[ASSESMENT REPORT]

Prepared for: Ms Ho Min Er

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Contents Pages

Abstract 2
Amendments
Introduction 3
Malaysia Port General Information
Administration Port

Known Port Operators 4

Malaysia Freight Preparations 5-7

Procedure On Registration Malaysian Ship 7-9

Qualification for Ship Registry (Traditional Ship Registration and Malaysian International Ship 10
Registry)

Ship Registry Procedure ( Traditional Registration) 11-15

Ship Registry Procedure ( Malaysia International Ship Registration) 16-22
Charter Party 23
Freight Forwarder 24-25

Shipping Documents 25-27

Advantages of Ocean Charterer/Charterparty and Freight- Forwarder 27-28

Conclusion 28

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[Amendments]
Abstract
Keyword
This written report mainly
to explain the basis of
Government Relates standard requirement in
domestic water shipping
MDM - Marine Department Malaysia in Malaysia for
organization that have
intention to involve in
MOT - Ministry of Transportation Malaysia
freight activity. These
written reports are sources
MISR - Malaysia International Ship Registry from electronic
information via web
TSR - Traditional Ship Registry access.

DSL - Domestic Ship License Port regulations, small

rules, gazettes can be
Frequent Shipping Term varied as each port have
their own Local Port
Charterparty - Contract by which the owner of a ship lets it to others for use in Authority to govern the
transporting a cargo.
port.
Vessel - A ship or large boat

Berth - A location alongside a quay where a ship loads or discharge. Space that
could be occupied by one ship, it is not a fixed size, but would rather depend on the
size of ship usually found in that place.

Wharves - For the commercial unloading and loading of ships and is (usually)
private property belonging to a shipping company.

Freight - Goods transported in bulk by truck, train, ship, or aircraft.

Introduction

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Malaysia Port General Information

A port is a maritime commercial facility which may comprise one or more wharves where ships may dock to load
and discharge passengers and cargo.

Usually individual or organization that have business activity that involve port shipping regardless would subject
to liaise or hire other business entity generally called as agent or formal term, freight forwarder, or also
charterer service by firm ,whose sole purpose is to make the transportation of freight cheaper and easier for
company and individuals who need to move freight.

General port services known to have in nowadays standard are:

i. Freight Forwarder
ii. Charterparty
Both services are function to help and ease shipper in doing freight transportation and usually exist as private
company.

Administration Ports

Currently, Malaysia has a total of seven (7) major Federal ports namely Port Klang, Johor Port, Port of Tanjung
Pelepas, Kuantan Port, Penang Port, Bintulu Port and Kemaman Port. Meanwhile, the ports in Sabah and Sarawak
are under the jurisdiction of the State Government of Sabah and Sarawak respectively. Organization or individual
are required to contact Port Authority if needed any port services mention above.

Each port is administrative and legislated under the port acts. Port authority was established to govern it. Below
are table provided showing list of port authority to govern the major ports.

Major Port Local Authorities Related Acts

Penang Port Penang Port Commission Penang Port Commission Act 1995
Port Klang Port Klang Authority
Johor Port Johor Port Authority
Port of Tanjung Pelepas Johor Port Authority (Tanjung Port Authorities Act 1963
Pelepas)
Kuantan Port Kuantan Port Authority
Kemaman Port Kemaman Port Authority
Malacca Port Malacca Port Authority
Teluk Ewa Port Teluk Ewa Port Authority
Bintulu Port Bintulu Port Authority Bintulu Port Authority Act 1981

Known Port Operators

The major port operations have been privatized to the following operators, display in the table provided below.

The main terms of port privatization concessions are,

1. Land are leased to the operator

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2. Operation license
3. Operator responsible for the development or port expansion.

Major Ports Known Operator

Port Klang Northports Sdn Bhd

-North Port Westports Sdn Bhd
-West Port
Johor Port Johor Port Sdn Bhd
Kuantan Port Kuantan Port Consortium Sdn Bhd
Bintulu Port Bintulu Port Sdn Bhd
Tanjung Pelepas Port Port of Tanjung Pelepas Sdn Bhd
Pulau Pinang Port Penang Port Sdn Bhd

Sources: Ministry of Transport Malaysia

Malaysia Freight Preparations

Introduction

There are preparation and regulations need to be done and followed before organization or individual want to
involve in shipping activity. These preparations are the general steps or custom in Malaysia water shipping
activity.

Note that as each port have different port authority hence some small regulations or small rules such as freight
tariff, scale rate, charge can be varies but the Maritime; Ordinance, Acts, and Gazette still need to be follow under
Ministry of Transportation Malaysia.

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In addition, these preparations can be diverse into two criteria which are,

Criteria 1

As an organization or individual who possess and own vessel and have intention fully use the vessel for freight
purpose. This situation required more of document preparation before fully operational.

Criteria 2

As an organization or individual who do not possess and own vessel but need to do freight shipment. This
situation has two (2) ways to conduct,

i. Through hire of freight agent or freight forwarder agent available in Malaysia. Generally, agent acts as
intermediaries between organization or individual and port operators, ships owner, Custom, etc.
ii. Through Charterparty, charterparty is a maritime contract between a ship-owner and a "charterer" for
the hire of either a ship for the carriage of passengers or cargo.
Hence, the following explanation on preparation and requirement for Criteria 1 will explain first and criteria 2
later on.

Malaysia (Ocean Shipping Requirement)

GENERAL INFORMATION

Before entering water shipping activity in Malaysia, the vessel need to undergoes ship registration under Marine
Department Malaysia. As for the full detail lists for requirement are stated in Merchant Shipping Ordinance
1952.

There are two (2) main reasons why a ship should be registered.

i. To establish the identity of the ship owner as well as proof of Flag State and registration state of a ship.
ii. To allows recording / registering of information related to mortgages where the ship is pledged as
security. In Addition, Registered ships can claim privileges and sovereign protection from the Flag State
where the ship is registered.

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There are three (3) categories of ships that are exempted from registration, namely:

i. Ships that do not exceed 15 net tonnage

ii. Licensed boats
iii. Local fishing vessel of 500 GT and below operating within Malaysian waters
Currently Malaysia has two types of vessels registration, namely:

i. Traditional registration; and

ii. International registration (MISR)
The ship registry is administered by the Marine Department of Malaysia by 5 ports of registry as follows:

i. Port Klang;
ii. Pulau Pinang;
iii. Kota Kinabalu;
iv. Kuching; dan
v. Labuan (MISR).
Circumstances that need to Re-register and Register Anew.

Register anew is a process where the current particulars of a ship, including its Official Number,  ownership and
any encumbrances, are re-entered in the Ship Register.

Re-registry is a term used under the Ordinance where the registration of a vessel has been previously terminated
and now is subject to a fresh registration. Examples of events leading to re-registry are:-

(a) Registration is terminated on sale of ship to foreigners, reacquired by Malaysian and re-registered in the
Malaysian register.

(b) Registration is terminated on abandonment of ship as a wreck or constructively lost but subsequently
recovered.

(c) Registration is terminated following application to license under Boat Licensing Rules. Ship subsequently sold
to another Malaysian requiring title registration.

(d) Registration of ship declared as void ship by a competent court

Ship owners must notify to Ship Registrar any amendments or changes in the ship's information that affect the
information in the Certificate of Registry, for example, change of address or ship's tonnage.

PROCEDURE ON REGISTRATION MALAYSIAN SHIP.

General Information

The ship's name has to be approved prior to its registration. The application for ship name can be made at any port
of registry office. Upon the approval of the name, application to register a ship can be made at any port of registry
office of one's choice.

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In most circumstances, a provisional certificate of registry will be issued by the Registrar of Ship for a maximum
period of six (6) months pending the carving and marking of ships name and port of registry.

Requirements that are required for the registration application are:

i. Application for the registration of ship

ii. Declaration of ship ownership

iii. Original documents such as Builders Certificate (for new ship), Bills of Sale, Invoices, Proof of
Ownership, etc.

iv. Certificate of Survey for Tonnage and Measurement issued by Marine Surveyors.

v. If the vessel is over 24 meters in length, an International Tonnage Certificate 1969 is required

vi. Certificate of Company Incorporation if owner is a body corporate

vii. If the vessel was acquired from a foreign owner or foreign Flag State, a deletion certificate and an extract
of its registration.

Change of Ownership Information

In the case of an individual owner, the appointed Ship Manager or the owner may affect the change of ownership
information at the port of registry office by submitting :

i. A copy of Identification Card

ii. Appointment of Ship Manager

iii. Declaration of Ownership

iv. Original Bills of Sale referring to the last registered owner

v. Original Certificate of Registration

 In the case of Corporate Ownership;

i. Declaration of Ownership

ii. Appointment of Ship Manager

iii. Original Bills of Sale referring to the last registered owner

iv. Original Certificate of Ship Registration

v. Memorandum and Article of Association

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vi. Certificate of Incorporation of Company (Form 9)

vii. Return of Allotment of Share (Form 24) of Company Act 1965

viii. Form 49 of Company Act 1965

Changes of Ship's Particulars

 Before notifying the Registrar of the changes of ship's particulars, a marine surveyor shall inspect the ship to
verify the changes and issues a Certificate of Survey.

For change in ship's engine particulars, the documents to be submitted are:

Certificate of Survey

Copy of Certificate of Registration

Marine 255 - Amendment 1/99 Form which has been endorsed by the marine surveyor

Survey 118 Form - Declaration of ship engine

For change in ship's tonnage particulars, the documents to be submitted are:

 Certificate of Survey

 Copy of Certificate of Registration

 Marine 255 - Amendment 1/99 Form

 A copy of International Tonnage Certificate 196

Register a ship's mortgage

There are two (2) kinds of mortgages, namely

i. To secure a loan of principal sum with interest 

ii. To secure a current account or similar transactions.
The application to register a mortgage shall be accompanied with,

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i. Appropriate mortgage forms (Form 247/249/251)

ii. An original or certified true copy of Deeds of Covenant
There are fees to be paid which are calculated based on the tonnage of the ships. The form with supporting
documents as evidence of the mortgage debt and registration fee must be forwarded to the relevant Registrar. The
Registrar will enter in the Registry of Ships and return the Mortgage form stating the date the mortgage was
registered.

A mortgage on a ship may be recorded in the register as soon as the ship is registered upon presentation of the
instrument of mortgage.

A mortgage on a ship may be recorded in the register as soon as the ship is registered upon presentation of the
instrument of mortgage.

i. Document of title of ownership.

ii. Letter of confirmation from the previous port of registry that the vessel is free from any encumbrances.
Qualification for Ship Registry (Traditional Ship Registration and Malaysian International Ship
Registry)

Traditional Ship Registration

The qualifications to register a ship as a Malaysian ship are:

i. The owners of the ship are Malaysian citizens

ii. If it is owned by a company, the company must be incorporated in Malaysia

iii. The company shall have a principal office in Malaysia

iv. Majority (51% or more) of the shareholding are held by Malaysian citizens

v. Majority of the board of directors are Malaysian citizens

Foreign vessel must register under MISR; Port of Registry Office of Malaysian International Ship Registry is
located at Marine Department Federal Territory of Labuan

Malaysian International Ship Registry

The qualifications to register ships under the Malaysian International Ship Registry are:

i. Company incorporated in Malaysia

ii. Office is in Malaysia

iii. Majority (51% or more) of the shareholding are held by  foreigner

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iv. Paid up capital of at least 10 % of the value of the ship or Ringgit Malaysia One Million, whichever is
higher

Restriction on MISR

To register a ship under the Malaysian International Ship Registry, the ship shall meet the following criteria:-

i. Equipped with mechanical propulsion system

ii. Not less than 1,600 gross tonnage
iii. Not more than 15 years if it is a tanker or a bulk carrier
iv. Not more than 20 years if it is other than above

SHIP REGISTRY PROCEDURE (TRADITIONAL REGISTRATION)

APPLICATION FOR VESSEL NAME  

Application for vessel name should be submitted in writing to Registrar of Ships using prescribed form; Form
Application for Name of Ship.

 Proposed name for a Malaysia vessel must be approved by the Registrar General of Ships. Owners should apply
for the vessel’s name at least three (3) days in advance before the date at which the vessel is supposed to be
registered.

 Three (3) names can be submitted for approval. An approved name is valid for a period of six (6) months.

 For the purpose of guidance, the following format for name of vessel shall not be used:-

 Names of Royalties, Dignitaries, Political Figures and any royal awards e.g “Muzaffar Shah”, Tengku Muzaffar”,
“Tan Sri”, “Datuk Razali”, etc.;

i. Names with racial undertones or with intention to dishonor or obscene in nature;

ii. Names with intention to mislead;
iii. Names made up of initials only e.g ““Y.T.M”, “K.K 17”, “S 12”, etc.;
iv. Numbers preceding names e.g “113 Trading”, “IV Setia”, “No. 3 Bersatu”, etc.;
v. Names solely made up of numerals e.g “123”, “IV”, etc;
 However, initials approved under Prefix followed by names or numerals are allowed. E.g “YTM Lady”, “YTM
01”, etc.

 Subject to approval given by Registrar of Ship, Certificate of Ship Name Approval will be issued within two (2)
working days.

 Forms required at this stage: 

(i) Checklist on Application For Ship Name Registry 100

(ii) Application For Name Of Ship M270/BKI/04 – Pin 1/99

(iii) Application For Reserve Prefix/Suffix Name Of Ship M270/BKI/05 – Pin 1/99

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(iv) Appointment / Cancellation of An Authorised Officer DK/BKI/02 – Pin 1/99

PROVISIONAL REGISTRATION

 Vessels are generally first registered on a provisional basis by the Registrar of Ships for a minimum period of six
(6) months but not more than twelve (12) months.

 The following documents must be presented for provisional registration of the vessel: 

(i)           Statutory declaration of ownership:-

 a.    In the case of individual owner(s), a copy of the identity card for each individual.

 b.    In the case of Body Corporate :-

i. The original and certified true copy of the Article and Memorandum of Association;
ii. The original and certified true copy of the Certificate of Incorporation;
iii. The original and certified true copy of the Certificate of Registry of Business;
iv. Declaration of ownership;
 

Authority Form - appointing the public officer authorized to make declaration on behalf of the owner

i. The original copy of Provisional Certificate of Survey (COS);

ii. The original copy of Bill of Sale;
Ship particular:-

i. Name and details of the vessel;

ii. A copy of Builder Certificate; If the date and place of building are not known, a statement that the
declarant does not know the date and place of the building of the ship;
iii. Statement of the name of the master of the Vessel and his citizenship.
iv. Certification from Customs Department that import duty has been paid (if applicable)
 

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Upon due acceptance of the above documents by the registry, the Registrar will allocate an Official Number and
International Call Sign to the vessel. Registration may take as quickly as three (3) working days for issuance of
Provisional Registry subject to complete document submitted.

Forms required at this stage:

(i) Checklist on Provisional / Permanent Certificate of Registry

Registry 110
(COR)

(ii) Application To Register A Ship M265/BKI/06 – Pin 1/05

(iii) Application For Allotment Of An International Call Sign M253/BKI/07 – Pin 1/99

(iv) Declaration Of Ownership And Nationality M240/BKI/01 – Pin 1/99

(v) Appointment / Cancellation / Change Of Ship Manager DK/BKI/03 – Pin 1/99

 PERMANENT REGISTRATION

 Subject to documents provided in the Provisional Registry process, the following documents must be presented
for permanent registration of the vessel:

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The original copy of Permanent Certificate of Survey (COS);

i. Deletion Certificate;
ii. Certified Ships Carving and Marking Note.
 Full registration may take as quickly as three (3) working days for issuance of Permanent Registry subject to
complete document submitted.

 CERTIFICATE OF SURVEY

 'Certificate of Survey' is a certificate issued to the Registrar of Ship which contains the testimonials on the
description of the vessel to be registered. It also act as a certificate of seaworthiness for the vessel from the Ships
Surveyor to the Registrar of Ships.

 A Certificate of Survey is issued on:

 First registry of the vessel for the purpose of Certificate of Registry Provisional and Permanent;

 After major modification conducted on the vessel which alters the vessel's shape, tonnage or any particulars of
the vessel as specified in the Certificate of Registry.

 Application for the Certificate of Survey shall be made to the Ships Surveyor enclosing the following
documents: 

(i)           Application letter;

(ii)          Certificate of Approved Ship Name issued by Registrar of Ships;

(iii)         Survey Form 118: Machinery Declaration;

(iv)         A copy of the vessel:- 

a.    General Arrangement Plan

b.    Midship / capacity plan (if tanker)

  Ship from previous registry:- 

a.    Copy of Previous Certificate of Registry

b.    Copy of International Tonnage Certificate 1969

c.    Copy of International Oil Pollution Prevention Certificate (IOPP) (for tanker only) 

(vi) Newly Built Ship

i. Copy of Interim / Permanent Builder Certificate issued by shipyard;

ii. Copy of Interim International Tonnage Certificate 1969 / Attestation. 
(vii)        Ship more than 20 years:- 

a.    Special Survey / Docking Survey Report;

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b.    Ultrasonic Thickness Gauging (UTG) Report;

c.    Recent Hull & Machinery survey report from existing Classification Society.  

 For the application of the Permanent Certificate of Survey, owner may have to enclose following documents:- 

(i)           Application letter; 

(ii)          A copy of Permanent International Tonnage Certificate issued by Classification Society recognized by
Gov. of Malaysia 

(iii)         A copy of Builder Certificate (if new)

 After all documents have been received by the Ships Surveyor, the Surveyor shall vet through all the documents
and conducting the inspection of the vessel to verify that all particulars is correct, in seaworthy condition and that
all carving and marking have been properly made.

  Certificate may take as quickly as two (2) working days for issuance subject to complete document submitted
and fulfil survey requirement.

 Forms / checklist required at this stage:

(i) Checklist on Provisional / Permanent Certificate of Survey (COS) Registry 115

(ii) Declaration of Main Propulsion System / Machinery Survey 118

SHIP REGISTRY PROCEDURE (MALAYSIA INTERNATIONAL SHIP REGISTRATION)

General Information

Port of Registry

The Ports of registry for Malaysia International Ship is Labuan.

Ship-owner Eligibility

Registrar General may register a ship as a Malaysian International Ship, if it is owned by a corporation that
satisfies the following requirements:

i. Incorporated in Malaysia

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ii. An office of the corporation is established in Malaysia

iii. The majority of the shareholding, including voting shares, of the corporation are not held by Malaysian
citizens
iv. Ship Manager Eligibility
The owner of a ship shall, before applying for a ship to be registered, appoint a ship manager whom shall be:

i. A Malaysian citizen having his permanent residence in Malaysia or

ii. A company incorporated in Malaysia and having its principal place of business in Malaysia
iii. Vessel Age and Survey Requirements
No ship shall be registered under Malaysia International Ship Registry unless:

i. It is fitted with mechanical means of propulsion

ii. It is not less than 1,600 gross tonnages
iii. The age of the ship is not more than 15 years if it is tanker or a bulk carrier or not more than 20 years if it
is of type other than a tanker or a bulk carrier.
Surveys are conducted by Ships Surveyor working under the direction of the Surveyor-General who may also
authorized classification societies on his behalf.

List of Ships Registration Forms

i. Application To Register A Ship MISR/BKI/05/05

ii. Application For Name Of Ship MISR/BKI/01/05

iii. Application For Reserve Prefix/Suffix Name Of Ship MISR/BKI/02/05

iv. Declaration Of Ownership And Nationality MISR/BKI/06/05

v. Appointment / Cancellation of An Authorised Officer MISR/BKI/03/05

vi. Application For Allotment Of An International Call Sign MISR/BKI/07/05

vii. Appointment / Cancelation / Change Of Ship Manager MISR/BKI/04/05

 Application for Vessel Name

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An application in writing to Registrar of Ships to receive vessel's name approval:

Proposed name for a Malaysia vessel must be approved by the Registar General of Ships. Owners should apply
for the vessel’s name at least 14 weeks in advance before the date at which the vessel is supposed to be
registered. 

Three (3) names can be submitted for approval. An approved name is valid for a period of twelve months. 

Form Application for Name of Ship (MISR/BKI/01/05) to be used.

Submit other relevant documents as required for this stage:

i. Appointment / Cancellation of an Authorised Officer (MISR/BKI/03/05) 

ii. Application for Reserve Prefix/Suffix Name of Ship (MISR/BKI/02/05)

Provisional Registration Process

Vessels are generally first registered on a provisional basis by the Registrar of Ships or a Malaysian diplomatic or
consular officer. The following documents must be presented for provisional registration of the vessel:

i. Form 
ii. Application To Register
iii. A Ship form (MISR/BKI/05/05) 

iv. Application for Allotment of an International Call Sign form (MISR/BKI/07/05) 

v. Form Declaration of Ownership and Nationality (MISR/BKI/06/05) 

vi. Appointment / Cancelation / Change Of Ship Manager (MISR/BKI/04/05)

Certificate: 

Certificate of Approved Name 

Provisional Certificate of Survey (COS) issued by Ships Surveyor of Malaysia

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Statutory declaration of ownership must include the following details -

i. Name of the ship and its existing tonnage.

ii. Statement of the date when and place where the vessel was built, or if the date and place of building are
not known, a statement that the declarant does not know the date and place of the building of the ship. 

iii. Statement as to the owner of the ship and the citizenship of such owner, and if the vessel is owned by
more than one person, the number of shares each is entitled.

iv. Statement of the name of the master of the Vessel and his citizenship.

v. Statement that no other person (other than those declared) is entitled as owner of any legal or beneficial
interest in the ship or any share thereof.

vi. Except where the operator and the owner of the ship are the same person, the name and citizenship of the
operator of the ship.

vii. Declaration that the particulars stated in the form are true to the best of his knowledge and belief.

If individual - photocopy of citizen certificate

If corporation

i. Certified true copy of Memorandum and Articles of Association and Certificate of Incorporation 

ii. Certification under common seal that the majority shareholding including voting share of the corporation
is held by Malaysian citizens free from trust or obligations in favor of non-Malaysian 

iii. Authority Form - appointing the public officer authorized to make declaration on behalf of the owner
If applicable during this stage, certification from Customs Department that import duty has been paid. Upon due
acceptance of the above documents by the registry, the Registrar will allocate an Official Number to the vessel.
Registration may take as quickly as seven (7) working days for issuance of Provisional Registry subject to
complete document submitted. The certificate of Provisional Registry is valid for a maximum period of one year
from the date of its issue.

Permanent Registration Process

Vessels are generally first registered on a provisional basis by the Registrar of Ships or a Malaysian diplomatic or
consular officer. The following documents must be presented for provisional registration of the vessel:

i. Application Letter

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ii. Builder's Certificate or Deletion Certificate 

iii. Original Bill of Sale duly authenticated 

iv. Certified Ships Carving and Marking Note 

v. Permanent Certificate of Survey (COS) issued by Ships Surveyor of Malaysia. 

If applicable, certification from Customs Department that import duty has been paid.

Full Registration may take as quickly as seven (7) working days for issuance of Permanent Registry subject to
complete document submitted.

Certificate of Survey

Procedure for the Application of Certificate of Survey

General

a) 'Certificate of Survey' is a certificate issued to the Registrar of Ship which contains the testimonials on the
description of the vessel to be registered. It also act as a certificate of seaworthiness for the vessel from the Ships
Surveyor to the Registrar of Ships.
b) A Certificate of Survey is issued on: o First registry of the vessel o After major modification conducted on the
vessel which alter the vessel's shape, tonnage or any particulars of the vessel as specified in the Certificate of
Registry.

Application of the Provisional Certificate of Survey

Application for the Certificate of Survey shall be made by the Owner to the Ships Surveyor enclosing the
following documents:

I. Application letter 

II. A letter requesting the Department to authorise Classification Society of the Owner's choice to survey and
issue the relevant statutory certificates and documents including the stability booklet (if applicable).
Please indicate certificates required. 

III. Certificate of Approved Ship Name issued by Registrar of Ships 

Simplified notation of vessel particulars as follows: 

i. Type
ii. Gross Tonnage 

iii. Net Tonnage 

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iv. Deadweight 

v. Year Built o Place of Built 

vi. Accommodation o Number of crew 

vii. Form Survey 118 – Certificate of Machinery Particulars 

The following plans of the vessel: 

i. General Arrangement Plan

ii. Midship plan
iii. Capacity plan (if tanker) 
Stability Booklet (existing vessel) 

iv. A copy of statutory certificates issued under the previous registry including: 
Registry certificate
v. Builder's certificate (if available)
vi. Provisional Tonnage certificate
vii. After all documents have been received by the Ships Surveyor, the Surveyor shall vet through all the
documents and issue the Provisional Certificate of Survey to the Registrar of Ships upon payment of the
appropriate fees.
Application of the Permanent Certificate of Survey

I. Application letter 
Brief vessel particulars as follows (for any amendment):
II. Type 

III. Gross Tonnage 

IV. Net Tonnage 

V. Deadweight 

VI. Year Built 

VII. Place of Built 

VIII. Machinery (engine, auxiliary, kW shaft, etc) 

IX. Accommodation 

X. Number of crew

The following plans of the vessel:

i. Stability Booklet (if new and after approved by Classification Society)

ii. A copy of statutory certificates issued by Classification Society certified by Marine Department:
iii. Builder Certificate (if new) 
Full Term International Tonnage Convention 1969 certificate

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iv. Declaration of carving and marking inspection conducted by Ships Surveyor.

After all documents have been received by the Ships Surveyor, the Surveyor shall vet through all the documents
and conducting the inspection of the vessel to verify that all particulars is correct, in seaworthy condition and that
all carving and marking have been properly made.

Permanent Certificate of Survey will be issued to the Registrar of Ships upon payment of the appropriate fees for
any amendment from previous Provisional Certificate of Survey

The issuance of provisional and permanent COS may take as quickly as seven (7) working days subject to
complete document submitted and fulfil survey requirement.

After the documentation had been fulfilled and the registry of vessel had been approve by Maritime Department
Malaysia.

The next step would be acquiring:

i. Domestic Shipping Licensing (DSL)

Maritime Division provides secretarial services to the Domestic Shipping Licensing Board and is responsible to
process and issue Domestic Shipping License.

All ships operating to and from any port or place in Malaysia (including Exclusive Economic Zone) are requires
to have a DSL. Vessels that provide services other than fishing in Malaysian waters such as dredging, cable and
pipe installation and hydrographic research are also required to possess a DSL. All these are categorized as
domestic shipping services.

Under the Merchant Shipping Ordinance (MSO) 1952, only Malaysian ships are allowed to provide domestic
shipping services in Malaysian waters and the Exclusive Economic Zone (EEZ)

However, foreign vessels may be allowed to provide domestic shipping services by way of exemption by the
Minister of Transport provided there is no availability of Malaysian ships or Malaysian vessels could not provide
the required services.

The next step of organization or individual should do is getting or undergo;

I. Vessel Inward Clearance

II. Vessel Outward Clearance
Both of these documents can be acquired at the port. Usually, freight agent or ship owner are the one who handle
all tasks and documentation of this.

Before vessel ready to enter certain port such as Port Kelang, ship owner are required to contact port authority to
have Vessel Inward Clearance and Vessel Outward Clearance. When all of these conditions are fulfill, vessel now
can enter port and continue its operation inside port.

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For organization or individual who do not possess vessel for their meant in freighting activity is advisable to liaise
with these firm (Criteria 2);

Charterparty

An organization or individual who want to do freight shipping can hire or lease a charterparty at the port. There
are various charterparty firms in Malaysia that offer domestic freight service.

Charterparty by definition, hire or lease contract between the owner of a vessel (aircraft or ship), and the hirer or
lessee (charterer).

Under a charterparty, a vessel is rented

ii. (in full or in part) for one or more voyages

iii. (voyage charter) or
iv. For a fixed period (time charter).
Normally, the vessel owner retains rights of possession and control while the charter has the right to choose the
ports of call. Also called charter agreement or charter contract, and written also as charter party.

Mostly charter service provided by firm will do most of the port documentation, custom clearance, inward and
outward clearance, etc.

Charter cargo ships do not operate on regular routes and schedules and pick up cargo only when it is chartered
from the ship operator.

When a consignment represents several thousand tons or cubic meters, for instance bulk cargo like oil, coal, ore
and grain, the normal procedure is to charter a vessel or part of a vessel, after contacting possible carriers for
quotations.

Charter shipping has the lowest freight rate per unit of weight or measure.

A charter-party can be concluded for a specific load (tonnage), for a journey, or for a determined length of time.

Freight forwarder

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The freight forwarder or forwarding agent is an indispensable member of the international trade and transport
community; the freight forwarder arranges for the international shipment of merchandise. Like travel agents – but
dealing with cargo rather than passengers – freight forwarder use their knowledge of varying freight rates to offer
the shipper the bet “package deal”. Different with charterer, freight forwarder doesn’t own vessel.

In addition to booking freight, freight forwarders may also handle export and customs documentation, insurance
and port and terminal charges. Small exporters often consult with their freight forwarders before quoting a Price
in a tender for a particular international transaction.

The terms “freight forwarder” and “forwarding agent” are generic terms encompassing a variety of specialized
functions, within the profession. Some forwarders offer a wide range of these functions, whereas others restrict
themselves to a single speciality or particular geographical coverage.

These various functions are summarized below. In addition, it is important for traders to understand that
forwarders may act as either agents or principals, with differing legal consequences.

Freight Forwarders Main functions

Following the sequential order of international trade operations, the freight forwarders perform the following
functions:

i. Advice on export costs, including freight costs, port expenses, consular fees, special documentation
costs, insurance costs and merchandise costs.

ii. Planning the most appropriate route for a shipment, taking into account the perishable or dangerous
nature of the goods, cost, transit time and safety.

iii. Reservation and contracting of the necessary cargo space on a ship, aircraft, train or truck.

iv. Advising and contracting insurance for transportation of the merchandise on behalf of the client and,
if applicable, assistance in the event of an accident.

v. Advice on the most appropriate way to transport cargo and carry out the procedures for packing,
stowing and loading the merchandise.

vi. Preparation and presentation of Transport and Trade Documents required for export and import, such
as the CMR, Bill of Lading, Airway Bill, etc.

vii. Handling with customs agents abroad to ensure that goods and documents comply with customs
regulations.

viii. Acting as an intermediary in customs negotiations around the world to guide the cargo efficiently.

ix. Use of e-commerce, Internet technology and satellite systems to allow real-time tracking of the
transport of goods.

x. Advice on legislation affecting international trade, political and social situations (strikes) as well as
other factors that may affect the movement of goods

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Shipping Documents

Certain basic documents are required for the carriage of cargo. Other documents are also needed by consignees
and buyers to complete any transaction.

Ocean Freight (bill of lading (B/L)

The document covering the carriage of goods by sea is called a bill of lading (B/L). The B/L is the authentic
receipt delivered by a carrier, confirming that the goods therein specified (markings, types of goods, number of
packages, etc.) have been loaded or taken in charge for loading on a designated vessel for carriage to a specified
port.

Apart from the Master copy, B/L is established in two or three “originals”, signed and stamped by the carriers or
their agent. Non-negotiable copies, which are not signed, have no legal value. An original B/L is the title of
property to the goods.

They can be of the following types:

Relating to parties

B/L to a named person or consignee

That a person alone will be able to collect the goods at the destination against presentation of the original B/L .

B/L to bearer

The holder is considered as the legal owner of the goods.

12 Shipping and Incoterms / Practice Guide

B/L to order

A negotiable-instrument of title and ownership of goods covered under it can be transferred

by one party to another by signature (endorsement) and delivery of the B/L. Generally, goods

which have not been paid-for in advance (goods sent under an open-account or a letter-ofcredit) are shipped this
way. The consignor must stamp and sign (endorse) this B/L so that

its title can be transferred.

Relating to the journey

Direct B/L

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From port to port, without transshipment.

Through B/L

Transhipment is taking place along the journey. This can be either in a first port of unloading

for transfer into another vessel serving the final destination, in a port for overland on-forwarding, or from an
inland origin for carriage to a port where shipment will take place.

These various features of B/L designating beneficiaries and routing can combine their elements, and there can be
direct B/L to order, or a through B/L to bearer, for instance.

Other provisions can be made on B/L, but the only one that should be focus on mention here is the “ clean B/L”,
meaning that the cargo has been accepted by the carriers without reservation, i.e. that the consignment has been
received for shipment in sound, external condition – therefore, the Carriers must deliver it at the destination in the
same sound, external condition.

Forwarder B/L

We have seen that in the case of multimodal transportation, one document only is issued and

this is what is called an “hours” B/L, or also a FIATA B/L, if the document is prepared on

forms produced by FIATA (according to the International Federation of Freight Forwarders

Association). This document is, in fact, a through B/L, with the difference that it is not created

by an ocean carrier, but by a forwarding agent, under his own name.

Other features on the B/L

Even if two or three original Bs/L have been issued, only one needs be presented to withdraw

the cargo at the destination and be endorsed (or “accomplished”). When one of the originals

has been accomplished, the remaining originals stand void.

The indications which must appear on a B/L are:

i. The beneficiaries;
ii. Port of shipment, port of destination or transhipment (final destination in case of transhipment);
iii. Complete markings and numbering of packages;
iv. Quantity and types of packages (cases, bags, bales, drums, pallets, etc.);
v. Type of goods, with all the legal, compulsory notices, in case of restricted cargo;
vi. Weight and measurements by type of cargo; and

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vii. Whether freight is prepaid or payable at destination.

Advantages of Ocean Charterer/Charterparty and Freight- Forwarder

Charterparty

i. Booking directly with the source of the sea freight offering can sometimes result in more competitive
rates.
ii. It could mean your cargo is more likely to obtain space on your desired vessel.
iii. Shipping lines are accountable for any loss or damages.
iv. The owner of the goods can authorise the shipping line to sign on their behalf to expedite any processes
along the way, without the need of the owner to physically be there. However, the degree to which this
power is given is often listed out in the agreed contract prior to the shipment.

Freight forwarder

i. Forwarders are able to negotiate with shipping lines on behalf of shippers to get a competitive deal and
discover the most economical route to take.
ii. Global forwarders commit big volumes to shipping lines which can make their rates very competitive.
iii. Forwarders complete all documentation on your behalf.
iv. Import / Export processes are after complex and time consuming. Outsourcing these responsibilities in the
supply chain can save untold time and potential headaches.
v. A freight forwarder will often see the cargo through the entire process from door to door, providing multi-
modal transportation options and advising customers along the way.

Conclusion

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As an organization that has interest on running own freight or possess vessel, it is advisable to undergo more
deeper research on the procedure, law, Acts, gazette, government related, etc. to avoid any hassle in long
term that could distribute to loss.

The main difference between shipping lines and freight forwarders are the types of services offered.

A freight forwarder will provide services which are outside the scope of a charterer. For example, a freight
forwarder will often see the cargo through the entire process from door to door.

While a charterer may only be concerned during the process when the cargo is consolidated to the time when
the cargo is deconsolidated. Another key difference is a freight forwarder often provides multi-modal
transportation options, while a charterer will often specialize in a certain mode of transportation, be it via
ship, air or land.

Sources:

INCOTERM

http://www.mot.gov.my

http://www.marine.gov.my

http://www.customs.gov.my/en

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