Liner Services for Shipping: Importance, benefits and types of services
Liner shipping is carried out by shipping companies that offer liner services. In this scenario, the shipping company engages its fleet on the international waters to carry cargo from one port to another. The ships move from port to port at a predetermined schedule; e.g. weekly or fortnightly. The ship takes their clients’ cargo and sails from the port on the agreed day even if it is not loaded completely. To offer this kind of service, shipping companies need a fleet of ships so that they can offer reliable services. The role of a trade finance company is vital in providing shipping companies with the finance they need to maintain their fleet..
The Benefits of liner shipping
Compared to other global trade modes of transportation, liner shipping offers a strong, highly efficient, low cost network to move goods from one destination to another. The benefits of liner shipping are:
- Efficiency
When it comes to transporting goods, liner shipping is efficient. More than 200,000 container loads of cargo can be moved through a single large containership. The size and capacity of the containerships may vary. However, most can move around 10,000 containers in a single trip. Similarly, some car carrier ships can move 7600 cars in a single trip. Comparing the load transported on the ship with other modes of transportation, it would require hundreds of freight aircraft, many fleets of trucks and many miles of rail cars.
- Low environmental impact
Compared to other modes of transportation of cargo i.e. air, rail, or road, shipping produces fewer grams of emissions[1] and so can be called the most carbon-efficient mode of transportation. Moreover, vessels need to follow strict standards set in terms of SOx, NOx, and other emissions. They must adhere to the regulations set by the International Maritime Organization.
- Global economy platform
Liner shipping has made it possible for businesses to trade across countries and continents which was not possible previously. Today, around one-third of the total value transported through global trade is carried out by the liner shipping industry. Moreover, the role of the international shipping industry is responsible for maintaining millions of jobs & creating new ones. The liner shipping industry plays a major role by contributing hugely to the world economy and raising stock prices .
Types of liner shipping services
- Conference Service
A Liner Conference is a group of shipowners who have combined to provide trade operations on a set trade route. In this type of service there are many operators. However the nature of service and price of the service remains equivalent among them. This reduces consumer choice.
- Independent service
Independent service providers work on their own.They do not join an alliance or consortium & operate on their own trade route. For an independent service provider to be successful they must offer quality services at affordable prices.
- Consortia or Alliance Services
The takeover by huge shipping companies or conference schemes did not provide a solution to the current container revolution. The main reason to move towards using containers was the prohibitive cost of ships. However, a container ship can be more expensive than the traditional ships that they were replacing.
The issue of not having a single owner is more pressing. Shippers and consignees using these containers need ships to have access to a continuous flow of containers. This would help them keep their inventory in check while ensuring a regular flow for buyers.
Liner ships need to provide reliable service from the manufacturer to the last point in the production line. This demands larger vessels to ship products. Not every owner in the industry has such large ships available for trade. This has led to the formation of consortia.
Based on covered routes, liner shipping services include:
- Round the world service
In this kind of liner service, the ship keeps moving forward until it reaches its home port again. Over time, its importance has started to decline.
- End to end service
The Liner Operator starts the service from the starting point and covers different loading ports on the route. The Liner then returns back on the same route and reaches the starting point. Here the operator has the choice to go with a single type of service or choose a combination of more than one.
- Pendulum service
A pendulum service moves cargo from one destination to another. It is a kind of RTW service. Because the vessels are so large, they would avoid the Panama Canal. The vessel will typically operate from (ECUS) Eastern Seaboard of the USA to the Far East via Europe and vice versa. Due to the long transit time, this type of service is largely unsuitable for the transportation of cargo.
- Hub & spoke service
This type of service works between the hub port and the gateway port. The main ship will cover all the major ports in its route. These ports are called Hubs. Feeder services will connect such hubs with local areas. These are termed spokes. This kind of service connects the cargo service to the ports located in all four directions. All the major shipping companies in the market today follow this service. This plays a large role in increasing the accessibility of cargo across the ports.
Summary
The liner shipping industry plays a huge role in transporting cargo from one destination to another. Understanding different types of liners and their benefits will help businesses choose the right ship for their cargo transportation needs.
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