- A ship engaged in the tramp trade is one which does not have a fixed
schedule or published ports of call. As opposed to freight liners, tramp
ships trade on the spot market with no fixed schedule or
itinerary/ports-of-call(s). A steamship engaged in the tramp trade is
sometimes called a tramp steamer; the similar terms tramp freighter and
tramper are also in use. Chartering is done globally but chiefly on
London, New York, Singapore shipbroking exchanges. The Baltic Exchange
serves as a type of stock market index for the trade. The term tramper is
derived from the British meaning of "tramp" as itinerant beggar or
vagrant; in this context it is first documented in the 1880s, along with
"ocean tramp" at the time many sailing vessels engaged in irregular trade
as well.
Tramp shipping are irregular shipping, mainly over nonstandard routes,
with no definite schedule. Tramp ships are used to transport bulk cargoes
and break-bulk cargoes of low value that do not require fast delivery. The
transportation of cargoes that are picked up or dropped off along the way
plays a large role in tramp shipping. Tramp ships are slow and can
transport a variety of cargoes. Specialized types of dry-cargo,
liquid-cargo, and mixed-cargo ships are also used in tramp shipping. Tramp
shipping plays an important role in the foreign trade of the capitalist
countries.
Today, the tramp trade includes all types of vessels, from bulk carriers
to tankers. Each can be used for a specific market, or ships can be
combined like the oil, bulk, ore carriers to accommodate many different
markets depending where the ship is located and the supply and demand of
the area. Tramp ships often carry with them their own gear (booms, cranes,
derricks) in case the next port lacks the proper equipment for loading or
discharging cargo.
- Liner Service vs Tramp Service - Liner service is a service that
operates within a schedule and has a fixed port rotation with published
dates of calls at the advertised ports.. A liner service generally
fulfills the schedule unless in cases where a call at one of the ports has
been unduly delayed due to natural or man-mad causes while a Tramp Service
or tramper on the other hand is a ship that has no fixed routing or
itinerary or schedule and is available at short notice or fixture to load
any cargo from any port to any port.
Shipping industry can be divided into three broad segments, each of which
handles a specific set of cargoes.
- a. Bulk shipping; handles large cargo parcels in "bulk carriers" and
oil tankers designed for the efficient transport of the very large parcels
(10 to 450,000 tonnes) of homogeneous cargoes such as iron ore, coal,
grain, oil etc.
b. Specialized shipping transports large quantities of "specialized"
trades (e.g. chemicals, gas, motor vehicles, forest products), generally
using ships built for the purpose. Although these ships are purpose built,
they are often designed to allow the carriage of other cargoes.
Specialized cargoes are often subject to competition from both the liner
and bulk shipping segments.
c. Liner shipping; specializes in the transport of small cargo parcels,
which do not fill the hold of a ship, on regular services. Today most
liner cargo is carried in containerships, but some are still transported
in multi-purpose vessels or ro-ros.
- Tramp charters
The tramp ship is a contract carrier. Unlike a liner, often called a
common carrier, which has a fixed schedule and a published tariff, the
ideal tramp can carry anything anywhere, and freight rates are
influenced by supply and demand. To generate business, a contract to lease
the vessel known as a charter party is drawn up between the ship owner and
the charterer. There are three types of charters, voyage, time and demise.
Voyage charter
The voyage charter is the most common charter in tramp shipping, according
to Schiels. The owner of the tramp is obligated to provide a seaworthy
ship while the charterer is obligated to provide a full load of cargo.
This type of charter is the most lucrative, but can be the riskiest due to
lack of new charterers. During a voyage charter a part or all of a vessel
is leased to the charterer for a voyage to a port or a set of different
ports. There are two types of voyage charter – net form and gross form.
Under the net form, the cargo a tramp ship carries is loaded, discharged,
and trimmed at the charterer's expense. Under the gross form the expense
of cargo loading, discharging and trimming is on the owner. The charterer
is only responsible to provide the cargo at a specified port and to accept
it at the destination port. Time becomes an issue in the voyage charter if
the tramp ship is late in her schedule or loading or discharging are
delayed. If a tramp ship is delayed the charterer pays demurrage, which is
a penalty, to the ship owner. The number of days a tramp ship is chartered
for is called lay days.
- Time charter
In a time charter the owner provides a vessel that is fully manned and
equipped. The owner provides the crew, but the crew takes orders from the
charterer. The owner is also responsible for insuring the vessel, repairs
the vessel may need, engine parts, and food for ships personnel. The
charterer is responsible for everything else. The main advantage of the
time charter is that it diverts the costs of running a ship to the
charterer.
- Demise charter
The demise charter is the least used in the tramp trade because it heavily
favors the owner. The ship owner only provides a ship devoid of any crew,
stores, or fuel. It is the Charterer's responsibility to provide
everything the ship will need. The ship owner must provide a seaworthy
vessel, but once the charterer accepts the vessel, the responsibility of
seaworthiness is the charterer's. The charterer crews the vessel, but the
owner can make recommendations. There are no standardized forms in a
demise charter, contracts can vary greatly, and are written up to meet the
needs of the charterer.
- Brokerage
Tramp ship owners and tramp ship charterers rely on brokers to find
cargoes for their ships to carry. A broker understands international trade
conditions, the movements of goods, market prices, and the availability of
the owner's ships. The Baltic Exchange, in London, is the physical
headquarters for tramp ship brokerage. The Baltic Exchange works like an
organized market, and provides a meeting place for ship owners, brokers,
and charterers. It also provides easy access to information on market
fluctuations, and commodity prices to all the parties involved. Brokers
can use it to quickly match a cargo to a ship or ship to a cargo depending
on whom they are working for. A committee of owners, brokers, and
charterers are elected to manage the exchange to ensure everyone's
interests are represented. With the speed of today's communications the
floor of the Baltic Exchange is not nearly as populated as it once was,
but the information and networking the exchange provides is still an asset
to the tramp trade.
Tramp shipping has relatively few barriers to entry. New investors require
equity, but commercial shipping banks will provide loans to acceptable
credits against a first mortgage on the ship. There is a comprehensive
network of support services to which new investors can subcontract most
business functions
subject to sound management controls. Ship management companies will
manage the ships for a fee; chartering brokers arrange employment,
collecting the revenues and dealing with claims; sale and purchase brokers
will buy and sell ships; maritime lawyers and accountants undertake legal
and administrative functions; classification societies and technical
consultants provide technical support.
Fundamentally, the organization of a tramping company will be simpler than
the organization of a liner company. The fact, that tramp ships are solely
destined to transport bulk goods and that they are usually chartered as a
whole in one harbour, allows the tramping company to operate without many
departments and personnel. In the liner trade, a separate bill of lading
has to be drawn up for each parcel. The number of bills of lading can be
so great that the manifest that records them is often as thick as a book.
Not only the paperwork requires a large number of personnel, but the
carefully sorting, handling and stowage of encumbered general cargo
parcels also needs many and competent staff members. This is superfluous
for the tramping company or at least reduced to its minimum. In the
tramping, the owner does not determine the freight but the fluctuations of
the freight markets. More than in the liner trade, the tramp owner has to
keep down expenses so as to ward off competition. Sometimes, the freight
is so low that only the running costs are covered.
The organisation of a tramping company depends mainly on the number of
ships it owns. The fewer ships, the simpler the organization. With only
one ship, the company can be reduced to a one-man business.
Usually though, a tramping company with a reasonable number of ships, will
have a similar organization as the one of a liner company. There will also
be operating, technical, administrative and financial divisions, however
with strongly reduced personnel. Some departments such as the "Research
and Development Department" and the "Conference Department" are totally
absent in a tramping company. The operating department and in particular
the department for inward and outward freights, cargo handling and
stowage, insurance and claims, and agencies will be far less important.
This is because the goods being carried are mainly homogeneous which are
cheaper and are less prone to damage.
On the other hand, the chartering department will be much more extensive
than in the liner trade because it is the main activity of tramping. The
personnel of this department must consequently be much more qualified,
with a number of experts for certain kinds of goods such as coal, ore,
grain, and others. They must be in continuous communication – by telex,
fax, telephone, data transmission, e-mail – with brokers and shipping
exchanges and be well informed about the freight markets and freight
prices.
In the smaller tramping companies, the business division is often left in
the care of specialized firms such as shipping operators, shipping
managers or managing companies.
Often, tramping companies maintain a strong relationship with large
industries to whom they will let part of their fleet or even their whole
fleet for a long period of time. In that case, the organization of the
company will be still more simplified.
In tramp shipping, tramp ships are being used. As the name indicates, this
branch of the shipping industry is very irregular in its activities. Tramp
ships are sent in where the most paying freights are available. Therefore,
tamping is very unstable and very little organised.
Tramp ships are, in accordance with the demand, contractually put at the
disposal of charterers, to carry, for one or more voyages, a quantity of
goods between named harbours (in voyage charter) or to carry out a number
of transport assignments in a certain period of time (in time charter). In
the broadest sense of the word, tramp shipping is the activity that is
done with ships in voyage charter. Usually, under a charter agreement,
they have to perform only one voyage so that each voyage stands completely
apart from the other. The vessel is an independent operating and competing
unit and its operation is highly individual. The sailing schedule of a
tramp ship is consequently very irregular. The ship operator must see to
it that his ship is rarely idle and in the port of discharge – or in a
harbour as close as possible to the port of discharge – he must always try
to get a new charter for the ship.
Tramp ships vary considerably in size and are sometimes of lesser quality
than the liner ships. Because the cargoes usually don't have to be
transported at a high speed and the ship doesn't need highly sophisticated
equipment, tramp ships are relatively slow and cheap. However, the
present-day tramp fleet counts numerous modern bulk carriers suitable for
different sorts of cargoes, including tankers and specialized ships.
Owners of modern and cost-effective tramp ships have a better chance than
their competitors who offer inferior and less flexibility in the freight
market.
The cargo consist of unpackaged bulk goods (ore, coal, grain, phosphates,
and others) or a massive amount of general cargo (e.g. saw wood) or
seasonal products; with preferably a full cargo which belong to one
shipper. No special care is given to manipulation and stowage; speed of
delivery is not of primary importance.
Compared with the liner trade, the freight is low and is consequently in
accordance with the relative low value of the goods. The freight is
established on the international freight market, in the accordance with
the rules of offer and demand. The Baltic Exchange in London is the main
market. The freights are not fixed because they follow the feverish
fluctuations of the freight markets.
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- BCAS: 7103-1001
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