Dede Law and Business Series: Tramp Services in maritime business

By Foluke Akinmoladun

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 according to demand. They do not follow a schedule but sail to wherever the market draws them. They routinely operate on an opportunistic basis, picking up suitable cargo as and when it becomes available, without necessarily a predetermined route or timetable. They will often have to sail from a port of discharge to their next port of loading with no cargo on board. This is known as a ’ballast voyage’ when the vessel is ’in ballast’ – without cargo.

One of the ways in which ship owners of tramp ships have tried to reduce the incidence and cost implications of ballast voyage has been to design and develop tramp ships that can carry both dry cargo and wet cargo. An example of such vessel is an ore-bulk-oil carrier, also known as combination carrier or OBO.

The idea behind its design is to reduce the number of empty (ballast) voyages and thus carry either dry or wet cargo from the port of discharge. One disadvantage is the huge maintenance costs of an OBO and the fact that there is a limit to the type of dry and wet cargo combinations that an OBO can carry. An example is an OBO for crude oil maybe be used for iron ore but not for grains.

These vessels are a common feature of the larger bulk trades for example crude oil from the Middle East, iron ore and coal from Australia, South Africa and Brazil. The ore/bulk/oil OBO however continues to fall, representing less than 1% of the world fleet. This is due to the high maintenance cost and absence of trades to support such tonnage.

Another example of a tramp ship operation is a ship that arrives at Durban from Korea to discharge cargo and might carry some other cargo from Durban to the Oakland in the West Coast of USA, which is in an entirely different direction. From Oakland, it could then carry some cargo to Bremerhaven. As this example shows, the movements of a tramp ship is dependent on the markets for the cargo it carries, its design, whether or not it has cargo handling equipment and the kind of ports that it can load and discharge at.

Finally, Tramps may be used for dry bulk cargo or for bulk liquids depending on the design of the vessel. In addition, 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.

The main differences between Liner services and Tramp services could be noted in the type of contract of carriage and Bill of Lading used; type of cargo they generally carry and the schedule for delivery. In the case of a Liner, generally the shipping line operating the liner service will have their own pre-printed bill of lading or use a BIMCO ConLineBill, whereas in the case of a Tramp service (which may be covered by a Charter Party), a bill of lading like the BIMCO ConGenBill will be used depending on the cargo, charter party etc..

Liners convey general cargo in a container or trailer/truck or as break bulk (loose cargo). The vessel sails whether she is full or not. Liners have incorporated the development of combined transport that involves inland distribution by road/rail through the use of a combined transport bill of lading involving a through-rate door-to-door from warehouse to warehouse.

This has made the liner ideal for carriage of cargo of manufactured and semi manufactured goods such as cars, mechanical equipment and medical equipment. The fact that deliveries can be done door to door (from manufacturer to final consumer) also allows for direct delivery to homes, factories and hospitals amongst others.
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 thus transport a variety of cargoes.

Tramps are best suited for bulk cargo such as steel, coal, grain, timber, sugar, ores, fertilizers, copra, etc., which are carried in complete shiploads. They are also ideal for seasonal cargoes.

The tramp companies are much smaller than their liner cargo counterparts, and their business demands an intimate knowledge of market conditions. 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(OBOs as mentioned above) 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 services is made up of vessels carrying cargo on fixed schedule. Tramp services on the other hand are engaged on a more ad hoc basis dependent on the demand for the vessel, its capacity and the kind of cargo it carries. For all ships, ship and port design determines the type of cargo to be carried and the ports of loading and discharge. Liners are better suited for manufactured and semi manufactured goods transported by containers. Tramps are however better suited for non-containerised cargo, dry bulk cargo, wet bulk cargos and may be engaged on a charter party basis.