sea Carrieris the one who operates their own ships or leases ships from

others to conduct shipping contract Sea Carrier is a main party of charter-party Sea Carrier can be either shipowner or ship charterer who signs charter-party with cargo owner

Chartereris the one who either stand behalf of himself or others to sign

charter-party

Cargo owneris the one who has the right to dispose cargo to be carried on

board Cargo owner can charter the vessel by himself or assign to others to charter the vessel

Other parties that provide services for vessel includes:ship’s agent, worker/supervisor/foreman/stevedores, tally man, freight forwarder, surveyor, sea pilot, towage service

Bank and Insurance companies are also important in terms of transaction and financial issues

The authority parties include Port Authority, Border Security, Customs,

Quarantine and Port State Control

1.6 The international convention and national laws referring to the liability of parties

The Hague-Visby Rules or “International Convention for the Unification of

Certain Rules of Law relating to Bills of Lading” is a set of international rules laid down for the carriage of goods by sea These regulations were drafted in Brussel in

1924 stating that the carrier’s main duties are to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried as long as to exercise due diligence to ensure the seaworthiness of the ship Under these rules, the shipper

is obligated to pay freight, to manifest precisely and honestly, to pack the cargo properly for the voyage

The Hamburg Rulesrefers to The United Nation Convention on the Carriage

of Goods by Sea convened at Hamburg, Germany in 1978 The Hamburg Rules regulates the rights and obligations of shipper, carriers and consignees under a contract of carriage of goods in which concentrates on the liability of both carrier and shipper In particular a carrier must be fully in charge of loss and damage to the cargo and of delay in delivery while the shipper is governed by the liability for loss sustained by the carrier and for damage to the ship Other provisions of this convention deal with shipping documents issued by the carrier along with limitation

of actions, jurisdiction and arbitral proceedings

In general, The Hague-Visby Rulesmainly covers the period from the time

the goods are loaded onto the ship until the time they are discharged from it whereas

The Hamburg Rules apply to the entire period the carrier is liable for the custody of

goods (at the port of loading, during the sea carriage and at the port of discharge)

Vietnam Maritime Code 2005 includes 261 articles divided into 18 chapters

and amended in 2005 by Vietnam National Congress This code subjects to Vietnamese organizations/individuals and foreign organizations/individuals involved in maritime shipping activities in Vietnam

1.7 Contract to be used

The contract to carry goods by sea or to hire or lease or use a ship is defined

as Charter meanwhilethe document that contains the detail of the charter or contract

is called a Charterparty (C/P) The contract between the shipowners and the

charterers is often drawn up for signature by the brokers and usually signed “As agent only”

There are three types of contract which are Voyage C/P, Time C/P and Demise C/P (or so-called Bareboat C/P)

Voyage C/P: Under a voyage charter, shipowners must undertake to put a

predetermined merchant vessel of a certain description at the disposal of a charterer for the shipment of a full cargo or part cargo from one or more ports in a specified range of ports to one or more named ports of destination or ports within a specified range at freight rates and conditions agreed between the two during negotiations before the fixture The vessel can be employed once (single voyage) or more than once (consecutive voyages) Thereto, the shipowner must provide ship at an agreed port for loading at a certain date and must care for the goods during the voyage The contract expressly defines which costs are borne by the shipowner and which by the charterers If freight is not paid in time under a voyage charter, shipowners can protect their interest by exercising a lien on the cargo(J Bes, Norman J Lopez, 1992)

General Charter Conditions (agreement) officially adopted by Baltic and International Maritime Council (BIMCO), also known as Gencon Charter Party, is the most commonly form of voyage charter party used worldwide Gencon was first issued in 1922 and revised in 1976 and 1994 Shipowner and charterer are based on this contract to form a reductive voyage contract so called Fixture Note that states out specific terms and clauses after negotiation between two parties(J Bes, Norman

J Lopez, 1992)

Time C/P: A time C/P contains the terms and conditions mutually agreed

upon between shipowners who have let and charterers who have hired a vessel for a specific period, or she may be let on time charter for one or more consecutive voyages between certain ports or ranges of ports.Time C/P usually stipulate that the owners shall provide and pay for all provisions, subsistence, wages, bonuses and other expenses such as insurance and necessary stores including galley fuel and water whilst the charterer usually bear the expense for fuel (except galley fuel), port

charges, pilotage, towage and other dues and charges.Time charter hire is payable in advance and runs continuously unless the vessel is “off-hire” If hire is not paid in time then the vessel can be withdrawn(J Bes, Norman J Lopez, 1992)

Typical time C/P form that is widely used includes New York Produce Exchange Form (NYPE 93) and General Time Charter Party (GENTIME) by BIMCO

Demise/Bareboat C/P: This charter is not an agreement for the carriage of

good by sea but a contract for the hire of ship in which the charterer becomes the disponent owner and has complete control over the ship as well as complete responsibility for her operation (the appointment of the crew, maintenance, insurance…) for an agreed period This charter is prefered in times of shipping recession when shipowners find it difficult to operate their ships at a profit(J Bes, Norman J Lopez, 1992)

In practice, demise/bareboat C/P are almost always based on the BIMCO Barecon 89 standard agreement form – the most important one and the only standard in the shipping industry – but it is also feasible to alter if necessary from case to case

Contract of Affreightment (COA): this term is a somewhat old form of

describing a contract to carry goods by sea or a contract of carriage However, in modern shipping terminology, a COA usually refers to an agreement on transportation of a large volume of cargo over an agreed period of time between named ports or regions(J Bes, Norman J Lopez, 1992)

There is on maintype of standard-forms COAs for dry cargo which is the

“Standard Volume Contract of Affreightment for the Transportation of Bulk Dry Cargoes” publish by BIMCO in 1982 (VOLCOA)

1.8 The process of bulk carrier’s operation

A regular voyage operation can be demonstrated as the flowchart below:

FIGURE 3 VOYAGE OPERATION FLOWCHART

(Source: collected by author)

Accordingly the process of bulk carrier’s operation being mentioned hereafter is theoretically applied during a voyage charter There are seven main stages which are Chartering, Pre-voyage, Vessel’s last departure port, At port of loading, Departure and Sailing to Discharging port, At port of discharge and Post-voyage

respectively

1.8.1 Chartering

The process in which ashipowner or a sea carrierbegins the negotiation of a contract for the hire of a ship, perhaps through chartering brokers and owner’s shipbrokers then ends with the agreement and signs the C/P is called chartering.Usually, both parties shall sign a "Fixture Note” that has no unified format, but its content will list the main clauses in detail promised by the shipowner and the charterer/chartering broker during the negotiation After the fixture note is signed by the both concerning parties, both parties shall keep one for future reference

1.8.2 Pre-voyage

After both parties are in full agreement on Fixture Note, ship operator must summarize it in a Recap including necessary information of concerned parties and agreed charter terms The operator then will check information of coming ports and update those into the voyage instruction for ship prior to the next voyage The purpose is to inform the Caption about guidance for the voyage Besides, operator must plan for both vessel and her crew to be eligible to sail during the voyage such

as plan for supplies and provisions, oil, dunnage material, fumigation material

Operator is also responsible for declaration of loadable quantity and stowage plan -

showing different part of the ships where cargo have been stowed and helping agents at the port of discharge to take the necessary measures for the discharge of vessel well in advance – to concerned parties and nominate agent at port on behalf shipowner After all, other departments will be advised the plan of vessel

1.8.3 Vessel’s last departure port

The first task of operator in this stage is to notify vessel’s Estimated Time of Arrival(ETA) to all concerned parties ETA is a short notice that shows expected

date and time of arrival in a certain port At the same time, the daily report of vessel

in regards to ETA, sea conditions, speed and consumption must be checked continuously Operator will request agent to inform the condition of cargo, formalities, berth or estimated time for vessel waiting for berth Operator must advise technical department for plans to repair the vessel during the waiting time if necessary Finally the cargo hold’s conditions need to be ensured that they are suitable for loading cargo

1.8.4Atport of loading

When vessel is at port of loading, operator must check Notice of Readiness (NOR) tendered by Captain as well as plan to supply necessities the vessel In shipping manner, NOR is a written document or telex issued by the captain of a vessel to the charterers advising them the moment when a vessel is ready to load or discharge and advising a consignee or his agent that cargo has arrived and is ready for delivery

Then operator must prepare carefully the hold inspection – a survey

conducted by an approved surveyor that may certify the hold for cleanliness and infestation - or draft survey if any Once the hold inspection passed, operator will deal with shipper and agent on loading plan at berth plus oversee the loading process in the meantime so that operator could handle occurrence if any

The following step is to estimate time for completion/departure at loading

port then nominate agent at port of discharge and keep Notice of Arrival (a notice

sent by the carrier or ship’s agent to notify mostly the consignee the arrival of the

to send required formalities to agent Though NOA is deemed similar to NOR, however, NOA is no more than a time notice while the tendering of NOR triggers

off the commencement of laytime (the amount of time agreed in a voyage charter

between the shipowner and the charterer during which the vessel will be made and kept available for loading and discharging cargo)

Once the vessel has finished loading, operator will instruct person in charge

to sign B(s)/L

After completion of loading

When ship’s departure is settled, operator thenchecks if B/L is signed and issued properly as well as to request agent for shipping documents Subsequently operator can start calculating the freight to make out freight invoice before sending shipping document to agent assigned at port of discharge

1.8.5 Departure and sailing to discharging port

During the voyage, NOA must be updated daily to concerned parties (charterer, broker and agent at discharge port) by operator Agent at discharge port will update berthing line-up as requested from operator in order to find suitable berth to discharge In case the voyage to port of discharge takes longer than usual, operator must ask the Captain to constantly check the condition of cargo onboard in particular the ventilation In addition, operator must pursue the remittance from charterer

1.8.6At port of discharge

NOR must be checked by operator if tendered and informed to concerned parties After NOR is accepted by charterer, then operator will check with agent in regard to cargo hold’sinspection Then the discharge will be commenced Once it finished, operator are required to check with concerned parties if there is shortage of cargo or cargo damaged so as to solve possible conflict between parties if needed Operator must estimate time of discharge completion as well

1.8.7 Post-voyage

Operator must request agent to complete necessary formalities related to the departure of ship after the discharging process finished At the same time operator

will deliver all cargo documentreceived from agent to charterer for charterer’s

reference The next step is to calculate laytime so that operator can determine

demurrage or dispatch at discharge port before sending this detailed calculation to

charterer and receiving their confirmation in return

Demurrage is defined as the money payable to the shipowner for the delay of ship which the owner is not responsible in loading/unloading after the laytime has

expired In contrast, dispatch is the compensation paid to charterers if the loading or

discharging process are completed within the laytime agreed in the C/P and it is

traditional for dispatch rate to be at half the rate of demurrage If there is detention,

operator also need to request charterer to pay for it This term refers to the

compensation payable by the charterer if a vessel is detained without agreement

usually because the charterer fails to nominate a berth suitable for the vessel’s

arrival Lastly, in order to fulfill the voyage account (or trip account), operator will

collect all the invoice and voucher from both agent and vessel

CHAPTER 2: THE PRACTICAL PROCESS OF BULK

CARRIER OPERATION OF VINASHIP

2.1 Overview of Vinaship Joint Stock Company

2.1.1 History

The former of VINASHIP was Ocean Shipping Company III established on May 19th, 1984 which was originally the combination of VIETCOSHIP and SOUTH VOSCO The company then was directly under Vietnam Maritime Bureau with the primary task was to meet the demand from domestic shipping market and regional shipping market within Southeast Asia

Until 1993, Ocean Shipping Company III was recognized as a state-owned company under 388/HĐBT Resolution enforced on November 20th

, 1991 by Ministry of Transportation

The headquarter locate at No.1 Hoang Van Thu Str., Hong Bang Dist., Haiphong City along with other branches in Ho Chi Minh City, Da Nang City and

- Phase of 1991 – 1995: The country has made a significant movement from centralized economy to market economy in which the government has relocated the capital by entrusting to the companies Due to the limit in human resource and managing knowledge, the company faced many problems in terms of market, investment, managerial structure…