IMPORTANCE OF TRANSPORT

1. Transport is necessary to provide for the physical movement of people and

goods from where they are abundant (such as plantations, mines, farms) to the
factory where they are needed as raw materials for the manufacture of finished
goods, or where they are processed.
2. Transport is again necessary to send these processed or finished goods to their
markets, and ultimately, to the final consumers, both domestic and foreign.
3. A fast, cheap and efficient transport system has led to the extension of both
local and overseas markets.
4. This has enabled producers to specialize and engage in large-scale production
with its related cost savings. It has also led to different regions specializing in
those goods in which they find comparative advantage in producing on a
commercial basis. Trade between different regions within and outside the country
expanded.
5. Consumers all over the world can now buy goods produced in far-off countries.
Thus, they have greater choice. Standards of living have improved.
6. The main means of transport in home trade are by road, rail, rivers and canals
whilst in foreign trade they are by air and sea.

CHARACTERISTICS OF DIFFERENT METHODS OF TRANSPORT

WATER TRANSPORT
Water transport is cheaper than various modes of transport of land transport. In
land transport large amount of capital is required for the construction and
maintenance of roads and railways. But in water transport, it is not necessary
except in the case of canal transports. The cost of running expenditure is also
less.

Inland water ways

Transporting the goods by using the rivers and canals are called inland water
ways. It requires navigable rivers free from rapids and constant silting.

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Advantages of inland water ways
1. Transport by water is a cheap means of inland transport for heavy and bulky
goods like logs, grain and metals.
2. Building materials can be carried in larger quantities than by road or train.
3. Loading and unloading will be easy.

Disadvantages of inland water ways

1. Its speed is slower than road, railway and air transport.
2. It is not reliable.
3. It provides services to limited areas.
4. Canals may be expensive to build and maintain.

PIPELINES
Advantages of pipelines

1. Liquid and gaseous goods like liquefied natural gas and petroleum are
transported over long distances from the place of production to the refineries, and
from there, to the consumers in their homes via pipelines because this is the
safest and most economical method to transfer such hazardous (inflammable)
materials in bulk. Goods in bulk like wheat are also transferred via pipelines from
the silos (places of storage) at the ports into special bulk carriers. Maintenance
costs are low because very little labour is needed and fuel costs are lower than
that required if vehicles were used to transport these goods.
2. Loss due to pilfering and evaporation is minimized.
3. It is not affected by weather conditions.
4. There is less pollution of the environment compared to vehicles.

Disadvantages

1 High initial capital cost is involved in installing the whole system, which is
normally laid underground.
2 It is rather limited in use. Once built, these pipelines can only be used the
particular type of product for which it was originally installed. Long-term use must
be guaranteed to make the laying of the pipelines a viable project.

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 Transport

ROAD TRANSPORT
Advantages:
 Flexibility: Goods can be delivered right up to the customer’s doorstep.
Even remote areas can be reached by road. In road transport, the direction
can be changed very easily.
 Timetables: There is no specific timetable for a road journey. The transport
can be arranged at any time and is even available at short notice.
 Economy: There is heavy competition in road transport resulting in
efficiency and lower charges for customers. Employers have to meet the
expenses for return journeys. So drivers can take loads on return journeys
at lower rates.
 Motorways: The motorway system has developed and has linked industrial
centers with consumers. Goods can now be delivered very fast.
 Vehicles: Vehicles have increased in size and efficiency. This allows more
freight to be transported at one time.
 Suitability: Road transport is suitable for carrying small quantities of goods
over short distances.
 Containerization: Goods are now packed in containers, sealed and then
transported. Damages caused by rainwater and sunlight can be avoided.
Theft of goods can also be avoided. The containers are loaded and
unloaded with the help of cranes. So breakages can be minimized.
Perishable goods can be transported in freezed containers.

Disadvantages:

 Bulk: It is not suitable to carry bulk goods by road as it incurs a great cost.
Moreover the vehicles are small when compared with the quantity that the
railways can carry.
 Congestion and delays: The heavy road congestion has become a
problem resulting in delays in transporting goods to industrial centers. This
problem does not arise in railways.
 Social costs: Private concerns are only worried about expenses such as
driver’s wages, fuel, tax, etc. They do not take into account the expenses
on pollution, maintaining the road system, signaling system, accidents, etc.
These costs are met by the society and are called social costs. These costs
are very high.

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  Slow traveling time: A road journey will take more time especially for long
distances when compared with railways. Road journeys could also be
slowed down because of traffic jams.

RAIL TRANSPORT:

Advantages:
 Cheap: Rail is the cheapest mode of land transport for long journeys,
especially for bulky and heavy goods. If the goods are to be sent by road,
then many lorries have to be hired and lorry drivers paid. But for a rail
journey only the freight charges have to be paid.
 Speed: It provides faster services for goods and passengers especially
over long distances. There are no traffic jams, to slow down the journey.
 Bulk commodities: Railways are very suitable for the transport of bulk
commodities like coal, petroleum and iron and steel.
 Containerization: Goods are now packed in containers, sealed and then
transported. Damages caused by rainwater and sunlight can be avoided.
Theft of goods can also be avoided. The containers are loaded and
unloaded with the help of cranes. So breakages can be minimized.
Perishable goods can be transported in freezed containers.

Disadvantages:

 Transshipment: When goods are transported by rail, lorries have to be

arranged to carry the goods to and from the railway station. So most of the
customers prefer to use road transport for the whole journey.
 Delays: Railways follow a strict timetable, which leads to delays for
customers needing immediate transport of goods.
 Short journeys: Railways are only suitable for carrying goods over long
distances. They are not suitable for short journeys.
 Timetables: This is the biggest problem for railways as trains are not
available at short notice. They follow strict timetables, which cause delays.
 Changing output: In recent years more emphasis has been shown on
consumer goods, which are carried by road. With the decline of the coal
industry and the steel industry, the need for the railways has also declined.
 High capital costs: Capital costs are heavy. Maintenance of tracks and
railway rolling stock is also very expensive.

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 Transport

Recent Improvements in Rail freight Transport:

 Many loss-making lines and stations have been closed.

 Diesel and electric locomotives, which give a faster service, are now being
used.
 The signalling system and rail tracks have been improved.
 The freight transport is now operated by computer.
 The express parcel delivery by passenger train has been developed.

SEA TRANSPORT:

Advantages:
 Cheap: Sea transport is cheap for carrying bulky and heavy goods over
long distances. Moreover the fuel needed to run a ship is much less when
compared with air transport.
 Bulk: Thousands of tones of goods can be delivered in a single journey. Oil
tankers can deliver four hundred thousand tones of oil in a single journey.
 Flexibility: Ships go where business takes them. Hence they are flexible
and exporters can transport goods easily.
 Facilities: Ships are specially built. Perishable goods can be transported in
refrigerated vessels. There are ships for transporting raw materials. There
are sophisticated loading and unloading facilities for ships.
 Short notice: Ships can be arranged at short notice to carry goods to any
part of the world.
 Containerization: Goods are now packed in containers, sealed and then
transported. Damages caused by rainwater and sunlight can be avoided.
Theft of goods can also be avoided. The containers are loaded and
unloaded with the help of cranes. So breakages can be minimized.
Perishable goods can be transported in freezed containers.

Disadvantages:

 Slow Speed: Sea transport is not suitable for goods urgently needed
because of its slow speed. So hence not all types of goods can be
transported by sea.

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  Documentation: Documents involved in transporting goods by sea are
more in number and are very complex.
 Other costs: Expenses for insurance premium, packing costs, storage and
port charges are very high and as a result increase the cost price of goods.

AIR TRANSPORT

Advantages:
 Aircrafts are now built larger to carry more goods.
 Mail, newspapers, medicine and perishable goods can be transported very
quickly by air.
 Aircrafts are now available at short notice.
 Goods sent by sea need special packing for protection. But this is not so in
the case of air.
 As the risks involved in transporting goods by air are less the insurance
charges are low.
 The documents used in air transport are less complicated when compared
with the documents used in sea transport.
 As there are no obstructions, aeroplanes can take the shortest route.

Disadvantages:

 Airfreight transport is very expensive because of high capital investment

and maintenance costs.
 As aircrafts have limited cargo capacity, bulky goods cannot be sent.
 Usually airports are located outside the cities, so road transport has to be
arranged to carry the goods to and from the airport. This results in higher
costs and wastage of time.
 Bad weather may restrict flights.

FACTORS INFLUENCING THE CHOICE OF TRANSPORT

 Distance: Although the cost of haulage increases with distance, the cost of
rail and shipping services does not increase in proportion to distance
travelled. Thus it is more economical to use rail or shipping services over
long distances, whilst road transport is faster and cheaper for short
distances.

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 Transport

 Nature of the Goods: Perishable goods need quick delivery and minimum
handling. Specially constructed trucks can be used to transport vegetables,
fish and milk. In foreign trade, air transport can be used to transport
perishable goods. Products like oil can be transported in oil tankers in
foreign trade and by pipelines or oil trucks in home trade.
 Quantity: Bulky goods are normally transported by railway in home trade
and by sea in foreign trade.
 Value of Goods: Expensive goods, which are small and light are normally
transported by air. In home trade, it is not advisable to send expensive
goods by rail. Road transport is more suitable for expensive goods since
the problem of transshipment does not arise.
 Risk of damage: Fragile goods, which are easily breakable and need
careful handling are normally sent by sea or air.
 Urgency: Goods, which are urgently needed, are sent by air.
 Convenience: The most convenient mode of transport is the one most
available with the least formality. Road transport is considered to be the
most convenient mode of transport, with its door-to-door delivery service.
 Cost: The consignor would normally choose the most economical mode of
transport, unless the factor of urgency arises. Sea and rail would be most
economical for bulk goods. Air and road would be most economical for
urgency goods.

ANALYSIS OF GIVEN SITUATIONS IN THE CHOICE OF TRANSPORT

1. Lim Trading, a wholesaler; wishes to send goods regularly to his customers

who are mainly small retailers located in the same city and the surrounding
suburbs. State) with reasons, which mode of transport he would use. The city and
the surrounding suburbs are served with a good system of light rail transport.
Choice of transport recommended: Road, preferably own lorry

Reasons for choice

(a) It is convenient because delivery of goods is made right up to a customer's

doorsteps. No unloading or reloading is required, which is necessary if rail were to
be used. There are less chances of pilfering and damage to goods since the
goods are sent by the company's own workers.

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(b) It is flexible as Lim Trading can schedule his time of delivery at a time
convenient to him and his customers. He can get a full load for most trips since all
his customers are in the same city and the surrounding suburbs. This will ensure
that his lorry is used economically. If he were to use rail, he may have to follow the
railway timetable. If he were to used a hired lorry, he would have to depend on the
availability of hauliersi lorries.
(c) It is more economical than rail delivery since goods are sent short distances, in
small quantities.

2. HKL Ltd, a factory producing computer disc drives located in Singapore, has
found that one of its machinery has broken down suddenly. As a result, all
production has come to a halt since the spare part has to be specially ordered
from the manufacturer in the UK. The Production Manager of HKL Ltd has
confirmed through the e-mail that the particular spare part is available. He,
however has 2 options as to the choice of the most suitable form of transport: air
or sea cargo. Which one should he use? Advise him, giving your reasons for your
choice.

Choice of transport recommended: Air cargo

Reasons for choice

(a) Air transport is much faster than sea transport. As the spare part is needed
urgently, time is of utmost importance. Without the spare part, there can be no
production. If production is affected, it means HKL Ltd may not be able to fulfil its
customers' orders for computer disc drives. This would mean a loss of customer
goodwill, and it would affect its good standing with the affected customers whose
own plans would be adverse affected. This would in turn reduce HKL future sales.
(b) In the meantime, HKL Ltd has to pay its workers and other factory overheads
even though production is nil.
(c) It is true that the cost of freight is much higher for air transport compared to the
cost of freight by sea. However, the above advantages far outweigh the factor of
cost in this instance.

3. Cool Cut, a diamond cutting factory located in Singapore, has to import uncut
diamonds from Johannesburg, South Africa. Suggest a suitable mode of
transport, giving reasons for your choice.

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 Transport

Choice of transport recommended: Airline, possibly personally brought in by the

exporter himself or a trusted agent

Reasons for choice

(a) Diamonds are very expensive, small and light. There is great risk of theft. The
factor of security of such valuable goods is very important. That is why they may
have to be brought in by somebody trustworthy, rather than be sent by air cargo.
(b) The factor of speed is also very important. The faster such precious gems
reach its destination, the safer it is. Thus, the choice is air transport since it is the
fastest means of transport.
(c) The factor of cost is secondary although there is no doubt that the cost of air
transport plus the personal travelling expenses of the courier is very high.

4. Sheik Farouk, an oil exporter located in Kuwait wants to send his crude oil to
Japan. Advise him, giving your reasons.

Choice of transport recommended: Sea transport using oil tanker

Reasons for choice

(a) Crude oil is fluid and heavy, normally exported in bulk and there is enough to
fill one ship. It is not a perishable item. It is best to use sea transport in special
carriers, specially designed to carry oil even though the journey takes a long time.
(b) Kuwait and Japan are very far apart and are separated by huge oceans. So
sea transport has to be used. It is impossible to use rail or road transport.
(c) It is cheaper to send the crude oil by sea and it is not suitable to use air
transport. Crude oil is not sent in small quantities but in bulk. There would not be
enough space in an airplane to carry all the crude oil. Only items which are light,
small and valuable are suitable to be sent by air transport. On the other hand,
crude oil is very heavy.

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MODES OF TRANSPORT

1. Passenger liner - This is normally used for carrying passengers, mail and
some express cargo. It has a regular time-table and only calls at major ports.
2. Cargo liner - This is mainly used for carrying a variety of cargo and sometimes
a few passengers. It has a regular itinerary.

Transportation via liners - This can be planned ahead as space on ships can be
booked ahead. Charges are made according to published tariff rates fixed by the
shipping conference.
3. Tramp - This is essentially a cargo ship which does not belong to any special
line of services or sail to any special place. It is normally chartered to carry a full
load of one type of cargo to a certain specified destination where it unloads the
whole bulk.
4. Bulk carrier - This is a ship which is specially built to carry a particular type of
cargo, e.g. a bulk carrier is for iron ore.
5. Tanker - This is a special bulk carrier which carries liquids or gases such as
oil or liquefied natural gas.
6. OBO ship - This is an ore-bulk-oil carrier which uses different holds to transport
at one time a mixed-bulk cargo. It has holds which can be completely sealed off
one from the other.
7. Roll - on, roll - off or Ro - Ro ship - This is a highly specialized ship that
allows loaded vehicles like trucks, trailers, passenger cars, etc. to be driven
aboard through ramps at the stern and sides. Using a system of interior ramps,
these vehicles are driven to their proper positions, either below decks or topside.
At their destinations, they are driven off the ship in reverse to the loading
operation.
8. Container ship - This is built to carry large standard sized containers. (See
Containerization)
9. Liners - Liners follow fixed routes and timetables. These liners carry mixed
cargo and belong to shipping conferences, which determine the fares, the freight
charges and the frequency of journeys.

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 Transport

10. Coastal Shipping - Sometimes goods are transported around the coast
rather than inland. Some large ocean going tankers find it very difficult to travel
along the coast. So goods are carried by these coastal ships.

11. Ferries - These are small boats that carry passengers over very short
distances. These ferries also provide roll-on/roll-off facilities.

12. Delivery vans – Mostly wholesalers and large scale retailers make use of
delivery vans for shorter distances for small consignments. Free door delivery
service is facilitated by delivery vans. Most probably, delivery vans are owned by
these traders.

Differences between a Tramp Ship and a Cargo Liner:

CARGO LINER TRAMP SHIP

 It follows a regular route and  It has no route or timetable but
timetable. goes wherever there is business.
 It carries a variety of cargo.  It usually carries only one type of
cargo in bulk.
 The freight rates are determined
 The freight rates for goods and
by bargaining at the time when
passengers carried are fixed by
the ship is chartered.
the owners at the shipping
conferences.
 It is subject to charter.  Tramp ships can be chartered
either for a voyage or for a
period of time.
 Generally more control and
 There is not much control and
supervision are exercised over
supervision exercised.
the ship activities.

OWN FLEET OPERATION

Most of manufactures, wholesalers and retailers prefer to operate their own fleet
of vehicles to deliver the good for them. Such vehicles may be owned, leased or
hired by the firms.

Advantages of own fleet operation

1. It could be cheaper than using transport firms vehicles.
2. Own vehicles can carry free advertisement for the firms.

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3. The vehicles are always on hand. Therefore, the traders can use them at any
time to carry the goods.
4. The firm can use its own drivers which reduces the risk of theft and damage.
Disadvantages of own fleet operation
1. More capital could be needed.
2. If the vehicles are not fully used it would be more expensive than using road
transport firms.
3. Additional cost for servicing employment to drivers, garaging and licensing the
vehicles are created.

CONTAINERIZATION
1. Containerization involves the stacking of goods in large metal containers.
These containers usually conform to international standards of 20 ft x 8 ft x 8 ft or
40 ft x 8 ft x 8 ft. The goods are stacked into the container either at the consignor's
premises or at the container terminal and transported as a single unit.
2. These standard sized containers can be transferred between different forms of
transport, especially between road, rail and sea, as Lorries, rail wagons and ships
have been specially designed to hold them. This integration of different methods
of transport ensures that goods are facilitated by using special cranes.
3. There is an increasing tendency for shippers to send general cargo like mail
bags, etc. in containers.

Advantages of containerization

 As cranes are used for loading and unloading containers, there is speed in
their transportation. Moreover lorries carrying containers can drive directly
on to a ship.
 Containers are sealed and opened at its destination. So damages caused
by rainwater and sunlight can be avoided.
 Theft of goods can also be avoided.
 As the containers are loaded and unloaded with the help of cranes,
breakages can be reduced.
 Containers reduce the need to employ labourers to carry the goods. This
reduces expenses.
 Containers, which can be stacked, reduce the need for warehousing.

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 Transport

 As there is increased safety in using containers, the insurance cost is

reduced.
 Refrigerated containers can be used to transport perishable goods.
Disadvantages of containerization

 High capital costs are involved in purchasing and maintaining containers.

 High training costs are incurred in training labour to handle the loading and
unloading of containers.
 Containers occupy a lot of space and hence large space is needed to keep
the containers.
 The weight of the containers, reduce the amount of goods that can be
transported.
 Containers are loaded and unloaded with the help of cranes. This replaces
human labour thus causing unemployment.

OTHER TRENDS IN TRANSPORT

Charter transport
Traders might charter either a part of transport or they might charter the whole
transport only for their use. When chartering a road way or sea way or air way, the
traders can be assured of fastest delivery of goods to the destinations. Charter
transports can benefit the traders in transport cost too. Charter transport exist in
all the countries. In UK the London Baltic Exchange offers chartering of sea and
aircrafts for domestic and international trade activities.

Express road routes

It does means that the special road routes away from the city limit to facilitate
fastest transport in dispatching goods. The road transport system is away from
hassles of city traffic and road congestion when there is an efficient system of
bye-pass road around the city it can speed up the delivery. In every country there
are national high ways that can connect to major city routes.

Recent improvements in air transport

1. The increase in size of aircrafts makes it more economical to run them.

2. Improvements to design, e.g. the fuselage and engine improve fuel
efficiency and reduce fuel costs. Larger doors, from the tail and nose
13
 reduce loading and unloading time, thus save labour costs. Cargoes of
larger size can now be transported by air.
3. With technological improvements, aircrafts are now faster and more
reliable. More safety features in aircrafts, e.g. the 'auto-pilot, improve
landing and navigation of the aircrafts.
4. With an increase in the number of airports and better handling facilities
now available in most airports, less time is wasted.
5. Nowadays, special lightweight containers are available for air cargo.

Recent Improvements in Rail freight Transport:

1. Many loss-making lines and stations have been closed.

2. Diesel and electric locomotives, which give a faster service, are now being
used.
3. The signaling system and rail tracks have been improved.
4. The freight transport is now operated by computer.
5. The express parcel delivery by passenger train has been developed.

TRANSPORT DOCUMENTS

Bill of lading

1. The bill of lading is the most important export document whenever goods are
sent by ship. It is issued by the shipping company.

2. The key information in a bill of lading are as follows:

(a) The name of the shipping company.
(b) The name of the shipper (beneficiary) or his agent.
(c) The name of the carrying vessel.
(d) The names of the ports of shipment and discharge.
(e) The identification (shipping) marks and numbers.
(f) The number of containers, cases, packages or individual items.
(g) A description of the goods in general terms consistent with the description of
the goods in the letter of credit.
(h) Evidence that the goods have been received for shipment or shipped (loaded)
on board and its date.
(i) The name of the consignee (if not made out 'to order') and also the name and

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 Transport

address of the 'notify party' wherever applicable.

(j) Whether freight has been prepaid or payable at destination.
(k) The number of originals issued (A bill of lading is normally issued in a set of
three originals; anyone of which may be used to take delivery and possession of
goods. It is important that the consignee must secure all the originals.)
(l) The date of issuance and the signature of the ship's master or the carrier or his
agent.

3. Bills of lading are normally issued in a 'set' of two or more transferable copies,
all of which must be signed by the master of the ship who makes a note on the
bills of lading, of the number of copies issued and any damages to the goods
taken on board. He then keeps one copy for reference. The other copies are sent
to the foreign importer by separate mail or returned to the exporter (consignor).

4. However, if the exporter has arranged for the importer to open a letter of credit
in the exporter's favour in a local bank, then the bills of lading together with the
other shipping documents such as the invoice, the consular invoice, the marine
insurance policy and a certificate of origin must be lodged by the exporter at the
local bank, together with the bill of exchange.

5. It is one of the documents that has to be submitted to the advising bank before
the shipper can secure payment in the letter of credit.

6. The functions of a bill of lading are as follows:

(a) It acts as an advice note indicating the quantity and description of goods sent
by a named ship.
(b) It is a receipt of goods in good condition on board, signed by the master of the
ship. Any damage to goods is noted.
(c) It is evidence of a contract of carriage between the shipper and the
shipowner.
(d) (i) It is a document of title to goods described therein. This means that the
holder of the bill of lading can claim the goods when he hands it over to the
Port Authority at the port of discharge.
(ii) When delivery of goods has taken place, all other copies of the bill of
lading are rendered invalid.
(e) Since it is a document of title it can be used as a basis for negotiating for a

15
letter of credit from the bank.
(f) (i) It informs the customs authorities of the type of imports/exports and the
country of origin or destination respectively.
(ii) It allows the customs to see at a glance whether the imports or exports
are taxable.
(iii) It helps in the recording of statistics.
(g) It may be used as a document in support in the event of an insurance claim.

Consignment note / Delivery note

1. It is sometimes called a rail and road consignment note or a delivery note. It is
normally prepared by the road/rail transport company or a freight forwarder.

2. The key information in a consignment note/delivery note are as follows:

(a) The name and address of the sender (consignor).
(b) The name and address of the recipient (consignee).
(c) The number of packages or cases.
(d) The marks and numbers on the packages or cases.
(e) A brief description of the goods.
(f) The place of departure and the date of departure.
(g) The time of collection and delivery.
(h) The time of arrival.
(i) The type of haulier and the vehicle number.
(j) The signature of the carrier. (if its a Rail Consignment Note, it is stamped by the
Station master).
(k) The freight charged.

3. The functions of a delivery note are as follows:

(a) This is an advice note, indicating the quantity and description of goods being
despatched on a certain date by the named road or rail transport agency.
(b) It is evidence of a contract of carriage but is not negotiable.
(c) It is not a document of title but should be despatched with other documents for
it shows the date of despatch of the goods which is useful for exchange and
import control purposes.
(d) It is a receipt for goods and a document for delivery.
(e) It is also on a note of freight charges.

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 Transport

Airway bill / Air consignment note

1. An airway bill is a very important document used whenever goods are sent by
air.

2. An airway bill is issued by an airline company in a set of 12 copies. However,

only three copies are originals - the first is for the carrier, the second for the
consignee and the third is for the shipper. The balance 9 (nine) copies are
retained by the airline company for administrative purposes. It corresponds to a
Bill of Lading but it is only used when goods are sent by air.

3. The key information in an airway bill are as follows:

(a) The name of the airline company or carrier.
(b) The name and address of the shipper (beneficiary).
(c) The names of the airports of departure and destination, flight number and
actual flight date.
(d) A description of the goods in general terms, its weight and the freight charged,
its declared value
(e) The number of pieces sent.
(f) Evidence (by and authorized signature) that the goods have been received by
the carrier or its agent, and the date of issuance.
(g) The name and address of the consignee and also the name and city of the
carrier's agent.
(h) The status of the freight charges prepaid or payable at destination.

4. It is normally prepared in triplicate by the consignor. The part marked for the
'Carrier' has to be signed by the consignor. The part marked for the 'Consignee'
travels with the goods. The third part is signed by the carrier and returned to the
consignor.

5. The consignee is usually the bank that issues the letter of credit, and the party
to be notified when the goods arrive is the importer

6. The functions of an airway bill are as follows:

(a) It is an advice note indicating all the key information stated above.

17
(b) It is evidence of contract of carriage but is not negotiable.
(c) It is not a document of title. The delivery of goods is not dependent upon the
presentation of the Airway Bill but rather the goods will be delivered to the named
consignee against proof of identification at the airport of destination.
(d) It should be despatched with other documents for it shows the date of
despatch which is useful for exchange and import control purposes.
(e) It may be used as a receipt to be signed by the consignee on the delivery of
the goods.
(f) It is also a note of freight charges.

INTERNATIONAL TRANSPORT

Services offered at seaports

Port Authorities, e.g. Port of Singapore Authority, are responsible for maintaining
the efficiency of the port. They may provide the following facilities:
 dock facilities to enable ships to dock, load, unload, fuel and be repaired
 good transport connections inland - linking the port by road and rail
networks
 mechanised handling facilities - gantries, cranes, pumps for unloading
 warehousing, bonded warehousing and offices for shipping companies,
customs, immigration
 ship repair yards - dry docks
 deep water access - pilots, dredging, navigational aids specialised facilities
for handling certain types of cargo, e.g. container handling equipment
 security and emergency facilities

Efficient seaport facilities are important because they enable ships to ‘turnaround
quickly’ so cutting dock and freight costs. They enable goods to be imported and
exported efficiently so increasing the volume of world trade

Services offered at airports

Airport authorities are responsible for maintaining the efficiency of the an airport.
They may provide the following facilities -
 services for passengers, e.g. lounges, toilets, shops, trolleys, walkways,

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restaurants etc
 security and emergency services, e.g. X-ray, security people, fire service,
first aid and health facilities
 areas for customs and immigration to function
 warehousing and bonded warehousing
 hangars, refuelling and repair facilities for aircraft
 facilities for various airlines operating at the airport, e.g. storage, offices,
desks in the airport
 communication facilities air traffic control
 runways
 links with the city they serve, e.g. road, rail, monorail, helicopter

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