Shipping and ports

In short

Shipping is the carriage of goods by sea and ports are the land-sea interface where cargo changes mode, is stored, cleared by Customs and handed to inland transport. Over 95% of India's trade by volume and about 70% by value moves by sea, so sea freight, port charges and documentation decide the landed cost of almost every imported or exported item. The topic is examined in BBA/B.Voc papers on international logistics, shipping and port management, EXIM documentation and multimodal transport, and in CILT/IIMM/CHA certification. Employers test it in interviews at Maersk, MSC, CMA CGM, Hapag-Lloyd, DP World, Adani Ports, JSW Infrastructure, Shipping Corporation of India, Allcargo, DHL Global Forwarding, Kuehne+Nagel, Concor and freight forwarders/CHAs.

Explained

Shipping: types of operation and ship types

• Liner shipping - fixed route, published schedule and tariff, many shippers sharing one ship; container trades (Maersk, MSC, CMA CGM, Hapag-Lloyd) work this way. Carrier issues a bill of lading; the contract is one of carriage.
• Tramp shipping - no fixed route or schedule; the whole ship is hired for a voyage or period under a charter party, mostly for bulk (coal, iron ore, grain, fertiliser, crude). Rates swing with demand; tracked by the Baltic Dry Index.
• Industrial shipping - the cargo owner owns or controls the fleet (an oil major, a steel plant) to guarantee capacity.
• Ship types by cargo: container ships (cellular, gearless; feeder ~1,000-3,000 TEU up to ULCV >20,000 TEU), dry bulk carriers (Handysize, Handymax/Supramax, Panamax, Capesize), tankers (Handy, Aframax, Suezmax, VLCC, ULCC), gas carriers (LNG/LPG), Ro-Ro and PCTC (car carriers), reefer ships, break-bulk/general cargo, heavy-lift and project carriers, barges/lighters, dredgers and tugs.
• Ship dimensions that limit routing: LOA (length overall), beam, draught (depth below waterline - decides which port a ship can enter), air draught (bridge clearance). Panamax/Neopanamax and Suezmax are canal-constrained sizes; Malaccamax is strait-constrained.
• Tonnage terms: GT/NT (gross and net tonnage - volume-based, used for dues and manning), DWT (deadweight - total mass of cargo + fuel + stores a ship can carry), displacement (mass of water displaced), lightweight (empty ship). Cargo capacity in containers is in TEU (20 ft equivalent unit); a 40 ft box = 2 TEU (FEU).
• Containers: 20 ft and 40 ft general purpose, high-cube (9'6"), reefer, open-top, flat rack, tank, ventilated. ISO 668 fixes dimensions; CSC safety approval plate is mandatory. Typical payload: 20 ft about 28 t, 40 ft about 26-28 t (volume-limited, not weight-limited).

Ports: types, components and services

• Port - a sheltered place with facilities to berth ships and transfer cargo. Harbour is the sheltered water; terminal is a specialised cargo facility inside a port.
• Types: natural, semi-natural, artificial; coastal and riverine/estuarine (Kolkata on the Hooghly); deep-water/transhipment hub (Vizhinjam, Vallarpadam) versus feeder port; landlord port (authority owns land and leases terminals to private operators under concession - the Indian model) versus tool port and service/operating port.
• Dry port / ICD / CFS - inland Customs-notified facilities. ICD (Inland Container Depot, e.g. Tughlakabad, Dadri) is an inland port where import/export clearance happens; CFS (Container Freight Station) is near the port, for stuffing/destuffing LCL and decongesting the quay.
• Infrastructure: approach channel, breakwater, turning circle, berth/quay, apron, quay cranes (ship-to-shore gantry), RTG/RMG yard cranes, reach stackers, straddle carriers, container yard, warehouses and silos, tank farms, conveyors and ship-loaders/unloaders, rail siding, dry dock, bunkering, tugs, pilotage, VTS (Vessel Traffic Service), dredging to maintain draught.
• Port community: Port Authority, terminal operator, stevedores, shipping agent, pilot, Customs, immigration, port health, CHA/Customs Broker, freight forwarder, NVOCC, surveyors, P&I club representatives, container train operators (Concor and private CTOs).

Indian institutional framework

• Major Ports (12, Central): Deendayal (Kandla), Mumbai, Jawaharlal Nehru Port (JNPA, Nhava Sheva) - India's largest container port, Mormugao, New Mangalore, Cochin, V.O. Chidambaranar (Tuticorin), Chennai, Kamarajar (Ennore), Visakhapatnam, Paradip, Syama Prasad Mookerjee (Kolkata, with Haldia dock complex). Governed by the Major Port Authorities Act, 2021, which replaced the Major Port Trusts Act, 1963 - trusts became Port Authority Boards with power to fix their own tariffs (TAMP's rate-fixing role for major ports ended; an Adjudicatory Board handles disputes/concession issues).
• Non-major ports (about 65 handling cargo of roughly 200+ notified) are under State Maritime Boards (Gujarat Maritime Board, Maharashtra Maritime Board, etc.) and now handle close to half of India's total port cargo. Mundra (Adani) is the largest single Indian port by cargo. Vizhinjam (Kerala), commissioned 2024-25, is India's first dedicated deep-water transhipment port.
• Regulator/ministry: Ministry of Ports, Shipping and Waterways; Directorate General of Maritime Administration (DGMA) — the former DG Shipping, renamed under the Merchant Shipping Act, 2025 (safety, seafarers, registration, flag-state inspection); IWAI for national waterways; the Indian Ports Act, 2025 (assent 21 August 2025, in force from 1 April 2026) replaced the Indian Ports Act, 1908.
• Key statutes: Merchant Shipping Act, 2025 (in force 15 March 2026, repealing the 1958 Act: registration, seafarers, safety, pollution); Carriage of Goods by Sea Act, 2025 (replaced the 1925 Act; carrier's liability under a bill of lading); Bills of Lading Act, 2025 (replaced the 1856 Act); Multimodal Transportation of Goods Act, 1993 (MTO issues one multimodal document through to destination); Customs Act, 1962 (clearance, warehousing, duty); Marine Insurance Act, 1963; the Hague/Hague-Visby/Hamburg/Rotterdam Rules are the comparative questions.
• Programmes: Sagarmala (port-led development, modernisation, connectivity, coastal shipping, community development); Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047; Gati Shakti for multimodal connectivity; cabotage relaxation for transhipped containers; PCS 1x / NLP-Marine digital single windows; Dedicated Freight Corridor feeding JNPA and Mundra.
• International instruments: IMO conventions - SOLAS (safety, including the SOLAS VGM verified gross mass rule for containers), MARPOL (pollution; IMO 2020 sulphur cap 0.50% m/m outside ECAs, 0.10% inside), STCW (crew training), ISM Code, ISPS Code (port and ship security levels 1-3), MLC 2006, Ballast Water Management Convention. IMO's net-zero/GHG strategy targets around 2050 - the mid-term measures are still being settled, so quote the direction, not a final rule.

Shipping documents, contracts and Incoterms

• Bill of Lading (B/L) does three jobs: (1) receipt for goods, (2) evidence of the contract of carriage, (3) document of title - the holder of an original negotiable B/L can claim the goods. Types: clean vs clause/dirty; shipped on board vs received for shipment; straight (consigned), order (negotiable), bearer; through B/L, combined/multimodal transport B/L, house B/L (HBL, by forwarder/NVOCC) vs master B/L (MBL, by carrier), switch B/L, charter-party B/L. A Sea Waybill is a non-negotiable alternative; an Electronic B/L (eBL) is being pushed under the FIATA/DCSA/MLETR framework.
• Other documents: booking note, shipping bill (export) / bill of entry (import), IGM and EGM (import/export general manifest), mate's receipt, delivery order, packing list, commercial invoice, certificate of origin, marine insurance policy/certificate, Letter of Credit under UCP 600, VGM declaration, DG declaration (IMDG) for hazardous cargo.
• Charter party types: voyage charter (paid per tonne of cargo or lump sum; owner bears voyage costs; laytime and demurrage apply), time charter (hire per day; charterer pays bunkers and port charges), bareboat/demise charter (ship only, charterer crews and operates), contract of affreightment (a quantity over a period).
• Laytime, demurrage, despatch: laytime is the free time allowed for loading/discharge; exceeding it costs demurrage to the owner; finishing early earns despatch (usually half the demurrage rate). NOR (notice of readiness) starts the clock. WWDSHEX = weather working days, Sundays and holidays excepted. Separately, in container trade, demurrage = charge for a box lying inside the terminal beyond free days, detention = charge for the box outside the terminal (with the importer) beyond free days - the examiners' favourite distinction.
• Freight terms: liner terms (loading/discharge in freight), FIOST (free in, out, stowed, trimmed), FILO/LIFO. Surcharges: BAF (bunker), CAF (currency), THC (terminal handling), peak season, war risk, congestion, ISPS, GRI.
• Incoterms 2020 (ICC) - eleven rules, split by mode:
  • Any mode: EXW, FCA, CPT, CIP, DAP, DPU, DDP
  • Sea/inland waterway only: FAS, FOB, CFR, CIF
  • Risk passes in FOB/CFR/CIF when goods are on board the vessel; CIP needs all-risks (Institute Cargo Clauses A) insurance, CIF only minimum cover (Clause C). DDP puts import duty on the seller - advise against it where the seller cannot clear Customs locally. Containerised cargo should use FCA/CPT/CIP, not FOB/CFR/CIF, because the seller loses control at the terminal, not at the ship's rail.
• GST and sea freight: export of goods is a zero-rated supply; ocean freight on imports and the place-of-supply/RCM treatment have changed more than once (and the 2025 restructuring left slabs at 5%/18%/40%), so check the current notification before quoting a rate in practice.

Port operations, performance and productivity

• Cargo flow, import: vessel arrival and NOR → pilotage and berthing → discharge by quay crane → yard stacking → IGM filing → bill of entry (self-assessment on ICEGATE), duty payment, examination/RMS facilitation → out-of-charge → gate-out by road/rail (or to a CFS/ICD) → delivery. Export reverses it: booking → stuffing (factory or CFS) → shipping bill, LEO (Let Export Order) → gate-in, yard, load → EGM → B/L release.
• Berth and yard planning: stowage plan and bay plan, weight distribution and stability, reefer plug allocation, hazardous segregation, dual-cycling, twin-lift spreaders, transhipment moves, empty repositioning and container imbalance (India's import-heavy lanes leave empties stranded).
• Key performance indicators: turn-round time (TRT) of the ship, pre-berthing detention, berth day output / berth productivity, crane productivity (moves/hour), ship-to-shore moves per ship-hour, idle time at berth, berth occupancy (60-70% is the practical optimum for liner terminals - beyond that queues explode), container dwell time in the yard, yard utilisation, output per gang-shift. India's average container TRT has come down to roughly a day at the better terminals; cite the latest Basic Port Statistics or World Bank CPPI rather than a remembered number.
• Costs at the port: port dues, pilotage, berth hire, towage, anchorage, wharfage, stevedoring, THC, ground rent, reefer power, scanning, cess. Ship cost per day makes speed the whole game: a ship waiting is pure loss to the carrier and ultimately to the shipper.
• Limitations and problems: draught constraints and dredging cost, road congestion at gates, low rail coevacuation share, documentary delays, labour practice, seasonal/weather downtime (monsoon at west-coast ports), capacity lumpiness (a berth is added in large steps), and transhipment leakage to Colombo, Singapore, Jebel Ali and Port Klang - roughly three-quarters of India's transhipment cargo has historically been handled abroad (Colombo alone taking the bulk of it), which Vizhinjam is meant to reclaim.

Coastal shipping, multimodal links and risk

• Coastal shipping/cabotage: carriage between Indian ports, reserved for Indian-flag vessels — now licensed under the Coastal Shipping Act, 2025, which took over Part XIV of the Merchant Shipping Act, 1958 — with relaxations (notably for transhipment of EXIM containers and for specified cargo) to encourage hub traffic. Coastal movement is cheaper per tonne-km than road or rail for bulk, but needs balanced two-way cargo.
• Inland waterways: NW-1 (Ganga-Bhagirathi-Hooghly, Haldia-Prayagraj/Allahabad), NW-2 (Brahmaputra), NW-3 (West Coast Canal, Kerala) and over a hundred notified waterways under IWAI; Jal Marg Vikas project; useful for over-dimensional cargo and bulk, limited by depth and seasonality.
• Multimodal: MTO registered with the DGMA (formerly DG Shipping) issues one document under the MTG Act, 1993 and takes through liability; land-bridge and sea-rail (Concor's double-stack dwarf containers to Mundra/JNPA). ICD/CFS move clearance inland.
• Risk and insurance: general average (York-Antwerp Rules - a sacrifice for common safety is shared by ship, cargo and freight), particular average, Institute Cargo Clauses A/B/C, P&I (third-party liability of the owner) versus hull and machinery, war and strikes cover. Himalaya clause extends carrier defences to servants and agents; package limitation under the Hague Rules caps liability unless value is declared; deviation and unseaworthiness break the carrier's defence.
• Security and compliance: ISPS levels, container scanning, AEO (Authorised Economic Operator) tiers T1-T3 for faster clearance, Faceless Assessment and Turant Customs, DPD (Direct Port Delivery) and DPE at JNPA which cut dwell time by moving boxes straight to the importer's factory.

Key points

• Liner vs tramp - fixed schedule and published tariff with a B/L, versus a whole ship hired under a charter party.
• TEU - 20 ft equivalent unit; a 40 ft container is 2 TEU; port throughput and ship size are both quoted in TEU.
• DWT vs GT - deadweight is a mass-carrying capacity; gross tonnage is a volume measure used for dues and manning.
• Draught - the limiting dimension for port entry; dredging maintains the declared channel depth.
• Major Port Authorities Act, 2021 - replaced the 1963 Trusts Act; boards now set their own tariffs; 12 Major Ports.
• Landlord port model - authority owns the land, private operators (DP World, APM Terminals, Adani, PSA, J M Baxi) run terminals under concession (BOT/PPP).
• Bill of lading - receipt, evidence of contract and document of title; only the negotiable original gives title.
• HBL vs MBL - house B/L issued by forwarder/NVOCC to the shipper; master B/L issued by the carrier to the forwarder.
• Incoterms 2020 - FOB/CFR/CIF are sea-only and risk passes on board; containerised cargo belongs in FCA/CPT/CIP.
• Laytime, demurrage, despatch - free time, penalty for exceeding it, reward for beating it (usually half rate).
• Container demurrage vs detention - inside the terminal versus outside with the importer, beyond free days.
• Turn-round time - total time from arrival to departure; the headline port KPI, with pre-berthing detention and dwell time.
• Berth occupancy - best kept near 60-70%; higher occupancy means exponentially longer waiting (queuing effect).
• ICD vs CFS - inland Customs port for clearance versus port-side station for LCL stuffing/destuffing and decongestion.
• Sagarmala / MIV 2030 - port-led development, connectivity and coastal shipping programmes of the Ministry of Ports, Shipping and Waterways.
• SOLAS VGM - verified gross mass must be declared before loading or the box is not shipped.
• General average - loss from a deliberate sacrifice for common safety is shared proportionally by ship and cargo interests.
• Transhipment leakage - a large share of Indian transhipment boxes has been handled at Colombo/Singapore; Vizhinjam is India's answer.

Formulas and examples

Example 1 - LCL chargeable weight and freight. An exporter in Tirupur ships 30 cartons, each 1.2 m × 0.8 m × 0.5 m, total weight 3,900 kg. Ocean LCL rate is USD 28 per revenue tonne (W/M), USD 1 = ₹88.

• Volume per carton = 1.2 × 0.8 × 0.5 = 0.48 CBM; total = 0.48 × 30 = 14.4 CBM.
• Actual weight = 3,900 kg = 3.9 t.
• W/M basis: chargeable = greater of 14.4 and 3.9 = 14.4 revenue tonnes (volume governs - light, bulky cargo).
• Freight = 14.4 × 28 = USD 403.20 = 403.20 × 88 = ₹35,481.60.

Example 2 - FCL versus LCL decision. Same consignment grows to 48 cartons = 48 × 0.48 = 23.04 CBM, weight 6,240 kg. A 20 ft container holds about 28 CBM usable (33 CBM capacity, ~85% stuffing efficiency) and 28 t payload; FCL all-in rate USD 620.

• LCL freight = 23.04 × 28 = USD 645.12; FCL = USD 620.
• FCL is cheaper by USD 25.12 and also avoids CFS destuffing, extra handling and damage risk → ship FCL.
• Volume utilisation of the 20 ft = 23.04 / 28 = 82.3%; weight utilisation = 6.24 / 28 = 22.3% → the box is volume-limited, so density, not weight, drives the cost.
• Break-even CBM where LCL = FCL: 620 / 28 = 22.14 CBM; above this, FCL always wins.

Example 3 - Laytime, demurrage and despatch (voyage charter). A Panamax discharges 60,000 t of coal at Paradip. Agreed discharge rate 12,000 t per weather working day; demurrage USD 18,000 per day, despatch half demurrage. NOR tendered and accepted 06:00 on 1 March; discharge completed 14:00 on 6 March (no excepted periods).

• Laytime allowed = 60,000 / 12,000 = 5 days, so laytime expires 06:00 on 6 March.
• Time used = 1 March 06:00 → 6 March 14:00 = 5 days 8 hours = 5.3333 days.
• Time on demurrage = 5.3333 − 5 = 0.3333 day = 8 hours.
• Demurrage payable = 0.3333 × 18,000 = USD 6,000 (i.e. 8/24 × 18,000).
• Had discharge finished at 06:00 on 5 March instead, laytime saved = 1 day → despatch = 1 × 9,000 = USD 9,000 earned by the charterer.

Example 4 - Berth occupancy, TRT and berth output. A container terminal has 3 berths. In a 30-day month, ships occupied berths for a total of 1,620 berth-hours and the terminal handled 54,000 TEU (36,000 boxes).

• Available berth-hours = 3 × 30 × 24 = 2,160.
• Berth occupancy = 1,620 / 2,160 = 75% - above the 60-70% comfort band, so pre-berthing waiting will be rising.
• Berth-days occupied = 1,620 / 24 = 67.5 → berth day output = 54,000 / 67.5 = 800 TEU per berth-day.
• TEU factor = 54,000 / 36,000 = 1.5 (an even mix of 20 ft and 40 ft boxes).
• If 40 ships called, average time at berth = 1,620 / 40 = 40.5 hours; with average pre-berthing detention of 6 hours and 1.5 hours idle, TRT ≈ 48 hours.

Example 5 - Container demurrage and detention. An importer at JNPA gets 7 free days inside the terminal and 7 free days of container detention. The box is discharged on 2 November, gated out on 12 November and returned empty on 25 November. Terminal ground rent beyond free days ₹1,800 per day for days 8-14 and ₹3,600 per day thereafter; carrier detention ₹2,500 per day beyond free days.

• Time in terminal = 2 → 12 November = 10 days; chargeable = 10 − 7 = 3 days (all in the ₹1,800 slab) = 3 × 1,800 = ₹5,400 demurrage.
• Detention clock from gate-out 12 November to return 25 November = 13 days; chargeable = 13 − 7 = 6 days × 2,500 = ₹15,000 detention.
• Total avoidable cost = ₹20,400 on one box - which is exactly why DPD/DPE and pre-filed bills of entry matter.

Where it is used

• Container lines and agencies (Maersk, MSC, CMA CGM, Hapag-Lloyd, ONE, Shipping Corporation of India, J M Baxi as agent): roles in booking, documentation, equipment control, vessel operations, demurrage recovery.
• Port and terminal operators (DP World at Nhava Sheva and Cochin, APM Terminals Mumbai, Adani Ports at Mundra/Hazira/Krishnapatnam, JSW Infrastructure, PSA Chennai, Vizhinjam): berth planning, yard planning, crane productivity, gate operations.
• Freight forwarding, CHA and 3PL (Allcargo, Jeena, DHL Global Forwarding, Kuehne+Nagel, Expeditors, Transworld): Incoterms advice, LCL consolidation, Customs brokerage, landed-cost quotations.
• Exporters and importers - textiles from Tirupur via Tuticorin, auto components from Pune/Chennai, engineering goods from Rajkot via Mundra, spices and seafood from Kochi, petroleum and fertiliser imports at Kandla, Paradip and Vizag.
• Rail and ICD/CFS operators - Concor, Adani Logistics, Hind Terminals moving boxes to Tughlakabad, Dadri, Whitefield and Nagpur, the northern ICDs over the Western DFC.
• Job roles - documentation executive, export-import executive, pricing/trade-lane analyst, vessel operations and berth planner, equipment controller, demurrage/detention analyst, Customs compliance officer, marine insurance surveyor.

Interview questions

• Q: What are the three functions of a bill of lading? A: It is a receipt for the goods, evidence of the contract of carriage, and a document of title that lets the lawful holder claim delivery.
• Q: Difference between demurrage and detention on a container? A: Demurrage is charged by the terminal/port for the box lying inside the terminal beyond the free days; detention is charged by the carrier for the box held outside the terminal by the importer beyond the free days.
• Q: Why should containerised cargo not be sold on FOB terms? A: Under FOB risk passes only when the goods are on board, but the seller loses physical control at the container terminal days earlier, leaving a gap in risk and insurance - FCA (or CPT/CIP) fits container trade.
• Q: What does a 75% berth occupancy tell you? A: That the terminal is busy beyond the comfortable 60-70% band, so queuing theory says pre-berthing waiting time will rise sharply; capacity or productivity must be added.
• Q: What is TEU and why is a TEU factor useful? A: A twenty-foot equivalent unit; the TEU factor (TEU per box) shows the 20 ft/40 ft mix, which drives crane moves, yard slots and equipment needs for the same TEU throughput.
• Q: What is transhipment and why has India lost it to Colombo? A: Moving a box from one ship to another en route; India historically lacked a deep-draught hub on a main east-west route with cabotage flexibility, so mother vessels called at Colombo/Singapore - Vizhinjam and cabotage relaxation aim to reverse this.
• Q: Voyage charter versus time charter - who pays the bunkers? A: In a voyage charter the owner bears bunkers and port costs and is paid per tonne of cargo; in a time charter the charterer pays bunkers and port charges and pays hire per day.
• Q: What is general average? A: Under the York-Antwerp Rules, when cargo or ship is deliberately sacrificed for the common safety of the voyage, the loss is shared proportionately by ship, cargo and freight interests.
• Q: What is the SOLAS VGM requirement? A: The shipper must declare the verified gross mass of a packed container before loading, by weighing it or by calculation; without a VGM the box cannot be loaded.
• Q: Which Act governs India's Major Ports today, and what changed? A: The Major Port Authorities Act, 2021 - port trusts became Port Authority Boards with autonomy to fix their own tariffs, replacing TAMP's rate-setting, with an Adjudicatory Board for disputes.
• Q: What is cabotage, and how has India relaxed it? A: Carriage between two Indian ports reserved for Indian-flag ships; India has relaxed it for transhipment of EXIM containers and certain cargo so foreign ships can feed Indian hubs.
• Q: An importer complains freight is cheap but landed cost is high - where do you look? A: At the surcharges and local charges: THC, BAF/CAF, documentation, CFS handling, ground rent, detention, duty and inland haulage often exceed the ocean leg, so quote all-in, not just ocean freight.
• Q: How would you reduce container dwell time at a port? A: Pre-file the bill of entry and pay duty before arrival, use DPD/AEO facilitation, book evacuation (rail or road) in advance, and keep RMS-facilitated, well-documented declarations to avoid examination holds.

Common mistakes

• Treating demurrage under a charter party (ship time) and demurrage on a container (box time at the terminal) as the same charge.
• Using FOB/CIF for air, road or multimodal shipments - those four rules are sea and inland-waterway only.
• Confusing DWT with gross tonnage, or quoting a ship's TEU capacity as its deadweight.
• Taking chargeable weight as the actual weight in LCL - the W/M rule charges whichever is greater, and 1 CBM counts as 1 tonne.
• Saying CIF means the seller insures fully - CIF requires only minimum (Clause C) cover; CIP requires Clause A.
• Still quoting the Major Port Trusts Act, 1963 and TAMP tariff fixing, or an old count of Major Ports, instead of the Major Port Authorities Act, 2021.
• Forgetting pre-berthing detention and idle time when computing turn-round time, so TRT is understated.
• Mixing up ICD and CFS, or assuming a CHA can issue a bill of lading (only the carrier or NVOCC can).

Related topics

Transportation modes and freight · Last-mile and e-commerce logistics · Air cargo · Warehouse management · Export-import documentation and Incoterms · Multimodal transport and inland container depots